Q4 2025 Eagle Materials Inc Earnings Call

Operator: Good day everyone and welcome to Eagle Materials fourth quarter and fiscal 2025 earnings conference call.

Good day, everyone and welcome to Eagle Materials' fourth quarter and fiscal 2025 earnings Conference call. This call is being recorded and at this time I'd like to turn the floor over to you. He was president and Chief Executive Officer, Mr. Michael Haack, Mr. Haack. Please.

Michael Haack: This call is being recorded, and 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, sir. Thank you, Jamie, and welcome, everyone.

Please go ahead Sir.

Michael Haack: Thank you Jamie and welcome everyone.

Michael Haack: 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: Joining me today are Craig Kesler, our Chief Financial Officer, and I'll static senior Vice President of Investor Relations strategy and corporate development.

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

There'll be a slide presentation made in connection with this call to access. It. Please go to you go materials dot com and click on the link to the webcast.

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.

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

Speaker Change: As our fiscal year and it allows me some time to look back on our performance and reflect on the year in totality.

Michael Haack: As our fiscal year ends, it allows me some time to look back on our performance and reflect on the year in totality. There's no question that this year has had its challenges. The true measure of an individual or a company is how they respond to those challenges. I'm extremely grateful to lead a company that has dedicated employees that have made this company stronger. Without this dedication, Eagle would not have been successful.

Speaker Change: There's no question that this year has had its challenges.

Speaker Change: The true measure of an individual or a company is how they respond to those challenges.

Speaker Change: I'm extremely grateful to lead a company that has dedicated employees who have made this company stronger without this dedication equal would not have been successful. So I want to thank every eagle employee for making Eagle a better company.

Michael Haack: So I want to thank every Eagle employee for making Eagle a better company.

Michael Haack: I also want to spend a few minutes highlighting what Eagle was able to accomplish this past fiscal year. I want to start these comments with the topic that is Eagle's top priority. Employee Health and Safety. You have heard me state in the past that we are proud of our industry-leading safety record. But this year, I am more impressed that we are able to achieve our lowest Total Recordable Injury Rate, or TRIR, in company history. This was coupled with a 25% increase in our hazard observation, or near-miss reporting, showing that our safety culture is well-established and self-sustaining.

Speaker Change: I also want to spend a few minutes highlighting what eagle was able to accomplish this past fiscal year.

Speaker Change: I want to start these comments with the topic that is eagle's top priority.

Speaker Change: <unk> health and safety.

Speaker Change: Yeah, I've heard me state in the past that we are proud of our industry, leading safety record, but this year I am more impressed that we were able to achieve our lowest total recordable injury rate or tier I or in company history.

Speaker Change: This was coupled with a 25% increase in our hazard observation or near Misreporting, showing that our safety culture is well established and self sustaining.

Speaker Change: Over this next year, we will continue to progress our safety culture with the rollout of a program called the Eagle safe.

Michael Haack: Over this next year, we will continue to progress our safety culture with the rollout of a program called Eagle Safe. a series of standardized company-wide best practices and procedures to focus our efforts on critical safety issues. I am a true believer that if you have diligence around safety, then you have a culture that strives for diligence around every other aspect in the business, leading to improved results holistically.

Speaker Change: A series of standardized company wide best practices and procedures to focus our efforts on critical safety issues.

Speaker Change: I'm a true believer that if you have diligence around safety and you have a culture that strives for diligence around every other aspect in the business leading to improved results holistically.

Michael Haack: This is the case for Eagle, where I am proud to say that this year marks our fourth consecutive year of record financial results. having generated record fiscal year revenue of $2.3 billion and record earnings per share of $13.77. This was accomplished with day-to-day headlight noise surrounding the economy, but with focus, our businesses have continued to perform well and operate efficiently.

Speaker Change: This is the case for Eagle, where I am proud to say that this year marks our fourth consecutive year of record financial results, having generated record fiscal year revenue of $2 $3 billion and record earnings per share of $13 77.

Speaker Change: This was accomplished with day to day headline noise surrounding the economy, but with focus our businesses have continued to perform well and operate efficiently.

Speaker Change: Next I want to talk about the efforts we have made with regards to sustainability.

Michael Haack: Next, I want to talk about the efforts we have made with regards to sustainability. You will see a lot of information on the projects we have in process or that are completed in our sustainability report that will be published this summer. For now, let me share a few highlights. We are on track to complete an upgrade of our wastewater treatment facility at our paper mill this summer. This $22 million project, when completed, will reduce our water consumption by approximately 50% through a more closed-loop system. It will also allow us to return water that is already heated to the process, hence reducing our energy consumption and improving our efficiency.

Speaker Change: You will see a lot of information on the projects we have in process or that are completed and our sustainability report that will be published this summer.

Speaker Change: For now let me share a few highlights.

Speaker Change: We are on track to complete an upgrade of our wastewater treatment facility at our paper mill. This summer this $22 million project when completed will reduce our water consumption by approximately 50% through a more closed loop system.

Speaker Change: It will also allow us to return water that is already heated to the process, hence, reducing our energy consumption and improving our efficiency.

Michael Haack: In our cement business, we completed our Illinois cement plant's alternative fuel feeder that will enable the plant to run more alternative fuels. We are also nearing completion of a project at Cosmos Cement Facility to expand the use of recycled tires that would otherwise be landfilled. All our environmental projects are similar to these examples. They have meaningful economic benefits, driving efficiency, and lowering costs as we reduce usage of water, solid fuels, and other raw materials.

Speaker Change: In our cement business, we completed our Illinois cement plants alternative fuel theater that will enable the plant to run more alternative fuels.

Speaker Change: We are also nearing completion of our project at Kosmos cement facility to expand the use of recycled tires that would otherwise be landfilled.

Speaker Change: All our environmental projects are similar to these examples.

Speaker Change: Meaningful economic benefits driving efficiency and lowering costs as we reduce usage of water solid fuels and other raw materials.

Speaker Change: Additionally, our deployment of capital in fiscal 2025 allowed us to strategically expand our ability to serve our customers across our geographic footprint. These.

Michael Haack: Additionally, our deployment of capital in fiscal 2025 allowed us to strategically expand our ability to serve our customers across our geographic footprint. These investments are both acquisitions and organic investments. I will highlight a few of these. Within aggregates, a key growth area for us, we acquired two pure play aggregate operations. one in Kentucky and the other in Western Pennsylvania. Enhancing our ability to serve these markets, which are complementary to our existing heavy-side footprint. Integration of both operations is going well and both businesses are already contributing to Eagle. These two additions will increase Eagle's aggregate production capacity by 50%.

Speaker Change: These investments are both acquisitions and organic investments I will highlight a few of these.

Speaker Change: Within the aggregates a key growth area for US we acquired two pure play aggregates operations.

Speaker Change: One in Kentucky, and the other in Western Pennsylvania.

Speaker Change: Enhancing our ability to serve these markets, which are complementary to our existing heavy side footprint.

Speaker Change: Integration of both operations is going well and both businesses are already contributing to Eagle. These two additions will increase eagles aggregate production capacity by 50%.

Michael Haack: In cement, we completed commissioning of our Texas Lehigh slag facility this winter. And production will ramp up throughout this upcoming fiscal year, providing additional cementitious tons to the Texas market. In the northern Colorado area, our mountain cement plant expansion continues to be on time and on budget. This next fiscal year, we'll see a major ramp-up in construction efforts and capital expenditure. Like the other projects I mentioned above, the mountain cement modernization will have meaningful economic benefits as well as environmental benefits, utilizing alternative fuels and lowering our CO2 intensity per ton.

Speaker Change: In cement, we completed commissioning of our Texas Lehigh slag facility. This winter.

Speaker Change: And production will ramp up throughout this upcoming fiscal year, providing additional cementitious tons to the Texas market.

Speaker Change: In Northern Colorado area, our mountain cement plant expansion continues to be on time and on budget.

Speaker Change: This next fiscal year, we'll see a major ramp up in construction efforts and capital expenditure.

Speaker Change: Like the other projects I mentioned above the mountains and that modernization will have meaningful economic benefits as well as environmental benefits utilizing alternative fuels and lowering our C O two intensity per tonne.

Speaker Change: Lastly, we announced last week, we have initiated a project to modernize and expand our Duke Oklahoma Gypsum wallboard facility.

Michael Haack: Lastly, we announced last week we have initiated a project to modernize and expand our Duke, Oklahoma gypsum wallboard facility. The modernized plant takes advantage of our decades-long natural gypsum position at Duke and upgrades the facility with state-of-the-art technology, enhancing Eagle's low-cost producer position and strengthening our competitive advantage as the rest of the industry continues to struggle to source synthetic gypsum. Duke has advanced geographically, allowing the plant to serve customers throughout the high-growth South and Southeast markets. The project is expected to cost about $330 million, and startup is scheduled for the second half of calendar 2027.

Speaker Change: The modernized plant takes advantage of our decades long natural gypsum position at Duke.

Speaker Change: The facility with state of the art technology, enhancing eagle's low cost producer position and strengthening our competitive advantage as the rest of the industry continues to struggle to source synthetic gypsum.

Speaker Change: Duke is advantaged geographically, allowing the plant to serve customers throughout the high growth south and southeast markets.

Speaker Change: The project is expected to cost about $330 million and startup is scheduled for the second half of calendar 2027.

Speaker Change: Our ability to execute on these investment opportunities is underpinned by our capital allocation principles and our balance sheet strength.

Michael Haack: Our ability to execute on these investment opportunities is underpinned by our capital allocation principles and our balance sheet strength. In fiscal 2025, we completed over $175 million of M&A transactions and increased our capital expenditure for the mountain cement project while ending the year with a net leverage ratio of 1.5 times. And even while investing our excess free cash flow in these high-return projects, we continue to return capital to shareholders, distributing $332 million of cash to shareholders through share repurchases and dividends.

Speaker Change: In fiscal 2025, we completed over $175 million of M&A transactions and increased our capital expenditure expenditure for the mountains map project, while ending the year with a net leverage ratio of one five times.

Speaker Change: And even while investing our excess free cash flow in these high return projects, we continued to return capital to shareholders distributing $332 million of.

Speaker Change: Of cash to shareholders through share repurchases and dividends.

Speaker Change: In summary, FY 'twenty 25 was a good year for Eagle.

Michael Haack: In summary, FY 2025 was a good year for Eagle. We held to our strategy that has always served us well and demonstrates that in periods of uncertainty like we're facing today, Eagle's steady focus on investing through cycles, not just for a point in the cycle, enables us to navigate through turbulence, continue to perform well, and position ourselves for the future. In fact, as a 100% U.S. domestic manufacturer, we feel well equipped to weather the variety of potential tariff outcomes and the uncertainty as created for the U.S. economy more broadly.

Speaker Change: We held to our strategy that has always served us well and demonstrates that in periods of uncertainty like we're facing today Eagle steady focus on investing three cycles not just for a point in the cycle enables us to navigate through turbulent continued to perform well and position ourselves for the future.

Speaker Change: In fact, as a 100% U S domestic manufacturer, we feel well equipped to weather the variety of potential tariff outcomes and the uncertainty. It has created for the U S economy more broadly.

Speaker Change: Let me now give some color on our fourth quarter performance and outlook.

Michael Haack: Let me now give some color on our fourth quarter performance and outlook. Our fourth quarter results reflect the impact of adverse weather on our cement and concrete and aggregates businesses, which was severe enough to cause production interruptions at some of our facilities. We made the decision to constructively use the downtime caused by the poor weather to pull forward the annual maintenance outage at our Texas Lehigh cement facility. Despite the recent choppiness in our heavy materials financial performance, we believe the underlying fundamentals in the sector remain solid. Demand and supply dynamics remain favorable across all of our business lines, and we are positioned to benefit from these dynamics.

Speaker Change: Our fourth quarter results reflect the impact of adverse weather on our cement and concrete and aggregates businesses, which was severe enough to cause production interruptions at some of our facilities.

Speaker Change: We made the decision to constructively used the downtime caused by the poor weather to pull forward the annual maintenance outage at our Texas Lehigh cement facility.

Speaker Change: Despite the recent choppiness in our heavy materials financial performance, we believe the underlying fundamentals in the sector remains solid.

Speaker Change: Demand and supply dynamics remain favorable across all of our business lines and we are positioned to benefit from these dynamics.

Michael Haack: In the cement sector, we have seen no material disruption in award funding for public infrastructure projects. Our customers report healthy bidding activities and are anticipating a rebound from the SOFR 2023 and 2024 demand realization. Looking out further, there's continued bipartisan support for infrastructure funding, which should be additive to cement consumption for the next several years.

Speaker Change: In the cement sector, we have seen no material disruption and award funding for public infrastructure projects.

Speaker Change: Our customers report healthy bidding activities and are anticipating a rebound from the soccer 'twenty two 'twenty, three and 'twenty 'twenty four demand realization.

Speaker Change: Looking out further theres continued bipartisan support for infrastructure funding, which should be additive to cement consumption for the next several years.

Speaker Change: Turning to the residential outlook, which is a primary end market driver for wallboard businesses.

Michael Haack: Turning to the residential outlook, which is a primary end market driver for a wallboard. In many ways, we are in a similar place to where we've been for the last several years. While high mortgage rates and housing affordability challenges continue to exert downward pressure on single-family housing starts, this pressure is mitigated somewhat by the clear need for new housing and overall pent-up buyer demand. Ultimately, new home construction will be needed to address the affordability issue. Thus, we believe it's a matter of when, not if, single-family housing starts will rebound. Turning to supply, we believe the outlook in both cement and wallboard is unlikely to change in the medium term.

Speaker Change: In many ways, we are in a similar place to where we've been for the last several years.

Speaker Change: Well, hi, mortgage rates and housing affordability challenges continue to exert downward pressure on single family housing starts there's pressure is mitigated somewhat by the clear need for new housing and overall pent up buyer demand.

Speaker Change: Ultimately new home construction will be needed to address the affordability issue.

Speaker Change: Thus, we believe it's a matter of when not if single family housing starts will rebound.

Speaker Change: Turning to supply we believe the outlook in both cement and wallboard is unlikely to change in the medium term.

Michael Haack: Significant capacity constraints persist in both cement and wall board. As a result, even in an environment like last year where cement volumes were down and wallboard volumes remained subdued versus historical figures Both sectors continued to see relatively elevated utilization rates. As we look forward three to five years and beyond, we believe both the demand and supply dynamics will continue to support our business. Our strategy of steady investment through economic cycles and volatile market conditions positions us well to capture the benefits of these dynamics.

Speaker Change: Significant capacity constraints persists in both cement and wallboard.

Speaker Change: As a result, even in an environment like last year, where cement volumes were down in wallboard volumes remained subdued versus historical figures.

Speaker Change: Both sectors continued to see relatively elevated utilization rates.

Speaker Change: As we look forward three to five years and beyond.

Speaker Change: We believe both the demand and supply dynamics will continue to support our business.

Speaker Change: Our strategy of steady investment through economic cycles, and volatile market conditions positions us well to capture the benefits of these dynamics.

Michael Haack: We are committed to health, safety, sustainability, investing in every one of our plants to maintain our reserves position and keep them in like-new condition, expanding our geographic and customer footprint through compelling organic and M&A investments and maintaining capital allocation discipline. Those are just some of the reasons why we've been able to outperform and provide value for our shareholders through varied economic cycles and why we continue to do so.

Speaker Change: We are committed to health and safety sustainability investing in every one of our plants to maintain our reserves position and keep them in like new condition, expanding our geographic and customer footprint through compelling organic and M&A investments and maintaining capital allocation discipline.

Speaker Change: Those are just some of the reasons why we've been able to outperform and provide value for our shareholders through various economic cycles and why we continue to do so.

Speaker Change: Lastly, before I turn it over to Craig I wanted to highlight governance related announcement, we made earlier this month.

Michael Haack: Lastly, before I turn it over to Craig, I want to highlight a governance-related announcement we made earlier this month.

Speaker Change: On May 15th we announced the appointment of David Rush to our board of directors.

Michael Haack: On May 15th, we announced the appointment of David Rush to our Board of Directors. Dave is the retired CEO of Builders FirstSource, and prior to being CEO at Builders, he held a variety of senior executive roles over his nearly 30-year career there. Dave brings a wealth of valuable industry and management experience, and we're thrilled to add him to the board.

Speaker Change: Dave is the retired C E O of builders first stores and prior to being CEO I builders. He held a variety of senior executive roles over his nearly 30 year career there.

Speaker Change: Dave brings a wealth of valuable industry and management experience and we're thrilled to add him to the board.

Craig Kessler: With that, I'll turn it over to Craig. Thank you, Michael. Fiscal year 2025 revenue was a record $2.3 billion, up slightly from the prior year. The increase primarily reflects higher prices across all of our business lines, partially offset by lower cement and concrete in aggregate sales volume. Revenue for the fourth quarter was down 1% to $470 million, primarily reflecting lower cement and gypsum wallboard sales volumes, partially offset by higher cement and aggregate prices. Diluted earnings per share for the full fiscal year increased 1% to $13.77. The increase was due to the reduced share count resulting from our share repurchase program, which more than offset the net earnings decline.

Craig Kesler: With that I'll turn it over to Craig.

Craig Kesler: Thank you Michael.

Craig Kesler: Fiscal year 2025 revenue.

Craig Kesler: It was a record $2 $3 billion up slightly from the prior year.

Craig Kesler: The increase primarily reflects higher prices across all of our business lines, partially offset by lower cement and concrete and aggregate sales volume.

Craig Kesler: Revenue for the fourth quarter was down 1% to $470 million, primarily reflecting lower cement and gypsum wallboard sales volumes, partially offset by higher cement and aggregate prices.

Craig Kesler: Diluted earnings per share for the full fiscal year increased 1% to $13 77.

Craig Kesler: The increase was due to the reduced share count, resulting from our share repurchase program, which more than offset the net earnings decline.

Craig Kessler: Fully diluted shares are down 4% from the prior year and are down 20% in the last five years. Fourth quarter earnings per share was down 11 percent, largely because of heavy materials results in the quarter when the cement and concrete and aggregates businesses were affected by adverse weather and maintenance costs in the cement business increased. Our quarterly results were also affected by approximately $3.4 million of acquisition, accounting, and related expenses. Adjusting for these items, fourth quarter diluted earnings per share were down 7%.

Craig Kesler: Fully diluted shares were down 4% from the prior year and are down 20% in the last five years.

Craig Kesler: Fourth quarter earnings per share was down 11% largely because of heavy materials results in the quarter, when the cement and concrete and aggregates businesses were affected by adverse weather.

Craig Kesler: And maintenance costs in the cement business increased.

Craig Kesler: Our quarterly results were also affected by approximately $3 4 million of acquisition accounting and related expenses.

Adjusting for these items fourth quarter diluted earnings per share were down 7%.

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

Craig Kessler: Turning now to segment performance.

Craig Kessler: Highlight on the next slide. In our heavy materials sector, which includes our cement and concrete and aggregate segments. Annual revenue declined 2% to $1.4 billion. The decline reflects lower cement sales volume, which was down 5 percent, and was partially offset by higher sales prices. The two aggregates businesses acquired during the year contributed approximately $12 million to annual revenue. Annual operating earnings in the heavy materials sector declined 11% to $311 million, again reflecting lower sales volume, harshly offset by higher cement prices. During the fourth quarter, Heavy Materials operating earnings declined 50% to $18.3 million.

Craig Kesler: And our heavy materials sector, which includes our cement and concrete and aggregate segments.

Annual revenue declined 2% to $1 $4 billion.

Craig Kesler: The decline reflects lower cement sales volume, which was down 5%.

Craig Kesler: And it was partially offset by higher sales prices.

Craig Kesler: The two aggregates businesses acquired during the year contributed approximately $12 million to annual revenue.

Craig Kesler: Annual operating earnings and the heavy materials sector declined 11% to $311 million again, reflecting lower sales volume, partially offset by higher cement prices.

Craig Kesler: During the fourth quarter heavy materials operating earnings declined 50% to $18 3 million.

Craig Kessler: As Michael mentioned, adverse weather conditions during the fourth quarter, most notably in February, caused disruption to not only cement sales opportunities, but also to cement operations. We estimate the operational impact from equipment downtime to be $4 to $5 million. In addition, we pulled forward our annual maintenance outage at the Joint Venture to March versus April in the prior year. And the Joint Venture started up its new slag cement facility in Houston. The combined impact on joint venture results from the timing change of the annual outage and the commissioning costs for the new facility was approximately $4 million.

Craig Kesler: Michael mentioned adverse weather conditions during the fourth quarter, most notably in February caused disruption to not only cement sales opportunities, but also the cement operations.

Craig Kesler: We estimate the operational impact from equipment downtime to be $4 million to $5 million.

Craig Kesler: In addition, we pull forward our annual maintenance outage at the joint venture to March versus April in the prior year.

Craig Kesler: And the joint venture started up its new slag cement facility in Houston.

Craig Kesler: The combined impact on joint venture results from the timing change of the annual outage and the commissioning cost from the new facility was approximately $4 million.

Craig Kessler: Our fourth quarter cement price was up 2%.

Craig Kesler: Our fourth quarter cement price was up 2%.

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

Craig Kessler: Moving to the light materials sector on the next slide. Annual revenue in our light materials sector increased 3% to $969 million, driven by higher wall board sales prices and record recycled paper board sales volume. Annual operating earnings increased 3% to $389 million, also because of higher wallboard sales prices and record paperboard sales volume, plus lower energy and freight costs.

Craig Kesler: Annual revenue in our light materials sector increased 3% to $969 million driven by higher wallboard sales prices and record recycled paperboard sales volume.

Craig Kesler: Annual operating earnings increased 3% to $389 million.

Craig Kesler: Also because of higher wallboard sales prices and record paperboard sales volume plus lower energy and freight cost.

Craig Kesler: Looking now at our cash flow.

Craig Kessler: Looking now at our cash flow. We continue to generate healthy cash flow and allocate capital in line with our strategic priorities and rigorous financial return criteria. Operating cash flow in fiscal 2025 totaled $549 million. Capital spending increased to $195 million as we continue to invest in and improve our operation. Most of the increase in capital spending was associated with the modernization and expansion of our mountain cement plant, which began construction in July. As a reminder, the plant is being upgraded from the existing two long dry kilns to a single modern pre-calcine or kiln line which will significantly improve energy efficiency and simplify maintenance programs, resulting in cost savings of approximately 25%.

Craig Kesler: We continue to generate healthy cash flow and allocate capital in line with our strategic priorities and rigorous financial return criteria.

Craig Kesler: Operating cash flow in fiscal 2025 totaled $549 million.

Craig Kesler: Capital spending increased to $195 million as we continued to invest in and improve our operations.

Craig Kesler: Most of the increase in capital spending was associated with the modernization and expansion of our mountain cement plant, which began construction in July.

Craig Kesler: As a reminder, the plants is being upgraded from the existing too long dry kilns to a single modern pre calciner kiln line, which will significantly improve energy efficiency and simplified maintenance programs, resulting in cost savings of approximately 25%.

Craig Kesler: The project will also increase plant capacity by 50% enhancing our ability to serve the growing northern Colorado market.

Craig Kessler: The project will also increase plant capacity by 50 percent, enhancing our ability to serve the growing northern Colorado market.

Craig Kessler: And as Michael mentioned, last week we announced plans to modernize our Oklahoma wallboard plant, which will further improve its competitive position. The total investment is $330 million and construction is expected to start later this year. Considering these two projects, as well as our sustaining capital spending, we expect total company capital spending in fiscal 2026 to increase to a range of $475 million to $525 million.

Craig Kesler: And as Michael mentioned last week, we announced plans to modernize our Oklahoma Wallboard plant, which will further improve its competitive position.

Craig Kesler: The total investment of $330 million and construction is expected to start later this year.

Craig Kesler: Considering these two projects as well as our sustaining capital spending we expect total company capital spending in fiscal 2026th to increase to a range of 475 million to $525 million.

During fiscal 2025, we acquired two aggregates businesses for approximately $175 million.

Craig Kessler: During fiscal 2025, we acquired two aggregates businesses for approximately $175 million. The previously announced acquisition of Bullskin, Stone & Lime was completed in early January and was funded with cash on hand and borrowings under our bank credit facility. Also during the year, we paid $34 million in dividends and repurchased approximately 1.2 million shares of our common stock, or 4% of the outstanding, for $298 million. We have 4.7 million shares remaining under our current repurchase authorization.

Craig Kesler: The previously announced acquisition of both skin and stone in line was completed in early January and was funded with cash on hand, and borrowings under our bank credit facility.

Craig Kesler: Also during the year, we paid $34 million in dividends and repurchased approximately one 2 million shares of our common stock or 4% of the outstanding for $298 million.

Craig Kesler: We have $4 7 million shares remaining under our current repurchase authorization.

Craig Kesler: Finally, a look at our capital structure, which.

Craig Kessler: And finally, a look at our capital structure, which continues to give us significant financial flexibility. On March 31st, 2025, our net debt-to-cap ratio was 46%. and our net debt to EBITDA leverage ratio was 1.5 times. We ended the year with $20 million of cash on hand. Total liquidity at the end of the fiscal year was approximately $560 million, and we have no meaningful near-term debt maturities, giving us substantial financial flexibility.

Craig Kesler: Which continues to give us significant financial flexibility.

Craig Kesler: At March 31, 2025, our net debt to cap ratio was 46%.

Craig Kesler: Our net debt to EBITDA leverage ratio was one five times.

Craig Kesler: We ended the year with $20 million of cash on hand.

Craig Kesler: Total liquidity at the end of the fiscal year was approximately $560 million and we have no meaningful near term debt maturities, giving us substantial financial flexibility.

Craig Kesler: Thank you for attending today's call Jamie, we'll now move to the question and answer session.

Operator: Thank you for attending today's call. Jamie will now move to the question-and-answer session.

Craig Kesler: Ladies and gentlemen at this time, if you'd like to ask some question. Please press star one using a touchtone telephone.

Operator: Ladies and gentlemen, at this time, if you would like to ask a question, please press star and then 1 using a touch-tone telephone. To withdraw your question, please press star and 2. If you are using a speakerphone, would you 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.

Craig Kesler: So it was draw your question you May press Star and two if.

Craig Kesler: If you are using a speakerphone.

Craig Kesler: Please pick up the handset prior to pressing the keys to ensure the best sound quality once again.

Craig Kesler: And that is star and then one to join the question queue.

Speaker Change: Our first question today comes from Trey Grooms, absolutely comes from Brian Murphy from Stifel. Please go ahead with your question.

Brian Brophy: Our first question today comes from Trey Grooms, actually it comes from Brian Brophy from Stiefel. Please go ahead with your question. Yeah, thanks. Good morning, everybody. Appreciate you taking the question.

Yeah. Thanks. Good morning, everybody. Appreciate you taking the question. So just at a high level you guys have had a number of large modernization and expansion efforts here recently can you remind us how you're philosophically think about deploying capital into these projects. What do you think about return on capital hurdles payback periods.

Michael Haack: So just at a high level, you guys have had a number of large modernization expansion efforts here recently. Can you remind us how you philosophically think about deploying capital into these projects? How do you think about return on capital hurdles, payback periods or anything else we should keep in mind? Yeah, I'll answer part of that and Craig will probably jump in with some is, you know, we've always been pretty open on how we look at our operations and how we Keep them in as good a condition as possible and in favorable markets. You know, we've run strategies on basically every single one of our facilities, and these two have just shown themselves as great investments for us.

Speaker Change: Anything else, we should keep in mind. Thanks.

Craig Kesler: Yeah, I'll answer part of that and Craig will probably jump in with some as you know are we.

Speaker Change: We've always been pretty open on how we are.

Speaker Change: Look at our operations and Howie.

Keep them in as good a condition as possible and unfavorable markets.

Speaker Change: We brought in strategies on basically every single one of our facilities. In these two have just just showing themselves as great investments for us.

Craig Kessler: We like to invest in assets we know, in markets we know, and we think both of these are high-return projects that will add significant value to our customers. And Brian, look, I'd add to that, you know, yes, these are two significant projects, good returns. We have BOGEY's internal hurdle rates of 15% cash on cash after tax type of returns. And these are projects, and we've done similar projects in our history that have been fantastic return projects for us, really improving the competitive position of both of these facilities in really good returning markets or growing markets.

Speaker Change: We like to invest in assets, we know well in markets. We know and we think both of these are high return projects that will add significant value to our customers.

Speaker Change: Yeah, and Brian look out I'd add to that yes. These are two significant projects. Good returns we are bogeys.

Speaker Change: Internal hurdle rates of 15% cash on cash after tax type of returns.

Speaker Change: And these are projects that we've done similar projects in our history that have been fantastic return projects for us are really improving the competitive position of both of these facilities and really good returning markets.

Speaker Change: Growing markets, and then last but not least given where the balance sheet sits today you know right around one five times that also does these projects don't preclude us from continue to explore M&A opportunities and continuing to return capital. So we positioned ourselves really well here.

Michael Haack: And then last but not least, given where the balance sheet sits today, you know, right around one and a half times, that also does – these projects don't preclude us from continuing to explore M&A opportunities and continuing to return capital. So we position ourselves really well here. Thanks. Yeah, that's really helpful.

Okay. Yeah, that's really helpful. And then in the deck you talked about your comments you talked about some expansion to utilize alternative fuels on the cement side of the business can you add any more color here what type of alternative fuels are able to utilize and how should we be thinking about that impact.

Michael Haack: And then in the deck you talked about and your comments talked about some expansion to utilize alternative fuels on the cement side of the business. Can you add any more color here? What type of alternative fuels are you able to utilize? And how should we be thinking about that impacting your ability to manage costs on the energy side? Thanks.

Speaker Change: And your ability to manage costs.

Speaker Change: Thanks.

Michael Haack: Yeah, so, you know, we look at all of our facilities for what we're burning as fuels. The two that mentioned today are really using tires at our Cosmo Cement Facility and an alternative fuel feeder at Illinois Cement. That feeder will allow us to burn multiple different products. Right now we're burning tire chips at that facility with it. How we view these projects is for a CO2 benefit and also for flexibility in the fuel source themselves that we could switch from one fuel source to another opportunistically as the pricing looks beneficial for us at the facilities.

Speaker Change: Yeah. So you know we look at all of our facilities for what we're burning as fuels are the two that I mentioned today are really using tires at our Kosmos cement facility and an alternative fuel theater at Illinois cement that theater will allow us to burn multiple different products right now we're burning a tire.

Speaker Change: At that facility with it.

Speaker Change: How I view these projects is for a <unk> benefit and also or flexibility in the fuel source themselves that we can switch from one fuel source to another opportunistically as the pricing looks a beneficial for us at the facilities.

Michael Haack: You know, we will continue to look for other alternative fuel source projects across our cement plant.

Speaker Change: We will continue to look for other alternative fuel source projects across our cement plants.

Speaker Change: That's really helpful. I'll pass it on thank you.

Michael Haack: That's really helpful.

Michael Haack: I'll pass it on. Thank you.

Trey Grooms: And our next question comes from Trey Grooms from Stephens. Please go ahead with your question.

Trey Grooms: And our next question comes from Trey Grooms from Stevens. Please go ahead with your question. Hey, good morning, Craig and Michael. Thanks for taking my questions. So if we could maybe dive into the wallboard pricing down a few dollars sequentially in the quarter, you mentioned, you know, increased freight costs, and clearly, you know, your wallboard prices are ported net of freight. So that makes sense. But how did the, you know, like for like wallboard pricing trend through the quarter and maybe thus far through your fiscal 1Q? And should this, you know, higher kind of freight costs in the quarter, should that continue here?

Trey Grooms: Hey, good morning, Craig and Michael Thanks for taking my questions.

Speaker Change: So if we could maybe dive into the wallboard pricing down a few dollars sequentially in the quarter. You mentioned you know increased freight costs.

Speaker Change: Costs and clearly you know your wallboard prices reported net of freight so it makes sense, but how did the like for like wallboard pricing trend through the quarter and maybe thus far through your fiscal <unk> and should this you know higher freight costs in the quarter should that continue here.

Speaker Change: Yeah look I would tell you the kind of exit price was not that far off of what the quarterly average was.

Craig Kessler: Yeah, look, Trey, I would tell you the kind of exit price was not that far off of what the quarterly average was. And, you know, we are moving forward on a price increase in wallboard here this spring.

Speaker Change: And we are moving forward on a price increase in wallboard here. This spring and so Oh really won't talk much about kind of post the quarter pricing until we get to the next call in July where we can talk about the realization of that but you know look it's it's interesting the freight costs being higher.

Craig Kessler: And so, you know, really won't talk much about kind of post the quarter pricing until we get to the next call in July, where we can talk about the realization of that. But, you know, look, it's interesting, the freight cost being higher, that's, you know, at least half of the sequential decline. We've seen that in a couple of markets where, you know, things are a little busier than I think people expected, at least on the trucking side. So that was the majority of the change there. Yep. Okay, got it. Makes sense. And then on that note, with wallboard volume, you know, held in well in the quarter, maybe, you know, a little better than than some of the, you know, industry numbers may have suggested through the quarter.

Speaker Change: You know at least half of the sequential decline.

Speaker Change: We've seen that in a couple of markets, where you know things are a little busier than I think people expected at least on the trucking side. So.

Speaker Change: That was the majority of the change there yet.

Speaker Change: Yep, Okay got it makes sense and then on that note with wallboard volume you know held in well in the quarter, maybe a little better than than some of the you know industry numbers may have suggested through the quarter can you talk about you know maybe your expectations around.

Craig Kessler: Can you talk about, you know, maybe your expectations around volume here as we move into the seasonally busier season? Should it continue to, you know, the this kind of level of change or should there be any shifts there? Any update on kind of what you're seeing on the demand front? Yeah, you know, Trey, as we've said for years, I think we are well positioned geographically and better than average markets. So we look at the performance of our business, not just quarterly, but over a trailing 12 month basis. And I think our markets may be outperformed slightly, but pretty much in line with the marketplace.

Speaker Change: William here as we move into the seasonally busier season should it continue with the you know the this kind of level of <unk>.

Speaker Change: Change or should there be any.

Speaker Change: Shifts there or what anything any update on kind of what you're seeing on the demand front.

Speaker Change: Yeah, you know Troy as we've said for years I think we are well positioned geographically and better than average markets. So we look at the performance of our business not just quarterly but over a trailing 12 month basis, and I think our our markets, maybe outperformed slightly but pretty much in.

Speaker Change: Align with the marketplace.

Craig Kessler: You know, look, as it comes to the overall demand picture, it's been interesting home building, which has been pretty tepid for the last three or four years, and annual consumption of wallboard in the U.S. has been pretty flat for several years now. Sitting here today, you know, our outlook is home building to kind of remain in this same level. You know, Michael mentioned it, and we've talked a lot about interest rates and, and the sensitivities around home building affordability, the demand is there. It's just how, how do you have people be able to afford getting to these homes, but, you know, the we're under built in the U.S., and we've been under built for quite some time.

Speaker Change: Look as it comes to the overall demand picture, it's been interesting homebuilding, which has been pretty tepid for the last three or four years and annual consumption of wallboard in the U S has been pretty flat for several years now.

Speaker Change: Sitting here today.

Speaker Change: Our our outlook as homebuilding to kind of remain in this same level you know Michael mentioned, it and we've talked a lot about interest rates and the sensitivities around our homebuilding affordability the demand is there.

Speaker Change: It's just how how do you have people being able to afford a getting into these homes, but.

Speaker Change: We're under built in the U S and we'd been under build for quite some time, but until you can fix the interest rate an affordability issue I think your range bound here for a while.

Craig Kessler: But until you can fix the interest rate and affordability issue, I think you're range bound here for a while. Okay. All right. That makes sense. Thanks, Craig.

Speaker Change: Okay, Alright that makes sense, thanks, Craig I'll pass it on.

Craig Kessler: I'll pass it on.

Speaker Change: Okay.

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

Asher Sohnen: Our next question comes from Anthony Pettinari from Citigroup. Please go ahead with your question.

Michael Haack: Hi, this is Asher Sohnen on for Anthony. Thanks for taking my question. I think you mentioned that there was wasn't really any impact on like public demand for macro uncertainty. But I was wondering, you know, what that might look like for your private non-res or commercial end markets, you know, what you're seeing there, right now, quarter to date? Good question. It really is a bigger driver on the cement side. Private non-res, not a big driver for wallboard, but it's probably, call it 25% or so for the cement demand. The private non-res has so many different subcategories, including data centers and warehouses and large manufacturing facilities, in addition to hospitals and commercial office buildings and the like.

Speaker Change: Hi. This is Asher started on for Anthony Thanks for taking my question. I think you mentioned that there was weather related impact on like public demand for macro uncertainty, but I was wondering you know what that might look like for your private non res, our commercial end markets and what Youre seeing there right now quarter to date.

Speaker Change: Yeah, you know and in good question. It really is a bigger driver on the cement side private non res not a big driver for wallboard, but it's probably call it 25% or so for the cement demand.

Speaker Change: And.

Speaker Change: The private non res has so many different subcategories, including data centers and warehouses and large manufacturing facilities. In addition to the hospitals and commercial office buildings and the like so very different and then geographically the answer could be very different.

Michael Haack: So very different, and then geographically the answer can be very different, but as we look at the overall picture, there's a large number of big projects that are multi-years in length. So again, it's been a growing market for us for a while. I think it remains a pretty steady business for us, and especially in our geographic market. That's helpful.

Speaker Change: But as we look at the overall picture, there's there's a large number of big projects that are multi years in length. So you know again, it's been a growing market for us for a while I think it remains a pretty steady business for us and especially in our geographic markets.

Got it that's helpful. And then just switching gears I forgive me if I missed this but how should we think about the cadence of spending for that for the modernization.

Michael Haack: I'm just switching gears.

Craig Kessler: And forgive me if I missed this, but how should we think about the cadence of spending for the Duke modernization? Yeah, as we said, we should start up construction sometime later this year, you know, late summer, fall time frame. And, you know, cadence will be, you know, pretty heavy here in the fiscal 26 in the, you know, 475 to $525 million level for total company capital spending. You know, obviously that includes mountain cement, plus the Duke wall board facility and our sustaining capital. And then I would expect to see that, you know, start to trail off a little bit into fiscal 27 as the mountain cement project will complete late calendar 26 or late fiscal 27.

Speaker Change: Yeah, as we said we should startup construction sometime later this year late summer fall timeframe and.

The cadence will be you know pretty heavy here into fiscal 'twenty, six and a $475 million to $525 million level for total company capital spending obviously that includes mountain cement plus the Duke wallboard facility and our sustaining capital.

Speaker Change: And then I would expect to see that start to trail off a little bit into fiscal 'twenty seven as the mountain cement project will complete a late calendar 'twenty six or late fiscal 'twenty seven.

Craig Kessler: Okay, that's our help.

Speaker Change: Okay that helps.

Craig Kessler: I'll turn it over.

Speaker Change: I'll turn it over.

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

Jerry Revich: Our next question comes from Jerry Revich from Goldman Sachs. Please go ahead with your question. Yes, hi, good morning, everyone. I'm wondering if we just talk about in cement, obviously, the cadence of pricing for the industry is slowing a bit. Can you folks just talk about based on the pricing cost visibility that you see over the next three to six months? Do you expect pricing to be ahead of inflation? I know we've got moving piece in terms of maintenance, timing, etc. But conceptually, how do you feel about price costs in cement over the next three to six months?

Jerry Revich: Yes, hi, good morning, everyone. I'm wondering who just talked about are in cement are obviously, the cadence of pricing for the industry is slowing a bit but can you just talk about based on the pricing cost visibility that you see over the next three to six months do you expect pricing to be ahead of inflation.

Jerry Revich: And I know that moving piece in terms of maintenance timing et cetera, but conceptually how do you feel about price costs met over the next three to six months.

Speaker Change: Yeah, Jerry I think I would tell you rather than looking at just the next three to six months because our primary outage season is April and May. So the June quarter always has a quite a bit of cost associated with that program, but as you look at the year you know on the cost side, you know energy.

Craig Kessler: Yeah, Jerry, I think I would tell you, rather than looking at just the next three to six months, because our primary outage season is April and May, so the June quarter always has quite a bit of costs associated with that program. But as you look at the year, you know, on the cost side, you know, energy prices or costs are pretty flat here for a little while. Electricity costs are up slightly, you know, but on the balance, I think as we look across our network, you know, we think we can continue to improve margins from here, you know, the exact cadence of that over the next year or two years to be determined, and obviously a lot of that is going to be driven by the volume outlook as well.

Speaker Change: Prices or costs are been pretty pretty flat here for a little while let you electricity costs are up slightly you'll put on the balance I think as we look across our network. We think we can continue to improve margins from here you know the exact cadence of that over the next year or two years to be determined.

Speaker Change: Herman and obviously a lot of that is going to be driven by the volume outlook as well.

Craig Kessler: You know, the incrementals on additional volume is important, and whereas we've come off of, you know, two years in a row with lower volume across the country for the U.S. cement business. So, you know, a rebound in volumes would also go a long way towards improving the margins of the business.

Speaker Change: The incrementals on on additional volume is important and whereas we've come off of two years in a row with lower volume across the country for the U S. Cement business. So you know a rebound in volumes would also go a long way.

Speaker Change: Towards our towards improving the margins of the business.

Speaker Change: Okay, and then in terms of the wallboard business.

Craig Kessler: And then, in terms of the wallboard business, you know, in Texas there's a significant importer of wallboard from Mexico. Can you just talk about what impact you're seeing on pricing from tariffs on wallboard? And then, you know, Samant, can you just talk about what benefits you could folks with the CCMF on business... Yeah, Jerry, when we look at it, you know, for both Mexico and Canada, wallboard and cement are both excluded, so there is no tariff impact to any imports coming in from either of those countries. So, really, the tariffs are very low impact to us as a domestic manufacturer, and there's not really a lot of other imports other than the cement side.

Speaker Change: Theres a significant importer of wallboard from Mexico can you just talk about what impact you're seeing on pricing from parents in wallboard and you use it.

Jerry Revich: So Matt can you just talk about what benefits you could could folks yes, hi. This is Jerry when we look at it you know yeah.

Speaker Change: For both Mexico and Canada.

Speaker Change: Wallboard and cement are both excluded so there is no tariff impact to any imports coming in from either of those countries. So really the tariffs are very low impact to us as a domestic manufacturer and there's not really a lot of other imports other than the cement side.

Speaker Change: When you look at the tariffs on cement you know most of the countries right now are at a 10% tariff.

Craig Kessler: When you look at the tariffs on cement, you know, most of the countries right now are at a 10% tariff for their product. That's off of the...really the cost loaded into the ship. So, when you're looking at, you know, a large component of a cement ton landing in the United States is the shipping cost. So, when you back that out, you know, a lot of the cement coming into the U.S. only has a $4 to $5, maybe $6 tariff associated with it. So, it's not a substantial impact to the business one way or the other.

Speaker Change: For their product that's off of a really the costs loaded into the ship.

So when you're looking at you know a large component of a cement time landing in the United States is the shipping cost. So when you back that out you know a lot of the cement coming into the U S. Only has a four to five maybe six dollar tariff associated with it.

Speaker Change: So it's not a substantial impact to the business one way or the other.

Speaker Change: Yeah.

Speaker Change: Appreciate it and then you know lastly can I ask you and in terms of our wallboard really attractive margins, considering you know where it's sitting at just north of one 3 million starts as you folks think about price cost in that business over the next.

Jerry Revich: Appreciate it.

Craig Kessler: And then, you know, lastly, can I ask in terms of wallboard really attractive margins, considering, you know, we're sitting at just north of 1.3 million starts. As you folks think about price costs in that business over the next, you know, call it three to six months. Can you just talk about the ebbs and flows? And how do you expect margins to play out on a year over year basis? You've got some tough comps coming up in the Yeah, you know, look, similar, Jerry, I would say, you know, looking at it over a longer time period, you know, I think we're very well-positioned, you know, as a overall business given the certainty that we have around our raw material reserves, you know, notably on the gypsum side.

Speaker Change: So call it three to six months can you just talk about the ebbs and flows.

Speaker Change: How do you expect.

Speaker Change: Margins to play out on a year over year basis, you've got some tough comps coming up in the June quarter.

Speaker Change: Yeah.

Speaker Change: Yeah, you know look similar Jerry I would say you know looking at it over a longer time period, I think we're very well positioned.

Speaker Change: As a as a whole raul business given the certainty that we have around our raw material reserves, notably on the gypsum side.

Craig Kessler: And, you know, and so I think that is well-positioned for us as home building, you know, when it does recover in a more meaningful way to continue to see some margin expansion from here. But, I mean, look, in the immediate term, you know, home building, a lot of uncertainty, again, back around interest rates. And so the question is, when does home building recover? And that's when, you know, the real big opportunity to move pricing and therefore margins. You know, on the shorter end of the curve, you know, natural gas has come down here recently. OCC prices are down recently.

Speaker Change: And and so I think that is well positioned for us.

Speaker Change: As homebuilding when it does recover in a more meaningful way.

Speaker Change: To continue to see some margin expansion from here, but I mean look in the immediate term.

Speaker Change: You know the whole building a lot of uncertainty again back around interest rates and so the question is when does homebuilding recover and that's when the real big opportunity to move pricing and therefore margins go on on the on the shorter end of the curve you know natural gas has come down here recently OCC prices are down recently.

Speaker Change: So those are all favorable from that perspective, but we're we're more focused on the longer term and you know when does a windows homebuilding actually turn in our favor and therefore wallboard demand really meaningfully move higher.

Craig Kessler: So those are all favorable from that perspective. But we're more focused on the longer term. And, you know, when does home building actually turn in our favor and therefore wallboard demand really meaningfully move higher. You know, I'd point out, Jerry, you know, we've shipped in this country, 36 billion square feet of product before. And, you know, we're shipping at an annual pace for the last four years around 28 billion square feet plus or minus a couple percent. So, you know, we're well off historical type of higher levels of shipment.

Speaker Change: I'd I'd point out Gerry.

Speaker Change: We've shipped in this country with 36 billion square feet of product before and we're shipping at an annual pace for the last four years around 28 billion square feet, plus or minus a couple of percent.

Speaker Change: So we're well off our historical type of there are higher levels of shipments.

Speaker Change: That's clear thank you.

Speaker Change: Our next question comes from Adam polymer pumps and Davis. Please go ahead with your question.

Adam Thalhimer: Our next question comes from Adam Thalhimer from Thompson Davis. Please go ahead with your question. Thank you. Good morning, guys.

Speaker Change: Thank you good morning, guys.

Speaker Change:

Speaker Change: Craig to the operating loss in concrete and aggregates and Q4 are you looking at that basically is a one off.

Craig Kessler: Craig, the operating loss in concrete and aggregates in Q4, are you looking at that basically as a one-off? Yes, good question, Adam. Look, we had an acquisition that closed during the fourth quarter. As I mentioned, you've got some purchase accounting that added some incremental additional costs there. Not to mention, you've got, you know, a full quarter of depreciation and amortization related to that business. So I would tell you, really look at the concrete and aggregates business on an EBITDA basis. And again, a lot of noise in this fourth quarter given the acquisition closing. But more broadly, look at it as a on an EBITDA basis.

Speaker Change: Yes. Good question Adam look, we we had an acquisition to close during the fourth quarter as I mentioned, you've got some purchase accounting.

Speaker Change: <unk> added some some incremental additional costs there.

Speaker Change: Not to mention you've got you know a full quarter of depreciation and amortization related to that business. So I would tell you really look at the concrete and aggregates business on an EBITDA basis, and again a lot of noise in this fourth quarter, given the acquisition closing, but more broadly look at it as a on an EBITDA basis and and.

Craig Kessler: And once you peel through that, you know, actually, we're pretty happy with where we are positioned with the aggregates business. And we've increased the production capacity there by 50 percent with these two acquisitions this year.

Speaker Change: Once you Peel through that actually we're pretty happy with.

Speaker Change: You know, where we are positioned with the aggregates business.

Speaker Change: We've increased the production capacity there by 50% with these two acquisitions. This year. So you know, it's it's starting to really move the needle.

Craig Kessler: So, you know, it's starting to really move the needle.

Craig Kessler: Okay, and then at the cement joint venture, are you looking at fiscal year 26 as a nice recovery year for that business? Yeah, we certainly, you know, put some investments into that business over the last 12 to 18 months. If you recall, we had a pretty large, you know, clinker cooler work done in the fall, we started up the slag business. During the winter, that's been a drag on earnings. As that business really starts to improve here with the paving season, you know, this summer, we would expect to see, you know, a meaningful improvement there.

Speaker Change: Okay, and then at the cement joint venture or are you looking at fiscal year 'twenty six as a nice recovery year for that business.

Speaker Change: Yeah, we certainly.

Speaker Change: Put some investments into that business over the last 12 to 18 months. If you recall, we had a pretty large.

Speaker Change: Clinker cooler work done in the fall we started up the slag business during the winter that's been a drag on earnings as that business really starts to improve here with the paving season. This summer we would expect to see you know a meaningful improvement there.

Speaker Change: And then just lastly for modeling purposes is there anything more to come from.

Craig Kessler: And then just lastly, for modeling purposes, is there anything more to come from purchase accounting? So an impact there in the first half of 26, and then how much is left in the ERP costs, you called out. Yeah, from a Purchase County perspective, no, that was all contained really in our fourth quarter. And then from on the IT side with our ERP system implementation, implementation, you know, that'll continue here into fiscal 26. So I would model the corporate SG&A at this same level.

Speaker Change: Purchase accounting so.

Speaker Change: Impact there in the first half of 'twenty six and then how much is left in the ERP costs you called out.

Speaker Change: Yeah from a purchase accounting perspective, no that was all contained really in our fourth quarter and then on the it side with our ERP system implemented implementation.

Speaker Change: That'll continue here into fiscal 'twenty six so I would model the corporate SG&A in this at the same level.

Speaker Change: Perfect. Thanks, guys.

Craig Kessler: Perfect. Thanks, Craig.

Speaker Change: Our next question comes from Philip <unk> from Jefferies. Please go ahead with your question Hey.

Philip Ng: Our next question comes from Philip Ng from Jefferies. Please go ahead with your question. Hey guys, you know, cement volumes have been pretty muted the last few quarters, and you know, part of that's water related. So, any updating color in terms of what activity you're seeing right now? Have you seen demand kind of bounce back with water clearing out? Any color on orders, backlogs? Helpful to kind of get a little perspective now. Demand is shaping up thus far on your heavy material side of things.

Speaker Change: Hey, guys, you know cement volumes have been pretty muted the last few quarters and you know part of that's water related so any updated color on in terms of what activity you're seeing right. Now have you seen demand kind of bounce back with wider clearing out any color on orders backlogs are helpful to kind of get a little perspective, now demand is shaping up thus far.

Speaker Change: Oh like you had any material side of things.

Speaker Change: Yeah, No you're right Phil it's been a slog for a couple of years quite frankly on the U S cement side.

Michael Haack: Yeah, no, you're right, Phil, it's been a slog for a couple of years, quite frankly, on the US cement side. Some of it, certainly weather, but there's no doubt infrastructure spending has been very slow to materialize. You know, we've spent, you know, not quite even 35% of the infrastructure bill at this point. That's several years old. We would have expected those dollars to have benefited the business well before now. But encouragingly, as the weather has improved here, March and April, we've seen volume start to improve. So that's been very encouraging from our perspective. Okay, so you're seeing positive year volumes at this point, April and March, correct?

Speaker Change: Some of it certainly weather, but there's no doubt infrastructure spending has been very slow to materialize we spent.

Speaker Change: Not quite even 35% of the of the infrastructure Bill at this point, that's several years old we would've expected those dollars to a benefit of the business well before now but encouragingly as the weather has improved here in March and in April we've.

Speaker Change: We've seen you don't see the volume start to start to improve so that's been very encouraging from our perspective.

Speaker Change: Okay. So you are seeing part of your volumes disappoint April and March right. That's right that's right Okay Super.

Craig Kessler: That's right. Okay, super. And then on the cement price increases, I believe you guys had some in the marketplace in April. Any update on how that has progressed? I know weather's been a little choppy. Cement is very regional in nature. So any color on how that's kind of shaping up across your portfolio? Yeah, most of those were slated for the April timeframe. You know, we try not to talk too much forward looking around pricing.

Speaker Change: On the cement price increases I believe you guys had some in the marketplace in April any update on how that has progressed I know whether it's been choppy. Some med is very regional in nature. So any color on how that's kind of shaping up across your portfolio.

Speaker Change: Yes, most of those were slated for the April time frame, we try not to talk too much forward looking around pricing. So we're suddenly give you that update as we get into our on our July call as we talk about our first fiscal quarter.

Craig Kessler: So we're certainly give you that update as we get into on our July call, as we talk about our first fiscal quarter. Okay, helpful. And from a wallboard demand standpoint, you know, volumes are certainly down, call it three points in the fourth quarter. Spring selling season has been pretty muted. Are you seeing choppy orders from your distributors in any color on how we should think about inventory in the channel? Because we cover some other housing related sectors like installation, for example, order patterns do seem to be very choppy there. So curious if you're seeing any of that as well.

Speaker Change: Okay helpful. And then from a wallboard demand standpoint, you know volumes are certainly down in call. It three points in the fourth quarter.

Speaker Change: Spring selling season has been pretty muted.

Speaker Change: Are you seeing choppy orders from your distributors and any color on how you we should think about inventory in the channel because we cover some other housing related sectors like installation for example, order patterns do seem to be very choppy. There. So curious if you're seeing any of that as well.

Craig Kessler: Yeah, I'd like to tell you, it's been choppy for a couple of years, you know, just with a very muted, single-family housing environment, you know, here in the U.S. And so, you know, not a lot of visibility. As you said, volumes have hung in there reasonably well in the grand scheme of things. So, I would tell you, inventory in the channel, not as big of a thing in Wal-Mart, given that it's, you know, perishable products, so you're not going to store it outside. And so, you know, not a lot of inventory in the grand scheme of things within the channel, either at the manufacturer level or even at the distributor level.

Speaker Change: Yeah, Bill I can tell you it's been choppy for a couple of years, you know just with a very muted a single family housing environment.

Speaker Change: Here in the U S and so a lot of.

Speaker Change: Not a lot of visibility as you said Oh volumes have hung in there reasonably well.

Speaker Change: In the Grand scheme of things. So I would tell you is inventory in the channel.

Speaker Change: Not as big of a thing in wallboard given that it's you know perishable products youre not gonna stored outside.

Speaker Change: And so you know but.

Speaker Change: But not a lot of inventory in the Grand scheme of things within the channel either at the manufacturer level or even at the distributor level, but Oh look I think we're all waiting for the turnaround of affordability and interest rates and.

Craig Kessler: But, you know, look, I think we're all waiting for the turnaround of affordability and interest rates to kind of move the needle. Okay, thank you.

Speaker Change: To kind of move move the needle.

Speaker Change: Okay. Thank you I appreciate all the great color.

Craig Kessler: I appreciate all the great color.

Yeah.

Jonathan Bettenhausen: And our next question comes from Jonathan Bettenhausen from U.S. Please go ahead with your question. Hey, guys. I'm on for Keith Hughes this morning. Thanks for taking my question.

Speaker Change: And our next question comes from Jonathan but in the house and from <unk>. Please go ahead with your question.

Speaker Change: Hey, guys I'm on for our key teams. This morning, Thanks for taking my question.

Michael Haack: What kind of production down times, if any, do you expect from the existing lines at the Duke-Wallport facility while you work on that plant? The existing lines will continue to operate as they have until the new line is complete. It's very similar to the mountain cement project. Okay, got it.

Speaker Change: What kind of production downtime if any do you expect from the existing lines that the deep wallboard facility, while you're at work on that plant.

Speaker Change: Are the existing lines will continue to operate as they have until the new line is complete.

Speaker Change: Very similar to.

To the mountain cement project.

Speaker Change: Okay got it and then what are your thoughts on the aggregate deal pipeline are you guys getting a target to do more of those acquisitions.

Michael Haack: And then what are your thoughts on the aggregates deal pipeline? Are you guys going to target to do more of those acquisitions here in fiscal 26? Yeah, so you know, we we always look at aggregate deals when they come come around with it. You know, the pipeline is pretty cyclical, you know, we get a few every now and then that comes through, you know, from our past history, you can see that, you know, we are a buyer in that space with it, if the if it meets our criteria, which we will not stray from our criteria.

Speaker Change: Acquisitions here in fiscal 'twenty six.

Speaker Change: Yeah. So you know we always look at our aggregate deals when they come.

Speaker Change: Come around with it are you know the pipeline is a pretty cyclical you know we get a if you every now and then that comes through.

From our past history, you can see that we are a buyer in that space with it if the if it meets our criteria, which are we will not stray from our criteria.

Michael Haack: And, you know, we like them that tie into our network have way we feel we can get a you know, our entire network could benefit from those. So, you know, as they come available, we will continue to look in that space, along with the other spaces we look in. Great, thanks.

Speaker Change: Well, we like them that tie into our network have a weight. We feel we can get a great financial return from and that you know our entire network to benefit from those.

Speaker Change: So you know as they come available we will continue to look in that space along with the other spaces, we look at.

Speaker Change: Great. Thanks.

Operator: And ladies and gentlemen, with that, we'll be concluding today's question and answer session.

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 Haq for any closing comments.

Michael Haack: I'd like to turn the floor back over to Michael Haack for any closing comments. Thank you, Jamie. And thanks to all of you for joining the call today. Before we conclude, I want to acknowledge the hard work of our dedicated team members. It's their daily focus on operational excellence, safety, and incremental efficiency gains that enables us to perform steadily in economic cycles. Regardless of the day-to-day noise around us, we will continue to invest wisely in our businesses and capitalize on high-value enhancing opportunities in the year ahead and beyond.

Michael Haack: Thank you Jamie and thanks to all of you for joining the call today before we conclude I want to acknowledge the hard work of our dedicated team members.

Michael Haack: Daily focus on operational excellence safety and incremental efficiency gains that enables us to perform steadily and economic cycles.

Michael Haack: Regardless of the day to day noise around us we will continue to invest wisely in our businesses and capitalize on high value enhancing opportunities in the year ahead and beyond we look forward to talking to you in the summer.

Michael Haack: We look forward to talking to you in the summer.

Speaker Change: Ladies and gentlemen, with that we'll conclude today's conference call and presentation. We do thank you for joining you may now disconnect your lines.

Operator: Ladies and gentlemen, with that, we'll conclude today's conference call and presentation. We do thank you for joining.

Operator: You may now disconnect your lines.

Michael Haack: Okay.