EXP 10-K & 10-Q changes, risk factors and insider trading

The strength of the construction industry is also substantially affected by macroeconomic and other factors beyond our control. For example, the recentprevious rises in inflation and interest rates have negatively affected the construction industry by, among other things, increasing material costs and decreasing demand for some construction products. While we cannot predict the extent to which inflation or rising interest rates will continue or increase,fluctuate, any further increases could result in a reduction in residential or commercial activity, which could have a material adverse effect on our business, financial condition, and results of operations. In addition, demand for our products sold to the residential and commercial construction industries could decline if our customers cannot obtain funding for construction projects or if the costs of obtaining such funding increase, or due to other market factors such as labor shortages and supply chain issues.

Many of the products sold by us are commodities, and competition among manufacturers is based largely on price. Prices are often subject to material changes in response to relatively minor fluctuations in supply and demand, general economic conditions, and other market conditions beyond our control. Increases in the production capacity of industry participants for products such as gypsum wallboard or cement (including in connection with the increased use of Portland Limestone Cement) or increases in cement imports tend to create an oversupply of such products leading to an imbalance between supply and demand, which can have a negative impact on product prices. Currently, there continues to be significant excess nameplate capacity in the gypsum wallboard industry in the United States. There can be no assurance that prices for products sold by us will not decline in the future or that such declines will not have a material adverse effect on our business, financial condition, and results of operations.

Our operations and those of our customers are subject to and affected by federal, state, and local laws and regulations with respect to a wide range of matters, including land usage, street and highway usage, noise level, as well as environmental, health and safety matters. In many instances, various certificates, permits, or licenses are required in order for us or our customers to conduct business or carry out construction and related operations. Although we believe we are in compliance in all material respects with applicable regulatory requirements, there can be no assurance that we will not incur material costs or liabilities in seeking to comply with existing or new laws or regulations, or that demand for our products will not be adversely affected by regulatory issues affecting our customers.

CertainOur of our waste-burning cement kilnsoperations are subject to thecertain CISWIfederal Rule,environmental whichregulations, isincluding those discussed above in “Environmental Matters” in the Cement section.and InGypsum addition,Wallboard somesections. These regulations include the CISWI Rule which applies to one of theour facilities' kilns; certain permitting and control requirements for operations in states in which we operatethat contain at least one “area” that was designated as being in nonattainment for the 2015 ozone NAAQS,NAAQS; whichinterstate maytransport resultrequirements infor the imposition2015 ofozone certainNAAQS under the Good Neighbor Plan; and potential additional permitting and control requirements.requirements EPAto alsoaddress disapprovedmore certainstringent statestandards implementationunder plansthe (SIPs)revised forPM2.5 statesNAAQS. inRequirements whichunder wethe operateGood addressingNeighbor interstatePlan transportare obligationscurrently stayed, and promulgated a replacement federal implementation plan (FIP) for these states, which imposes stricter standards and more burdensome obligations. However, the FIP is currently subject to a nationwide stay, and EPA has indicated its intent to reconsider requirements in both the FIP.Good Neighbor plan and underlying SIP disapprovals for certain states in which we operate. Nevertheless, we may ultimately be required to meet new control requirements in our facilities in these statesstates, requiringwhich may require significant capital expenditures for compliance and may cause us to incur additional operating costs or need to modify or curtail the nature and scope of our operations at such facilities to meet our regulatory obligations. For instance, we entered into a settlement agreement withThe EPA onhas July 11, 2024, in accordance with which we are proceeding with the installation of additional NOx controls for our Nevada facility. Further, in February 2024, the EPA announced its final rule lowering the primary (health-based) standard for fine particle matter, which may have a similar impact on us. While the Trump Administration hasalso indicated its intent to reconsider thisrequirements rule,in the revised PM2.5 NAAQS; however, the timing for any reconsideration action is uncertain.uncertain, and we may ultimately be similarly impacted by these requirements. For further information regarding these matters, please refer to Item 1. Business - Industry Segment Information. We have incurred, and in the future expect to incur, significant capital and operating expenditures to comply with such laws and regulations. The cost of complying with such laws and regulations could significantly affect our businesses.

Manufacturing and construction sites are inherently dangerous workplaces. Our manufacturing sites often put our employees and others in proximity to kilns and other large pieces of mechanized equipment, moving vehicles, chemical, and manufacturing processes and exposesexpose them to other potential safety hazards. We endeavor to maintain a safe work environment at all our facilities and take steps to preserve the health and safety of our workforce. There can be no assurance, however, that these measures will be successful in preventing injuries or violations of health and safety laws and regulations. Any failure to maintain safe work sites or violations of applicable health and safety standards and laws could have a material adverse effect on our business.

The effects of climate change and legislation and regulation concerning GHGs could have a material adverse effect on our financial condition, results of operations, and liquidity. A number of governmental bodies have finalized, proposed, or are contemplating legislative and regulatory changes in response to the potential effects of climate change. Such legislation or regulation has and potentially could include provisions for a “cap and trade” system of allowances and credits or a carbon tax, among other provisions. Any future laws or regulations restricting GHG emissions would likely haveaffect aour negativecement plants and wallboard plants and negatively impact on our business orand results of operations, whether through the imposition of raw material or production limitations, fuel-use, or carbon taxes, emission limitations or reductions, or otherwise. In addition, we may not be able to recover any increased operating costs, taxes or capital investments relating to GHG emission limitations at those plants from our customers while still maintaining pricing that is competitive in the relevant markets. There is also a potential for climate change legislation and regulation to adversely affect the cost of purchased energy and electricity.

The effects of future climate change legislation and regulation concerning GHGs are highly uncertain and difficult to estimate. However, because a chemical reaction inherent to the manufacture of portland cement releases carbon dioxide, a GHG, cement kiln operations may be disproportionately affected by future regulation of GHGs. Our cement plants, like those of other cement operators, require combustion of significant amounts of fuel to generate high kiln temperatures and create carbon dioxide as a product of the calcination process, which is an unavoidable step in making cement clinker. Accordingly, we continue to closely monitor GHG regulations and legislation for potential impact on our Cement business. There is also a potential for climate change legislation and regulation to adversely affect the cost of purchased energy and electricity.

Other potential effects of climateClimate change includemay impact our operations, including through physical effects such as disruption in production and product distribution as a result of major storm events and shifts in regional weather patterns and intensities. Production and shipment levels for our businesses correlate with general construction activity, most of which occurs outdoors and, as a result, is affected by erratic weather patterns, seasonal changes, and other unusual or unexpected weather-related conditions, which can significantly affect our business, financial condition and results of operations.

We may communicate certain initiatives and goals regarding GHGs and related matters in our SEC filings or in other public disclosures. On March 6, 2024, the SEC adopted new rules regarding climate-related disclosures. These rules were challenged in numerous proceedings that have been consolidated in the Eighth Circuit. In response, the SEC delayed the effective date of these rules indefinitely pending judicial review. However, in March 2025, the SEC informed the court that it was withdrawing its defense of the disclosure rules. If disclosure requirements are revisited in the future, they would require public companies to make a wide range of climate-related disclosures. Our initiatives and goals regarding GHGs and potential related disclosure requirements, together with the associated controls and procedures that we will need to implement, may be difficult and expensive and a source of future claims against us. Further, to the extent we elect to make statements about our GHG-related initiatives and goals, and progress towards these goals, these statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future. If our GHG-related data, processes and reporting are inaccurate or incomplete, or if we fail to achieve progress with respect to these goals or initiatives on a timely basis or at all, we could be subject to liability for inaccurate, incomplete, or misleading statements, and our operations and financial performance could be adversely affected.

Regulatory, stakeholder, and societal environmental, social, governance, and other sustainability matters and our response to these matters could negatively affect our business.

We are subject to governmental, stakeholder, and societal attention regarding climate change, air emissions, waste management, water management, community engagement, human rights, labor conditions, sustainability and efficiency, health and safety, and information disclosure. Such attention may result in our business facing adverse reputational risks, may alter the environment in which we do business, may increase our ongoing costs of operations, compliance, assessment, and reporting and may adversely affect our business, financial condition, results of operations, and liquidity. We communicate certain initiatives and goals regarding environmental, social, governance, and other sustainability matters in our SEC filings and in other public disclosures. Statements about these initiatives and goals, and progress against these goals, may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change, and we may revise such initiatives and goals in the future. Non-compliance with, or a failure to address, the regulatory, stakeholder, and societal expectations regarding these matters (and accompanying emerging regulation and policy requirements (and related interpretations)) may result in potential cost increases, fines, penalties, production restrictions, brand or reputational damage, loss of customers, failure to retain and attract talent, and investor activism.

The United States government has made and may continue to make changes in trade policy. These changes include renegotiating and terminating certain existing bilateral or multi-lateral trade agreements, and initiating substantial new or increased tariffs on foreign imports into the United States from a variety of countries and regions. These changes in trade policy have historically resulted in, (and mayany continuecountermeasures toadopted resultin in,response one or moreby foreign governments) adopting countermeasures thatcould impact demand for our products, our costs, our customers, our suppliers, our ability to source materials and equipment economically and the U.S. economy, which in turn could have a material adverse effect on our business, financial condition, liquidity, and results of operations.

We maintain insurance coverage in amounts and against insurable risks that we believe are consistent with industry practice, but this insurance may not be adequate to cover all losses or liabilities we may incur in our operations. Our insurance policies are subject to a number orof exclusions and varying levels of deductibles and coverage limits. In general, liabilities subject to insurance are difficult to estimate due to unknown factors, including the severity of an injury, the determination of our liability in proportion to other parties, the number of incidents not reported, and the effectiveness of our safety programs. If we were to experience insurance claims or costs above our estimates, our financial condition, results of operations and liquidity could be materially and adversely affected.

Our operations rely on information technology systems and the secure processing, storage, and transmission of confidential, sensitive, proprietary, and other types of information relating to our business operations. We also rely on confidential and sensitive information about our customers and employees, which is maintained both in our computer systems and networks, and in the computer systems and networks of our third-party vendors. Any significant breakdown, invasion, destruction, outage, disruption or interruption of our systems could negatively affect operations. Cyber threats are rapidly evolving as data thieves and hackers have become increasingly sophisticatedsophisticated, including an increasing use of artificial intelligence, and carry out direct large-scale, complex automated attacks against a company or through vendor software supply chain compromises. We are not able to anticipate or prevent all such breakdowns, invasions, destructions, outages, disruptions, interruptions, and attacks and could be held liable for any resulting material security breach or data loss. Additionally, it is not always possible to foresee or prevent internal issues, such as human error, or malicious acts or misconduct by employees or third-party vendors. There are also significant risks related to the use of remote networking services and technologies that enable remote work.

sell, transfer, lease, or otherwise dispose of all or substantially all of the assets of the Company and its consolidated subsidiaries;

Our business is significantly affected by the movement of interest rates. As a result, in recent periods we have experienced higher interest expense related to borrowings under our borrowing facilities. The recent rise in inflationInflation has caused our cost of capital to increase, and the purchasing power of our cash resources to decline. Current or future efforts by the government to stimulate the economy may increase the risk of significant inflation, which could have a direct and indirect adverse impact on our business and results of operations. Interest rates also have a direct impact on the level of residential, commercial, and infrastructure construction activity by affecting the cost of borrowed funds to builders. Rising interest rates or the continuation of high levels of interest rates could result in decreased demand for our products, which could have a material adverse effect on our business and results of operations.

Our success depends to a significant degree upon the continued services of, and on our ability to attract and retain, our key personnel and executive officers, including qualified management, operations, technical, marketing and sales, and support personnel. Competition for such personnel is intense, and we may not be successful in attracting or retaining such qualified personnel, which could negatively affect our businesses. In addition, because we rely on our senior management team to set and implement business strategy, the unanticipated departure of any key member could have an adverse effect on our business. Our future success depends, in part, on our ability to identify and develop or recruit talent to succeed our senior management and other key positions throughout the organization. If we fail to identify and develop or recruit successors, we are at risk of being harmed by the departures of these key employees. Effective succession planning is also important to our long-term success. Failure to manage effective transfer of knowledge and smooth transitions involving key employees could hinder our strategic planning and execution.

Approximately half of our hourly employees are covered by collective bargaining agreements. Labor is a meaningful component in our ability to operate our business and can have a significant impact on the cost of operating our business. Labor shortages could restrict our ability to operate our business and increase costs to operate our business. Additionally, disputes with trade unions or the inability to renew our labor agreements may lead to work stoppages or strikes that could disrupt our business operations and lead to higher costs and/or reduced revenue and operating earnings. Labor issues affecting our suppliers, service providers, customers and other third parties may similarly have a material adverse effect on our business operations.

the diversion of management’s attention from our existing businesses to integratethe integration of the operations and personnel of the acquired business or joint venture;

From time to time, we may make significant investments to increase the capacity and efficiency of certain of our facilities. However, there is no assurance that such investments will result in increased capacity and efficiency at our facilities at the expected levels, within the expected budget and timeline, or at all. In addition, newly commissioned facilities and equipment are also subject to unforeseen breakdowns or failures related to mistakes in engineering and equipment selection, poor workmanship during fabrication and/or installation, accidents during the construction and/or commissioning phases, mistakes during initial operation, and other related issues that can cause significant delays in project implementation and facility start up. If our investments do not achieve the expected increased capacity or efficiency at the levels or timeline that is expected, or at all, or are otherwise impacted by budget overruns, or mistakes or defects in materials or workmanship, we could incur additional costs or expenses, which may harm our business, prospects, financial condition, results of operations, and cash flows.

We are a leading U.S. manufacturer of heavy construction products and light building materials. Our primary products, portland cement and gypsum wallboard, are essential for building, expandingexpanding, and repairing roads, highways, and residential, commercial, and industrial structures across America. Headquartered in Dallas, Texas, Eagle manufactures and sells its products through a network of more than 70 facilities spanning 21 states. Demand for our products is generally cyclical and seasonal, depending on economic and geographic conditions. 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.

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).

On August 9, 2024, we finalized the Northern Kentucky Acquisition.Acquisition Theat a purchase price of the Northern Kentucky Acquisition was approximately $24.9 million. The Northern Kentucky Acquisition is included in our Heavy Materials sector, and its results of operations are reported in the Concrete and Aggregates business segment frombeginning on August 9, 2024 through March 31, 2025.2024.

On January 7, 2025, we completed the Western Pennsylvania Acquisition.Acquisition Theat a purchase price of the Western Pennsylvania Acquisition was approximately $150.0 million, subject to customary post-closing adjustments. The Western Pennsylvania Acquisition is included in our Heavy Materials sector, and its results of operations are reported in the Concrete and Aggregates business segment beginning in the fourth quarter of fiscal 2025.

Our fiscal 20252026 results were generally strong, with record Revenue of $2.3 billion, Net Earnings of $463.4$423.8 million, and Diluted Earnings per Share of $13.77$13.16 per share. Our end markets remained resilient despite adversegeopolitical, weather conditions, primarily in the Midwestfiscal, and Greattrade-policy Plains markets,disruptions and widespread uncertainty around future U.S. economic conditions. Year over yearYear-over-year sales volume increased in our Heavy Materials Sector and declined in our Light Materials Sector increased, and declined in our Heavy Materials Sector.

The macroeconomic environment continues to be constructive for our products. We expect demand for cement to remain steady in the near term givensupported by bipartisan federal, statestate, and local support for public infrastructure projects and continued spending on heavy manufacturing and certain elements of the private-nonresidential construction.construction Tocategory. date,A onlysignificant approximately 30%amount of federal funding from the trillion-dollar Infrastructure Investment and Jobs Act (IIJA) hasremains beento spent.be We anticipate a pick-up in demand as the remaining IIJA funds get spent on public constructionspent, and repairstate projects.Department of Transportation (DOT) budgets remain strong.

We believe we are well-positioned to manage our cost structure and meet our customers’ needs. Our substantialmajor costs include raw materialmaterials, reservesenergy, forfreight, our Cement, Aggregates,labor, and Gypsum Wallboard businesses, and their proximity to our respective manufacturing facilities, support our low-cost producer position across all our business segments.maintenance.

Paper is a significant cost component in our Recycled Paperboard and Gypsum Wallboard business.businesses. The primary raw material used to produce paperboard is old corrugated cardboardcontainers (OCC). RecycledRecently, OCC prices have been relatively flat; however, recycled fiber prices are subject to change uponon 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 the cost of raw materials, such as recycled fiber,fiber and energy, including natural gas,gas and electricity. However, because these price adjustments are not realized until future quarters, adjustments to material costs in our Gypsum Wallboard segment arecould likelybe to fluctuatedelayed until the effects of these price adjustments are realized.

MaintenanceWhile maintenance costs were updown 13%2% in fiscal 2025 and2026, we expect continuedlow single digit inflation for maintenance as equipment and contractor costs remainare high.expected to increase.

Revenue in fiscal 20252026 wasincreased up slightly2% to $2,260.5$2,308.7 million. The Aggregates Acquisitions contributed $11.6$30.6 million of Revenue during fiscal 2025.2026. Excluding Revenue from the Aggregates Acquisitions, Revenue decreasedincreased $10.4$17.6 million. This decreaseincrease was due to approximately $73.9$41.5 million of lowerhigher Sales Volume, primarily in Cement and Concrete and Aggregates,Cement, partially offset by $63.5$23.9 million of higherlower average gross sales pricesprices, acrossprimarily allin segments.our Gypsum Wallboard segment. See Fiscal Year 20252026 vs Fiscal Year 20242025 Results by Segment section for more information.

Cost of Goods Sold increased by $13.4$68.7 million, or 1%,4%, to $1,587.4$1,656.1 million in fiscal 2025.2026. The Aggregates Acquisitions contributed $13.9$24.3 million of Cost of Goods Sold during fiscal 2025.2026. Excluding the Northern Kentucky and Western Pennsylvania Acquisitions, Cost of Goods Sold decreasedincreased $0.5$44.4 million. The slight decreaseincrease in Cost of Goods Sold was due to higher Sales Volume of $39.6 million and higher operating costs of $55.6 million, partially offset by lower Sales Volume of $56.1$4.8 million. Operating costs increased primarily in allCement and Gypsum Wallboard and were offset by our businesses,Recycled exceptPaperboard Gypsumand Wallboard,Concrete and Aggregates segments as discussed in the Fiscal Year 20252026 vs Fiscal Year 20242025 Results by Segment section.

Gross Profit decreased by 2%3% to $673.1$652.5 million in fiscal 20252026 primarily duebecause toof lower Salesgross Volumesales prices and higher operating costs, partially offset by an increase in grossSales sales prices. OurVolume. Gross Profit margin declined to 28.3% in fiscal 2026, compared with 29.8% in fiscal 2025, compared with 30.3% in fiscal 2024.2025.

Equity in Earnings of Unconsolidated Joint Venture decreased by $5.2$6.4 million, or 16%.24%. The decline was due to lower gross sales prices of $1.8$8.2 million and higher operating costs of $3.4$2.1 million, which were partially offset by higher Sales Volumes of $3.9 million. The higher operating costs were due primarily to increased maintenanceraw materials and fixed costs,freight, which reduced operating earnings by approximately $3.0$6.1 million and $3.1$2.3 million, respectively. ThisThe wasincreased raw materials and freight costs were partially offset by lower$5.1 freight costsmillion of $1.3 million. The increase inlower maintenance and fixed costs was primarily due to the annual maintenance outage being moved from April 2025 to March 2025, and the start up of the new cement slag facility this past winter. The combined effect of the timing change of the annual outage and the commissioning costs of the new slag facility was approximately $4.0 million.costs.

Corporate General and Administrative expenses increased by approximately $14.1$15.3 million, or 24%,21%, to $73.9$89.2 million in fiscal 2025.2026. The increase was due primarily to approximately $5.1$7.8 million of higher salarysalaries and incentive compensation, $3.2$4.8 million of higher information technology costs for upgrades, and $5.3$2.4 million of increasedhigher legalprofessional costs,services including those associated with business development and transaction-related activities.fees.

Other Nonoperating Income was $5.1 million in fiscal 2026 compared with $6.4 million in fiscal 2025 compared with $3.1 million in fiscal 2024.2025. Other Nonoperating Income consists of a variety of items that are not related to segment operations, including lease and rental income, investment income, asset sales, and other miscellaneous income and cost items, such as large nonroutinenon-routine sales of excess raw materials or energy.

Earnings Before Income Taxes decreased tofrom $591.5 million during fiscal 2025,2025 to $542.0 million during fiscal 2026, primarily due to lower Gross Profit and Equity in Earnings of Joint Venture, as well as higher Corporate General and Administrative expenses,expenses which were partially offset by lowerand Interest Expense and increased Other Income, Net.Expense.

Net Earnings decreased 3%9% in fiscal 20252026 to $463.4$423.8 million. Diluted Earnings per Share in fiscal 20252026 was updown 1%4% to $13.77$13.16 compared with $13.61$13.77 for fiscal 2024.2025. The improvementdecrease in dilutedDiluted earningsEarnings per share despitewas primarily due to lower Net EarningsEarnings, iswhich awas resultpartially ofoffset by lower weighted-average shares outstanding due to our share buyback program.

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

Net of freight, including the Joint Venture.

Cement Revenue was $1,201.4$1,299.4 million forin fiscal 2025,2026, aan 2%8% decreaseincrease over fiscal 2024.2025. The decreaseincrease was primarily due to lowerhigher Sales Volume of $60.0$93.5 million,million partially offset byand higher gross sales prices of $35.4$4.5 million.

Cement Operating Earnings decreasedincreased 6%3% to $319.5$328.3 million forin fiscal 2025.2026. The decreaseincrease was due to approximately $17.5$26.1 million of lowerhigher Sales Volume and $36.8 million of increased operating expenses, partially offset by $35.4$4.5 million of higher gross sales prices.prices, partially offset by $21.7 million of increased operating expenses. The higher operating expenses consisted of $24.4 million of increased maintenance, $3.2 million of higher freight costs, a $5.4$15.3 million increase in purchased raw materials costs, and $7.6$16.2 million related to increased fixed costs, includingprimarily labor,labor resultingand fromdepreciation, lowerdepletion, production.and amortization. These higher costs were partially offset by a reduction in energymaintenance costs of $10.0$7.6 million and the impactenergy of recording$6.1 in the prior year $2.8 million of acquired inventories at fair value.million. Cement Operating Margin decreased to 27%,25%, primarily duebecause toof increased operating expenses, partially offset by higher gross sales prices.

Concrete and Aggregates Revenue decreasedincreased 1%19% to $251.6$299.5 million forin fiscal 2025.2026. Excluding the Aggregates Acquisitions, Revenue decreasedincreased 5%12% to $240.0$268.9 million. The decreaseincrease in Revenue was primarily relateddue to $23.8higher million of lower Sales Volume, which was partially offset by higherConcrete gross sales prices of $10.8$5.9 million.million and higher Aggregates Sales Volume of $13.3 million, which were partially offset by lower Aggregates gross sales prices and lower Concrete Sales Volume, which reduced revenue by $3.7 million and $0.4 million, respectively.

Operating LossEarnings wasimproved approximatelyto $8.8$12.9 million.million in fiscal 2026. Excluding the Aggregates Acquisitions, Operating LossEarnings wasincreased $6.5to million.$10.1 million for fiscal 2026. The declineincrease in Operating Earnings was due to $4.2$2.2 million and $2.1 million of lower Sales Volume and $25.5 million of higher operating expenses, partially offset by higher gross sales prices and Sales Volume, respectively, as well as lower operating expenses of $10.8$11.2 million. The increase inlower operating expenses waswere primarily due to approximately $5.1 million of higherlower cost of materials, $6.8maintenance, milliondelivery, and fixed costs of increased$1.3 maintenancemillion, costs,$3.8 million, $2.4 million, and $5.2$4.5 millionmillion, of higher direct costs, which includes labor and delivery.respectively.

Gypsum Wallboard Revenue increaseddecreased 1%10% to $846.5$764.5 million in fiscal 2025.2026. The increasedecrease was due to higherlower gross sales prices and Sales Volume, which increaseddecreased Revenue by $6.1$22.4 million and $0.9$59.6 million, respectively. Our market share remained relatively flat in fiscal 20252026 compared with fiscal 2024.2025.

Operating Earnings increaseddecreased 5%18% to $350.8$286.8 million in fiscal 2025.2026. The increasedecrease was primarily related to higherlower gross sales prices andof $22.4 million, lower Sales Volume of approximately$24.7 $6.1 millionmillion, and $0.4 million, respectively, as well as lowerhigher operating expenses of $9.8$16.8 million. The decreaseincrease in operating costs was due primarily to $3.6$5.3 million of lower freight costs, a $3.5$0.7 million decreaseof inenergy costs, $2.4 million of maintenance costs, and $3.6$5.2 million of lower energy costs, all of which were partially offset by an increase of $2.8 million in purchased raw materials. During fiscal 2025,2026, Gypsum Wallboard Operating Margin increaseddecreased to 41%.38%, Fixeddue coststo arelower notgross asales significantprice partand of the overall cost of wallboard; therefore, changes in volume have a relatively minor impact on ourincreased operating cost per unit.expenses.

Recycled Paperboard Revenue, including intersegmentIntersegment Revenue, increaseddecreased 15%6% to $211.7$199.2 million forin fiscal 2025,2026, drivendue byto ana increasedecrease of approximately $17.8$6.6 million in gross sales prices and a $9.7$5.9 million increasedecrease in Sales Volume. The increasedecline in gross sales prices was due to the price adjustment provisions in our long-term sales agreements.

Operating Earnings increased 20%17% to $38.1$44.5 million forin fiscal 2025,2026, primarily duebecause toof higherlower operating expenses of $14.2 million, partially offset by lower gross sales prices and Sales Volume of $17.8$6.6 million and $1.7$1.0 millionmillion, of higher Sales Volume, partially offset by higher operating expenses of $13.0 million.respectively. The increasedecrease in operating expenses was primarily related to higher input costs, namelylower raw materials of $15.7 million and $0.5 millioncosts of higher$16.8 repair and maintenance costs,million, which werewas partially offset by lowerhigher energy expenses of $2.7 million. During fiscal 2025,2026, Operating Margin increased to 18%22% from 17%18% in fiscal 2024,2025, primarily because of higherlower grossoperating sales prices,expenses, partially offset by higherlower operatinggross expenses.sales prices.

Please see our Form 10-K for fiscal year 20242025 for the discussion of our Results of Operations and results of Revenue and Operating Earnings by segment for fiscal 20242025 compared with fiscal 2023.2024. Our 20242025 Form 10-K can be found on the investor page of our website, at eaglematerials.com.

Certain of our critical accounting policies require the use of judgment in their application or require estimates of inherently uncertain matters. Although our accounting policies are in compliance with generally accepted accounting principles, a change in the facts and circumstances of the underlying transactions could significantly change the application of the accounting policies and the resulting financial statement impact.statements. Listed below are those policies we believe are critical and require the use of complex judgment in their application.

We annually assess Goodwill for impairment annually in the fourth quarter of our fiscal year, or more frequently when indicators of impairment exist. Impairment testing for Goodwill is done at the reporting unit, which is consistent with our reportable segments.

Goodwill is considered impaired if the carrying value of the reporting unit exceeds its fair value. Prior to performing the Step 1 quantitative test, we may, at our discretion, perform an optional qualitative analysis, or we may choose to proceed directly to the Step 1 quantitative analysis. The qualitative test considers the impact of the following events and circumstances on the reporting unit being tested: macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, and other relevant entity-specific events. If, as a result of this qualitative analysis, we conclude that it is more likely than not (a likelihood of greater than 50%) that the fair value of the reporting unit exceeds its carrying value, then an impairment does not exist, and the quantitative Step 1 quantitative test is not required. If we are unable to conclude that it is more likely than not that the fair value of the reporting unit exceeds its carrying value, then we proceed to the quantitative Step 1 quantitative test.

The fair values of the reporting units are estimated by using both the market and income approaches. The market approach considers market factors and certain multiples in comparison to similar companies, while the income approach uses discounted cash flows to determine the estimated fair values of the reporting units. Key assumptions in the model include estimated average net sales prices, sales volume, and the estimated weighted-average cost of capital specific to each industry. We also perform an overall comparison of all reporting units to our market capitalization in order to test the reasonableness of our fair value calculations.

Determining the fair value of our reporting units involves the use of significant estimates and assumptions and considerable management judgment. We base our fair value estimates on assumptions we believe to be reasonable at the time, but such assumptions are subject to inherent uncertainty. The most important assumption underlying our estimates is the projection of construction spending in the U.S. over the next several years. Actual results may differ materially from those estimates. Changes in market conditions, market trends, interest rates, or other factors outside of our control, such as a worldwide pandemic, global energy crisis, or military conflict, could cause us to change key assumptions and our judgment about a reporting unit’s prospects. Similarly, in a specific period, a reporting unit could significantly underperform relative to its historical or projected future operating results. Either situation could result in a meaningfully different estimate of the fair value of our reporting units, and a consequent future impairment charge.

The segment breakdown of Goodwill at March 31, 2025,2026, and 2024,2025, was as follows:follows.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction,transaction and therefore represents an exit price. A fair value measurement assumes the highest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible at the measurement date. We assign the highest level of fair value available to assets acquired and liabilities assumed based on the following options:

We believe we have access at the present time 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 twelve12 months. In the long term, we intend to rely on our existing financial resources, together with borrowings under existing and future credit facilities and potential offerings of our securities in private or public markets. 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-month12 month period.

The following table provides a summary of our Cash Flows:Flows.

Cash Flows from Operating Activities decreasedincreased by $15.4$65.6 million to $548.5$614.2 million in fiscal 2025.2026. The decreaseincrease was largely attributable to lowerhigher changes in Working Capital of $62.9 million and higher Net Earnings, adjusted for non-cash charges of $13.9 million and lower dividends from our Unconsolidated Joint Venture of $7.0 million, partially offset by higher changes in Working Capital of $5.5$2.7 million.

Working Capital increased by $35.4$267.1 million to $423.7$690.7 million at March 31, 2025,2026, primarily because of higher Accounts Receivable, Inventories,Cash and PrepaidAccounts Receivable of $277.5 million and Other Assets of $9.3 million, $41.3 million, and $4.7$16.2 million, respectively. This was partially offset by an increase in Accounts Payable and Accrued Liabilities of $2.7$9.0 million and $1.8$6.1 million, respectively, and a decrease in CashInventories of $14.5$6.8 million.

The increase in Accounts and Notes Receivable at March 31, 2025,2026, was primarily due to the timing of sales and collections during the quarter ended March 31, 2024.2026. As a percentage of quarterly sales generated in the fiscal fourth quarters, Accounts Receivable was 48% at March 31, 2026, and 45% at March 31, 2025, and 43% at March 31, 2024.2025. Management measures the change in Accounts Receivable by monitoring the day’s sales outstanding monthly 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 March 31, 2025.2026.

Our Inventory balance at March 31, 2025,2026, increaseddecreased approximately $41.3$6.8 million from our balance at March 31, 2024.2025. Within Inventories, Raw Materials and Materials-in-Progress, Finished Cement, Aggregates, and Fuel and Coal increaseddecreased by approximately $41.9$5.9 million, $5.6$4.4 million, $1.6 million, and $4.0$5.0 million, respectively, which was partially offset by an increase in Repair Parts and Supplies and Recycled Paperboard of $8.1 million and $2.9 million, respectively. The increasesdecreases in Raw Materials and Materials-in-Progress, and Fuel and Coal were mostly due to timing, while the increase in Aggregates inventory was partially due to the Aggregates Acquisitions, which contributed $3.5 million of the increase in aggregates at March 31, 2025.timing. We have less than one year’s sales of all product inventories, and our inventories have a low risk of obsolescence given that they are basic construction materials. The largest individual balance in our inventory is Repair Parts, which was relatively flat compared with fiscal 2024.Parts. The size and complexity of our manufacturing plants, as well as the age of certain of our plants, 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.

Net Cash Used in Investing Activities in fiscal 20252026 was approximately $370.1$431.7 million compared with $175.4$370.1 million in fiscal 2024,2025, an increase of approximately $194.7$61.6 million. This was primarily due to an increase in additions to capital spending and an investment of $75.0$221.5 million and to$15.0 million, respectively. This was partially offset by a reduction in acquisition spending of $119.8$174.9 million, in fiscal 2025 compared with fiscal 2024.million. The increase in capital spending was mainly due to the expansion and modernization of our Mountain Cement facility,facility and theour increasegypsum wallboard plant in acquisition spending was due primarily to the Western Pennsylvania Acquisition.Oklahoma.

Net Cash Provided by Financing Activities was approximately $95.1 million during fiscal 2026, compared with Net Cash Used in Financing Activities was approximatelyof $192.9 million during fiscal 2025, compared with $368.9 million in fiscal 2024.2025. The $176.0$288.0 million decreaseincrease was primarilymainly duerelated to anhigher increaseborrowings, in our Term Loannet of $125.0repayments, of $383.0 million, andpartially loweroffset by higher Purchases and Retirement of Common Stock and Payment of $45.0Debt Issuance Costs of $83.5 million and $5.0 million, respectively, as well as lower Proceeds from Stock Option Exercises of $5.8 million.

Below is a summary of the Company’s outstanding debt facilities at March 31, 2025:2026.

See Footnote (F) to the Audited Consolidated Financial Statements for further details on the Company's debt facilities, including interest rate,rates, and financial and other covenants and restrictions.

The revolving borrowing capacity of our Revolving Credit Facility is $750.0 million (any revolving loans borrowed under the Revolving Credit Facility, as applicable, the Revolving Loans). The Revolving Credit Facility also includes a swingline loan sublimit of $25.0 million, and a $40.0 million letter of credit facility. At March 31, 2025,2026, we had $200.0 millionno outstanding of Revolving Loans under the Revolving Credit Facility and $9.9 million of outstanding letters of credit, leaving us with $540.1$740.1 million of available borrowings under the Revolving Credit Facility, net of outstanding letters of credit. We are contingently liable for performance under $43.9$48.7 million in performance bonds relating primarily to our mining operations. We do not have any off-balance-sheet debt or any outstanding debt guarantees as of March 31, 2025.2026.

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 debt service requirements for at least the next 12 months. However, our future liquidity and capital requirements may vary depending on a number ofseveral 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, 5.000% Senior Unsecured Notes, the Term Loan, and any Revolving Credit Loans, in each case, 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 madewe by usmake may be funded by the use ofusing cash on our balance sheet or the incurrence ofissuing new debt. The amounts involved in any such purchase transactions, individually or in aggregate, may be material.

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 of shares will be determined by the Company’s 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 to comply with the safe harbor provided by Rule 10b5-1.

ForThere informationhave regardingbeen no material changes to the risk factors thatas coulddisclosed affect our results of operations, financial condition, and liquidity, seein Part 1. Item 1A. Risk Factors in our Form 10-K for the fiscal year ended March 31, 2025,2026, filed with the Securities and Exchange Commission on May 20,19, 2025.2026.

Our business is organized into two sectors: Heavy Materials, which includes the Cement and Concrete and Aggregates segments, and Light Materials, which includes the Gypsum Wallboard and Recycled Paperboard segments. Financial results and other information for the three and nine months ended DecemberJune 31,30, 2025,2026, and 2024,2025, are presented on a consolidated basis and by business segment.

InWe expect demand for cement to remain steady in the firstnear nineterm monthssupported ofby fiscalbipartisan year 2026, conditions in our markets were mixed, with a favorable environment for our Heavy Materials business and a more challenging Light Materials environment. Federal,federal, state, and local budgetssupport for public infrastructure projects remainedand strong, andcontinued spending acrosson certain non-residential end markets continued to be elevated, driving demand for cement. In this environment, our Cement sales volume was up approximately 7% during the first nine monthselements of ourprivate-nonresidential fiscalconstruction, year.including Thedata outlookcenters. for cement demand in our markets continues to be favorable, as aA significant amount of thefederal fundsfunding from the trillion-dollar Infrastructure Investment and Jobs Act (IIJA) remains to be spent, and state Department of Transportation (DOT) budgets remain strong.supportive.

The backdrop for residential construction activity remained challenging in the first nine monthsquarter of our fiscal 2026,2027, primarily because of housing affordability concerns driven by persistently elevated mortgage interest rates, as well as other macroeconomic uncertainties. At the same time, the national supply of homes remains constrained by years of underbuilding. Recently, new home construction has slowed as builders have pulled back on production because of mixed demand signals and higher levels of new home inventory in certain markets. This recent pullback affected our wallboard sales volume, which was down approximately 8%2% in the first nine monthsquarter of our fiscal year.2027. The path ahead for mortgage rates, and the corresponding effect on residential construction activity, is unclear, and thus the timing of a recovery in new-home construction remains uncertain. Nonetheless, we believe our geographic footprint across the U.S. heartland and fast-growing Sun Belt region positions us to capitalize on these market dynamics in the near and longer term.

PaperRecycled isfiber aand finished paper are significant cost componentcomponents in our Recycled Paperboard and Gypsum Wallboard businesses.businesses, respectively. The primary raw material used to produce paperboard is old corrugated containers (OCC). Recently, OCC prices have been declining; however, recycledRecycled fiber prices are subject to change on short notice due to several factors, including supply of OCC and demand for OCC from both domestic and international companies. OCC prices have increased recently. Our current customer contracts for gypsum liner include price adjustments that partially compensate for changes in the cost of raw materials, such as recycled fiber,OCC and energy, including natural gas and electricity. However, because these price adjustments are not realized until future quarters, changesadjustments to material costs in our Gypsum Wallboard segment could be delayed until the effects of these price adjustments are realized.

MaintenanceWhile cement maintenance costs arewere aup significant10% partin the first quarter of fiscal 2027, this was largely driven by specific projects at some of our totalCement operatingplants. expenses,Other andthan these discreet projects, we expect a low single-digitsingle increase indigit inflation for maintenance in the remainder of our fiscal 2026,costs as equipment and contractor costs remainare elevated.expected to increase.

THREE MONTHS ENDED DecemberJune 31,30, 2025,2026, Compared WITH THREE MONTHS ENDED DecemberJune 31,30, 20242025

Revenue decreasedincreased by $2.0$16.3 millionmillion, or 3%, to $556.0$651.0 million for the three months ended DecemberJune 31,30, 2025.2026. ExcludingHigher theSales $7.6Volume millionpositively related to the Aggregates Acquisition,affected Revenue decreasedby $9.6$19.8 million.million, Lowerand was partially offset by lower gross sales pricesprices, and Sales Volumewhich adversely affected Revenue by approximately $7.3 million and $2.3$3.5 million. The lower Sales Volume was mostly related to our Gypsum Wallboard segment.

Gross Profit decreased 10%13% to $160.9$161.2 million during the three months ended DecemberJune 31,30, 2025. Excluding the $1.1 million of Gross Profit related to the Aggregates Acquisition, Gross Profit decreased $18.0 million, or 10%.2026. The decrease was primarily related to higher operating costs of $25.7 million and lower gross sales prices andof $3.5 million, partially offset by higher Sales Volume of $7.3 million and $3.9 million, respectively, as well as increased operating costs of $6.8$4.8 million. The gross margin declined to 29%,25%, primarily because of lower gross sales prices andwith higher operating costs.costs being partially offset by higher Sales Volume.

Equity in Earnings of our Unconsolidated Joint Venture decreased by $0.6$1.0 million, or 11%,25%, for the three months ended DecemberJune 31,30, 2025.2026. The decrease was due to lower average gross sales prices of $2.7$0.5 million and increased operating costs of $1.1 million, which werepartially offset by higher Sales Volume of $1.1 million and lower operating costs of $1.0$0.7 million. DecreasedIncreased operating costs were primarily arelated result of lower maintenance and other fixed costs of $2.1 million and $1.3 million, respectively, which were partially offset byto higher raw materialsmaintenance and freight costs of $1.5$1.6 million and $0.7$0.8 million, respectively.respectively, which was partially offset by lower purchased cement costs of $1.4 million.

Corporate General and Administrative expenses increaseddecreased by approximately $3.2$0.6 million, or 15%,3%, for the three months ended DecemberJune 31,30, 2025.2026. The increasedecrease was due primarily to business-developmentlower salary and professionalincentive servicescompensation andof $2.8 million, which was partially offset by higher information technology costs and insurance costs of $1.4$1.8 million and $1.2$0.5 million, respectively.

Interest Expense, net increased by approximately $4.7$1.2 million, or 51%,11%, during the three months ended DecemberJune 31,30, 2025.2026. This increase was mainly due to increased interest expense of approximately $4.7$5.2 million on our 5.000% Senior Unsecured Notes due May 2036, which were issued on November 13, 2025, and $1.0increased millionother expenses of higher$0.4 interest on our Term Loan,million, which was increased to $300.0 million in February 2025. This was partially offset by higher Interest Capitalized of approximately $1.4$2.5 million and higher interest income of $1.9 million. The increase in interest expense was primarily a result of our 5.000% Senior Unsecured Notes due March 2036, which were issued on November 13, 2025. The increase in Interest Capitalized was due primarily to capital spending for the expansion and modernization of our cement plant in Laramie, Wyoming and our gypsum wallboard plant in Duke, Oklahoma.

Earnings Before Income Taxes decreased to $129.2$131.7 million during the three months ended DecemberJune 31,30, 2025,2026, primarily as a result of lower Gross Profit and Equity in Earnings of Unconsolidated Joint Venture, and higher Corporate General and Administrative expense and Interest Expense, net.

InterestINCOME Expense,TAX NetEXPENSE

Income Tax Expense was $99.9$29.6 million for the ninethree months ended DecemberJune 31,30, 2025,2026, compared with $113.6$34.5 million for the ninethree months ended DecemberJune 31,30, 2024.2025. The effective tax rate remained consistent at 22%, consistent22% with the prior-year period.

Net Earnings decreased 8%17% to $363.6$102.1 million for the ninethree months ended DecemberJune 31,30, 2025.2026.

Three and nine MONTHS ENDED DecemberJune 31,30, 2025,2026, COMPARED WITH three and nine MONTHS ENDED DecemberJune 31,30, 2024,2025, BY SEGMENT

The following presents results within our two business sectors for the three and nine months ended DecemberJune 31,30, 2025,2026, and 2024.2025. Revenue and operating results are organized by sector and discussed by individual business segments.

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

Cement Revenue was $1,053.7$377.9 million, a 7%9% increase, for the ninethree months ended DecemberJune 31,30, 2025.2026. This increase was due to higher Sales Volume and gross sales prices and Sales Volume,prices, which increased Cement Revenue by $3.9$25.8 million and $62.5$4.5 million, respectively.

Cement Operating Earnings increaseddecreased by $0.4$7.5 million to $292.2$73.6 million for the ninethree months ended DecemberJune 31,30, 2025.2026. The increasedecrease was due to higher operating costs of $17.9 million, which were partially offset by higher Sales Volume and higher gross sales prices of $19.8$5.9 million and $3.9$4.5 million, respectively, which were partially offset by higher operating costs of $23.3 million.respectively. The increase in operating costs was mainly due to higher freight,maintenance, purchased raw materials, and laborinefficiencies andassociated otherwith fixedunexpected costsdowntime at our Mountain Cement facility of approximately $4.1$7.4 million, $13.3$4.2 million, and $9.4 million, respectively. These higher costs were partially offset by lower maintenance and energy costs of approximately $5.6 million and $2.6$6.0 million, respectively. The Operating Margin decreased to 28%19% from 30%23% because of higher operating costs, partially offset by the increase in grossSales sales prices.Volume.

Concrete and Aggregates Revenue increased 21%4% to $73.5$80.7 million for the three months ended DecemberJune 31,30, 2025. Excluding the Aggregates Acquisition, Revenue increased $5.2 million, or 9%.2026. The increase was due to higher Concrete gross sales prices of $1.9$3.3 million and higher Aggregates Sales Volume of $4.3$0.1 million, which was partially offset by lower AggregatesConcrete grossSales sales prices (excluding the Aggregates Acquisition),Volume, which reduced Revenue by $1.0$0.9 million.

Operating Earnings were approximately $15.5$4.0 million, a 2,532%35% increase. Excluding the Aggregates Acquisition, Operating Earnings increased $8.7 million, or 1,480%.decrease. The increasedecrease was due to higher Aggregatesoperating Salescosts Volumeof $5.5 million and were partially offset by higher gross sales prices,prices whichof positively affected Operating Earnings by $4.0$3.3 million and $1.6higher million, respectively, as well as lower operating costs of $3.1 million. Excluding the Aggregates Acquisition,net Sales Volume increased 33%, with most of the$0.1 increase in our Northern Colorado and Northern Kentucky markets.million. The decreaseincrease in operating costs was primarily due to lowerhigher materialsfreight, maintenance, energy, and maintenancelabor expensesand other fixed costs of approximately $2.0$1.4 millionmillion, $1.6 million, $0.9 million, and $1.2$ 0.9 million, respectively.

Gypsum Wallboard Revenue was $175.9$204.7 million, aan 16%8% decrease for the three months ended DecemberJune 31,30, 2025.2026. Lower gross sales prices and lower Sales Volume reduceddecreased Revenue by approximately $5.2$13.4 million and $28.4$3.4 million, respectively. Our market share remained relatively consistent during the three months ended DecemberJune 31,30, 2025.2026, based on the Gypsum Association's data.

Operating Earnings decreased 29%21% to $61.4$73.4 million, primarily because of lower gross sales prices andof $13.4 million, lower Sales Volume of $5.2 million and $11.7$1.4 million, as well asand higher operating costs of $8.1$4.5 million. The higher operating costs were primarily related to freight,higher maintenance,freight energy,costs andof fixed$4.1 costs, which reduced Operating Earnings by approximately $1.7 million, $0.9 million, $0.8 million, and $3.8 million, respectively.million. Operating Margin decreased to 35%36% for the three months ended DecemberJune 31,30, 2025,2026, primarily because of lower gross sales prices and higher 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.