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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

June 30, 2024

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 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 July 26, 2024, the number of outstanding shares of common stock was:

Class |  | Outstanding Shares
Common Stock, $.01 Par Value |  | 33,618,968

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION (unaudited)

|  |  |  | Page
Item 1. |  | Consolidated Financial Statements |  |
|  | Consolidated Statements of Earnings for the Three Months Ended June 30, 2024 and 2023 |  | 1
|  | Consolidated Statements of Comprehensive Earnings for the Three Months Ended June 30, 2024 and 2023 |  | 2
|  | Consolidated Balance Sheets as of June 30, 2024, and March 31, 2024 |  | 3
|  | Consolidated Statements of Cash Flows for the Three Months Ended June 30, 2024 and 2023 |  | 4
|  | Consolidated Statements of Stockholders' Equity for the Three Months Ended June 30, 2024 and 20 23 |  | 5
|  | Notes to Unaudited Consolidated Financial Statements |  | 6
Item 2. |  | Management’s Discussion and Analysis of Financial Condition and Results of Operations |  | 19
Item 3. |  | Quantitative and Qualitative Disclosures About Market Risk |  | 31
Item 4. |  | Controls and Procedures |  | 31
PART II. OTHER INFORMATION
Item 1. |  | Legal Proceedings |  | 32
Item 1a. |  | Risk Factors |  | 33
Item 2. |  | Unregistered Sales of Equity Securities and Use of Proceeds |  | 33
Item 4. |  | Mine Safety Information |  | 33
Item 5. |  | Other Information |  | 33
Item 6. |  | Exhibits |  | 34
SIGNATURES |  | 35

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

|  | For the Three Months Ended June 30, |
|  | 2024 |  |  | 2023 |
|  | (dollars in thousands, except share and per share data) |
Revenue |  | $ | 608,689 |  |  | $ | 601,521 |
Cost of Goods Sold |  |  | 421,821 |  |  |  | 425,526 |
Gross Profit |  |  | 186,868 |  |  |  | 175,995 |
Equity in Earnings of Unconsolidated Joint Venture |  |  | 7,716 |  |  |  | 3,159 |
Corporate General and Administrative Expense |  |  | (15,649 | ) |  |  | (11,679 | )
Other Non-Operating Income (Expense) |  |  | 2,683 |  |  |  | 213 |
Interest Expense, net |  |  | (10,684 | ) |  |  | (12,239 | )
Earnings before Income Taxes |  |  | 170,934 |  |  |  | 155,449 |
Income Taxes |  |  | (37,092 | ) |  |  | (34,600 | )
Net Earnings |  | $ | 133,842 |  |  | $ | 120,849 |
EARNINGS PER SHARE |  |  |  |  |  |
Basic |  | $ | 3.97 |  |  | $ | 3.43 |
Diluted |  |  | 3.94 |  |  |  | 3.40 |
AVERAGE SHARES OUTSTANDING |  |  |  |  |  |
Basic |  |  | 33,734,280 |  |  |  | 35,274,753 |
Diluted |  |  | 33,993,023 |  |  |  | 35,532,284 |
CASH DIVIDENDS PER SHARE |  | $ | 0.25 |  |  | $ | 0.25 |

See Notes to Unaudited Consolidated Financial Statements.

1

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

|  | For the Three Months Ended June 30, |
|  | 2024 |  |  | 2023 |
|  | (dollars in thousands) |
Net Earnings |  | $ | 133,842 |  |  | $ | 120,849 |
Net Actuarial Change in Defined Benefit Plans |  |  |  |  |  |
Amortization of Net Actuarial Loss |  |  | 60 |  |  |  | 63 |
Tax Expense |  |  | (15 | ) |  |  | (15 | )
Comprehensive Earnings |  | $ | 133,887 |  |  | $ | 120,897 |

See Notes to Unaudited Consolidated Financial Statements.

2

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

|  | June 30, |  |  | March 31, |
|  | 2024 |  |  | 2024 |
|  | (dollars in thousands) |
ASSETS |  |  |  |  |  |
Current Assets |  |  |  |  |  |
Cash and Cash Equivalents |  | $ | 46,540 |  |  | $ | 34,925 |
Accounts and Notes Receivable, net |  |  | 278,428 |  |  |  | 202,985 |
Inventories |  |  | 371,619 |  |  |  | 373,923 |
Income Tax Receivable |  |  | 2,605 |  |  |  | 9,910 |
Prepaid and Other Assets |  |  | 13,797 |  |  |  | 5,950 |
Total Current Assets |  |  | 712,989 |  |  |  | 627,693 |
Property, Plant, and Equipment, net |  |  | 1,676,041 |  |  |  | 1,676,217 |
Investment in Joint Venture |  |  | 121,409 |  |  |  | 113,478 |
Operating Lease Right-of-Use Assets |  |  | 17,970 |  |  |  | 19,373 |
Goodwill and Intangible Assets, net |  |  | 484,298 |  |  |  | 486,117 |
Other Assets |  |  | 30,160 |  |  |  | 24,141 |
Total Assets |  | $ | 3,042,867 |  |  | $ | 2,947,019 |
LIABILITIES AND STOCKHOLDERS’ EQUITY |  |  |  |  |  |
Current Liabilities |  |  |  |  |  |
Accounts Payable |  | $ | 148,231 |  |  | $ | 127,183 |
Accrued Liabilities |  |  | 89,537 |  |  |  | 94,327 |
Operating Lease Liabilities |  |  | 7,008 |  |  |  | 7,899 |
Income Tax Payable |  |  | 35,774 |  |  |  | — |
Current Portion of Long-term Debt |  |  | 10,000 |  |  |  | 10,000 |
Total Current Liabilities |  |  | 290,550 |  |  |  | 239,409 |
Long-term Debt |  |  | 1,091,116 |  |  |  | 1,083,299 |
Noncurrent Operating Lease Liabilities |  |  | 17,902 |  |  |  | 19,037 |
Other Long-term Liabilities |  |  | 49,916 |  |  |  | 51,942 |
Deferred Income Taxes |  |  | 242,585 |  |  |  | 244,797 |
Total Liabilities |  |  | 1,692,069 |  |  |  | 1,638,484 |
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 33,761,968 and 34,143,945 Shares, respectively |  |  | 338 |  |  |  | 341 |
Capital in Excess of Par Value |  |  | — |  |  |  | — |
Accumulated Other Comprehensive Losses |  |  | (3,328 | ) |  |  | (3,373 | )
Retained Earnings |  |  | 1,353,788 |  |  |  | 1,311,567 |
Total Stockholders’ Equity |  |  | 1,350,798 |  |  |  | 1,308,535 |
|  | $ | 3,042,867 |  |  | $ | 2,947,019 |

See Notes to Unaudited Consolidated Financial Statements.

3

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

|  | For the Three Months Ended June 30, |
|  | 2024 |  |  | 2023 |
|  | (dollars in thousands) |
CASH FLOWS FROM OPERATING ACTIVITIES |  |  |  |  |  |
Net Earnings |  | $ | 133,842 |  |  | $ | 120,849 |
Adjustments to Reconcile Net Earnings to Net Cash Provided by Operating Activities, Net of Effect of Noncash Activity |  |  |  |  |  |
Depreciation, Depletion, and Amortization |  |  | 38,350 |  |  |  | 36,682 |
Deferred Income Tax Provision |  |  | (2,212 | ) |  |  | 2,312 |
Stock Compensation Expense |  |  | 4,539 |  |  |  | 6,457 |
Equity in Earnings of Unconsolidated Joint Venture |  |  | (7,716 | ) |  |  | (3,159 | )
Distributions from Joint Venture |  |  | — |  |  |  | 2,500 |
Changes in Operating Assets and Liabilities |  |  |  |  |  |
Accounts and Notes Receivable |  |  | (75,443 | ) |  |  | (46,213 | )
Inventories |  |  | 2,304 |  |  |  | 4,166 |
Accounts Payable and Accrued Liabilities |  |  | 15,503 |  |  |  | (5,100 | )
Other Assets |  |  | (16,724 | ) |  |  | (9,577 | )
Income Taxes Payable (Receivable) |  |  | 40,193 |  |  |  | 31,570 |
Net Cash Provided by Operating Activities |  |  | 132,636 |  |  |  | 140,487 |
CASH FLOWS FROM INVESTING ACTIVITIES |  |  |  |  |  |
Additions to Property, Plant, and Equipment |  |  | (33,128 | ) |  |  | (35,999 | )
Acquisition Spending |  |  | — |  |  |  | (55,053 | )
Net Cash Used in Investing Activities |  |  | (33,128 | ) |  |  | (91,052 | )
CASH FLOWS FROM FINANCING ACTIVITIES |  |  |  |  |  |
Increase in Credit Facility |  |  | 10,000 |  |  |  | 65,000 |
Repayment of Term Loan |  |  | (2,500 | ) |  |  | (2,500 | )
Dividends Paid to Stockholders |  |  | (8,538 | ) |  |  | (8,995 | )
Purchase and Retirement of Common Stock |  |  | (85,490 | ) |  |  | (74,058 | )
Proceeds from Stock Option Exercises |  |  | 56 |  |  |  | 10,385 |
Shares Redeemed to Settle Employee Taxes on Stock Compensation |  |  | (1,421 | ) |  |  | (1,360 | )
Net Cash Used in Financing Activities |  |  | (87,893 | ) |  |  | (11,528 | )
NET INCREASE IN CASH AND CASH EQUIVALENTS |  |  | 11,615 |  |  |  | 37,907 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD |  |  | 34,925 |  |  |  | 15,242 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD |  | $ | 46,540 |  |  | $ | 53,149 |

See Notes to Unaudited Consolidated Financial Statements.

4

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

|  | Common Stock |  |  | Capital in Excess of Par Value |  |  | Retained Earnings |  |  | Accumulated Other Comprehensive 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 |
|  | Common Stock |  |  | Capital in Excess of Par Value |  |  | Retained Earnings |  |  | Accumulated Other Comprehensive Losses |  |  | Total |
|  | (dollars in thousands) |
Balance at March 31, 2024 |  | $ | 341 |  |  | $ | — |  |  | $ | 1,311,567 |  |  | $ | (3,373 | ) |  | $ | 1,308,535 |
Net Earnings |  |  | — |  |  |  | — |  |  |  | 133,842 |  |  |  | — |  |  |  | 133,842 |
Stock Compensation Expense |  |  | — |  |  |  | 4,539 |  |  |  | — |  |  |  | — |  |  |  | 4,539 |
Stock Option Exercises and Restricted Share Issuances |  |  | — |  |  |  | 56 |  |  |  | — |  |  |  | — |  |  |  | 56 |
Shares Redeemed to Settle Employee Taxes |  |  | — |  |  |  | (1,421 | ) |  |  | — |  |  |  | — |  |  |  | (1,421 | )
Purchase and Retirement of Common Stock |  |  | (3 | ) |  |  | (3,174 | ) |  |  | (83,168 | ) |  |  | — |  |  |  | (86,345 | )
Dividends to Shareholders |  |  | — |  |  |  | — |  |  |  | (8,453 | ) |  |  | — |  |  |  | (8,453 | )
Unfunded Pension Liability, net of tax |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 45 |  |  |  | 45 |
Balance at June 30, 2024 |  | $ | 338 |  |  | $ | — |  |  | $ | 1,353,788 |  |  | $ | (3,328 | ) |  | $ | 1,350,798 |

See Notes to Unaudited Consolidated Financial Statements.

5

Eagle Materials Inc. and Subsidiaries
N otes to Consolidated Financial Statements

(A) BASIS OF PRESENTATION

The accompanying Unaudited Consolidated Financial Statements as of and for the three-month period ended June 30, 2024, 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 22, 2024.

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

PENDING ADOPTION

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07), which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 will become effective for public companies during annual reporting periods beginning after December 15, 2023, and interim reporting periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of adopting this guidance on its Consolidated Financial Statements.

In December 2023, the FASB issued Accounting Standards Update No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which focuses on the rate reconciliation and income taxes paid. ASU 2023-09 requires public entities to disclose, on an annual basis, a tabular rate reconciliation using both percentages and currency amounts organized by specified categories with certain reconciling items broken out by nature and jurisdiction to the extent those items exceed a specified threshold. Additionally, all entities are required to disclose income taxes paid, net of refunds received, disaggregated by federal, state, and local, and by individual jurisdiction if the amount is at least 5% of the total income tax payments, net of refunds received. ASU 2023-09 is effective prospectively for annual periods beginning after December 15, 2024. Early adoption and retrospective application are permitted. ASU 2023-09 will not have any impact on the Company's results of operations, cash flows, and financial condition.

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(B) SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental cash flow information is as follows:

|  | For the Three Months Ended June 30, |
|  |  | 2024 |  |  |  | 2023 |
|  | (dollars in thousands) |
Cash Payments |  |  |  |  |  |
Interest |  | $ | 3,678 |  |  | $ | 14,993 |
Income Taxes |  |  | 780 |  |  |  | 636 |
Operating Cash Flows Used for Operating Leases |  |  | 2,287 |  |  |  | 2,391 |
Noncash Financing Activities |  |  |  |  |  |
Excise Tax on Share Repurchases |  | $ | 855 |  |  | $ | 741 |
Right-of-Use Assets Obtained for Capitalized Operating Leases |  |  | 719 |  |  |  | 4,166 |

(C) 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 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 (M) to the Unaudited Consolidated Financial Statements for disaggregation of revenue by segment.

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(D) ACCOUNTS AND NOTES RECEIVABLE

Accounts Receivable are shown net of the allowance for doubtful accounts totaling $6.7 million and $6.7 million at June 30, 2024, and March 31, 2024, respectively. We perform ongoing credit evaluations of our customers’ financial condition and generally require no collateral from our customers. The allowance for non-collection of receivables is based on analysis of economic trends in the construction industry, detailed analysis of the expected collectability of past due accounts receivable, and the expected collectability of overall receivables. We have no significant credit risk concentration among our diversified customer base.

(E) 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:

|  | June 30, |  |  | March 31, |
|  | 2024 |  |  | 2024 |
|  | (dollars in thousands) |
Raw Materials and Materials-in-Progress |  | $ | 126,351 |  |  | $ | 122,772 |
Finished Cement |  |  | 69,507 |  |  |  | 71,396 |
Aggregates |  |  | 13,983 |  |  |  | 12,149 |
Gypsum Wallboard |  |  | 6,914 |  |  |  | 5,242 |
Recycled Paperboard |  |  | 10,007 |  |  |  | 14,278 |
Repair Parts and Supplies |  |  | 122,247 |  |  |  | 127,511 |
Fuel and Coal |  |  | 22,610 |  |  |  | 20,575 |
|  | $ | 371,619 |  |  | $ | 373,923 |

(F) ACCRUED EXPENSES

Accrued Expenses consist of the following:

|  | June 30, |  |  | March 31, |
|  | 2024 |  |  | 2024 |
|  | (dollars in thousands) |
Payroll and Incentive Compensation |  | $ | 18,768 |  |  | $ | 34,274 |
Benefits |  |  | 17,514 |  |  |  | 17,507 |
Dividends |  |  | 8,644 |  |  |  | 6,374 |
Interest |  |  | 13,379 |  |  |  | 8,729 |
Property Taxes |  |  | 8,453 |  |  |  | 5,921 |
Power and Fuel |  |  | 2,679 |  |  |  | 2,993 |
Freight |  |  | 5,144 |  |  |  | 2,893 |
Excise Tax |  |  | 5,025 |  |  |  | 4,170 |
Legal and Professional |  |  | 2,904 |  |  |  | 2,602 |
Sales and Use Taxes |  |  | 1,905 |  |  |  | 1,372 |
Other |  |  | 5,122 |  |  |  | 7,492 |
|  | $ | 89,537 |  |  | $ | 94,327 |

(G) LEASES

We lease certain real estate, buildings, and equipment, including railcars and barges. 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 one year 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,

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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 June 30, |
|  | 2024 |  |  | 2023 |
|  | (dollars in thousands) |
Operating Lease Cost |  | $ | 2,047 |  |  | $ | 2,274 |
Short-term Lease Cost |  |  | 341 |  |  |  | 223 |
Total Lease Cost |  | $ | 2,388 |  |  | $ | 2,497 |

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

|  | June 30, |  |  | March 31, |
|  | 2024 |  |  | 2024 |
|  | (dollars in thousands) |
Operating Leases |  |  |  |  |  |
Operating Lease Right-of-Use Assets |  | $ | 17,970 |  |  | $ | 19,373 |
Current Operating Lease Liabilities |  | $ | 7,008 |  |  | $ | 7,899 |
Noncurrent Operating Lease Liabilities |  |  | 17,902 |  |  |  | 19,037 |
Total Operating Lease Liabilities |  | $ | 24,910 |  |  | $ | 26,936 |

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

Fiscal Year |  | Amount |
2025 (remaining nine months) |  | $ | 6,355 |
2026 |  |  | 4,784 |
2027 |  |  | 3,618 |
2028 |  |  | 2,752 |
2029 |  |  | 2,675 |
Thereafter |  |  | 11,016 |
Total Lease Payments |  | $ | 31,200 |
Less: Imputed Interest |  |  | (6,290 | )
Present Value of Lease Liabilities |  | $ | 24,910 |
Weighted-Average Remaining Lease Term (in years) |  |  | 9.8 |
Weighted-Average Discount Rate |  |  | 4.21 | %

(H) S hare-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 and consultants, independent contractors, and agents of the Company. The Compensation Committee of our Board of Directors (Compensation Committee) specifies grant terms for awards under the Plan.

Fiscal 2025 Equity Awards

In May 2024, the Compensation Committee awarded to certain officers and key employees an aggregate of 29,391 performance stock units and 1,963 performance stock options, which represents achievement of the target level of performance (collectively, the Performance Stock Awards). For the Performance Stock Awards to be earned, the Company must achieve performance vesting criteria as modified based on the Company’s average absolute total stockholder return during the performance period. The performance vesting criteria are based upon

9

certain levels of average annual return on equity (as defined in the Performance Stock Award Agreements) ranging from 10.0% to 20.0% measured at the end of fiscal 2027 (three-year performance period) as modified by total stockholder return. Performance outcomes (taking into account both criteria) will result in a threshold vesting percentage of 50% of target and maximum performance will result in a vesting percentage of 200% of target. If the threshold vesting percentage is not achieved none of the Performance Stock Awards will be earned.

Our Performance Stock Awards are evaluated on a quarterly basis with adjustments to compensation expense based on the likelihood of the performance targets being achieved or exceeded. The maximum expense for our outstanding Performance Stock Awards is approximately $11.7 million. Any forfeitures are recognized as a reduction to expense in the period in which they occur.

The fair value of the above Performance Stock Awards was determined using a Monte Carlo simulation. The following are key inputs in the Monte Carlo analysis for the Fiscal 2025 Employee Performance Stock Awards.

Measurement Period (in years) |  |  | 2.85 |
Risk-Free Interest Rate |  |  | 4.7 | %
Dividend Yield |  |  | 0.4 | %
Volatility |  |  | 31.4 | %
Estimated Fair Value of Market-Based PSAs at Grant Date |  | $ | 238.27 |

In addition to the Performance Stock Awards discussed above, the Compensation Committee approved the granting to certain officers and key employees an aggregate of 1,963 time-vesting stock options which vest ratably over three years (the Fiscal 2025 Employee Time-Vesting Stock Option Grant) and 30,272 shares of time-vesting restricted stock units, which vest ratably over three years (the Fiscal 2025 Employee Restricted Stock Unit Time-Vesting Award). The Fiscal 2025 Employee Restricted Stock Unit Time-Vesting Award was valued at the closing price of the stock on the grant date and is being expensed over a three-year period. The Fiscal 2025 Employee Time-Vesting Stock Option Grant was valued at their grant date using the Black-Scholes option pricing model, which used similar input as the Monte Carlo analysis shown above.

In addition to the stock options described above, we may issue equity awards, including stock options, restricted stock, and restricted stock units, 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, while restricted stock and restricted stock units are valued using the closing price on the date of grant and expensed over the vesting period.

Long-Term Compensation Plans

STOCK OPTIONS

Stock option expense for all outstanding stock option awards totaled approximately $0.3 million and $0.5 million for the three months ended June 30, 2024 and 2023, respectively. At June 30, 2024, there was approximately $1.9 million of unrecognized compensation cost related to outstanding stock options, which is expected to be recognized over a weighted-average period of 1.6 years.

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The following table represents stock option activity for the three months ended June 30, 2024:

|  | Number of Shares |  |  | Weighted- Average Exercise Price |
Outstanding Options at March 31, 2024 |  |  | 252,364 |  |  | $ | 91.28 |
Granted |  |  | 3,926 |  |  | $ | 238.27 |
Exercised |  |  | (424 | ) |  | $ | 132.70 |
Cancelled |  |  | — |  |  | $ | — |
Outstanding Options at June 30, 2024 |  |  | 255,866 |  |  | $ | 93.23 |
Options Exercisable at June 30, 2024 |  |  | 217,398 |  |  |  |
Weighted-Average Fair Value of Options Granted During the Year |  | $ | 101.99 |  |  |  |

The following table summarizes information about stock options outstanding at June 30, 2024:

|  | Options Outstanding |  |  | Options Exercisable |
Range of Exercise Prices |  | Number of Shares Outstanding |  |  | Weighted- Average Remaining Contractual Life (in years) |  |  | Weighted- Average Exercise Price |  |  | Number of Shares Outstanding |  |  | Weighted- Average Exercise Price |
$59.32 - $81.28 |  |  | 107,490 |  |  |  | 5.39 |  |  | $ | 62.50 |  |  |  | 107,490 |  |  | $ | 62.50 |
$87.37 - $106.24 |  |  | 75,608 |  |  |  | 4.02 |  |  | $ | 94.15 |  |  |  | 73,750 |  |  | $ | 94.07 |
$118.27 - $139.25 |  |  | 59,839 |  |  |  | 7.78 |  |  | $ | 127.52 |  |  |  | 31,500 |  |  | $ | 128.30 |
$143.09 - $238.27 |  |  | 12,929 |  |  |  | 8.74 |  |  | $ | 184.69 |  |  |  | 4,658 |  |  | $ | 149.25 |
|  |  | 255,866 |  |  |  | 5.72 |  |  | $ | 93.23 |  |  |  | 217,398 |  |  | $ | 84.60 |

At June 30, 2024, the aggregate intrinsic value for the outstanding and exercisable options was approximately $31.9 million and $28.9 million, respectively. The total intrinsic value of options exercised during the three months ended June 30, 2024, was approximately $0.1 million.

RESTRICTED STOCK UNITS AND RESTRICTED STOCK

The following table summarizes the activity for restricted stock units and nonvested restricted stock during the three months ended June 30, 2024:

|  | Number of Shares |  |  | Weighted-Average Grant Date Fair Value |
Restricted Stock Units and Nonvested Restricted Stock at March 31, 2024 |  |  | 204,946 |  |  | $ | 121.12 |
Granted |  |  | 59,663 |  |  | $ | 238.10 |
Vested |  |  | (14,923 | ) |  | $ | 178.58 |
Forfeited |  |  | — |  |  | $ | — |
Restricted Stock Units and Nonvested Restricted Stock at June 30, 2024 |  |  | 249,686 |  |  | $ | 150.61 |

Expense related to restricted stock units and restricted stock wa s approximately $4.3 million and $6.0 million for the three months ended June 30, 2024, and 2023, respectively. At June 30, 2024, there was approximately $30.9 million of unearned compensation from restricted stock units and nonvested restricted shares, which will be recognized over a weighted-average period of 1.9 years.

The number of shares available for future grants of stock options, restricted stock units, stock appreciation rights, and restricted stock under the Plan was 1,351,520 at June 30, 2024.

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(I) COMPUTATION OF EARNINGS PER SHARE

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

|  | For the Three Months Ended June 30, |
|  | 2024 |  |  | 2023 |
Weighted-Average Shares of Common Stock Outstanding |  |  | 33,734,280 |  |  |  | 35,274,753 |
Effect of Dilutive Shares |  |  |  |  |  |
Assumed Exercise of Outstanding Dilutive Options |  |  | 250,430 |  |  |  | 320,261 |
Less Shares Repurchased from Proceeds of Assumed Exercised Options |  |  | (98,558 | ) |  |  | (173,894 | )
Restricted Stock and Restricted Stock Units |  |  | 106,871 |  |  |  | 111,164 |
Weighted-Average Common Stock and Dilutive Securities Outstanding |  |  | 33,993,023 |  |  |  | 35,532,284 |
Shares Excluded Due to Anti-Dilution Effects, Including Contingent Awards |  |  | 56,641 |  |  |  | 58,288 |

(J) 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. These plans have been frozen to new participants and new benefits over the last several years, with the last plan frozen during fiscal 2020. Our defined benefit plans are all fully funded, with plan assets exceeding the benefit obligation at March 31, 2024. Due to the frozen status and current funding of the single-employer pension plans, our expected pension expense for fiscal 2025 is less than $0.2 million.

(K) 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 three months ended June 30, 2024, was approximately 22%, which is consistent with the tax rate for the three months ended June 30, 2023. The effective tax rate was higher than the U.S. Statutory rate of 21% mainly due to state income taxes, partially offset by a benefit recognized related to percentage depletion.

(L) LONG-TERM DEBT

Long-term Debt at June 30, 2024 was as follows:

|  | June 30, |  |  | March 31, |
|  | 2024 |  |  | 2024 |
|  | (dollars in thousands) |
Revolving Credit Facility |  | $ | 180,000 |  |  | $ | 170,000 |
2.500% Senior Unsecured Notes Due 2031 |  |  | 750,000 |  |  |  | 750,000 |
Term Loan |  |  | 180,000 |  |  |  | 182,500 |
Total Debt |  |  | 1,110,000 |  |  |  | 1,102,500 |
Less: Current Portion of Long-term Debt |  |  | (10,000 | ) |  |  | (10,000 | )
Less: Unamortized Discounts and Debt Issuance Costs |  |  | (8,884 | ) |  |  | (9,201 | )
Long-term Debt |  | $ | 1,091,116 |  |  | $ | 1,083,299 |

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 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.

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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 was $180.0 million of outstanding borrowings under the Revolving Credit Facility, plus $10.0 million outstanding letters of credit as of June 30, 2024, leaving us with $560.0 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 June 30, 2024; therefore, the entire $560.0 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

13

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.

(M) SEGMENT INFORMATION

Operating segments are defined as components of an enterprise engaged 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 to build, expand, and repair roads and buildings; and all repair and remodel activities. Demand for our products is generally cyclical and seasonal, depending on economic and geographic conditions. We distribute our products across many United States markets, 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 (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 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.

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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 June 30, |
|  | 2024 |  |  | 2023 |
|  | (dollars in thousands) |
Revenue |  |  |  |  |  |
Cement |  | $ | 339,162 |  |  | $ | 329,032 |
Concrete and Aggregates |  |  | 64,815 |  |  |  | 70,453 |
Gypsum Wallboard |  |  | 217,826 |  |  |  | 219,097 |
Recycled Paperboard |  |  | 54,240 |  |  |  | 45,328 |
|  |  | 676,043 |  |  |  | 663,910 |
Less: Intersegment Revenue |  |  | (38,044 | ) |  |  | (35,266 | )
Less: Joint Venture Revenue |  |  | (29,310 | ) |  |  | (27,123 | )
|  | $ | 608,689 |  |  | $ | 601,521 |

|  | For the Three Months Ended June 30, |
|  | 2024 |  |  | 2023 |
|  | (dollars in thousands) |
Intersegment Revenue |  |  |  |  |  |
Cement |  | $ | 10,280 |  |  | $ | 10,137 |
Concrete and Aggregates |  |  | 3,777 |  |  |  | 3,038 |
Recycled Paperboard |  |  | 23,987 |  |  |  | 22,091 |
|  | $ | 38,044 |  |  | $ | 35,266 |
Cement Sales Volume (M tons) |  |  |  |  |  |
Wholly Owned |  |  | 1,767 |  |  |  | 1,848 |
Joint Venture |  |  | 180 |  |  |  | 165 |
|  |  | 1,947 |  |  |  | 2,013 |

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|  | For the Three Months Ended June 30, |
|  | 2024 |  |  | 2023 |
|  | (dollars in thousands) |
Operating Earnings |  |  |  |  |  |
Cement |  | $ | 89,125 |  |  | $ | 74,061 |
Concrete and Aggregates |  |  | 2,980 |  |  |  | 7,034 |
Gypsum Wallboard |  |  | 93,976 |  |  |  | 90,857 |
Recycled Paperboard |  |  | 8,503 |  |  |  | 7,202 |
Sub-Total |  |  | 194,584 |  |  |  | 179,154 |
Corporate General and Administrative Expense |  |  | (15,649 | ) |  |  | (11,679 | )
Other Non-Operating Income (Loss) |  |  | 2,683 |  |  |  | 213 |
Earnings Before Interest and Income Taxes |  |  | 181,618 |  |  |  | 167,688 |
Interest Expense, net |  |  | (10,684 | ) |  |  | (12,239 | )
Earnings Before Income Taxes |  | $ | 170,934 |  |  | $ | 155,449 |
Cement Operating Earnings |  |  |  |  |  |
Wholly Owned |  | $ | 81,409 |  |  | $ | 70,902 |
Joint Venture |  |  | 7,716 |  |  |  | 3,159 |
|  | $ | 89,125 |  |  | $ | 74,061 |
Capital Expenditures |  |  |  |  |  |
Cement |  | $ | 18,794 |  |  | $ | 18,368 |
Concrete and Aggregates |  |  | 6,589 |  |  |  | 3,220 |
Gypsum Wallboard |  |  | 3,280 |  |  |  | 11,028 |
Recycled Paperboard |  |  | 3,561 |  |  |  | 3,268 |
Corporate and Other |  |  | 904 |  |  |  | 115 |
|  | $ | 33,128 |  |  | $ | 35,999 |
Depreciation, Depletion, and Amortization |  |  |  |  |  |
Cement |  | $ | 22,917 |  |  | $ | 21,679 |
Concrete and Aggregates |  |  | 4,530 |  |  |  | 5,031 |
Gypsum Wallboard |  |  | 6,473 |  |  |  | 5,461 |
Recycled Paperboard |  |  | 3,690 |  |  |  | 3,719 |
Corporate and Other |  |  | 740 |  |  |  | 792 |
|  | $ | 38,350 |  |  | $ | 36,682 |

|  | June 30, |  |  | March 31, |
|  | 2024 |  |  | 2024 |
|  | (dollars in thousands) |
Identifiable Assets |  |  |  |  |  |
Cement |  | $ | 2,121,374 |  |  | $ | 2,042,499 |
Concrete and Aggregates |  |  | 242,607 |  |  |  | 225,485 |
Gypsum Wallboard |  |  | 429,773 |  |  |  | 432,122 |
Recycled Paperboard |  |  | 167,405 |  |  |  | 170,832 |
Other, net |  |  | 81,708 |  |  |  | 76,081 |
|  | $ | 3,042,867 |  |  | $ | 2,947,019 |

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.

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The segment breakdown of Goodwill is as follows:

|  | June 30, |  |  | March 31, |
|  | 2024 |  |  | 2024 |
|  | (dollars in thousands) |
Cement |  | $ | 227,639 |  |  | $ | 227,639 |
Concrete and Aggregates |  |  | 40,774 |  |  |  | 40,774 |
Gypsum Wallboard |  |  | 116,618 |  |  |  | 116,618 |
Recycled Paperboard |  |  | 7,538 |  |  |  | 7,538 |
|  | $ | 392,569 |  |  | $ | 392,569 |

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 June 30, |
|  | 2024 |  |  | 2023 |
|  | (dollars in thousands) |
Revenue |  | $ | 58,620 |  |  | $ | 54,246 |
Gross Margin |  | $ | 16,424 |  |  | $ | 8,538 |
Earnings Before Income Taxes |  | $ | 15,548 |  |  | $ | 6,364 |

|  | June 30, |  |  | March 31, |
|  | 2024 |  |  | 2024 |
|  | (dollars in thousands) |
Current Assets |  | $ | 123,487 |  |  | $ | 111,164 |
Noncurrent Assets |  | $ | 172,875 |  |  | $ | 158,618 |
Current Liabilities |  | $ | 49,102 |  |  | $ | 27,994 |

(N) INTEREST EXPENSE

The following components are included in Interest Expense, net:

|  | For the Three Months Ended June 30, |
|  | 2024 |  |  | 2023 |
|  | (dollars in thousands) |
Interest Income |  | $ | (182 | ) |  | $ | (158 | )
Interest Expense |  |  | 10,391 |  |  |  | 11,923 |
Other Expenses |  |  | 475 |  |  |  | 474 |
Interest Expense, net |  | $ | 10,684 |  |  | $ | 12,239 |

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.

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(O) 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 June 30, 2024, we had contingent liabilities under these outstanding letters of credit of approximately $10.0 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 $30.1 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 past experience, no material claims have been made against these financial instruments.

(P) FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair value of our long-term debt has been estimated based upon our current incremental borrowing rates for similar types of borrowing arrangements. The fair value of our 2.500% Senior Unsecured Notes at June 30, 2024, is as follows:

|  | Fair Value |
|  | (dollars in thousands) |
2.500% Senior Unsecured Notes Due 2031 |  | $ | 634,000 |

The estimated fair value of our long-term debt was based on quoted prices of similar debt instruments with similar terms that are publicly traded (Level 1 input). The carrying values of Cash and Cash Equivalents, Accounts Receivable, Accounts Payable, and Accrued Liabilities approximate their fair values at June 30, 2024, 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 June 30, 2024.

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I TEM 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 months ended June 30, 2024, and 2023, 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).

MARKET CONDITIONS AND OUTLOOK

Our end markets remained steady despite continued restrictive monetary policy from the U.S. Federal Reserve. Although Sales Volume for both Cement and Gypsum Wallboard declined in the first quarter of fiscal 2025, the decline was relatively low, and both pricing and demand remained relatively strong.

Demand Outlook

The macroeconomic environment continues to be constructive for our products. We expect demand for cement to remain steady given increased federal funding from the Infrastructure Investment and Jobs Act for public construction and repair projects; continued high allocations from state budgets for additional infrastructure projects; and growth in heavy industrial projects. The chronic housing shortage driven by more than a decade of underproduction supports solid levels of housing construction activity, and at this time, most consumers are employed and confident they will remain employed. These conditions support the housing market; however, persistent inflation and the impact of interest rates on affordability have moderated housing market strength. Nonetheless, we also believe our geographical footprint across the U.S. heartland and fast-growing Sun Belt region positions us to capitalize on these favorable market dynamics.

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Cost Outlook

We believe we are well-positioned to manage our cost structure and meet our customers’ needs during this 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 costs, primarily solid fuel, decreased slightly in all our businesses, but primarily Cement, during the first quarter of fiscal 2025 compared with fiscal 2024. We anticipate fuel costs will be lower in fiscal 2025 but will remain higher than they have been historically. We are expecting increases in freight and delivery costs in fiscal 2025 compared with fiscal 2024.

The primary raw material used to produce paperboard is OCC. Prices for OCC increased during the three months ended June 30, 2024 as compared to fiscal 2024. Fiber prices are subject to change upon short notice due to several factors, including supply of OCC and demand for OCC from both domestic and international companies. 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, material costs in our Gypsum Wallboard segment are likely to fluctuate until the effects of these price adjustments are realized.

Maintenance costs increased in fiscal 2024, and we expect continued inflation for maintenance in fiscal 2025 as equipment and contractor costs remain high.

RESULTS OF OPERATIONS

THREE MONTHS ENDED June 30, 2024, Compared WITH THREE MONTHS ENDED June 30, 2023

|  | For the Three Months Ended June 30, |  |  |  |
|  | 2024 |  |  | 2023 |  |  | Change |
|  | (dollars in thousands, except per share) |  |  |  |
Revenue |  | $ | 608,689 |  |  | $ | 601,521 |  |  |  | 1 | %
Cost of Goods Sold |  |  | (421,821 | ) |  |  | (425,526 | ) |  |  | (1 | )%
Gross Profit |  |  | 186,868 |  |  |  | 175,995 |  |  |  | 6 | %
Equity in Earnings of Unconsolidated Joint Venture |  |  | 7,716 |  |  |  | 3,159 |  |  |  | 144 | %
Corporate General and Administrative |  |  | (15,649 | ) |  |  | (11,679 | ) |  |  | 34 | %
Other Non-Operating Income |  |  | 2,683 |  |  |  | 213 |  |  |  | 1160 | %
Interest Expense, net |  |  | (10,684 | ) |  |  | (12,239 | ) |  |  | (13 | )%
Earnings Before Income Taxes |  |  | 170,934 |  |  |  | 155,449 |  |  |  | 10 | %
Income Tax Expense |  |  | (37,092 | ) |  |  | (34,600 | ) |  |  | 7 | %
Net Earnings |  | $ | 133,842 |  |  | $ | 120,849 |  |  |  | 11 | %
Diluted Earnings per Share |  | $ | 3.94 |  |  | $ | 3.40 |  |  |  | 16 | %

REVENUE

Revenue increased by $7.2 million, or 1%, to $608.7 million for the three months ended June 30, 2024. Higher gross sales prices positively affected Revenue by $26.8 million, and were partially offset by lower Sales Volume, which adversely affected Revenue by approximately $19.6 million.

COST OF GOODS SOLD

Cost of Goods Sold decreased by $3.7 million, or 1%, to $421.8 million for the three months ended June 30, 2024. The decrease was due to lower Sales Volume of 15.4 million, partially offset by higher operating costs of $11.7 million. Higher operating costs were primarily related to our Concrete and Aggregates and Recycled Paperboard businesses and are discussed further in the segment analysis.

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GROSS PROFIT

Gross Profit increased 6% to $186.7 million during the three months ended June 30, 2024. 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 31%, 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 increased by $4.5 million, or 144%, for the three months ended June 30, 2024. The increase was primarily due to higher Sales Volume and lower operating costs, which positively affected earnings by approximately $0.3 million and $4.5 million, respectively. This was partially offset by lower gross sales prices of $0.3 million. Decreased operating costs were primarily related to lower maintenance and energy costs, which increased operating earnings by $3.5 million and $0.5 million respectively. Lower maintenance costs in the current fiscal quarter were partly due to maintenance costs in the prior year being approximately $2.8 million higher than normal given an extended outage that required additional maintenance spending as well as reduced production.

CORPORATE GENERAL AND ADMINISTRATIVE

Corporate General and Administrative expenses increased by approximately $3.9 million, or 34%, for the three months ended June 30, 2024. The increase was due primarily to higher salary and incentive compensation, insurance, and information technology costs of $1.2 million, $1.0 million, and $1.6 million, respectively.

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 decreased by approximately $1.5 million, or 13%, during the three months ended June 30, 2024. This decrease was primarily due to lower interest on our revolving credit facility, which was related to lower average outstanding borrowings in the first quarter of fiscal 2025 compared with the prior-year period.

EARNINGS BEFORE INCOME TAXES

Earnings Before Income Taxes increased to $170.9 million during the three months ended June 30, 2024, primarily as a result of higher Gross Profit and Equity in Earnings of Unconsolidated Joint Venture, and lower Interest expense, which was partially offset by higher Corporate General and Administrative expense.

INCOME TAX EXPENSE

Income Tax Expense was $37.1 million for the three months ended June 30, 2024, compared with $34.6 million for the three months ended June 30, 2023. The effective tax rate remained consistent at 22% with the prior-year period.

NET EARNINGS

Net Earnings increased 11% to $133.8 million for the three months ended June 30, 2024, as discussed above.

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Three MONTHS ENDED June 30, 2024 vs. three MONTHS ENDED June 30, 2023 BY SEGMENT

The following presents results within our two business sectors for the three months ended June 30, 2024, and 2023. Revenue and operating results are organized by sector and discussed by individual business segments.

Heavy Materials

CEMENT (1)

|  | For the Three Months Ended June 30, |  |  |  |
|  | 2024 |  |  | 2023 |  |  | Percentage Change |
|  | (in thousands, except per ton information) |  |  |  |
Revenue, including Intersegment and Joint Venture |  | $ | 339,162 |  |  | $ | 329,032 |  |  |  | 3 | %
Less Intersegment Revenue |  |  | (10,280 | ) |  |  | (10,137 | ) |  |  | 1 | %
Less Joint Venture Revenue |  |  | (29,310 | ) |  |  | (27,123 | ) |  |  | 8 | %
Revenue |  | $ | 299,572 |  |  | $ | 291,772 |  |  |  | 3 | %
Sales Volume (M Tons) |  |  | 1,947 |  |  |  | 2,013 |  |  |  | (3 | )%
Freight and Delivery Costs billed to Customers |  | $ | (20,372 | ) |  | $ | (17,528 | ) |  |  | 16 | %
Average Net Sales Price, per ton (2) |  | $ | 156.10 |  |  | $ | 147.27 |  |  |  | 6 | %
Operating Margin, per ton |  | $ | 45.78 |  |  | $ | 36.79 |  |  |  | 24 | %
Operating Earnings |  | $ | 89,125 |  |  | $ | 74,061 |  |  |  | 20 | %

(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.

Cement Revenue was $339.2 million, a 3% increase, for the three months ended June 30, 2024. Higher gross sales prices increased Cement Revenue by approximately $20.3 million, and were partially offset by lower Sales Volume of $10.2 million.

Cement Operating Earnings increased by $15.0 million to $89.1 million for the three months ended June 30, 2024. The increase was due to higher gross sales prices of $20.3 million which were partially offset by lower Sales Volume and higher operating costs of $2.9 million and $2.4 million, respectively. The increase in operating costs was primarily due to higher freight, labor, depreciation, and purchased raw materials costs of approximately $3.4 million, $1.1 million, $1.2 million, and $2.6 million, respectively. These were partially offset by lower maintenance and fuel costs of $1.8 million and $0.9 million, and the impact of recording acquired inventories at fair value in the first quarter of fiscal 2024 of $2.8 million. The Operating Margin increased to 26% from 23% as a result of higher gross sales prices, partially offset by the increase in operating expenses.

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CONCRETE AND AGGREGATES

|  | For the Three Months Ended June 30, |  |  |  |
|  | 2024 |  |  | 2023 |  |  | Percentage Change |
|  | (in thousands, except net sales prices) |  |  |  |
Revenue, including Intersegment |  | $ | 64,815 |  |  | $ | 70,453 |  |  |  | (8 | )%
Less Intersegment Revenue |  | $ | (3,777 | ) |  | $ | (3,038 | ) |  |  | 24 | %
Revenue |  | $ | 61,038 |  |  | $ | 67,415 |  |  |  | (9 | )%
Sales Volume |  |  |  |  |  |  |  |  |
M Cubic Yards of Concrete |  |  | 343 |  |  |  | 385 |  |  |  | (11 | )%
M Tons of Aggregate |  |  | 799 |  |  |  | 1,157 |  |  |  | (31 | )%
Average Net Sales Price |  |  |  |  |  |  |  |  |
Concrete - Per Cubic Yard |  | $ | 148.56 |  |  | $ | 141.80 |  |  |  | 5 | %
Aggregates - Per Ton |  | $ | 12.61 |  |  | $ | 11.30 |  |  |  | 12 | %
Operating Earnings |  | $ | 2,980 |  |  | $ | 7,034 |  |  |  | (58 | )%

Concrete and Aggregates Revenue declined 8% to $64.8 million for the three months ended June 30, 2024. The decrease was due to lower Sales Volume, which reduced Revenue by $9.3 million, partially offset by higher gross sales prices of $3.6 million.

Operating Earnings were approximately $3.0 million, a 58% decline. Lower Sales Volume of $2.8 million and higher operating costs of $4.9 million contributed to the decrease, and were partially offset by higher gross sales prices of $3.6 million. The increase in operating costs was primarily due to higher materials, maintenance, and delivery expenses of approximately $2.3 million, $1.3 million, and $1.3 million, respectively.

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Light Materials

GYPSUM WALLBOARD

|  | For the Three Months Ended June 30, |  |  |  |
|  | 2024 |  |  | 2023 |  |  | Percentage Change |
|  | (in thousands, except per MSF information) |  |  |  |
Revenue |  | $ | 217,826 |  |  | $ | 219,097 |  |  |  | (1 | )%
Sales Volume (MMSF) |  |  | 757 |  |  |  | 763 |  |  |  | (1 | )%
Freight and Delivery Costs billed to Customers |  | $ | (36,485 | ) |  | $ | (38,608 | ) |  |  | (5 | )%
Average Net Sales Price, per MSF (1) |  | $ | 239.43 |  |  | $ | 236.66 |  |  |  | 1 | %
Freight, per MSF |  | $ | 48.20 |  |  | $ | 50.60 |  |  |  | (5 | )%
Operating Margin, per MSF |  | $ | 124.14 |  |  | $ | 119.08 |  |  |  | 4 | %
Operating Earnings |  | $ | 93,976 |  |  | $ | 90,857 |  |  |  | 3 | %

(1) Net of freight per MSF.

Gypsum Wallboard Revenue was $217.8 million, a 1% decrease for the three months ended June 30, 2024. Lower Sales Volume reduced Revenue by approximately $1.7 million, partially offset by higher gross sales prices of $0.4 million. Our market share remained relatively consistent during the three months ended June 30, 2024.

Operating Earnings increased 3% to $94.0 million, primarily because of higher gross sales prices of $0.4 million and lower operating costs of $3.4 million. The higher gross sales prices were partially offset by lower Sales Volume of $0.7 million. The lower operating costs were primarily related to freight and energy, which positively affected Operating Earnings by approximately $1.9 million and $1.1 million, respectively. Operating Margin increased to 43% for the three months ended June 30, 2024, primarily because of higher gross sales prices and lower operating costs. 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.

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RECYCLED PAPERBOARD

|  | For the Three Months Ended June 30, |  |  |  |
|  | 2024 |  |  | 2023 |  |  | Percentage Change |
|  | (in thousands, except per ton information) |  |  |  |
Revenue, including Intersegment |  | $ | 54,240 |  |  | $ | 45,328 |  |  |  | 20 | %
Less Intersegment Revenue |  |  | (23,987 | ) |  |  | (22,091 | ) |  |  | 9 | %
Revenue |  | $ | 30,253 |  |  | $ | 23,237 |  |  |  | 30 | %
Sales Volume (M Tons) |  |  | 91 |  |  |  | 83 |  |  |  | 10 | %
Average Net Sales Price, per ton (1) |  | $ | 597.41 |  |  | $ | 536.56 |  |  |  | 11 | %
Operating Margin, per ton |  | $ | 93.44 |  |  | $ | 86.77 |  |  |  | 8 | %
Operating Earnings |  | $ | 8,503 |  |  | $ | 7,202 |  |  |  | 18 | %

(1) Net of freight per ton.

Recycled Paperboard Revenue increased 20% to $54.2 million during the three months ended June 30, 2024. Higher gross sales prices and Sales Volume increased Revenue by $4.9 million and $4.0 million, respectively. Higher gross sales prices were related to the pricing provisions in our long-term sales agreements.

Operating Earnings increased 18% to $8.5 million, primarily because of higher gross sales prices and Sales Volume, which increased Operating Earnings by $4.9 million and $0.6 million, respectively. This was partially offset by higher operating costs, which reduced Operating Earnings by approximately $4.2 million. The increase in operating costs was primarily related to higher input costs, namely fiber,of approximately $6.6 million which were partially offset by lower energy, chemical, and freight costs of $1.0 million, $0.7 million, and $0.5 million, respectively. The Operating Margin remained consistent at 16%, with the increase in operating costs offsetting the higher gross sales prices. Although the Company has certain pricing provisions in its 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.

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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, alternative policies or estimation techniques 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 are material to our financial statements, and either require the most judgment, or the selection or application of alternative accounting policies, 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 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 Three Months Ended June 30, |
|  | 2024 |  |  | 2023 |
|  | (dollars in thousands) |
Net Cash Provided by Operating Activities |  | $ | 132,636 |  |  | $ | 140,487 |
Investing Activities |  |  |  |  |  |
Additions to Property, Plant, and Equipment |  |  | (33,128 | ) |  |  | (35,999 | )
Acquisition Spending |  |  | — |  |  |  | (55,053 | )
Net Cash Used in Investing Activities |  |  | (33,128 | ) |  |  | (91,052 | )
Financing Activities |  |  |  |  |  |
Increase in Credit Facility |  |  | 10,000 |  |  |  | 65,000 |
Repayment of Term Loan |  |  | (2,500 | ) |  |  | (2,500 | )
Dividends Paid to Stockholders |  |  | (8,538 | ) |  |  | (8,995 | )
Purchase and Retirement of Common Stock |  |  | (85,490 | ) |  |  | (74,058 | )
Proceeds from Stock Option Exercises |  |  | 56 |  |  |  | 10,385 |
Shares Redeemed to Settle Employee Taxes on Stock Compensation |  |  | (1,421 | ) |  |  | (1,360 | )
Net Cash Used in Financing Activities |  |  | (87,893 | ) |  |  | (11,528 | )
Net Increase in Cash and Cash Equivalents |  | $ | 11,615 |  |  | $ | 37,907 |

Net Cash Provided by Operating Activities decreased by $7.9 million to $132.6 million during the three months ended June 30, 2024. This decrease was primarily attributable to lower cash flows from changes in Working

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Capital and dividends from our Unconsolidated Joint Venture of $8.9 million and $2.5 million, respectively. This was partially offset by higher Net Earnings, adjusted for approximately $3.7 million of non-cash expenses.

Working Capital increased by $34.1 million to $422.4 million at June 30, 2024, compared with March 31, 2024. The increase was primarily due to higher Cash, Accounts and Notes Receivable, net, and Prepaid and Other Assets of $11.6 million, $75.4 million, and $7.9 million, respectively. This was partially offset by $7.3 million of lower Income Tax Receivable, $21.0 million of higher Accounts Payable, and $35.7 million of higher Income Tax Payable.

The increase in Accounts Receivable at June 30, 2024, was primarily related to higher Revenue during the three months ended June 30, 2024, particularly in the month of June, compared with the three months ended March 31, 2024. As a percentage of quarterly sales generated for the respective quarter, Accounts Receivable was approximately 46% and 33% at June 30, 2024 and March 31, 2024, respectively. 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 June 30, 2024.

Our Inventory balance at June 30, 2024, decreased by approximately $2.3 million from our balance at March 31, 2024. Within Inventory, Recycled Paperboard and Repair Parts inventory declined $4.3 million and $5.3 million, respectively. This was partially offset by increased Raw Materials and Materials-in-Progress, Aggregates and Gypsum Wallboard inventory of approximately $3.6 million, $1.9 million, and $1.7 million, respectively. The relatively flat balance in Raw Materials and Materials-in-Progress 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 decrease in Repair Parts inventory was primarily due to the completion of most of our scheduled outages during the 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 three months ended June 30, 2024, was approximately $33.1 million, compared with $91.1 million during the same period in 2023. The $58.0 million decrease was primarily related to the $55.1 million purchase of the Stockton Terminal in May 2023.

Net Cash Used in Financing Activities was $87.9 million during the three months ended June 30, 2024 compared with $11.5 million during the same period in 2023. The $76.4 million increase was primarily related to lower borrowings and Proceeds from Stock Option Exercises of $55.0 million and $10.3 million, respectively, as well as higher Purchase and Retirement of Common Stock of $11.4 million.

Our debt-to-capitalization ratio and net-debt-to-capitalization ratio were 45.1% and 44.0%, respectively, at June 30, 2024, compared with 45.7% and 44.9%, respectively, at March 31, 2024.

Debt Financing Activities

Below is a summary of the Company’s outstanding debt facilities at June 30, 2024:

| 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.

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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 June 30, 2024 we had $180.0 million outstanding of Revolving Loans under the Revolving Credit Facility and $10.0 million of outstanding letters of credit, leaving us with $560.0 million of available borrowings under the Revolving Credit Facility, net of the outstanding letters of credit. We are contingently liable for performance under $30.1 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 $24.9 million of lease liabilities at June 30, 2024, that have an average remaining life of approximately 9.9 years.

Dividends

Dividends paid were $8.5 million and $9.0 million for the three months ended June 30, 2024, and 2023, 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 three months ended June 30, 2024, our share repurchases were as follows:

Period |  | Total Number of Shares Purchased |  |  | Average Price Paid Per Share |  |  | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |  |  | Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs |
April 1 through April 30, 2024 |  |  | 129,067 |  |  | $ | 256.53 |  |  |  | 129,067 |  |  |  |
May 1 through May 31, 2024 |  |  | 118,618 |  |  |  | 253.81 |  |  |  | 118,618 |  |  |  |
June 1 through June 30, 2024 |  |  | 100,048 |  |  |  | 222.63 |  |  |  | 100,048 |  |  |  |
Quarter 1 Totals |  |  | 347,733 |  |  | $ | 245.85 |  |  |  | 347,733 |  |  |  |
Year-to-Date Totals |  |  | 347,733 |  |  | $ | 245.85 |  |  |  | 347,733 |  |  |  | 5,535,937 |

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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 June 30, 2024, we have repurchased approximately 50.4 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 three months ended June 30, 2024, the Company withheld from employees 5,493 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 Three Months Ended June 30, |
|  | 2024 |  |  | 2023 |
|  | (dollars in thousands) |
Land and Quarries |  | $ | 2,344 |  |  | $ | 548 |
Plants |  |  | 13,591 |  |  |  | 16,272 |
Buildings, Machinery, and Equipment |  |  | 17,193 |  |  |  | 19,179 |
Total Capital Expenditures |  | $ | 33,128 |  |  | $ | 35,999 |

Capital expenditures for fiscal 2025 are expected to range from $310.0 million to $340.0 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.

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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; fluctuations in public infrastructure expenditures; adverse weather conditions and their effects on infrastructure and other construction projects; 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; the availability and fluctuations in the cost of raw materials; changes in the costs of energy, including, without limitation, natural gas, coal and oil (including diesel), and the nature of our obligations to counterparties under energy supply contracts, such as those related to market conditions (for example, 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; consolidation of our customers; 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 or the nature or level of activity in any one or more of the markets or industries in which the Company or its customers are engaged; 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; 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; the availability of acquisition or other growth opportunities that meet our financial return standards and fit our strategic focus; 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 including inflation and recessionary conditions; and changes in interest rates and the resulting effects on the Company and demand for our products. 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, 2024. 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.

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Ite m 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 June 30, 2024, under which borrowings bear interest at a variable rate. A hypothetical 100 basis point increase in interest rates on the $180.0 million of borrowings under the Revolving Credit Facility and the $180.0 million of borrowings under the Term Loan at June 30, 2024, would increase interest expense by approximately $3.6 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.

Ite m 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.

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P ART II. OTHER INFORMATION

Item 1. Legal Proceedings

In February 2023, the EPA published a final rule disapproving the State Implementation Plans (SIPs) for twenty-one states, which addressed each state’s obligations to eliminate significant contributions to nonattainment, or interference with maintenance, of the 2015 ozone NAAQS in other states (interstate transport requirements). States subject to a SIP Disapproval under this final action relevant to our cement operations include Illinois, Kentucky, Missouri, Nevada, Ohio, Oklahoma, and Texas.

In March 2023, the EPA finalized a proposed Federal Implementation Plan (FIP), also known as the "Good Neighbor Plan," which addresses interstate transport obligations for the twenty-one states with disapproved SIPs as well as two additional states that had not submitted any revisions for their SIPs. In January 2024, the EPA added five more states to the FIP. The FIP establishes nitrogen oxide (NOx) emissions limitations beginning in 2026 during the ozone season for kilns used in cement and cement product manufacturing in 20 states, including all the above-listed states. The FIP went into effect on August 4, 2023, but has not been implemented in 12 of the states with disapproved SIPs due to legal challenges.

States subject to the FIP relevant to our cement operations include Illinois, Kentucky, Missouri, Nevada, Ohio, Oklahoma, and Texas. Our facilities most directly affected by the disapproval by the EPA of the SIPs and the FIP finalized in March 2023 are our cement plants located in Nevada, Oklahoma and Texas. Various legal challenges have been filed against the EPA’s disapproval of the SIPs for such states, including Nevada, Oklahoma and Texas, which stayed the implementation of the EPA’s FIP in those states. We also filed our own challenges to the disapproval of the SIPs in these three states. In each of these actions, the petitioners have challenged the failure on the part of the EPA to appropriately defer to the applicable state’s analysis and determinations regarding interstate transport obligations.

An adverse outcome in these actions could require us to incur significant capital expenditures related to the installation of additional controls and additional operating costs at the affected facilities or, if the installation of controls proves impracticable, to modify or curtail our operations at such facilities, which could have a material adverse effect on their profitability. Multiple parties have filed lawsuits challenging the EPA’s disapproval of the states’ plans as well as the Good Neighbor Plan, but no court has issued a final ruling on the validity of the disapprovals or the FIP.

Although we are unable to predict the likely outcome of the multiple legal challenges to both the state disapprovals and the Good Neighbor Plan at this time, on July 12, 2024, we entered into a settlement agreement with the EPA related to our cement operations in Nevada, which agreement provides (i) for the installation of additional emissions controls referred to as “low NOx burners” and (ii) that we perform a test-and-set process to determine an appropriate NOx emission limit by March 27, 2026. Assuming such emission limit is finalized and approved by EPA, our Nevada cement operations would no longer be subject to the emissions limit in the Good Neighbor Plan. We estimate the cost of installing the low NOx burners to be approximately $2.5 million.

In addition to the Good Neighbor Plan legal challenges described above, 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 (O) in the Unaudited Consolidated Financial Statements.

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I tem 1A. Risk Factors

For information regarding factors that could affect 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, 2024, filed with the Securities and Exchange Commission on May 22, 2024.

Item 2. Unregis tered 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. Min e 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 quarter ended June 30, 2024.

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Item 6. Exhibits

10.1* |  | Form of Management Restricted Stock Unit Agreement (Time). (1)
10.2* |  | Form of Management Restricted Stock Unit Agreement (Performance). (1)
10.3* |  | American Gypsum Company Salaried Incentive Compensation Program for Fiscal Year 2025. (1)
10.4* |  | Cement Companies Salaried Incentive Compensation Program for Fiscal Year 2025. (1)
10.5* |  | Put Option Agreement by and among Eagle Materials Inc., TLCC GP LLC, TLCC LP LLC, Heidelberg Materials US Inc., and HM Southeast Cement LLC, dated May 1, 2024.
10.6 |  | Eagle Materials Inc. Salaried Incentive Compensation Program for Fiscal 2025 (filed as Exhibit 10.1 to the Current Report on Form 8-K filed with the Commission on May 22, 2024, and incorporated herein by reference). (1)
10.7 |  | Eagle Materials Inc. Special Situation Program for Fiscal 2025 (filed as Exhibit 10.2 to the Current Report on Form 8-K filed with the Commission on May 22, 2024, and incorporated herein by reference). (1)
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 with Embedded Linkbase Documents.
104.1* |  | Cover Page Interactive Data File – (formatted as Inline XBRL and Contained in Exhibit 101).

* Filed herewith.

(1) Management contract, compensatory plan, or arrangement.

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SIGNAT URES

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
July 30, 2024 |  | /s/ MICHAEL R. HAACK
|  | Michael R. Haack President and Chief Executive Officer (principal executive officer)
July 30, 2024 |  | /s/ D. CRAIG KESLER
|  | D. Craig Kesler Executive Vice President – Finance and Administration and Chief Financial Officer (principal financial officer)

July 30, 2024 |  | /s/ WILLIAM R. DEVLIN
|  | William R. Devlin Senior Vice President – Controller and Chief Accounting Officer (principal accounting officer)

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