Eagle Materials Inc · NYSE:EXP
Eagle Materials — Investor Presentation (November 2005)
29 slides from Eagle Materials's investor presentation, Nov 9, 2005
Slide 1: Mapping a Strong Future
Mapping a Strong Future Investor Presentation Fall 2005 Eagle Materials Inc. NYSE: EXP and EXP.B www.eaglematerials.com
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified
Slide 3: Gypsum Wallboard, Cement, Paperboard, Concrete & Aggregates
Gypsum Wallboard Cement Paperboard Concrete & Aggregates
Slide 4: Eagle Materials' operations are well positioned
Mapping a Strong Future Eagle Materials' operations are well positioned Excellent Operators of Modern Assets High-speed wallboard lines and dry process cement plants Maintained in "better than new" condition Operated significantly above rated capacity Low cost producer in all segments A Disciplined
Slide 5: Executing the Strategy
Executing the Strategy ($ in millions) 02 03 04 05 06E Revenues 395 429 503 617 785 Revenues 02-06E CAGR - 15% $395 $503 $617 $785 For Fiscal Year Ending March 31 02 03 04 05 06E Op Income 79 102 115 172 240 Operating Income 02-06E CAGR - 25% $240 $172 $115 $102 $79 $429
Slide 6: Eagle's Wallboard Performance
Eagle's Wallboard Performance Segment Operating Earnings FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06E Segment Earnings 7 12 21 36 56 108 27.1 5 27 36 81.6 125 ($ in millions)
Slide 7: Eagle's Solid Cement Performance
Eagle's Solid Cement Performance Segment Operating Earnings FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06E Cement Earnings 26 35 40 48 57 53 59.6 60 54 50 57.6 78 ($ in millions)
Slide 8: Eagle's Demand Drivers
Eagle's Demand Drivers New Residential Commercial Construction Repair & Remodel Manufacturing Housing Wallboard 51 18 29 2 Wallboard New Commercial Construction 18% Manufacturing Housing 2% New Residential 51% Repair and Remodel 29% New Residential Commercial Construction Public Construction Other C
Slide 9: Favorable Industry Dynamics - FY 2006E
Favorable Industry Dynamics - FY 2006E Wallboard(1) Cement(2) Consumption Grew 5.5% for the first 9 months of Calendar 2005 Grew 5.8% for the first 8 months of Calendar 2005 Capacity Approximately 0.5 BSF, or 1%, added in Calendar 2005 Additions expected to be no more than 1%, or 1 million tons Pric
Slide 10: Favorable Industry Dynamics - FY 2007E
Favorable Industry Dynamics - FY 2007E Wallboard (1) Cement (2) Consumption Expected to increase 1% to 35.8 BSF in Calendar 2006 Expected to grow 3% in calendar 2006 to 136.9 million tons Capacity Only one minor expansion project expected to come on-line during Calendar 2006 Additions expected to be
Slide 11: Eagle's Wallboard Current Operations
Current Operations: Capacity of 2.8 bsf 8% U.S. market share (5th largest) FY 2006 Expectations: All-time record highs for production, sales volume and operating earnings Operating earnings of approximately $125 million (42% greater than FY 2005) Beyond FY 2006: Still upside pricing and margin poten
Slide 12: Wallboard Utilization Outlook
Wallboard Utilization Outlook (numbers in billion square feet) Calendar 2005 Calendar 2006 Consumption Estimates: New Residential (51% of Demand) 18.2 17.4 New Commercial (18% of Demand) 6.4 6.9 Repair & Remodel (29% of Demand) 10.3 10.8 Manufactured Housing (2% of Demand) 0.6 0.7 Total 35.5 35.8 Co
Slide 13: Wallboard Utilization and Pricing
Fiscal Years Capacity Utilization AGC Net Sales 86 0.95 140.69 87 0.88 114.31 88 0.82 94.89 89 0.87 96.11 90 0.85 76.07 91 0.75 74.36 92 0.84 67.34 93 0.88 80 94 0.94 68 95 0.95 88.53 96 0.91 88.21 97 0.95 99.39 98 0.95 109.01 99 0.98 122.55 00 1 153.57 01 0.85 91.12 02 0.86 72.97 03 0.87 87.12 04 0
Slide 14: Eagle's Wallboard Quarterly Net Sales Price Trend
Eagle's Wallboard Quarterly Net Sales Price Trend 12/31/03 3/31/04 6/30/04 9/30/04 12/31/04 3/31/05 6/30/05 9/30/05 Price 86 95 101 110 109 115 119 132 $/MSF $95 $101 $110 $109 $115 $86 $119 $132
Slide 15: American Gypsum Plant Georgetown, South Carolina
American Gypsum Plant Georgetown, South Carolina Project Background New gypsum wallboard plant with annual design capacity of 750 mmsf Long-term supply agreement with Santee Cooper, a South Carolina service authority for synthetic gypsum Construction expected to be completed by mid 2007 Increases Ea
Slide 16: Eagle's Cement Current Operations
Current Operations Approximately 2.65 million tons of capacity 3% market share (12th in North America) Low costs and solid customer relationships have allowed us to sell out our production for 19 consecutive years FY 2006 Expectations All-time record highs for production, sales volume and operating
Slide 17: Cement Industry Update
Cement Industry Update Consumption Record high shipments through August 2005 - 90.0 millions tons (up 5.8% over 2004) Calendar 2006 total shipments we expect 136.9 million tons (3% greater than calendar 2005) Capacity Current domestic capacity of approximately 102 million tons 25%+ imports needed to
Slide 18: Cement Industry Overview: Capacity vs. Consumption
Capacity Consumption 75 91 72 76 90 76 77 92.5 82 78 91.5 89 79 94 88 80 91 79 81 94 75 82 91 67 83 93 74 84 92 85 85 89.5 88 86 88.5 91 87 87.5 94 88 88 93 89 86 91 90 85 90 91 86 80 92 87 84 93 87 88 94 87.5 94 95 88.5 95 96 88 100 97 89 106 98 91 114 99 92.5 120 0 94 121 1 96 124 2 98 120 3 100.4
Slide 19: Illinois Expansion Update
Illinois Expansion Update Project Background $65 million expansion Increases capacity by 65% to 1.1 million tons Expansion expected to be complete in winter of 2006 Expected to reduce manufacturing costs by approximately 20% Expanded market share has already been established through imports Project
Slide 20: Illinois Cement Construction of Cement Storage Dome
Illinois Cement Construction of Cement Storage Dome
Slide 21: Eagle's Gypsum Paperboard
Eagle's Gypsum Paperboard Current Operations Original capacity of 220,000 has been increased to 325,000 Increased paperboard capacity is expected to be absorbed by Eagle's future expansion of its wallboard capacity 40% of capacity consumed internally, 45% sold through long-term sales contract with w
Slide 22: Eagle's Concrete and Aggregates Operations
Eagle's Concrete and Aggregates Operations Current Operations Strong competitive positions in local markets (highly fragmented industries) Capacity Aggregates - 5.5 million tons Concrete - 850,000 cubic yards FY 2006 Expectations Record high sales volume in both concrete and aggregates Operating ear
Slide 23: Northern California New Clamshell Dredge
Northern California New Clamshell Dredge
Slide 24: Eagle Materials: A Cash Flow Company
94 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 Revenues Operating Cash Flow Eagle Materials A Cash Flow Company ($ Millions)
Slide 25: EXP's Annual Dividend is $1.20 Per Share
EXP's Annual Dividend is $1.20 Per Share Yield (1) Payout (2) (1) Based on $110 per share stock price (2) Based on TTM reported earnings EXP's Dividend Industry Average* *Industry average includes Vulcan Materials, Rinker Group, Florida Rock, Martin Marietta, Lafarge NA, and Texas Industries. 1.6% 1
Slide 26: Returning Cash to Shareholders
Returning Cash to Shareholders RIN MLM FRK VMC BPB LAF CMX Eagle Total Returns 0.009 0.011 0.013 0.016 0.018 0.021 0.022 0.027 RIN MLM FRK VMC BPB LAF CMX Eagle Dividend 0.009 0.011 0.013 0.016 0.018 0.012 0.022 0.005 Repurchases 0.009 0.022 1.3% 1.6% 1.8% 2.1% 2.2% 2.7% 1.1% 0.9% Source: Company es
Slide 27: The Road Ahead
The Road Ahead Eagle is well positioned now and is improving its future position by adding new low cost production capacity in growing markets We continue to increase the production capacities of our existing assets with minimal additional investment We will use our strong cash flow to proceed with
Slide 28: Guidance
Guidance FY 2005 FY 2006E Net Income ($ in millions) $107 $137 - $142 Earnings per Diluted Share $5.73 $7.60 - $7.90 Average Price/mill net Assumptions: Wallboard ($/msf) $109 $130 Cement ($/ton) $71 $82
Slide 29: Contact Information
Contact Information Steve Rowley, President and CEO Telephone: 214-432-2020 Email: srowley@eaglematerials.com Arthur Zunker, Senior Vice President and CFO Telephone: 214-432-2010 Email: azunker@eaglematerials.com Craig Kesler, Vice President - Investor Relations and Corporate Development Telephone:
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