Eagle Materials Inc. Reports Third Quarter Results

Eagle Materials Inc. (NYSE: EXP) today reported fiscal third quarter net earnings of $11.3 million ($0.26 per share). For the same period a year ago, Eagle reported net earnings of $22.5 million ($0.50 per share), which included after-tax income of $1.6 million ($0.04 per share) related to the favorable settlement of an outstanding lawsuit at our Lawton, Oklahoma paper mill.

GYPSUM WALLBOARD AND PAPERBOARD

Eagle’s Gypsum Wallboard and Paperboard operations reported third quarter revenues of $76.9 million, a 17% decrease from the $92.8 million for the same quarter a year ago. The quarterly comparative revenue decline reflects lower gypsum wallboard sales volumes. Gypsum Wallboard and Paperboard’s third quarter operating earnings of $6.8 million were down 31% compared with operating earnings of $9.8 million for the same quarter last year, excluding a pre-tax gain of approximately $2.3 million related to the favorable settlement of an outstanding lawsuit. The average gypsum wallboard net sales price for this fiscal year’s third quarter was $103.71 per MSF, 3% higher than the $100.32 per MSF for the same quarter last year. Gypsum Wallboard sales volume of 453 million square feet (MMSF) for the quarter declined 17% from the prior year’s third quarter.

CEMENT, CONCRETE AND AGGREGATES

Eagle’s Cement operations reported revenues, including joint venture and intersegment revenues, of $71.4 million, 17% less than the $85.8 million for the same quarter a year ago. Operating earnings from Eagle’s Cement operations declined to $22.0 million for the third quarter this year from $26.6 million for the same quarter last year. Cement sales volumes for the third quarter were 701,000 tons, 18% below the 850,000 tons for the same quarter last year. Eagle’s purchased cement sales volumes for the quarter declined 36% to approximately 110,000 tons. The average net sales price for this fiscal year’s third quarter was $95.00 per ton, 1% less than the $96.31 per ton for the same quarter last year.

Revenues from Concrete and Aggregates were $15.1 million for this year’s third quarter, 32% less than the $22.4 million for the third quarter a year ago. Concrete and Aggregates reported a $0.4 million operating profit for this year’s third quarter, down from the $3.1 million operating profit for the same quarter last year, primarily due to lower sales volumes in our Concrete and Aggregates businesses and lower net sales prices for both Concrete and Aggregates.

Concrete sales volume decreased 33% for the third quarter this year to 144,000 cubic yards from 215,000 cubic yards for the same quarter last year. Our Concrete quarterly average net sales price of $72.74 per cubic yard for the third quarter of fiscal 2009 was 7% less than the $77.88 per cubic yard for the third quarter a year ago. Our Aggregates operation reported sales volume of 735,000 tons for the current quarter, 15% less than the third quarter last year. Our Aggregates quarterly average net sales price was 2% below last year’s third quarter average net sales price.

DETAILS OF FINANCIAL RESULTS

We conduct one of our cement plant operations through a 50/50 joint venture, Texas Lehigh Cement Company LP (the "Joint Venture”). We utilize the equity method of accounting for our 50% interest in the Joint Venture. For segment reporting purposes only, we proportionately consolidate our 50% share of the Joint Venture’s revenues and operating earnings, which is consistent with the way management organizes the segments within the Company for making operating decisions and assessing performance.

In addition, for segment reporting purposes, we report intersegment revenues as a part of a segment’s total revenues. Intersegment sales are eliminated on the income statement. Refer to Attachment 4 for a reconciliation of the amounts referred to above.

REPURCHASE OF SENIOR NOTES

Subsequent to December 31, 2008, Eagle offered to purchase up to $100 million in aggregate principal amount of its Series 2007A and Series 2005A Senior Notes at a 5% discount. Eagle has accepted for purchase $100 million in aggregate principal amount, and it is anticipated that payment for the Notes will be made in the next few business days. The purchase of the notes will be funded by lower cost borrowings made under our revolving credit facility. As a result of the purchase, Eagle will modestly reduce its outstanding debt, reduce interest payments, and improve financial flexibility with a combination of fixed term debt, variable revolving debt and cash, while at the same time maintaining a large amount of readily available liquidity.

Eagle Materials Inc. is a Dallas-based company that manufactures and distributes Cement, Gypsum Wallboard, Recycled Paperboard, and Concrete and Aggregates.

EXP’s senior management will conduct a conference call to discuss the financial results, forward looking information and other matters at 2:00 p.m. Eastern Time (1:00 p.m. Central Time) on Thursday, February 5, 2009. The conference call will be webcast simultaneously on the EXP Web site http://www.eaglematerials.com. A replay of the webcast and the presentation will be archived on that site for one year. For more information, contact EXP at 214-432-2000.

Forward-Looking Statements. This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the context of the statement and generally arise when the Company is discussing its beliefs, estimates or expectations. These statements are not historical facts or guarantees of future performance but instead represent only the Company's belief at the time the statements were made regarding future events which are subject to certain risks, uncertainties and other factors many of which are outside the Company's control. Actual results and outcomes may differ materially from what is expressed or forecast in such forward-looking statements. The principal risks and uncertainties that may affect the Company’s actual performance include the following: the cyclical and seasonal nature of the Company’s business; public infrastructure expenditures; adverse weather conditions; availability of raw materials; changes in energy costs including, without limitation, natural gas and oil; changes in the cost and availability of transportation; unexpected operational difficulties; inability to timely execute announced capacity expansions; governmental regulation and changes in governmental and public policy (including, without limitation, climate change regulation); changes in economic conditions specific to any one or more of the Company’s markets; competition; announced increases in capacity in the gypsum wallboard and cement industries; changes in the demand for residential housing construction or commercial construction; general economic conditions; and interest rates. For example, increases in interest rates, decreases in demand for construction materials or increases in the cost of energy (including, without limitation, natural gas and oil) could affect the revenues and operating earnings of our operations. In addition, changes in national or regional economic conditions and levels of infrastructure and construction spending could also adversely affect the Company's result of operations. These and other factors are described in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2008 and in its Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2008. These reports are filed with the Securities and Exchange Commission. All forward-looking statements made herein are made as of the date hereof, and the risk that actual results will differ materially from expectations expressed herein will increase with the passage of time. The Company undertakes no duty to update any forward-looking statement to reflect future events or changes in the Company's expectations.

(1) Summary of Consolidated Earnings

(2) Revenues and Earnings by Lines of Business (Quarter)

(3) Revenues and Earnings by Lines of Business (Nine Months)

(4) Sales Volume, Net Sales Prices and Intersegment and Cement Revenues

(5) Consolidated Balance Sheets

* Net of Intersegment and Joint Venture Revenues listed on Attachment 4.

* Net of Intersegment and Joint Venture Revenues listed on Attachment 4.

** Nine months ended December 31, 2008 results include a $2.6 million gain on sale of railcars.

*Net of freight and delivery costs billed to customers.

*From audited financial statements.