Eagle Materials — Second Quarter Fiscal 2027 Earnings Summary

Financial Performance:

• Reported record revenue of $652.7 million for the quarter ended September 30, 2026, an increase from $638.9 million in the prior year period.
• Net earnings were $111.5 million, down from $137.4 million in the prior year quarter; diluted earnings per share were $3.63 compared to $4.23 previously.
• Adjusted EBITDA was $202.7 million, a decrease from $233.3 million in the prior year quarter.
• Gross profit declined to $174.7 million from $199.7 million in the prior year quarter.
• Corporate General and Administrative Expenses increased 26% to $26.9 million, driven by higher health insurance costs and expenses related to implementing a new enterprise resource planning system.
• Ended the quarter with total debt of $1.8 billion, net debt of $1.5 billion, and a net leverage ratio of 2.1x.
• Repurchased 304,881 shares of common stock for approximately $62 million during the quarter; total repurchases for the first half of the fiscal year were 711,381 shares for approximately $146.0 million.
• Cash and cash equivalents increased to $241.2 million as of September 30, 2026, from $35.0 million in the prior year period.

Guidance and Future Outlook:

• Management indicated that while higher interest rates, economic uncertainty, and geopolitical conditions may continue to affect construction activity in the near term, the company remains focused on factors within its control.
• Investments in the modernization of Mountain Cement and Duke, Oklahoma Gypsum Wallboard facilities are expected to deliver meaningful financial and strategic benefits, including strengthening low-cost operating positions, enhancing reliability and efficiency, and increasing production capacity.
• The company stated it is positioned to navigate changing market conditions and create value for shareholders over the long term through favorable market positions, low-cost operations, and disciplined capital allocation.

Business Segments and Product Lines:

• Heavy Materials: Revenue increased 2% to $477.8 million; operating earnings declined 12% to $113.0 million due to higher operating costs.
  • Cement revenue rose 1% to $390.5 million, while operating earnings fell 9% to $108.8 million due to higher fixed costs, raw material costs, and freight expenses; sales volume increased slightly to a record 2.2 million tons.
  • Concrete and Aggregates revenue increased 7% to $87.2 million, but operating earnings dropped 47% to $4.2 million due to higher maintenance, diesel, and production costs; aggregates sales volume decreased 6% to 1.9 million tons.
• Light Materials: Revenue increased 2% to $216.4 million; operating earnings declined 13% to $68.3 million primarily due to lower net sales prices and higher freight costs.
  • Gypsum Wallboard sales volume increased 7% to 696 million square feet; average net sales price decreased 10% to $209.37 per MSF due to higher freight costs.
  • Recycled Paperboard sales volume increased 5% to 86,000 tons; average net sales price increased 4% to $622.90 per ton.

Market and Competitive Landscape:

• Demand for Heavy Materials products was supported by spending on public infrastructure and large private non-residential construction projects.
• Elevated interest rates placed additional pressure on the residential construction market.
• Elevated diesel fuel prices increased transportation costs across all business lines.
• The company operates through a network of more than 70 facilities spanning 21 states.

Risks and Challenges:

• Operating environment challenges include elevated diesel fuel prices and higher interest rates driven by macroeconomic and geopolitical uncertainty.
• Forward-looking statements identify risks such as the cyclical and seasonal nature of businesses, fluctuations in public infrastructure expenditures, adverse weather conditions, and commodity price fluctuations.
• Potential risks include increases in raw material and energy costs, changes in transportation costs, operational difficulties, customer non-payment, supply chain interruptions, and regulatory changes.

Management Commentary and Tone:

• Michael Haack, President and CEO, noted that despite a challenging operating environment, the company's teams remained focused on employee safety, operational execution, customer service, and disciplined capital allocation.
• Management expressed confidence in the company's ability to navigate changing market conditions and create long-term shareholder value.
• The tone reflected a focus on operational execution and cost discipline amidst external headwinds.

Other Key Points:

• The company conducts one cement plant operation through a 50/50 joint venture, Texas Lehigh Cement Company LP, accounted for using the equity method.
• For segment reporting, the company proportionately consolidates its 50% share of the Joint Venture's revenue and operating earnings.
• Intersegment sales are eliminated on the consolidated income statement.
• A conference call to discuss results was scheduled for November 4, 2026, at 8:30 a.m. Eastern Time.