UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended

December 31, 2023

Commission File Number 1-12984

EAGLE MATERIALS INC.

(Exact name of registrant as specified in its charter)

Delaware

(State of Incorporation)

75-2520779

(I.R.S. Employer Identification No.)

5960 Berkshire Lane

Suite 900

Dallas

Texas

75225

(Address of principal executive offices)

(

214

)

432-2000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading<br><br>Symbol(s)	Name of each exchange on which registered
Common Stock (par value $.01 per share)	EXP	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ NO ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)

Yes ☐ No ☒

As of January 23, 2024, the number of outstanding shares of common stock was:

Class	Outstanding Shares
Common Stock, $.01 Par Value	34,450,244

PART I. FINANCIAL INFORMATION (unaudited)

		Page
Item 1.	Consolidated Financial Statements
	Consolidated Statements of Earnings for the Three and Nine Months Ended December 31, 2023 and 2022	1
	Consolidated Statements of Comprehensive Earnings for theThree and Nine Months Ended December 31, 2023 and 2022	2
	Consolidated Balance Sheets as of December 31, 2023, and March 31, 2023	3
	Consolidated Statements of Cash Flows for theThree and Nine Months Ended December 31, 2023 and 2022	4
	Consolidated Statements of Stockholders' Equity for the Three and Nine Months Ended December 31, 2023 and 2022	5
	Notes to Unaudited Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	35
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	36
Item 1a.	Risk Factors	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 4.	Mine Safety Information	36
Item 5.	Other Information	36
Item 6.	Exhibits	37
SIGNATURES		38

EAGLE MATERIALS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (unaudited)

	For the Three Months Ended December 31,						For the Nine Months Ended December 31,
	2023			2022			2023			2022
	(dollars in thousands, except share and per share data)
Revenue	$	558,833		$	511,487		$	1,782,590		$	1,677,942
Cost of Goods Sold		378,205			352,717			1,216,949			1,174,067
Gross Profit		180,628			158,770			565,641			503,875
Equity in Earnings of Unconsolidated Joint Venture		9,285			11,377			22,790			23,631
Corporate General and Administrative Expense		(14,201	)		(12,497	)		(42,456	)		(37,944	)
Other Non-Operating Income (Loss)		1,019			2,210			2,837			911
Interest Expense, net		(10,128	)		(8,932	)		(32,571	)		(24,842	)
Earnings before Income Taxes		166,603			150,928			516,241			465,631
Income Taxes		(37,465	)		(33,744	)		(115,701	)		(104,447	)
Net Earnings		129,138			117,184			400,540			361,184
EARNINGS PER SHARE
Basic	$	3.75		$	3.23		$	11.47		$	9.72
Diluted	$	3.72		$	3.20		$	11.38		$	9.66
AVERAGE SHARES OUTSTANDING
Basic		34,466,141			36,336,056			34,931,378			37,149,927
Diluted		34,749,721			36,605,982			35,201,658			37,395,586
CASH DIVIDENDS PER SHARE	$	0.25		$	0.25		$	0.75		$	0.75

See Notes to Unaudited Consolidated Financial Statements.

EAGLE MATERIALS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (unaudited)

	For the Three Months Ended December 31,						For the Nine Months Ended December 31,
	2023			2022			2023			2022
	(dollars in thousands)
Net Earnings	$	129,138		$	117,184		$	400,540		$	361,184
Net Actuarial Change in Defined Benefit Plans
Amortization of Net Actuarial Loss		63			30			189			90
Tax Expense		(15	)		(7	)		(45	)		(20	)
Comprehensive Earnings	$	129,186		$	117,207		$	400,684		$	361,254

See Notes to Unaudited Consolidated Financial Statements.

EAGLE MATERIALS INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (unaudited)

			March 31,
			2023

ASSETS
Current Assets
Cash and Cash Equivalents	48,912		$	15,242
Accounts and Notes Receivable, net	192,982			195,052
Inventories	333,828			291,882
Income Tax Receivable	2,917			16,267
Prepaid and Other Assets	9,092			3,060
Total Current Assets	587,731			521,503
Property, Plant, and Equipment, net	1,667,915			1,662,061
Notes Receivable	—			7,382
Investment in Joint Venture	104,822			89,111
Operating Lease Right-of-Use Assets	20,670			20,759
Goodwill and Intangible Assets, net	488,088			466,043
Other Assets	21,114			14,143
Total Assets	2,890,340		$	2,781,002
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts Payable	117,270		$	110,408
Accrued Liabilities	88,178			86,472
Income Tax Payable	1,848			—
Operating Lease Liabilities	8,217			6,009
Current Portion of Long-term Debt	10,000			10,000
Total Current Liabilities	225,513			212,889
Long-term Debt	1,022,482			1,079,032
Noncurrent Operating Lease Liabilities	20,685			24,940
Other Long-term Liabilities	42,331			41,603
Deferred Income Taxes	246,168			236,844
Total Liabilities	1,557,179			1,595,308
Stockholders’ Equity
Preferred Stock, Par Value 0.01; Authorized 5,000,000 Shares; None Issued	—			—
Common Stock, Par Value 0.01; Authorized 100,000,000 Shares; Issued and Outstanding 34,474,435 and 35,768,376 Shares, respectively	345			358
Capital in Excess of Par Value	—			—
Accumulated Other Comprehensive Losses	(3,403	)		(3,547	)
Retained Earnings	1,336,219			1,188,883
Total Stockholders’ Equity	1,333,161			1,185,694
Total Liabilities and Stockholders’ Equity	2,890,340		$	2,781,002

All values are in US Dollars.

See Notes to Unaudited Consolidated Financial Statements.

EAGLE MATERIALS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

	For the Nine Months Ended December 31,
	2023			2022
	(dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net Earnings	$	400,540		$	361,184
Adjustments to Reconcile Net Earnings to Net Cash Provided<br>by Operating Activities, Net of Effect of Non-Cash Activity
Depreciation, Depletion, and Amortization		111,347			103,689
Deferred Income Tax Provision		9,324			7,227
Stock Compensation Expense		15,356			13,636
Equity in Earnings of Unconsolidated Joint Venture		(22,790	)		(23,631	)
Distributions from Joint Venture		7,000			19,000
Changes in Operating Assets and Liabilities
Accounts and Notes Receivable		9,452			9,300
Inventories		(27,137	)		(3,219	)
Accounts Payable and Accrued Liabilities		3,278			(13,959	)
Other Assets		(19,428	)		4,411
Income Taxes Payable (Receivable)		13,607			2,473
Net Cash Provided by Operating Activities		500,549			480,111
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to Property, Plant, and Equipment		(87,848	)		(60,951	)
Acquisition Spending		(55,053	)		(158,451	)
Net Cash Used in Investing Activities		(142,901	)		(219,402	)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings Under Revolving Credit Facility		222,000			200,000
Repayment of Borrowings Under Revolving Credit Facility		(272,000	)		(70,000	)
Repayment of Term Loan		(7,500	)		(5,000	)
Dividends Paid to Stockholders		(26,692	)		(28,421	)
Purchase and Retirement of Common Stock		(248,852	)		(313,898	)
Proceeds from Stock Option Exercises		11,560			840
Payment of Debt Issuance Costs		—			(903	)
Shares Redeemed to Settle Employee Taxes on Stock Compensation		(2,494	)		(1,806	)
Net Cash Used in Financing Activities		(323,978	)		(219,188	)
NET INCREASE IN CASH AND CASH EQUIVALENTS		33,670			41,521
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		15,242			19,416
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	48,912		$	60,937

See Notes to Unaudited Consolidated Financial Statements.

EAGLE MATERIALS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (unaudited)

	Common<br>Stock			Capital in<br>Excess of<br>Par Value			Retained<br>Earnings			Accumulated<br>Other<br>Comprehensive<br>Losses			Total
	(dollars in thousands)
Balance at March 31, 2022	$	387		$	—		$	1,136,344		$	(3,175	)	$	1,133,556
Net Earnings		—			—			105,005			—			105,005
Stock Compensation Expense		—			5,146			—			—			5,146
Stock Option Exercises and Restricted Share Issuances		1			666			—			—			667
Shares Redeemed to Settle Employee Taxes		—			(1,497	)		—			—			(1,497	)
Purchase and Retirement of Common Stock		(8	)		(4,315	)		(105,289	)		—			(109,612	)
Dividends to Shareholders		—			—			(9,507	)		—			(9,507	)
Unfunded Pension Liability, net of tax		—			—			—			23			23
Balance at June 30, 2022	$	380		$	—		$	1,126,553		$	(3,152	)	$	1,123,781
Net Earnings		—			—			138,995			—			138,995
Stock Compensation Expense		—			4,402			—			—			4,402
Stock Option Exercise and Restricted Share Issuances		—			68			—			—			68
Shares Redeemed to Settle Employee Taxes		—			(309	)		—			—			(309	)
Purchase and Retirement of Common Stock		(9	)		(4,161	)		(96,616	)		—			(100,786	)
Dividends to Shareholders		—			—			(9,471	)		—			(9,471	)
Unfunded Pension Liability, net of tax		—			—			—			24			24
Balance at September 30, 2022	$	371		$	—		$	1,159,461		$	(3,128	)	$	1,156,704
Net Earnings		—			—			117,184			—			117,184
Stock Compensation Expense		—			4,088			—			—			4,088
Stock Option Exercise and Restricted Share Issuances		—			105			—			—			105
Purchase and Retirement of Common Stock		(9	)		(4,193	)		(99,298	)		—			(103,500	)
Dividends to Shareholders		—			—			(9,090	)		—			(9,090	)
Unfunded Pension Liability, net of tax		—			—			—			23			23
Balance at December 31, 2022	$	362		$	—		$	1,168,257		$	(3,105	)	$	1,165,514
	Common<br>Stock			Capital in<br>Excess of<br>Par Value			Retained<br>Earnings			Accumulated<br>Other<br>Comprehensive<br>Losses			Total
	(dollars in thousands)
Balance at March 31, 2023	$	358		$	—		$	1,188,883		$	(3,547	)	$	1,185,694
Net Earnings		—			—			120,849			—			120,849
Stock Compensation Expense		—			6,457			—			—			6,457
Stock Option Exercises and Restricted Share Issuances		2			10,383			—			—			10,385
Shares Redeemed to Settle Employee Taxes		(1	)		(1,359	)		—			—			(1,360	)
Purchase and Retirement of Common Stock		(5	)		(15,481	)		(59,313	)		—			(74,799	)
Dividends to Shareholders		—			—			(8,863	)		—			(8,863	)
Unfunded Pension Liability, net of tax		—			—			—			48			48
Balance at June 30, 2023	$	354		$	—		$	1,241,556		$	(3,499	)	$	1,238,411
Net Earnings		—			—			150,553			—			150,553
Stock Compensation Expense		—			4,542			—			—			4,542
Stock Option Exercise and Restricted Share Issuances		—			1,084			—			—			1,084
Shares Redeemed to Settle Employee Taxes		—			(1,134	)		—			—			(1,134	)
Purchase and Retirement of Common Stock		(4	)		(4,492	)		(73,541	)		—			(78,037	)
Dividends to Shareholders		—			—			(8,833	)		—			(8,833	)
Unfunded Pension Liability, net of tax		—			—			—			48			48
Balance at September 30, 2023	$	350		$	—		$	1,309,735		$	(3,451	)	$	1,306,634
Net Earnings		—			—			129,138			—			129,138
Stock Compensation Expense		—			4,357			—			—			4,357
Stock Option Exercise and Restricted Share Issuances		—			91			—			—			91
Purchase and Retirement of Common Stock		(5	)		(4,448	)		(94,051	)		—			(98,504	)
Dividends to Shareholders		—			—			(8,603	)		—			(8,603	)
Unfunded Pension Liability, net of tax		—			—			—			48			48
Balance at December 31, 2023	$	345		$	—		$	1,336,219		$	(3,403	)	$	1,333,161

See Notes to Unaudited Consolidated Financial Statements.

Eagle Materials Inc. and SubsidiariesNotes to Consolidated Financial Statements

(A) BASIS OF PRESENTATION

The accompanying Unaudited Consolidated Financial Statements as of and for the three and nine months ended December 31, 2023, include the accounts of Eagle Materials Inc. and its majority-owned subsidiaries (collectively, the Company, us, or we) and have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. These Unaudited Consolidated Financial Statements should be read in conjunction with the Audited Consolidated Financial Statements and the notes thereto included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on May 19, 2023.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although we believe that the disclosures are adequate to make the information presented not misleading. In our opinion, all adjustments (consisting solely of normal recurring adjustments) necessary to present fairly the information in the following unaudited consolidated financial statements of the Company have been included. The results of operations for interim periods are not necessarily indicative of the results for the full year.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Recent Accounting Pronouncements

There have been no recent accounting pronouncements that are expected to materially affect the Company.

(B) SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental cash flow information is as follows:

	For the Nine Months Ended December 31,
		2023		2022
	(dollars in thousands)
Cash Payments
Interest	$	38,797	$	26,526
Income Taxes		92,718		94,793
Operating Cash Flows Used for Operating Leases		7,016		6,360
Non-Cash Financing Activities
Excise Tax on Share Repurchases	$	3,227	$	—
Right-of-Use Assets Acquired for Capitalized Operating Leases		6,018		—

On May 3, 2023, we purchased the assets of a cement import terminal in Stockton, California (the Stockton Terminal Acquisition), which was accounted for under the acquisition method. The purchase price of the Stockton Terminal Acquisition was approximately $55.1 million. The purchase price was funded through borrowings under our revolving credit facility. Operations related to the Stockton Terminal Acquisition are included in the Cement business in our segment reporting from May 3, 2023, through December 31, 2023.

The following table summarizes the allocation of the purchase price to the fair value of assets acquired and liabilities assumed (based on Level 3 inputs) as of December 31, 2023:

	Fair Value
Inventory	$	14,809
Prepaid and Other Current Assets		179
Property, Plant, and Equipment		12,737
Lease Right-of-Use Assets		1,646
Intangible Assets		16,100
Lease Obligations		(1,646	)
Other Long-term Liabilities		(630	)
Goodwill		11,858
Total Purchase Price	$	55,053

The estimated useful lives assigned to Property, Plant, and Equipment range from 5 to 30 years, while the estimated useful lives assigned to Intangible Assets range from 2 to 15 years. All goodwill generated from the Stockton Terminal Acquisition is deductible for income tax purposes.

The following table presents the Revenue and Operating Loss related to the Stockton Terminal Acquisition that has been included in our Consolidated Statement of Earnings from May 3, 2023, through December 31, 2023.

	For the Three Months Ended			For the Nine Months Ended
	December 31, 2023
	(dollars in thousands)
Revenue	$	11,247		$	32,529
Operating Loss	$	(56	)	$	(2,106	)

Operating Earnings shown above for the three months ended December 31, 2023 were affected by approximately $0.7 million related to depreciation and amortization. Operating Loss for the nine months ended December 31, 2023, was affected by approximately $1.9 million and $3.9 million related to depreciation and amortization and the recording of acquired inventories at fair value, respectively.

(D) REVENUE

We earn Revenue primarily from the sale of products, which include cement, concrete, aggregates, gypsum wallboard, and recycled paperboard. The vast majority of Revenue from the sale of concrete, aggregates, and gypsum wallboard is originated by purchase orders from our customers, who are mostly third-party contractors and suppliers. Revenue from the sale of cement is recognized at the point-of-sale to customers under sales orders. Revenue from our Recycled Paperboard segment is generated mainly through long-term supply agreements. These agreements do not have a stated maturity date, but may be terminated by either party with a two to three-year notice period. We invoice customers upon shipment, and our collection terms range from 30 to 75 days. Revenue from the sale of cement, concrete, aggregates, and gypsum wallboard not related to long-term supply agreements is recognized upon shipment of the related products to customers, which is when title and ownership are transferred, and the customer is obligated to pay.

Revenue from sales under our long-term supply agreements is also recognized upon transfer of control to the customer, which generally occurs at the time the product is shipped from the production facility or terminal location. Our long-term supply agreements with customers define, among other commitments, the volume of product that we must provide and the volume that the customer must purchase by the end of the defined periods. Pricing structures under our agreements are generally market-based, but are subject to certain contractual adjustments. Shortfall amounts, if applicable under these arrangements, are constrained and not recognized as Revenue until an agreement is reached with the customer and, therefore, are not subject to the risk of reversal.

The Company offers certain of its customers, including those with long-term supply agreements, rebates and incentives, which we treat as variable consideration. We adjust the amount of Revenue recognized for the variable consideration using the most likely amount method based on past history and projected volumes in the rebate and incentive period. Any amounts billed to customers for taxes are excluded from Revenue.

The Company has elected to treat freight and delivery charges we pay for the delivery of goods to our customers as a fulfillment activity rather than a separate performance obligation. When we arrange for a third party to deliver products to customers, fees for shipping and handling billed to the customer are recorded as Revenue, while costs we incur for shipping and handling are recorded as expenses and included in Cost of Goods Sold.

Other Non-Operating Income includes lease and rental income, asset sale income, non-inventoried aggregates sales income, distribution center income, and trucking income, as well as other miscellaneous revenue items and costs that have not been allocated to a business segment.

See Footnote (N) to the Unaudited Consolidated Financial Statements for disaggregation of revenue by segment.

(E) ACCOUNTS AND NOTES RECEIVABLE

Accounts Receivable are shown net of the allowance for credit losses totaling $7.0 million and $6.9 million at December 31, 2023, and March 31, 2023, respectively. We perform ongoing credit evaluations of our customers’ financial condition and generally require no collateral from our customers. The allowance for credit losses is based upon an analysis of economic trends in the construction industry, detailed analysis of the expected collectability of accounts receivable that are past due, and the expected collectability of overall receivables. We have no significant credit risk concentration among our diversified customer base.

(F) INVENTORIES

Inventories are stated at the lower of average cost (including applicable material, labor, depreciation, and plant overhead) or net realizable value. Raw Materials and Materials-in-Progress include clinker, which is an intermediary product before it is ground into cement powder. Quantities of Raw Materials and Materials-in-Progress, Aggregates, and Coal inventories, are based on measured volumes, subject to estimation based on the size and location of the inventory piles, and are converted to tonnage using standard inventory density factors. Inventories consist of the following:

	December 31,		March 31,
	2023		2023
	(dollars in thousands)
Raw Materials and Materials-in-Progress	$	104,465	$	96,880
Finished Cement		55,480		46,364
Aggregates		10,580		8,309
Gypsum Wallboard		7,183		4,244
Recycled Paperboard		13,471		8,651
Repair Parts and Supplies		123,555		112,885
Fuel and Coal		19,094		14,549
	$	333,828	$	291,882

(G) ACCRUED EXPENSES

Accrued Expenses consist of the following:

	December 31,		March 31,
	2023		2023
	(dollars in thousands)
Payroll and Incentive Compensation	$	39,703	$	32,742
Benefits		17,073		16,130
Dividends		8,793		9,186
Interest		1,297		7,163
Property Taxes		5,817		6,671
Power and Fuel		3,479		3,051
Freight		4,643		1,663
Legal and Professional		2,083		1,691
Sales and Use Tax		1,160		1,452
Other		4,130		6,723
	$	88,178	$	86,472

(H) LEASES

We lease certain real estate, buildings, and equipment. Certain of these leases contain escalations of rent over the term of the lease, as well as options for us to extend the term of the lease at the end of the original term. These extensions range from periods of 1 to 20 years. Our lease agreements do not contain material residual value guarantees or material restrictive covenants. In calculating the present value of future minimum lease payments, we use the rate implicit in the lease if it can be determined. Otherwise, we use our incremental borrowing rate in effect at the commencement of the lease to determine the present value of the future minimum lease payments. Additionally, we lease certain equipment under short-term leases with initial terms of less than 12 months, which are not recorded on the balance sheet.

Lease expense for our operating and short-term leases is as follows:

	For the Three Months Ended December 31,				For the Nine Months Ended December 31,
	2023		2022		2023		2022
	(dollars in thousands)
Operating Lease Cost	$	1,921	$	1,953	$	6,148	$	5,351
Short-term Lease Cost		187		135		601		410
Total Lease Cost	$	2,108	$	2,088	$	6,749	$	5,761

The Right-of-Use Assets and Lease Liabilities are reflected on our Balance Sheet as follows:

	December 31,		March 31,
	2023		2023
	(dollars in thousands)
Operating Leases
Operating Lease Right-of-Use Assets	$	20,670	$	20,759
Current Operating Lease Liabilities	$	8,217	$	6,009
Noncurrent Operating Lease Liabilities		20,685		24,940
Total Operating Lease Liabilities	$	28,902	$	30,949

Future payments for operating leases are as follows (dollars in thousands):

Fiscal Year	Amount
2024 (remaining three months)	$	2,269
2025		8,653
2026		4,776
2027		3,606
2028		2,735
Thereafter		13,664
Total Lease Payments	$	35,703
Less: Imputed Interest		(6,801	)
Present Value of Lease Liabilities	$	28,902
Weighted-Average Remaining Lease Term (in years)		9.3
Weighted-Average Discount Rate		4.17	%

(I) Share-BASED EMPLOYEE COMPENSATION

On August 3, 2023, our stockholders approved the Eagle Materials Inc. 2023 Equity Incentive Plan (the 2023 Plan), which reserves 1,425,000 shares for future grants of stock awards. Under the terms of the 2023 Plan, we can issue equity awards, including stock options, restricted stock units, restricted stock, and stock appreciation rights, to employees of the Company, members of the Board of Directors, consultants, independent contractors, and agents of the Company. The Compensation Committee of our Board of Directors specifies grant terms for awards under the Plan.

Long-Term Compensation Plans

OPTIONS

In May 2023, under the 2013 Amended and Restated Incentive Plan (the Prior Plan), the Compensation Committee of the Board of Directors approved the granting to certain officers and key employees an aggregate of 2,296 performance-vesting stock options that will be earned only if certain performance conditions are satisfied (the Fiscal 2024 Employee Performance Stock Option Award). The performance criteria for the Fiscal 2024 Employee Performance Stock Option Award are based upon the achievement of certain levels of return on equity (as defined in the option agreements), ranging from 10.0% to 20.0%, for the performance periods described in the table below. All stock options in each performance period will be earned if the return on equity is 20.0% or greater. If the return on equity is less than 20% but at least 10% in any performance period, the amount of stock options earned in such period will be reduced proportionately using straight-line interpolation, such that approximately 66.7% of the amount of stock options granted will be earned if the return on equity is 10.0%. If the Company does not achieve a return on equity of at least 10.0% during any performance period, all stock option awards for that performance period will be forfeited. The stock option performance periods are as follows:

		Performance Period	Vesting Date
One-Year Performance Shares	574	April 1, 2023 to March 31, 2024	May 2024
Two-Year Performance Shares	574	April 1, 2023 to March 31, 2025	May 2025
Three-Year Performance Shares	1,148	April 1, 2023 to March 31, 2026	May 2026

The stock options have a term of 10 years from the grant date. The Compensation Committee also approved the granting of 1,914 time-vesting stock options to the same officers and key employees, which vest ratably over three years (the Fiscal 2024 Employee Time-Vesting Stock Option Award).

In August 2023, under the 2023 Plan, the Compensation Committee granted 1,348 options to members of the Board of Directors (the Fiscal 2024 Board of Directors Stock Option Award). Options granted under the Fiscal 2024 Board of Directors Stock Option Award vest one year after the grant date, and can be exercised from the date of vesting until their expiration on the tenth anniversary of the grant date.

The Fiscal 2024 Employee Performance Stock Option Award, the Fiscal 2024 Employee Time-Vesting Stock Option Award, and the Fiscal 2024 Board of Directors Stock Option Award were valued at their grant date using the Black-Scholes option pricing model. The weighted-average assumptions used in the Black-Scholes model to value the option awards for fiscal 2024 are as follows:

Dividend Yield		0.8	%
Expected Volatility		38.8	%
Risk-Free Interest Rate		3.7	%
Expected Life	6.0 years

In addition to the stock options described above, we issue stock options to certain employees from time to time. Any options issued are valued using the Black-Scholes options pricing model on the grant date and expensed over the vesting period.

Stock option expense for all outstanding stock option awards totaled approximately $0.5 million and $1.5 million for the three and nine months ended December 31, 2023, respectively, and $0.8 million and $2.7 million for the three and nine months ended December 31, 2022, respectively. At December 31, 2023, there was approximately $2.2 million of unrecognized compensation cost related to outstanding stock options, which is expected to be recognized over a weighted-average period of

1.9

years. The following table represents stock option activity for the nine months ended December 31, 2023:

	Number<br>of Shares			Weighted-<br>Average<br>Exercise<br>Price
Outstanding Options at March 31, 2023		436,949		$	89.69
Granted		5,558		$	172.62
Exercised		(131,099	)	$	88.17
Cancelled		(1,000	)	$	73.37
Outstanding Options at December 31, 2023		310,408		$	91.86
Options Exercisable at December 31, 2023		215,822
Weighted-Average Fair Value of Options Granted<br>During the Year	$	69.84

The following table summarizes information about stock options outstanding at December 31, 2023:

						Options Exercisable
Range of Exercise Prices		Weighted-<br>Average<br>Remaining<br>Contractual<br>Life (in years)		Weighted-<br>Average<br>Exercise<br>Price		Number of<br>Shares<br>Outstanding		Weighted-<br>Average<br>Exercise<br>Price
59.32 - 81.28	113,490		5.91	$	62.49		71,086	$	63.67
87.37 - 106.24	125,721		4.60	$	95.77		122,005	$	95.72
118.27 - 166.75	71,197		8.34	$	131.77		22,731	$	130.79
	310,408		5.94	$	91.86		215,822	$	88.86

All values are in US Dollars.

At December 31, 2023, the aggregate intrinsic value of the outstanding and exercisable options was approximately $34.4 million and $24.6 million, respectively. The total intrinsic value of options exercised during the nine months ended December 31, 2023, was approximately $10.6 million.

RESTRICTED STOCK

In May 2023, under the Prior Plan, the Compensation Committee approved the granting to certain officers and key employees an aggregate of 45,693 shares of performance-vesting restricted stock that will be earned if certain performance conditions are satisfied (the Fiscal 2024 Employee Restricted Stock Performance Award). The performance criteria for the Fiscal 2024 Employee Restricted Stock Performance Award are based upon the

achievement of certain levels of return on equity (as defined in the award agreement), ranging from 10.0% to 20.0%, for the performance periods described in the table below. All restricted shares in each performance period will be earned if the return on equity is 20.0% or greater. If the return on equity is less than 20% but at least 10% in any performance period, the amount of shares earned in such period will be reduced proportionately using straight-line interpolation, such that approximately 66.7% of the amount of shares issued will be earned if the return on equity is 10.0%. If the Company does not achieve a return on equity of at least 10.0% during any performance period, all awards for that performance period will be forfeited. The restricted share performance periods are as follows:

		Performance Period	Vesting Date
One-Year Performance Shares	11,424	April 1, 2023 to March 31, 2024	May 2024
Two-Year Performance Shares	11,424	April 1, 2023 to March 31, 2025	May 2025
Three-Year Performance Shares	22,845	April 1, 2023 to March 31, 2026	May 2026

The Compensation Committee also approved the granting of 38,072 shares of time-vesting restricted stock to the same officers and key employees, which vest ratably over three years (the Fiscal 2024 Employee Restricted Stock Time-Vesting Award). The Fiscal 2024 Employee Restricted Stock Performance Award and the Fiscal 2024 Employee Restricted Stock Time-Vesting Award were valued at the closing price of the stock on the grant date and are being expensed over a three-year period.

In August 2023, under the 2023 Plan, we granted 10,755 shares of restricted stock to members of the Board of Directors (the Fiscal 2024 Board of Directors Restricted Stock Award). Restrictions on these shares will lapse one year after the grant date. The Fiscal 2024 Board of Directors Restricted Stock Award was valued at the closing price of the stock on the grant date, and is being expensed over a one-year period.

In addition to the restricted stock described above, from time to time we issue restricted stock to certain employees. These awards are valued at the closing price of the stock on the grant date and expensed over the vesting period.

The fair value of restricted stock is based on the stock price on the grant date. The following table summarizes the activity for nonvested restricted shares during the nine months ended December 31, 2023:

			Weighted-Average Grant Date Fair Value
Nonvested Restricted Stock at March 31, 2023	219,084		$	96.54
Granted	97,257		$	169.62
Vested	(35,958	)	$	146.24
Forfeited	(3,000	)	$	139.03
Nonvested Restricted Stock at December 31, 2023	277,383		$	125.10

Expense related to restricted shares was approximately $4.0 million and $13.8 million for the three and nine months ended December 31, 2023, respectively, and $3.3 million and $11.0 million for the three and nine months ended December 31, 2022, respectively. At December 31, 2023, there was approximately $21.5 million of unearned compensation from restricted stock, which will be recognized over a weighted-average period of

1.7

years. The number of shares available for future grants of stock options, restricted stock units, stock appreciation rights, and restricted stock under the 2023 Plan was 1,411,804 at December 31, 2023.

(J) COMPUTATION OF EARNINGS PER SHARE

The calculation of basic and diluted common shares outstanding is as follows:

	For the Three Months Ended December 31,						For the Nine Months Ended December 31,
	2023			2022			2023			2022
Weighted-Average Shares of Common Stock Outstanding		34,466,141			36,336,056			34,931,378			37,149,927
Effect of Dilutive Shares
Assumed Exercise of Outstanding Dilutive Options		305,842			424,949			312,723			424,642
Less Shares Repurchased from Proceeds of Assumed Exercised Options		(169,413	)		(294,478	)		(170,910	)		(305,741	)
Restricted Stock Units		147,151			139,455			128,467			126,758
Weighted-Average Common Stock and Dilutive Securities Outstanding		34,749,721			36,605,982			35,201,658			37,395,586
Shares Excluded Due to Anti-Dilution Effects		5,558			66,802			22,145			46,736

(K) PENSION AND EMPLOYEE BENEFIT PLANS

We sponsor several single-employer defined benefit plans and defined contribution plans, which together cover substantially all our employees. Benefits paid under the single-employer defined benefit plans covering certain hourly employees were historically based on years of service and the employee’s qualifying compensation over the last few years of employment. Over the last several years, these plans have been frozen to new participants and new benefits, with the last plan becoming frozen during fiscal 2020. Our defined benefit plans are all fully funded, with plan assets exceeding the benefit obligation at March 31, 2023. Due to the frozen status and current funding of the single-employer pension plans, our expected pension expense for fiscal 2024 is less than $0.2 million.

(L) INCOME TAXES

Income Taxes for the interim periods presented have been included in the accompanying financial statements on the basis of an estimated annual effective tax rate. In addition to the amount of tax resulting from applying the estimated annual effective tax rate to pre-tax income, we will include, when appropriate, certain items treated as discrete events to arrive at an estimated overall tax amount. The effective tax rate for the nine months ended December 31, 2023, was approximately 22%, which was consistent with the effective tax rate for the nine months ended December 31, 2022. The effective tax rate was higher than the U.S. Statutory rate of 21% mainly because of state income taxes, partially offset by a benefit recognized related to percentage depletion.

(M) LONG-TERM DEBT

Long-term Debt at December 31, 2023 is as follows:

	December 31,			March 31,
	2023			2023
	(dollars in thousands)
Revolving Credit Facility	$	107,000		$	157,000
2.500% Senior Unsecured Notes Due 2031		750,000			750,000
Term Loan		185,000			192,500
Total Debt		1,042,000			1,099,500
Less: Current Portion of Long-term Debt		(10,000	)		(10,000	)
Less: Unamortized Discounts and Debt Issuance Costs		(9,518	)		(10,468	)
Long-term Debt	$	1,022,482		$	1,079,032

Revolving Credit Facility

We have an unsecured $750.0 million revolving credit facility (the Revolving Credit Facility). The Revolving Credit Facility includes a separate $200.0 million term loan facility (the Term Loan) and also provides the Company the option to increase the borrowing capacity by up to $375.0 million (for a total borrowing capacity of $1,125.0

million), provided the existing lenders, or new lenders, agree to such increase. The Revolving Credit Facility includes a $40.0 million letter of credit facility and a swingline loan sub-facility of $25.0 million, and expires on May 5, 2027.

The Revolving Credit Facility contains customary covenants for an unsecured investment-grade facility, including covenants that restrict the Company’s and/or its subsidiaries’ ability to incur additional debt; encumber assets; merge with or transfer or sell assets to other persons; and enter into certain affiliate transactions. The Revolving Credit Facility also requires the Company to maintain at the end of each fiscal quarter a Leverage Ratio of 3.50:1.00 or less and an Interest Coverage Ratio (both ratios, as defined in the Revolving Credit Facility) equal to or greater than 2.50 to 1.00 (collectively, the Financial Covenants).

At the Company’s option, outstanding loans under the Revolving Credit Facility bear interest, at a variable rate equal to either (i) the adjusted term SOFR rate (secured overnight financing rate), plus 10 basis points, plus an agreed spread (ranging from 100 to 162.5 basis points, which is established based on the Company's credit rating); (ii) in respect of any Revolving Loans (until such time as the then-existing Benchmark (as defined in the Revolving Credit Facility) is replaced in accordance with the Revolving Credit Facility), the adjusted daily simple SOFR rate, plus 10 basis points, plus an agreed spread (ranging from 100 to 162.5 basis points, which is established based on the Company's credit rating) or (iii) an Alternate Base Rate (as defined in the Revolving Credit Facility), which is the highest of (a) the Prime Rate (as defined in the Revolving Credit Facility) in effect on any applicable day, (b) the NYFRB Rate (as defined in the Revolving Credit Facility) in effect on any applicable day, plus ½ of 1%, and (c) the Adjusted Term SOFR (as defined in the Revolving Credit Facility) for a one month interest period on any applicable day, or if such day is not a business day, the immediately preceding business day, plus 1.0%, in each case plus an agreed upon spread (ranging from 0 to 62.5 basis points), which is established quarterly based on the Company's credit rating. The Company is also required to pay a facility fee on unused available borrowings under the Revolving Credit Facility ranging from 9 to 22.5 basis points, which is established based on the Company's then credit rating.

The Company pays each lender a participation fee with respect to such lender’s participations in letters of credit, which fee accrues at the same Applicable Rate (as defined in the Revolving Credit Facility) used to determine the interest rate applicable to Eurodollar Revolving Loans (as defined in the Revolving Credit Facility), plus a fronting fee for each letter of credit issued by the issuing bank in an amount equal to 12.5 basis points per annum on the daily maximum amount then available to be drawn under such letter of credit. The Company also pays each issuing bank such bank’s standard fees with respect to issuance, amendment or extensions of letters of credit and other processing fees, and other standard costs and charges relating to such issuing bank’s letters of credit from time to time.

There were $107.0 million of outstanding borrowings under the Revolving Credit Facility, plus $8.3 million outstanding letters of credit as of December 31, 2023, resulting in $634.7 million of available borrowings under the Revolving Credit Facility, net of the outstanding letters of credit. We were in compliance with all Financial Covenants on December 31, 2023; therefore, the entire $634.7 million is available for future borrowings.

Term Loan

On May 5, 2022, we borrowed the $200.0 million Term Loan under the Revolving Credit Facility, and used these proceeds to, among other things, pay down a portion of the Revolving Credit Facility. The Term Loan requires quarterly principal payments of $2.5 million, with any unpaid amounts due upon maturity on May 5, 2027. At the Company’s option, principal amounts outstanding under the Term Loan bear interest as set forth in the Revolving Credit Facility (but not, for the avoidance of doubt, at a daily simple SOFR rate unless and until such time as the then-existing Benchmark (as defined in the Revolving Credit Facility) is replaced in accordance with the Revolving Credit Facility).

2.500% Senior Unsecured Notes Due 2031

On July 1, 2021, we issued $750.0 million aggregate principal amount of 2.500% senior notes due July 2031 (the 2.500% Senior Unsecured Notes). The 2.500% Senior Unsecured Notes are senior unsecured obligations of the Company and are not guaranteed by any of our subsidiaries. The 2.500% Senior Unsecured Notes were issued net of original issue discount of $6.3 million and have an effective interest rate of approximately 2.6%. The original issue discount is being amortized by the effective interest method over the 10-year term of the notes. The 2.500% Senior Unsecured Notes are redeemable prior to April 1, 2031, at a redemption price equal to 100% of the aggregate principal amount of the 2.500% Senior Unsecured Notes being redeemed, plus the present value of remaining scheduled payments of principal and interest from the applicable redemption date to April 1, 2031, discounted to the redemption date on a semi-annual basis at the Treasury rate plus 20 basis points. The 2.500% Senior Unsecured Notes are redeemable on or after April 1, 2031, at a redemption price equal to 100% of the aggregate principal amount of the 2.500% Senior Unsecured Notes being redeemed, plus accrued and unpaid interest to, but excluding, the applicable redemption date. If we experience certain change of control triggering events, we would be required to offer to repurchase the 2.500% Senior Unsecured Notes at a purchase price equal to 101% of the aggregate principal amount of the 2.500% Senior Unsecured Notes being repurchased, plus accrued and unpaid interest to, but excluding, the applicable redemption date. The indenture governing the 2.500% Senior Unsecured Notes contains certain covenants that limit our ability to create or permit to exist certain liens; enter into sale and leaseback transactions; and consolidate, merge, or transfer all or substantially all of our assets, and provides for certain events of default that, if any occurred, would permit or require the principal of and accrued interest on the 2.500% Senior Unsecured Notes to become or be declared due and payable.

(N) SEGMENT INFORMATION

Operating segments are defined as components of an enterprise that engage in business activities that earn revenue, incur expenses, and prepare separate financial information that is evaluated regularly by our chief operating decision maker in order to allocate resources and assess performance.

Our business is organized into two sectors within which there are four reportable business segments. The Heavy Materials sector includes the Cement and Concrete and Aggregates segments. The Light Materials sector includes the Gypsum Wallboard and Recycled Paperboard segments.

Our primary products are commodities that are essential in commercial and residential construction; public construction projects; and projects to build, expand, and repair roads and highways. Demand for our products is generally cyclical and seasonal, depending on economic and geographic conditions. We distribute our products throughout most of the United States, except the Northeast, which provides us with regional economic diversification. Our operations are conducted in the U.S. and include the mining of limestone for the manufacture, production, distribution, and sale of portland cement, including portland limestone cement (a basic construction material that is the essential binding ingredient in concrete); the grinding and sale of slag; the mining of gypsum for the manufacture and sale of gypsum wallboard; the manufacture and sale of recycled paperboard to the gypsum wallboard industry and other paperboard converters; the sale of readymix concrete; and the mining and sale of aggregates (crushed stone, sand, and gravel).

We operate eight modern cement plants (one of which is operated through a joint venture located in Buda, Texas), one slag grinding facility, and over 30 cement distribution terminals. Our cement companies focus on the U.S. heartland and operate as an integrated network selling product primarily in California, Colorado, Illinois, Indiana, Iowa, Kansas, Kentucky, Missouri, Nebraska, Nevada, Ohio, Oklahoma, Tennessee, and Texas. We operate over 25 readymix concrete batch plants and five aggregates processing plants in markets that are complementary to our cement network.

We operate five gypsum wallboard plants and a recycled paperboard mill. We distribute gypsum wallboard and recycled paperboard throughout the continental U.S., with the exception of the Northeast.

We account for intersegment sales at market prices. For segment reporting purposes only, we proportionately consolidate our 50% share of the Joint Venture Revenue and Operating Earnings, consistent with the way management reports the segments within the Company for making operating decisions and assessing performance.

The following table sets forth certain financial information relating to our operations by segment. We do not allocate interest or taxes at the segment level; these costs are disclosed at the consolidated company level.

	For the Three Months Ended December 31,						For the Nine Months Ended December 31,
	2023			2022			2023			2022
	(dollars in thousands)
Revenue
Cement	$	308,654		$	256,313		$	998,437		$	860,289
Concrete and Aggregates		61,186			55,176			201,526			186,407
Gypsum Wallboard		200,969			212,016			629,299			652,981
Recycled Paperboard		47,053			47,774			135,397			155,520
		617,862			571,279			1,964,659			1,855,197
Less: Intersegment Revenue		(32,346	)		(32,172	)		(99,356	)		(98,190	)
Less: Joint Venture Revenue		(26,683	)		(27,620	)		(82,713	)		(79,065	)
	$	558,833		$	511,487		$	1,782,590		$	1,677,942
	For the Three Months Ended December 31,				For the Nine Months Ended December 31,
---	---	---	---	---	---	---	---	---
	2023		2022		2023		2022
	(dollars in thousands)
Intersegment Revenue
Cement	$	7,804	$	7,719	$	27,192	$	26,371
Concrete and Aggregates		3,414		—		10,235		—
Recycled Paperboard		21,128		24,453		61,929		71,819
	$	32,346	$	32,172	$	99,356	$	98,190
Cement Sales Volume (M tons)
Wholly Owned		1,663		1,527		5,470		5,313
Joint Venture		161		172		496		524
		1,824		1,699		5,966		5,837

	For the Three Months Ended December 31,						For the Nine Months Ended December 31,
	2023			2022			2023			2022
	(dollars in thousands)						(dollars in thousands)
Operating Earnings
Cement	$	105,566		$	72,315		$	301,056		$	233,442
Concrete and Aggregates		1,760			2,692			13,434			15,700
Gypsum Wallboard		75,063			87,335			251,625			261,164
Recycled Paperboard		7,524			7,805			22,316			17,200
Sub-Total		189,913			170,147			588,431			527,506
Corporate General and Administrative Expense		(14,201	)		(12,497	)		(42,456	)		(37,944	)
Other Non-Operating Income (Loss)		1,019			2,210			2,837			911
Earnings Before Interest and Income Taxes		176,731			159,860			548,812			490,473
Interest Expense, net		(10,128	)		(8,932	)		(32,571	)		(24,842	)
Earnings Before Income Taxes	$	166,603		$	150,928		$	516,241		$	465,631
Cement Operating Earnings
Wholly Owned	$	96,281		$	60,938		$	278,266		$	209,811
Joint Venture		9,285			11,377			22,790			23,631
	$	105,566		$	72,315		$	301,056		$	233,442
Capital Expenditures
Cement	$	11,571		$	7,278		$	38,288		$	21,157
Concrete and Aggregates		1,207			2,128			10,281			16,468
Gypsum Wallboard		7,386			7,307			23,866			19,777
Recycled Paperboard		1,868			463			7,733			2,318
Corporate and Other		403			526			7,680			1,231
	$	22,435		$	17,702		$	87,848		$	60,951
Depreciation, Depletion, and Amortization
Cement	$	22,514		$	20,582		$	66,380		$	60,893
Concrete and Aggregates		4,857			4,402			14,850			12,954
Gypsum Wallboard		5,611			5,387			16,620			16,539
Recycled Paperboard		3,694			3,738			11,121			11,197
Corporate and Other		792			706			2,376			2,106
	$	37,468		$	34,815		$	111,347		$	103,689
	December 31,		March 31,
---	---	---	---	---
	2023		2023
	(dollars in thousands)
Identifiable Assets
Cement	$	1,997,649	$	1,905,227
Concrete and Aggregates		229,998		234,767
Gypsum Wallboard		412,092		421,425
Recycled Paperboard		168,120		163,797
Other, net		82,481		55,786
	$	2,890,340	$	2,781,002

Segment Operating Earnings, including the proportionately consolidated 50% interest in the revenue and expenses of the Joint Venture, represent Revenue, less direct operating expenses, segment Depreciation, and segment Selling, General, and Administrative expenses. We account for intersegment sales at market prices. Corporate assets consist mainly of cash and cash equivalents, general office assets, and miscellaneous other assets.

The basis used to disclose Identifiable Assets; Capital Expenditures; and Depreciation, Depletion, and Amortization conforms with the equity method, and is similar to how we disclose these accounts in our Unaudited Consolidated Balance Sheets and Unaudited Consolidated Statements of Earnings.

The segment breakdown of Goodwill is as follows:

	December 31,		March 31,
	2023		2023
	(dollars in thousands)
Cement	$	227,669	$	215,781
Concrete and Aggregates		40,774		40,774
Gypsum Wallboard		116,618		116,618
Recycled Paperboard		7,538		7,538
	$	392,599	$	380,711

The increase in Goodwill in the Cement segment is related to the Stockton Terminal Acquisition. The purchase price allocation is still in progress, and may affect the recorded balance of Goodwill when completed.

Summarized financial information for the Joint Venture that is not consolidated is set out below. This summarized financial information includes the total amount for the Joint Venture and not our 50% interest in those amounts:

	For the Three Months Ended December 31,				For the Nine Months Ended December 31,
	2023		2022		2023		2022
	(dollars in thousands)				(dollars in thousands)
Revenue	$	53,366	$	55,240	$	165,426	$	158,129
Gross Margin	$	19,465	$	24,716	$	51,512	$	52,718
Earnings Before Income Taxes	$	18,711	$	22,754	$	45,925	$	47,262
	December 31,		March 31,
---	---	---	---	---
	2023		2023
	(dollars in thousands)
Current Assets	$	104,158	$	88,562
Noncurrent Assets	$	150,950	$	124,503
Current Liabilities	$	40,621	$	29,434

(O) INTEREST EXPENSE

The following components are included in Interest Expense, net:

	For the Three Months Ended December 31,						For the Nine Months Ended December 31,
	2023			2022			2023			2022
	(dollars in thousands)						(dollars in thousands)
Interest Income	$	(150	)	$	(163	)	$	(523	)	$	(245	)
Interest Expense		9,804			8,621			31,671			23,676
Other Expenses		474			474			1,423			1,411
Interest Expense, net	$	10,128		$	8,932		$	32,571		$	24,842

Interest Income includes interest earned on investments of excess cash. Components of Interest Expense include interest associated with the Revolving Credit Facility, Term Loan, Senior Unsecured Notes, and commitment fees based on the unused portion of the Revolving Credit Facility. Other Expenses include amortization of debt issuance costs and Revolving Credit Facility costs.

(P) COMMITMENTS AND CONTINGENCIES

We have certain deductible limits under our workers’ compensation and liability insurance policies for which reserves are established based on the undiscounted estimated costs of known and anticipated claims. We have entered into standby letter of credit agreements relating to workers’ compensation, auto, and general liability self-insurance. At December 31, 2023, we had contingent liabilities under these outstanding letters of credit of approximately $8.3 million.

In the ordinary course of business, we execute contracts involving indemnifications that are both standard in the industry and specific to a transaction, such as the sale of a business. These indemnifications may include claims relating to any of the following: environmental and tax matters; intellectual property rights; governmental regulations and employment-related matters; customer, supplier, and other commercial contractual relationships; and construction contracts and financial matters. While the maximum amount to which the Company may be exposed under such agreements cannot be estimated, management believes these indemnifications will not have a material adverse effect on our consolidated financial position, results of operations, or cash flows. We currently have no outstanding guarantees.

We are currently contingently liable for performance under $29.3 million in performance bonds required by certain states and municipalities, and their related agencies. The bonds are principally for certain reclamation obligations and mining permits. We have indemnified the underwriting insurance company against any exposure under the performance bonds. In our experience, no material claims have been made against these financial instruments.

(Q) FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair value of our long-term debt has been determined using market transactions (Level 1 inputs). The fair value of our 2.500% Senior Unsecured Notes at December 31, 2023, is as follows:

	Fair Value
	(dollars in thousands)
2.500% Senior Unsecured Notes Due 2031	$	631,000

The carrying values of Cash and Cash Equivalents, Accounts Receivable, Accounts Payable, and Accrued Liabilities approximate their fair values at December 31, 2023, due to the short-term maturities of these assets and liabilities. The fair value of our Revolving Credit Facility and Term Loan also approximates the carrying value at December 31, 2023.

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

EXECUTIVE SUMMARY

We are a leading manufacturer of heavy construction materials and light building materials in the United States. Our primary products, portland cement and gypsum wallboard, are commodities that are essential in commercial and residential construction; public construction projects; and projects to build, expand, and repair roads and highways. Demand for our products is generally cyclical and seasonal, depending on economic and geographic conditions. We distribute our products throughout most of the United States, except the Northeast, which provides us with regional economic diversification. However, general economic downturns or localized downturns in the regions where we have operations may have a material adverse effect on our business, financial condition, and results of operations.

Our business is organized into two sectors: Heavy Materials, which includes the Cement and Concrete and Aggregates segments; and Light Materials, which includes the Gypsum Wallboard and Recycled Paperboard segments. Financial results and other information for the three and nine months ended December 31, 2023 and 2022, are presented on a consolidated basis and by these business segments – Cement, Concrete and Aggregates, Gypsum Wallboard, and Recycled Paperboard.

We conduct one of our cement operations through a joint venture, Texas Lehigh Cement Company LP, which is located in Buda, Texas (the Joint Venture). We own a 50% interest in the Joint Venture and account for our interest under the equity method of accounting. We proportionately consolidate our 50% share of the Joint Venture’s Revenue and Operating Earnings in the presentation of our Cement segment, which is the way management organizes the segments within the Company for making operating decisions and assessing performance.

All our business activities are conducted in the United States. These activities include the mining of limestone for the manufacture, production, distribution, and sale of portland cement, including portland limestone cement (a basic construction material that is the essential binding ingredient in concrete); the grinding and sale of slag; the mining of gypsum for the manufacture and sale of gypsum wallboard; the manufacture and sale of recycled paperboard to the gypsum wallboard industry and other paperboard converters; the sale of readymix concrete; and the mining and sale of aggregates (crushed stone, sand, and gravel).

In April 2023, we assumed operation of our quarry in Battletown, Kentucky (Battletown Aggregates). Our Battletown quarry is primarily used to supply our Kosmos Cement plant with limestone; however, beginning in April 2023, we started selling a portion of the mined materials as aggregates. Battletown Aggregates is included in our Heavy Materials sector, in the Concrete and Aggregates business segment.

On May 3, 2023, we finalized the Stockton Terminal Acquisition. The purchase price of the Stockton Terminal Acquisition was approximately $55.1 million. The Stockton Terminal Acquisition is included in our Heavy Materials sector, in the Cement business segment. See Footnote (B) in the Unaudited Consolidated Financial Statements for more information regarding the Stockton Terminal Acquisition.

MARKET CONDITIONS AND OUTLOOK

During the first nine months of fiscal 2024, our end markets generally remained stable despite shifting economic conditions brought on by US monetary policy in response to inflation. Construction activity in most of our regional markets continued to be steady. Sales Volume in our Cement business, excluding volume related to the Stockton Acquisition, remained relatively flat for the first nine months of fiscal 2024. Sales Volume in our Gypsum Wallboard business declined 4% over the same time period. The decline in Sales Volume in Gypsum Wallboard was due to the slowdown in residential construction. Despite this decline, our overall sales volume remains historically strong.

Demand Outlook

The principal end-use market of Cement is public infrastructure (i.e. roads, bridges, and highways). Our Cement business remains in a near sold-out position, and several factors indicate cement demand will remain strong. First, the Inflation Reduction and Infrastructure Investment and Jobs Acts have resulted in increased federal funding for public construction and repair projects. At the same time, state budget allocations for additional infrastructure projects remain high. Finally, passage of the CHIPS and Science Act is leading to growth in heavy industrial and manufacturing projects. Despite underlying growth in demand, our ability to increase Cement sales volume from our existing facilities is limited, because our integrated cement sales network, which stretches across the U.S. heartland, is operating at high utilization levels.

The principal end use for Gypsum Wallboard is residential housing, consisting of new construction (both single-family and multi-family homes) as well as repair and remodel. Our Gypsum Wallboard shipments and orders, while down 4% for the first nine months of fiscal 2024, were down only 1% for the quarter ended December 31, 2023, both compared to similar periods in the prior year, and remain historically strong. Residential construction activity continued at a healthier pace than expected as the market continues to balance affordability challenges related primarily to higher interest rates with chronic supply shortages and resultant demand for new homebuilding. Our Recycled Paperboard business sells paper primarily into the gypsum wallboard market, and demand for our paper generally follows the demand for gypsum wallboard.

Cost Outlook

We are well-positioned to manage our cost structure and meet our customers’ needs during the remainder of the fiscal year. Our substantial raw material reserves for our Cement, Aggregates, and Gypsum Wallboard businesses, and their proximity to our respective manufacturing facilities, support our low-cost producer position across all our business segments.

Energy and freight costs increased in all our businesses during fiscal 2023. In the first nine months of fiscal 2024, our natural gas costs have declined and freight costs have stabilized compared with the prior year; however, our solid fuel costs, which are the primary energy costs in manufacturing cement, continue to increase in fiscal 2024 compared with fiscal 2023. Our maintenance costs have increased during fiscal 2024 from fiscal 2023 due to the inflation in repair parts and contractor services, and we expect these amounts to remain elevated.

The primary raw material used to produce recycled paperboard is old corrugated containers (OCC). Prices for OCC stabilized toward the end of fiscal 2023. OCC prices increased during the first nine months of fiscal 2024, and we anticipate OCC pricing to remain relatively stable in the near term. Our current customer contracts for gypsum liner include price adjustments that partially compensate for changes in raw material fiber prices. However, because these price adjustments are not realized until future quarters, costs in our Gypsum Wallboard segment are likely to be adjusted in the period that these price changes are realized.

RESULTS OF OPERATIONS

THREE MONTHS ENDED december 31, 2023 Compared WITH THREE MONTHS ENDED december 31, 2022

	For the Three Months Ended December 31,
	2023			2022			Change
	(dollars in thousands, except per share)
Revenue	$	558,833		$	511,487			9	%
Cost of Goods Sold		(378,205	)		(352,717	)		7	%
Gross Profit		180,628			158,770			14	%
Equity in Earnings of Unconsolidated Joint Venture		9,285			11,377			(18	)%
Corporate General and Administrative Expense		(14,201	)		(12,497	)		14	%
Other Non-Operating Income		1,019			2,210			(54	)%
Interest Expense, net		(10,128	)		(8,932	)		13	%
Earnings Before Income Taxes		166,603			150,928			10	%
Income Tax Expense		(37,465	)		(33,744	)		11	%
Net Earnings	$	129,138		$	117,184			10	%
Diluted Earnings per Share	$	3.72		$	3.20			16	%

REVENUE

Revenue increased by $47.3 million, or 9%, to $558.3 million for the three months ended December 31, 2023. Battletown Aggregates and the Stockton Terminal Acquisition contributed $2.0 million and $11.2 million of Revenue, respectively, during the three months ended December 31, 2023. Excluding Battletown Aggregates and the Stockton Terminal Acquisition, Revenue increased by $34.1 million. This was due to higher gross sales prices and Sales Volume, which positively affected Revenue by $26.0 million and $8.1 million, respectively.

COST OF GOODS SOLD

Cost of Goods Sold increased by $25.5 million, or 7%, to $378.2 million for the three months ended December 31, 2023. Battletown Aggregates and the Stockton Terminal Acquisition contributed $2.6 million and $11.3 million of Cost of Goods Sold, respectively, during the three months ended December 31, 2023. Excluding Battletown Aggregates and the Stockton Terminal Acquisition, Cost of Goods Sold increased by $11.6 million, or 3%. The increase was due to higher Sales Volume and increased operating costs of $4.1 million and $7.5 million, respectively. Higher operating costs were primarily related to our Cement and Concrete and Aggregates businesses and are discussed further in the segment analysis.

GROSS PROFIT

Gross Profit increased 14% to $180.6 million during the three months ended December 31, 2023. The increase was primarily related to higher gross sales prices and Sales Volume, partially offset by increased operating costs. The gross margin expanded to 32%, with higher gross sales prices being partially offset by a rise in operating costs.

EQUITY IN EARNINGS OF UNCONSOLIDATED JOINT VENTURE

Equity in Earnings of our Unconsolidated Joint Venture decreased $2.1 million, or 18%, for the three months ended December 31, 2023. The decrease was primarily due to higher operating expense and lower Sales Volume, which reduced earnings by approximately $2.2 million and $0.8 million, respectively. This was partially offset by higher gross sales prices, which increased earnings by $0.9 million. The increase in operating expense was due primarily to freight, energy, and maintenance costs of $0.8 million, $0.6 million, and $0.4 million, respectively.

CORPORATE GENERAL AND ADMINISTRATIVE EXPENSE

Corporate General and Administrative Expense increased by approximately $1.7 million, or 14%, for the three months ended December 31, 2023. The increase was primarily due to higher salary and incentive compensation, information technology upgrades, and legal and professional expenses of $0.4 million, $0.9 million, and $0.3 million, respectively. The increase in incentive compensation was due to higher earnings compared with the prior year.

OTHER NON-OPERATING INCOME

Other Non-Operating Income consists of a variety of items that are unrelated to segment operations and include non-inventoried Aggregates income, asset sales, and other miscellaneous income and cost items.

INTEREST EXPENSE, NET

Interest Expense, net increased by approximately $1.2 million, or 13%, during the three months ended December 31, 2023. This was primarily due to higher interest on our revolving credit facility, which was mostly related to higher interest rates on our borrowings.

EARNINGS BEFORE INCOME TAXES

Earnings Before Income Taxes increased to $166.6 million during the three months ended December 31, 2023, primarily because of higher Gross Profit. This was partially offset by higher Corporate General and Administrative Expense and Interest Expense as well as lower Equity in Earnings of Unconsolidated Joint Venture.

INCOME TAX EXPENSE

Income Tax Expense was $37.5 million for the three months ended December 31, 2023, compared with $33.7 million for the three months ended December 31, 2022. The effective tax rate of 22% remained consistent with the prior-year period.

NET EARNINGS

Net Earnings increased 10% to $129.1 million for the three months ended December 31, 2023, as discussed above.

RESULTS OF OPERATIONS

NINE MONTHS ENDED DECember 31, 2023 Compared WITH Nine MONTHS ENDED DECember 31, 2022

	For the Nine Months Ended December 31,
	2023			2022			Change
	(dollars in thousands, except per share)
Revenue	$	1,782,590		$	1,677,942			6	%
Cost of Goods Sold		(1,216,949	)		(1,174,067	)		4	%
Gross Profit		565,641			503,875			12	%
Equity in Earnings of Unconsolidated Joint Venture		22,790			23,631			(4	)%
Corporate General and Administrative Expense		(42,456	)		(37,944	)		12	%
Other Non-Operating Income		2,837			911			211	%
Interest Expense, net		(32,571	)		(24,842	)		31	%
Earnings Before Income Taxes		516,241			465,631			11	%
Income Tax Expense		(115,701	)		(104,447	)		11	%
Net Earnings	$	400,540		$	361,184			11	%
Diluted Earnings per Share	$	11.38		$	9.66			18	%

REVENUE

Revenue increased by $104.7 million, or 6%, to $1,782.6 million for the nine months ended December 31, 2023. Battletown Aggregates and the Stockton Terminal Acquisition contributed $6.2 million and $32.5 million of Revenue, respectively, during the nine months ended December 31, 2023. Excluding Battletown Aggregates and the Stockton Terminal Acquisition, Revenue increased by $66.0 million, or 4%. This was due to higher gross sales prices, which positively affected Revenue by $120.4 million, partially offset by lower Sales Volume, which adversely affected Revenue by approximately $54.4 million.

COST OF GOODS SOLD

Cost of Goods Sold increased by $42.8 million, or 4%, to $1,216.9 million for the nine months ended December 31, 2023. Battletown Aggregates and the Stockton Terminal Acquisition contributed $6.9 million and $34.6 million of Cost of Goods Sold, respectively, during the nine months ended December 31, 2023. Excluding Battletown Aggregates and the Stockton Terminal Acquisition, Cost of Goods Sold increased by $1.3 million. The increase was due to higher operating costs of $42.6 million, partially offset by lower Sales Volume of $41.3 million. Higher operating costs were primarily related to our Cement and Concrete and Aggregates businesses and are discussed further in the segment analysis.

GROSS PROFIT

Gross Profit increased 12% to $565.6 million during the nine months ended December 31, 2023. The increase was primarily related to higher gross sales prices, partially offset by lower Sales Volume and increased operating costs. The gross margin expanded to 32%, with higher gross sales prices being partially offset by a rise in operating costs.

EQUITY IN EARNINGS OF UNCONSOLIDATED JOINT VENTURE

Equity in Earnings of our Unconsolidated Joint Venture decreased $0.8 million, or 4%, for the nine months ended December 31, 2023. The decrease was primarily due to higher operating expense and lower Sales Volume, which adversely affected earnings by $8.0 million and $1.5 million, respectively. This was partially offset by higher gross sales prices, which increased earnings by approximately $8.7 million. The increase in operating expense was primarily related to extended equipment downtime that reduced production and resulted in higher maintenance cost of approximately $2.8 million, as well as purchased cement, freight, and energy costs which reduced operating earnings by $1.3 million, $1.2 million, and $0.8 million, respectively.

CORPORATE GENERAL AND ADMINISTRATIVE EXPENSE

Corporate General and Administrative Expense increased by approximately $4.6 million, or 12%, for the nine months ended December 31, 2023. The increase was primarily due to higher salary and incentive compensation, information technology upgrades, and legal and professional expenses of $1.7 million, $1.4 million, and $1.4 million, respectively. The increase in incentive compensation was due to higher earnings compared with the prior year, while the increase in legal and professional expense was primarily related to the Stockton Acquisition.

OTHER NON-OPERATING INCOME

INTEREST EXPENSE, NET

Interest Expense, net increased by approximately $7.8 million, or 31%, during the nine months ended December 31, 2023. This was primarily due to approximately $7.9 million of higher interest on our revolving credit facility, which was related to increased average outstanding borrowings and higher interest rates, partially offset by increased interest income on cash deposits.

EARNINGS BEFORE INCOME TAXES

Earnings Before Income Taxes increased to $516.2 million during the nine months ended December 31, 2023, primarily because of higher Gross Profit. This was partially offset by higher Corporate General and Administrative Expense and Interest Expense as well as lower Equity in Earnings of Unconsolidated Joint Venture.

INCOME TAX EXPENSE

Income Tax Expense was $115.7 million for the nine months ended December 31, 2023, compared with $104.4 million for the nine months ended December 31, 2022. The effective tax rate of 22% remained consistent with the prior-year period.

NET EARNINGS

Net Earnings increased 11% to $400.5 million for the nine months ended December 31, 2023, as discussed above.

Three AND NINE MONTHS ENDED December 31, 2023 vs. three AND nine MONTHS ENDED december 31, 2022 BY SEGMENT

The following presents results within our two business sectors for the three and nine months ended December 31, 2023, and 2022. Revenue and operating results are organized by sector and discussed by individual business segments.

Heavy Materials

CEMENT (1)

	For the Three Months Ended December 31,									For the Nine Months Ended December 31,
	2023			2022			Percentage Change			2023			2022			Percentage Change
	(in thousands, except per ton information)									(in thousands, except per ton information)
Revenue, including Intersegment and Joint Venture	$	308,654		$	256,313			20	%	$	998,437		$	860,289			16	%
Less Intersegment Revenue		(7,804	)		(7,719	)		1	%		(27,192	)		(26,371	)		3	%
Less Joint Venture Revenue		(26,683	)		(27,620	)		(3	)%		(82,713	)		(79,065	)		5	%
Revenue	$	274,167		$	220,974			24	%	$	888,532		$	754,853			18	%
Sales Volume (M Tons)		1,824			1,699			7	%		5,966			5,837			2	%
Freight and Delivery Costs billed to Customers	$	(16,944	)	$	(12,910	)		31	%	$	(52,344	)	$	(48,922	)		7	%
Average Net Sales Price, per ton (2)	$	151.32		$	134.36			13	%	$	150.20		$	131.44			14	%
Operating Margin, per ton	$	57.88		$	42.56			36	%	$	50.46		$	39.99			26	%
Operating Earnings	$	105,566		$	72,315			46	%	$	301,056		$	233,442			29	%

(1) Total of wholly owned subsidiaries and proportionately consolidated 50% interest of the Joint Venture’s results.

(2) Net of freight per ton, including Joint Venture.

Three months ended December 31, 2023

Cement Revenue was $308.7 million, a 20% increase, for the three months ended December 31, 2023. Excluding Intersegment Revenue and the Stockton Terminal Acquisition, Revenue increased $41.1 million, or 17%, for the three months ended December 31, 2023. The increase was primarily due to higher gross sales prices and Sales Volume, which improved Cement Revenue by approximately $34.6 million and $6.5 million, respectively.

Cement Operating Earnings increased by $33.3 million to $105.6 million for the three months ended December 31, 2023. Excluding the Stockton Terminal Acquisition, Operating Earnings increased by $33.4 million. The increase was due to higher gross sales prices and Sales Volume of $34.5 million and $1.5 million, respectively. This was partially offset by higher operating costs of $2.7 million. Higher operating costs were primarily due to increased energy costs of approximately $2.4 million. The Operating Margin increased to 34% from 28%, as a result of higher gross sales prices, partially offset by higher operating expenses.

Nine months ended December 31, 2023

Cement Revenue was $998.4 million, a 16% increase, for the nine months ended December 31, 2023. Excluding Intersegment Revenue and the Stockton Terminal Acquisition, Revenue increased $104.8 million, or 13%, for the nine months ended December 31, 2023. The increase was primarily due to higher gross sales prices, which improved Cement Revenue by approximately $120.2 million, partially offset by lower Sales Volume from legacy cement plants of $15.4 million.

Cement Operating Earnings increased by $67.7 million to $301.1 million for the nine months ended December 31, 2023. Excluding the Stockton Terminal Acquisition, Operating Earnings increased by $69.8 million, or 30%. The increase was due to higher gross sales prices of $120.2 million. This was partially offset by lower Sales Volume and higher operating costs of $4.3 million and $46.1 million, respectively. Higher operating costs were primarily due to increased maintenance, purchased raw materials, energy, and fixed costs of approximately $24.0 million, $11.6 million, $3.8 million, and $2.8 million, respectively. The Operating Margin increased to 30% from 27%, as a result of higher gross sales prices, partially offset by higher operating expenses.

CONCRETE AND AGGREGATES

	For the Three Months Ended<br>December 31,								For the Nine Months Ended<br>December 31,
	2023			2022		Percentage Change			2023			2022		Percentage Change
	(in thousands, except net sales prices)								(in thousands, except net sales prices)
Revenue, including Intersegment	$	61,186		$	55,176		11	%	$	201,526		$	186,407		8	%
Less Intersegment Revenue		(3,414	)		—		—			(10,235	)		—		—
Revenue	$	57,772		$	55,176		5	%	$	191,291		$	186,407		3	%
Sales Volume
M Cubic Yards of Concrete		308			353		(13	)%		1,055			1,210		(13	)%
M Tons of Aggregate		1,034			626		65	%		3,362			2,333		44	%
Average Net Sales Price
Concrete - Per Cubic Yard	$	149.54		$	134.42		11	%	$	145.29		$	132.46		10	%
Aggregates - Per Ton	$	11.18		$	11.70		(4	)%	$	11.20		$	11.21		—
Operating Earnings	$	1,760		$	2,692		(35	)%	$	13,434		$	15,700		(14	)%

Three months ended December 31, 2023

Concrete and Aggregates Revenue increased 11% to $61.2 million for the three months ended December 31, 2023. Excluding Intersegment Revenue and Battletown Aggregates, Revenue increased $0.6 million. The increase was due to higher gross sales prices in Concrete of $4.7 million and higher Sales Volume in Aggregates of $2.1 million. This was partially offset by lower Sales Volume in Concrete, which reduced Revenue by $6.2 million.

Operating Earnings were approximately $1.8 million, a 35% decrease. Excluding Battletown Aggregates, Operating Earnings were $2.3 million, a decrease of $0.4 million. The decrease in Operating Earnings was due to higher operating costs of $5.6 million. This was partially offset by higher gross sales prices and Sales Volume of $4.7 million and $0.5 million, respectively. The increase in operating costs was primarily due to higher cost of materials of approximately $5.7 million.

Nine months ended December 31, 2023

Concrete and Aggregates Revenue was $201.5 million for the nine months ended December 31, 2023. Excluding Intersegment Revenue and Battletown Aggregates, Revenue declined $1.3 million. The decrease was due to lower Sales Volume, primarily in Concrete, which reduced Revenue by $17.2 million. This was partially offset by higher gross sales prices of $15.9 million.

Operating Earnings were approximately $13.4 million, a 14% decrease. Excluding Battletown Aggregates, Operating Earnings were $14.1 million, a decrease of $1.6 million. The decline in Operating Earnings was due to higher operating costs of $17.8 million. This was partially offset by higher gross sales prices and Sales Volume of $15.9 million and $0.3 million, respectively. The increase in operating costs was primarily due to higher cost of materials, maintenance, and fixed costs of approximately $13.6 million, $2.5 million, and $2.0 million, respectively. This was partially offset by the impact of recording acquired inventories at fair value of $1.2 million in the first quarter of fiscal 2022.

Light Materials

GYPSUM WALLBOARD

	For the Three Months Ended <br>December 31,									For the Nine Months Ended <br>December 31,
	2023			2022			Percentage Change			2023			2022			Percentage Change
	(in thousands, except per MSF information)									(in thousands, except per MSF information)
Revenue	$	200,969		$	212,016			(5	)%	$	629,299		$	652,981			(4	)%
Sales Volume (MMSF)		722			728			(1	)%		2,218			2,309			(4	)%
Freight and Delivery Costs billed to Customers	$	(36,569	)	$	(38,238	)		(4	)%	$	(112,979	)	$	(121,778	)		(7	)%
Average Net Sales Price, per MSF (1)	$	227.78		$	238.51			(4	)%	$	232.79		$	230.01			1	%
Freight, per MSF	$	50.65		$	52.52			(4	)%	$	50.94		$	52.74			(3	)%
Operating Margin, per MSF	$	103.97		$	119.97			(13	)%	$	113.45		$	113.11			—
Operating Earnings	$	75,063		$	87,335			(14	)%	$	251,625		$	261,164			(4	)%

(1) Net of freight per MSF.

Three months ended December 31, 2023

Gypsum Wallboard Revenue was $201.0 million, a 5% decrease, for the three months ended December 31, 2023. The decrease was primarily due to lower gross sales prices and Sales Volume, which reduced Revenue by $9.3 million and $1.7 million, respectively. Our market share remained relatively consistent during the three months ended December 31, 2023.

Operating Earnings decreased 14% to $75.1 million, primarily because of lower gross sales prices and Sales Volume, as well as higher operating costs. The decline in gross sales prices and Sales Volume negatively affected Operating Earnings by approximately $9.3 million and $0.7 million, respectively, while the higher operating costs decreased Operating Earnings by approximately $2.3 million. The increase in operating costs was primarily related to maintenance, input costs, and wage expense $1.8 million, $0.4 million, and $1.1 million, respectively, partially offset by lower energy costs of $1.3 million. Operating Margin decreased to 37% for the three months ended December 31, 2023, primarily because of higher operating costs and lower gross sales prices. Fixed costs are not a significant portion of the overall cost of wallboard; therefore, changes in utilization have a relatively minor impact on our operating cost per unit.

Nine months ended December 31, 2023

Gypsum Wallboard Revenue was $629.3 million, a 4% decrease, for the nine months ended December 31, 2023. The decrease was primarily due to lower Sales Volume, which reduced Revenue by $25.7 million, partially offset by higher gross sales prices, which increased Revenue by $2.1 million. Our market share remained relatively consistent during the nine months ended December 31, 2023.

Operating Earnings decreased 4% to $251.6 million, primarily because of lower Sales Volume and higher operating costs of $10.3 million and $1.3 million, respectively. This was partially offset by higher gross sales prices, which increased Operating Earnings by approximately $2.1 million. Operating Margin remained consistent at 40% for the nine months ended December 31, 2023, primarily because higher gross sales prices offset the increase in operating expenses. Fixed costs are not a significant portion of the overall cost of wallboard; therefore, changes in utilization have a relatively minor impact on our operating cost per unit.

RECYCLED PAPERBOARD

	For the Three Months Ended December 31,									For the Nine Months Ended December 31,
	2023			2022			Percentage Change			2023			2022			Percentage Change
	(in thousands, except per ton information)									(in thousands, except per ton information)
Revenue, including Intersegment	$	47,053		$	47,774			(2	)%	$	135,397		$	155,520			(13	)%
Less Intersegment Revenue		(21,128	)		(24,453	)		(14	)%		(61,929	)		(71,819	)		(14	)%
Revenue	$	25,925		$	23,321			11	%	$	73,468		$	83,701			(12	)%
Sales Volume (M Tons)		84			77			9	%		247			246			—
Freight and Delivery Costs billed to Customers	$	(3	)	$	(2,007	)		(100	)%	$	(608	)	$	(7,025	)		(91	)%
Average Net Sales Price, per ton (1)	$	559.49		$	594.93			(6	)%	$	546.21		$	603.73			(10	)%
Operating Margin, per ton	$	89.57		$	101.36			(12	)%	$	90.35		$	69.92			29	%
Operating Earnings	$	7,524		$	7,805			(4	)%	$	22,316		$	17,200			30	%

(1) Net of freight per ton.

Three months ended December 31, 2023

Recycled Paperboard Revenue decreased 2% to $47.1 million during the three months ended December 31, 2023. The decrease was primarily due to lower gross sales prices which reduced Revenue by $4.5 million, partially offset by higher Sales Volume of $3.8 million. Lower gross sales prices were related to the pricing provisions in our long-term sales agreements.

Operating Earnings decreased 4% to $7.5 million, primarily because of lower gross sales prices, which reduced Operating Earnings by $4.5 million. This was partially offset by lower operating expense and higher Sales Volume, which increased Operating Earnings by approximately $3.6 million and $0.6 million, respectively. The decrease in operating expense was primarily related to lower input costs, namely fiber and freight, which improved Operating Earnings by approximately $1.4 million and $2.0 million, respectively. Operating Margin remained consistent at 16% because of lower operating costs, partially offset by lower gross sales prices. Although we have certain pricing provisions in our long-term sales agreements, prices are only adjusted at certain times throughout the year, so price adjustments are not always reflected in the same period as the change in costs.

Nine months ended December 31, 2023

Recycled Paperboard Revenue decreased 13% to $135.4 million during the nine months ended December 31, 2023. The decrease was primarily due to lower gross sales prices, which reduced Revenue by $20.6 million, partially offset by higher Sales Volume of $0.5 million. Lower gross sales prices were related to the pricing provisions in our long-term sales agreements.

Operating Earnings increased 30% to $22.3 million, primarily because of lower operating expenses, which increased Operating Earnings by $25.7 million. This was partially offset by lower gross sales prices, which reduced Operating Earnings by approximately $20.6 million. The decrease in operating expense was primarily related to lower input costs, namely fiber and freight, which lowered Operating Earnings by approximately $21.0 million and $6.4 million, respectively. This was partially offset by higher fixed costs of $1.8 million. The Operating Margin increased to 16% because of lower operating costs, partially offset by lower gross sales prices. Although we have certain pricing provisions in our long-term sales agreements, prices are only adjusted at certain times throughout the year, so price adjustments are not always reflected in the same period as the change in costs.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to adopt accounting policies and make significant judgments and estimates to develop amounts disclosed in the financial statements. In many cases, there are alternative policies or estimation techniques that could be used. We maintain a thorough process to review the application of our accounting policies and to evaluate the appropriateness of the many estimates that are required to prepare our financial statements. However, even under optimal circumstances, estimates routinely require adjustment based on changing circumstances and the receipt of new or better information.

Information regarding our Critical Accounting Policies can be found in our Annual Report. The three Critical Accounting Policies that we believe either require the use of the most judgment, or the selection or application of alternative accounting policies, and are material to our financial statements, are those related to long-lived assets, goodwill, and business combinations. Management has discussed the development and selection of these Critical Accounting Policies and estimates with the Audit Committee of our Board of Directors and with our independent registered public accounting firm. In addition, Note (A) to the financial statements in our Annual Report contains a summary of our significant accounting policies.

Recent Accounting Pronouncements

Refer to Footnote (A) in the Notes to Unaudited Consolidated Financial Statements of this Form 10-Q for information regarding recently issued accounting pronouncements that may affect our financial statements.

LIQUIDITY AND CAPITAL RESOURCES

We believe at this time that we have access to sufficient financial resources from our liquidity sources to fund our business and operations, including contractual obligations, capital expenditures, and debt service obligations for at least the next twelve months. We regularly monitor any potential disruptions to the economy, and to our operations, particularly changing fiscal policy or economic conditions affecting our industries. Please see the Debt Financing Activities section below for a discussion of our revolving credit facility and the amount of borrowings available to us in the next twelve-month period.

Cash Flow

The following table provides a summary of our cash flows:

	For the Nine Months Ended December 31,
	2023			2022
	(dollars in thousands)
Net Cash Provided by Operating Activities	$	500,549		$	480,111
Investing Activities
Additions to Property, Plant, and Equipment		(87,848	)		(60,951	)
Acquisition Spending		(55,053	)		(158,451	)
Net Cash Used in Investing Activities		(142,901	)		(219,402	)
Financing Activities
Increase (Decrease) in Revolving Credit Facility		(50,000	)		200,000
Repayment of Term Loan and Term Loan Credit Agreement		(7,500	)		(75,000	)
Dividends Paid to Stockholders		(26,692	)		(28,421	)
Purchase and Retirement of Common Stock		(248,852	)		(313,898	)
Proceeds from Stock Option Exercises		11,560			840
Payment of Debt Issuance Costs		—			(903	)
Shares Redeemed to Settle Employee Taxes on Stock Compensation		(2,494	)		(1,806	)
Net Cash Used in Financing Activities		(323,978	)		(219,188	)
Net Increase in Cash and Cash Equivalents	$	33,670		$	41,521

Net Cash Provided by Operating Activities increased by $20.4 million to $500.5 million during the nine months ended December 31, 2023. This increase was primarily attributable to higher Net Earnings, adjusted for non-cash charges of approximately $51.6 million. This was partially offset by changes in working capital of $19.2 million and lower dividends from our Unconsolidated Joint Venture of $12.0 million.

Working capital increased by $53.6 million to $362.2 million at December 31, 2023, compared with March 31, 2023. The increase was due to higher Cash, Inventories, Prepaid and Other Assets of $33.7 million, $41.9 million, and $6.0 million, respectively. This was partially offset by lower Accounts and Notes Receivable, net and Income Tax Receivable of $2.1 million and $13.3 million, respectively, and higher Income Tax Payable and Accounts Payable and Accrued Liabilities of $2.0 million and $8.6 million, respectively. The increase in Inventory was due primarily to the Stockton Terminal Acquisition and the increase in repair parts as we prepare for annual outages in our Cement business. The Stockton Terminal Acquisition in May 2023 increased working capital by approximately $4.1 million at December 31, 2023.

The decrease in Accounts Receivable at December 31, 2023, was primarily related to increased collection efforts during the third fiscal quarter. As a percentage of quarterly sales generated for the respective quarter, Accounts Receivable was approximately 35% at December 31, 2023, and 41% at March 31, 2023. Management measures the change in Accounts Receivable by monitoring the days sales outstanding on a monthly basis to determine if any deterioration has occurred in the collectability of the Accounts Receivable. No significant deterioration in the collectability of our Accounts Receivable was identified at December 31, 2023.

Our Inventory balance at December 31, 2023, increased by approximately $41.9 million from our balance at March 31, 2023. Excluding the Stockton Terminal Acquisition, our Inventory balance increased by $32.7 million. Within Inventory, Raw Materials and Materials-in-Progress, Aggregates, Recycled Paperboard, Repair Parts, and Fuel and Coal increased by approximately $7.6 million, $2.3 million, $4.8 million, $10.7 million, and $4.6 million, respectively. The increase in Raw Materials and Materials-in-Progress and relatively flat balance in Finished Cement is consistent with our business cycle; we generally build up clinker inventory over the winter months to meet the demand for cement in the spring and summer. The increase in repair parts inventory was primarily due to preparing for the expected maintenance outages in the fiscal fourth quarter. The largest individual balance in our Inventory is our repair parts. These parts are necessary given the size and complexity of our manufacturing plants, as well as the age of certain of our plants, which creates the need to stock a high level of repair parts inventory. We believe all of these repair parts are necessary, and we perform semi-annual analyses to identify obsolete parts. We have less than one year’s sales of all product inventories, and our inventories have a low risk of obsolescence because our products are basic construction materials.

Net Cash Used in Investing Activities during the nine months ended December 31, 2023, was approximately $142.9 million, compared with $219.4 million during the same period in 2022. The $76.5 million decrease was primarily related to the lower purchase price for the Stockton Terminal Acquisition in May 2023, compared with the acquisition completed in the nine months ended December 31, 2022, partially offset by higher capital expenditures in the current fiscal year.

Net Cash Used in Financing Activities was approximately $324.0 million during the nine months ended December 31, 2023, compared with $219.2 million during the nine months ended December 31, 2022. The $104.8 million increase was primarily related to reduced borrowings of $182.5 million, partially offset by lower Purchase and Retirement of Common Stock of $65.0 million and increased Proceeds from Stock Option Exercises of $10.8 million.

Our debt-to-capitalization ratio and net-debt-to-capitalization ratio were 43.9% and 42.7%, respectively, at December 31, 2023, compared with 48.1% and 47.8%, respectively, at March 31, 2023.

Debt Financing Activities

Below is a summary of the Company’s outstanding debt facilities at December 31, 2023:

	Maturity
Revolving Credit Facility		May 2027
Term Loan		May 2027
2.500% Senior Unsecured Notes		July 2031

See Footnote (M) to the Unaudited Consolidated Financial Statements for further details on the Company’s debt facilities, including interest rate, and financial and other covenants and restrictions.

The revolving borrowing capacity of our Revolving Credit Facility is $750.0 million (any revolving loans borrowed under the Revolving Credit Facility, as applicable, the Revolving Loans). The Revolving Credit Facility also includes a swingline loan sublimit of $25.0 million, and a $40.0 million letter of credit facility. At December 31, 2023 we had $107.0 million outstanding of Revolving Loans under the Revolving Credit Facility and $8.3 million of outstanding letters of credit, resulting in $634.7 million of available borrowings under the Revolving Credit Facility, net of the outstanding letters of credit. We are contingently liable for performance under $29.3 million in performance bonds relating primarily to our mining operations. We do not have any off-balance sheet debt, or any outstanding debt guarantees.

Other than the Revolving Credit Facility, we have no additional source of committed external financing in place. Should the Revolving Credit Facility be terminated, no assurance can be given as to our ability to secure a new source of financing. Consequently, if any balance were outstanding on the Revolving Credit Facility at the time of termination, and an alternative source of financing could not be secured, it would have a material adverse impact on our business.

We believe that our cash flow from operations and available borrowings under our Revolving Credit Facility, as well as cash on hand, should be sufficient to meet our currently anticipated operating needs, capital expenditures, and dividend and debt service requirements for at least the next 12 months. However, our future liquidity and capital requirements may vary depending on a number of factors, including market conditions in the construction industry, our ability to maintain compliance with covenants in our Revolving Credit Facility, the level of competition, and general and economic factors beyond our control, such as supply chain constraints and inflation. These and other developments could reduce our cash flow or require that we seek additional sources of funding. We cannot predict what effect these factors will have on our future liquidity. See Market Conditions and Outlook section above for further discussion of the possible effects on our business.

As market conditions warrant, the Company may from time to time seek to purchase or repay its outstanding debt securities or loans, including the 2.500% Senior Unsecured Notes, Term Loan, and borrowings under the Revolving Credit Facility, in privately negotiated or open market transactions, by tender offer or otherwise. Subject to any applicable limitations contained in the agreements governing our indebtedness, any purchases made by us may be funded by the use of cash on our balance sheet or the incurrence of new debt. The amounts involved in any such purchase transactions, individually or in aggregate, may be material.

We have approximately $28.9 million of lease liabilities at December 31, 2023, that have an average remaining life of approximately 9.3 years.

Dividends

Dividends paid were $26.7 million and $28.4 million for the nine months ended December 31, 2023 and 2022, respectively. Each quarterly dividend payment is subject to review and approval by our Board of Directors, who will continue to evaluate our dividend payment amount on a quarterly basis.

Share Repurchases

During the nine months ended December 31, 2023, our share repurchases were as follows:

Period		Average Price Paid<br>Per Share
April 1 through April 30, 2023	234,000	$	143.73	234,000
May 1 through May 31, 2023	145,000		155.99	145,000
June 1 through June 30, 2023	105,000		161.65	105,000
Quarter 1 Totals	484,000	$	154.54	484,000
July 1 through July 31, 2023	10,000	$	184.80	10,000
August 1 through August 31, 2023	157,500		181.29	157,500
September 1 through September 30, 2023	265,000		176.84	265,000
Quarter 2 Totals	432,500	$	178.64	432,500
October 1 through October 31, 2023	177,500	$	163.67	177,500
November 1 through November 30, 2023	220,000	$	176.22	220,000
December 1 through December 31, 2023	161,000	$	184.53	161,000
Quarter 3 Totals	558,500	$	174.63	558,500
Year-to-Date Totals	1,475,000	$	168.71	1,475,000	6,272,204

On May 17, 2022, the Board of Directors authorized us to repurchase an additional 7.5 million shares. This authorization brought the cumulative total of Common Stock our Board has approved for repurchase in the open market to 55.9 million shares since we became publicly held in April 1994. Through December 31, 2023, we have repurchased approximately 49.6 million shares.

Share repurchases may be made from time to time in the open market or in privately negotiated transactions. The timing and amount of any share repurchases are determined by management, based on its evaluation of market and economic conditions and other factors. In some cases, repurchases may be made pursuant to plans, programs, or directions established from time to time by the Company’s management, including plans intended to comply with the safe harbor provided by Rule 10b5-1.

During the nine months ended December 31, 2023, the Company withheld from employees 14,572 shares of stock upon the vesting of Restricted Shares that were granted under the Plan. We withheld these shares to satisfy the employees’ statutory tax withholding requirements, which is necessary once the Restricted Shares or Restricted Share Units are vested.

Capital Expenditures

The following table details capital expenditures by category:

	For the Nine Months Ended December 31,
	2023		2022
	(dollars in thousands)
Land and Quarries	$	5,761	$	11,178
Plants		42,354		33,650
Buildings, Machinery, and Equipment		39,733		16,123
Total Capital Expenditures	$	87,848	$	60,951

Capital expenditures for fiscal 2024 are expected to range from $125.0 million to $140.0 million and will be allocated across both Heavy Materials and Light Materials sectors. These estimated capital expenditures will include maintenance capital expenditures and improvements, as well as other safety and regulatory projects.

FORWARD LOOKING STATEMENTS

Certain matters discussed in this report contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the context of the statement and generally arise when the Company is discussing its beliefs, estimates or expectations. These statements are not historical facts or guarantees of future performance but instead represent only the Company’s belief at the time the statements were made regarding future events which are subject to certain risks, uncertainties and other factors, many of which are outside the Company’s control. Actual results and outcomes may differ materially from what is expressed or forecast in such forward-looking statements. The principal risks and uncertainties that may affect the Company’s actual performance include the following: the cyclical and seasonal nature of the Company’s businesses; public infrastructure expenditures; adverse weather conditions; the fact that our products are commodities and that prices for our products are subject to material fluctuation due to market conditions and other factors beyond our control; availability of raw materials; changes in the costs of energy, including, without limitation, natural gas, coal and oil, and the nature of our obligations to counterparties under energy supply contracts, such as those related to market conditions (such as fluctuations in spot market prices), governmental orders and other matters; changes in the cost and availability of transportation; unexpected operational difficulties, including unexpected maintenance costs, equipment downtime and interruption of production; material nonpayment or non-performance by any of our key customers; fluctuations in or changes in the nature of activity in the oil and gas industry; inability to timely execute announced capacity expansions; difficulties and delays in the development of new business lines; governmental regulation and changes in governmental and public policy (including, without limitation, climate change and other environmental regulation); possible outcomes of pending or future litigation or arbitration proceedings; changes in economic conditions specific to any one or more of the Company’s markets; adverse impact of severe weather conditions (such as winter storms, tornados and hurricanes) and their effects on our facilities, operations and contractual arrangements with third parties; competition; cyber-attacks or data security breaches; announced increases in capacity in the gypsum wallboard and cement industries; changes in the demand for residential housing construction or commercial construction or construction projects undertaken by state or local governments; risks related to pursuit of acquisitions, joint ventures and other transactions or the execution or implementation of such transactions, including the integration of operations acquired by the Company; general economic conditions; and interest rates. For example, increases in interest rates, decreases in demand for construction materials or increases in the cost of energy (including, without limitation, natural gas, coal and oil) and the cost of our raw materials can expected to adversely affect the revenue and operating earnings of our operations. In addition, changes in national or regional economic conditions and levels of infrastructure and construction spending could also adversely affect the Company’s result of operations. Finally, any forward-looking statements made by the Company are subject to the risks and impacts associated with natural disasters, the outbreak, escalation, or resurgence of health emergencies, pandemics or other unforeseen events, including, without limitation, the COVID-19 pandemic and responses thereto designed to contain its spread and mitigate its public health effects, as well as their impact on our operations or on economic conditions, capital and financial markets. These and other factors are described in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2023. All forward-looking statements made herein are made as of the date hereof, and the risk that actual results will differ materially from expectations expressed herein will increase with the passage of time. The Company undertakes no duty to update any forward-looking statement to reflect future events or changes in the Company’s expectations.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risks related to fluctuations in interest rates on our Revolving Credit Facility. We have occasionally utilized derivative instruments, including interest rate swaps, in conjunction with our overall strategy to manage the debt outstanding that is subject to changes in interest rates. We had a $750.0 million Revolving Credit Facility at December 31, 2023, under which borrowings bear interest at a variable rate. A hypothetical 100 basis point increase in interest rates on the $107.0 million of borrowings under the Revolving Credit Facility and the $185.0 million of borrowings under the Term Loan at December 31, 2023, would increase interest expense by approximately $2.9 million on an annual basis. At present, we do not utilize derivative financial instruments.

We are subject to commodity risk with respect to price changes principally in coal, coke, natural gas, and power. We attempt to limit our exposure to changes in commodity prices by entering into contracts or increasing our use of alternative fuels.

Item 4. Controls and Procedures

We have established a system of disclosure controls and procedures that are designed to ensure that information relating to the Company, which is required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 (Exchange Act), is recorded, processed, summarized, and reported within the time periods specified by the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), in a timely fashion. An evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) was performed as of the end of the period covered by this quarterly report. This evaluation was performed under the supervision and with the participation of management, including our CEO and CFO. Based upon that evaluation, our CEO and CFO have concluded that these disclosure controls and procedures were effective.

Item 1. Legal Proceedings

In addition to the legal matters described in Part 1, Item 3 "Legal Proceedings" of our Form 10-K for the fiscal year ended March 31, 2023, from time to time, we have been and may in the future become involved in litigation or other legal proceedings in the ordinary course of our business activities or in connection with transactions or activities undertaken by us, including claims related to worker safety, worker health, environmental matters, commercial contracts, land use rights, taxes, and permits. While the outcome of these proceedings cannot be predicted with certainty, in the opinion of management (based on currently available facts), we do not believe that the ultimate outcome of any currently pending legal proceeding will have a material effect on our consolidated financial condition, results of operations, or liquidity.

For additional information regarding claims and other contingent liabilities to which we may be subject, see Footnote (P) in the Unaudited Consolidated Financial Statements.

Item 1A. Risk Factors

For information regarding factors that could impact our results of operations, financial condition, and liquidity, see Part 1. Item 1A. Risk Factors in our Form 10-K for the fiscal year ended March 31, 2023, filed with the Securities and Exchange Commission on May 19, 2023.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The disclosure required under this Item is included in “Management’s Discussion and Analysis of Results of Operations and Financial Condition” of this Quarterly Report on Form 10-Q under the heading “Share Repurchases” and is incorporated herein by reference.

Item 4. Mine Safety Disclosures

The information concerning mine safety violations or other regulatory matters required by Section 1503 (a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95 to this Form 10-Q.

Item 5. Other Information

None of the Company's directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement, or a non-Rule 10b5-1 trading arrangement during the Company's fiscal third quarter ended December 31, 2023, except as follows: On December 6, 2023, Michael R. Haack, President and Chief Executive Officer, adopted a Rule 10b5-1 trading arrangement intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 10,000 shares of the Company’s common stock and the exercise of up to 21,700 stock options and the sale of the underlying shares, subject to certain conditions. Trades may occur under Mr. Haack’s plan during the period from (a) the later of March 6, 2024, or the third trading day after the filing of the Company’s Form 10-Q for the quarter ended December 31, 2023, through (b) March 5, 2025.

Item 6. Exhibits

31.1*	Certification of the Chief Executive Officer of Eagle Materials Inc. pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934, as amended.
31.2*	Certification of the Chief Financial Officer of Eagle Materials Inc. pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934, as amended.
32.1*	Certification of the Chief Executive Officer of Eagle Materials Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification of the Chief Financial Officer of Eagle Materials Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
95*	Mine Safety Disclosure.
101.INS*	Inline XBRL Instance Document – The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*	Inline XBRL Taxonomy Extension Schema Document.
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104	Cover Page Interactive Data File – (formatted as Inline XBRL and Contained in Exhibit 101).

* Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	EAGLE MATERIALS INC.
	Registrant
January 25, 2024	/s/ MICHAEL R. HAACK
	Michael R. Haack<br><br>President and Chief Executive Officer<br><br>(principal executive officer)
January 25, 2024	/s/ D. CRAIG KESLER
	D. Craig Kesler<br><br>Executive Vice President – Finance and<br><br>Administration and Chief Financial Officer<br><br>(principal financial officer)
January 25, 2024	/s/ WILLIAM R. DEVLIN
---	---
	William R. Devlin<br><br>Senior Vice President – Controller and<br><br>Chief Accounting Officer<br><br>(principal accounting officer)

EX-31.1

Exhibit 31.1

Certification of Periodic Report Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Michael R. Haack, certify that:

I have reviewed this report on Form 10-Q of Eagle Materials Inc.;
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures [as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)] and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: January 25, 2024

By	/s/ Michael R. Haack
	Michael R. Haack<br><br>President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of Periodic Report Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, D. Craig Kesler, certify that:

I have reviewed this report on Form 10-Q of Eagle Materials Inc.;
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures [as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)] and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: January 25, 2024

By	/s/ D. Craig Kesler
	D. Craig Kesler<br><br>Chief Financial Officer<br><br>(Principal Financial Officer)

EX-32.1

Exhibit 32.1

Certification of Periodic Report Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Eagle Materials Inc. and subsidiaries (the “Company”) on Form 10-Q for the period ended December 31, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael R. Haack, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(i) the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: January 25, 2024

By	/s/ Michael R. Haack
	Michael R. Haack<br><br>President and Chief Executive Officer

EX-32.2

Exhibit 32.2

Certification of Periodic Report Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Eagle Materials Inc. and subsidiaries (the “Company”) on Form 10-Q for the period ended December 31, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, D. Craig Kesler, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(i) the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: January 25, 2024

By	/s/ D. Craig Kesler
	D. Craig Kesler<br><br>Chief Financial Officer<br><br>(Principal Financial Officer)

EX-95

EX-95Exhibit 95

MINE SAFETY DISCLOSURE

Section 1503 of the Dodd-Frank Wall Street Reform and Consumer Protection Act contains reporting requirements regarding mine safety. The operation of our quarries is subject to regulation by the federal Mine Safety and Health Administration, or MSHA, under the Federal Mine Safety and Health Act of 1977, or the Mine Act. Set forth below is the required information regarding certain mining safety and health matters for the three-month period ended December 31, 2023 for our facilities. In evaluating this information, consideration should be given to factors such as: (i) the number of citations and orders will vary depending on the size of the quarry, (ii) the number of citations issued will vary from inspector-to-inspector and mine-to-mine, and (iii) citations and orders can be contested and appealed, and in that process, may be reduced in severity and amount, and are sometimes dismissed.
Mine or Operating Name/MSHA <br>Identification Number	Section 104 S&S Citations	Section 104(b) Orders	Section 104(d) Citations and Orders	Section 110(b)(2) Violations	Section 107(a) Orders	Total Dollar Value of MSHA Assessments Proposed	Total Number of Mining Related Fatalities	Received Notice of Pattern of Violations Under Section 104(e)<br>(yes/no)	Received Notice of Potential to Have Pattern Under Section 104(e)<br>(yes/no)	Legal Actions Pending as of Last Day of Period	Legal Actions Initiated During Period	Legal Actions Resolved During Period
---	---	---	---	---	---	---	---	---	---	---	---	---
3D Concrete LLC<br><br>Lander, NV (2602434)	0	0	0	0	0	$ 0	0	no	no	0	0	0
3D Concrete LLC<br><br>Lyon, Nevada (2602412)	0	0	0	0	0	$ 0	0	no	no	0	0	0
American Gypsum Company LLC<br><br>Albuquerque, NM (2900181)	0	0	0	0	0	$ 0	0	no	no	0	0	0
American Gypsum Company LLC<br>Duke, OK (3400256)	0	0	0	0	0	$ 0	0	no	no	0	0	0
American Gypsum Company LLC<br>Eagle, CO (0503997)	0	0	0	0	0	$ 0	0	no	no	0	0	0
Battletown Quarry2<br><br>Battletown, KY (1500040)	1	0	0	0	0	$ 0	0	no	no	0	0	0
Centex Materials LLC<br>Buda, TX (4102241)	0	0	0	0	0	$ 0	0	no	no	0	0	0
Central Plains Cement Company LLC<br>Sugar Creek, MO (2302171)	4	0	0	0	0	$34,202	0	no	no	2(1)	0	0
Central Plains Cement Company LLC, Tulsa, OK (3400026)	12	0	1	0	0	$ 9,055	0	no	no	0	0	0
Fairborn Cement Company LLC<br>Greene County, OH (3300161)	0	0	0	0	0	$ 0	0	no	no	0	0	0
Illinois Cement Company LLC<br>LaSalle, IL (1100003)	5	0	0	0	0	$35,692	0	no	no	0	0	0
Kosmos Cement Company LLC<br><br>Jefferson, KY (1504469)	12	0	0	0	0	$ 0	0	no	no	0	0	0
Mountain Cement Company LLC<br>Laramie, WY (4800007)	2	0	0	0	0	$ 0	0	no	no	0	0	0
Nevada Cement Company LLC<br>Fernley, NV (2600015)	0	0	0	0	0	$ 0	0	no	no	0	0	0
Seguin Sand<br><br>Guadalupe, TX (4105665)	0	0	0	0	0	$ 0	0	no	no	0	0	0
Texas Lehigh Cement Company LP<br><br>Buda, TX (4102781)	0	0	0	0	0	$ 0	0	no	no	2(1)	0	0

(1) All legal actions were penalty contests.

(2) Battletown Quarry was acquired on 3/31/2023 by Eagle Materials Inc. - Operator is Battletown Materials LLC.

10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended

December 31, 2023

Commission File Number 1-12984

EAGLE MATERIALS INC.

Delaware

75-2520779

5960 Berkshire Lane

Suite 900

Dallas

Texas

75225

214

432-2000

Yes ☐ No ☒

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION (unaudited)

See Notes to Unaudited Consolidated Financial Statements.

EAGLE MATERIALS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (unaudited)

See Notes to Unaudited Consolidated Financial Statements.

EAGLE MATERIALS INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (unaudited)

See Notes to Unaudited Consolidated Financial Statements.

EAGLE MATERIALS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

See Notes to Unaudited Consolidated Financial Statements.

EAGLE MATERIALS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (unaudited)

See Notes to Unaudited Consolidated Financial Statements.

Eagle Materials Inc. and SubsidiariesNotes to Consolidated Financial Statements

(A) BASIS OF PRESENTATION

Recent Accounting Pronouncements

(B) SUPPLEMENTAL CASH FLOW INFORMATION

(D) REVENUE

(E) ACCOUNTS AND NOTES RECEIVABLE

(F) INVENTORIES

(G) ACCRUED EXPENSES

(H) LEASES

(I) Share-BASED EMPLOYEE COMPENSATION

Long-Term Compensation Plans

OPTIONS

1.9

RESTRICTED STOCK

1.7

(K) PENSION AND EMPLOYEE BENEFIT PLANS

(L) INCOME TAXES

(M) LONG-TERM DEBT

Revolving Credit Facility

Term Loan

2.500% Senior Unsecured Notes Due 2031

(N) SEGMENT INFORMATION

(O) INTEREST EXPENSE

(P) COMMITMENTS AND CONTINGENCIES

(Q) FAIR VALUE OF FINANCIAL INSTRUMENTS

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

EXECUTIVE SUMMARY

MARKET CONDITIONS AND OUTLOOK

Demand Outlook

Cost Outlook

RESULTS OF OPERATIONS

THREE MONTHS ENDED december 31, 2023 Compared WITH THREE MONTHS ENDED december 31, 2022

REVENUE

COST OF GOODS SOLD

GROSS PROFIT

EQUITY IN EARNINGS OF UNCONSOLIDATED JOINT VENTURE

CORPORATE GENERAL AND ADMINISTRATIVE EXPENSE

OTHER NON-OPERATING INCOME

INTEREST EXPENSE, NET

EARNINGS BEFORE INCOME TAXES

INCOME TAX EXPENSE

NET EARNINGS

RESULTS OF OPERATIONS

NINE MONTHS ENDED DECember 31, 2023 Compared WITH Nine MONTHS ENDED DECember 31, 2022

REVENUE

COST OF GOODS SOLD

GROSS PROFIT

EQUITY IN EARNINGS OF UNCONSOLIDATED JOINT VENTURE

CORPORATE GENERAL AND ADMINISTRATIVE EXPENSE