EAGLE MATERIALS INC

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 three and six months ended September 30, 2025, and 2024, 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 three and nine months ended December 31, 2025, and 2024, are presented on a consolidated basis and by business segment.

Previous wording

On January 7, 2025, we acquired Bullskin Stone & Lime LLC. The purchase price of this acquisition was approximately $149.9 million. This acquisition is included in our Heavy Materials sector, and its results of operations are reported in the Concrete and Aggregates business segment from the date of purchase. See Note (C) in the Notes to Unaudited Consolidated Financial Statements for more information regarding this acquisition.

Current wording

On January 7, 2025, we acquired Bullskin Stone & Lime LLC in Western Pennsylvania. The purchase price of this acquisition was approximately $149.9 million. This acquisition is included in our Heavy Materials sector, and its results of operations are reported in the Concrete and Aggregates business segment from the date of purchase. See Note (C) in the Notes to Unaudited Consolidated Financial Statements for more information regarding this acquisition.

Previous wording

In the first half of fiscal year 2026, our cement sales volume increased, driven primarily by federal, state and local support for public infrastructure projects and continued elevated spending across private non-residential end markets. In this improved environment, our Cement sales volume was up approximately 5% during the first half of our fiscal year. The outlook for cement demand continues to be favorable, as nearly 60% of the funds from the trillion-dollar Infrastructure Investment and Jobs Act (IIJA) remain to be spent, and state Department of Transportation (DOT) budgets remain strong.

Current wording

In the first nine months of fiscal 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, state, and local budgets for public infrastructure projects remained strong, and spending across 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 months of our fiscal year. The outlook for cement demand in our markets continues to be favorable, as a significant amount of the funds from the trillion-dollar Infrastructure

Previous wording

The backdrop for residential construction activity remains challenging, 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 5% in the first half of our fiscal year. 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.

Current wording

The backdrop for residential construction activity remained challenging in the first nine months of our fiscal 2026, 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% in the first nine months of our fiscal year. 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.

Previous 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.

Current wording

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

Paper is a significant cost component in our Recycled Paperboard and Gypsum Wallboard businesses. The primary raw material used to produce paperboard is old corrugated containers (OCC). Recently, OCC prices have been declining; however, recycled 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. 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.

Current wording

Paper is a significant cost component in our Recycled Paperboard and Gypsum Wallboard businesses. The primary raw material used to produce paperboard is old corrugated containers (OCC). Recently, OCC prices have been declining; however, recycled 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. 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, and energy, including natural gas and electricity. However, because these price adjustments are not realized until future quarters, changes to material costs in our Gypsum Wallboard segment could be delayed until the effects of these price adjustments are realized.

Previous wording

Energy costs decreased slightly in the second quarter but are expected to remain relatively stable over the near future. Freight costs for our Gypsum Wallboard segment increased during the second quarter of fiscal 2026 and are expected to remain at similar levels for the rest of the calendar year. Freight costs for our Cement segment, which relies mostly on rail delivery, increased slightly in the second quarter, and are also expected to remain stable over the remainder of the calendar year. Additionally, labor constraints, primarily drivers, can adversely affect our Concrete business. If labor constraints were to worsen, it could cause delays and inefficiencies in this business.

Current wording

Freight costs for our Gypsum Wallboard segment increased during the third quarter of fiscal 2026 and are expected to remain at similar levels for the rest of the fiscal year. Freight costs for our Cement segment, which relies mostly on rail delivery, increased slightly in the third quarter, and are also expected to remain stable over the remainder of the fiscal year.

Previous wording

Maintenance costs are a significant part of our total operating expenses, and we expect a low single-digit increase in inflation for maintenance in fiscal 2026, as equipment and contractor costs remain elevated.

Current wording

Maintenance costs are a significant part of our total operating expenses, and we expect a low single-digit increase in inflation for maintenance in the remainder of our fiscal 2026, as equipment and contractor costs remain elevated.

Previous wording

Gross Profit decreased 2% to $199.7 million during the three months ended September 30, 2025. Excluding the $3.3 million of Gross Profit related to the Aggregates Acquisitions, Gross Profit decreased $7.4 million, or 4%. The decrease was primarily related to lower gross sales prices of $1.3 million and increased operating costs of $4.9 million. The gross margin declined to 28%, primarily due to lower gross sales prices.

Current wording

Gross Profit decreased 10% to $160.9 million during the three months ended December 31, 2025. Excluding the $1.1 million of Gross Profit related to the Aggregates Acquisition, Gross Profit decreased $18.0 million, or 10%. The decrease was primarily related to lower gross sales prices and Sales Volume of $7.3 million and $3.9 million, respectively, as well as increased operating costs of $6.8 million. The gross margin declined to 29%, primarily because of lower gross sales prices and higher operating costs.

Previous wording

Equity in Earnings of our Unconsolidated Joint Venture decreased by $3.0 million, or 32%, for the three months ended September 30, 2025. The decrease was due to higher operating costs of $4.6 million, which were offset by higher gross sales prices of $1.6 million. Increased operating costs were primarily related to higher energy, freight, and raw materials costs, which reduced operating earnings by $1.0 million, $0.9 million, and $2.0 million respectively.

Current wording

Equity in Earnings of our Unconsolidated Joint Venture decreased by $0.6 million, or 11%, for the three months ended December 31, 2025. The decrease was due to lower gross sales prices of $2.7 million, which were offset by higher Sales Volume of $1.1 million and lower operating costs of $1.0 million. Decreased operating costs were primarily a result of lower maintenance and other fixed costs of $2.1 million and $1.3 million, respectively, which were partially offset by higher raw materials and freight costs of $1.5 million and $0.7 million, respectively.

Previous wording

Corporate General and Administrative expenses increased by approximately $8.6 million, or 26%, for the six months ended September 30, 2025. The increase was due primarily to higher salary and incentive compensation, professional fees, and information technology costs of $3.9 million, $1.9 million, and $1.9 million, respectively.

Current wording

Corporate General and Administrative expenses increased by approximately $3.2 million, or 15%, for the three months ended December 31, 2025. The increase was due primarily to business-development and professional services and information technology costs of $1.4 million and $1.2 million, respectively.

Previous wording

Interest Expense, net decreased by approximately $0.3 million, or 1%, during the six months ended September 30, 2025. This decrease was mainly due to an increase of $2.4 million in capitalized interest during fiscal 2026 compared with fiscal 2025. The increase in capitalized interest is due primarily to capital spending for the expansion and modernization of our cement plant in Laramie, Wyoming and our gypsum wallboard plant in Oklahoma. This was partially offset by $1.8 million of increased interest expense from our Revolving Credit Facility and Term Loan due to higher outstanding borrowings.

Current wording

Interest Expense, net increased by approximately $4.7 million, or 51%, during the three months ended December 31, 2025. This increase was mainly due to increased interest expense of approximately $4.7 million on our 5.000% Senior Unsecured Notes due May 2036, which were issued on November 13, 2025, and $1.0 million of higher interest on our Term Loan, which was increased to $300.0 million in February 2025. This was partially offset by higher Interest Capitalized of approximately $1.4 million. 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 Oklahoma.

Previous wording

Earnings Before Income Taxes decreased to $176.5 million during the three months ended September 30, 2025, primarily as a result of lower Gross Profit and Equity in Earnings of Unconsolidated Joint Venture, and higher Corporate General and Administrative expense, partially offset by lower Interest Expense, net.

Current wording

Earnings Before Income Taxes decreased to $129.2 million during the three months ended December 31, 2025, 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.

Previous wording

Income Tax Expense was $39.1 million for the three months ended September 30, 2025, compared with $41.7 million for the three months ended September 30, 2024. The effective tax rate declined to 22% from 23% in the prior-year period.

Current wording

Income Tax Expense was $26.3 million for the three months ended December 31, 2025, compared with $34.7 million for the three months ended December 31, 2024. The effective tax rate declined to 20% from 23% in the prior-year period. The decline in the effective tax rate was primarily due to a benefit recognized in the current year related to certain income tax credits.

Previous wording

Revenue increased by $15.3 million, or 2%, to $638.9 million for the three months ended September 30, 2025. Excluding the $11.6 million related to the Aggregates Acquisitions, Revenue increased $3.7 million. Higher Sales Volumes positively affected Revenue by $5.0 million, and were partially offset by lower gross sales prices, which adversely affected Revenue by approximately $1.3 million.

Current wording

Revenue increased by $39.3 million, or 2%, to $1,829.6 million for the nine months ended December 31, 2025. Excluding the $30.6 million related to the Aggregates Acquisition, Revenue increased $8.7 million. Higher Sales Volumes positively affected Revenue by $21.4 million, and were partially offset by lower gross sales prices, which adversely affected Revenue by approximately $12.7 million.

Previous wording

Cost of Goods Sold increased by $46.7 million, or 6%, to $888.3 million for the six months ended September 30, 2025. Excluding the $17.8 million related to the Aggregates Acquisitions, Cost of Goods Sold increased $28.9 million, or 3%.The increase was due to higher Sales Volume and operating costs of $17.7 million and $11.1 million, respectively. Higher operating costs were primarily related to our Cement and Gypsum Wallboard businesses and are discussed further in the segment analysis.

Current wording

Cost of Goods Sold increased by $61.5 million, or 5%, to $1,283.3 million for the nine months ended December 31, 2025. Excluding the $24.4 million related to the Aggregates Acquisition, Cost of Goods Sold increased $37.1 million, or 3%.The increase was due to higher Sales Volume and operating costs of $19.1 million and $18.0 million, respectively. Higher operating costs were primarily related to our Gypsum Wallboard and Cement businesses and are discussed further in the segment analysis.

Previous wording

Gross Profit decreased 1% to $385.3 million during the six months ended September 30, 2025. Excluding the $5.2 million of Gross Profit related to the Aggregates Acquisitions, Gross Profit decreased $10.6 million, or 3%. The decrease was primarily related to lower gross sales prices and higher operating costs of $5.7 million and $11.1 million, respectively, partially offset by higher Sales Volume of $6.2 million. The gross margin declined to 26%, primarily due to higher operating costs and lower gross sales prices.

Current wording

Gross Profit decreased 4% to $546.2 million during the nine months ended December 31, 2025. Excluding the $6.2 million of Gross Profit related to the Aggregates Acquisition, Gross Profit decreased $28.5 million, or 5%. The decrease was primarily related to higher operating costs and lower gross sales prices of $18.0 million and $12.7 million, respectively, partially offset by higher Sales Volume of $2.2 million. The gross margin declined to 30%, primarily because of higher operating costs and lower gross sales prices.

Previous wording

Equity in Earnings of our Unconsolidated Joint Venture decreased by $6.9 million, or 40%, for the six months ended September 30, 2025. The decrease was due to lower Sales Volume and increased operating costs of $1.1 million and $9.0 million, respectively. This was partially offset by $3.2 million from increased gross sales prices. Increased operating costs were primarily related to higher energy, freight, raw materials, and fixed costs, which reduced operating earnings by $1.7 million, $1.4 million, $2.9 million, and $2.0 million, respectively.

Current wording

Equity in Earnings of our Unconsolidated Joint Venture decreased by $7.5 million, or 34%, for the nine months ended December 31, 2025. The decrease was due to increased operating costs and lower sales volume of $11.1 million and $0.4 million, respectively, which were partially offset by $4.0 million of increased gross sales prices. Increased operating costs resulted primarily from higher raw materials, freight, energy, and fixed costs, which reduced operating earnings by $4.6 million, $2.2 million, $1.9 million, and $1.8 million, respectively.

Previous wording

Corporate General and Administrative expenses increased by approximately $3.4 million, or 19%, for the three months ended September 30, 2025. The increase was due primarily to higher salary and incentive compensation, professional fees, and information technology costs of $1.7 million, $0.7 million, and $0.8 million, respectively.

Current wording

Corporate General and Administrative expenses increased by approximately $11.8 million, or 22%, for the nine months ended December 31, 2025. The increase was due primarily to higher salary and incentive compensation, information technology costs, and business-development and professional fees of $4.3 million, $3.1 million, and $3.3 million, respectively.

Previous wording

Interest Expense, net decreased by approximately $1.3 million, or 13%, during the three months ended September 30, 2025. This decrease was mainly due to an increase of $1.4 million in capitalized interest during fiscal 2026 compared with fiscal 2025. The increase in capitalized interest is due primarily to capital spending for the expansion and modernization of our cement plant in Laramie, Wyoming and our gypsum wallboard plant in Oklahoma.

Current wording

Interest Expense, net increased by approximately $4.3 million, or 14%, during the nine months ended December 31, 2025. This increase was mainly due to increased interest expense of approximately $4.7 million on our 5.000% Senior Unsecured Notes due May 2036, which were issued on November 13, 2025, and $4.3 million of higher interest on our Term Loan, which was increased to $300.0 million in February 2025. This was partially offset by higher Interest Capitalized of approximately $3.8 million, and higher interest income of $1.1 million. 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 Oklahoma

Previous wording

Earnings Before Income Taxes decreased to $334.3 million during the six months ended September 30, 2025, primarily as a result of lower Gross Profit and Equity in Earnings of Unconsolidated Joint Venture, and higher Corporate General and Administrative expense, partially offset by lower Interest Expense, net.

Current wording

Earnings Before Income Taxes decreased to $463.6 million during the nine months ended December 31, 2025, 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.

Previous wording

Income Tax Expense was $73.6 million for the six months ended September 30, 2025, compared with $78.8 million for the six months ended September 30, 2024. The effective tax rate remained at 22%, consistent with the prior-year period.

Current wording

Income Tax Expense was $99.9 million for the nine months ended December 31, 2025, compared with $113.6 million for the nine months ended December 31, 2024. The effective tax rate remained at 22%, consistent with the prior-year period.

Previous wording

Three and six MONTHS ENDED september 30, 2025, COMPARED WITH three and six MONTHS ENDED september 30, 2024, BY SEGMENT

Current wording

Three and nine MONTHS ENDED December 31, 2025, COMPARED WITH three and nine MONTHS ENDED December 31, 2024, BY SEGMENT

Previous wording

The following presents results within our two business sectors for the three and six months ended September 30, 2025, and 2024. Revenue and operating results are organized by sector and discussed by individual business segments.

Current wording

The following presents results within our two business sectors for the three and nine months ended December 31, 2025, and 2024. Revenue and operating results are organized by sector and discussed by individual business segments.

Previous wording

(2) This amount does not include the cost of freight from our plants to our distribution terminals.

Current wording

(2) Excludes the cost of freight from our plants to our distribution terminals.

Previous wording

Cement Revenue was $732.5 million, a 6% increase, for the six months ended September 30, 2025. This increase was due to higher gross sales prices and Sales Volume, which increased Cement Revenue by $4.2 million and $36.4 million, respectively.

Current wording

Cement Revenue was $321.2 million, a 9% increase, for the three months ended December 31, 2025. This increase was due to higher Sales Volume, which increased Cement Revenue by $26.0 million, and was partially offset by lower gross sales prices, which decreased Cement Revenue by $0.2 million.

Previous wording

Cement Revenue was $384.9 million, a 9% increase, for the three months ended September 30, 2025. This increase was due to higher gross sales prices and Sales Volume, which increased Cement Revenue by $3.4 million and $28.7 million, respectively.

Current wording

Cement Revenue was $1,053.7 million, a 7% increase, for the nine months ended December 31, 2025. This increase was due to higher gross sales prices and Sales Volume, which increased Cement Revenue by $3.9 million and $62.5 million, respectively.

Previous wording

Cement Operating Earnings increased by $3.9 million to $119.8 million for the three months ended September 30, 2025. The increase was due to higher gross sales prices and Sales Volume of $3.4 million and $9.9 million, respectively, which were partially offset by higher operating costs of $9.4 million. The increase in operating costs was mainly due to higher freight, purchased raw materials, and labor and other fixed costs of approximately $1.9 million, $7.2 million, and $4.3 million, respectively. This was partially offset by lower maintenance costs of approximately $5.3 million. The Operating Margin decreased to 31% from 33% because of higher operating costs, partially offset by the increase in gross sales prices.

Current wording

Cement Operating Earnings increased by $0.4 million to $292.2 million for the nine months ended December 31, 2025. The increase was due to higher Sales Volume and higher gross sales prices of $19.8 million and $3.9 million, respectively, which were partially offset by higher operating costs of $23.3 million. The increase in operating costs was mainly due to higher freight, purchased raw materials, and labor and other fixed costs of approximately $4.1 million, $13.3 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 million, respectively. The Operating Margin decreased to 28% from 30% because of higher operating costs, partially offset by the increase in gross sales prices.

Previous wording

Concrete and Aggregates Revenue increased 23% to $85.8 million for the three months ended September 30, 2025. Excluding the Aggregates Acquisitions, Revenue increased $4.2 million, or 6%. The increase was due to higher Concrete gross sales prices of $1.4 million and higher Aggregates Sales Volume of $4.9 million, which was partially offset by lower Aggregates gross prices, which reduced Revenue by $2.1 million.

Current wording

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

Previous wording

Operating Earnings were approximately $7.9 million, an 896% increase. Excluding the Aggregates Acquisitions, Operating Earnings increased $5.6 million, or 660%. The increase was due to higher Sales Volume and lower operating costs, which positively affected Operating Earnings by $1.1 million and $5.1 million, respectively, partially offset by lower gross sales prices of $0.6 million. Excluding the Aggregates Acquisitions, Sales Volume increased 35%, with most of the increase in our Northern Colorado and Northern Kentucky markets. The decrease in operating costs was primarily due to lower materials, delivery, and maintenance expenses of approximately $2.3 million, $2.2 million, and $0.3 million, respectively.

Current wording

Acquisition, Sales Volume increased 34%, with most of the increase in our Northern Colorado and Northern Kentucky markets

Previous wording

Concrete and Aggregates Revenue increased 21% to $163.4 million for the six months ended September 30, 2025. Excluding the Aggregates Acquisitions, Revenue increased $5.6 million, or 4%. The increase was due to higher Concrete gross sales prices of $2.1 million and higher Aggregates Sales Volume of $7.9 million, which was partially offset by lower Concrete Sales Volume and Aggregates gross sales prices, which reduced Revenue by $3.1 million and $1.3 million.

Current wording

Concrete and Aggregates Revenue increased 21% to $236.9 million for the nine months ended December 31, 2025. Excluding the Aggregates Acquisition, Revenue increased $10.8 million, or 6%. The increase was due to higher Aggregates Sales Volume of $12.6 million and higher Concrete gross sales prices of $3.9 million, which were partially offset by lower Concrete Sales Volume and Aggregates gross sales prices, which reduced Revenue by $3.3 million and $2.4 million, respectively.

Previous wording

Operating Earnings were approximately $14.1 million, a 610% increase. Excluding the Aggregates Acquisitions, Operating Earnings increased $6.9 million, or 345%. The increase was due to higher gross sales prices and higher Aggregates Sales Volume, which positively affected Operating Earnings by $0.8 million and $2.9 million, respectively, as well as lower operating costs of $3.2 million. Excluding the Aggregates Acquisitions, Sales Volume increased 33%, with most of the increase in our Northern Colorado and Northern Kentucky markets. The decrease in operating costs was primarily due to lower materials and maintenance expenses of approximately $1.1 million and $1.2 million, respectively.

Current wording

Operating Earnings were approximately $15.5 million, a 2,532% increase. Excluding the Aggregates Acquisition, Operating Earnings increased $8.7 million, or 1,480%. The increase was due to higher Aggregates Sales Volume and higher gross sales prices, which positively affected Operating Earnings by $4.0 million and $1.6 million, respectively, as well as lower operating costs of $3.1 million. Excluding the Aggregates Acquisition, Sales Volume increased 33%, with most of the increase in our Northern Colorado and Northern Kentucky markets. The decrease in operating costs was primarily due to lower materials and maintenance expenses of approximately $2.0 million and $1.2 million, respectively.

Previous wording

Gypsum Wallboard Revenue was $183.5 million, a 15% decrease for the three months ended September 30, 2025. Lower gross sales prices and Sales Volume reduced Revenue by approximately $1.8 million and $29.7, respectively. Our market share remained relatively consistent during the three months ended September 30, 2025.

Current wording

Gypsum Wallboard Revenue was $175.9 million, a 16% decrease for the three months ended December 31, 2025. Lower gross sales prices and Sales Volume reduced Revenue by approximately $5.2 million and $28.4 million, respectively. Our market share remained relatively consistent during the three months ended December 31, 2025.

Previous wording

Operating Earnings decreased 25% to $67.3 million, primarily because of lower gross sales prices and Sales Volume of $1.8 million and $12.5 million, as well as higher operating costs of $8.6 million. The higher operating costs were primarily related to freight, maintenance, energy, input costs (mainly fiber), and fixed costs, which reduced Operating Earnings by approximately $0.8 million, $0.6 million, $1.4 million, $0.9 million, and $1.8 million, respectively. Operating Margin decreased to 37% for the three months ended September 30, 2025, primarily because of lower gross sales prices and higher operating costs. Fixed costs are less than 20% of the overall cost of wallboard; therefore, changes in utilization generally have a relatively minor impact on our operating cost per unit.

Current wording

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

Previous wording

Gypsum Wallboard Revenue was $405.0 million, a 6% decrease for the six months ended September 30, 2025. Lower gross sales prices and Sales Volume negatively affected Revenue by approximately $5.7 million and $22.1 million, respectively. Our market share remained relatively consistent during the six months ended September 30, 2025.

Current wording

Gypsum Wallboard Revenue was $580.9 million, a 10% decrease for the nine months ended December 31, 2025. Lower gross sales prices and Sales Volume reduced Revenue by approximately $10.8 million and $50.6 million, respectively. Our market share remained relatively consistent during the nine months ended December 31, 2025.

Previous wording

Operating Earnings increased 37% to $11.0 million, primarily because of higher gross sales prices and lower operating costs, which increased Operating Earnings by $0.3 million and $3.1 million, respectively. This was partially offset by lower Sales Volume, which reduced Operating Earnings by approximately $0.4 million. The decrease in operating costs was primarily related to lower input costs, namely fiber, of approximately $5.5 million, which were partially offset by higher energy, maintenance and supplies, and fixed costs of $0.8 million, $0.9 million, and $0.3 million, respectively. Operating Margin increased to 23%, largely due to the decrease in operating costs. Although the Company has certain pricing provisions in its long-term sales agreements, prices are adjusted only at certain times throughout the year, so price adjustments are not always reflected in the same period as the change in costs.

Current wording

Operating Earnings increased 2% to $11.2 million, primarily because of lower operating costs, which increased Operating Earnings by $4.3 million. This was partially offset by lower gross sales prices and Sales Volume, which reduced Operating Earnings by approximately $3.1 million and $1.0 million, respectively. The decrease in operating costs was primarily related to lower input costs, namely fiber, of approximately $4.6 million, which were partially offset by higher energy costs of $0.8 million. Operating Margin increased to 24%, largely due to the decrease in operating costs. Although the Company has certain pricing provisions in its long-term sales agreements, prices are adjusted only at certain times throughout the year, so price adjustments are not always reflected in the same period as the change in costs.

Previous wording

Recycled Paperboard Revenue decreased 5% to $99.7 million during the three months ended September 30, 2025. Lower gross sales prices and Sales Volume reduced Revenue by $2.5 million and $2.8 million, respectively. Lower gross sales prices were related to the pricing provisions in our long-term sales agreements.

Current wording

Recycled Paperboard Revenue decreased 8% to $147.5 million during the nine months ended December 31, 2025. The decrease was due to lower gross sales prices and Sales Volume, which decreased revenue by $5.8 million and $7.8 million, respectively. Lower gross sales prices were related to the pricing provisions in our long-term sales agreements.

Previous wording

Operating Earnings increased 24% to $20.5 million, primarily because of lower operating costs, which increased Operating Earnings by $6.6 million. This was partially offset by lower gross sales prices and Sales Volume, which reduced Operating Earnings by approximately $2.5 million and $0.4 million, respectively. The decrease in operating costs was primarily related to lower input costs, namely fiber, of approximately $9.0 million, which were partially offset by higher energy and fixed costs of $1.2 million and $0.5 million, respectively. Operating Margin increased to 21%, with the decrease in operating costs offsetting the lower gross sales prices. Although the Company has certain pricing provisions in its long-term sales agreements, prices are adjusted only at certain times throughout the year, so price adjustments are not always reflected in the same period as the change in costs.

Current wording

Operating Earnings increased 15% to $31.8 million, primarily because of lower operating costs, which increased Operating Earnings by $11.3 million. This was partially offset by lower gross sales prices and Sales Volume, which reduced Operating Earnings by approximately $5.8 million and $1.3 million, respectively. The decrease in operating costs was primarily related to lower input costs, namely fiber, of approximately $13.9 million, which were partially offset by higher energy and fixed costs of $2.0 million and $0.2 million, respectively. Operating Margin increased to 22%, with the decrease in operating costs offsetting the lower gross sales prices. Although the Company has certain pricing provisions in its long-term sales agreements, prices are adjusted only at certain times throughout the year, so price adjustments are not always reflected in the same period as the change in costs.

Previous wording

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

Current wording

At this time, we believe we have access to sufficient financial resources from our liquidity sources to fund our business and operations, including contractual obligations, capital expenditures, and debt service obligations for at least the next twelve months. We regularly monitor 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

Working Capital increased by $0.5 million to $424.1 million at September 30, 2025, compared with March 31, 2025. The increase was primarily due to higher Cash, Accounts Receivable, net, and Prepaid and Other Assets of $14.6 million, $38.5 million, and $2.9 million, respectively. This was partially offset by $10.2 million of lower Income Tax Receivable, net and $45.0 million of lower Inventories.

Current wording

Working Capital increased by $367.0 million to $790.6 million at December 31, 2025, compared with March 31, 2025. The increase was primarily due to higher Cash of $398.6 million and lower Accounts Payable of $5.7 million, partially offset by lower Inventories, Accounts Receivable, net, and Income Tax Receivable, net of $30.3 million, $3.8 million, and $1.9 million, respectively.