Eagle Materials has just reported financial results for the fourth quarter ended March 31, 2006 and for fiscal year 2006. Eagle also issued guidance for the first quarter of its fiscal year 2007. Eagle produces and distributes Gypsum Wallboard, Cement, Recycled Paperboard and Concrete and Aggregates.
For the fiscal year ended March 31, 2006, Eagle’s net earnings increased 51 per cent to US$161.0m, or $3.02 per diluted share, from US$106.7m, or US$1.91 per diluted share, for the previous fiscal year. Revenues for fiscal 2006 of $859.7 million were a record high, and were 39 per cent greater than the US$616.5m for the previous fiscal year.
Eagle remains well positioned to continue to achieve outstanding financial results given its low cost operations which supply building materials to a strong construction industry. Wallboard pricing remains strong and an average US$15 per thousand square feet (MSF) price increase was implemented in late March 2006 in all of its wallboard markets.
Also, national demand for cement remains at a record high level with imports projected to fulfill approximately 30 per cent of the US construction industry demand this year. Low inventories and strong demand continue to put upward pressure on cement pricing. Eagle implemented price increases ranging from US$5 to US$10 per ton on April 1st in its Illinois, Nevada and California cement markets.
On January 26, 2006, Eagle announced plans to expand and modernize its Mountain Cement plant located in Laramie, Wyoming and its Nevada Cement plant located in Fernley, Nevada. The plans will expand the production capacity of Mountain Cement by 60 per cent and double the production of Nevada Cement (bringing both plants up to 1.1Mt of cement production) while at the same time dramatically reducing their fuel and electricity consumption. Both projects are expected to be operational in fall 2008. The total capital investment in these two projects is expected to be approximately US$320m.
Operating earnings from Cement increased 47 per cent to US$19.6m for the fourth quarter this year from US$13.3m for the same quarter last year. The earnings gain was due primarily to a record high average net sales price and record fourth quarter sales volumes. Cement revenues, including joint venture and inter-segment sales, for the fourth quarter totaled US$64.8m, 31 per cent greater than the US$49.6m for the same quarter a year ago. Cement sales volume for the fourth quarter totaled 669,000t, seven per cent above the 626,000t for the same quarter last year. The average net sales price for this fiscal year’s fourth quarter was US$90 per ton, 22 per cent greater than the US$74 per ton for the same quarter last year.