Eagle Materials Q3 2025 Earnings Report

Eagle Materials EPS Results

• Actual EPS: $3.59
• Consensus EPS: $3.97
• Beat/Miss: Missed by -$0.38
• One Year Ago EPS: N/A

Eagle Materials Revenue Results

• Actual Revenue: N/A
• Expected Revenue: $581.72 million
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Eagle Materials Announcement Details

• Quarter: Q3 2025
• Date: 1/29/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, January 29, 2025
• Conference Call Time: 8:30AM ET

Eagle Materials (NYSE:EXP), through its subsidiaries, manufactures and sells heavy construction materials and light building materials in the United States. It operates in four segments: Cement, Concrete and Aggregates, Gypsum Wallboard, and Recycled Paperboard. The company engages in the mining of limestone for the manufacture, production, distribution, and sale of Portland cement, including Portland limestone cement; grinding and sale of slag; and mining of gypsum for the manufacture and sale of gypsum wallboards used to finish the interior walls and ceilings in residential, commercial, and industrial structures, as well as well as containerboard and lightweight packaging grades; manufacture and sale of recycled paperboard to the gypsum wallboard industry and other paperboard converters; the sale of readymix concrete; and mining and sale of aggregates, such as crushed stone, sand, and gravel. Its products are used in commercial and residential construction; public construction projects to build, expand, and repair roads and highways; and repair and remodel activities. The company was formerly known as Centex Construction Products, Inc. and changed its name to Eagle Materials, Inc. in January 2004. Eagle Materials Inc. was founded in 1963 and is headquartered in Dallas, Texas.

Eagle Materials Q3 2025 Earnings Call Transcript

Key Takeaways

• Eagle Materials achieved its lowest total recordable incident rate ever and is standardizing safety policies and engineering controls to pursue zero incidents.
• The company completed sustainability investments in blended cement production to lower CO₂ intensity and manufacturing costs and is building a water treatment facility at Republic Paperboard to cut water use by 50%.
• The acquisition of Bullskin Stone and Lime expands Eagle’s aggregates footprint in Western Pennsylvania and integrates a pure‐play asset into its heavy materials network.
• Eagle delivered near‐record Q3 revenue despite a 7% drop in cement volumes due to unprecedented rainfall and completed $8 million of major maintenance at Tulsa and Texas Lehigh plants for long‐term reliability.
• The company continues to execute price increases for cement and wallboard in early 2025, showing confidence in demand driven by federal infrastructure funding and housing shortages, while maintaining healthy leverage and returning capital through share buybacks.

Presentation

[Operator]

Good day, everyone, and welcome to Eagle Materials 4th Quarter and Fiscal 20 24 Earnings Conference Call. This call is being recorded. At this time, I would like to turn the call over to Eagle's President and Chief Executive Officer, Mr. Michael Hack. Mr.

[Operator]

Hack, please go ahead, sir.

[Michael Haack, President & CEO at Eagle Materials]

Thank you. Good morning. Welcome to Eagle Materials' conference call for our 3rd quarter of fiscal year 2025. This is Michael Hack. Joining me today are Craig Kessler, our Chief Financial Officer and Alex Haddock, Senior Vice President of Investor Relations, Strategy and Corporate Development.

[Michael Haack, President & CEO at Eagle Materials]

There will be a slide presentation made in connection with this call. To access it, please go to eaglematerials.com and click on the link to the webcast. While you're accessing the slides, please note that the first slide covers our cautionary disclosure regarding forward looking statements made during this call. These statements are subject to risks and uncertainties that could cause results to differ from those discussed during the call. For further information, please refer to this disclosure, which is also included at the end of our press release.

[Michael Haack, President & CEO at Eagle Materials]

Thank you for joining us today to discuss our FY 2025 Q3 results. In the Q3, once again, the operational performance and strategic focus of our team enabled us to deliver positive results and execute on several strategic priorities. This morning, I'd like to start off with some color on several of those strategic initiatives across Eagle Materials. These initiatives demonstrate our approach to investing for the long term to ensure we remain a low cost producer throughout economic cycles. Let me highlight 3 areas of particular importance.

[Michael Haack, President & CEO at Eagle Materials]

These are just a few examples of the many things we do to strengthen our core business. First, our primary focus at Eagle is safety. In this regard, I'm happy to report that we ended the calendar year with our lowest total recordable incident rate or TRIR since we began tracking this lagging indicator. While this is an achievement, we don't plan on stopping there. We continue to build out our company wide safety culture, standardize safety policies and procedures and ensure we tackle all the necessary protocols for keeping our people safe.

[Michael Haack, President & CEO at Eagle Materials]

We will continue our focus on putting engineering controls in place through the use of leading indicators to continue our journey towards 0. 2nd, we continue to make meaningful progress on our sustainability initiatives. In our cement business, we have completed investments that are getting us closer to our goal of 100 percent construction grade blended cement for our manufactured product. These projects like our mountain cement expansion and modernization reduce our CO2 intensity while lowering our overall manufacturing cost. We are also making headway on completing our water treatment facility at Republic Paperboard, which should reduce water usage at the plant by 50% and increase the use of recycled water.

[Michael Haack, President & CEO at Eagle Materials]

The 3rd strategic initiative is our recent acquisition of Bullskin Stone and Lime and its alignment with our overall growth strategy. Wolfskin was a rare opportunity to acquire a pure play aggregate asset that fits nicely within our current heavy materials footprint. This combination provides strategic advantages for us, including our ability to serve our regional customers. The acquisition also expands our presence in Western Pennsylvania, a market with solid growth fundamentals and healthy DOT spending levels. Acquisitions such as Bullskin fit squarely in our broader growth strategy.

[Michael Haack, President & CEO at Eagle Materials]

We will continue to seek growth investments that strengthen our footprint and meet our strategic and financial criteria as Bullskin does. The acquisition closed in early January and integration is well underway. I'm excited to welcome the Bullskin employees to Eagle. Now let me give some details on our operating performance this past quarter and our views on business conditions more broadly. We generated near record 3rd quarter revenue despite cement volumes being down 7% because of record rainfall in some areas.

[Michael Haack, President & CEO at Eagle Materials]

In key markets, rainfall reached 2 50 percent of historical averages. Our people and our plants executed impressively amidst these challenging conditions. As discussed last quarter, we undertook major maintenance at both our Tulsa and Texas Lehigh cement plants. The work planned was completed timely at both locations. The increased maintenance costs, which did affect us this past quarter, were smart investments for the long term, ensuring increased reliability of both plants and enabled us to get back to a normal maintenance cycle.

[Michael Haack, President & CEO at Eagle Materials]

We also continue to realign our customer portfolio at both our Denver and Kansas City concrete and aggregate sites and feel we can position those businesses well for the future. With regards to pricing, we have price increase letters out for the majority of our cement markets and our wallboard operations for the first half of twenty twenty five. Despite these tougher operating environments, the demand fundamentals for our products remain solid. In cement, federal infrastructure dollars through the IIJA program are just starting to flow through and private nonresidential manufacturing projects should tilt cement consumption higher. Regarding wallboard demand, we're focused on the widely discussed change in the outlook for interest rates and mortgage rates over the next 12 to 24 months.

[Michael Haack, President & CEO at Eagle Materials]

The path to lower rates and the knock on effects of increased home buying demand is cloudier today than it was just a quarter ago. Single family housing, the most important end market for our wallboard businesses, will continue to benefit from the drastic need for more housing in the United States. The affordability challenges facing today's potential homebuyers are being made worse by the lack of homes and thus we feel the underlying demand for residential construction will be positive for wallboard consumption. Regardless of the short term demand picture, we continue to generate a significant amount of free cash flow and to focus on how we best invest our cash over cycles. Over the last 5 years, Eagle Materials has put over $3,000,000,000 of capital to work on a combination of high growth, high return projects and capital returns through share buybacks.

[Michael Haack, President & CEO at Eagle Materials]

These investments include strategic organic investments to improve the reliability of our plants, including an upgrade to our Republic Paper Mill as well as replacing or repairing critical equipment across our footprint to keep our plants in like new condition. Investments in raw material reserves to ensure we have multi decades of material close to our plants. This is a strategic operational initiative that results in a competitive advantage for Eagle. We also made several strategic inorganic investments to strengthen our low cost position, including the acquisition of Kosmos Cement, several cement terminals and multiple aggregate sites. We've made those organic and inorganic investments while maintaining a healthy leverage profile and reducing our outstanding shares by 30% through our share repurchase program.

[Michael Haack, President & CEO at Eagle Materials]

Our commitment to executing similar high return initiatives through the cycle remains firm as it has for many years. Now let me turn it over to Craig to go through our financial results.

[Craig Kesler, EVP - Finance and Administration & CFO at Eagle Materials]

Thank you, Michael. 3rd quarter revenue was $558,000,000 a slight downtick from the prior year. The decline was driven by lower cement and concrete and aggregate sales volume, partially offset by higher wallboard and paperboard sales volume and pricing. 3rd quarter earnings per share was $3.56 The quarterly EPS reflects lower earnings offset by a 3% reduction in fully diluted shares due to our share buyback program. As we highlighted in the press release, we had 1 non routine expense item during the quarter.

[Craig Kesler, EVP - Finance and Administration & CFO at Eagle Materials]

It was $1,300,000 of costs associated with business development and transaction related activities. Turning now to segment performance highlighted on the next slide. In our heavy materials sector, which includes our cement and concrete and aggregate segments, revenue declined 4%, primarily because of lower cement sales volume, partially offset by cement sales price increases we implemented earlier this year. Our 3rd quarter cement sales volume was significantly affected by the exceptionally wet weather in our Midwest and Great Plains markets during November. Operating earnings were down 20% primarily because of the lower cement sales volume in addition to higher maintenance costs.

[Craig Kesler, EVP - Finance and Administration & CFO at Eagle Materials]

As we previewed last quarter, we had major maintenance projects at 2 of our cement plants during the Q3, which increased maintenance costs by approximately $8,000,000 The work at both plants has been completed improving the plant's long term reliability. As Michael mentioned, we have cement price increases announced in nearly all of our markets for the 1st part of calendar 2025. Moving to the Light Materials sector on the next slide. Revenue in this sector 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%.

[Craig Kesler, EVP - Finance and Administration & CFO at Eagle Materials]

In terms of prices, wallboard increased 4% and recycled paperboard 12%. Operating earnings in the sector were also up 18% to $97,000,000 driven by the higher wallboard and recycled paperboard sales volume and higher wallboard and paperboard sales prices. Looking now at our cash flow. We continue to generate healthy cash flow and allocate capital in line with our strategic priorities and rigorous financial return criteria. During the 1st 9 months of the year, operating cash flow was $486,000,000 Capital spending increased to $147,000,000 primarily because of the modernization and expansion project at our Laramie, Wyoming cement plant.

[Craig Kesler, EVP - Finance and Administration & CFO at Eagle Materials]

We also acquired a small aggregates business for $25,000,000 last quarter. The acquired operation is complementary to our existing aggregates business in Kentucky. And finally, we repurchased nearly 800,000 shares of our common stock for $201,000,000 in addition to paying our quarterly dividends, returning a total of $226,000,000 to shareholders during the 1st 9 months of the year. We have approximately 5,100,000 shares remaining under our current repurchase authorization. And finally, a look at our capital structure, which continues to provide us significant financial flexibility.

[Craig Kesler, EVP - Finance and Administration & CFO at Eagle Materials]

At December 31, 2024, our net debt to cap ratio was 40% and our net debt to EBITDA leverage ratio was 1.2 times. We ended the quarter with $31,000,000 of cash on hand, bringing total committed liquidity at the end of the quarter to approximately $686,000,000 and we have no meaningful near term debt maturities. As Michael mentioned, subsequent to quarter end, we completed the previously announced acquisition of Bullskin, Stone and Lime, which we funded through a combination of cash on hand and borrowings under our bank credit facility. Thank you for attending today's call. We'll now move to the question and answer session.

[Craig Kesler, EVP - Finance and Administration & CFO at Eagle Materials]

Dave?

[Operator]

We will now begin the question and answer session. Our first question comes from Trey Grooms with Stephens. Please go ahead.

[Trey Grooms, Managing Director at Stephens Inc]

Good morning, Craig and Michael. Thanks for taking my questions. First off, if we could maybe touch on the acquisitions. The pure play aggregates in Pennsylvania, so bullskin there and the other tuck in. Maybe any more color on how it fits geographically?

[Trey Grooms, Managing Director at Stephens Inc]

Are they are there other opportunities kind of in that market? Or is this one more kind of a one off in that Pennsylvania market? And then maybe bigger picture, the aggregates has historically been a smaller kind of part of the overall Eagle asset portfolio. But again, you have been maybe a little more active recently on aggregates M and A. Is aggregates a place where we could expect you all to deploy more capital in a bigger way than you have historically?

[Trey Grooms, Managing Director at Stephens Inc]

Or how should we be thinking about that in your approach there?

[Michael Haack, President & CEO at Eagle Materials]

Yes, Trey.

[Michael Haack, President & CEO at Eagle Materials]

I'll answer that for you. When we look at the aggregate assets that we procured here recently, one is the tuck in as you said and it's in a market that we already have in a large quarry for our cement manufacturing. The one we procured actually was right down the road from that. It gives us just a little bit more flexibility and secures a couple of different things. It lets us participate in the aggregate market there locally and it also gives us a secondary supply to our cement plant if it was ever needed.

[Michael Haack, President & CEO at Eagle Materials]

We have plenty of reserves at our existing quarry, but just if it several strategic criteria for us. Up in Pennsylvania, the Bullskin asset, it's not as common to find just a pure play aggregates resource. We're very excited to have that team join the Eagle team. As we build out our network of facilities, this one fits very well. We provide cement up into that market.

[Michael Haack, President & CEO at Eagle Materials]

And so it's right in line with our growth strategy is to have that network and secure that network to make it stronger over time. To your second question, secure that network to make it stronger over time. To your second question of aggregates and deploying capital to aggregates, we've always been a fan of aggregates. We consider that the heavy side of the business. Our strategy has continuously been to grow the heavy side of

[Michael Haack, President & CEO at Eagle Materials]

the business

[Michael Haack, President & CEO at Eagle Materials]

primarily. And we see aggregates as a great fit into that. And as good quality assets that meet our return criteria come available at the right price, we are interested in those assets.

[Trey Grooms, Managing Director at Stephens Inc]

Got it. Thank you. That's helpful. I guess second one, maybe switching gears a little bit on to wallboard. So wallboard volume held in better than we would have expected.

[Trey Grooms, Managing Director at Stephens Inc]

And obviously, the rate environment is now more certain, which you mentioned. But any kind of directional expectations maybe that you could give us for overall kind of wallboard demand as we sit here today? Is it fair to think wallboard volume kind of remains steady, kind of continues to bump along in this range in the medium term until maybe we see some more significant changes on the rate front? Or is there a more significant move expected? Any high level thoughts there would be helpful.

[Trey Grooms, Managing Director at Stephens Inc]

Thank you.

[Craig Kesler, EVP - Finance and Administration & CFO at Eagle Materials]

Trey, I think you actually hit the nail on the head. If you were to look at over the last 4 calendar years, wallboard demand has been plus or minus 1% each year over that 4 year timeframe. So look, we've been in an environment where housing has been pretty tepid, pretty mediocre and wallboard consumption reflects that. We're going to like we finished calendar 24,000,000,000 around 27,300,000,000 square feet, and that number has been consistent. And so as you look forward, prior cycles, we've been well north of 30,000,000,000 square feet of consumption in the U.

[Craig Kesler, EVP - Finance and Administration & CFO at Eagle Materials]

S. So we're still at pretty low levels of total consumption. We've just got, as Michael pointed out, the affordability issue, certainly interest rates are a part of that. But there's also good underlying demand. There's healthy employment here in the U.

[Craig Kesler, EVP - Finance and Administration & CFO at Eagle Materials]

S, healthy wages. And this rate lock in and the lack of construction activity for many years now, at least a decade, you just got a very low level of inventory. So as we start to see the affordability improve, we would expect to see consumption and housing in total increase. We just got to see the affordability improvement.

[Trey Grooms, Managing Director at Stephens Inc]

Okay. Thank you for all that Craig and Michael. I'll pass it along and best of luck.

[Operator]

And the next question comes from Brent Thielman with D. A. Davidson. Please go ahead.

[Brent Thielman, MD & Senior Research Analyst at D.A. Davidson]

Hey, thanks. Good morning. Michael or Craig, I know you previously talked about price increase in wallboard slated for November. You're going to delay that to the 1st part of 2025. I mean, any update there?

[Brent Thielman, MD & Senior Research Analyst at D.A. Davidson]

Are you still kind of taking the temperature of the market right now? Just to be curious any comments around that.

[Craig Kesler, EVP - Finance and Administration & CFO at Eagle Materials]

Yes, Brent, we've got a price increase that we announced for here early February, so shortly after this call, frankly. So we try not to speculate on exact realization and whatnot, but we do have a price increase in the market and we're going to move forward with that.

[Brent Thielman, MD & Senior Research Analyst at D.A. Davidson]

Got it. And then, I guess, Craig, in cement, I mean, obviously, a pinch here on volume, which is related to the weather. I just was wondering any other extraordinary cost to flush out when we look at the margin in that segment from a year on year perspective? I don't know if there's extra maintenance costs or anything else like that in there.

[Craig Kesler, EVP - Finance and Administration & CFO at Eagle Materials]

Yes, Brent. Certainly, and we talked about it last quarter and highlighted it here. We had 2 maintenance projects at our facility, one of the facilities down in Texas and then in Tulsa, Oklahoma that were very large non typical maintenance programs related to 50 year old pieces of equipment and the replacements of those. So that was an $8,000,000 headwind in this quarter. So yes, I would say this quarter had a unique cost impact from those programs, as Michael mentioned, really about improving the long term reliability of the both of those facilities and the team did a good job with those projects.

[Brent Thielman, MD & Senior Research Analyst at D.A. Davidson]

Got it. Just last one, I know we're only a month in, not a lot gets done this time of the year anyway, but doesn't seem like some of these weather conditions have abated from what I can see in the news. Just wondering if you can talk a little bit about that in the current quarter and how we ought to be approaching that as we sit here today?

[Craig Kesler, EVP - Finance and Administration & CFO at Eagle Materials]

Yes. Look, I've always said it's tough to draw a trend during January and frankly even February as most of the country is going through winter. This January is no different than that. Certainly, lots of weather activity across the entirety of the U. S.

[Craig Kesler, EVP - Finance and Administration & CFO at Eagle Materials]

So, yes, January always has those types of issues and this year will be no different.

[Brent Thielman, MD & Senior Research Analyst at D.A. Davidson]

Yes. Okay. Thanks guys. I'll pass it on.

[Operator]

And the next question comes from Anthony Pettinari with Citigroup. Please go ahead.

[Asher Sohnen, Analyst at Citigroup]

Hi. This is Ashish Sohin on for Anthony. So thanks for taking my question. Just on the cement side, can you provide some color maybe on early realization you might be seeing on the January hikes? And then have you had any initial conversations around mid years or just the sense that customers might be bracing for it?

[Craig Kesler, EVP - Finance and Administration & CFO at Eagle Materials]

Probably a little too early to speculate on a second round of a cement price increase. The and as Michael mentioned, we've got price increases in most of our markets throughout the first part of calendar 2025, not all of January, some into the springtime as well. And as I said earlier, certainly with the weather that we've seen for the 1st part of January, we'll talk about how we what we realized as we get into the Q4 and go through those results. But it's kind of sporadic throughout the springtime.

[Asher Sohnen, Analyst at Citigroup]

Got it. Got it. And then just

[Asher Sohnen, Analyst at Citigroup]

I think if I

[Asher Sohnen, Analyst at Citigroup]

strip out the increased maintenance costs for the quarter, it looks like maybe cement margins were roughly flat year over year, which is encouraging given the volume headwinds. So just how should we maybe think about the margin opportunity for cement over the next couple of quarters with no more maintenance headwind and potentially weather easing up?

[Craig Kesler, EVP - Finance and Administration & CFO at Eagle Materials]

Yes. Again, we're optimistic about going into the spring. As we think about the construction activity and bidding activity that we see, a lot of that again, we're down and volumes will be down for the 9 months. We're down 4%, 5%. Again, a lot of that has been weather throughout calendar 2024.

[Craig Kesler, EVP - Finance and Administration & CFO at Eagle Materials]

It's been highlighted the lack of infrastructure spending coming out of IIJA. As those funds start to trickle through the system. There's reasons to be optimistic not just about calendar 2025, but 2016 27 as well. And improvement in volumes will certainly go a long way on the margin side as well. And as you said, some of this maintenance has been pretty unique to this year and not necessarily repeatable next year.

[Asher Sohnen, Analyst at Citigroup]

Great. Thanks. That's really helpful. I'll turn it over.

[Operator]

And the next question comes from Jerry Revich with Goldman Sachs. Please go ahead.

[Jerry Revich, Senior Investment Leader & Head of US Machinery, Infrastructure, Sustainable Tech franchise at Goldman Sachs]

Yes. Hi. Good morning, everyone.

[Michael Haack, President & CEO at Eagle Materials]

Good morning.

[Jerry Revich, Senior Investment Leader & Head of US Machinery, Infrastructure, Sustainable Tech franchise at Goldman Sachs]

Michael, Craig, the key question that folks have is really given the outstanding wallboard margin performance and continuing soft resi data points, people are asking what's different about the wallboard pricing and margins in this cycle compared to, call it, 2015 timeframe where we saw pricing give back during a similar mid cycle pause. Would love your thoughts on that and the level of comfort on the sustainability of the current margin structure in an uneven resi environment, if you don't mind?

[Craig Kesler, EVP - Finance and Administration & CFO at Eagle Materials]

Yes. So good question, Jerry. Look, we've talked about it quite a bit. The industry has changed dramatically and certainly the demand side is one point. And as I mentioned earlier, we've been stuck in neutral as it relates to homebuilding here in the U.

[Craig Kesler, EVP - Finance and Administration & CFO at Eagle Materials]

S. For quite some time and therefore wallboard consumption has been pretty consistent at pretty low levels quite frankly. But on the flip side, the synthetic gypsum raw material issue, when you're talking about 2015, believe it or not, that's 10 years ago now. And as we've seen coal plant closures, some of the synthetic gypsum inventory that had been on the ground has been used. And so you've seen a significant change in the cost structure as that raw material has become more difficult to find and further away, which now has increased maintenance or transportation costs.

[Craig Kesler, EVP - Finance and Administration & CFO at Eagle Materials]

Again, unique Eagle and American Gypsum are unique in that we have surety around supply of our raw materials. But when you had roughly half of the industry that was relying on synthetic gypsum as its primary raw material and the shift away from that is going to have a material impact on their cost structure. So we enjoy these margins because of decisions that were made many moons ago and it's a structural advantage for us. Not everybody is that well positioned.

[Jerry Revich, Senior Investment Leader & Head of US Machinery, Infrastructure, Sustainable Tech franchise at Goldman Sachs]

And Craig, on that note, given the high cost position for some of the competitor base, any strategic opportunities emerging for you folks on the wallboard side of the business? Or is our capital deployment focus here still strictly on the heavy side?

[Craig Kesler, EVP - Finance and Administration & CFO at Eagle Materials]

As Michael has always said, we continue to look at ways to put our free cash flow and our balance sheet to work and take advantage of the position that we have across our wallboard network. So we continue to look at those opportunities with our facilities that are in the western part of the country that sit on decades worth of raw materials and gypsum. Those are things that we continue to explore. How do we improve those facilities and take advantage of the cost position that we do have.

[Jerry Revich, Senior Investment Leader & Head of US Machinery, Infrastructure, Sustainable Tech franchise at Goldman Sachs]

And can we shift gears and talk about cement? So your shipments in the quarter, I thought were pretty good given the maintenance. Normally, your shipments are down 20% sequentially. You were down just 17% sequentially. As we think about the cadence of demand into calendar 2025, it feels like you still have a tough comparison for volumes in the Q1, but quite the easy one applying normal seasonality in the Q2.

[Jerry Revich, Senior Investment Leader & Head of US Machinery, Infrastructure, Sustainable Tech franchise at Goldman Sachs]

And just would love to get your views on how that normal seasonality math stacks up versus your expectations for volumes in terms of tough comp in the March quarter and then a very easy comp looks like in June?

[Craig Kesler, EVP - Finance and Administration & CFO at Eagle Materials]

Yes. Sitting here today, you'd expect to see pretty normal seasonality. The March quarter is always a typical quarter just quarter is always a typical quarter just given that 2 thirds of it is January February, which are particularly the hardest winter months and January certainly proved that out here this year. But yes, as you get into June and get into September, that's when the construction season really starts to kick off. And sitting here today, have optimism around the beginning of the construction season.

[Craig Kesler, EVP - Finance and Administration & CFO at Eagle Materials]

So ready to get there.

[Jerry Revich, Senior Investment Leader & Head of US Machinery, Infrastructure, Sustainable Tech franchise at Goldman Sachs]

Okay. Appreciate the conversation. Thank you.

[Operator]

And the next question comes from Adam Thalhimer with Thompson Davis. Please go ahead.

[Adam Thalhimer, Director of Research at Thompson Davis & Co]

Hey, good morning guys.

[Craig Kesler, EVP - Finance and Administration & CFO at Eagle Materials]

Good morning.

[Adam Thalhimer, Director of Research at Thompson Davis & Co]

On cement prices, were there any push through in January or are those more for April?

[Craig Kesler, EVP - Finance and Administration & CFO at Eagle Materials]

It's a combination across our plants, across our networks. Some markets are in January, some markets are going in April, some in between. So it's kind of across the board depending upon the market that you're in.

[Adam Thalhimer, Director of Research at Thompson Davis & Co]

Okay. And then Craig for Bullskin, how much should we add for aggregates tonnage? And is their pricing kind of similar to your corporate average?

[Craig Kesler, EVP - Finance and Administration & CFO at Eagle Materials]

Good question, Adam. Look, I would tell you from a pricing perspective, I don't consistent with kind of the average across our markets. In terms of volume, we've owned it for less than a month here. So we'll give you a better update on volumes as we can have a little more time with the business.

[Adam Thalhimer, Director of Research at Thompson Davis & Co]

Okay. And then lastly on the paperboard price, the average pricing jumped up quite a bit in Q3. I'm curious was that mechanical and that will reverse or is that kind of the new norm over $600,000,000

[Craig Kesler, EVP - Finance and Administration & CFO at Eagle Materials]

No, that is mechanical dealing with the price adjustments in the supply agreements within that business. So that price improvement is a function of OCC prices earlier in the year having been higher. OCC prices here in October, November December actually came down. And so as we go into the March quarter, you'll see that that pricing probably dip back below $600 a ton. Again, it's not a market change.

[Craig Kesler, EVP - Finance and Administration & CFO at Eagle Materials]

It's just a function of the pricing mechanisms in the long term contracts.

[Adam Thalhimer, Director of Research at Thompson Davis & Co]

Understood. Okay. Thanks, Craig.

[Operator]

And the next question comes from Phil Ng with Jefferies. Please go ahead.

[Philip Ng, Managing Director at Jefferies Financial Group]

Hey, guys. There's been a lot of headlines with funding being paused, whether it's for IJA or IRA since Trump has been back in office. Appreciating this is a super fluid situation. What's the Eagle House view? And what this all means?

[Philip Ng, Managing Director at Jefferies Financial Group]

Have you seen any noticeable pause in activity projects? And then separately, if there are any tariffs potentially being implemented on cement, how do you think that actually impacts your business, good or bad?

[Craig Kesler, EVP - Finance and Administration & CFO at Eagle Materials]

Yes. Phil, on your first question, look, a change in administration always has some speed bumps and bumps in the road as they're going through that transition. This is certainly no different, a lot of noise here and recently. But as it relates to the things that matter to Eagle, we don't think there's much of an issue there. We get a lot of noise, but things that matter at Eagle are we would expect to see infrastructure continue and other construction activity continue.

[Craig Kesler, EVP - Finance and Administration & CFO at Eagle Materials]

In

[Craig Kesler, EVP - Finance and Administration & CFO at Eagle Materials]

terms of tariffs on cement imports, TBD, of course, but it would certainly impact the cost of imported product into the U. S, not necessarily a dramatic impact to us directly, but indirectly would cause the marginal supply to be a higher cost ton.

[Philip Ng, Managing Director at Jefferies Financial Group]

Super. But it doesn't sound like you've seen any pause in projects on the public side thus far. I mean, I know there's not a lot getting done in the winter months of the year, but you haven't seen much activity slowdown on that front?

[Craig Kesler, EVP - Finance and Administration & CFO at Eagle Materials]

No, no.

[Philip Ng, Managing Director at Jefferies Financial Group]

Okay, super.

[Philip Ng, Managing Director at Jefferies Financial Group]

And then on the wallboard side of things, once again, the quarter was pretty impressive, demand was pretty resilient. And the way that you kind of characterize this environment, muted growth, but pretty steady. Is that what you're seeing on the order front as well? Because some of the distributors out there have talked about demand softening in single family as well as commercial, but I think the way you've kind of messaged it seems steady, but just want to make sure we're being thoughtful about this.

[Craig Kesler, EVP - Finance and Administration & CFO at Eagle Materials]

Yes. Ken, even though wallboard is an indoor sport, it's always hard to generate a lot of trend activity whether it's orders shipments in January, but we haven't seen any dramatic swings one way or the other within the wallboard business.

[Philip Ng, Managing Director at Jefferies Financial Group]

Okay. Appreciate all the great color guys. Thank you.

[Operator]

And the next question comes from Jonathan Bettenhausen with Truist Securities. Please go ahead.

[Jonathan Bettenhausen, Equity Research Associate at Truist Securities]

Hey guys, I'm on for Keith this morning. Thanks for taking my question. On Wallboard, it looks like the Wallboard volumes outperformed the industry manufacturer shipment number once again. What are the main drivers of that? Is this more of like a regional focus or are there some share gains going on?

[Jonathan Bettenhausen, Equity Research Associate at Truist Securities]

Just any color here would be helpful.

[Craig Kesler, EVP - Finance and Administration & CFO at Eagle Materials]

No. Look, I would say it's right on the margin. I think the industry was down 1.5% or so and we're up slightly. So very close to being in line with that. Our share hasn't changed much in the last 5 years.

[Craig Kesler, EVP - Finance and Administration & CFO at Eagle Materials]

There are certainly regional activities that we benefit from just given our footprint in the southern part of the country where construction activity is generally more robust. So I think it's more of that.

[Jonathan Bettenhausen, Equity Research Associate at Truist Securities]

Okay. That's helpful. Thank you.

[Operator]

This concludes our question and answer session. I would like to turn the conference back over to Mr. Hack for any closing remarks.

[Michael Haack, President & CEO at Eagle Materials]

Thank you, Dave. Next quarter marks the end of our fiscal year and we look forward to reflecting on the year we had, while also laying out our strategic priorities for the year ahead. Until then, and as always, we will focus on excellent operational execution and capitalizing on opportunities for our businesses. Thanks to everyone who joined the call today.

[Operator]

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Participants

Executives

• Craig Kesler, EVP - Finance and Administration & CFO

Analysts

• Michael Haack, President & CEO at Eagle Materials
• Trey Grooms, Managing Director at Stephens Inc
• Brent Thielman, MD & Senior Research Analyst at D.A. Davidson
• Asher Sohnen, Analyst at Citigroup
• Jerry Revich, Senior Investment Leader & Head of US Machinery, Infrastructure, Sustainable Tech franchise at Goldman Sachs
• Adam Thalhimer, Director of Research at Thompson Davis & Co
• Philip Ng, Managing Director at Jefferies Financial Group
• Jonathan Bettenhausen, Equity Research Associate at Truist Securities