Eagle Materials reports Q3 loss
Plant acquisition could result in 25% increase in annual cement capacity.
Eagle Materials reported a third quarter 2020 revenue of $350.2 million, rising 5% from revenue of $333.3 million in the third quarter 2019.
The Dallas, Texas-based company also reported a net loss of $114.6 million for the quarter compared to a net income of $57.7 million for the same period in the prior year.
Eagle manufactures and distributes Portland cement, gypsum wallboard and recycled gypsum paperboard, and concrete, sand and aggregates from more than 75 U.S. facilities.
During the quarter, Eagle entered into a definitive agreement to purchase the Kosmos cement plant in Louisville, Kentucky, as well as seven distribution terminals and raw-material reserves. The plant has the capacity to produce nearly 1.7 million tons of cement annually. Eagle expects that the acquisition will increase its U.S. annual cement capacity by approximately 25% to more than 7.5 million tons.
The purchase price is $665 million, subject to customary post-closing adjustments. Eagle expects the transaction to close in its fiscal 2020 fourth quarter.
The Bottom Line: Profits plummet as Eagle Materials reports a net loss of $114.6 million for Q3.
What the CEO said: “We are pleased that during the third quarter of fiscal 2020 we capitalized on robust underlying demand across our geographic footprint to achieve a 5% revenue improvement. Notably, our cement sales volume was up 7% to a record 1.4 million tons. Market demand for our wallboard also remained healthy, with shipments up 2%. Our operational cost-control initiatives and continued strong operational execution also contributed to the favorable third-quarter performance,” said Michael Haack, president and CEO of Eagle Materials.
Company info: The full third quarter 2020 report from Eagle Materials can be accessed here.
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