Good day, everyone, and welcome to the Eagle Materials First Quarter of Fiscal 2026 Earnings Conference Call. This call is being recorded. At this time, I would like to turn the call over to Eagle's President and Chief Executive Officer, Mr. Michael Hack. Mr. Hack, please go ahead, sir.

Thank you, Chuck. Good morning. Welcome to Eagle Materials Conference Call for our first quarter of fiscal year 2026. This is Michael Hack. Joining me today are Craig Senior Vice President of Investor Relations and Strategy. There will be a slide presentation made in connection with EagleMaterials.com and click on the link to the webcast. While you're accessing the slides, please note that the first slide covers our cautionary disclosure regarding forward-looking statements made during this call. These statements are subject to risks and uncertainties that could cause results to differ for those discussing. For further information, please refer to this disclosure, which is also included at the end of our press release. Thank you for joining us today, fiscal year 2026. We generated record first quarter revenue of $634.7 million and diluted net earnings per share of $3.76. Despite challenging weather conditions across many of our cement, concrete, and aggregate markets, it helped us weather tougher conditions. Regardless of specific near-term conditions, our operations maintain the same discipline focus every quarter and every year. Improving our operational metrics is always a key priority, and this long-term, multi-cycle approach to operational improvement is an important competitive advantage for Eagle Materials. For me, that all starts with our safety performance. I'm pleased we continued our safety progress, maintaining our total recordable incident rate well below the industry average and near our all-time aim to do better to establish our safety culture so it is self-sustaining. The progress we've made is tangible, and I'm grateful to our employees for their relentless efforts. We've also made substantial progress in our sustainability initiative. The economic benefits of being a low-cost producer means sustainability has always been part of our operational DNA. We are always looking for ways to do more with less. Five-plus years, we have expanded our investments that offer us good returns focused on improving our sustainability. I think our progress is evidenced in our results across several initiatives, which can be found in our newly published and updated sustainability report. To highlight just a few examples, we met our 2030 midterm cement CO2E intensity goal early. This does not mean we are done. We'll continue to focus on efforts so we can improve this metric, operate more efficiently, and provide a return to our investors. We continue to enhance our reporting. For example, in our most recent report, we separate cement GHG emissions by fuel and process TerraCO2 as a lead investor to further our efforts to produce low-carbon supplementary cementitious material to help meet the expected future demand for cement more broadly. Overall, I'm pleased with our progress and believe we still are in the early innings and will show further improvements. With that, let me turn to a few comments on our business environment. First, from a demand perspective, despite headline macroeconomic and policy uncertainty, we saw stable order trends across each of our major business lines. Our aggregate volumes improved meaningfully year over year, both from the integration of our two recently acquired quarries and on an organic basis. Our cement volumes also improved year-over-year, which is especially impressive given the major weather disruptions in several of our cement markets. This is the first quarter since December 2023 that we've seen a year-over-year increase in cement sales volumes. Our heavyside customers continue to express cautious optimism for their business outlooks as DOT state budgets remain healthy and infrastructure awards accelerate. Against this backdrop, once cement sales volumes rebound from the slower than anticipated consumption in 2023 and 2024, we believe the high-capacity utilization rates across the cement industry should also lead to an improved pricing environment. The term outlook on volumes for the wallboard business remains more subdued. Single-family new home building constraints persist. The ability challenges for the new home buyer. For wallboard volumes to recover, interest rates and or home prices will need to come down to aid buyer demand more broadly. However, putting the current environment into context, annual consumption of wallboards sits at levels akin to the late 1990s when the U.S. had a much lower population base, and despite the tougher residential construction environment, our wallboard business has performed exceptionally well. Even against a softer demand environment, we have been able to maintain our margin profile across our businesses given our operational advantages. Our cement footprint is more modern than strategic acquisitions, and in cement and wallboards, structural constraints on adding supply remain. We believe long-term demand fundamentals favor the consumption of our products. U.S. infrastructure assets and the U.S. housing stock continue to age, and the replenishment of our roads, bridges, and homes will require cement, concrete, and aggregates and wallboard. That is why, as we believe, we can continue to grow and expand our margins further. We also continue to prudently invest our substantial excess free cash flow. I recently visited our Laramie-Wyoming cement plant, and I'm happy with the progress we are making on modernizing and expanding the plant. The project remains on budget and on schedule for late calendar 2026 commissioning. Construction for our Duke, Oklahoma wallboard plant modernization will also commence this summer, and we have already begun purchasing major equipment. Both projects highlight our investment philosophy well. We plan to continue to seek strategic projects, whether acquisitions or organic opportunities, that meet our financial return criteria and position our company for the next 40 years or more. Alongside these projects, we plan to continue to invest in our company through opportunistic share repurchases as well. There's a lot of meaningful value-creating work underway at Eagle Materials, and I'm excited to share our progress along the way. With that, Craig, I'll pass it over to you.

Revenue was a record $635 million, an increase of 4%. Recently acquired businesses' consolidated revenue was up 2%. 5% to $3.76 from the recently acquired volume was up 29%. In fact, of lower production 1%, 3% to $137 million, reflecting improved working capital management, we continue to invest in and improve our operation. and expansion of our mountain cement plant and equipment purchases for the project to modernize our due sustaining capital spending in fiscal 2026 and used to give us significant financial flexibility and our net debt to EBITDA leverage ratio was 1.6 at the end of the quarter was approximately 500.

Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone if you're using a speaker phone 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 and at this time we'll pause momentarily to assemble our roster and the first question will come from trey grooms with Stephen. Please go ahead.

Hey, good morning, everyone. Hey, if you could maybe touch on wall board here. I mean, you guys are clearly outperforming the market. Maybe touch on some of the drivers there and, you know, maybe what you're seeing on the demand front. You know, housing continues to be pretty weak, but, you know, like I said, you guys are outperforming there. So any color you can give us around that.

Yeah, Trey, look, I think some of it is our geographic position continues to do well many times.

Okay. And then kind of sticking with wallboard, you know, the margins there continue to be really good. Can you talk about anything on the cost front we should be kind of keeping our eye out for on the wallboard side? Any swings there or any changes that you're expecting on that front?

You know, look, natural gas has pretty been range-bound for over $3 a million at this level for a little while.

Well, thanks for taking my questions. I'll pass it on and jump back in queue.

The next question will come from Brian Brophy with C4. Please go ahead.

Thanks. Good morning, everybody. The JV operating earnings were a little bit lower than the street was. I guess just curious to what extent that was a continuation of a drag from the slide facility ramp up and just any update on how you guys are thinking about that ramp moving forward here.

Yeah, look, I think that's helpful.

And then on the flip side, obviously, there was a nice bounce back in profitability on the concrete and ag side. Is this a good run rate to think about margins moving forward in that segment, or is there any kind of one-time benefits to call out this quarter?

Time issues or one-time benefits.

Thanks. I'll pass it on.

The next question will come from Anthony Pettinari with Citigroup. Please go ahead.

Good morning. I was wondering with the strength you saw in cement volumes, if there was anything notable in terms of the cadence in the three months of the quarter and then maybe quarter to date here in July, whether, I don't know, the strength has built or there's any pattern there. And then I'm wondering if you could talk a little bit more about maybe some of the regional or, you know, state-by-state dynamics that you're seeing in the cement market.

Yeah, thanks, Anthony. Look, you know, you're spending, even in light of some, you know, steady.

And is there any notable dynamic that you call out in the states that you serve, you know, areas that are stronger or maybe weaker?

No, really, you know, if you look across the country, you know, it's pretty consistent acropic deviation compared to any.

Okay, that's helpful. I'll turn it over. The next question will come from Adam Salheimer with Thompson Davis. Please go ahead.

Hey, good morning, guys. Nice quarter. Thanks, Adam. Hey, Craig, can you give us any high-level thoughts on wallboard volumes going forward?

You know, still feel good about, you know, kind of the medium and longer term.

Okay, and then on cement, I was curious if the higher operating costs you called out, were those temporary in the quarter?

Yeah, Adam, great question. You know, this is our quarter where we perform the vast majority of our annual maintenance. Got it.

The next question will come from Philip Ng with Jeffrey. Please go ahead.

Hey, guys. On cement, Michael, I think if I heard you correctly, your commentary on the outlook with capacity-lization high, you were pretty upbeat on cement prices. I don't know if that was a medium to longer-term comment, but I'd love to get your thoughts on how you're seeing cement prices evolve over the course of the year. It sounds like demand's reasonably good, but prices flipped modestly, sequentially. So just kind of give us a lay of the land on how you're thinking about cement prices Yeah, Phil, thanks for the question.

When we look at it, you know, if we look at the, you know, what I continue to focus on is kind of the midterm and the long-term side of the market, you know. And when we look at it, you know, demand is staying pretty consistent and pretty stable. We're happy with the volumes we were able to ship. And as I stated earlier, you know, it's pretty consistent across the country, you know. So, you know, from what we're hearing from customers and everything, I think we think the demand profile in the midterm and the long term would be good, which would lead to more pricing potential in the future as those supply-demand dynamics tighten with it. You know, in the shorter-term time frame, you know, we have a good supply-demand dynamic right now. But, you know, I think the shorter term, I won't say it will be a little bit more challenging and getting price increases through, but we'll be more pacing them, looking at the fall to see what we do and what we implement during that time frame, whereas the midterm and the longterm, that has really more potential and upside on that.

Okay. Just if I'm interpreting you correctly, Michael, the spring increase, TBD, it's probably barely muted, and it kind of depends on how the demand backdrop, supply demand on fall kind of materializes and potentially that could give you some momentum on pricing for cement?

That's exactly correct, Phil.

Okay. Perfect. And perhaps a question for you, Craig. With the bill change out there, and you guys are obviously making real investments in both your cement and wall business, anything to be mindful of from a cash flow standpoint and potentially cash tax implications?

You hit the nail on the head, Phil. Yeah, from a P&L perspective, not a big change, but extended spending.

Is there a way to kind of decide what that cash tax rate could look like in the next few years?

Our cash taxes pay different than our...

Okay. All right. Thank you. Appreciate the color, guys.

The next question will come from Keith Hughes with Truist. Please go ahead.

Thank you. I just wanted to shift over to wallboard pricing was down in the quarter. You talked about, was there any mixed impact on the numbers and what's in the near term, what do you think pricing will do? Yeah, Keith, really, you know, the decline year over year, yes. Sequentially...

Okay. Thank you. This concludes our question and answer session. I would like to turn the conference back over to Mr. Michael Hack for any closing remarks. Please go ahead, sir.

Thank you, Chuck. The first quarter was a solid start to our year, which is a testament to our operational resilience. We have maintained our clear operational, strategic, and financial goalposts even as the economy and construction conditions evolve. EGLE continues to position itself for growth throughout cycles, and we will keep focused on executing for outperformance. Thanks also for everyone discussing our results again with you next quarter.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.