Eagle Materials Announces Strategic Portfolio Review

Eagle Materials Inc. (NYSE: EXP) (“Eagle” or the “Company”) today announced that its Board of Directors and management team, with the support of independent financial and legal advisors, has commenced a strategic review of its portfolio of businesses: heavy materials, light materials, and oil and gas proppants.

Strategic Portfolio Review

The Company regularly evaluates its strategic, operational, financial and capital allocation policies for opportunities to enhance shareholder value. The Eagle Board has decided to conduct this further review with its advisors following consultation and input from the Company’s largest shareholders. As part of the portfolio review, the Company will carefully consider the full range of options focused on enhancing the value creation potential of Eagle, including separating the businesses and evaluating potential transactions, among other strategic and financial alternatives. The Company may also, as appropriate, engage with third parties that could be participants in certain potential transactions.

There can be no assurance that the strategic portfolio review will result in any particular action or that a transaction will be consummated, nor can there be any assurance regarding the timing of any action or transaction. The Company does not intend to publicly discuss or disclose developments with respect to this process unless and until the Board has approved a definitive action, or the process is otherwise concluded.

Goldman Sachs & Co. LLC is serving as financial advisor to Eagle, and Wachtell, Lipton, Rosen & Katz is serving as legal counsel in this review.

Preliminary Fourth Quarter Results and Share Repurchases

Based on preliminary financial results, Eagle expects to report financial results in the following ranges for the fiscal fourth quarter ended March 31, 2019:

				Quarter Ended March 31, 2019
Revenue				$283 - $285 million
GAAP Losses before Income Taxes				$(173) - $(170) million
Adjusted Earnings before Income Taxes (1)				$47 - $50 million
GAAP Net Loss per Share (Diluted)				$(2.84) - $(2.80)
Adjusted Earnings per Share (Diluted) (1)				$0.85 - $0.89

(1)			Adjusted Earnings before Income Taxes and Adjusted Earnings per Share (Diluted) are non-GAAP financial measures and exclude the impact of a $220 million (pre-tax) non-cash impairment charge related to the Company’s oil and gas proppants business due to a decline in demand for northern white sand, in part due to some of our customers utilizing local in-basin sand with lower logistics cost. A reconciliation of the Company’s non-GAAP financial measures to the corresponding GAAP measure is attached hereto.

The estimated ranges of fourth quarter financial performance represent the most current information available to management and are not meant to be a comprehensive statement of our financial results for the quarter ended March 31, 2019. These amounts reported herein represent the Company’s unaudited, preliminary estimates and are thus subject to change.