EAGLE MATERIALS INC Q3 FY2025 earnings call

• Safety: Ended calendar year with lowest total recordable incident rate (TRIR) since tracking began; continuing to build safety culture, standardize policies, and use engineering controls towards zero incidents. • Sustainability: Cement business completed investments for 100% construction-grade blended cement, reducing CO2 intensity and costs; Republic Paperboard water treatment facility reduces water usage by 50% and increases recycled water use. • Acquisition: Bullskin Stone and Lime acquisition aligns with growth strategy, provides strategic advantages in Western Pennsylvania, and integration is underway.

In the heavy materials sector (Cement and Concrete and Aggregates), revenue declined 4% primarily because of lower cement sales volume, partially offset by cement sales price increases. In the Light Materials sector, revenue increased 6% reflecting higher wallboard and recycled paperboard sales volume and prices. Wallboard sales volume was up 2% and recycled paperboard sales volume increased 7%. Wallboard prices increased 4% and recycled paperboard 12%.

• Cement: Price increase letters out for majority of markets in first half of 2025; optimism about infrastructure spending through IIJA program trickling through and private nonresidential manufacturing projects boosting consumption. • Wallboard: Underlying demand for residential construction positive despite affordability challenges; expect wallboard consumption to increase as affordability improves. • Aggregates: Continue to seek growth investments that strengthen footprint and meet criteria as seen with Bullskin acquisition.

• Weather: Record rainfall in some areas affected cement volumes in third quarter; ongoing weather conditions in early 2025 could impact volumes. • Infrastructure: Uncertainties with infrastructure funding from IIJA program initially slow to flow; potential impact on cement consumption. • Tariffs: Potential tariffs on cement imports could impact cost of imported product, indirectly affecting market dynamics.

Q: Touch on acquisitions, specifically Bullskin and aggregates M&A.

A: Bullskin fits geographically near existing cement quarry, provides local aggregate participation and secondary supply; aggregates is a focus for capital deployment if good quality assets meet return criteria.

Q: Wallboard demand expectations.

A: Wallboard demand has been steady over last 4 years, around 27.3 billion sq ft; expect consumption to increase as affordability improves with lower interest rates.

Q: Wallboard price increase delay.

A: Price increase announced for early February, moving forward with it.

Q: Cement margin and maintenance costs.

A: Cement segment had $8 million maintenance cost headwind from large projects, unique to 2024, not repeatable; optimistic about margins in 2025 and beyond with improved volumes.

Q: Cement price increase realization and seasonality.

A: Cement price increases across markets, some in January, some in April and beyond; normal seasonality expected, with March quarter tough due to winter, June quarter easier as construction season kicks off.

Q: Bullskin aggregates tonnage and pricing.

A: Pricing consistent with average markets; volume update to come with more time with the business.

Q: Paperboard pricing.

A: Paperboard price improvement was mechanical due to supply agreement pricing mechanisms, likely to dip back below $600 in March quarter.

Q: IIJA funding and tariffs.

A: No noticeable pause in public projects yet; tariffs on cement imports TBD, would impact cost of imported product.