EAGLE MATERIALS INC

Previous wording

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 to build, expand, and repair roads and highways; and repair and remodel activities. 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.

Current wording

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, expanding 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.

Previous wording

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 fiscal years ended March 31, 2024 and 2023, are presented on a consolidated basis and by business segment.

Current wording

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 fiscal years ended March 31, 2025, and 2024, are presented on a consolidated basis and by business segment. The relative contribution to fiscal 2025 earnings by segment is shown below.

Previous wording

On May 3, 2023, we finalized the Stockton Terminal Acquisition. The purchase price of the Stockton Terminal Acquisition was approximately $55.1 million. The Stockton Terminal Acquisition is included in our Heavy Materials sector, in the Cement business segment, in fiscal 2024. See Footnote (B) in the Audited Consolidated Financial Statements for more information regarding the Stockton Terminal Acquisition.

Current wording

See Footnote (B) in the Audited Consolidated Financial Statements for more information regarding the Northern Kentucky and Western Pennsylvania Acquisitions (collectively, the Aggregates Acquisitions).

Previous wording

We believe we are well-positioned to manage our cost structure and meet our customers’ needs during the next 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.

Current wording

We believe we are well-positioned to manage our cost structure and meet our customers’ needs. 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.

Previous wording

The primary raw material used to produce paperboard is OCC. Prices for OCC increased during the second half of 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.

Current wording

Paper is a significant cost component in our Gypsum Wallboard business. The primary raw material used to produce paperboard is old corrugated cardboard (OCC). Recycled 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 the cost of raw materials, such as recycled fiber, natural gas, and electricity. 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.

Previous wording

Maintenance costs were up 21% in fiscal 2024 and we expect continued inflation for maintenance as equipment and contractor costs remain high.

Current wording

Maintenance costs were up 13% in fiscal 2025 and we expect continued inflation for maintenance as equipment and contractor costs remain high.

Previous wording

Cost of Goods Sold increased by $65.2 million, or 4%, to $1,574.0 million in fiscal 2024. Battletown Materials and the Stockton Terminal Acquisition contributed $8.1 million and $41.8 million of Cost of Goods Sold, respectively, during fiscal 2024. Excluding Battletown Materials and the Stockton Terminal Acquisition, Cost of Goods Sold increased $15.3 million, or 1%. The increase in Cost of Goods Sold was due to higher operating costs of $61.5 million, partially offset by lower Sales Volume of $46.2 million. Operating costs increased in all of our businesses, except Recycled Paperboard and Aggregates, as discussed in the Fiscal Year 2024 vs Fiscal Year 2023 Results by Segment section.

Current wording

Cost of Goods Sold increased by $13.4 million, or 1%, to $1,587.4 million in fiscal 2025. The Aggregates Acquisitions contributed $13.9 million of Cost of Goods Sold during fiscal 2025. Excluding the Northern Kentucky and Western Pennsylvania Acquisitions, Cost of Goods Sold decreased $0.5 million. The slight decrease in Cost of Goods Sold was due to higher operating costs of $55.6 million, partially offset by lower Sales Volume of $56.1 million. Operating costs increased in all our businesses, except Gypsum Wallboard, as discussed in the Fiscal Year 2025 vs Fiscal Year 2024 Results by Segment section.

Previous wording

Other Nonoperating Income was $3.1 million in fiscal 2024 compared with $2.7 million in fiscal 2023. Other Nonoperating Income consists of a variety of items that are nonsegment operating in nature, including lease and rental income, investment income, asset sales, and other miscellaneous income and cost items, such as large nonroutine sales of excess raw materials or energy.

Current wording

Other Nonoperating Income was $6.4 million in fiscal 2025 compared with $3.1 million in fiscal 2024. 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 nonroutine sales of excess raw materials or energy.

Previous wording

Interest Expense, net increased by approximately $7.1 million, or 20%, during fiscal 2024. The increase was primarily related to higher interest expense on our Revolving Credit Facility, including the Term Loan, of approximately $7.7 million. The increase in interest on our Revolving Credit Facility was related to increased average outstanding borrowings and higher interest rates, partially offset by increased interest income on cash deposits.

Current wording

Interest Expense, net decreased by approximately $1.8 million, or 4%, during fiscal 2025. The decrease was primarily related to approximately $1.1 million lower interest expense on our Revolving Credit Facility, including the Term Loan, and higher interest income of $0.7 million. The decrease in interest on our Revolving Credit Facility was related to lower average outstanding borrowings and lower interest rates.

Previous wording

Earnings Before Income Taxes increased to $617.9 million during fiscal 2024, primarily because of higher Gross Profit. This was partially offset by higher Corporate General and Administrative expenses and Interest Expense, as well as lower Equity in Earnings of Joint Venture.

Current wording

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

Previous wording

Income Tax Expense for fiscal 2024 increased to $140.3 million from $127.1 million for fiscal 2023. The effective tax rate was 23%, compared with 22% in the prior fiscal year.

Current wording

Income Tax Expense for fiscal 2025 decreased to $128.1 million from $140.3 million for fiscal 2024. The effective tax rate was 22%, compared with 23% in the prior fiscal year.

Previous wording

Operating Earnings decreased 32% to approximately $12.4 million. Excluding Battletown Materials, Operating Earnings were $13.2 million, a decrease of $5.1 million. The decline in Operating Earnings was due to higher operating expenses of $23.8 million. This was partially offset by higher gross sales prices and Sales Volume of $18.6 million and $0.3 million, respectively. The increase in operating expenses was primarily due to higher cost of materials, maintenance, and delivery of approximately $17.7 million, $2.4 million, and $3.1 million, respectively.

Current wording

Operating Loss was approximately $8.8 million. Excluding the Aggregates Acquisitions, Operating Loss was $6.5 million. The decline in Operating Earnings was due to $4.2 million of lower Sales Volume and $25.5 million of higher operating expenses, partially offset by higher gross sales prices of $10.8 million. The increase in operating expenses was primarily due to approximately $5.1 million of higher cost of materials, $6.8 million of increased maintenance costs, and $5.2 million of higher direct costs, which includes labor and delivery.

Previous wording

Gypsum Wallboard Revenue decreased 4% to $839.5 million in fiscal 2024. The decrease was due to lower gross sales prices and Sales Volume, which reduced Revenue by $4.5 million and $28.5 million, respectively. Our market share remained relatively flat in fiscal 2024 compared with fiscal 2023.

Current wording

Gypsum Wallboard Revenue increased 1% to $846.5 million in fiscal 2025. The increase was due to higher gross sales prices and Sales Volume, which increased Revenue by $6.1 million and $0.9 million, respectively. Our market share remained relatively flat in fiscal 2025 compared with fiscal 2024.

Previous wording

Operating Earnings decreased 5% to $334.5 million for fiscal 2024. The decrease was primarily related to lower gross sales prices and Sales Volume of approximately $4.5 million and $11.5 million, respectively, as well as higher operating expenses of $2.0 million. During fiscal 2024, Gypsum Wallboard Operating Margin remained flat at 40%. Fixed costs are not a significant part of the overall cost of wallboard; therefore, changes in volume have a relatively minor impact on our operating cost per unit.

Current wording

Operating Earnings increased 5% to $350.8 million in fiscal 2025. The increase was primarily related to higher gross sales prices and Sales Volume of approximately $6.1 million and $0.4 million, respectively, as well as lower operating expenses of $9.8 million. The decrease in operating costs was due primarily to $3.6 million of lower freight costs, a $3.5 million decrease in maintenance costs, and $3.6 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, Gypsum Wallboard Operating Margin increased to 41%. Fixed costs are not a significant part of the overall cost of wallboard; therefore, changes in volume have a relatively minor impact on our operating cost per unit.

Previous wording

Recycled Paperboard Revenue, including intersegment Revenue, declined 8% to $184.2 million for fiscal 2024, as lower gross sales prices negatively affected Revenue by approximately $21.3 million, partially offset by higher Sales Volume of $4.2 million. The decrease in gross sales prices was due to the price adjustment provisions in our long-term sales agreements.

Current wording

Recycled Paperboard Revenue, including intersegment Revenue, increased 15% to $211.7 million for fiscal 2025, driven by an increase of approximately $17.8 million in gross sales prices and a $9.7 million increase Sales Volume. The increase in gross sales prices was due to the price adjustment provisions in our long-term sales agreements.

Previous wording

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. Listed below are those policies that we believe are critical and require the use of complex judgment in their application.

Current wording

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. Listed below are those policies we believe are critical and require the use of complex judgment in their application.

Previous wording

While we use our best estimates and assumptions as part of the process to value assets acquired and liabilities assumed at the acquisition date, our estimates are inherently uncertain and subject to refinement. During the measurement period, which occurs before finalization of the purchase price allocation, changes in assumptions and estimates that result in adjustments to the fair values of assets acquired and liabilities assumed are recorded on a retroactive basis as of the acquisition date, with the corresponding offset to Goodwill. Any adjustments subsequent to the conclusion of the measurement period will be recorded to our Consolidated Statements of Earnings.

Current wording

While we use our best estimates and assumptions as part of the process to value assets acquired and liabilities assumed at the acquisition date, our estimates are inherently uncertain and subject to refinement. During the measurement period, which occurs before finalization of the purchase price allocation, changes in assumptions and estimates that result in adjustments to the fair values of assets acquired and liabilities assumed are recorded on a retroactive basis as of the acquisition date, with the corresponding offset to Goodwill. Any adjustments subsequent to the conclusion of the measurement period will be recorded on our Consolidated Statements of Earnings.

Previous wording

We believe that 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 twelve 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-month period.

Current wording

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 twelve 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-month period.

Previous wording

Cash Flows from Operating Activities increased by $22.2 million to $563.9 million for fiscal 2024. The increase was largely attributable to higher Net Earnings, adjusted for non-cash charges of $37.4 million and changes in Working Capital of $4.8 million, partially offset by lower dividends from our Unconsolidated Joint Venture of $20.0 million.

Current wording

Cash Flows from Operating Activities decreased by $15.4 million to $548.5 million in fiscal 2025. The decrease was largely attributable to lower 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 million.

Previous wording

Working Capital increased by $79.7 million to $388.3 million at March 31, 2024, primarily because of higher Accounts Receivable, Inventories, and Cash of $7.9 million, $82.0 million, and $19.7 million, respectively. This was partially offset by an increase in Accounts Payable and Accrued Liabilities of $16.8 million and $7.8 million, respectively.

Current wording

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

Previous wording

The increase in Accounts and Notes Receivable at March 31, 2024, was primarily due to higher Revenue during the quarter ended March 31, 2024, compared with March 31, 2023. As a percentage of quarterly sales generated in the fiscal fourth quarters, Accounts Receivable was 43% at March 31, 2024, and 41% at March 31, 2023. 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, 2024.

Current wording

The increase in Accounts and Notes Receivable at March 31, 2025, was primarily due to the timing of sales and collections during the quarter ended March 31, 2024. As a percentage of quarterly sales generated in the fiscal fourth quarters, Accounts Receivable was 45% at March 31, 2025, and 43% at March 31, 2024. 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.

Previous wording

Our Inventory balance at March 31, 2024, increased approximately $82.0 million from our balance at March 31, 2023. Within Inventories, raw materials and materials-in-progress, finished cement, recycled paperboard, repair parts inventory, and fuel and coal increased by approximately $25.9 million, $25.0 million, $5.6 million, $14.6 million, and $6.1 million, respectively. The increases in raw materials and materials-in-progress, finished cement, and fuel and coal were mostly due to timing. Additionally, the Stockton Terminal Acquisition contributed $8.7 million of the increase in finished cement at March 31, 2024. The increase in repair parts was primarily due to the timing of outages in our Cement business, most of which occurred in April 2024, as well as overall increases in the cost of repair parts. 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. 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.

Current wording

Our Inventory balance at March 31, 2025, increased approximately $41.3 million from our balance at March 31, 2024. Within Inventories, Raw Materials and Materials-in-Progress, Aggregates, and Fuel and Coal increased by approximately $41.9 million, $5.6 million, and $4.0 million, respectively. The increases 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. 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. 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.

Previous wording

Net Cash Used in Investing Activities in fiscal 2024 was approximately $175.4 million compared with $268.6 million in fiscal 2023, a decrease of approximately $93.2 million. This was primarily due to $103.4 million less in acquisition spending in fiscal 2024 compared with fiscal 2023. The decrease in acquisition spending was partially offset by an increase of $10.2 million in capital spending. The increase in capital spending was mainly due to higher spending in our Cement and Recycled Paperboard segments, partially offset by reduced spending in our Concrete and Aggregates segment.

Current wording

Net Cash Used in Investing Activities in fiscal 2025 was approximately $370.1 million compared with $175.4 million in fiscal 2024, an increase of approximately $194.7 million. This was primarily due to an increase in additions to capital spending of $75.0 million and to acquisition spending of $119.8 million, in fiscal 2025 compared with fiscal 2024. The increase in capital spending was mainly due to the expansion and modernization of our Mountain Cement facility, and the increase in acquisition spending was due primarily to the Western Pennsylvania Acquisition.

Previous wording

Net Cash Used in Financing Activities was approximately $368.9 million during fiscal 2024, compared with $277.3 million in fiscal 2023. The $91.6 million increase was primarily due to $144.0 million lower cash received from net borrowings under the Revolving Credit Facility. This was partially offset by lower Purchases and Retirement of Common Stock of $44.4 million, respectively.

Current wording

Net Cash Used in Financing Activities was approximately $192.9 million during fiscal 2025, compared with $368.9 million in fiscal 2024. The $176.0 million decrease was primarily due to an increase in our Term Loan of $125.0 million, and lower Purchases and Retirement of Common Stock of $45.0 million.

Previous wording

Our debt-to-capitalization ratio and net debt-to-capitalization ratio were 45.7% and 44.9%, respectively, at March 31, 2024, compared with 48.1% and 47.8%, respectively, at March 31, 2023.

Current wording

Our debt-to-capitalization ratio and net debt-to-capitalization ratio were 46.1% and 45.7%, respectively, at March 31, 2025, compared with 45.7% and 44.9%, respectively, at March 31, 2024.

Previous wording

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, 2024, we had $170.0 million outstanding of Revolving Loans under the Revolving Credit Facility and $8.3 million of outstanding letters of credit, leaving us with $571.7 million of available borrowings under the Revolving Credit Facility, net of outstanding letters of credit. We are contingently liable for performance under $29.3 million in performance bonds relating primarily to our mining operations. We do not have any off-balance-sheet debt or any outstanding debt guarantees as of March 31, 2024.

Current wording

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, we had $200.0 million outstanding of Revolving Loans under the Revolving Credit Facility and $9.9 million of outstanding letters of credit, leaving us with $540.1 million of available borrowings under the Revolving Credit Facility, net of outstanding letters of credit. We are contingently liable for performance under $43.9 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.

Previous wording

We also have approximately $26.9 million of lease liabilities at March 31, 2024, that have an average remaining life of approximately 9.6 years.

Current wording

We also have approximately $37.6 million of lease liabilities at March 31, 2025, that have an average remaining life of approximately 12.6 years.

Previous wording

Capital expenditures for fiscal 2025 are expected to range from $310.0 million to $340.0 million and to be allocated primarily to the Heavy Materials sector. These estimated capital expenditures will include the expansion and modernization of our Mountain Cement facility in Wyoming, as well as maintenance capital expenditures and improvements, and other safety and regulatory projects.

Current wording

Capital expenditures for fiscal 2026 are expected to range from $475.0 million to $525.0 million and to be allocated between the Heavy Materials and Light Materials sectors. These estimated capital expenditures will include the expansion and modernization of our Mountain Cement facility in Wyoming and the modernization and expansion of our gypsum wallboard plant in Oklahoma, as well as maintenance capital expenditures and improvements, and other safety and regulatory projects.

Previous wording

Dividends paid in fiscal years 2024, 2023, and 2022 were $35.3 million, $37.5 million, and $30.8 million, respectively.

Current wording

Dividends paid in fiscal years 2025, 2024, and 2023 were $33.7 million, $35.3 million, and $37.5 million, respectively.

Previous wording

(1)The Revolving Credit Facility expires in May 2027.

Current wording

The Revolving Credit Facility expires in February 2030.

Previous wording

(2)The Term Loan facility expires in May 2027.

Current wording

The Term Loan facility expires in February 2030.

Previous wording

(3)We estimate the future cash flows for interest and commitment fees by assuming a level repayment of the Revolving Credit Facility over its remaining term. Actual amounts paid, as well as the payment time periods, will likely differ from this estimate.

Current wording

We estimate the future cash flows for interest and commitment fees by assuming a level repayment of the Revolving Credit Facility over its remaining term. Actual amounts paid, as well as the payment time periods, will likely differ from this estimate.

Previous wording

(4)The future cash flows for interest on the Term Loan were calculated using the same estimated interest rates as the Revolving Credit Facility.

Current wording

The future cash flows for interest on the Term Loan were calculated using the same estimated interest rates as the Revolving Credit Facility.

Previous wording

(5) Purchase obligations are noncancelable agreements to purchase coal, natural gas, slag, and synthetic gypsum, and to fund capital expenditure commitments.

Current wording

Purchase obligations are noncancelable agreements to purchase coal, natural gas, slag, and synthetic gypsum, and to fund capital expenditure commitments, including the expansion and modernization of our cement plant in Wyoming.

Previous wording

(6)The above table does not include any future amounts for the expansion and modernization of our cement plant in Wyoming and related distribution facilities, as we are not currently contractually obligated to make such payments. We expect to spend approximately $430.0 million over the next two years on this project.

Current wording

In May 2025 we entered into an agreement with a contractor for the expansion and modernization of our gypsum wallboard in Oklahoma. This contract is not included in the table above, as we were not contractually obligated to make such payments at March 31, 2025. We expect to spend approximately $330.0 million over the next two years on this project.

Previous wording

The Consumer Price Index rose approximately 3.5% in fiscal 2024, 5.0% in fiscal 2023, and 8.5% in fiscal 2022. Prices of all materials and services increased again this year compared with the previous year, with much of the increase related to electricity and transportation. During fiscal 2024, the Consumer Price Index for electricity and transportation increased 5.0% and 10.7%, respectively, while natural gas decreased 3.5%. The increase in electricity and transportation resulted in higher costs for our manufacturing businesses during fiscal 2024, and we expect these increases to continue throughout calendar 2024. We have some protection from increasing natural gas costs in fiscal 2025 as we have forward purchase contracts for approximately 30.0% of our anticipated natural gas usage. Freight costs are expected to rise in fiscal 2025 by approximately 3.0% to 5.0%. Our ability to increase sales prices to cover higher costs in the future varies with the level of activity in the construction industry: the number, size, and strength of competitors, as well as the availability of products to supply a local market.

Current wording

The Consumer Price Index rose approximately 2.4% in fiscal 2025, 3.5% in fiscal 2024, and 5.0% in fiscal 2023. During fiscal 2025, the Consumer Price Index (CPI) for electricity, natural gas, and transportation increased 2.8%, 9.4%, and 3.1%, respectively, while the cost of gasoline declined 9.8%. We have some protection from increasing natural gas costs in fiscal 2026 as we have forward purchase contracts for approximately 20.0% of our anticipated natural gas usage. Although CPI for transportation increased in fiscal 2025, we expect our freight costs to be relatively flat in calendar 2025. Our ability to increase sales prices to cover higher costs in the future varies with the level of activity in the construction industry: the number, size, and strength of competitors, as well as the availability of products to supply a local market.

Previous wording

Certain matters discussed in this report contain forward-looking statements within the meaning of Section 27A of the Securities Act, Section 21E of the Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the context of the statement and generally arise when the Company is discussing its beliefs, estimates, or expectations. These statements are not historical facts or guarantees of future performance but instead represent only the Company’s belief at the time the statements were made regarding future events which are subject to certain risks, uncertainties and other factors, many of which are outside the Company’s control. Actual results and outcomes may differ materially from what is expressed or forecast in such forward-looking statements. The principal risks and uncertainties that may affect the Company’s actual performance include the following: the cyclical and seasonal nature of the Company’s businesses; public infrastructure expenditures; adverse weather conditions; the fact that our products are commodities and that prices for our products are subject to material fluctuation due to market conditions and other factors beyond our control; availability of raw materials; changes in the costs of energy, including, without limitation, electricity, natural gas, coal and oil, and the nature of our obligations to counterparties under energy supply contracts, such as those related to market conditions (such as fluctuations in spot market prices), governmental orders, and other matters; changes in the cost and availability of transportation; unexpected operational difficulties, including unexpected maintenance costs, equipment downtime, and interruption of production; material nonpayment or nonperformance by any of our key customers; consolidation of 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; insurance coverage; changes in economic conditions specific to any one or more of the Company’s markets; adverse impact of severe weather conditions (such as winter storms, tornadoes, and hurricanes) and their effects on our facilities, operations, and contractual arrangements with third parties; competition; alternative products and new product technologies; cyber-attacks or data security breaches; announced increases in capacity in the gypsum wallboard and cement industries; changes in the demand for residential housing construction or commercial construction or construction projects undertaken by state or local governments; the availability of acquisitions or other growth opportunities that meet our financial return standards and fit our strategic focus; risks relat…

Excerpt shortened here; the source contains the full paragraph.

Current wording

Certain matters discussed in this report contain forward-looking statements within the meaning of Section 27A of the Securities Act, Section 21E of the Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the context of the statements and generally arise when the Company is discussing its beliefs, estimates or expectations as to future events. 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; the effects of adverse weather conditions on infrastructure and other construction projects as well as our facilities and operations; 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 of 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; interruptions in our supply chain; inability to timely execute or realize capacity expansions or efficiency gains from capital improvement projects; 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); changes in trade policy, including tariffs and the effects of any increases in tariffs on our business, including increases in inputs used in our facility expansion and modernization projects; possible losses or other adverse outcomes from 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; competition; cyber-attacks or data security breaches, together with the costs of protecting our systems against such incidents an…

Excerpt shortened here; the source contains the full paragraph.