Eagle Materials Inc

Good day everyone and welcome to EGLE Materials first quarter fiscal 2025 earnings conference call. Today's event is being recorded. At this time, I'd like to turn the floor over to EGLE's President and Chief Executive Officer, Mr. Michael Hack. Mr. Hack, please go ahead.

Thank you, Jamie. Good morning. Welcome to EGLE Materials conference call for our first quarter of fiscal year 2025. This is Michael Hack. Joining me today are Craig Kessler, our Chief Financial Officer, and Alex Haddock, Senior Vice President of Investor Relations, Strategy, and Corporate Development. There will be a slide presentation made in connection with this call. To access it, please go to eaglematerials.com and click on the link to the webcast. While you're 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. Today, I'm pleased to discuss a good start to our 2025 fiscal year. The first quarter results include record revenue of $609 million and a 16% increase in earnings per share. Our performance this quarter reflects our consistent, disciplined approach to managing and operating our businesses through shifting conditions. We achieved our positive results during the quarter characterized by challenging weather conditions and our solid performance was largely led by operational efforts of our employees. At EGLE, we maintain our consistent approach to running our businesses regardless of the challenges presented. Our approach revolves around several aspects that we hold as standards. The first focus area is on safety. It is our belief that a safe operation leads to superior operational and financial results. As I travel to our facilities across the country, it is always impressive to see our employees across all of our businesses stay committed to maintaining the safest possible working environment. Their efforts are demonstrated through our safety statistics, which are consistently below industry averages, but also, most importantly, through their interactions with one another, ensuring each job can be done safely. Second, we are relentlessly focused on operating as efficiently as possible. We are always proactive with our maintenance programs to keep our facilities in like-new condition, enabling us to perform with high efficiency and support our customers. This proactive approach regarding maintenance last quarter benefited us this quarter. We were able to navigate the weather challenges well and manage our costs accordingly. Third, we continuously maintain our focus on sustainability. This quarter, like others, have several highlights I want to mention. We continue to make progress on several organic investments, including our joint venture Texas-Lehigh slag grinding facility, which is nearing completion and will have meaningful economic and environmental benefits by providing slag to our customers in Texas. We also recently announced the expansion and upgrade of our mountain cement facility. This upgrade will make this plant more efficient, aligning not only with our focus on sustainability by doing more with less, but also expanding our low-cost producer position. Dirt work on this project has begun, and we will continue to provide updates on this project as we reach other milestones. Another area we are focused on with regards to sustainability is around the products we produce. A few highlights regarding our work in this area are we continue our transition to Portland Limestone Cement, or PLC, and other blended products to reduce our CO2 intensity. Currently 90% of our production is PLC or blended cement. We are also in process of installing two alternative fuel systems to expand the usage of these fuels. Our capital project at our paper mill to cut our water usage in half continues and is scheduled to be completed mid-next year. Now let me turn to some financial observations for the quarter. Regarding our demand outlook for our businesses, we see The cadence and timing of our business demand drivers vary, but we also see the outlook for each business continuing to skew to the upside. In cement, the demand visibility picture remains strong. BBO data shows years of public infrastructure spend ahead, largely driven by the IIJA bill. Non-residential construction, especially as it relates to heavy manufacturing projects, should continue to remain at elevated levels. Both infrastructure and non-residential projects are typically multi-year projects that provide confidence around our visibility over the coming years. We also benefit from our geographic footprint, and our markets generally outperform the national average. While weather impacted all our regions, it did so at different magnitudes and pushed out the construction season to varying degrees. If the demand fundamentals we see do stay in place, We think the cement business will continue to see strong performance, especially given the US manufacturing supply response is more limited than in any other cycle. Regarding the wallboard side of our business, in the near term, frankly, the demand cycle is harder to predict right now, and much will depend on how the economy fares, as well as how our policymakers react in response to the economic data. As we've said many times, we continue to believe in the structural characteristics of our wallboard business, especially as the supply has continued to come offline over the last several years. Some key facts that lead us to believe this are we have been underbuilding housing against underlying demand in the U.S. for a long time. This underbuilding has led to a shortage of homes while household formations expand. In addition, The U.S. existing housing stock continues to age and is older than ever, giving us further confidence in the medium and long-term demand profile for our wallboard business. But as this cycle has already proven out, we believe both demand and supply fundamentals of the wallboard industry create an appealing performance backdrop for our business. As we look forward, even with some of the uncertainties I mentioned, we are confident we can continue our track record of superior margin performance, setting the industry benchmark for our low-cost producer position. To that end, I'll conclude with some remarks that largely mirror my opening comments on the consistency of our approach to running our businesses exceptionally well in shifting economic conditions. As we look forward to the quarters, years, and even cycles ahead, We are committed to looking for opportunities to strengthen our core businesses across both the heavy and light material segments through investments, both organically and through M&A. Our consistent strategy has led to superior shareholder returns over the history of our company, and we believe these unique investments, coupled with our strict strategic and financial investment criteria, will generate similar outstanding returns in the future. Another key tenant to maintaining a strong core is keeping our balance sheet healthy. We have generally kept our leverage at or below 1.5 times through the last several years. This allows us to execute on investment opportunities, but it also gives us the flexibility to return our excess free cash flow to shareholders, mostly through share buybacks. Finally, but equally important, we'll make our core business stronger by executing operationally. As our long track record of performance shows, we will achieve this while keeping our people safe and being excellent environmental stewards in the communities we operate in. With that, I'll turn it over to Craig for more details on our financials.

Thank you, Michael. As mentioned, first quarter revenue was a record $609 million, an increase of 1%. The increase primarily reflects higher cement and wallboard sales prices and record paperboard sales volume, partially offset by lower cement sales volume, which I'll comment on during the segment discussion. First quarter earnings per share was a record $3.94. That's a 16% increase from the prior year. The increase was driven by higher earnings and a 4% reduction in fully diluted shares due to our share buyback program. Turning now to segment performance on the next slide. In our heavy materials sector, which includes our cement and concrete and aggregate segments, revenue was up 1%, driven primarily by cement sales price increases implemented earlier this year. Higher cement prices were partially offset by lower cement sales volume as wet weather delayed construction projects, hampering cement, concrete, and aggregates volume during the quarter. In addition, June of 2024 had two fewer shipping days than last June. Operating earnings were up 14%, primarily because of increased cement prices, lower fuel costs within the cement business, and lower maintenance costs during our planned annual maintenance outages. In addition, last year's quarterly results included approximately $2.8 million of costs associated with the step-up in inventory values related to the terminal Stockton acquisition. Moving to the light materials sector on the next slide, revenue in the sector increased 2%, reflecting higher wallboard sales prices and record recycled paperboard sales volume. Operating earnings in the sector increased 5% to $102 million, reflecting higher net sales prices and lower input costs, primarily for freight and energy. Looking now at our cash flow, we continue to generate substantial cash flow and allocate capital in a disciplined way in line with our strategic priorities. In the first quarter, operating cash flow decreased by 6% to $133 million, reflecting improved earnings offset by increased working capital. Capital spending decreased to $33 million, and we repurchased 348,000 shares of our common stock for $85.5 million and paid our quarterly dividend, returning $94 million to shareholders. We have 5.5 million shares remaining under our current repurchase authorization. Finally, a look at our capital structure, which continues to give us significant financial flexibility. At June 30, 2024, our net debt to cap ratio was 44%, and our net debt to EBITDA leverage ratio remained at 1.3 times. We ended the quarter with $47 million of cash on hand. Total committed liquidity at the end of the quarter was approximately $607 million, and we have no meaningful near-term debt maturities. Thank you for attending today's call. We'll now move to the question and answer session. Jamie?

Ladies and gentlemen, at this time, if you would like to ask a question, please press star and then 1. To remove yourself from the question queue, you may press star and 2. If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing the keys to ensure the best sound quality. Once again, that is star and then 1 to join the question queue. Our first question today comes from Trey Grooms from Stevens Inc. Please go ahead with your question.

Hey, good morning, and thanks for taking my question. First off, you know, nice improvement on the margins in both cement and wallboard. I guess maybe first on wallboard, you know, OCC costs have been rising, paperboard margins saw a little bit of compression in the quarter. So, you know, given the timing differences, you know, between paperboard and then the wallboard business, how should we be thinking about the kind of directional impact maybe to wallboard here in the near term, and then also with NatGas pulling back again, still pretty low. Could that help offset? And then, Craig, if you could maybe give us an update on where you stand with your hedging efforts there with NatGas.

Yes. Thanks, Trey. From a OCC recycled fiber cost, which are the primary raw material for the paper business, You know, we saw those costs up significantly the second half of calendar 23 and into early calendar 24. I will tell you, April, May, and June, OCC prices have been flat. So that we will pass kind of the earlier part of the year through to the wallboard business here in the September quarter. But, you know, given where prices have gone over the last couple of months, it would seem to stay right around that level. But you'll see a little bit of inflation there in wallboard, whereas the paper mill will pass that through and a little higher pricing. And you're right, natural gas, again, down lower the last few days. We did see a nice benefit year over year from lower gas prices. We're right around 40% edged for the remainder of fiscal 2025, just right around here at these market prices today. Keep in mind the forward curve isn't as low as the prompt month, but as you look at that forward curve, we're 40% hedged right in that area.

Got it. All right, that's helpful. And then maybe kind of a little bit the same for cement. Could you give us a little bit more detail? Again, great margin improvement there. I think you mentioned the lower fuel costs, if you could maybe talk about kind of the sustainability of that, and then you also touched on maintenance. But if you could just kind of give us a rundown on kind of the cost outlook there with cement, you know, given the nice margin improvement you've seen here in the quarter.

Yeah, the fuel costs, we've talked about it now for several quarters. We have good visibility into lower fuel costs around some of the solid fuels that we use, and that's largely... you know, purchased or committed for the remainder of the year. And then, as we pointed out and you mentioned, maintenance costs. Our teams did a really good job this quarter of looking at, you know, projects, what needed to be done, and found ways to get projects done that were needed. And given the weather that we experienced and I think well chronicled, you know, we did a good job of managing those costs during the quarter.

Yep. Good work with all that. And then last one for me is, you know, you mentioned the pricing and wall board that you guys put up and a nice sequential improvement, as you guys had talked about on the prior call. Could you give us kind of the ending number for the quarter, maybe, you know, relative to the reported ASP?

Yeah, the average for the quarter was pretty consistent throughout the quarter. We had implemented a March price increase, which we hadn't seen the full benefit of during the March quarter, but the average was pretty consistent throughout the quarter.

Great. Thanks. I'll pass it on. That's it for me. Good luck.

Our next question comes from Stanley Elliott from Stiefel. Please go ahead with your question.

Hey, good morning, everyone, and nice work in a very tough operating environment. I guess starting off, you mentioned kind of on the resi side being a little less certain in terms of how that's going to end up playing out. I am curious, did you guys see to what extent residential projects were getting pushed out because of financing costs? And then I guess secondly, were you seeing any of your builder customers concerned about rising inventory levels in any of the markets that you operate in?

I've always said as it relates to wallboard inventory in particular, it's a perishable product, so you don't see a tremendous amount of inventory either at the manufacturer level or at the distribution level. You can't store it outside in a meaningful way. It comes and goes. Look, I think we've said weather more than once this morning, especially you get into the south Texas market. That amount of rain, we think of wallboard as an indoor sport, but there's no doubt we've seen in south Texas a delay because of the rain that and extreme wet weather that market has faced. So, you know, again, maybe a little bit of inventory build here and there, but it's not significant. And, you know, in terms of the residential outlook, you know, there's obviously a lot of factors that influence that. Interest rates are one of them. They've come down nicely here the last four to six weeks. We'll see again tomorrow what tomorrow brings, but... you know, the overall, you know, given the low supply of homes in the country, you know, that has continued to support a pretty resilient level of construction activity.

And I guess one more on weather. To what extent, you know, do you see the weather impacting in the quarter? I mean, obviously pricing was very nice. Do you think that has any impact on pricing pressures later in the year or maybe even into, you know, I guess it's too early to think about 25, but just Any sort of disruptions in some of the pricing momentum that we've seen because of the weather?

I mean, no doubt the construction season got off to a very slow start in several markets, you know, with the extended rainfall, et cetera. So, yeah, that does maybe change timing and cadence a little bit. But, you know, the grand scheme of things, you know, the cement business continues to be in a fairly tight position. And, you know, exactly when and how prices go through, you know, will be determined over a cycle.

And then lastly, I mean, balance sheet, very manageable. You do have the larger Wyoming project coming up in 26. You started on it. Is the plan to kind of continue to build cash ahead of that to support that or, you know, still remain opportunistic on the M&A front or even the share repurchases?

No, absolutely. We've put the position, the balance sheet in a position, I think Michael said it well, so that we can continue to make good investments, whether that's organic, as we've talked about with the mountain cement modernization and expansion. But that doesn't preclude us, even though it is sizable, it doesn't preclude us from continuing to return capital to shareholders. and being active in the M&A market. There's a good pipeline of activity there, and we have the balance sheet and the free cash flow to continue to make good investments.

Perfect, guys. Thanks so much. Congrats, and best of luck.

Our next question comes from Brent Thielman from DA Davidson. Please go ahead with your question.

Hey, thanks. Good morning. Just had a question again on cement. Just maybe a clarifier. I mean, any plans for cement price increases in the calendar second half? And then, Craig, you had some markets with price increases for April. Would the realizations of those price increases been impacted at all by sort of weather-related issues? I'm just curious your thoughts there.

No, you know, I think they moved forward as we had expected. And, you know, We do have, again, Texas faced extremely wet weather April and May, even into July here with the hurricane that came through. But the pricing in that market has extended out. There is some here in the second part of the year. But that's about it for a second round of cement price increases as we sit here today.

Okay. And then just as a follow-up, I mean, Michael, with some of your comments just about the momentum you're seeing and some of the infrastructure projects and, you know, presumably going over the next few years, do you anticipate sort of your mix of sort of in-sector, in-market sector exposure to skew more heavily towards infrastructure in the coming years? I mean, I know it's sort of been 40%, 50%. Do you see it higher than that as we sort of move forward?

You know, it depends really regionally where you look at these items with it. You know, as we said in the comments, too, you know, we see these as multi-year projects with us, and the extending out give us great visibility. We're also kind of opportunistic when we take some of those projects with it. You know, we have a customer base that we support, and those projects we see as great projects to pick up, you know, uh certain aspects of them and and keep our demand profile looking strong so you know across our network we see this as a just a a good visibility for the cement side of the business for multi-years to come yep very good thank you our next question comes from anthony petnari from city please go ahead with your question uh good morning

On cement, is there a way to quantify the magnitude of volumes that were impacted by the weather in the quarter, and then just given kind of very poor weather in the first half of the calendar year, do your customers talk about an opportunity to maybe make some of that up in the second half of the year? Is that something that could be maybe a tailwind to volumes, either for you or the industry, or is that not really something you expect?

Yeah, Anthony, to the first part of your question, it's really hard to quantify, you know, the exact impact that weather had. You know, no doubt it was significant, but really tough to quantify that. And in terms of the last, that is a little bit market to market because you've got certainly the northern markets that winter weather will start. You don't know if that's November, December, or into January. But I think your overall, and then in the south, where we don't have near the winter, you can get maybe a little bit more. But your point's still right, that given that these projects were delayed, they're not canceled. They're just pushed out. It just means you're going to be real busy this fall and into the winter as long as you can. And so that is what you'll see. Can you make all of it up? That remains to be seen. But it should be a busy second half of the year. Got it, got it.

And then just, I guess, one follow-up. Was your exit rate on cement prices in the quarter, was that sort of similar to the quarter average or maybe a touch ahead?

Yeah, pretty much in line with the average.

Got it, got it. Okay, I'll turn it over.

Our next question comes from Jerry Revich from Goldman Sachs. Please go ahead with your question.

Yes, hi. Good morning, everyone, and congratulations on the strong performance. I want to ask, so, you know, normal seasonality for your cement business is margins are up about eight points in the September quarter from the June quarter, and so as we think about that normal seasonality, anything that we need to keep in mind this year, Craig, relative to the really strong June quarter results?

Sitting here today, I don't expect to see anything unique. That margin improvement, as you know, is mostly driven by our annual maintenance programs are completed during the June quarter. Those are quite heavy spends, and then that doesn't happen in the September and December quarters.

Got it. So the full benefit from the improved energy costs and all the other moving pieces there fully baked in the strong two-quarter results. Right. And then in terms of the sequential price cadence, so over the past two years, your cement average selling prices were up. 3% to 4% September quarter versus June quarter. I know part of that is mix where the volumes are coming from and contract rollovers, but can you just give us an update on how you're thinking about the sequential move in average selling price from here given timing of contract rollovers and mix of business? How should that look this year, September versus June versus the 3% to 4% points we've seen over the past couple of years?

Yeah, Jerry, as we talked a little bit earlier, we've got a few markets where we've got a price increase slated for later this year, mostly in the Texas area, just given the push out of that timing. But other than that, we don't have any incremental announcements at this point. And so absent something like that, you'd expect to see more of a consistent, sequential price from what we saw here in the June quarter.

Okay. And then in terms of the indications to customers of potential future price increases in both cement and wallboard, can you just talk about what the range of price increase discussions that you folks have had to the extent you can comment? I know in some markets you're going to roll those out as time comes, but I wonder if you just give us Any additional color on how those conversations are headed, particularly in cement ahead of 25?

Yeah, you know, Jerry, it's always hard to predict the exact timing and magnitude of price increases. That's certainly a discussion we'll be having with customers as we go over the next few weeks and months ahead of calendar 25. So I don't want to speculate too much on how much or when those price increases will be announced. But, you know, look, I think as Michael's mentioned and we've talked about now for several quarters, if not years, given the dynamics and the backdrop in both businesses, both in cement and wallboard, with supply being constrained for a variety of reasons and pretty good outlooks around demand, We do expect to see utilization rates remain high through the cycle, which should lead to higher pricing this cycle than we've seen in prior cycles, both, you know, in different economic climates, just given the changes that have occurred in our industries. And so without getting into specifics for timing, we just do continue to see pricing opportunity in front of us.

All right.

Thank you.

Our next question comes from Adam Thalheimer from Thompson Davis. Please go ahead with your question.

Hey, good morning, guys. Congrats on the strong quarter. I want to start on wallboard margins. I think that was the best quarterly wallboard margin in something like 18 years. Just curious what drove that and what your thoughts are on sustainability.

Yeah, you know, Adam, the environment that we've been in, certainly with lower natural gas prices contributed to that. Really managing the cost structure around maintenance projects and the need to spend. Again, our teams did a fantastic job this quarter, just like the cement group did as well. Look, our assets are well positioned. We've talked about that many times from a surety of raw materials, the primary raw material being gypsum and our long year's worth of either raw material reserves or a supply contract for synthetic gypsum. And so we really position this business very, very well. And yes, it's a good margin in performance, but that's been a hallmark of that business for many years now.

And, Craig, it's a smaller business, but the paper board volume jumped a little bit. And I know you did a capacity expansion there. What do you think your annual capacity is normalized now?

Yeah, you know, the 90,000, 91,000 tons is a record quarter for the paper mill business. We mentioned that we had gone through the expansion project a couple of years ago, really starting to see the benefit of that volume improvement. Again, that mill is running very well. That team is doing a fantastic job. If you just annualize that, you could get a pretty decent run rate, and we're always looking to de-bottleneck all of these facilities. We've taken that mill when we acquired it many, many years ago, and we've just incrementally been able to get more output, and the team's going to continue to do that.

Great. Thank you.

Our next question comes from Phil Eng from Jefferies. Please go ahead with your question.

Hey, guys. I have a question. How did cement volumes track? inch or quarter, especially when weather cleared out in perhaps June, July. I know June's got two less shipping days. If you kind of look at it on a per day basis, was it up? And then qualitatively, I think, Michael, your outlook was stable volumes from there, certainly upbeat on infrastructure. Are you set up to kind of put up volume growth in the back half? I just want to get a little more color in how you're thinking about some net volumes and how it's progressed since a very wet spring.

Yeah, Phil, good question. The first part of your question, and, you know, you look at our business, Texas, you know, we're actually up this quarter versus last year. I would say that had more to do with the comparison of prior year. We had some issues last year around that. So hard to look at those volumes necessarily as a good barometer for the overall market, you know, which is down. just given some of the weather issues that we've dealt with. And as you said, we saw much better weather in the month of June across most of the country, but we did have two less shipping days. So hard to get a real gauge when you're coming out of an April and May that we dealt with, but do feel good about the forward view of cement demand. And, look, we have the inventory in the network, and as the opportunity presents itself, we're going to meet our customers' needs.

And, Craig, I mean, I think one of the earlier questions, there was a question about catch-up demand. Have you seen orders kind of snap back and some of your customers look to kind of recapture some of that deferred demand pushed out thus far, like in July and as we kind of look at August?

Yeah, to the extent they can, I know they're going to push as hard as they can. When you have that much weather, you do see a just delay in the overall earthwork that happens. And so I know they're gearing up for a busy second half of the year.

Okay. And then from a margin standpoint, you know, really impressive quarters, both on wallboard and cement. You called out some good guys on energy and freight. Those feel pretty sticky unless things change materially here. Were there any other one-off costs that were, you know, that will roll off just because based on what you're putting up and where pricing is trending as well, I would imagine you could build off of this accounting for seasonality. But how should we think about the margin cadence the rest of the year in either wallboard or cement?

Yeah, you look sequentially while natural gas is down, it's been down at these levels, you know, between two, two and a half dollars a million for quite some time. So sequentially, I don't see a significant change there. As I mentioned at the beginning of the call, OCC prices, we will see some upward tick here in the September quarter. So sequentially, that will be up a little bit higher. So, you know, there's going to be some puts and takes where margins are concerned. And the cement business, you know, again, we're largely through the large maintenance programs. And, you know, and with fuel costs being low, we'd expect to continue to see that business perform very well.

Okay. And just one last one for me. The comments here on Wallboard in terms of outlook was a little more contingent on the macro, and obviously housing starts to be a little choppier and rates have kind of bounced around. But correct me if I'm wrong, Craig, I mean, your business tends to tie more to completions. So with completions lagging to start the next quarter, do you still see decent demand? Is that how we should think about Wallboard? Because your volumes lagged in history a smidge. I don't know if that was related, but any more perspective would be helpful.

Yeah, Phil, I think we're trying to get away from guessing on the next quarter. Given, as you said, some of the volatility around rates and other things that impact the volume trend. But I think generally we feel good about the demand environment given a lot of the factors that we've talked about. And now with rates seemingly coming down a little bit, that should help. The exact timing of how that flows through is harder for us to gauge. and it's always hard to forecast, but certainly the last three to six months have been even tougher.

Okay. Thank you. Appreciate it, Collin.

Our next question comes from Tyler Brown from Raymond James. Please go ahead with your question.

Hey, good morning. Hey, Craig, I think you mentioned transportation was a good guy on the cost side on a wall board. I get that it's largely a pass-through, but when the market is loosening, and the truck market is certainly loosening, do you tend to make a little bit of money on transportation, and would it move the other way in a tightened transportation environment?

As freight adjusts, that can be a headwind or a tailwind for us, and it's certainly been a tailwind the last couple of quarters. As you say, I don't expect that to change significantly in the trucking market.

Okay, that's helpful. And then just so I have it, I'm just curious, but what is the truck-to-rail mix? I assume you're heavy truck versus rail.

Oh, yeah. In wallboard, very little rail. Okay. Pretty inefficient commodity to move on the rail.

Okay. And then I think you're guiding to call it 310, 340 in CapEx, but you spent under $40 million in the quarter. I'm just curious if you still feel good about spending the full allotment or is Laramie off to a slow start? Just any color there?

Yeah, I wouldn't say it's a slow start, just timing of when payments are made. As Michael mentioned, we have started to do some dirt work, and so that construction site work will really start to pick up here the second part of the summer into the fall. So I would expect to see CapEx starting to pick up and the exact timing of that to be determined. But that's still our range for now, and we'll see as the year unfolds.

Okay, good deal. And my last one, just a couple small other modeling questions, but just any thoughts on how the tax rate pans out for the year? The corporate SG&A was up a bit. What was driving that? Was that bonus accruals? And then the other income was a good guy. Just curious if that was a gain, just how we should think about that line. Appreciate it.

Yeah, in terms of the corporate SG&A, that number has been in that same range for the last several quarters. Call it $16 million plus or minus. I'd expect to see it continue to be in that range. In fact, I think 4Q was a little bit higher. So that's the range I would stick with. Tax rate, you know, it ebbs and flows a little bit. But I would – it may tick up a little bit here for the second part of the year. But, again, pretty much range bound. And – Other income, you know, that can be other asset sales and little minor things that are hard to predict, but I don't expect it to continue to be at that same level for the second, third, and fourth quarter.

Okay, cool. Thank you.

And our next question comes from Keith Hughes from Truist. Please go ahead with your question.

Thank you. Getting back to cement prices, I know you got a few increases you had mentioned earlier, but it doesn't sound like a lot. Do you think, are your markets getting back to where you're increasing price just sort of once a year, or what do you think the cadence is going to look like in the medium term?

Keith, like I've always said, it's hard to predict that exact timing of There's a lot of factors that go into that. For the last couple of years, we've seen multiple increases given some of the delayed start to the construction season. I'm frankly not surprised to see a limited second round of increases. Normally, the construction season starts in March, but this year just got extended. That doesn't mean or that doesn't preclude next year from being you know, two increases. We just got to see how the year unfolds and how the second half of this year goes through. But, you know, it remains to be seen in terms of the exact timing.

Okay. Thank you.

And, ladies and gentlemen, with that, we'll be concluding today's question and answer session. I'd like to turn the floor back over to Michael Hack for any closing comments.

Thank you, Jamie. Looking back on our first quarter for fiscal year 2025, I want to conclude by thanking our employees directly for their resilience through the quarter. Your superior execution and consistent, steadfast operational focus once again set the industry standard and helped us achieve positive results to start our fiscal year. Thanks also to everyone joining us on the call today. We look forward to discussing our results again with you next quarter.

Ladies and gentlemen, with that, we'll conclude today's conference call and presentation. We thank you for attending. You may now disconnect your lines.