Eagle Materials Inc. Reports Second Quarter Results

Eagle Materials Inc. (NYSE: EXP) today reported financial results for the second quarter of fiscal 2010 ended September 30, 2009. Notable items for the quarter include:

• Net earnings of $12.2 million, or $0.28 per diluted share
• Revenues of $138.2 million
• Cash flow from operations was $39 million
• Net debt-to-total capitalization ratio declined to 40% from 48% a year ago

Revenues this quarter were down 23% compared with the same quarter a year ago. Net earnings were down 22% compared to the same quarter last year, or 13% when excluding the prior year’s after-tax gain on sale of railcars of $1.7 million, or $0.04 per diluted share. Lower operating costs across nearly all of Eagle’s businesses, as well as lower financing costs associated with lower borrowing levels, substantially offset the impact of quarterly sales volumes and price declines.

Gypsum Wallboard and Paperboard

Gypsum Wallboard and Paperboard’s second quarter operating earnings of $5.7 million were up 63% over the same quarter last year. Lower energy, transportation and raw materials costs were the primary drivers of the quarterly earnings improvement.

Gypsum Wallboard and Paperboard revenues for the second quarter totaled $68.7 million, a 28% decrease from the same quarter a year ago. The revenue decline reflects lower gypsum wallboard and paperboard sales volumes and prices. The average gypsum wallboard net sales price this quarter was $92.71 per MSF, 6% less than the same quarter a year ago. Gypsum Wallboard sales volume for the quarter of 469 million square feet (MMSF) represents a 16% decline from the same quarter last year.

Cement, Concrete and Aggregates

Operating earnings from Cement for the second quarter were $22.0 million, a 19% decline from the same quarter a year ago. Cement revenues for the quarter, including joint venture and intersegment revenues, totaled $72.9 million, 15% less than the same quarter last year. Cement sales volumes for the quarter were 790,000 tons, 5% below the same quarter a year ago.

Eagle’s purchased cement sales volumes for the quarter declined to approximately 15,000 tons, or 2% of total cement sales volume, compared to approximately 134,000 tons, or 16% of total sales volume for the quarter a year ago. The average net sales price this quarter was $85.99 per ton, 11% less than the same quarter last year.

Concrete and Aggregates reported a $0.3 million operating profit for the second quarter, down from the $1.4 million operating profit for the same quarter a year ago, primarily due to lower sales volumes in both Concrete and Aggregates and to lower net sales prices in Concrete.

Revenues from Concrete and Aggregates were $14.1 million for the quarter, 34% less than the same quarter a year ago. Concrete sales volume decreased 29% from the same quarter a year ago to 128,000 cubic yards. Concrete average net sales price for the quarter of $67.82 per cubic yard was 7% less than the same quarter a year ago. Aggregates sales volume of 0.9 million tons for this quarter is 32% less than the sales volume for the same quarter a year ago. Aggregates average net sales price for the quarter was $6.18, essentially flat compared to last year’s second quarter.

Details of Financial Results

Texas Lehigh Cement Company LP, one of our cement plant operations, is conducted through a 50/50 joint venture (the "Joint Venture”). We utilize the equity method of accounting for our 50% interest in the Joint Venture. For segment reporting purposes we proportionately consolidate our 50% share of the Joint Venture’s revenues and operating earnings, which is consistent with the way management organizes the segments in the Company for making operating decisions and assessing performance.

In addition, for segment reporting purposes, we report intersegment revenues as a part of a segment’s total revenues. Intersegment sales are eliminated on the income statement. Refer to Attachment 4 for a reconciliation of the amounts referred to above.

About Eagle Materials Inc.

Eagle Materials Inc. manufactures and distributes Cement, Gypsum Wallboard, Recycled Paperboard, Concrete and Aggregates from 25 facilities across the US. The company is headquartered in Dallas, Texas.

EXP’s senior management will conduct a conference call to discuss the financial results, forward-looking information and other matters at 2:00 p.m. Eastern Time (1:00 p.m. Central Time) on Thursday, October 22, 2009. The conference call will be webcast simultaneously on the EXP Web site http://www.eaglematerials.com. A replay of the webcast and the presentation will be archived on that site for one year. For more information, contact EXP at 214-432-2000.

Forward-Looking Statements. This press release 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 by the context of the statement and generally arise when the Company is discussing its beliefs, estimates or expectations. These statements are not historical facts or guarantees of future performance but instead represent only the Company's belief at the time the statements were made regarding future events which are subject to certain risks, uncertainties and other factors many of which are outside the Company's control. Actual results and outcomes may differ materially from what is expressed or forecast in such forward-looking statements. The principal risks and uncertainties that may affect the Company’s actual performance include the following: the cyclical and seasonal nature of the Company’s business; public infrastructure expenditures; adverse weather conditions; availability of raw materials; changes in energy costs including, without limitation, natural gas and oil; changes in the cost and availability of transportation; unexpected operational difficulties; inability to timely execute announced capacity expansions; governmental regulation and changes in governmental and public policy (including, without limitation, climate change regulation); changes in economic conditions specific to any one or more of the Company’s markets; competition; announced increases in capacity in the gypsum wallboard and cement industries; changes in the demand for residential housing construction or commercial construction; general economic conditions; and interest rates. For example, increases in interest rates, decreases in demand for construction materials or increases in the cost of energy (including, without limitation, natural gas and oil) could affect the revenues and operating earnings of our operations. In addition, changes in national or regional economic conditions and levels of infrastructure and construction spending could also adversely affect the Company's result of operations. These and other factors are described in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2009 and in its Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2009. These reports are filed with the Securities and Exchange Commission. All forward-looking statements made herein are made as of the date hereof, and the risk that actual results will differ materially from expectations expressed herein will increase with the passage of time. The Company undertakes no duty to update any forward-looking statement to reflect future events or changes in the Company's expectations.

For additional information, contact at 214/432-2000.

Steven R. Rowley
President and Chief Executive Officer

D. Craig Kesler
Executive Vice President and Chief Financial Officer

Robert S. Stewart
Executive Vice President, Strategy, Corporate Development and Communications

(1) Summary of Consolidated Earnings
(2) Revenues and Earnings by Lines of Business (Quarter)
(3) Revenues and Earnings by Lines of Business (Six Months)
(4) Sales Volume, Net Sales Prices and Intersegment and Cement Revenues
(5) Consolidated Balance Sheets

*Net of freight and delivery costs billed to customers.