Q1 2025 Eagle Materials Inc Earnings Call

Good day, everyone, and welcome to Eagle Materials' first quarter fiscal 2025 earnings conference call.

quarter, Fiscal 2025 earnings conference call. Today's event is being recorded.

Operator: This is your fiscal 2025 earnings conference call. Today's event is being recorded. At this time, I'd like to turn the floor over to Eagle's President and Chief Executive Officer, Mr. Michael Haack. Mr. Haack, please go ahead.

Jamie: At this time, I'd like to turn the floor over to Eagle's President and Chief Executive Officer, Mr. Michael Haack. Mr. Haack, please go ahead.

Today's event is being recorded.

Speaker Change: At this time, I'd like to turn the floor over to Eagle's President and Chief Executive Officer, Mr. Michael Haack. Mr. Haack, please go ahead.

Michael Haack: Thank you, Jamie. Good morning. Welcome to Eagle Materials conference call for our first quarter of fiscal year 2025. This is Michael Haack. Joining me today are Craig Kessler, our Chief Financial Officer, and Al Tatek, Senior Vice President of Investor Relations, Strategy, and Corporate Development. 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.

Michael R. Haack: Good morning. Welcome to Eagle Materials' conference call for our first quarter of fiscal year 2025. This is Michael Haack.

Michael R. Haack: Thank you, Jamie.

Michael R. Haack: Good morning. Welcome to Eagle Materials' conference call for our first quarter of fiscal year 2025. This is Michael Haack.

Michael R. Haack: Joining me today are Craig Kessler, our Chief Financial Officer, and Alex Haddock, Senior Vice President of Investor Relations, Strategy, and Corporate Development. There will be a slide presentation made in connection with this call. To access it, please go to www.eaglematerials.com and click on the link to the webcast.

Speaker Change: Joining me today are Craig Kessler, our Chief Financial Officer, and Alex Haddock, Senior Vice President of Investor Relations, Strategy, and Corporate Development.

Speaker Change: 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.

Michael R. Haack: 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. Today, I'm pleased to discuss a good start to our 2025 fiscal year. The first quarter results include record revenue of $609 million and a 16% increase in earnings per share.

Speaker Change: While you're accessing the slides, please note that the first slide covers our cautionary disclosure regarding forward-looking statements made during this call.

Speaker Change: 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.

For further information, please refer to this disclosure, which is also included at the end of our press release.

Michael Haack: Today I'm pleased to discuss a good start to our 2025 fiscal year. The first quarter results include record revenue of $609 million and a 16% increase in earnings per share. Our performance this quarter reflects our consistent, disciplined approach to managing and operating our businesses through shifting conditions. We achieved our positive results during the quarter, characterized by challenging weather conditions in our solid performance, largely led by operational efforts of our employees. At Eagle, we maintain our consistent approach to running our businesses, regardless of the challenges presented. Our approach revolves around several aspects that we hold as standards.

Speaker Change: Today, I'm pleased to discuss a good start to our 2025 fiscal year. The first quarter results include record revenue of $609 million and a 16% increase in earnings per share.

Michael R. Haack: Our performance this quarter reflects our consistent, disciplined approach to managing and operating our businesses through shifting conditions. We achieved positive results during the quarter characterized by challenging weather conditions, and our solid performance was largely led by the operational efforts of our employees. At Eagle, we maintain our consistent approach to running our businesses, regardless of the challenges presented. Our approach revolves around several aspects that we hold as standard. The first focus area is safety.

Speaker Change: Our performance this quarter reflects our consistent, disciplined approach to managing and operating our businesses through shifting conditions.

Speaker Change: We achieved our positive results during the quarter, characterized by challenging weather conditions, and our solid performance was largely led by operational efforts of our employees.

Speaker Change: At Eagle, we maintain our consistent approach to running our businesses, regardless of the challenges presented. Our approach revolves around several aspects that we hold as standards.

Michael Haack: The first focus area is on safety. It is our belief that a safe operation leads to superior operational and financial results. As I travel to our facilities across the country, it is always impressive to see our employees across all of our businesses stay committed to maintaining the safest possible working environment. Their efforts are demonstrated through our safety statistics, which are consistently below industry averages, but also, most importantly, through their interactions with one another, ensuring each job can be done safely.

Michael R. Haack: It is our belief that a safe operation leads to superior operational and financial results. As I travel to our facilities across the country, it is always impressive to see our employees across all of our businesses stay committed to maintaining the safest possible working environment. Their efforts are demonstrated through our safety statistics, which are consistently below industry averages, but also, most importantly, through their interactions with one another, ensuring each job can be done safely.

Speaker Change: The first focus area is on safety. It is our belief that a safe operation leads to superior operational and financial results.

Speaker Change: As I travel to our facilities across the country, it is always impressive to see our employees, across all of our businesses, stay committed to maintaining the safest possible working environment.

Speaker Change: Their efforts are demonstrated through our safety statistics, which are consistently below industry averages, but also, most importantly, through their interactions with one another, ensuring each job can be done safely.

Michael Haack: Second, we are relentlessly focused on operating as efficiently as possible. We are always proactive with our maintenance programs to keep our facilities in like new condition, enabling us to perform with high efficiency and support our customers. This proactive approach, regarding maintenance last quarter, benefited us this quarter. We were able to navigate the weather challenges well and manage our costs accordingly.

Michael R. Haack: Second, we are relentlessly focused on operating as efficiently as possible. We are always proactive with our maintenance programs to keep our facilities in like-new condition, enabling us to perform with high efficiency and support our customers. This proactive approach regarding maintenance last quarter benefited us this quarter; we were able to navigate the weather challenges well and manage our costs accordingly. Third, we continuously maintain our focus on sustainability. This quarter, like others, has several highlights I want to mention.

Speaker Change: Second, we are relentlessly focused on operating as efficiently as possible.

Speaker Change: We are always proactive with our maintenance programs to keep our facilities in like-new condition, enabling us to perform with high efficiency and support our customers.

Speaker Change: This proactive approach regarding maintenance last quarter benefited us this quarter. We were able to navigate the weather challenges well and manage our costs accordingly.

Michael Haack: Third, we continuously maintain our focus on sustainability. This quarter, like others, have several highlights I want to mention. We continue to make progress on several organic investments, including our joint venture, Texas Lehigh SLAG grinding facility, which is nearing completion and will have meaningful economic and environmental benefits by providing SLAG to our customers and Texas. We also recently announced the expansion and upgrade of our mountain cement facility. This upgrade will make this plant more efficient, aligning not only with our focus on sustainability by doing more with less, but also expanding our low-cost producer position. Dirt work on this project has begun, and we will continue to provide updates on this project as we reach other milestones.

Speaker Change: Third, we continuously maintain our focus on sustainability. This quarter, like others, have several highlights I want to mention.

Michael R. Haack: We continue to make progress on several organic investments, including our joint venture, Texas Lehigh Slag Grinding Facility, which is nearing completion and will have meaningful economic and environmental benefits by providing slag to our customers in Texas. We also recently announced the expansion and upgrade of our mountain cement facility. This upgrade will make this plant more efficient, aligning not only with our focus on sustainability by doing more with less, but also expanding our low-cost producer position. DIRT work on this project has begun, and we will continue to provide updates on this project as we reach other milestones.

Speaker Change: We continue to make progress on several organic investments, including our joint venture Texas Lehigh Slag Grinding Facility, which is nearing completion and will have meaningful economic and environmental benefits by providing slag to our customers in Texas.

Speaker Change: We also recently announced the expansion and upgrade of our mountain cement facility. This upgrade will make this plant more efficient, aligning not only with our focus on sustainability by doing more with less, but also expanding our low-cost producer position.

Speaker Change: DIRT work on this project has begun and we will continue to provide updates on this project as we reach other milestones.

Michael Haack: Another area we are focused on with regards to sustainability is around the products we produce. A few highlights regarding our work in this area are we continue our transition to Portland Line Stone Cement or PLC and other blended products to reduce our CO2 intensity. Currently, 90 percent of our production is PLC or blended cement. We are also in process of installing two alternative fuel systems to expand the usage of these fuels. Our capital project at our paper mill to cut our water usage in half continues and is scheduled to be completed mid next year.

Michael R. Haack: Another area we are focused on with regard to sustainability is the products we produce. A few highlights regarding our work in this area are: continue our transition to Portland Limestone Cement, or PLC, and other blended products to reduce our CO2 intensity. Currently, 90% of our production is PLC or blended cement. We are also in the process of installing two alternative fuel systems to expand the usage of these fuels.

Speaker Change: Another area we are focused on with regards to sustainability is around the products we produce. A few highlights regarding our work in this area are

Speaker Change: We continue our transition to Portland Limestone Cement, or PLC, and other blended products to reduce our CO2 intensity. Currently, 90% of our production is PLC, or blended cement.

Speaker Change: We are also in the process of installing two alternative fuel systems to expand the usage of these fuels.

Michael R. Haack: Our capital project at our paper mill to cut our water usage in half continues and is scheduled to be completed mid-next year. Now, let me turn to some financial observations for the quarter. Regarding our demand outlook for our businesses, we see the cadence and timing of our business demand drivers vary, but we also see the outlook for each business continuing to skew to the upside. In cement, the demand visibility picture remains strong. CBO data shows years of public infrastructure spending ahead, largely driven by the IIJA bill. Non-residential construction, especially as it relates to heavy manufacturing projects, should continue to remain at elevated levels.

Speaker Change: Our capital project at our paper mill to cut our water usage in half continues, and it's scheduled to be completed mid-next year.

Michael Haack: Now let me turn to some financial observations for the quarter. Regarding our demand outlook for our businesses, we see the cadence in timing of our business demand drivers vary, but we also see the outlook for each business continuing to skew to the upside. In cement, the demand's visibility picture remains strong. CBO data shows years of public infrastructure spend ahead, largely driven by the IIA bill. Non-residential construction, especially as it relates to heavy manufacturing projects, should continue to remain at elevated levels. Both infrastructure and non-residential projects are typically multi-year projects that provide confidence around our visibility over the coming years.

Speaker Change: Now let me turn to some financial observations for the quarter.

Speaker Change: Regarding our demand outlook for our businesses, we see the cadence and timing of our business demand drivers vary, but we also see the outlook for each business continuing to skew to the upside. In cement, the demand visibility picture remains strong.

Speaker Change: CBO data shows years of public infrastructure spend ahead, largely driven by the IIJA bill. Non-residential construction, especially as it relates to heavy manufacturing projects, should continue to remain at elevated levels.

Michael R. Haack: Both infrastructure and non-residential projects are typically multi-year projects that provide confidence around our visibility over the coming years. We also benefit from our geographic footprint, and our markets generally outperform the national average. While weather impacted all of our region,

Speaker Change: Both infrastructure and non-residential projects are typically multi-year projects that provide confidence around our visibility over the coming years.

Michael Haack: We also benefit from our geographic footprint, and our markets generally outperform the national average. While weather impacted all our regions, it did so at different magnitudes and pushed out the construction season to varying degrees. If the demand fundamentals we see stay in place, we think the cement business will continue to see strong performance, especially given the US manufacturing supply response is more limited than in any other cycle.

Speaker Change: We also benefit from our geographic footprint, and our markets generally outperform the national average.

Speaker Change: While weather impacted all our regions,

Speaker Change: It did so at different magnitudes and pushed out the construction season to varying degrees.

Michael R. Haack: If the demand fundamentals we see do stay in place, we think the cement business will continue to see strong performance, especially given the U.S. manufacturing supply response is more limited than in any other cycle. Regarding the wallboard side of our business, in the near term, the demand cycle is harder to predict right now, and much will depend on how the economy fares, as well as how our policymakers react in response to the economic data.

Speaker Change: If the demand fundamentals we see do stay in place, we think the cement business will continue to see strong performance, especially given the U.S. manufacturing supply response is more limited than in any other cycle.

Michael Haack: Regarding the wallboard side of our business, in the near term, frankly, the demand cycle is harder to predict right now, and much will depend on how the economy fares as well as how our policymakers react in response to the economic data. As we've said many times, we continue to believe in the structural characteristics of our wallboard business, especially as the supply has continued to come offline over the last several years. Some key facts that lead us to believe this are we have been underbuilding housing against underlying demand in the US for a long time. This underbuilding has led to a shortage of homes while household formations expand.

Speaker Change: Regarding the wallboard side of our business, in the near term, frankly, the demand cycle is harder to predict right now, and much will depend on how the economy fares, as well as how our policy makers react in response to the economic data.

Michael R. Haack: As we've said many times, we continue to believe in the structural characteristics of our wallboard business, especially as the supply has continued to come offline over the last several years. Some key facts that lead us to believe this are: We have been underbuilding housing against underlying demand in the U.S. for a long time. This underbuilding has led to a shortage of homes while household formations expand.

Speaker Change: As we've said many times, we continue to believe in the structural characteristics of our wallboard business, especially as the supply has continued to come offline over the last several years.

Speaker Change: Some key facts that lead us to believe this are...

Speaker Change: We have been under-building housing against underlying demand in the U.S. for a long time. This under-building has led to a shortage of homes while household formations expand.

Michael Haack: In addition, the US existing housing stock continues to age and is older than ever, giving us further confidence in the medium and long-term demand profile for our wallboard business. Business. But as this cycle has already proven out, we believe both demand and supply fundamentals of the wallboard industry creating an appealing performance backdrop for our business.

Michael R. Haack: In addition, the U.S. existing housing stock continues to age and is older than ever, giving us further confidence in the medium and long-term demand profile for our wallboard business. But as this cycle has already proven, we believe both demand and supply fundamentals of the wallboard industry create an appealing performance backdrop for our business. As we look forward, even with some of the uncertainties I mentioned, we are confident we can continue our track record of superior margin performance.

Speaker Change: In addition, the U.S. existing housing stock continues to age and is older than ever, giving us further confidence in the medium and long-term demand profile for our wallboard business.

Speaker Change: But as this cycle has already proven out, we believe both demand and supply fundamentals of the wallboard industry create an appealing performance backdrop for our business.

Michael Haack: As we look forward, even with some of the uncertainties I mentioned, we are confident we can continue our track record of superior margin performance, setting the industry benchmark for our low-cost producer position. To that end, I'll conclude with some remarks that largely mirror my opening comments on the consistency of our approach to running our businesses exceptionally well in shifting economic conditions. As we look forward to the quarters, years, and even cycles ahead, we are committed to looking for opportunities to strengthen our core businesses across both the heavy and light material segments through investments, both organically and through M&A.

Speaker Change: As we look forward, even with some of the uncertainties I mentioned, we are confident we can continue our track record of superior margin performance, setting the industry benchmark for our low-cost producer position.

Michael R. Haack: To that end, I'll conclude with some remarks that largely mirror my opening comments on the consistency of our approach to running our businesses exceptionally well in the face of changing economic conditions. As we look forward to the quarters, years, and even cycles ahead, we are committed to looking for opportunities to strengthen our core businesses across both the heavy and light material segments through investments, both organically and through M&A. Our consistent strategy has led to superior shareholder returns over the history of our company, and we believe these unique investments, coupled with our strict strategic and financial investment criteria, will generate similar outstanding returns in the future.

Speaker Change: To that end, I'll conclude with some remarks that largely mirror my opening comments on the consistency of our approach to running our businesses exceptionally well and shifting economic conditions.

Speaker Change: As we look forward to the quarters, years, and even cycles ahead, we are committed to looking for opportunities to strengthen our core businesses across both the heavy and light material segments through investments, both organically and through M&A.

Michael Haack: Our consistent strategy has led to superior shareholder returns over the history of our company, and we believe these unique investments, coupled with our strict strategic and financial investment criteria, will generate similar outstanding returns in the future.

Speaker Change: Our consistent strategy has led to superior shareholder returns over the history of our company and we believe these unique investments, coupled with our strict strategic and financial investment criteria, will generate similar outstanding returns in the future.

Michael Haack: Another key tenant to maintaining a strong core is keeping our balance sheet healthy. We have generally kept our leverage at or below 1.5 times through the last several years. This allows us to execute on investment opportunities, but it also gives us the flexibility to return our excess free cash flow to shareholders, mostly to reshare buybacks. Finally, the equally important will make our core business stronger by executing operationally. As our long chat cracker of performance shows, we will achieve this while keeping our people safe and being excellent environmental stewards in the communities we operate in.

Michael R. Haack: Another key tenet to maintaining a strong core is keeping our balance sheet healthy. We have generally kept our leverage at or below 1.5 times through the last several years. This allows us to execute on investment opportunities, but it also gives us the flexibility to return our excess free cash flow to shareholders, mostly through share buybacks. Finally, but equally important, we'll make our core business stronger by executing operationally. With that, I'll turn it over to Craig for more details on our financial...

Speaker Change: Another key tenet to maintaining a strong core is keeping our balance sheet healthy. We have generally kept our leverage at or below 1.5 times through the last several years.

Speaker Change: This allows us to execute on investment opportunities, but it also gives us the flexibility to return our excess free cash flow to shareholders, mostly through share buybacks.

Speaker Change: Finally, but equally important, we'll make our core business stronger by executing operationally.

Speaker Change: As our long track record of performance shows, we will achieve this while keeping our people safe and being excellent environmental stewards in the communities we operate in. With that, I'll turn it over to Craig for more details on our financials.

Craig Kessler: With that, I'll turn it over to Craig for more details on our financials. Thank you, Michael. As mentioned, first quarter revenue was a record $609 million, an increase of 1%. The increase primarily reflects higher cement and wallboard sales prices, and record paperboard sales volume, partially offset by lower cement sales volume, which I'll comment on during the segment discussion. First quarter earnings per share was a record $3.94; that's a 16% increase from the prior year. The increase was driven by higher earnings and a 4% reduction in fully diluted shares due to our share buyback program.

Craig Kessler: As mentioned, first quarter revenue was a record $609 million, an increase of 1%. The increase primarily reflects higher cement and wallboard sales prices and record paperboard sales volumes, partially offset by lower cement sales volumes, which I'll comment on during the segment discussion. First quarter earnings per share was a record $3.94.

Craig Kessler: Thank you, Michael. As mentioned, first quarter revenue was a record $609 million, an increase of 1%. The increase primarily reflects higher cement and wall board sales prices and record paper board sales volume.

Craig Kessler: Partially offset by lower cement sales volume, which I'll comment on during the segment discussion.

Craig Kessler: First quarter earnings per share was a record $3.94, that's a 16% increase from the prior year. The increase was driven by higher earnings and a 4% reduction in fully diluted shares due to our share buyback program.

Craig Kessler: That's a 16% increase from the prior year. The increase was driven by higher earnings and a 4% reduction in fully diluted shares due to our share buyback program. Turning now to segment performance on the next slide.

Craig Kessler: Turning now to segment performance on the next slide. In our heavy material sector, which includes our cement and concrete and aggregate segments, revenue was up 1%, driven primarily by cement sales price increases implemented earlier this year. Higher cement prices were partially offset by lower cement sales volume, as wet weather delayed construction projects, hampering cement, concrete, and aggregates volume during the quarter. In addition, June of 2024 had two fewer shipping days than last June. Operating earnings were up 14%, primarily because of increased cement prices, lower fuel costs within the cement business. and lower maintenance costs during our planned annual maintenance outages.

Craig Kessler: Turning now to segment performance on the next slide.

Craig Kessler: In our heavy materials sector, which includes our cement and concrete, and aggregate segments, revenue was up one percent, driven primarily by cement sales price increases implemented earlier this year. Higher cement prices were partially offset by lower cement sales volume as wet weather delayed construction projects, hampering cement, concrete, and aggregate volumes during the quarter. In addition, June of 2024 had two fewer shipping days than last year.

Craig Kessler: In our heavy materials sector, which includes our cement and concrete and aggregate segments, revenue was up 1%, driven primarily by cement sales price increases implemented earlier this year.

Craig Kessler: Higher cement prices were partially offset by lower cement sales volume as wet weather delayed construction projects, hampering cement, concrete, and aggregates volume during the quarter. In addition, June of 2024 had two fewer shipping days than last June .

Craig Kessler: Operating earnings were up 14%, primarily because of increased cement prices, lower fuel costs within the cement business, and lower maintenance costs during our planned annual maintenance outages. In addition, last year's quarterly results included approximately $2.8 million of costs associated with the step-up in inventory values related to the terminal Stockton acquisition. Moving to the light materials sector on the next slide, revenue in the sector increased 2%. Reflecting higher wall board sales prices and record recycled paper board sales volume.

Craig Kessler: Operating earnings were up 14%, primarily because of increased cement prices, lower fuel costs within the cement business, and lower maintenance costs during our planned annual maintenance outages.

Craig Kessler: In addition, last year's quarterly results included approximately $2.8 million of costs associated with the step-up in inventory values related to the terminal Stockton acquisition.

Craig Kessler: In addition, last year's quarterly results included approximately $2.8 million of costs associated with the step-up in inventory values related to the terminal Stockton acquisition.

Craig Kessler: Moving to the light material sector on the next slide, revenue in the sector increased 2%, reflecting higher wallboard sales prices and record recycled paperboard sales volume. Operating earnings in the sector increased 5% to $102 million, reflecting higher net sales prices and lower input costs, primarily for freight and energy.

Craig Kessler: Moving to the light materials sector on the next slide.

Craig Kessler: Revenue in the sector increased 2%, reflecting higher wall board sales prices and record recycled paper board sales volume.

Craig Kessler: Operating earnings in the sector increased 5% to $102 million, reflecting higher net sales prices and lower input costs, primarily for freight and energy. Now, look at our cash flow. We continue to generate substantial cash flow and allocate capital in a disciplined way in line with our strategic priorities. In the first quarter, operating cash flow decreased by 6% to $133 million, reflecting improved earnings offset by increased working capital. Capital spending decreased to $33 million.

Craig Kessler: Operating earnings in the sector increased 5% to $102 million, reflecting higher net sales prices and lower input costs, primarily for freight and energy.

Craig Kessler: Looking now at our cash flow, we continue to generate substantial cash flow and allocate capital in a disciplined way in line with our strategic priorities. In the first quarter, operating cash flow decreased by 6% to $133 million, reflecting improved earnings offset by increased working capital. Capital spending decreased to $33 million, and we repurchased 348,000 shares of our common stock for $85.5 million, and paid our quarterly dividend, returning $94 million to shareholders. We have 5.5 million shares remaining under our current repurchase authorization.

Craig Kessler: Looking now at our cash flow.

Craig Kessler: We continue to generate substantial cash flow and allocate capital in a disciplined way in line with our strategic priorities.

Craig Kessler: In the first quarter, operating cash flow decreased by 6% to $133 million, reflecting improved earnings offset by increased working capital.

Craig Kessler: Capital spending decreased to $33 million, and we repurchased 348,000 shares of our common stock for $85.5 million and paid our quarterly dividend, returning $94 million to shareholders.

Craig Kessler: We have five and a half million shares remaining under our current repurchase authorization.

Craig Kessler: Finally, a look at our capital structure, which continues to give us significant financial flexibility. At June 30, 2024, our net debt to cap ratio was 44%, and our net debt to even dollar leverage ratio remained at 1.3 times. We ended the quarter with $47 million of cash on hand; total committed liquidity at the end of the quarter was approximately $607 million, and we have no meaningful near-term debt maturities.

Craig Kessler: And we repurchased 348,000 shares of our common stock for $85.5 million and paid our quarterly dividends, returning $94 million to shareholders. We have five and a half million shares remaining under our current repurchase authorization. Finally, a look at our capital structure, which continues to give us significant financial flexibility. At June 30, 2024, our net debt-to-capital ratio was 44%, and our net debt to EBITDA leverage ratio remained at 1.3 times. We ended the quarter with $47 million of cash on hand. Total committed liquidity at the end of the quarter was approximately $607 million, and we had no meaningful near-term debt maturity. Thank you for attending today's call. We'll now move to the question and answer session.

Craig Kessler: Finally, a look at our capital structure, which continues to give us significant financial flexibility.

Craig Kessler: At June 30, 2024, our Net Debt to Cap Ratio was 44% and our Net Debt to Evendow Leverage Ratio remained at 1.3 times.

Craig Kessler: We ended the quarter with $47 million of cash on hand, total committed liquidity at the end of the quarter was approximately $607 million, and we have no meaningful near-term debt maturities.

Jamie: Thank you for attending today's call. We'll now move to the question and answer session, Jamie. Ladies and gentlemen, at this time, if you would like to ask a question, please press star and then one. To remove yourself from the question queue, you may press star and two.

Craig Kessler: Thank you for attending today's call. We'll now move to the question and answer session. Jamie?

Operator: Ladies and gentlemen, at this time, if you would like to ask a question, please press star and then 1. To remove yourself from the question queue, you may press star and 2. If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing the keys to ensure the best sound quality.

Jamie: Ladies and gentlemen, at this time, if you would like to ask a question, please press star and then 1. To remove yourself from the question queue, you may press star and 2.

If you are using a speaker phone, we do ask that you please pick up the handset prior to pressing the keys to ensure the best sound quality. Once again, that is star and then one to join the question queue.

Jamie: If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing the keys to ensure the best sound quality.

Operator: Once again, that is the star and then one to join the question. Our first question today comes from Trey Grooms from Stevens, Inc. Please go ahead with your question.

Jamie: Once again, that is star and then 1 to join the question queue.

Trey Grooms: Our first question today comes from Trey Grooms from Steven Zayn. Please go ahead with your question. Good morning, and thanks for taking my question. First off, nice improvement on the margins and both cement and wallboard. I guess maybe first on wallboard, OCC costs have been rising, paperboard margins, a little bit of compression in the quarter. So given the timing differences between paperboard and then the wallboard business, how should we be thinking about the kind of directional impact, maybe to wallboard here in the near term and then also with that gas pulling back again still pretty low.

Trey Grooms: Hey, good morning. And thanks for taking my question.

Jamie: Our first question today comes from Trey Grooms from Stevens Inc. Please go ahead with your question.

Craig Kessler: First off, you know, nice improvement in the margins on both cement and wallboard. But I guess maybe first on wallboard, you know, OCC costs have been rising, and paperboard margins saw a little bit of compression in the quarter. So, you know, given the timing differences, you know, between paperboard and then the wallboard business, how should we be thinking about the kind of directional impact, maybe to wallboard, here in the near term? And then also, you know, with NatGas pulling back again, still still pretty low. Could that help offset it? And then Craig, if you could maybe give us an update on where you stand with your hedging efforts there with NatGas.

Trey Grooms: Hey, good morning and thanks for taking my question.

Trey Grooms: First off, you know, nice improvement on the margins in both cement and wallboard. But I guess maybe first on wallboard, you know, OCC costs have been...

Speaker Change: rising. Paperboard margins saw a little bit of compression in the quarter. So, you know, given the timing differences, you know, between paperboard and then the wall board business...

Speaker Change: How should we be thinking about the kind of directional impact maybe to wallboard here in the near term and then also, you know, with NatGas?

Could that help offset, and then Craig, if you could maybe give us an update on where you stand with your hedging efforts there with that gas.

Craig Kessler: Pulling back again, still pretty low. Could that help offset? And then Craig, if you could maybe give us an update on where you stand with your hedging efforts there with NatGas.

Craig Kessler: Yes, thanks Trey. You know, from OCC recycled fiber costs, which are the primary raw material for the paper business. You know, we saw those costs go up significantly the second half of calendar 23, and into early calendar 24. I will tell you April, May, and June OCC prices have been flat. So we will pass kind of the earlier part of the year through to the wallboard business here in the September quarter, but you know given where prices have gone over the last couple of months, it would seem to stay right around that level, but you'll see a little bit of inflation there in wall board, whereas the paper mill will pass that through in a little higher prices.

Craig Kessler: Yes, thanks, Trey. You know, from a OCC recycled fiber cost, which are the primary raw materials for the paper business. We saw those costs up significantly a second half of calendar 23 and into early calendar 24. I will tell you April, May, and June OCC prices have been flat.

Craig Kessler: Yes, thanks Trey.

Speaker Change: You know, from a OCC recycled fiber costs, which are the primary raw material for the paper business.

Speaker Change: You know, we saw those costs up significantly the second half of calendar 23.

Speaker Change: and in the early calendar 24, I will tell you April , May, and June OCC prices have been flat. So that we will pass kind of the earlier part of the year through to the wall board business here in the

So that we will pass kind of the earlier part of the year through to the wallboard business here in the September quarter. But you know, given where prices have gone over the last couple of months, it would. It would seem to stay right around that level, but you'll see a little bit of inflation there in Wallboard, whereas the paper mill will pass that through and little higher pricing. And you're right, natural gas, again down lower the last few days. We did see a nice benefit year over year from lower gas prices. We're right around the 40% hedge for the rest, the remainder of fiscal 2025.

Speaker Change: September quarter, but you know given where prices have gone over the last couple of months it would

Speaker Change: It would seem to stay right around that level, but you'll see a little bit of inflation there in wall board, whereas the paper mill will pass that through and a little higher pricing.

Craig Kessler: And you're right, natural gas prices have been down lower the last few days. We did see a nice benefit year-over-year from lower gas prices. We're right around 40% hedged for the rest, the remainder of fiscal 2025, just right around here at these market prices. Keep in mind, the forward curve isn't as low as the prompt month, but as you look at that forward curve, we're 40% hedged right in that area

Speaker Change: And you're right. Natural gas, again, down lower the last few days. We did see a nice benefit year over year from lower gas prices. We're right around 40% hedged for the rest, the remainder of fiscal 2025.

Just right around here at these market prices, keep in mind the forward curve isn't as low as the prompt month, but as you look at that forward curve, we're 40% hedge right in that area.

Speaker Change: Just right around here at at these market prices keep in mind the forward curve isn't as low as the as the prompt month But as you look at that board curve, we're we're 40% edge right right in that area

Craig Kessler: Got it. All right that's helpful and then it may be kind of a little bit the same for cement you know could you could you give us a little bit more detail again great margin improvement there I think you mentioned you know the lower fuel cost if you could maybe talk about kind of the sustainability of that and then you also touched on maintenance but if you could just kind of give us a rundown on kind of the cost outlook there with cement you know given the the nice margin improvement you've seen here in the quarter

Craig Kessler: Got it. All right, that's helpful. And then maybe kind of a little bit the same for cement. Yeah, you know, could you could you give us a little bit more detail? Again, great margin improvement there.

Speaker Change: Got it. All right, that's helpful. And then maybe kind of a little bit the same for cement, you know, could you give us a little bit more detail again? Great margin improvement there.

Craig Kessler: I think you mentioned, you know, the lower fuel cost. If you could maybe talk about kind of the sustainability of that, and then you also touched on maintenance. But if you could just kind of give us a rundown on kind of the cost outlook there with cement, you know, given the nice margin improvement you've seen here in the quarter. Yeah, the fuel cost we talked about it now for several quarters. We have good visibility into lower fuel costs around some of the solid fuels that we use, and that's largely, you know, purchased or committed for the remainder of the year.

Speaker Change: I think you mentioned, you know, the lower fuel costs, if you could maybe talk about kind of the sustainability of that. And then you also touched on maintenance.

Speaker Change: But if you could just kind of give us a rundown on kind of the cost outlook there with cement, you know, given the nice margin improvement you've seen here in the quarter.

Craig Kessler: Yeah, fuel costs. We've talked about it now for several quarters; we had good visibility into lower fuel costs for some of the solid fuels that we use, and that's largely purchased or committed for the remainder of the year. And then, as we pointed out, and you mentioned, maintenance costs, our teams did a really good job this quarter of looking at projects, what needed to be done, and finding ways to get projects done that were needed. And given the weather that we experienced, and I think it was well chronicled, we did a good job of managing those costs during the quarter.

Speaker Change: Yeah, the fuel costs, we've talked about it now for several quarters, we have good visibility into lower fuel costs around

Trey Grooms: Yep, good work with all that. And then the last one for me is, you know, you mentioned the pricing and wallboard that you guys put up, and a nice sequential improvement, as you guys had talked about on the prior call. Could you give us kind of the ending number for the quarter, maybe, you know, relative to the reported ASP?

Speaker Change: Some of the solid fuels that we use, and that's largely...

Speaker Change: You know, purchased or committed for the remainder of the year. And then, as we pointed out and you mentioned, maintenance costs. Our teams did a really good job this quarter.

And then, as we pointed out and you mentioned, maintenance costs are teams did a really good job this quarter of looking at, you know, projects, what needed to be done and found ways to get projects done that were needed. And given the weather that we experienced and I think well chronicled, you know, we did a good job of managing those costs during the quarter.

Speaker Change: of looking at, you know, projects, what needed to be done and found ways to get projects done that were needed. And given the weather that we experienced and I think well chronicled, you know, we did a good job of managing those costs during the quarter.

Craig Kessler: Yep, good work with all that, and then last one for me is, you know, you mentioned the pricing and wallboard that you guys put up and a nice sequential improvement, as you guys had talked about on the prior call.

Speaker Change: Yep.

Speaker Change: Good work with all that. And then last one for me is, you know, you mentioned the pricing and wall board that you guys put up.

Speaker Change: And a nice sequential improvement, as you guys had talked about on the prior call. Could you give us kind of the ending number for the quarter, maybe, you know, relative to the reported ASP?

Is there, could you give us kind of the ending number for the quarter, maybe, you know, relative to the reported ASP? Yeah, the average for the quarter was pretty consistent throughout the quarter. We had implemented a March price increase, which we hadn't seen the full benefit of during the March quarter, but the average was pretty consistent throughout the quarter. Great. Thanks. I'll pass it on. That's it for me. Good luck.

Craig Kessler: Yeah, the average for the quarter was pretty consistent throughout the quarter. We had implemented a March price increase, which we hadn't seen the full benefit of during the March quarter, but the average was pretty consistent.

Speaker Change: Yeah, the average for the quarter was pretty consistent throughout the quarter. We had implemented a March price increase, which we hadn't seen the full benefit of during the March quarter, but the average was pretty consistent throughout the quarter.

Trey Grooms: Great. Thanks. I'll pass it on. That's it for me. Good luck.

Speaker Change: Great. Thanks. I'll pass it on. That's it for me. Good luck.

Stanley Elliott: Our next question comes from Stanley Elliott from Stiefel. Please go ahead with your question. Good morning, everyone. And nice work on a very tough operating environment. I guess starting off, you mentioned kind of on the rezzy side, being a little less certain in terms of how that's going to end up playing out. I am curious. Did you guys see, you know, to what extent residents of product projects were getting pushed out because of financing costs? And then, I guess secondly, you know, were you seeing any of your builder customers concerned about rising inventory levels in any of the markets to operate?

Operator: Our next question comes from Stanley Elliott from Stiefel. Please go ahead with your question. Hey, good morning.

Speaker Change: Our next question comes from Stanley Elliott from Stiefel. Please go ahead with your question.

Stanley Stoker Elliott: Hey, good morning everyone, and nice work in a very tough operating environment. I guess starting off, you mentioned kind of on the Resi side being a little less certain in terms of how that's going to end up playing out. I am curious, did you guys see to what extent residential projects were getting pushed out because of financing costs? And then, I guess secondly, were you seeing any of your builder customers concerned about rising inventory levels in any of the markets that you operate in?

Stanley Stoker Elliott: Good morning, everyone, and nice work in a very tough operating environment.

Stanley Stoker Elliott: I guess starting off, you know, you mentioned kind of on the resi side being a little less certain in terms of how that's going to end up playing out. I am curious, did you guys see, you know, to what extent residential projects were getting pushed out because of financing costs?

Speaker Change: And then, I guess secondly, were you seeing any of your builder customers concerned about rising inventory levels in any of the markets that you operate?

Michael R. Haack: You know, I've always said, as it relates to wallboard inventory in particular, it's a perishable product, so you don't see a tremendous amount of inventory, you know, either at the manufacturer level or at the distribution level. You can't store it outside in a meaningful way, so it comes and goes. And look, I think we've said weather more than once this morning, you know, especially you get into the South Texas market, that amount of rain, you know, we think of wallboard as an indoor sport, but, you know, there's no doubt we've seen in South Texas a delay because of the rain and extreme wet weather that market has faced, so, you know, again, maybe a little bit of inventory build here and there, but it's not significant.

Michael Haack: I've always said, is it relates to wallboard inventory in particular? It's a perishable product. So you don't see a tremendous amount of inventory, you know, either at the manufacturer level or at the distribution level. You can't store it outside in a meaningful way. So it comes and goes. And look, I think we've said whether or more than once this morning. You know, especially you get into the South Texas market, that amount of rain. You know, we don't we think of wallboard as an indoor sport, but you know, there's no doubt we've seen in South Texas a delay because of the rain and extreme weather that market has faced.

Speaker Change: I've always said, as it relates to wallboard inventory in particular, it's a perishable product.

Speaker Change: So, you don't see a tremendous amount of inventory, you know, either at the manufacturer level or at the distribution level. You can't store it outside in a meaningful way.

Speaker Change: It comes and goes, and look, I think we've said weather more than once this morning.

Speaker Change: Especially you get into the South Texas market, that amount of rain, we think of wallboard as an indoor sport, but there's no doubt we've seen

Speaker Change: In South Texas, a delay because of the rain and extreme wet weather that market has faced. So, you know, again, maybe a little bit of inventory build here and there, but it's not significant. And, you know, in terms of the residential outlook...

Michael Haack: So, you know, again, maybe a little bit of inventory build here and there, but it's not significant. And in terms of the residential outlook, you know, there's obviously a lot of factors that influence that; interest rates are one of them. They've come down nicely here the last four to six weeks. We'll see you again tomorrow; what tomorrow brings. But you know, the overall, you know, given the low supply of homes in the country, you know, that has continued to sport a pretty resilient level of construction activity.

Michael R. Haack: And, you know, in terms of the residential outlook, there's obviously a lot of factors that influence that; interest rates are one of them; they've come down nicely here in the last four to six weeks; we'll see again tomorrow what tomorrow brings, but, you know, the overall picture, given the low supply of homes in the country, has continued to support a pretty resilient level of construction activity.

Speaker Change: You know, there's obviously a lot of factors that influence that, interest rates are one of them. They've come down nicely here the last four to six weeks.

Speaker Change: We'll see again tomorrow what tomorrow brings, but, you know, the overall, you know, given the low supply of homes in the country, you know, that has continued to support a pretty resilient level of construction activity.

Stanley Stoker Elliott: And I guess one more on weather. To what extent do you see the weather impacting the quarter? I mean, obviously, pricing was very nice. Do you think that has any impact on pricing pressures later in the year? Or maybe even into, I guess it's too early to think about 25. But just any sort of disruptions in some of the pricing momentum that we've seen because of the weather?

Michael Haack: I guess one more on weather. To what extent do you see the weather impacting in the quarter? I mean, obviously, pricing was very nice. Do you think that has any impact on pricing pressures later in the year or maybe even into, you know, I guess it's too early to think about 25, but any sort of disruption and some of the pricing momentum that we've seen because of the weather? No doubt the construction season got off to a very slow start in several markets. It's, you know, with the extended rainfall, et cetera. So yeah, that does maybe change timing and cadence a little bit but, you know, in the grand scheme of things, you know, the cement business continues to be in a fairly tight position and, you know, exactly when and how prices go through.

Speaker Change: And I guess one more on weather. To what extent do you see the weather impacting in the quarter? I mean, obviously pricing was very nice. Do you think that has any impact on pricing pressures later in the year? Or maybe even into, you know, I guess it's too early to think about 25. But just any sort of disruptions in some of the pricing momentum that we've seen because of the weather?

Michael R. Haack: I mean, no doubt the construction season got off to a very slow start in several markets, you know, with the extended rainfall, etc. So yeah, that does maybe change timing and cadence a little bit, but, you know, in the grand scheme of things, the cement business continues to be in a fairly tight position, and, you know, exactly when and how prices go up, you know, will be determined over a cycle.

Speaker Change: I mean, no doubt the construction season got off to a very slow start in several markets, you know, with the extended rainfall, etc. So yeah, that does maybe change timing.

Speaker Change: and Cadence a little bit, but, you know, the grand scheme of things, you know, the cement business continues to be in a fairly tight position and, you know, exactly when and how prices go through, you know, will be determined over a cycle.

You know, we'll be determined over over cycle.

Stanley Stoker Elliott: And then lastly, the balance sheet, very manageable. You do have the larger Wyoming project coming up in 2026. You started on it. Is the plan to kind of continue to build cash ahead of that to support that or still remain opportunistic on the M&A front or even the share repurchase?

Craig Kessler: And then lastly, I mean, balance sheet very manageable. You do have the larger Wyoming project coming up in 26 or starting started on it. It's a plan to kind of continue to build cash ahead of that to support that or, you know, still remain opportunistic on the M&A front or even the Sherry purchases. Absolutely. We've put the position, the balance sheet, and the position. I think Michael said it well so that we can continue to make good investments, whether that's organic, as we've talked about with the mountains, cement, modernization, and expansion. But that doesn't preclude us, even though it is sizable, doesn't preclude us from continuing to return capital to shareholders and being active in the M&A market.

Speaker Change: And then lastly, balance sheet, very manageable, you do have the larger Wyoming project coming up in 2026, you started on it, is the plan to kind of continue to build cash ahead of that to support that or still remain opportunistic on the M&A front or even the share repurchases?

Craig Kessler: Absolutely, we've put the balance sheet in a position, I think Michael said it well, so that we can continue to make good investments, whether that's organic, as we've talked about with the mountain cement modernization and expansion, but that doesn't preclude us, even though it is sizable, it doesn't preclude us from continuing to return capital to shareholders, and being active in the M&A market, there's a good pipeline of activity Perfect guy.

Speaker Change: No, absolutely. We've put the position, the balance sheet in the position. I think Michael said it well.

Speaker Change: So that we can continue to make good investments, whether that's organic, as we've talked about with the mountain cement modernization and expansion.

Speaker Change: But that doesn't preclude us, even though it is sizable, it doesn't preclude us from...

Michael R. Haack: continuing to return capital to shareholders, and being active in the M&A market. There's a good pipeline of activity there, and we have the balance sheet and the free cash flow to continue to make good investments.

There's a good pipeline of activity there. And we have the balance sheet and the free cash flow to continue to make good investments. Perfect. Guys, thanks so much. Congrats in the best one.

Stanley Stoker Elliott: Perfect guys, thanks so much, congrats, and best of luck.

Speaker Change: Perfect guys, thanks so much, congrats, and best of luck.

Brent Thielman: Our next question comes from Brent Thielman from DA Davis. And please go ahead with your question. Hey, thanks. Good morning. Just a question again on cement. Just maybe a clarify. I mean, any plans for cement price increases in the calendar second half. And then Craig, you had some markets with price increases for April. Would the realizations of those price increases been impacted at all by sort of weather-related issues? I'm just curious your thoughts there. No, I think they moved forward as we had expected. And we do have, again, Texas faced extremely wet weather, April and May, even in July here with hurricane that came through.

Operator: Our next question comes from Brent Thielman from D.A. Davidson. Please go ahead with your question.

Speaker Change: Our next question comes from Brent Thielman from D.A. Davidson. Please go ahead with your question.

Brent Edward Thielman: Hey, thanks. Good morning.

Brent Edward Thielman: Hey, thanks. Good morning. Just I had a question again on cement. Just maybe a clarifier. I mean any plans for cement price increases in the calendar second half?

Brent Edward Thielman: Just a question again on cement. Just maybe a clarification. I mean, any plans for cement price increases in the calendar second half? And then, Craig, you had some markets with price increases for April. Would the realizations of those price increases be impacted at all by sort of weather-related issues? I'm just curious about your thoughts.

Craig Kessler: And then, Craig, you had some markets with price increases for April . Would the realizations of those price increases been impacted at all by sort of weather-related issues? I'm just curious your thoughts there.

Craig Kessler: No, you know, I think they moved forward as we had expected, and, you know, we do have, again, Texas faced extremely wet weather in April and May, and even into July here with the hurricane that came through, but, you know, the pricing in that market has extended out. There is some here in the second part of the year, but that's about it for a second round of cement price increases as we sit here today.

Craig Kessler: No, you know, I think they moved forward as we had expected, and, um...

Craig Kessler: We do have, again, Texas faced extremely wet weather.

Speaker Change: April and May, you know, even into July here with the hurricane that came through, but, you know, the pricing in that market has extended out, there is some here in the second part of the year.

Craig Kessler: But the pricing in that market has extended out there as some here in the second part of the year.

But that's about it for a second round of cement price increases as we sit here today. Okay.

Speaker Change: But that's about it for a second round of cement price increases as we sit here today.

Michael Haack: And then, just as a follow-up, Michael, with some of your comments just about the momentum you're seeing and some of the infrastructure projects, and presumably going over the next few years. Do you anticipate for your mix of sort of insect or in-market sector exposure to skew more heavily towards infrastructure in the coming years? Man, I know it's sort of been 40-50 percent. Do you see it higher than that as we sort of move forward? You know, it depends really regionally where you look at these items with it. You know, as we, as said in the comments too, you know, we see these as multi-year projects with us and the extending out; give us great visibility.

Brent Edward Thielman: Okay. And then just as a follow-up, Michael, with some of your comments just about the momentum you're seeing and some of the infrastructure projects and presumably going on over the next few years. Do you anticipate your mix of in sector and market sector exposure to skew more heavily towards infrastructure in the coming years? I mean, I know it's sort of been 40-50%, but do you see it higher than that as we sort of move forward?

Speaker Change: Okay and then just as a follow-up I mean Michael with some of your comments just about the momentum you're seeing and some of the infrastructure projects and you know presumably going over the next few years.

Speaker Change: Do you anticipate for your mix of in-sector, in-market sector exposure to skew more heavily towards infrastructure in the coming years? I mean, I know it's sort of been 40-50 percent. Do you see it higher than that as we sort of move forward?

Michael R. Haack: You know, it depends really regionally where you look at this, these items with it. You know, as we said in the comments too, we see these as multi-year projects with us, and extending out gives us great visibility. We're also kind of opportunistic when we take some of those projects with it. You know, we have a customer base that we support, and those projects we see as great opportunities to pick up, you know, certain aspects of them and keep our demand profile looking strong. So, you know, across our network, we see this as just a good visibility for the cement side of the business for many years to come.

Michael R. Haack: You know, it depends really regionally where you look at this, these items with it. You know, as we said in the comments too, you know, we see these as multi-year projects with us and extending out give us great visibility.

We're also kind of opportunistic when we take some of those projects with it. You know, we have a customer base that we support, and those projects we see as great projects to pick up, you know, certain aspects of them and keep our demand profile looking strong. So, you know, across our network, we see this as a just a good visibility for the cement side of the business for multi years to come. Yeah, very good.

Speaker Change: We're also kind of opportunistic when we take some of those projects with it. You know, we have a customer base that we support, and those projects we see as great projects to pick up, you know, certain aspects of them and keep our demand profile looking strong.

Speaker Change: So, you know, across our network, we see this as just a good visibility for the cement side of the business for multi-years to come.

Brent Edward Thielman: Yep. Very good. Thank you.

Thank you.

Speaker Change: Very good. Thank you.

Anthony Pettinari: Our next question comes from Anthony Pettinari from City. Please go ahead with your question. Good morning.

Operator: Our next question comes from Anthony Pettinari from Citi. Please go ahead with your question.

Speaker Change: Our next question comes from Anthony Pettinari from Citi. Please go ahead with your question.

Anthony James Pettinari: Good morning. On cement, is there a way to quantify the magnitude of volumes that were impacted by the weather in the quarter? And then, just given kind of very poor weather in the first half of the calendar year, do your customers talk about an opportunity to maybe make some of that up in the second half of the year? Is that something that could be, maybe, a tailwind to volumes either for you or the industry? Or is that not really something you expect?

Anthony Pettinari: On cement, is there a way to quantify the magnitude of volumes that were impacted by the weather in the quarter and then just given kind of very poor weather in the first half of the calendar year? Do your customers talk about an opportunity to maybe make some of that up in the second half of the year? Is that something that could be maybe a tailwind to volumes, either for you or the industry? Or is that not really something do you expect? Okay, Anthony, to the first part of your question, it's really hard to quantify, you know, the exact impact that weather had.

Anthony James Pettinari: Good morning.

Anthony James Pettinari: On cement, is there a way to quantify the magnitude of volumes that were impacted by the weather in the quarter and then just given kind of very poor weather in the first half of the calendar year? Do your customers talk about an opportunity to maybe make some of that up in the second half of the year? Is that something that could be maybe a tailwind to volumes, either for you or the industry, or is that not really something you expect?

Craig Kessler: Anthony, to the first part of your question, it's really hard to quantify the exact impact that weather had. No doubt it was significant, but really tough to quantify that.

Speaker Change: Anthony, to the first part of your question, it's really hard to quantify the exact impact that weather had. No doubt it was significant, but really tough to quantify that.

You know, no doubt it was significant, but really tough to quantify that.

Michael Haack: And in terms of the last, that is a little bit market to market because you've got certainly the northern markets that whether winter weather will start, you don't know if that's November or December or in the January, but I think you're overall, and then in the south where we don't have near the winter, you can get maybe a little bit more, but your points still right that you're being given that these projects were delayed, they're not canceled, they're just pushed out. It just means you're going to be real busy this fall and into the winter as long as you can.

Anthony James Pettinari: And in terms of the last, that is a little bit market to market because you've certainly got the northern markets where winter weather will start. You don't know if that's November, December, or into January, but I think your overall figure, and then in the south, where we don't have nearly as much winter, you can get maybe a little bit more, but your point's still right, that given that these projects were delayed, they're not canceled, they're just pushed out.

Speaker Change: And in terms of the last, that is a little bit market to market, because you've got certainly the northern markets.

Speaker Change: I would say that whether winter weather will start, you don't know if that's November , December , or into January , but I think your overall, and then in the south where we don't have near the winter, you can get maybe a little bit more but your points

Speaker Change: It's still right that given that these projects were delayed, they're not canceled, they're just pushed out. It just means you're going to be real busy this fall and into the winter as long as you can.

Anthony James Pettinari: It just means you're going to be real busy this fall and into the winter as long as you can, and so that is what you'll see. Can you make all of it up? That remains to be seen, but it should be a busy second half.

And so that is what you'll see.

Anthony Pettinari: Can you make all of it up? That remains to be seen, but it should be a busy, a busy second half of the year. Got it, got it.

Speaker Change: And so that is what you'll see. Can you make all of it up? That remains to be seen, but it should be a busy second half of the year.

Anthony James Pettinari: Got it, got it. And then just, I guess, one follow-up question: was your exit rate on cement prices in the quarter similar to the quarter average or maybe a touch ahead or anywhere else? Yeah, pretty much in line with the average. Got it, got it. Okay, I'll turn it over to you.

And then just, I guess one fall up. Was your exit rate on cement prices in the quarter? Was that sort of similar to the quarter average, or maybe a touch ahead, or any touch there? Yeah, pretty much in line with the average. Got it, got it.

Speaker Change: Got it, got it. And then just I guess one follow-up, was your exit rate on cement prices in the quarter, was that sort of similar to the quarter average or maybe a touch ahead? Yeah, pretty much in line with the average.

Okay, I'll turn it over.

Speaker Change: Got it, got it. Okay, I'll turn it over.

Jerry Revich: Our next question comes from Jerry Revitch from Goldman Sachs. Please go ahead with your question. Yes, hi, good morning everyone, and congratulations on the strong performance. I want to ask, so, you know, normal seasonality for your cement businesses, margins are up about eight points in the September quarter from the June quarter.

Operator: Our next question comes from Jerry Revich from Goldman Sachs. Please go ahead with your question.

Speaker Change: Our next question comes from Jerry Revich from Goldman Sachs. Please go ahead with your question.

Jerry David Revich: Yes. Hi. Good morning, everyone, and congratulations on the strong performance. I want to ask you, so normal seasonality for your cement business is margins up about eight points in the September quarter from the June quarter. And so as we think about that normal seasonality, anything that we need to keep in mind this year, Craig, relative to the really strong June quarter results?

Jerry David Revich: Hi, good morning everyone and congratulations on the strong performance. I want to ask, so normal seasonality for your cement business is margins are up about 8 points in the September quarter.

Craig Kessler: And so, as we think about that normal seasonality, anything that we need to keep in mind this year, Craig, relative to the really strong June quarter results. Sitting here today, you know, I don't expect to see anything unique. That margin improvement, as you know, is mostly driven by our annual maintenance programs that are completed during the June quarter. Those are quite heavy spends, and that doesn't happen in the September quarter. So the full benefit from the improved energy costs, and although they're moving pieces there, fully baked in the strong two-quarter results. And then, in terms of the sequential price cadence over the past two years, your cement average selling prices were up three to four percent, September quarter versus June quarter.

Jerry David Revich: from the June quarter. And so as we think about that normal seasonality, anything that we need to keep in mind this year, Craig, relative to the really strong June quarter results.

Craig Kessler: Sitting here today, I don't expect to see anything unique. That margin improvement, as you know, is mostly driven by our annual maintenance programs being completed during the June quarter. Those are quite heavy spends, and that doesn't happen in the September and December quarters.

Craig Kessler: Sitting here today, I don't expect to see anything unique. That margin improvement, as you know, is mostly driven by our annual maintenance programs are completed during the June quarter. Those are quite heavy spends, and that doesn't happen in the September and December quarters.

Jerry David Revich: Got it, so the full benefit from the improved energy costs and all the other moving pieces there fully baked in the strong two-quarter results. And then, in terms of the sequential price cadence, so over the past two years, your cement average selling prices were up three to four percent in the September quarter versus June quarter. You know, I know part of that is mixed where the volumes are coming from and contract rollovers, but can you just give us an update on how you're thinking about the sequential move in average selling price from here, given the timing of contract rollovers and mix of business? How should that look this year, September versus June versus the three to four points we've seen over the past couple of years?

Craig Kessler: Got it. So the full benefit from the improved energy costs and all the other moving pieces that are fully baked in the strong two-quarter results.

Craig Kessler: Bye.

Speaker Change: And then in terms of the sequential price cadence, so over the past two years your cement average selling prices were up.

Craig Kessler: You know, I know part of that is makes where the volumes are coming from and contract rollovers, but can you just give us an update on how you're thinking about the sequential move in average selling prices from here? Given timing of contract rollovers and makes a business, how should that look this year, September versus June versus the three to four points we've seen over the past couple of years? Yeah, Jerry, you know, as we talked a little bit earlier, we've got a few markets where we've got a price increase slated for later this year, you know, mostly in the Texas area, just given the push out of that timing.

Speaker Change: 3-4% September quarter vs June quarter. I know part of that is mixed where the volumes are coming from and contract rollovers, but can you just give us an update on how you're thinking about...

Speaker Change: The sequential move in average selling price from here, given timing of contract rollovers and mix of business, how should that look this year, September versus June , versus the three to four points we've seen over the past couple of years.

Craig Kessler: Yeah, Jerry, as we talked a little bit earlier, we've got a few markets where we've got a price increase slated for later this year, mostly in the Texas area, just given the push out of that timing. But other than that, you know, we don't have any incremental announcements at this point. And so absent something like that, you'd expect to see, you know, more of a consistent, you know, sequential price from what we saw here in the June quarter.

Speaker Change: Yeah, Jerry, you know, as we talked a little bit earlier, we've got a...

Jerry David Revich: where we've got a price increase slated for later this year, you know, mostly in the Texas area, just

But other than that, you know, we don't have any incremental announcements at this point, and so absent something like that, you'd expect to see more of a consistent, you know, sequential price from what we saw here in the June quarter.

Speaker Change: Given the push out of that timing, but other than that, we don't have any incremental announcements at this point, and so absent something like that, you'd expect to see more of a consistent, sequential price from what we saw here in the June quarter.

Jerry David Revich: Okay. And then in terms of the indications to customers of potential future price increases in both Cement and Wallboard, can you just talk about the range of price increase discussions that you folks have had to the extent that you can comment? I know in some markets, you're going to roll those out as time comes, but I wonder if you could just give us any additional color on how those conversations are headed, particularly in Cement ahead of 2025. Yeah, you know, Jerry, it's always

Craig Kessler: Okay, and then in terms of the indications to customers of potential future price increases in both cement them all board, can you just talk about what the range of price increase discussions that you folks have had to accept you can comment. I know in some markets you're going to roll those out as time comes, but I wonder if you could just give us any additional color on how those conversations are headed, particularly in cement ahead of 25. Yeah, you know, Jerry, it's always hard to predict the exact timing and magnitude of price increases that certainly a discussion will be having with customers as we go over the next few weeks and months ahead of calendar 25.

Speaker Change: Okay.

Speaker Change: And then in terms of the indications to customers of potential future price increases in both Cement and Walmart, can you just talk about what the range of price increase discussions that you folks have had to the extent you can comment?

Speaker Change: I know in some markets you're going to roll those out as time comes, but I wonder if you'd just give us any additional color on how those conversations are headed, particularly in cement ahead of 2025.

Craig Kessler: Yeah, you know, Jerry, it's always hard to predict the exact timing and magnitude of price increases. That's certainly a discussion we'll be having with customers as we go over the next few weeks and months ahead of calendar 25. So I don't want to speculate too much on how much or when those price increases will be announced. But, you know, look, I think as Michael's mentioned and we've talked about now for several quarters, if not years, given the dynamics and the backdrop in both businesses, both in cement and wallboard, with supply being constrained for a variety of reasons and pretty good outlooks around demand, we do expect to see utilization rates remain high through the cycle, which should lead to higher pricing this cycle than we've seen in prior cycles, And so without getting into specifics for timing, we just do continue to see pricing opportunity in front of us.

Speaker Change: Yeah, you know, Jerry, it's always hard to predict the exact timing and magnitude of price increases. That's certainly a discussion we'll be having with customers.

Jerry David Revich: as we go over the next few weeks and months ahead of calendar 25.

So I don't want to speculate too much on how much or when those price increases will be announced. But, you know, look, I think as Michael mentioned, and we talked about now for several quarters, if not years, given the dynamics and the backdrop in both businesses, both in cement and wall board, with supply being constrained for a variety of reasons and pretty good outlooks around demand. And we do expect to see utilization rates remain high through the cycle, which should lead to higher pricing this cycle. And we've seen in prior cycles, both in different economic climates, just given the changes that have occurred in our industries.

Jerry David Revich: So I don't want to speculate too much on...

Jerry David Revich: on how much or when those price increases will be announced.

Jerry David Revich: But, you know, look, I think as Michael's mentioned, and we've talked about now for several quarters, if not years, given the dynamics...

Michael R. Haack: and the backdrop in both businesses, both in cement and wallboard with...

Michael R. Haack: Supply being constrained for a variety of reasons and pretty good outlooks around demand. We do expect to see utilization rates.

Michael R. Haack: remain high through the cycle, which should lead to higher pricing this cycle than we've seen in prior cycles, both you know, in different economic climates, just given the changes that have occurred in our industries.

And so that, without getting into specifics for timing, we just do continue to see pricing opportunity in front of us. Right.

Michael R. Haack: And so without getting into specifics for timing, we just do continue to see pricing opportunity in front of us.

Adam Thalhimer: Thank you. Our next question comes from Adam Thalheimer from Thompson Davis. Please go ahead with your question. Hey, good morning, guys. Congrats on the strong quarter. I want to start on wall board margins. I think that was the best quarterly wall board margin in something like 18 years. Just curious.

Operator: Our next question comes from Adam Thalhimer from Thompson Davis. Please go ahead with your question.

Speaker Change: Thank you.

Speaker Change: Our next question comes from Adam Thalhimer from Thompson Davis. Please go ahead with your question.

Adam Robert Thalhimer: Hey, good morning guys. Congratulations on the strong quarter. I wanted to start on wall board margins. I think that was the best quarterly wall board margin in something like 18 years. What drove that, and what your thoughts are on sustainability.

Adam Robert Thalhimer: Hey, good morning guys. Congrats on the strong quarter.

Adam Robert Thalhimer: I want to start on wall board margins. I think that was the best quarterly wall board margin in something like 18 years. Just curious.

Craig Kessler: What drove that and what your thoughts are on sustainability? Yeah, Adam, the environment that we've been in, certainly with lower natural gas prices, contributed to that, you know, really managing the cost structure around maintenance projects and the need to spend. They did, again. Our teams did a fantastic job this quarter, just like the cement group did as well. And, you know, look, our assets are well positioned. We've talked about that many times from a surety of raw materials, the primary raw material being gypsum and our long years' worth of either raw material reserves or supply contract for synthetic gypsum.

Adam Robert Thalhimer: What drove that and what your thoughts are on sustainability?

Craig Kessler: Yeah, you know, Adam, the environment that we've been in, certainly with lower natural gas prices, contributed to that, you know, really managing the cost structure around maintenance projects and, and the need to spend that they did again. Our teams did a fantastic job this quarter, just like the cement group did as well. And, you know, look, our assets are well positioned. We've talked about that many times, from a surety of raw materials, the primary raw material being gypsum, and our long years' worth of either raw material reserves or a supply contract for synthetic gypsum. And, and so we really positioned this business very, very well. And yes, it's a good margin in performance, but that's been a hallmark of that business for many years now.

Speaker Change: Yeah, you know, Adam, the environment that we've been in, certainly with lower natural gas prices contributed to that.

Speaker Change: You know, really managing the cost structure around maintenance projects and...

Speaker Change: and the need to spend. They did, again, our teams did a fantastic job this quarter, just like the cement group did as well. And, you know, look, our assets are well positioned. We've talked about that many times from a...

Speaker Change: surety of raw materials, the primary raw material being gypsum and our long year's worth of either raw material reserves.

And so we really positioned this business very, very well.

Speaker Change: or a supply contract for synthetic gypsum. And so we really position this business very, very well. And yes, it's a good margin in performance, but that's been a hallmark of that business for many years now.

Craig Kessler: And yes, it's a good margin in performance, but that's been a hallmark of that business for many years now. And Craig, it's a smaller business, but the paper board volume jumped a little bit. And I know you did a capacity expansion there. What do you think your annual capacity is normalized now? Yeah, you know, the 90, 91,000 tons is a record quarter for the paper mill. We mentioned, you know, that we had gone through the expansion project a couple of years ago, really starting to see the benefit of that volume improvement. Again, the mill is running very well.

Adam Robert Thalhimer: And, Craig, it's a smaller business, but the paperboard volume jumped a little bit, and I know you did a capacity expansion there. What do you think your annual capacity is normalized now? Yeah, you know, the 90, 90...

Speaker Change: And Craig, it's a smaller business, but the paperboard...

Craig Kessler: volume jumped a little bit, and I know you did a capacity expansion there. What do you think your annual...

Craig Kessler: Yeah, you know, the 90,000, 91,000 tons is a record quarter for the paper mill. We mentioned, you know, that we went through an expansion project a couple of years ago. We're really starting to see the benefit of that volume improvement. Again, the mill's running very well. That team is doing a fantastic job. You know, we, if you just annualized that, you could get a pretty decent run rate, and we're always looking to de-bottleneck all of these facilities. And, you know, we took that mill when we acquired it many, many years ago, and we've just incrementally been able to get more output, and the team's going to continue to do that.

Craig Kessler: Capacity is normalized now.

Craig Kessler: Yeah, you know, the 91,000 tons is a record quarter for the paper mill. We mentioned that we had gone through the expansion project a couple of years ago, really starting to see the benefit of that volume improvement. Again, the mill's running very well. That team is doing a fantastic job.

That team is doing a fantastic job. You know, we, if you just annualize that, you could get a pretty decent run rate. And we're always looking to debottle neck all of these facilities. And, you know, we've taken that mill when we acquired as many, many years ago, and we've just incrementally been able to get more out. And the team's going to continue to do that. Great. Thank you.

Craig Kessler: If you just annualize that, you could get a pretty decent run rate, and we're always looking to de-bottleneck all of these facilities.

Craig Kessler: And, you know, we've taken that mill when we acquired it many, many years ago, and we've just incrementally been able to get more output, and the team's going to continue to do that.

Phil Ang: Our next question comes from Phil Ang from Jeffries. Please go ahead with your question. Hey, guys, I had a question.

Operator: Our next question comes from Phil Ng from Jefferies. Please go ahead with your question.

Speaker Change: Great, thank you.

Philip H. Ng: Hey guys, I have a question.

Speaker Change: Our next question comes from Phil Ng from Jefferies. Please go ahead with your question.

Philip H. Ng: How did cement volumes track intra-quarter, especially when the weather cleared out in perhaps June and July? I know June's got two less shipping days. If you kind of look at it on a per-day basis, was it up? And then qualitatively, I think Michael, your outlook was stable volumes from there, certainly upbeat on infrastructure. Are you set up to kind of put up volume growth in the back half? I just want to get a little more color on how you're thinking about cement volumes and how it's progressed since a very wet spring.

Phil Ang: How did cement designs track inter-quarter, question one, whether it cleared out in perhaps June, July? I know June's got two less shipping days; if you kind of look at it on a per day basis, was it up? And, in qualitatively, I think, Michael, your outlook was stable volumes from there, certainly up beyond infrastructure. Are you set up to kind of put up volume growth in the back half?

Philip H. Ng: Hey guys, I have a question. How did cement volumes track intra-quarter, especially when weather cleared out in perhaps June-July? I know June's got two less shipping days. If you kind of look at it on a per-day basis, was it up?

Speaker Change: And in qualitatively, I think, Michael, your outlook was stable volumes from there, certainly upbeat on infrastructure. Are you set up to kind of put up volume growth in the back half? I just want to get a little more color in how you're thinking about some of that volumes and how it's progressed since a very wet spring.

Just want to get a little more color in how you're thinking about some of that volumes and how it's progressed since a very widespread. Yeah, Phil, good question. The first part of your question, and you look at our business, Texas, you know, we were actually up this quarter versus last year. I would say that had more to do with the comparison of prior year. We had some issues last year around that. So hard to look at those volumes necessarily as a good barometer for the overall market, you know, which is down, just given some of the weather issues that we've dealt with.

Craig Kessler: Yeah, Phil, good question. The first part of your question, and you know, when you look at our business, Texas, you know, we're actually up this quarter versus last year. I would say that had more to do with the comparison with the prior year. We'd had some issues last year around that, so hard to look at those volumes necessarily as a good barometer for the overall market, which is down just given some of the weather issues that we've dealt with.

Speaker Change: Phil, good question. The first part of your question, and you know, you look at our business

Philip H. Ng: Texas, you know, we're actually up this quarter versus last year. I would say that had more to do with the comparison

Philip H. Ng: We've had some issues last year around that, so it's hard to look at those volumes necessarily as a good barometer for the overall market, which is down.

Craig Kessler: And as you said, we saw, you know, much better weather in the month of June across most of the country, but we did have two fewer shipping days. So, you know, hard to get a real gauge when you're coming out of an April and May that we dealt with, but I do feel good about, you know, the forward view of cement demand. And look, we have the inventory in the network, and as the opportunity presents itself, we're going to meet our customers' needs.

Michael Haack: And as you said, we saw, you know, much better weather in the month of June across most of the country, but we did have two less shipping days. So, you know, hard to get a real gauge when you're coming out of an April and May that we dealt with, but do feel good about, you know, the forward view of cement demand. And look, we have the inventory in the network. And, as the opportunity presents itself, we're going to meet our customers' needs.

Speaker Change: just given some of the weather issues that we've dealt with.

Speaker Change: And as he said, the...

Speaker Change: We saw much better weather in the month of June across most of the country, but we did have two less shipping days. So, you know, hard to get a real gauge when you're coming out of an April and May that we dealt with.

Speaker Change: but do feel good about, you know, the forward view of cement demand. And, look, we have the inventory in the network, and as the opportunity presents itself, we're going to meet our customers' needs.

Philip H. Ng: And Craig, I mean, one of the earlier questions... Trey Grooms, Keith Hughes, Adam Thalhimer, Jerry Revich, Stanley Elliott, Michael Haack, Anthony Pettinari, Jerry Revich, Stanley Elliott, Jatin Khanna, Eagle Materials Inc., as we kind of look out to August.

And Craig, I mean, I think one or earlier questions. There was a question about catch up demand. Have you seen orders kind of snap back and some of your customers looked to kind of recapture some of that deferred demand pushed out thus far, like in July and as we kind of look at the August? To the extent they can, I know they're going to push as hard as they can. When you have that much weather, you do see a just delay in the overall earthwork. That happens. And so I know they're gearing up for a busy second half of the year.

Speaker Change: And Craig, I mean, I think one of the earlier questions...

Speaker Change: There was a question about catch-up demand. Have you seen orders kind of snap back and some of your customers look to kind of recapture some of that deferred demand pushed out thus far? Like in July and as we kind of look at August ?

Craig Kessler: Yeah, to the extent they can, I know they're going to push as hard as they can. But when you have that much weather, you do see a delay in the overall earthwork that happens. And so I know they're gearing up for a busy second half of the year.

Craig Kessler: Yeah, to the extent they can, I know they're going to push as hard as they can. When you have that much weather, you do see a delay in the overall earthwork that happens. And so I know they're gearing up for a busy second half of the year.

Philip H. Ng: Okay. And then from a margin standpoint, you know, really impressive quarters, both on wallboard and cement. You called out some good guys on energy and freight. Those feel pretty sticky unless things change materially here. Were there any other one-off costs that were, you know, that will roll off just because based on what you're putting up? Where pricing is trending as well, I would imagine you could build off of this accounting for seasonality, but how should we think about the margin cadence the rest of the year in adder, wallboard, or cement?

Craig Kessler: Okay. And then from a margin standpoint, you know, really impressive quarter wealth on wallboard in cement. You called out some good guys on energy and afraid of those feel pretty sticky unless things change materially here. Were there any other one-off costs that were, you know, that will roll off just because based on what you're putting up and where pricing is trending as well, I would imagine you could build off of this.

Speaker Change: Okay. And then, from a margin standpoint, you know, a really impressive quarter, both on wall board and cement. You called out some

Speaker Change: Good guys on NRG and Freight. Those feel pretty sticky unless things change materially here. Were there any other one-off costs that were, you know, that will roll off just because based on what you're putting up

Speaker Change: And where pricing is trending as well. I would imagine you could build off of this, accounting for seasonality. But how should we think about the margin cadence the rest of the year in adder, wallboard, or cement?

Counting for season alley, but how should we think about the margin cadence, the rest of the year, and that are wallboard, of course, in cement? Yeah, you look sequentially while natural gas is down. It's been down at these levels, you know, between $2 to $2.5 million for quite some time. So sequentially, I don't see a significant change there. I mentioned at the beginning of the call OCC prices. We will see some upward tick here in the September quarter. So sequentially, that will be up a little bit higher. So, you know, there's going to be some puts and takes where margins are concerned.

Craig Kessler: Yeah, you look sequentially, while natural gas is down, it's been down at these levels, you know, between two and a half dollars a million for quite some time. So, sequentially, I don't see a significant change there. As I mentioned at the beginning of the call, OCC prices, we will see some upward tick here in the September quarter. So, sequentially, that will be up a little bit higher. So, you know, there's going to be some puts and takes where margins are concerned. And the cement business, you know, again, we're largely through the large maintenance programs. And, you know, and with fuel costs being low, we'd expect to continue to see that business perform very well.

Speaker Change: Yeah, you look sequentially while natural gas is down, it's been down at these levels you know between two, two and a half dollars a million for quite some time so sequentially I don't see.

Philip H. Ng: Okay. And just one last one for me.

Speaker Change: A significant change there, as I mentioned at the beginning of the call.

Speaker Change: OCC prices, we will see some upward tick here in the September quarter.

And in the cement business, you know, again, we're largely through the large maintenance programs. And, you know, with fuel cost being low, we would expect to continue to see that business perform very well.

Speaker Change: You know, and with fuel costs being low, we'd expect to continue to see that business perform very well.

Craig Kessler: The commentary on Wall Street in terms of outlook was a little more contingent on the macro. And obviously, housing starts are a little choppier, and rates have kind of bounced around. But correct me if I'm wrong, Craig. I mean, your business tends to tie more to completions. So with completions lagging, the next quarter starts to see decent demand. Is that how we should think about Wall Board? Because your volumes lag the industry by a smidge. I don't know if that was related, but any more perspective would be helpful.

Craig Kessler: Okay. And just one last one for me. The commentary on wallboard turns out look was a little more contingent on the macro. And obviously, the starting start has been a little shopier, and rates have kind of bounced around. But correct me if I'm wrong, Craig. I mean, your business tends to tie more to completions. So with completions lagging starts. The next quarter to see decent demand. Is that how we should think about wallboard? Because your volume's lagged in history. The smidge at all felt was relatively related.

Speaker Change: And just one last one for me, the commentary on Wall Board in terms of outlook was a little more contingent on the macro, and obviously housing starts to spin a little choppier and rates have kind of bounced around.

Speaker Change: But correct me if I'm wrong, Craig. I mean, your business tends to tie more to completions.

Craig Kessler: So with completions lagging to start the next quarter, do you still see decent demand? Is that how we should think about wallboard? Because your volumes lagged initially a smidge. I don't know if that was related, but any more perspective would be helpful.

But any more perspective would be helpful. I think we're trying to get away from guessing on the next quarter. You know, given, as you said, some of the volatility around rates and other things that impact the volume trend. But I think generally, we feel good about the demand environment, given a lot of the factors that we've talked about. And now, with rates seemingly coming down a little bit, that should help the exact timing of how that flows through. You know, it is harder for us to gauge than it's always hard to forecast. Certainly, the last three to six months have been even tougher.

Philip H. Ng: If you feel it, I think we're trying to get away from guessing on the next quarter. You know, given, as you said, some of the volatility around rates and other things that impact the volume trend, but I think, generally, we feel good about the demand environment, given a lot of the factors that we've talked about, and now with rates seemingly coming down a little bit, that should help. The exact timing of how that flows through, you know, is harder for us to gauge than, and it's always hard to forecast, but certainly the last three to six months have been even tougher. Thank you. I appreciate it.

Craig Kessler: Yeah, Phil, I think we're trying to get away from guessing on the next quarter.

Speaker Change: Given, as you said, some of the volatility around rates and other things that impact the volume trend, but I think generally we feel good about the demand environment.

Speaker Change: Given a lot of the factors that we've talked about, and now with rates seemingly coming down a little bit, that should help. The exact timing of how that flows through, you know, is harder for us to gauge.

Speaker Change: It's always hard to forecast, but certainly the last three to six months have been even tougher.

Philip H. Ng: Thank you. I appreciate it, Collar.

Okay.

Thank you.

Appreciate it, Colin.

Speaker Change: Thank you. Appreciate it, Collar.

Tyler Brown: Our next question comes from Tyler Brown from Raymond James. Please go ahead with your question. Hey, good morning. Craig, I think you mentioned transportation was a good guy on the car side on Wallboard.

Operator: Our next question comes from Tyler Brown from Raymond James. Please go ahead with your question.

Speaker Change: Our next question comes from Tyler Brown from Raymond James.

Tyler Brown: Hey, good morning. Hey, Craig, I think you mentioned transportation was a good guy on the cost side for Wal-Mart. I get that it's largely a pass-through, but when the market is loosening, and the truck market is certainly loosening, do you tend to make a little bit of money on transportation, and would it move the other way in a tightened transportation environment?

Speaker Change: Please go ahead with your question.

Tyler Brown: Hey, good morning. Hey, Craig, I think you mentioned transportation was a good guy on the cost side on a wall board. I get that it's largely a pass-through, but when the market is loosening, and the truck market is certainly loosening,

Craig Kessler: I get that it's largely a pass-through, but when the market is loosening and the truck market is certainly loosening, do you tend to make a little bit of money on transportation, and would it move the other way in a Titan transportation environment? Yeah, as freight adjusts, that can be a headwind or a tailwind force, and it's certainly been a tailwind last couple of quarters. And, as you say, I don't expect that to change significantly in the trucking market. Okay, that's helpful.

Speaker Change: Do you tend to make a little bit of money on transportation and would it move the other way in a tightened transportation environment?

Craig Kessler: Yeah, you know, as freight adjusts, that can be a headwind or a tailwind for us, and it's certainly been a tailwind the last couple of quarters, and as you say, I don't expect that to change significantly in the trucking market.

Craig Kessler: Yeah, you know, as freight adjusts, you know, that can be a headwind or a tailwind for us, and it's certainly been a tailwind the last couple of quarters, and as you say, I don't expect that to change significantly in the trucking market.

Tyler Brown: Okay, that's helpful. And then, just so I have it, I'm just curious, but what is the truck-to-rail mix? I assume you have heavy truck versus rail.

And then, just so I have it, I'm just curious, but what is the truck-to-rail mix? I assume you're heavy truck versus rail. Oh, yeah, in Wallboard, very little rail.

Speaker Change: Okay, that's helpful. And then just so I have it, I'm just curious, but what is the truck-to-rail mix? I assume you're heavy truck versus rail.

Craig Kessler: Oh yeah, and wallboard, very little rail, a pretty inefficient commodity to move on the rails.

Okay, pretty inefficient commodity to move on the rail.

Speaker Change: Oh yeah, and wallboard, very little rail, pretty inefficient commodity to move on the rail.

Tyler Brown: Okay, and then I think you're guiding to call it $310, $340 in CapEx, but you spent under $40 million in the quarter. I'm just curious if you still feel good about spending the full allotment, or is that just giving me a slow start? Any color there?

Craig Kessler: Okay, and then I think you're guiding to call it 310-340 in CapEx, but you spent under 40 million in the quarter. I'm just curious if you still feel good about spending the full allotment, or is it layering me off to a slow start? Just any color there? Yeah, I wouldn't say it's a slow start, just timing of when payments are made. As Michael mentioned, we have started to do some dirt work, and so that construction site work will really start to pick up here. The second part of the summer into the fall, so I would expect to see CapEx starting to tick up.

Speaker Change: Okay, and then I think you're guiding to call it $310, $340 in CapEx, but you spent under $40 million in the quarter. I'm just curious if you still feel good about spending the full allotment, or is layering me off to a slow start? Just any color there.

Craig Kessler: Yeah, I wouldn't say it's a slow start, just the timing of when payments are made. As Michael mentioned, we have started to do some dirt work, and so that construction site work will really start to pick up here in the second part of the summer and into the fall. So I would expect to see CAPEX starting to pick up, and the exact timing of that to be determined. But, you know, that's still our range for now, and we'll see as the year unfolds.

Speaker Change: Yeah, I wouldn't say it's a slow start, just timing of when payments are made. As Michael mentioned, we have started to do some dirt work.

Speaker Change: construction site work will really start to pick up here the second part of the summer into the fall so I would expect to see CAPEX starting to pick up.

And the exact timing of that to be determined, but you know, that's still our range for now, and we'll see as the year unfolds. Okay, good deal.

Michael R. Haack: and the exact timing of that to be determined, but that's still our range for now and we'll see as the year unfolds.

Tyler Brown: Okay, good deal. And then my last one, just a couple of other modeling questions, but just any thoughts on how the tax rate pans out for the year. The corporate SG&A was up a bit. What was driving that? Was that bonus accruals? And then the other income was a good line. Just curious if that was a gain, just how we should think about that line. Appreciate it.

Craig Kessler: In my last one, just a couple small other modeling questions, but just any thoughts on how the tax rate pans out for the year. The corporate SGNA was up a bit. What was driving that was up on us accruals, and then the other income was a good guy just curious if that was a gain, just how we should think about that line. Appreciate it. Yeah, in terms of the corporate SG&A, that number has been in that same range for the last several quarters. Call it 16 million plus or minus; I'd expect to see it continue to be in that range.

Speaker Change: Okay, good deal. And then my last one, just a couple of small other modeling questions, but just...

Speaker Change: Any thoughts on how the tax rate pans out for the year? The corporate SG&A was up a bit, what was driving that? Was that bonus accruals? And then the other income was a good guy, just curious if that was a gain, just how we should think about that line. Appreciate it.

Craig Kessler: Yeah, in terms of corporate SG&A, that number has been in that same range for the last several quarters, call it $16 million, plus or minus. I'd expect to see it continue to be in that range. In fact, I think 4Q was a little bit higher, so that's the range I would stick with. The tax rate, you know, it ebbs and flows a little bit, but I would say it may tick up a little bit here for the second part of the year, but again, pretty much range bound.

Speaker Change: Yeah, in terms of the corporate SG&A, that number has been in that same range for the last several quarters, call it $16 million, plus or minus, I'd expect to see it continue to be in that range. In fact, I think 4Q was a little bit higher.

In fact, I think 40 was a little bit higher. So that's the range I would stick with. Tax rate, you know, it ebbs and flows a little bit, but I would it may tick up a little bit here for the second part of the year, but again, pretty much range bound. And other income, you know, that it could be other asset sales and little minor things that are hard to predict, but I don't expect it to continue to be at that same level for in the second, third, and fourth quarter. Okay. Cool. Thank you.

Speaker Change: So that's the range I would stick with. Tax rate, you know, it ebbs and flows a little bit, but it may tick up a little bit here for the second part of the year, but again, pretty much range-bound.

Craig Kessler: Other income, you know, can be other assets, sales, little minor things that are hard to predict, but I don't expect it to continue to be at that same level for the second, third, and fourth quarter. Okay, cool. Thank you.

Speaker Change: Other income, you know, that it can be other asset sales and little minor things that are hard to predict, but I don't expect it to continue to be at that same level for in the second, third, and fourth quarter. Okay, cool. Thank you.

Keith Hughes: And our next question comes from Keith Hughes from Truist. Please go ahead with your question. Thank you. I'm getting back to cement prices and how you got a few increases you mentioned earlier, but it doesn't sound like a lot. Do you think your market's getting back to where you're increasing price just sort of once a year? Or what do you think the cadence is going to look like in the medium terms? Yeah, Keith, like I've always said, it's hard to predict that exact timing. There's a lot of factors that go into that, you know. For the last couple of years, we've seen multiple increases given some of the delayed start to the construction season.

Operator: And our next question comes from Keith Hughes from Truist. Please go ahead with your question.

Speaker Change: And our next question comes from Keith Hughes from Truist. Please go ahead with your question.

Keith Brian Hughes: Thank you. I'm getting back to...

Keith Brian Hughes: Thank you. Getting back to cement prices, I know you've got a few increases you had mentioned earlier, but it doesn't sound like a lot. Do you think, are your markets getting back to where you're increasing price just sort of once a year, or what do you think the cadence is going to look like in the medium to long term?

Craig Kessler: Yeah, Keith, like I've always said, it's hard to predict that exact timing. There are a lot of factors that go into that. For the last couple of years, we've seen multiple increases, given some of the delayed start to the construction season. I'm not surprised to see a limited second round of increases. You know, normally the construction season starts in March, but this year it just got extended. That doesn't mean, or it doesn't preclude next year from being, you know, two increases. We've just got to see how the year unfolds and how the second half of this year goes. But, you know, it remains to be seen in terms of exact timing.

Keith Brian Hughes: Keith, like I've always said, it's hard to predict that exact timing.

Keith Brian Hughes: There's a lot of factors that go into that, you know, for the last couple of years, we've seen multiple increases.

And I'm frankly not surprised to see us a limited second round of increases. You know, normally construction season starts in March, but this year just got extended. That doesn't mean that doesn't preclude next year from being, you know, two increases. We just got to see how the year unfolds and how the second half of this year goes through, but it remains to be seen in terms of exact timing. Thank you.

Speaker Change: Given some of the delayed start to the construction season, I'm frankly not surprised to see a limited second round of increases. Normally the construction season starts in March, but this year just got extended.

Michael Haack: And ladies and gentlemen, we'll be concluding today's question-and-answer session. I'd like to turn the floor back over to Michael Haack for any closing comments. Thank you, Jamie. Looking back on our first quarter for fiscal year 2025, I want to conclude by thanking our employees directly for their resilience through the quarter. Your superior execution and consistent steadfast operational focus. Once again, set the industry standard and help us achieve positive results to start our fiscal year. Thanks also to everyone joining us on the call today. We look forward to discussing our results again with you next quarter.

Speaker Change: Okay, thank you.

Operator: And ladies and gentlemen, with that, we'll be concluding today's question-and-answer session. I'd like to turn the floor back over to Michael Haack for any closing comments.

Speaker Change: And ladies and gentlemen, with that, we'll be concluding today's question and answer session. I'd like to turn the floor back over to Michael Haack for any closing comments.

Michael R. Haack: Thank you, Jamie.

Michael R. Haack: Looking back on our first quarter for fiscal year 2025, I want to conclude by thanking our employees directly for their resilience through the quarter.

Speaker Change: Your superior execution and consistent, steadfast operational focus once again set the industry standard and helped us achieve positive results to start our fiscal year.

Michael R. Haack: Thanks also to everyone joining us on the call today. We look forward to discussing our results again with you next quarter.

Speaker Change: Thanks also to everyone joining us on the call today. We look forward to discussing our results again with you next quarter.

Ladies and gentlemen, with that, we'll conclude today's conference call and presentation. Thank you for attending. You may now disconnect your lines.

Operator: Ladies and gentlemen, with that, we'll conclude today's conference call.