Eagle Materials Q3 2026 Eagle Materials Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q3 2026 Eagle Materials Inc Earnings Call
Speaker #1: Mr. Haack, please go
Speaker #1: ahead, sir. Thank you,
Michael Haack: Thank you, Drew. Good morning. Welcome to Eagle Materials Conference Call for Our Q3 of Fiscal Year 2026. This is Michael Haack. Joining me today are Craig Kesler, our Chief Financial Officer, and Alex Haddock, Senior Vice President of Investor Relations, Strategy, and Corporate Development. A slide presentation accompanies this call. To access it, please go to eaglematerials.com and click on the link to the webcast. While you're accessing the slides, 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. In our Q3 of fiscal 2026, despite the mixed construction environment, our businesses continued to perform well.
Michael Haack: Thank you, Drew. Good morning. Welcome to Eagle Materials Conference Call for Our Q3 of Fiscal Year 2026. This is Michael Haack. Joining me today are Craig Kesler, our Chief Financial Officer, and Alex Haddock, Senior Vice President of Investor Relations, Strategy, and Corporate Development. A slide presentation accompanies this call. To access it, please go to eaglematerials.com and click on the link to the webcast. While you're accessing the slides, 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. In our Q3 of fiscal 2026, despite the mixed construction environment, our businesses continued to perform well.
Speaker #2: Drew, good morning. Welcome to Eagle Materials' conference call for our third quarter of fiscal year 2026. This is Michael Haack. Joining me today are Craig Kesler, our Chief Financial Officer, and Alex Haddock, Senior Vice President of Investor Relations, Strategy, and Corporate Development.
Speaker #2: A slide presentation accompanies this call. To access it, please go to eaglematerials.com and click on the link to the webcast. While you're accessing the slides, note that the first slide covers our cautionary disclosure regarding forward-looking statements made during this call.
Speaker #2: 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.
Speaker #2: In our third quarter of fiscal 2026, despite the mixed construction environment, our businesses continued to perform well. We generated $556 million in revenue, our earnings per share were $3.22, and we delivered a gross profit margin of 28.9%.
Michael Haack: We generated $556 million in revenue. Our earnings per share were $3.22, and we delivered a gross profit margin of 28.9%. In these choppy times, Eagle will continue to operate as it always has. We will control what is in our control and adjust to current market conditions to maximize profitability in both the short and long term. Our strategy is consistent. We will invest in the health and safety of our largest differentiating asset, our people, our plants to control costs and support our customers through increased reliability, efficiency, and capacity, our short- and long-term strategy with return-focused projects or acquisitions, all of this while ensuring our balance sheet remains in pristine condition. Foundational to everything we do is maintaining the highest standards of health and safety. Our annual safety conference was held in December.
We generated $556 million in revenue. Our earnings per share were $3.22, and we delivered a gross profit margin of 28.9%. In these choppy times, Eagle will continue to operate as it always has. We will control what is in our control and adjust to current market conditions to maximize profitability in both the short and long term. Our strategy is consistent. We will invest in the health and safety of our largest differentiating asset, our people, our plants to control costs and support our customers through increased reliability, efficiency, and capacity, our short- and long-term strategy with return-focused projects or acquisitions, all of this while ensuring our balance sheet remains in pristine condition. Foundational to everything we do is maintaining the highest standards of health and safety. Our annual safety conference was held in December.
Speaker #2: In these choppy times, Eagle will continue to operate as it always has. We will control what is in our control, and adjust to current market conditions to maximize profitability in both the short and long term.
Speaker #2: Our strategy is consistent. We will invest in the health and safety of our largest differentiating asset—our people—our plans to control costs and support our customers through increased reliability, efficiency, and capacity, our short- and long-term strategy with return-focused projects, or acquisitions.
Speaker #2: All of this while ensuring our balance sheet remains in pristine condition. Foundational to everything we do is maintaining the highest standards of health and safety.
Speaker #2: Our annual safety conference was held in December. It is always a great opportunity to interact with the leaders of the organization to review our safety and environmental performance, pass along some important messages, and set our path for continued improvement.
Michael Haack: It is always a great opportunity to interact with the leaders of the organization to review our safety and environmental performance, pass along some important messages, and set our path for continued improvement. Our journey to zero incidents is ongoing, but every employee at Eagle understands that the safety of our people always comes first. If we cannot perform a job safely, we will not perform the job. These meetings, with the best practice sharing and commitment from the team, have allowed Eagle to maintain an industry-leading safety record. To say the least, I'm proud of all Eagle's employees and the safety culture we have built. Regarding our plants, we work to maintain the reliability of our assets, increase efficiency and capacity, which gives us operational flexibility to execute efficiently through economic cycles.
It is always a great opportunity to interact with the leaders of the organization to review our safety and environmental performance, pass along some important messages, and set our path for continued improvement. Our journey to zero incidents is ongoing, but every employee at Eagle understands that the safety of our people always comes first. If we cannot perform a job safely, we will not perform the job. These meetings, with the best practice sharing and commitment from the team, have allowed Eagle to maintain an industry-leading safety record. To say the least, I'm proud of all Eagle's employees and the safety culture we have built. Regarding our plants, we work to maintain the reliability of our assets, increase efficiency and capacity, which gives us operational flexibility to execute efficiently through economic cycles.
Speaker #2: Our journey to zero incidents is ongoing, but every employee at Eagle understands that the safety of our people always comes first. If we cannot perform a job safely, we will not perform the job.
Speaker #2: These meetings, with the best-practice sharing and commitment from the team, have allowed Eagle to maintain an industry-leading safety record. To say the least, I'm proud of all Eagle's employees and the safety culture we have built.
Speaker #2: Regarding our plans, we work to maintain the reliability of our assets and increase efficiency and capacity which gives us operational flexibility to execute efficiently through economic cycles.
Speaker #2: This past quarter, we advanced several initiatives that convert our waste streams into revenue streams to help further improve our low-cost producer position. Let me give a few examples.
Michael Haack: This past quarter, we advanced several initiatives that convert our waste streams into revenue streams to help further improve our low-cost producer position. Let me give a few examples. In cement, we have been able to reclaim decades-old waste streams that can be used as a source of raw materials in our production process. In our aggregates operations, we have begun using fines and overburden to support our raw materials or extend our reserves at our cement plants and aggregate facilities. In the light side of our business, we are expanding the capabilities of our Republic Paperboard mill to repurpose non-wallboard-grade paper and trim rolls into higher value-add products. At American Gypsum, we are recycling 100% of our waste wallboard back into the production process, except at our Duke facility, which will also be at 100% following the completion of our modernization there.
This past quarter, we advanced several initiatives that convert our waste streams into revenue streams to help further improve our low-cost producer position. Let me give a few examples. In cement, we have been able to reclaim decades-old waste streams that can be used as a source of raw materials in our production process. In our aggregates operations, we have begun using fines and overburden to support our raw materials or extend our reserves at our cement plants and aggregate facilities. In the light side of our business, we are expanding the capabilities of our Republic Paperboard mill to repurpose non-wallboard-grade paper and trim rolls into higher value-add products. At American Gypsum, we are recycling 100% of our waste wallboard back into the production process, except at our Duke facility, which will also be at 100% following the completion of our modernization there.
Speaker #2: In cement, we have been able to reclaim decades-old waste streams that can be used as a source of raw materials in our production process.
Speaker #2: In our aggregates operations, we have begun using fines and overburden to support our raw materials or extend our reserves at our cement plants and aggregate facilities.
Speaker #2: In the light side of our business, we are expanding the capabilities of our Republic paper mill to repurpose non-wallboard-grade paper and trim rolls into higher-value-add products.
Speaker #2: At American Gipsum, we are recycling 100% of our waste wallboard back into the production process, except that our Duke facility which will also be at 100% following the completion of our modernization there.
Speaker #2: Importantly, many of these projects require minimal or no capital investment while having an outsized positive benefit on our operations. These initiatives complement some larger strategic projects we have underway that benefit our overall system reliability, y, capacity, and profitability.
Michael Haack: Importantly, many of these projects require minimal or no capital investment while having an outsized positive benefit on our operations. These initiatives complement some larger strategic projects we have underway that benefit our overall system reliability, capacity, and profitability, namely the modernization of our Mountain Cement plant and the Duke wallboard facility. We made good progress on both projects during the quarter, which means that our Laramie, Wyoming, cement plant should be going through its commissioning late this calendar year, followed by our Duke, Oklahoma, commissioning in the second half of calendar 2027. Each investment will lower the cost structure of the respective plant, strengthen our already low-cost, competitive position, and deliver a strong return on investment. I'm incredibly excited for what's ahead, as we are experiencing some downtime at the Mountain Cement kilns recently, increasing the justification for the modernization project.
Importantly, many of these projects require minimal or no capital investment while having an outsized positive benefit on our operations. These initiatives complement some larger strategic projects we have underway that benefit our overall system reliability, capacity, and profitability, namely the modernization of our Mountain Cement plant and the Duke wallboard facility. We made good progress on both projects during the quarter, which means that our Laramie, Wyoming, cement plant should be going through its commissioning late this calendar year, followed by our Duke, Oklahoma, commissioning in the second half of calendar 2027. Each investment will lower the cost structure of the respective plant, strengthen our already low-cost, competitive position, and deliver a strong return on investment. I'm incredibly excited for what's ahead, as we are experiencing some downtime at the Mountain Cement kilns recently, increasing the justification for the modernization project.
Speaker #2: Namely, the modernization of our mountain cement plant and the Duke wallboard facility. We made good progress on both projects during the quarter, which means that our Laramie, Wyoming cement plant should be going through its commissioning late this calendar year followed by our Duke Oklahoma commissioning in the second half of calendar 2027.
Speaker #2: Each investment will lower the cost structure of the respective plants, strengthen our already low-cost competitive position, and deliver a strong return on investment. I'm incredibly excited for what's ahead, as we are experiencing some downtime at the Mountain cement kilns recently.
Speaker #2: Increasing the justification for the modernization project. In the meantime, we can use our network of cement plants to meet our customer needs, albeit at an increased cost.
Michael Haack: In the meantime, we can use our network of cement plants to meet our customer needs, albeit at an increased cost. We'll continue to report on progress as we approach the end of each plant construction timeline. With both plants coming online over the next 18 months, let me pivot now to where we think we are in the economic cycle. At Eagle, we don't operate in a way that is overly focused on short-term demand cycles. Our primary products are essential commodities, meaning demand will fluctuate. That being said, heavy materials and wallboard appear to be at different inflection points today. Our cement and aggregate sales volumes grew last quarter, and we believe the support from federal, state, and local infrastructure spending, plus solid growth on key non-residential end markets, will continue support for our heavy materials business.
In the meantime, we can use our network of cement plants to meet our customer needs, albeit at an increased cost. We'll continue to report on progress as we approach the end of each plant construction timeline. With both plants coming online over the next 18 months, let me pivot now to where we think we are in the economic cycle. At Eagle, we don't operate in a way that is overly focused on short-term demand cycles. Our primary products are essential commodities, meaning demand will fluctuate. That being said, heavy materials and wallboard appear to be at different inflection points today. Our cement and aggregate sales volumes grew last quarter, and we believe the support from federal, state, and local infrastructure spending, plus solid growth on key non-residential end markets, will continue support for our heavy materials business.
Speaker #2: We'll continue to report on progress as we approach the end of each plant construction timeline. With both plants coming online over the next 18 months, let me pivot now to where we think we are in the economic cycle.
Speaker #2: At Eagle, we don't operate in a way that is overly focused on short-term demand cycles. Our primary products are essential commodities, meaning demand will fluctuate.
Speaker #2: That being said, heavy materials and wallboard appear to be at different inflection points today. Our cement and aggregate sales volumes grew last quarter, and we believe the support from federal, state, and local infrastructure spending plus solid growth on key non-residential end markets will continue support for our heavy materials business.
Speaker #2: As discussed last quarter, we have announced price increases for the first quarter of calendar 2026 in most of our markets, further reflecting our volume expectations for our heavy materials business.
Michael Haack: As discussed last quarter, we have announced price increases for the first quarter of calendar 2026 in most of our markets, further reflecting our volume expectations for our heavy materials business. At the same time, residential construction, which drives wallboard volumes, was challenged last quarter. Current housing data reflects the affordability issues that have been plaguing the home building industry for quite some time. Recent housing policy announcements, combined with more accommodative monetary and fiscal policy, recognize the fundamental need for new home construction in the US, so we are monitoring these developments closely. Nonetheless, as I said, our focus is on our operations, not on predicting demand. Over decades, we've demonstrated that we can operate equally well in strong economic environments and in mixed construction environments. Our low-cost producer position gives us opportunities and advantages for managing cost.
As discussed last quarter, we have announced price increases for the first quarter of calendar 2026 in most of our markets, further reflecting our volume expectations for our heavy materials business. At the same time, residential construction, which drives wallboard volumes, was challenged last quarter. Current housing data reflects the affordability issues that have been plaguing the home building industry for quite some time. Recent housing policy announcements, combined with more accommodative monetary and fiscal policy, recognize the fundamental need for new home construction in the US, so we are monitoring these developments closely. Nonetheless, as I said, our focus is on our operations, not on predicting demand. Over decades, we've demonstrated that we can operate equally well in strong economic environments and in mixed construction environments. Our low-cost producer position gives us opportunities and advantages for managing cost.
Speaker #2: At the same time, residential construction—which drives wallboard volumes—was challenged last quarter. Current housing data reflects the affordability issues that have been plaguing the homebuilding industry for quite some time.
Speaker #2: Recent housing policy announcements combined with more accommodative monetary and fiscal policy recognize the fundamental need for new home construction in the US. So we are monitoring these developments closely.
Speaker #2: Nonetheless, as I said, our focus is on our operations, not on predicting demand. Over decades, we've demonstrated that we can operate equally well in strong economic environments and in mixed construction environments.
Speaker #2: Our low-cost producer position gives us opportunities and advantages for managing cost. In wallboard, our sustaining maintenance costs are already low, and we benefit from the ability to flex production to match sales.
Michael Haack: In wallboard, our sustaining maintenance costs are already low, and we benefit from the ability to flex production to match sales. Finally, as I mentioned earlier, our focus on financial discipline and balance sheet strength remains. During the quarter, we strengthened our already solid financial position, issuing $750 million in ten-year senior notes, aligning our capital structure with our ongoing investments at the Laramie, Wyoming cement plant and Duke, Oklahoma wallboard plant. While making significant progress on our major capital projects, we increased our return of capital to shareholders. During our fiscal Q3, we returned nearly $150 million to shareholders through our dividend and share repurchases. Our leverage ratio of 1.8 times allows us to navigate cycles and stay in growth mode, even as our end markets have endured choppiness.
In wallboard, our sustaining maintenance costs are already low, and we benefit from the ability to flex production to match sales. Finally, as I mentioned earlier, our focus on financial discipline and balance sheet strength remains. During the quarter, we strengthened our already solid financial position, issuing $750 million in ten-year senior notes, aligning our capital structure with our ongoing investments at the Laramie, Wyoming cement plant and Duke, Oklahoma wallboard plant. While making significant progress on our major capital projects, we increased our return of capital to shareholders. During our fiscal Q3, we returned nearly $150 million to shareholders through our dividend and share repurchases. Our leverage ratio of 1.8 times allows us to navigate cycles and stay in growth mode, even as our end markets have endured choppiness.
Speaker #2: Finally, as I mentioned earlier, our focus on financial discipline and balance sheet strength remains. During the quarter, we strengthened our already solid financial position, issuing $750 million in 10-year senior notes.
Speaker #2: Aligning our capital structure with our ongoing investments at the Laramie, Wyoming cement plant and Duke Oklahoma wallboard plant. While making significant progress on our major capital projects, we increased our return of capital shareholders.
Speaker #2: During our fiscal third quarter, we returned nearly $150 million to shareholders through our dividend and share repurchases. Our leverage ratio of 1.8 times allows us to navigate cycles and stay in growth mode, even as our end markets have endured choppiness.
Speaker #2: Craig, with those comments, I will now turn it over to you. Thank you, Michael. Third quarter revenue was $556 million. Down slightly from the prior year.
Michael Haack: Craig, with those comments, I will now turn it over to you.
Craig, with those comments, I will now turn it over to you.
Craig Kesler: Thank you, Michael. Third quarter revenue was $556 million, down slightly from the prior year. The decrease reflects lower wallboard and paperboard sales volume, partially offset by higher cement sales volume and the contribution from the recently acquired aggregates business. Third quarter earnings per share was $3.22, down 10% from the third quarter of fiscal 2025. The decrease reflects lower net earnings, mostly the result of lower wallboard sales volume, offset by a 5% reduction in fully diluted shares due to our share buyback program. Turning now to segment performance. In our heavy materials sector, which includes our cement, concrete, and aggregate segments, revenue was up 11%, driven primarily by a 9% increase in cement sales volume and a 22% increase in concrete and aggregates revenue.
Craig Kesler: Thank you, Michael. Third quarter revenue was $556 million, down slightly from the prior year. The decrease reflects lower wallboard and paperboard sales volume, partially offset by higher cement sales volume and the contribution from the recently acquired aggregates business. Third quarter earnings per share was $3.22, down 10% from the third quarter of fiscal 2025. The decrease reflects lower net earnings, mostly the result of lower wallboard sales volume, offset by a 5% reduction in fully diluted shares due to our share buyback program. Turning now to segment performance. In our heavy materials sector, which includes our cement, concrete, and aggregate segments, revenue was up 11%, driven primarily by a 9% increase in cement sales volume and a 22% increase in concrete and aggregates revenue.
Speaker #2: The decrease reflects lower wallboard and paperboard sales volume, partially offset by higher cement sales volume and the contribution from the recently acquired aggregates business.
Speaker #2: Third quarter earnings per share was $3.22. Down 10% from the third quarter of fiscal 2025. The decrease reflects lower net earnings, mostly the result of lower wallboard sales volume, offset by a 5% reduction in fully diluted shares due to our share buyback program.
Speaker #2: Turning now to segment performance. In our heavy materials sector, which includes our cement and concrete and aggregate segments, revenue was up 11%, driven primarily by a 9% increase in cement sales volume and a 22% increase in concrete and aggregates revenue.
Speaker #2: Aggregate sales volume was up 81% to a record 1.6 million tons, reflecting a 34% increase in organic aggregate sales volume and the contribution from the recently acquired aggregates business.
Craig Kesler: Aggregate sales volume was up 81% to a record 1.6 million tons, reflecting a 34% increase in organic aggregate sales volume and the contribution from the recently acquired aggregates business. Operating earnings were up 9%, driven primarily by the 9% increase in cement sales volume. As Michael mentioned, cement price increases have been announced in most of our markets to take effect in the first part of calendar 2026. Moving to the light materials sector on the next slide. Revenue in the sector decreased 16% to $203 million, reflecting lower wallboard and recycled paperboard sales volume, and a 5% decline in wallboard sales prices. Operating earnings in the sector were down 25% to $73 million, primarily because of lower wallboard sales volume and prices. Looking now at our cash flow.
Aggregate sales volume was up 81% to a record 1.6 million tons, reflecting a 34% increase in organic aggregate sales volume and the contribution from the recently acquired aggregates business. Operating earnings were up 9%, driven primarily by the 9% increase in cement sales volume. As Michael mentioned, cement price increases have been announced in most of our markets to take effect in the first part of calendar 2026. Moving to the light materials sector on the next slide. Revenue in the sector decreased 16% to $203 million, reflecting lower wallboard and recycled paperboard sales volume, and a 5% decline in wallboard sales prices. Operating earnings in the sector were down 25% to $73 million, primarily because of lower wallboard sales volume and prices. Looking now at our cash flow.
Speaker #2: Operating earnings were up 9%, driven primarily by the 9% increase in cement sales volume. As Michael mentioned, cement price increases have been announced in most of our markets to take effect in the first part of calendar 2026.
Speaker #2: Moving to the Light Materials sector on the next slide. Revenue in the sector decreased 16% to $203 million, reflecting lower wallboard and recycled paperboard sales volume, and a 5% decline in wallboard sales prices.
Speaker #2: Operating earnings in the sector were down 25% to $73 million. Primarily because of lower wallboard sales volume and prices. Looking now at our cash flow.
Speaker #2: We continue to generate strong cash flow and allocate capital in a disciplined way, in line with our strategic priorities. During the first nine months of the fiscal year, operating cash flow increased 5% to $512 million.
Craig Kesler: We continue to generate strong cash flow and allocate capital in a disciplined way, in line with our strategic priorities. During the first nine months of the fiscal year, operating cash flow increased 5% to $512 million. Capital spending increased to $295 million. Most of this increase was associated with the modernization and expansion of our Mountain Cement plant in Laramie, Wyoming, and the modernization of our Duke, Oklahoma wallboard plant. Considering these two projects, as well as our sustaining capital spending, we expect total capital spending in fiscal 2026 to be in the range of $430 to $450 million. During our fiscal Q3, while investing in these growth projects, we also significantly increased our shareholder distributions.
We continue to generate strong cash flow and allocate capital in a disciplined way, in line with our strategic priorities. During the first nine months of the fiscal year, operating cash flow increased 5% to $512 million. Capital spending increased to $295 million. Most of this increase was associated with the modernization and expansion of our Mountain Cement plant in Laramie, Wyoming, and the modernization of our Duke, Oklahoma wallboard plant. Considering these two projects, as well as our sustaining capital spending, we expect total capital spending in fiscal 2026 to be in the range of $430 to $450 million. During our fiscal Q3, while investing in these growth projects, we also significantly increased our shareholder distributions.
Speaker #2: Capital spending increased to $295 million. Most of this increase was associated with the modernization and expansion of our mountain cement plant in Laramie, Wyoming, and the modernization of our Duke Oklahoma wallboard plant.
Speaker #2: Considering these two projects, as well as our sustaining capital spending, we expect total capital spending in fiscal 2026 to be in the range of $430 to $450 million.
Speaker #2: During our fiscal third quarter, while investing in these growth projects, we also significantly increased our shareholder distributions. We returned nearly $150 million to shareholders through our quarterly dividend payment, and the repurchase of approximately 648,000 shares of our common stock.
Craig Kesler: We returned nearly $150 million to shareholders through our quarterly dividend payment and the repurchase of approximately 648,000 shares of our common stock. Through the first nine months of fiscal 2026, we have repurchased approximately 1.4 million shares, or 4% of our outstanding. We have approximately 3.3 million shares remaining under our current repurchase authorization. Finally, a look at our capital structure, which continues to give us significant financial flexibility. As Michael mentioned, during the quarter, we further strengthened our financial position by issuing $750 million of 10-year Senior Notes with an interest rate of 5%. This issuance enhances our debt maturity schedule, increases committed liquidity, and aligns our capital structure with the long-term investments we're making at our Mountain Cement plant and Duke Wallboard facility.
We returned nearly $150 million to shareholders through our quarterly dividend payment and the repurchase of approximately 648,000 shares of our common stock. Through the first nine months of fiscal 2026, we have repurchased approximately 1.4 million shares, or 4% of our outstanding. We have approximately 3.3 million shares remaining under our current repurchase authorization. Finally, a look at our capital structure, which continues to give us significant financial flexibility. As Michael mentioned, during the quarter, we further strengthened our financial position by issuing $750 million of 10-year Senior Notes with an interest rate of 5%. This issuance enhances our debt maturity schedule, increases committed liquidity, and aligns our capital structure with the long-term investments we're making at our Mountain Cement plant and Duke Wallboard facility.
Speaker #2: Through the first nine months of fiscal '26, we've repurchased approximately $1.4 million shares or 4% of our outstanding. We have approximately $3.3 million shares remaining under our current repurchase authorization.
Speaker #2: Finally, a look at our capital structure. Which continues to give us significant financial flexibility. As Michael mentioned, during the quarter, we further strengthened our financial position by issuing $750 million of 10-year senior notes with an interest rate of 5%.
Speaker #2: This issuance enhances our debt maturity schedule, increases committed liquidity, and aligns our capital structure with the long-term investments we're making at our mountain cement plant and Duke wallboard facility.
Speaker #2: We also used a portion of the proceeds to repay our bank credit facility. At December 31, 2025, our net debt to cap ratio was 48%, and our net debt to EBITDA leverage ratio was 1.8 times.
Craig Kesler: We also used a portion of the proceeds to repay our bank credit facility. At December 31, 2025, our net debt to cap ratio was 48%, and our net debt to EBITDA leverage ratio was 1.8 times. We ended the quarter with $419 million of cash on hand. Total committed liquidity at the end of the quarter was approximately $1.2 billion, and we have no meaningful near-term debt maturities, giving us substantial financial flexibility. Thank you for attending today's call. We'll now move to the question-and-answer session. Drew, I'll throw it back to you.
We also used a portion of the proceeds to repay our bank credit facility. At December 31, 2025, our net debt to cap ratio was 48%, and our net debt to EBITDA leverage ratio was 1.8 times. We ended the quarter with $419 million of cash on hand. Total committed liquidity at the end of the quarter was approximately $1.2 billion, and we have no meaningful near-term debt maturities, giving us substantial financial flexibility. Thank you for attending today's call. We'll now move to the question-and-answer session. Drew, I'll throw it back to you.
Speaker #2: We ended the quarter with $419 million of cash on hand, total committed liquidity at the end of the quarter was approximately $1.2 billion, and we have no meaningful near-term debt maturities giving us substantial financial flexibility.
Speaker #2: Thank you for attending today's call. We'll now move to the question and answer session, so I'll throw it back to
Speaker #2: you. We will
Operator: We will now begin the question-and-answer session. To ask a question, you may press Star, then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press Star, then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Trey Grooms with Stephens Inc. Please go ahead.
Operator: We will now begin the question-and-answer session. To ask a question, you may press Star, then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press Star, then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Trey Grooms with Stephens Inc. Please go ahead.
Speaker #3: Now begin the question and answer session. To ask a question, you may press star, then one, on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys.
Speaker #3: If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster.
Speaker #3: The first question comes from Trey Grooms with Stevens Inc. Please go
Speaker #3: ahead. Hey, good morning, Craig and
Trey Grooms: Hey, good morning, Craig and Michael. So cement, if we could start there, the cement volume up nicely again in the quarter. Also, you know, organic aggregates volume as well. You touched on a few things there in the press release or in the slide deck, rather, that we're, that you, where we were seeing some strength, maybe infrastructure, data centers, those types of things. Can you talk about, you know, is that demand pretty well widespread across your markets, or is it more isolated to, you know, some specific geographies? And then, you know, has that strength kinda continued as we've started off here into calendar 2026?
Trey Grooms: Hey, good morning, Craig and Michael. So cement, if we could start there, the cement volume up nicely again in the quarter. Also, you know, organic aggregates volume as well. You touched on a few things there in the press release or in the slide deck, rather, that we're, that you, where we were seeing some strength, maybe infrastructure, data centers, those types of things. Can you talk about, you know, is that demand pretty well widespread across your markets, or is it more isolated to, you know, some specific geographies? And then, you know, has that strength kinda continued as we've started off here into calendar 2026?
Speaker #4: Michael. So cement, if we could start there, the cement volume up nicely again in the quarter also organic aggregates volume as well. Can you touch on a few things there in the press or in the slide deck, rather?
Speaker #4: That you were seeing some strength, maybe infrastructure data centers, those types of things. Can you talk about is that demand pretty well widespread across your markets, or is it more isolated to some specific geographies and then has that strength kind of continued as we've started off here into calendar '26?
Speaker #5: Yeah, Trey, look, I would tell you it's pretty broad-based across our markets. I think we came into calendar '25—if you think about a year ago—we were optimistic around infrastructure, some of the non-residential key markets, and that played out as we had expected.
Craig Kesler: Yeah, Trey, look, I would tell you it's pretty broad-based across our markets. You know, I think we came into calendar 2025. If you think about a year ago, we were optimistic around infrastructure, some of the non-residential key markets, and that played out as we had expected, and in many parts of our markets. And we're a broad national footprint. And so as we head into calendar 2026, we have some, you know, continue to have that optimism around infrastructure and some of the non-residential markets. So, you know, always hard to generate a trend in January and February, given winter weather, and certainly, we've all lived through that in the last week or so, but
Craig Kesler: Yeah, Trey, look, I would tell you it's pretty broad-based across our markets. You know, I think we came into calendar 2025. If you think about a year ago, we were optimistic around infrastructure, some of the non-residential key markets, and that played out as we had expected, and in many parts of our markets. And we're a broad national footprint. And so as we head into calendar 2026, we have some, you know, continue to have that optimism around infrastructure and some of the non-residential markets. So, you know, always hard to generate a trend in January and February, given winter weather, and certainly, we've all lived through that in the last week or so, but
Speaker #5: And in many parts of our markets. And we're a broad national footprint. And so as we head into calendar '26, we have some continue to have that optimism around infrastructure and some of the non-residential markets.
Speaker #5: So, it's always hard to generate a trend in January and February given winter weather, and certainly we've all lived through that in the last week or so.
Speaker #5: But optimism coming into '26.
Trey Grooms: Sure.
Trey Grooms: Sure.
Craig Kesler: You know, optimism coming into 2026.
Craig Kesler: You know, optimism coming into 2026.
Speaker #4: Good deal. Okay. And kind of sticking with cement, the margins impacted a bit here down a little bit here. Understand there was maybe a slight decline in pricing, but volume again here was strong like we discussed.
Trey Grooms: Good deal. Okay, and kind of sticking with cement, you know, the margins impacted a bit here, down a little bit here. Understand there was, you know, maybe a slight decline in pricing, but volume again here was strong, like we discussed. Can you talk about, you know, what's driving the margins there? I didn't see anything kind of unusual called out in the press release as far as, you know, maintenance or anything, but just if you could maybe touch on the margins in cement.
Trey Grooms: Good deal. Okay, and kind of sticking with cement, you know, the margins impacted a bit here, down a little bit here. Understand there was, you know, maybe a slight decline in pricing, but volume again here was strong, like we discussed. Can you talk about, you know, what's driving the margins there? I didn't see anything kind of unusual called out in the press release as far as, you know, maintenance or anything, but just if you could maybe touch on the margins in cement.
Speaker #4: Can you talk about what's driving the margins there? I didn't see anything kind of unusual called out in the press release as far as maintenance or anything, but just if you can maybe touch on the margins in—
Speaker #4: cement. Yeah.
Speaker #5: I mean, look, costs were largely in line. We did have some raw material costs, purchased raw materials costs that were up this quarter. But maintenance was largely in check.
Craig Kesler: Yeah, I mean, look, costs were largely in line. We did have some raw material costs, purchased raw materials costs that were up this quarter. You know, but maintenance was largely in check. Fuel costs, you know, as we've talked about, have been largely in line. So, you know, nothing stands out significant.
Craig Kesler: Yeah, I mean, look, costs were largely in line. We did have some raw material costs, purchased raw materials costs that were up this quarter. You know, but maintenance was largely in check. Fuel costs, you know, as we've talked about, have been largely in line. So, you know, nothing stands out significant.
Speaker #5: Fuel costs as we've talked about have been largely in line. So nothing stands out significant.
Speaker #4: Okay. Okay. Fair enough. And then last one for me. Is on wallboard pricing, you saw a little bit of a decline there sequentially. I think it was about 3% or so.
Trey Grooms: Okay. Okay, fair enough. And then, last one for me is on, on wallboard pricing. You know, you saw a little bit of a, a decline there sequentially. I think it was about, you know, 3% or so, and, and not overly surprising. But, you know, have, have you... Has this, has this kind of pricing trend maybe continued into January? Or how should we be thinking maybe about the kinda directionally, at least, with wallboard, or, you know, around wallboard pricing here in the near term as we kind of, you know, bump along at these lower, you know, demand levels with, you know, nothing looking to change drastically on that front, at least in the, in the near term. Any color you could give us on how we should be thinking about that?
Trey Grooms: Okay. Okay, fair enough. And then, last one for me is on, on wallboard pricing. You know, you saw a little bit of a, a decline there sequentially. I think it was about, you know, 3% or so, and, and not overly surprising. But, you know, have, have you... Has this, has this kind of pricing trend maybe continued into January? Or how should we be thinking maybe about the kinda directionally, at least, with wallboard, or, you know, around wallboard pricing here in the near term as we kind of, you know, bump along at these lower, you know, demand levels with, you know, nothing looking to change drastically on that front, at least in the, in the near term. Any color you could give us on how we should be thinking about that?
Speaker #4: And not overly surprising, but have you has this kind of pricing trend maybe continued into January? Or how should we be thinking maybe about the kind of directionally at least with wallboard around wallboard pricing here in the near term as we kind of bump along at these lower demand levels with nothing looking to change drastically on that front, at least in the near term?
Speaker #4: Any color you could give us on how we should be thinking about that?
Speaker #5: Well, you hit it on it, Trey. The annual shipments for calendar '25 for wallboard came in at about 25.4 billion square feet. That's back to a 2018 pace.
Craig Kesler: But, you know, you, you hit on it, Trey. You know, the annual shipments for calendar 2025 for wallboard came in at about 25.4 billion sq ft. You know, that, that's back to a 2018 pace. So, you know, in, in this type of residential market, you know, not, not at all surprised to see, you know, pricing, you know, have some, down, or trend, but again, very, range-bound relative to what we've seen and certainly relative to the demand environment that we're in. So not surprised by that, that at all.
Craig Kesler: But, you know, you, you hit on it, Trey. You know, the annual shipments for calendar 2025 for wallboard came in at about 25.4 billion sq ft. You know, that, that's back to a 2018 pace. So, you know, in, in this type of residential market, you know, not, not at all surprised to see, you know, pricing, you know, have some, down, or trend, but again, very, range-bound relative to what we've seen and certainly relative to the demand environment that we're in. So not surprised by that, that at all.
Speaker #5: So in this type of residential market, not at all surprised to see pricing have some downward trend. But again, very range-bound relative to what we've seen and certainly relative to the demand environment that we're in.
Speaker #5: So not surprised by that at all.
Speaker #4: Yeah. Yeah. But I assume it's still your take that there's been a lot of changes in the industry and with the cost structure and that we've talked about for years.
Trey Grooms: Yep. Yep, but I assume it's still your take that, you know, there's been a lot of changes in the industry and with the cost structure and, you know, that we've talked about for years, that have, I think, maybe changed, you know, made some changes with pricing, over the long term of being, you know, somewhat structurally higher, just given the backdrop of some of those things. So is it still your take that, you know, modest declines could be expected, but, these changes are still in place such that we shouldn't be expecting any kind of replay of some of the more drastic price trends?
Trey Grooms: Yep. Yep, but I assume it's still your take that, you know, there's been a lot of changes in the industry and with the cost structure and, you know, that we've talked about for years, that have, I think, maybe changed, you know, made some changes with pricing, over the long term of being, you know, somewhat structurally higher, just given the backdrop of some of those things. So is it still your take that, you know, modest declines could be expected, but, these changes are still in place such that we shouldn't be expecting any kind of replay of some of the more drastic price trends swings that we saw, you know, maybe go back, you know, 10+ years ago.
Speaker #4: That have, I think, maybe changed—made some changes with pricing over the long term of being somewhat structurally higher, just given the backdrop of some of those things.
Speaker #4: So is it still your take that modest declines could be expected, but these changes are still in place such that we shouldn't be expecting any kind of replay of some of the more drastic price swings that we saw maybe go back 10-plus years ago?
Asher Soh: ... swings that we saw, you know, maybe go back, you know, 10+ years ago.
Speaker #5: Yeah, no, exactly. Given all the changes that have happened with raw material costs, this is what you would have expected to see happen: a pretty range-bound pricing environment, even in light of a very difficult residential environment.
Craig Kesler: Yeah, no, exactly. You know, given all the changes that have happened with raw material costs, you know, this is what you would have expected to see happen, a pretty range-bound pricing environment, and even in light of a very difficult residential environment. So I don't see anything changing from that perspective. I do think there's upside on pricing as we get housing to recover and back to a reasonable level of construction activity. I think you'd see that fairly quickly. But in the current environment, yeah, I still think prices are relatively range-bound.
Craig Kesler: Yeah, no, exactly. You know, given all the changes that have happened with raw material costs, you know, this is what you would have expected to see happen, a pretty range-bound pricing environment, and even in light of a very difficult residential environment. So I don't see anything changing from that perspective. I do think there's upside on pricing as we get housing to recover and back to a reasonable level of construction activity. I think you'd see that fairly quickly. But in the current environment, yeah, I still think prices are relatively range-bound.
Speaker #5: So I don't see anything changing from that perspective. I do think there's upside on pricing as we get housing to recover and back to a reasonable level of construction activity.
Speaker #5: I think you'd see that fairly quickly. But in the current environment, yeah, I still think prices are relatively
Speaker #5: range-bound. All right.
Asher Soh: All right. Thank you, Craig. Michael, best of luck.
Trey Grooms: All right. Thank you, Craig. Michael, best of luck.
Speaker #4: Thank you, Craig. Michael, best of luck.
Speaker #4: luck. The next question
Operator: The next question comes from Brent Thielman with D.A. Davidson. Please go ahead.
Operator: The next question comes from Brent Thielman with D.A. Davidson. Please go ahead.
Speaker #3: Comes from Brent Steelman with D.A. Davidson. Please go ahead.
Brent Thielman: Hey, thanks. Hey, just as a follow-up on the wallboard side, just the down 14% in terms of shipments. You know, just thoughts in terms of whether that's consistent across the footprint or you've got some, you know, potentially some regions outperforming that.
Brent Thielman: Hey, thanks. Hey, just as a follow-up on the wallboard side, just the down 14% in terms of shipments. You know, just thoughts in terms of whether that's consistent across the footprint or you've got some, you know, potentially some regions outperforming that.
Speaker #4: Thanks. Hey, just had a follow-up on the wallboard side—just the down 14% in terms of shipments. Just thoughts in terms of whether that's consistent across the footprint, or if you've got some regions potentially outperforming that.
Speaker #5: No, that was pretty consistent across our regions. And if you look at the total GA numbers, they were down 8%. Our regions underperformed that.
Craig Kesler: No, that was pretty consistent across our regions. And if you look at, you know, the total GA numbers, they were down 8%. Our regions underperformed that, so our business was pretty much in line with the regional performance.
Craig Kesler: No, that was pretty consistent across our regions. And if you look at, you know, the total GA numbers, they were down 8%. Our regions underperformed that, so our business was pretty much in line with the regional performance.
Speaker #5: So our business was pretty much in line with the regional
Speaker #5: performance. Okay.
Brent Thielman: Okay. And then on the, the Lehigh JV, Craig, you know, I guess I've been anticipating some improvement in terms of the profit contribution. Just wanted to get a sense of, you know, what we're seeing here in the December quarter, sort of indicative of the market trends, or is there still some operational noise under the hood there?
Brent Thielman: Okay. And then on the, the Lehigh JV, Craig, you know, I guess I've been anticipating some improvement in terms of the profit contribution. Just wanted to get a sense of, you know, what we're seeing here in the December quarter, sort of indicative of the market trends, or is there still some operational noise under the hood there?
Speaker #4: And then on the Lehigh JV, Craig, I guess I've been anticipating some improvement in terms of the profit contribution. Just wanted to get a sense of what we're seeing here in the December quarter sort of indicative of the market trends or there's still some operational noise under the hood
Speaker #4: there? Yeah.
Craig Kesler: Yeah, so with the JV itself, you know, we're the plant itself is performing better. You know, Texas was probably our most challenged market, both from a pricing standpoint and some on demand and its competitive nature with it. So, you know, I know Trey asked the previous question about, you know, across the US, where we see, you know, kind of our demand and our pricing and everything with it. And, you know, we've been very stable in every location, except Texas had the most pressure. So you could really look at this as more of, we had to adjust, you know, our pricing more in that area, which offset some of the benefits you'd see from our plant operating better on the profit side.
Michael Haack: Yeah, so with the JV itself, you know, we're the plant itself is performing better. You know, Texas was probably our most challenged market, both from a pricing standpoint and some on demand and its competitive nature with it. So, you know, I know Trey asked the previous question about, you know, across the US, where we see, you know, kind of our demand and our pricing and everything with it. And, you know, we've been very stable in every location, except Texas had the most pressure. So you could really look at this as more of, we had to adjust, you know, our pricing more in that area, which offset some of the benefits you'd see from our plant operating better on the profit side.
Speaker #5: So with the JV itself, where the plant itself is performing better. Texas was probably our most challenged market, both from a pricing standpoint and some on demand.
Speaker #5: And it's competitive nature with it. So I know Trey asked the previous question about across the US where we see kind of our demand and our pricing and everything with it.
Speaker #5: And we've been very stable in every location except Texas had the most pressure. So you could really look at this as more of we had to adjust our pricing more in that area which offset some of the benefits you'd see from our plant operating better.
Speaker #5: On the profit side.
Speaker #4: Okay. All right. Appreciate that. Maybe just last quick one. Just in terms of the proposed price increases in cement here to start the year, I think typically you do some in January and some in spring.
Brent Thielman: Okay. All right. Appreciate that. What - maybe just last quick one. You know, just in terms of the proposed price increases in cement here to start the year, I, I think typically you do some in January and some in spring. I mean, obviously terrible weather across the country, does that potentially push some of this more into the spring? Any, any thoughts around that?
Brent Thielman: Okay. All right. Appreciate that. What - maybe just last quick one. You know, just in terms of the proposed price increases in cement here to start the year, I, I think typically you do some in January and some in spring. I mean, obviously terrible weather across the country, does that potentially push some of this more into the spring? Any, any thoughts around that?
Speaker #4: I mean, just from past experience, with obviously terrible weather across the country, does that potentially push some of this more into the spring? Any thoughts around that?
Speaker #4: that? Brent, I would say we have
Craig Kesler: You know, Brent, I would say we have terrible spring every January and February. Yeah, look, the volume improvement we saw here in calendar 2025, you know, is really good to see in terms of, you know, the incremental pricing opportunity as we head into calendar 2026. You know, we do have increases out there, as we talked about, they're spread throughout here, the first couple of months of calendar 2026. You know, exact realization, you know, we'll certainly update everybody on. But, you know, we have the volume momentum, and that's a good sign, and expect that to continue here into calendar 2026.
Craig Kesler: You know, Brent, I would say we have terrible spring every January and February. Yeah, look, the volume improvement we saw here in calendar 2025, you know, is really good to see in terms of, you know, the incremental pricing opportunity as we head into calendar 2026. You know, we do have increases out there, as we talked about, they're spread throughout here, the first couple of months of calendar 2026. You know, exact realization, you know, we'll certainly update everybody on. But, you know, we have the volume momentum, and that's a good sign, and expect that to continue here into calendar 2026.
Speaker #5: terrible spring every January and February. So yeah, look, the volume improvement we saw here in calendar '25 is really good to see in terms of the incremental pricing opportunity as we head into calendar '26.
Speaker #5: We do have increases out there as we talked about. They're spread throughout here the first couple of months of calendar '26. Exact realization will certainly update everybody on.
Speaker #5: But we have the volume momentum, and that's a good sign. And we expect that to continue here into the calendar.
Speaker #5: '26. Okay.
Brent Thielman: Okay. Thanks so much, guys.
Brent Thielman: Okay. Thanks so much, guys.
Speaker #4: Thanks so much,
Speaker #4: guys. The next question comes from
Operator: The next question comes from Anthony Pettinari with Citigroup. Please go ahead.
Operator: The next question comes from Anthony Pettinari with Citigroup. Please go ahead.
Speaker #3: Anthony Pettinari with Citigroup. Please go ahead.
Speaker #5: Yeah. Hi. This is Asher Sonnen on for Anthony. Thanks for taking my question. I was just wondering, how we should think about maybe natural gas costs for wallboard and cement and the fiscal fourth quarter.
Asher Soh: Yeah. Hi, this is Asher Soh, in on for Anthony. Thanks for taking my question. I was just wondering, you know, how we should think about maybe natural gas costs for wallboard and cement in the fiscal Q4. I think, you know, natural gas prices have risen pretty meaningfully in recent weeks. I'm just wondering how you guys are looking at that.
Asher Sohnen: Yeah. Hi, this is Asher Soh, in on for Anthony. Thanks for taking my question. I was just wondering, you know, how we should think about maybe natural gas costs for wallboard and cement in the fiscal Q4. I think, you know, natural gas prices have risen pretty meaningfully in recent weeks. I'm just wondering how you guys are looking at that.
Speaker #5: I think natural gas prices have risen pretty meaningfully in recent weeks. So I'm just wondering how you guys are looking at that. Yeah. It's really more of a wallboard thing.
Craig Kesler: Yeah, you know, it's really a more of a wallboard thing. In cement, you're going to burn typically more solid fuels than natural gas. In wallboard, and we do have a hedging program in place, so we're a little more than 50% hedged here through the winter, which is where we like to be, 'cause you will see these spikes when you get these winter storms that pop up. And I think that's what's driven natural gas here in the last week or so with the colder temps. You know, fully expect that to come back down, you know, more in line. There's not something that structurally changed in the natural gas markets. So, you know, just a short period here during the winter, and we've got a good hedge position from that.
Craig Kesler: Yeah, you know, it's really a more of a wallboard thing. In cement, you're going to burn typically more solid fuels than natural gas. In wallboard, and we do have a hedging program in place, so we're a little more than 50% hedged here through the winter, which is where we like to be, 'cause you will see these spikes when you get these winter storms that pop up. And I think that's what's driven natural gas here in the last week or so with the colder temps. You know, fully expect that to come back down, you know, more in line. There's not something that structurally changed in the natural gas markets. So, you know, just a short period here during the winter, and we've got a good hedge position from that.
Speaker #5: And cement, you're going to burn typically more solid fuels than natural gas. And wallboard—and we do have a hedging program in place. So we're a little more than 50% hedged here through the winter, which is where we like to be, because you will see these spikes when you get these winter storms that pop up.
Speaker #5: And I think that's what's driven natural gas here in the last week or so, with the colder temps. Fully expect that to come back down more in line there's not something that's structurally changed in the natural gas markets.
Speaker #5: So, just a short period here during the winter, and we've got a good hedged position from that.
Speaker #4: Okay. Great. And then one more from me. I mean, with the pressure in wallboard, it seems like it's causing a lot from new build.
Asher Soh: Okay, great. And then one more from me. I mean, with the pressure in wallboard, seems like it's coming a lot from new build, but I was wondering if you could talk about roughly what portion of the business is repair and remodel. I know it's a little bit smaller, maybe harder to estimate. And then, what trends you might be seeing in that end market if you're able to get that visibility?
Asher Sohnen: Okay, great. And then one more from me. I mean, with the pressure in wallboard, seems like it's coming a lot from new build, but I was wondering if you could talk about roughly what portion of the business is repair and remodel. I know it's a little bit smaller, maybe harder to estimate. And then, what trends you might be seeing in that end market if you're able to get that visibility?
Speaker #4: But I was wondering if you could talk about roughly what portion of the business is repairing or model. I know it's a little bit smaller, maybe harder to estimate.
Speaker #4: And then what trends you might be seeing in that end market if you're able to get that visibility.
Speaker #5: Yeah, no, it's a good question. We talk about a lot of the new residential construction activity, but repair and remodel is, call it, a third of the demand profile for wallboard.
Craig Kesler: Yeah. No, it's a good question. You know, we talk about a lot of the new residential construction activity, but repair and remodel is, call it, 1/3 of the demand profile for wallboard. And you know, it's certainly meaningful, and it's been growing over the last many, many years. And it's a much steadier market, harder to get forecast data exactly, but you know, at least the forward look there continues to see low single digit type of growth, in a very meaningful market for us. So it's a good question.
Craig Kesler: Yeah. No, it's a good question. You know, we talk about a lot of the new residential construction activity, but repair and remodel is, call it, 1/3 of the demand profile for wallboard. And you know, it's certainly meaningful, and it's been growing over the last many, many years. And it's a much steadier market, harder to get forecast data exactly, but you know, at least the forward look there continues to see low single digit type of growth, in a very meaningful market for us. So it's a good question.
Speaker #5: And it's certainly meaningful and has been growing. Over the last many, many years. And it's a much steadier market, harder to get forecast data exactly, but at least the forward look there continues to see low single-digit type of growth.
Speaker #5: And in a very meaningful market for us. So it's a good question.
Speaker #4: Okay. Thank you. I'll turn it
Asher Soh: Okay. Thank you. I'll turn it over.
Asher Sohnen: Okay. Thank you. I'll turn it over.
Speaker #4: over. The next
Operator: The next question comes from Timna Tanners with Wells Fargo Securities. Please go ahead.
Operator: The next question comes from Timna Tanners with Wells Fargo Securities. Please go ahead.
Speaker #3: question comes from Tim Tanners with Wells Fargo. Please go
Speaker #3: ahead. Yeah.
Timna Tanners: ... Yeah. Hey, good morning. I was hoping to follow up on the comments or questions about the upcoming quarter, if you had any specific observations on any impact to your operations from these storms. Anything you can comment on there?
Timna Tanners: ... Yeah. Hey, good morning. I was hoping to follow up on the comments or questions about the upcoming quarter, if you had any specific observations on any impact to your operations from these storms. Anything you can comment on there?
Speaker #2: Hey, good morning. I was hoping to follow up on the comments or questions about the upcoming quarter. If you had any specific observations on any impact to your operations from these storms?
Speaker #2: Anything you can comment on
Speaker #2: there? As
Craig Kesler: You know, as it relates specifically to the winter storms, our folks have done a really, really good job of preparing the facilities for, you know, very extreme cold temps, weatherproofing lines, raw material lines, and things like that. So from the winter storm perspective, you know, our folks and our plants are ready for it.
Craig Kesler: You know, as it relates specifically to the winter storms, our folks have done a really, really good job of preparing the facilities for, you know, very extreme cold temps, weatherproofing lines, raw material lines, and things like that. So from the winter storm perspective, you know, our folks and our plants are ready for it.
Speaker #5: it relates specifically to the winter storms, our folks have done a really, really good job of preparing the facilities for very extreme cold temps, weatherproofing, lines, raw material lines, and things like that.
Speaker #5: So from the winter storm perspective, our folks and our plants are ready for
Speaker #5: it. Okay.
Timna Tanners: Okay, I appreciate that. And then I was wondering if you can get into some more specific about what you're seeing about cement imports. I think that's what you were alluding to in terms of Texas and California, but any updated observations there?
Timna Tanners: Okay, I appreciate that. And then I was wondering if you can get into some more specific about what you're seeing about cement imports. I think that's what you were alluding to in terms of Texas and California, but any updated observations there?
Speaker #2: I appreciate that. And then I was wondering if you can get into some more specifics about what you're seeing with cement imports. I think that's what you were alluding to in terms of Texas and California, but any updated observations?
Speaker #2: there? Yeah.
Craig Kesler: Yeah, you know, really how you look at it is, you know, any of the markets that could be served by imports, of course, you know, it all depends on the freight rates and everything coming in. You know, Texas is not just impacted by imports, though, with my comments there. With it, you know, there's been a structural change in the market in Texas a little bit with the ownership, you know, and every time there is changes in it, you know, people operate their plants a little bit differently and look at markets a little bit differently.
Michael Haack: Yeah, you know, really how you look at it is, you know, any of the markets that could be served by imports, of course, you know, it all depends on the freight rates and everything coming in. You know, Texas is not just impacted by imports, though, with my comments there. With it, you know, there's been a structural change in the market in Texas a little bit with the ownership, you know, and every time there is changes in it, you know, people operate their plants a little bit differently and look at markets a little bit differently.
Speaker #5: Really, how you look at it is any of the markets that could be served by imports, of course, it all depends on the freight rates and everything coming in.
Speaker #5: Texas is not just impacted by imports, though, with my comments there with it. There's been a structural change in the market in Texas a little bit with the ownership.
Speaker #5: And every time there are changes in it, people operate their plants a little bit differently and look at markets a little bit differently. So I think there have been some structural changes in how those plants that changed ownership—which is a significant portion of the production in the Texas market between the two facilities—have different owners.
Craig Kesler: So I think there's been some structural changes on how those plants that changed ownership, which is a significant portion of the production in the Texas market between, you know, the two facilities, have different owners, that they look at it different. So we've just had different competitive pressures in Texas. You know, as you get closer to the coasts, imports definitely do have an impact, but it's not just one thing that's affecting Texas, it's more, and that led us to respond to some competitive pressures.
So I think there's been some structural changes on how those plants that changed ownership, which is a significant portion of the production in the Texas market between, you know, the two facilities, have different owners, that they look at it different. So we've just had different competitive pressures in Texas. You know, as you get closer to the coasts, imports definitely do have an impact, but it's not just one thing that's affecting Texas, it's more, and that led us to respond to some competitive pressures.
Speaker #5: That they look at it different. So we've just had different competitive pressures in Texas. As you get closer to the coasts, imports definitely do have an impact.
Speaker #5: But it's kind of a it's not just one thing that's affecting Texas. It's more. And that led us to respond to some competitive
Speaker #5: pressures. Got it.
Timna Tanners: Got it. Helpful. And then just finally from us on the CapEx comments, it seems like it was lowered from prior numbers. I'm just wondering if there's any basis or explanation for that.
Timna Tanners: Got it. Helpful. And then just finally from us on the CapEx comments, it seems like it was lowered from prior numbers. I'm just wondering if there's any basis or explanation for that.
Speaker #2: Helpful. And then just finally from us on the CAPEX comments, it seems like it was lowered from prior numbers and just wondering if there's any basis or explanation for that.
Speaker #2: Helpful. And then just finally from us on the CAPEX comments—it seems like it was lowered from prior numbers, and just wondering if there's any basis or explanation for that.
Speaker #5: No. Thanks, Tim, for bringing that up. We have been forecasting closer to 500 million. It's just timing. When you get these very, very large projects like mountain cement and the Duke plant, it's hard to exactly forecast when spending will occur.
Craig Kesler: No. Thanks, Timna, for bringing that up. Yeah, we had been forecasting closer to $500 million. It's just timing. You know, when you get these very, very large projects like Mountain Cement and the Duke plant, you know, it's hard to exactly forecast when spending will occur. Nothing to, you know, change there. Then, you know, sustaining capital, we look very hard at what spending needs to occur there, and in light of the elevated capital spending, we've done a good job of prioritizing more of the sustaining capital, which ends up with a slightly lower number.
Craig Kesler: No. Thanks, Timna, for bringing that up. Yeah, we had been forecasting closer to $500 million. It's just timing. You know, when you get these very, very large projects like Mountain Cement and the Duke plant, you know, it's hard to exactly forecast when spending will occur. Nothing to, you know, change there. Then, you know, sustaining capital, we look very hard at what spending needs to occur there, and in light of the elevated capital spending, we've done a good job of prioritizing more of the sustaining capital, which ends up with a slightly lower number.
Speaker #5: Nothing to change there. And then, sustaining capital—we look very hard at what spending needs to occur there. And in light of the elevated capital spending, we've done a good job of prioritizing more of the sustaining capital, which ends up with the slightly lower number.
Speaker #2: Okay. Helpful. Thank you.
Timna Tanners: Okay. Helpful. Thank you.
Timna Tanners: Okay. Helpful. Thank you.
Speaker #3: The next question comes from Adam Tallheimer with Thompson Davis. Please go
Operator: The next question comes from Adam Thalhimer with Thompson Davis & Co. Please go ahead.
Operator: The next question comes from Adam Thalhimer with Thompson Davis & Co. Please go ahead.
Speaker #3: ahead.
Speaker #4: Good morning,
Adam Thalhimer: Morning, guys.
Adam Thalhimer: Morning, guys.
Speaker #5: Good guys. morning.
Craig Kesler: Morning.
Craig Kesler: Morning.
Adam Thalhimer: I wanted to start on capital allocation. How are you guys thinking about share repurchases and acquisitions after the November bond deal?
Speaker #4: I wanted to start on capital allocation. How are you guys thinking about share repurchases and acquisitions after the November bond
Adam Thalhimer: I wanted to start on capital allocation. How are you guys thinking about share repurchases and acquisitions after the November bond deal?
Speaker #4: deal? Yeah.
Craig Kesler: Yeah, look, that's where we spend a lot of our time. You know, we, we've positioned the assets well. We've, we've got a good group of operators. And so, you know, how we continue to allocate capital to generate value is where we spend, you know, the majority of our time. As, as we've said, and this really hasn't changed over decades, and that is, the priority is to continue to grow the organization, but, you know, with a high bar for that growth, both strategically and financially, and whether that's M&A or organic. So, you know, we have the two large organic projects underway. Very excited about those and the returns they, they will generate. But we've also got a balance sheet that we can continue to pursue M&A activity, but remaining very disciplined on valuation there.
Craig Kesler: Yeah, look, that's where we spend a lot of our time. You know, we, we've positioned the assets well. We've, we've got a good group of operators. And so, you know, how we continue to allocate capital to generate value is where we spend, you know, the majority of our time. As, as we've said, and this really hasn't changed over decades, and that is, the priority is to continue to grow the organization, but, you know, with a high bar for that growth, both strategically and financially, and whether that's M&A or organic. So, you know, we have the two large organic projects underway. Very excited about those and the returns they, they will generate. But we've also got a balance sheet that we can continue to pursue M&A activity, but remaining very disciplined on valuation there.
Speaker #5: Look, that's where we spend a lot of our time. We've positioned the assets well. We've got a good group of operators. And so how we continue to allocate capital to generate value is where we spend the majority of our time, as we've said.
Speaker #5: And this really hasn't changed over decades. And that is the priority is to continue to grow the organization. But with a high bar for that growth, both strategically and financially, and whether that's M&A or organic.
Speaker #5: So we have the two large organic projects underway. Very excited about those and the returns they will generate. But we've also got to balance sheet that we can continue to pursue M&A activity.
Speaker #5: But remaining very disciplined on valuation there. And then you have our capital return strategy. And we certainly repurchased more shares this quarter than we had in quite some time.
Craig Kesler: And then you have our capital return strategy, and, you know, we certainly repurchased more shares this quarter than we had in quite some time. And, you know, some of that's also relative to, you know, to the stock price. And so we still see value in the shares, but we're fortunate we can continue to kind of have a balanced offense across all three of those.
And then you have our capital return strategy, and, you know, we certainly repurchased more shares this quarter than we had in quite some time. And, you know, some of that's also relative to, you know, to the stock price. And so we still see value in the shares, but we're fortunate we can continue to kind of have a balanced offense across all three of those.
Speaker #5: And some of that's also relative to the stock price. And so we still see value in the shares. But we're fortunate we can continue to kind of have a balanced offense across all three of those.
Speaker #4: Great. Thanks for that. And then I wanted to ask about wallboard margins. Can you talk a little bit about the puts and takes there?
Adam Thalhimer: Great. Thanks for that. And then, I wanted to ask about wallboard margins. Can you talk a little bit about the puts and takes there? And I guess what I'm really getting after is if margins could stabilize at that Q3 level.
Adam Thalhimer: Great. Thanks for that. And then, I wanted to ask about wallboard margins. Can you talk a little bit about the puts and takes there? And I guess what I'm really getting after is if margins could stabilize at that Q3 level.
Speaker #4: And I guess what I'm really getting after is if margins could stabilize at that Q3 level.
Speaker #5: Yeah. Look, I think we talked about we saw some sequential price declines there. I still think they're moderated given the structure and the changes that have occurred.
Craig Kesler: Yeah. You know, look, I think we talked about. We saw some sequential price declines there. I still think they're moderated, given the, you know, the structure and the changes that have occurred. Cost-wise, you know, OCC continues to be at a pretty low level. Natural gas, again, it fluctuates a little bit during the winter, but don't see that as a long-term change. You know, we own our primary raw materials, so, you know, nothing significant on the cost side that we're looking at today. You know, but in a volume environment, you know, we'll see where that goes. But, you know, we've positioned the business to continue to perform at this high level, even in this difficult environment for residential construction.
Craig Kesler: Yeah. You know, look, I think we talked about. We saw some sequential price declines there. I still think they're moderated, given the, you know, the structure and the changes that have occurred. Cost-wise, you know, OCC continues to be at a pretty low level. Natural gas, again, it fluctuates a little bit during the winter, but don't see that as a long-term change. You know, we own our primary raw materials, so, you know, nothing significant on the cost side that we're looking at today. You know, but in a volume environment, you know, we'll see where that goes. But, you know, we've positioned the business to continue to perform at this high level, even in this difficult environment for residential construction.
Speaker #5: A cost-wise, OCC continues to be at a pretty low level. Natural gas, again, it fluctuates a little bit during the winter. But don't see that as a long-term change.
Speaker #5: We own our primary raw materials. So nothing significant on the cost side that we're looking at today. But in a volume environment, we'll see where that goes.
Speaker #5: But we've positioned the business to continue to perform at this high level, even in this difficult environment for residential construction. So I think we'll continue to see good performance.
Craig Kesler: So, you know, I think we'll continue to see good performance.
So, you know, I think we'll continue to see good performance.
Speaker #4: Okay. And last one for me, the wallboard comps get a lot easier starting in late calendar '26. I'm just curious if there's any reason for optimism on volume stabilization or maybe even a little bit of growth as we get to the back half of the
Speaker #4: Okay. And last one for me, the wallboard comps get a lot easier starting in late calendar '26. I'm just curious if there's any reason for optimism on volume stabilization or maybe even a little bit of growth as we get to the back half of the year.
Adam Thalhimer: Okay. And last one for me, the wallboard comps get a lot easier, starting in late calendar 2026. I'm just curious if there's any reason for optimism on volume stabilization or maybe even a little bit of growth as we get to the back half of the year.
Adam Thalhimer: Okay. And last one for me, the wallboard comps get a lot easier, starting in late calendar 2026. I'm just curious if there's any reason for optimism on volume stabilization or maybe even a little bit of growth as we get to the back half of the year.
Speaker #5: Yeah. Look, there's a lot of moving parts when it comes to home building right now. So I would say our optimism is around how well our assets are positioned to cash flow that we're generating even in this environment.
Craig Kesler: Yeah, look, there's a lot of moving parts when it comes to home building right now. So, I, I would say our optimism is around how well our assets are positioned, the cash flow that we're generating, even in this environment, and our ability to continue to make good, return in investments. So, you know, we'll, we'll deal with the choppiness. When it does recover, I think it recovers, meaningfully, and, and you'll see a, a significant upward inflection there, but maybe a little early to call that.
Craig Kesler: Yeah, look, there's a lot of moving parts when it comes to home building right now. So, I, I would say our optimism is around how well our assets are positioned, the cash flow that we're generating, even in this environment, and our ability to continue to make good, return in investments. So, you know, we'll, we'll deal with the choppiness. When it does recover, I think it recovers, meaningfully, and, and you'll see a, a significant upward inflection there, but maybe a little early to call that.
Speaker #5: to continue to make good And our ability return investments. So we'll deal with the choppiness when it does recover. I think it recovers meaningfully.
Speaker #5: And you'll see a significant upward inflection there, but maybe it's a little early to call that.
Speaker #4: Got it. Thanks,
Keith Hughes: Got it. Thanks, Craig.
Adam Thalhimer: Got it. Thanks, Craig.
Speaker #4: Greg. The next question comes from Philip
Operator: The next question comes from Philip Ng with Jefferies. Please go ahead.
Operator: The next question comes from Philip Ng with Jefferies. Please go ahead.
Speaker #3: Ng with Jefferies. Please go
Speaker #3: ahead.
Speaker #4: Hey,
Philip Ng: Hey, guys. Michael, great color on the Texas market for cement. Are you seeing any other regions where you're seeing price competition be a little more elevated, perhaps in the West? I know the last earnings call, you guys announced an $8 per ton cement price increase in all the markets, ex Texas and the West. Have you announced, you know, price increases in those markets, and any early read on how the Jan increase is progressing? Are you seeing any traction, or are you seeing some pushback here?
Philip Ng: Hey, guys. Michael, great color on the Texas market for cement. Are you seeing any other regions where you're seeing price competition be a little more elevated, perhaps in the West? I know the last earnings call, you guys announced an $8 per ton cement price increase in all the markets, ex Texas and the West. Have you announced, you know, price increases in those markets, and any early read on how the Jan increase is progressing? Are you seeing any traction, or are you seeing some pushback here?
Speaker #4: Guys, Michael Greg Caller on the Texas market for cement. Are you seeing any other regions where you're seeing price competition be a little more elevated, perhaps in the West?
Speaker #4: I know the last earnings call you guys announced an $8 per ton cement price increase in all the markets ex Texas and the West.
Speaker #4: Have you announced price increases in those markets in any early read on how the gen increase is progressing? Do you see any traction, or are you seeing some pushback here?
Michael Haack: You know, it's a great question. You know, when we look across the US, you know, we're very happy with the remainder of our markets. I mean, some markets... You know, each market is independent of each other, you know, when you look at the supply-demand dynamics with it. But for the most part, you know, we've announced price increases across the majority of our network with it. You know, I highlighted, you know, Texas is the one that's the most challenged. Every other market, structurally, is in very good position, we feel. So there's nothing I would point out there.
Michael Haack: You know, it's a great question. You know, when we look across the US, you know, we're very happy with the remainder of our markets. I mean, some markets... You know, each market is independent of each other, you know, when you look at the supply-demand dynamics with it. But for the most part, you know, we've announced price increases across the majority of our network with it. You know, I highlighted, you know, Texas is the one that's the most challenged. Every other market, structurally, is in very good position, we feel. So there's nothing I would point out there.
Speaker #5: It's a great question. When we look across the US, we're very happy with the remainder of our markets. I mean, some markets, each market is independent of each other.
Speaker #5: When you look at the supply-demand dynamics with it, but for the most part, we've announced price increases across the majority of our network with it.
Speaker #5: I highlighted Texas is the one that's the most challenged. Every other market structurally is in very good position, we feel. So there's nothing I would point out there.
Michael Haack: You know, what we're really going to determine over this next, you know, months is, you know, which ones, you know, as we talk with our customers, what that, that number is, and if it's a January increase or an April increase, you know, and that'll be determined by individual markets.
You know, what we're really going to determine over this next, you know, months is, you know, which ones, you know, as we talk with our customers, what that, that number is, and if it's a January increase or an April increase, you know, and that'll be determined by individual markets.
Speaker #5: What's really going to what we're really going to determine over this next months is which ones as we talk with our customers, what that number is, and if it's a January increase or an April increase, and that'll be determined by individual markets.
Speaker #4: Okay, that's helpful. And then, I guess, question for you, Craig. Wallboard prices bled a little bit, right? No surprise there, just given the dynamic on the homebuilding side.
Philip Ng: Okay. That's helpful. And then, I guess, question for you, Craig. Wallboard prices bled a little bit, right? No surprise there, just given the dynamic on the home building side. Are you expecting prices to kind of stabilize here and some of the weakness, is that destocking related, or it's just kinda normal trends in terms of underlying demand? How should we think about the wallboards side of things?
Philip Ng: Okay. That's helpful. And then, I guess, question for you, Craig. Wallboard prices bled a little bit, right? No surprise there, just given the dynamic on the home building side. Are you expecting prices to kind of stabilize here and some of the weakness, is that destocking related, or it's just kinda normal trends in terms of underlying demand? How should we think about the wallboards side of things?
Speaker #4: Are you expecting prices to kind of stabilize here in some of the weakness? Is that destocking related, or it's just kind of normal trends in terms of underlying demand?
Speaker #4: How should we think about the wallboard side of things?
Speaker #5: Yeah. Not really destocking in my view. Just it's a perishable product. So you can't store it outside. So you're subject to the indoor storage at your own or our manufacturing facilities in the distributors.
Craig Kesler: Yeah, not really destocking, in my view. Just it's a perishable product, so either you don't, you know, can't store it outside, so you're subject to, you know, the indoor storage at our manufacturing facilities and the distributors. You know, look, as we said in the beginning, yeah, I'm not surprised by some of the pricing weakness, but it's all relative. It's down, but not down anything like what we would have seen in prior cycles, especially at this demand level. You know, utilization rates are higher, just given some of the raw material issues. So, you know, again, I think pricing stays range-bound.
Craig Kesler: Yeah, not really destocking, in my view. Just it's a perishable product, so either you don't, you know, can't store it outside, so you're subject to, you know, the indoor storage at our manufacturing facilities and the distributors. You know, look, as we said in the beginning, yeah, I'm not surprised by some of the pricing weakness, but it's all relative. It's down, but not down anything like what we would have seen in prior cycles, especially at this demand level. You know, utilization rates are higher, just given some of the raw material issues. So, you know, again, I think pricing stays range-bound.
Speaker #5: Look, as we said in the beginning, I'm not surprised by some of the pricing weakness, but it's all relative. It's down, but not down anything like what we would have seen in prior cycles, especially at this demand level.
Speaker #5: Utilization rates are higher just given some of the raw material issues. So again, I think pricing stays range-bound. I wouldn't be surprised to see some further decline here, but I think it's all relative.
Craig Kesler: I wouldn't be surprised to see, you know, some further, you know, decline here, but I think it's all relative and, you know, certainly, you know, versus where we are with the demand side.
I wouldn't be surprised to see, you know, some further, you know, decline here, but I think it's all relative and, you know, certainly, you know, versus where we are with the demand side.
Speaker #5: And certainly, versus where we are with the demand
Speaker #5: side.
Speaker #4: Gotcha. And just kind
Philip Ng: Gotcha. And just kinda 1 final question on the wallboard side. 2 of, I believe, your larger customers on the pro distribution side now are owned by Big Box. I'm just curious, as you kinda, you know, look into 2026, have that relationship dynamic changed any way in terms of how you're talking about procurement conversations? Is it the same people, or it's kinda, you know, merged where you have, you know, the retail side versus the pro side having 1 conversation? And then, any movement from a placement standpoint we should be mindful of this year?
Philip Ng: Gotcha. And just kinda 1 final question on the wallboard side. 2 of, I believe, your larger customers on the pro distribution side now are owned by Big Box. I'm just curious, as you kinda, you know, look into 2026, have that relationship dynamic changed any way in terms of how you're talking about procurement conversations? Is it the same people, or it's kinda, you know, merged where you have, you know, the retail side versus the pro side having 1 conversation? And then, any movement from a placement standpoint we should be mindful of this year?
Speaker #4: One final question on the wallboard side. Two of, I believe, your larger customers on the pro distribution side now are owned by big box.
Speaker #4: I'm just curious, as you kind of look into 2026, have that relationship dynamic changed any way in terms of how you're talking about procurement conversations?
Speaker #4: Is it the same people, or it's kind of merged where you have the retail side versus the pro side? Having one conversation and then any movement from a placement standpoint, we should be mindful of this
Speaker #4: year? Yeah.
Craig Kesler: Yeah, Phil, I think it's probably a little early to have that definitive, you know, see how the... You know, again, you mentioned it, and it's an important point, very different business models, you know, the traditional retail versus, you know, the mass distribution. You know, how they run those, you know, is, I think, to be determined, if they run them, you know, together or keep them independent because they are so different. So, you know, it's something that we'll continue to monitor, but it may be a little early to talk about that.
Craig Kesler: Yeah, Phil, I think it's probably a little early to have that definitive, you know, see how the... You know, again, you mentioned it, and it's an important point, very different business models, you know, the traditional retail versus, you know, the mass distribution. You know, how they run those, you know, is, I think, to be determined, if they run them, you know, together or keep them independent because they are so different. So, you know, it's something that we'll continue to monitor, but it may be a little early to talk about that.
Speaker #5: Phil, I think it's probably a little early to have that definitive. See how the again, you mentioned it, and it's an important point. Very different business models.
Speaker #5: The traditional retail versus the mass distribution and how they run those is, I think, to be determined—if they run them together or keep them independent—because they are so different.
Speaker #5: So it's something that we'll continue to monitor, but maybe a little early to talk about
Speaker #5: that. Okay.
Philip Ng: Okay. Thank you. Appreciate the color.
Philip Ng: Okay. Thank you. Appreciate the color.
Speaker #4: Thank you. Appreciate the
Speaker #4: color.
Speaker #3: The
Operator: The next question comes from Keith Hughes with Truist. Please go ahead.
Operator: The next question comes from Keith Hughes with Truist. Please go ahead.
Speaker #3: next question comes from Keith Hughes with Truist. Please go ahead.
Keith Hughes: Thanks. A couple of questions on wallboard. Given the volume, did you have to take extra downtime in the December quarter you kind of were expecting? And same thing on the March quarter, will, will we have some of that, just given where housing is and where the trends are?
Speaker #6: Thanks. A couple of questions on wallboard. Given the volume, did you have to take extra downtime in the December quarter? You kind of weren't expecting the same thing on the March quarter.
Keith Hughes: Thanks. A couple of questions on wallboard. Given the volume, did you have to take extra downtime in the December quarter you kind of were expecting? And same thing on the March quarter, will, will we have some of that, just given where housing is and where the trends are?
Speaker #6: We have some of that, just given where housing is and where the trends are.
Craig Kesler: You know, Keith, like we've always done, you match the production with the sales opportunity. You know, it's more of a variable cost business, very different than cement. You know, you can run a wallboard plant seven days a week. You can run it four days a week. So you'll certainly modulate shifts depending upon the opportunity.
Craig Kesler: You know, Keith, like we've always done, you match the production with the sales opportunity. You know, it's more of a variable cost business, very different than cement. You know, you can run a wallboard plant seven days a week. You can run it four days a week. So you'll certainly modulate shifts depending upon the opportunity.
Speaker #5: Keith, like we've always done, you match the production with the sales opportunity. It's more of a variable-cost business, very different than cement. You can run a wallboard plant seven days a week.
Speaker #5: You can run it four days a week. So you'll certainly modulate shifts depending upon the
Speaker #5: opportunity. Okay.
Keith Hughes: Okay. And the switching back over to cement. On the cement side, I know you got price increases out. When will you kind of be able to definitively tell what pricing is gonna be like for the year? Is that something that becomes evident in March, or does it take well into the second quarter before the price settles in?
Keith Hughes: Okay. And the switching back over to cement. On the cement side, I know you got price increases out. When will you kind of be able to definitively tell what pricing is gonna be like for the year? Is that something that becomes evident in March, or does it take well into the second quarter before the price settles in?
Speaker #6: And the switching back over to cement, on the cement side, I know you got price increases out. When will you kind of be able to definitively tell what pricing is going to be like for the year?
Speaker #6: Is that something that becomes evident in March, or does it take well into the second quarter before the price settles in?
Michael Haack: Keith, really, it's gonna be dependent on our conversations we have with our customers and what those individual markets are. You know, you'll see—we'll update you, you know, on each quarter on, you know. You'll see it in the financial results, with where we did the price increases and when. You know, really, our conversations right now are on timing. We've announced them in those markets, and it's just on what timing we implement that makes sense for us and our customers.
Speaker #5: Keith, really, it's going to be dependent on our conversations we have with our customers and what those individual markets are. You'll see we'll update you on each quarter on, and you'll see it in the financial results.
Michael Haack: Keith, really, it's gonna be dependent on our conversations we have with our customers and what those individual markets are. You know, you'll see—we'll update you, you know, on each quarter on, you know. You'll see it in the financial results, with where we did the price increases and when. You know, really, our conversations right now are on timing. We've announced them in those markets, and it's just on what timing we implement that makes sense for us and our customers.
Speaker #5: With where we did the price increases and when, our really our conversations right now are on timing. We've announced them in those markets, and it's just on what timing we implement that makes sense for us and our
Speaker #5: customers. Okay.
Keith Hughes: Okay, thank you.
Keith Hughes: Okay, thank you.
Speaker #6: Thank you.
Operator: The next question comes from Garrett Greenblatt with J.P. Morgan. Please go ahead.
Operator: The next question comes from Garrett Greenblatt with J.P. Morgan. Please go ahead.
Speaker #3: The next question comes from Garrett Greenblatt with JP Morgan. Please go ahead.
Garrett Greenblatt: Hey, good morning, guys. I was wondering if you just, just touch on cement pricing once again, in terms of, what have you announced in your current letters that you've already sent? And then maybe, you know, in something like a low single digit volume growth year for cement, what has been the historical, realization rate?
Garrett Greenblatt: Hey, good morning, guys. I was wondering if you just, just touch on cement pricing once again, in terms of, what have you announced in your current letters that you've already sent? And then maybe, you know, in something like a low single digit volume growth year for cement, what has been the historical, realization rate?
Speaker #7: Good morning, guys. I was wondering if you just touched on cement pricing once again in terms of what have you announced in your current letters that you've already sent?
Speaker #7: And then maybe is something like a low single-digit volume growth here for cement? What has been the historical realization rate?
Speaker #5: Yeah. In terms of the price increases that have been announced, they've been around $8 a ton. For most of our markets across the US, excluding Texas and the Far West markets, and timing ranges somewhere between January and April, kind of the first part of your calendar '26.
Craig Kesler: Yeah, in terms of the price increases that have been announced, you know, they've been around $8 a ton for most of our markets across the US, excluding Texas and the Far West markets. And timing ranges, you know, somewhere between January and April, kind of the first part of your calendar 2026. You know, Michael said it earlier, but these markets are very regional, so they'll have a very different, you know. The price will be determined regionally rather than a national average. So that's what we're going through right now. You know, look, we're coming off of, you know, calendar 2025 for us is really the first year where we in the first three years, the last three years, where we've seen volume improve.
Craig Kesler: Yeah, in terms of the price increases that have been announced, you know, they've been around $8 a ton for most of our markets across the US, excluding Texas and the Far West markets. And timing ranges, you know, somewhere between January and April, kind of the first part of your calendar 2026. You know, Michael said it earlier, but these markets are very regional, so they'll have a very different, you know. The price will be determined regionally rather than a national average. So that's what we're going through right now. You know, look, we're coming off of, you know, calendar 2025 for us is really the first year where we in the first three years, the last three years, where we've seen volume improve.
Speaker #5: And Michael said it earlier, but these markets are very regional, so they'll have very different the pricing will be determined regionally rather than a national average.
Speaker #5: So that's what we're going through right now. Look, we're coming off of calendar '25 for us is really the first year where we in the first three years, the last three years where we've seen volume improve and so that is certainly improved utilization rates.
Craig Kesler: And so that has certainly improved utilization rates. And so that's been good to see. You know, and as we head into calendar 2026, again, optimism around, you know, volume continuing to grow and should push utilization rates higher.
And so that has certainly improved utilization rates. And so that's been good to see. You know, and as we head into calendar 2026, again, optimism around, you know, volume continuing to grow and should push utilization rates higher.
Speaker #5: And so that's been good to see. And as we head into calendar '26, again, optimism around volume continuing to grow and should push utilization rates higher.
Speaker #5: And so that's been good to see. And as we head into calendar '26, again, optimism around volume continuing to grow and should push utilization rates
Garrett Greenblatt: Thanks. And then, just a quick follow-up on wallboard. How did those demand trends, I guess, progress through the fourth quarter? Was there any momentum coming into calendar Q1?
Garrett Greenblatt: Thanks. And then, just a quick follow-up on wallboard. How did those demand trends, I guess, progress through the fourth quarter? Was there any momentum coming into calendar Q1?
Speaker #7: Thanks. And then just a quick follow-up on wallboard. How did those demand trends, I guess, progress through the fourth quarter? Was there any momentum coming into calendar Q1?
Craig Kesler: You know, look, it's been pretty consistent here the second half of the year, which I think is pretty consistent with what the home builders have been reporting and, and others within kind of this light building materials sector, where the second half of the year, you know, was, was at, at a meaningful drop in demand profile. So I think as we head into calendar 2026, you know, again, you've got some winter issues here, but, you know, expect to continue to see a similar trend.
Craig Kesler: You know, look, it's been pretty consistent here the second half of the year, which I think is pretty consistent with what the home builders have been reporting and, and others within kind of this light building materials sector, where the second half of the year, you know, was, was at, at a meaningful drop in demand profile. So I think as we head into calendar 2026, you know, again, you've got some winter issues here, but, you know, expect to continue to see a similar trend.
Speaker #5: Look, it's been pretty consistent here the second half of the year. Which I think is pretty consistent with the homebuilders have been reporting and others within kind of these light building materials sector where the second half of the year was at a meaningful drop in demand profile.
Speaker #5: So I think as we head into calendar '26, again, you've got some winter issues here, but expect to continue to see a similar
Speaker #5: trend. Great.
Garrett Greenblatt: Great. Thank you.
Garrett Greenblatt: Great. Thank you.
Speaker #7: Thank you.
Speaker #3: This concludes our question-and-answer session. I would like to turn the conference back over to Michael Haack for any closing remarks.
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Michael Haack for any closing remarks.
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Michael Haack for any closing remarks.
Speaker #3: remarks. Thank you,
Michael Haack: Thank you, Drew. As we enter the final quarter of our fiscal year, we continue to prioritize health and safety, operational excellence, and financial discipline while seeking growth opportunities that meet our strategic and financial criteria. I look forward to elaborating more on our strategic priorities next quarter as we wrap up our fiscal year 2026. Thanks to everyone for joining our call today.
Michael Haack: Thank you, Drew. As we enter the final quarter of our fiscal year, we continue to prioritize health and safety, operational excellence, and financial discipline while seeking growth opportunities that meet our strategic and financial criteria. I look forward to elaborating more on our strategic priorities next quarter as we wrap up our fiscal year 2026. Thanks to everyone for joining our call today.
Speaker #5: Drew. As we enter the final quarter of our fiscal year, we continue to prioritize health and safety, operational excellence, and financial discipline. While seeking growth opportunities that meet our strategic and financial criteria, I look forward to elaborating more on our strategic priorities next quarter as we wrap up our fiscal year 2026.
Speaker #5: Thanks to everyone for joining our call
Speaker #5: today. The
Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
