Steven R. Rowley – President and Chief Executive Officer D. Craig Kesler – Executive Vice President, Finance and Administration and Chief Financial Officer.

Trey Grooms – Stephens Inc. Kathryn Thompson – Thompson Research Group Todd Vencil – Sterne Agee & Leach Jerry Revich – Goldman Sachs Garik Shmois – Longbow Research John Baugh – Stifel Nicolaus Jim Barrett – CL King and Associates Kevin Money – Cleveland Research.

Good day, ladies and gentlemen, and welcome to the Q1 2014 Eagle Materials Inc. Earnings Conference Call. My name is Stephanie and I will be your operator for today. At this time, participants are in a listen-only mode. And we will conduct a question-and-answer session towards the end of this conference.

(Operator Instructions) As a reminder, this conference call is being recorded for replay purposes. I would like to turn the call over to Mr. Steve Rowley, President and CEO of Eagle Materials. Please proceed, sir..

Thank you and welcome to Eagle Materials conference call for the first quarter of fiscal year 2014. Joining me today is Craig Kesler, our Chief Financial Officer. There will be a slide presentation made in connection with this call. To access it, please go to www.eaglematerials.com and click on the link to the webcast.

While you are accessing the slides, please note that the first slide covers our cautionary disclosure regarding forward-looking statements made during this call. These statements are subject to risks and uncertainties that could cause results to differ from those discussed during the call.

For further information please refer to this disclosure, which is also included at the end of our press release. Eagle’s first quarter revenues increased 47% and earnings per diluted share increased 94%, as a result of much improved pricing across most of our businesses and stronger sales volumes across all business line.

Our recently acquired operations in Kansas City in Tulsa performed well during the quarter, also contributing to the earnings increase. Cement sales volumes were at quarterly record for Eagle Materials. Also during the first quarter, we sold our first frac sand into the marketplace.

We are excited about our entry into this business and look forward to opening the Illinois mine later this year. The good news is that constructions improving in all of our market. Our cost reduction capital improvement project comparable remains full and is keeping our engineers very busy.

Likewise, our business development offer is very full and is keeping many of us busy and our legal department very busy. Record cement sales volumes increased concrete aggregate sales volumes and improved pricing with the primary drivers of the increase in Eagle’s quarterly comparative of cement concrete and aggregate revenues.

Sales volume improvements occurred in all of our cement market, excluding the Midwest, which endured an extremely wet spring. We continue to see strong demand for the energy sectors for the oil well cement, which we expect will continue.

Consistent with the prior year we performed our typical annual maintenance outages in all of our heritage cement plants during the first quarter. Average net cement sales prices increased 6% reflecting price increases successfully implemented this spring.

We have announced additional cement price increase for later this year in the range of $6 to $8 per ton. Increased average wallboard net sales prices and increased sales volume drove a 28% in our quarterly comparative of Wallboard and Paperboard revenues.

Operating earnings in our Wallboard and Paperboard business increased 83% to $35.3 million for the first quarter. Our Wallboard plans continue to perform exceptionally well. Now let me turn this over to Craig for more details on the financials..

Thanks, Steve. Eagle’s operating cash flow during the quarter was comparable with the prior year, reflecting improved earnings offset by an increase of working capital. Capital spending of approximately $21.2 million reduced primarily towards to build out of our frac sand mined in order Illinois and maintenance capital.

Effective tax rate for the quarter was approximately 32%. Last slide reflects Eagle’s capital structure which remains flexible with improved earnings and cash flow from our low cost operations. Our net debt to cap ratio was 40% in June 30, 2013. Thank you attending today’s call. Stephanie, we will now move to the question-and-answer session..

Thank you. (Operator Instructions) The first question comes from the line of Trey Grooms from Stephens Incorporated. Please proceed..

Steve, can you give us a little color on kind of what the reception has been like in the market there since you have started shipping?.

I missed the first part of the question..

Sorry, just if you can give us some color on kind of what the reception has been in the market to the frac sand you guys have been shipping out, now that you’ve opened that plan up into an operation?.

Sure, quality and customer services is really outstanding on that operation, so it’s been very well received as we continued to ramp up that operation..

Okay. So looking at now that we’ve started shipping or you guys have started shipping out of that plant.

Is there anyway that you can kind of help us kind of think about the economics of that business, at this point kind of how you see that?.

You know we’re just entering this business, so it would be a normal slow ramp up like you would with any new enterprise and really we’ll kick in earnest once we get our sand mine up in running later this year in Illinois..

So we should expect you guys will be selling I guess [pre-bought] or material up until that point?.

That’s correct third-party sand....

But just material I guess?.

Yeah. Third-party sand, but lower margin until we get our mine up in running..

And you’ve got your logistic structures a little bit unique for that in the industry.

Can you give us kind of sense of how you see yourself being positioned as far as in the cost curve there?.

Yeah, so the design from the get-go was to be the lowest deliberate cost of producer in the marketplace and we are very, very comfortable that that model works..

Okay. That’s helpful. Thanks for that. And then can you talk about – so obviously weather impacted the quarter, and I’m sorry I got on just a little bit late, but if you touched on this I apologize. But can you talk about kind of how the quarter kind of trended out kind of in the June and July, if you could in the different markets there in cement..

Yeah. So we had a little slow start as it was a little cold and wet in the month of April and even lingering in early May, but it extremely strong since then and really in all of our markets and in the markets that weren’t impacted by whether, supply is very tight, demand is very strong.

So the really good news is that we are seeing construction pick up in all of our markets. The pace of the pick up varies from market-to-market and the type of construction varies from market-to-market. So in some places housing is strong and other places commercial may be strong or infrastructure may be strong.

In some places all three of them are strong. So it varies from market-to-market, but the good news is that construction activity is picking up. The strongest activity obviously is associated near energy place..

Okay thanks for that and then my last question is you mentioned business development hopper is full, I have got to ask if you wouldn’t mind elaborating on that a little bit more, types of things you maybe looking at, just any types of details there would be helpful. Thank you..

So obviously what we are looking at, we have a very strong balance sheet and a lot of energy here in Dallas and in some of other operations, but we are planning to fully build out a complete network for frac sand within three to four years across the country, so a lot of effort in those areas as well as in few other items..

All right, great. Thanks a lot good luck..

Thank you. The next question comes from the line of Kathryn Thompson from Thompson Research Group. Please proceed..

Hi thanks for taking my questions today. First I wanted to focus on cement volumes, could you quantify the impact of higher precipitation in Illinois and Kansas operations and what impact this have in quarter, I assume that these are just simply pushed out sales versus lost sales. Thank you..

So the answer is that they definitely appear to be pushed out sales, because sales are very strong and almost ahead of our ability to meet the marketplace demand, which is what happens, you have got, you have system designed to produce here cement and clinker designed for normal seasonal pattern, then all of a sudden that season, a shifting season gets shortened and you have a hard time meeting the demand because of it.

We are working very hard and plants went through maintenance in all of our plants. So we are running very well, not having any downtime issues, but the demand is very strong. So that feels very, very good and in general compared to a year ago or two years ago, a demand in all of our markets has much improved.

As I mentioned earlier, exceptionally strong near the energy plays and exceptionally tight, we’re really nervous about our ability to get cement to those markets, which is the reason for pricing transportation to waterfall these things, you can waterfall cement to certain distance, but if prices aren’t up, you run out of margin pretty quickly.

So that is the reason for a lot of strong pricing for all our products to be able to waterfall into these strong demand markets..

And just in terms of volumes, was a greater impact from precipitation or was there an impact with the ramp up of Lafarge or any of the factors just to take into consideration..

They only factor at all was the precipitation and of course a year ago, we had just the opposite, so if it was a very mild winter and so our fourth quarter and the first quarter of calendar year last year was strong and so we didn’t have the initial ramp up like you would normally have in the spring.

So you just have to realize seasons do impact these northern markets dramatically is how they play out. But we are very busy right now..

Okay. And second question on cement segment again is on the margin side.

Could you better clarify the cost going into the wholly-owned cement operations, in other words how much did lower utilization from a higher precipitation versus maintenance costs versus any other factor that we should take in consideration, impact overall margins, essentially what we are trying to get a better sense of the incremental costs structure going forwards as Lafarge continue to ramp into the system, but also taken to account one-time factor is obviously are difficult to predict?.

So it’s going to be pretty tough comparisons until we have a full year of the Lafarge assets integrated into the financials. But the best way to look at it is especially on the maintenance side this quarter is always when we try to get ready and ahead of the busy shipping season to make sure our equipment is in a good shape.

So we have a lot of maintenance. I don’t think the maintenance this year was any greater than it was last year in our plants. We got a lot of work done, but I think costs were similar.

But the best way to look at maintenance, because we try to do it very religiously on an annual basis is to look at more of a trailing 12 months, look at your total cost that takes the lumpiness out because every once in a while maintenance might shift from one quarter to another quarter either instead of being in on an annual basis, it may hit the next year or it may hit the quarter ahead of that sometimes the maintenance moves a little bit.

But if you look at it at a trailing 12, that is a pretty good look at the direction of your cost in a cement facility..

So assuming that you have maintenance in the first quarter last year, would you guys did the greater impact to margins is just lower utilization from the weather impact?.

That’s interest..

Okay. That’s helpful. Thank you..

Thank you. The next question comes from the line of Todd Vencil from Sterne Agee. Please proceed..

Thanks good morning guys..

Good morning..

Obviously going back to my transcript to try to see it but could you just to keep me from doing that and while I have you on here? Steve, do you have an absolute amount of what the maintenance was in the quarter?.

I didn’t really had a look. I certain watched all of them and all of our plants. But it I don’t think it year-over-year there is that much difference..

Okay. Fair enough.

Can you talk about where you are in terms of capacity utilization at each of the cement plants?.

At the cement plants, we remain again sold out in our plant in Texas and in our plant at Laramie, Oklahoma is getting very, very full right now. Kansas City we still have a little bit of product available there, if you look at it on an annual basis, if you look at it the issue that we have talked about shores shipping season.

And we just don’t have any more finished brand left. So we’re little tight there. We would love to waterfall more cement out of Sugar Creek to our other facilities. And we can waterfall a little, but not as much as we like to do so. And we have been impacted by the weather and our ability to waterfalls as much cement as one.

We’re looking at projects to rectify that going forward..

Okay.

So generally just trying to get pretty full in a lot of the plants, I mean do you have any plans or even any sort of mechanism for being able to add capacity in those plants?.

We are certainly looking at that and other opportunities to make sure that can happen that we can take other customers and we’re also purchasing a lot of cement and we’ll continue to do so..

Okay.

Would be possible for your breakout, what the tonnage was from the required Lafarge plants?.

Craig..

Sure, I can walk through on that, so far the first quarter to be about 350,000 tons from the new facility..

Got it. Thank you.

And sticking with cement and I think to wrap it up on that par; you mentioned the cement price increases, are those in all your markets or specific markets?.

There are in all the market that hit the timing various a little bit from the fall to next spring. But it’s pretty much $6 to $8 across the Board whatever market you’re talking about, some little sooner, some in the fall and some in January and some next spring, but in that $6 to $8 range..

Got it. Thank you for that. Switching gears to go to gypsum, you saw that the cash cost per 1,000 were little higher than we were looking for kind of hung in there the way I calculated above 80 bucks.

Were there any particular costs in the wallboard business in the quarter?.

I think our costs were pretty good, if you are trying to look sequentially, they seem normal, if you look year-over-year, I think natural gas is higher, this year than it was last year at this time, I know they are three or four bucks. But I think that’s the only thing that I noted in the financials..

Got it, it will probably hang around this level, because with higher nat gas it didn’t actually makes fair amount of sense? And then in paperboard as I’m thinking about kind of the cost price spread there and Craig and I went through this at one point.

I think back in the middle of last year, you guys benefited from some OCC prices that is falling, but sort of looking like $120 to $125 sort of margin there on a cash basis.

Is that about the right level, I mean you look for that to stay there is there any reason in this costs?.

This quarter we also had maintenance in the paper mill and that usually happens at couple of times a year and this is a 45 day outage. So any adjustment of that is again probably just like we talked about a few minutes ago, maintenance in a cement operation gets a little lumpy, when you have maintenance in the paper mill as well.

But plants ran very well going into the maintenance is coming up; up and running exceptionally well after the maintenance outage at the paper mill..

Okay, thanks. That’s really helpful actually.

And I know frac sand and then this will wrap this up for me, what kind of timing are we looking at for the start-up in Illinois?.

Yeah, we’re hoping that it’s about three to four months that the timing has been delayed a little bit simply because its taking longer than originally anticipate to get one final environmental permit.

We have been working very, very closely to put a proper plan together, its gone out for public comment, that period is over now and now we are working with the state to respond any of those comments and hopefully we’ll get that permit three months to four months..

So three to four months, should we really think in more or like crank that thing up of the end of calendar year?.

Probably..

Okay.

Would it be possible to sort of go through tonnage and price numbers on the frac sand for the quarter?.

That’s really early to go through that..

Okay it fair to assume that the level of sales was pretty low just because there was no point in force high cost third-party sands are there..

Yeah, you want to be very careful when you are enter a new market and you are going to be even when you have regular sand you are careful when you are entering a market, because you don’t know what the real price is. All right so you are careful in the initial sales of any product into any new market.

Until you get an understanding of what the market really is..

Would you be between now and the end of the year, would you be thinking about possibly slow ramping up that level of sales or are you going to keep basically at the level you had in the quarter..

We clearly are going to ramp it up..

Okay. Okay, and then finally I think I would be [demystified] ask this question even I’m not sure you are going to want to answer it. You said in response Trey’s question about capital projects and business development that you are going to built that a complete frac sand network around the country.

I think would be demystified if I didn’t ask how many tons do you think a complete frac sand network would provide?.

We still think that’s going to be into the 4 million to 5 million ton per year at our business..

Okay. All right, I appreciate that. Thanks a lot..

Your next question comes from the line of Jerry Revich from Goldman Sachs. Please proceed..

Good morning. .

Good morning..

Steve can you just flush out the environmental just give us some more context and what is the risk that there is going to be a more significant delay to just help us understand the process from here if you could?.

Steven R. Rowley:.

And so once we got on board and network very closely with the state environmental engineers, we agreed on a plan to put forth for public comment and public comment period takes about 30 days, it was over earlier this week.

We will review those comments possibly go to a public hearing and another month or so and then after that process review the whole two process and make sure that the plan is appropriate and has addressed all needs and then receive a permit..

And so just to be clear when you said three months to four months that takes you into November, December timeframe or did you mean three to four months from the initial application?.

No I think that’s probably going to take us in to that November timeframe..

Thank you. The next question comes from the line of Garik Shmois from Longbow Research. Please proceed..

Thank you.

First question I think maybe for Craig, I’m wondering Craig if you could provide us with the tonnage from the Lafarge plants for Q2 and Q3 and particularly just sort of we have an apples-to-apple comparison as we model out for the next couple of quarters? Is that possible to do?.

So you’re talking about that be on a perspective basis for Q2 and Q3 and so we certainly, we can give you some of the details as we go through the rest of the year so that you can have apples-to-apples comparison. The 10-Q has some incremental disclosures as well on revenues and operating earnings for the purchase assets..

Okay, all right.

But you don’ have the volumes right now in front of you as far as…?.

Yeah for the prior year, no those when they were owned by Lafarge they would be in the respective supplement on an annual basis that we’ve provided back in the fall as well..

Okay, all right.

I guess just switching to the fracing business, is it possible to quantify the start-up costs that you are anticipating as you ramp up over the next several quarters?.

And we’ve really haven’t – we don’t really take that material to Eagle in general. So it’s really is not worth talking, it is some cost but we are – we do have some sales to cover those cost. So it’s just pretty difficult of any project..

Thank you. The next question comes from the line of John Baugh with Stifel Nicolaus. Please proceed sir..

Good morning, Steve and Craig. Yes, thank you.

Steve, Craig, I was wondering could you give some thoughts around both what you were doing with your wallboard capacity and sort of philosophical or strategic approach to bringing additional capacity online? What if any pockets of sort of supply constraint exist with strong demand? And then maybe make the same commentary on what you’re seeing some of your competitors doing in the marketplace? Thank you..

We’re doing the best we can to service all of our customers in all of our markets. We’ve been a little more fortunate with our wallboard business and that we are in the Sunbelt, we are there in a lot of the energy plays. So the demand has been little stronger there.

So what we’ve been very fortunate to not have to ship very far and sell a lot of product and it makes it easier for us to make those decisions to ship closer in and have to try to ship further out and when transportation cost continue to go up and it doesn’t make lot of sense and transportation availability is hard especially for longer haul.

So for us, it’s let’s stay close to home and focus on taking care of our customers..

Any commentary on what you see from your competition in terms of bringing any capacity out of mothballs or how they’re meeting shortages, spot shortages here in there..

Yeah, I really don’t know, I really can’t answer that question on a factual base; I can answer it somewhat intuitively knowing that there are markets where we typically might not play, where I know our competitors serve those markets, where we are getting requested to sell more and more wallboard.

So it appears that there is need for wallboard in markets, secondary markets that we have to decide whether we can meet it or not or whether it’s worth the effort to go out and try and find the transportation to get to those markets which is difficult these days..

And then lastly is there any concern or just not an issue at all as it relates synthetic gypsum and coal burning and all pressures that seem to be mounting steel and some of the coal burning utilities. Thank you..

I haven’t seen any of that issues, that was a phenomena a year or two ago, but I have not seen any of that of light..

Great, thank you..

Thank you the next question comes from the line of Jim Barrett from CL King and Associates. Please proceed..

Good morning, Steve and Craig..

Good morning..

Steve could you talk a bit about your plant in a Georgetown and the Carolinas has the performance in that marketplace the demand supply dynamics in that marketplace, is it materially different than your other plants in you network?.

No I would say that plants the demand there is very strong as well and so well that might not be near in energy play the demand has the remained very strong for that plant..

I see and pricing that market has it myriad the national average?.

Pricing has stayed very strong for us there as well. We went up to same amount in that marketplace as we did in the other marketplace and it’s been very firm..

Okay.

And finally on aggregates I realize it’s a very small part of your business, but what explains the large increase in price in that business and has it occurred just in Texas or is that occurred elsewhere as well?.

So as we move forward and as we ramp up the frac sand, the frac sand sells at much higher price than normal aggregate and while it’s still small, it still has some impact to that number..

I see..

Okay..

Well that’s helpful and thank you very much..

Thank you. The next question comes from the line of Kevin Money from Cleveland Research..

Good morning..

Good morning..

Good morning, Kevin..

Could you provide a little bit of an update on the oil well cement mix shift at Illinois, just kind of curious as how that customer acceptance has been and how those volumes are ramping up?.

Yeah, so volumes are slow there. We are just really starting that process. But along those same lines, we have done a great job perfecting the oil well cement of production in the two new plants.

So we’re happy that again our goal is provide oil well cement in a much broader market than just the Texas market and the mountain market is moving forward quite nicely..

Okay. Just on the wallboard price utilization, how does that trend through the quarter, was it pretty stable or was there any kind of a new….

So it’s very stable..

Okay, thanks..

Thank you. The next question comes from the line of Jerry Revich from Goldman Sachs. Please proceed..

Thanks, Steve here I’m wondering if you just flush out the plan for the third party sand and why you’re not interested in just ramping that up sooner considering the cost of energy and then the logistics side certainly can put up some pretty good financials as you wait for the permits here, can you just flush that out for us?.

Yeah, and we are ramping that was the response that we would continue to ramp it up..

Okay.

Right and relative to the full capacity run rate that you have at Corpus Christi, when do you expect to hit that number and I guess given your logistics advantages why does to that Eagle Ford, how long does it take to hit your earnings target for the segment, which in your slide you have outlined us ultimately exceeding earnings power and cement business? I guess given the advantage on the logistics side, should we expect that as soon as you get the full production for the Eagle Ford?.

So when we talk about being as big as the cement business that’s the broader scale, the whole build out to three to four year build out over the all of North America as far as this we expect to really start ramping, we’ll really start moving up steadily and ramping up sales rapidly as planned kind of in the first quarter of next calendar year and that really has been our plan all along..

Okay. Thank you..

Thank you. There are no more questions. I would now like to turn the call over to Steve Rowley for closing remarks..

Well, thank you. We’re very excited and a lot of good things happening here at Eagle Materials and looking forward to next quarter’s call. Thank you very much..

Thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect and enjoy the rest of your day..