Eagle Materials Inc

Good day, everyone, and welcome to Eagle Materials' fourth quarter and fiscal 2025 earnings conference call. This call is being recorded, and at this time, I'd like to turn the floor over to Eagle's President and Chief Executive Officer, Mr. Michael Hack. Mr. Hack, please go ahead, sir.

Thank you, Jamie, and welcome, everyone. 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. As our fiscal year ends, it allows me some time to look back on our performance and reflect on the year in totality. There is no question that this year has had its challenges. The true measure of an individual or a company is how they respond to those challenges. I'm extremely grateful to lead a company that has dedicated employees that have made this company stronger. Without this dedication, Eagle would not have been successful, so I want to thank every Eagle employee for making Eagle a better company. I also want to spend a few minutes highlighting what Eagle was able to accomplish this past fiscal year. I want to start these comments with the topic that is Eagle's top priority, employee health and safety. You have heard me state in the past that we are proud of our industry-leading safety record. but this year I am more impressed that we were able to achieve our lowest total recordable injury rate, or TRIR, in company history. This was coupled with a 25% increase in our hazard observation or near-miss reporting, showing that our safety culture is well-established and self-sustaining. Over this next year, we will continue to progress our safety culture with the rollout of a program called EagleSafe, a series of standardized company-wide best practices and procedures to focus our efforts on critical safety issues. I am a true believer that if you have diligence around safety, then you have a culture that strives for diligence around every other aspect in the business, leading to improved results holistically. This is the case for Eagle, where I am proud to say that this year marks our fourth consecutive year of record financial results having generated record fiscal year revenue of $2.3 billion and record earnings per share of $13.77. This was accomplished with day-to-day headline noise surrounding the economy, but with focus, our businesses have continued to perform well and operate efficiently. Next, I want to talk about the efforts we have made with regards to sustainability. you will see a lot of information on the projects we have in process or that are completed in our sustainability report that will be published this summer. For now, let me share a few highlights. We are on track to complete an upgrade of our wastewater treatment facility at our paper mill this summer. This $22 million project, when completed, will reduce our water consumption by approximately 50% through a more closed-loop system. It will also allow us to return water that is already heated to the process, hence reducing our energy consumption and improving our efficiency. In our cement business, we completed our Illinois cement plant's alternative fuel feeder that will enable the plant to run more alternative fuels. We are also nearing completion of a project at Cosmo Cement Facility to expand the use of recycled tires that would otherwise be landfilled. All our environmental projects are similar to these examples. They have meaningful economic benefits, driving efficiency, and lowering costs as we reduce usage of water, solid fuels, and other raw materials. Additionally, our deployment of capital in fiscal 2025 allowed us to strategically expand our ability to serve our customers across our geographic footprint. These investments are both acquisitions and organic investments, I will highlight a few of these. Within aggregates, a key growth area for us, we acquired two pure-play aggregate operations, one in Kentucky and the other in Western Pennsylvania, enhancing our ability to serve these markets, which are complementary to our existing Heaviside footprint. Integration of both operations is going well, and both businesses are already contributing to EGLE, These two additions will increase EGLE's aggregate production capacity by 50%. In cement, we completed commissioning of our Texas Lehigh slag facility this winter, and production will ramp up throughout this upcoming fiscal year, providing additional cementitious tons to the Texas market. In Northern Colorado area, our mountain cement plant expansion continues to be on time and on budget. This next fiscal year, we'll see a major ramp up in construction efforts and capital expenditure. Like the other projects I mentioned above, the mountain cement modernization will have meaningful economic benefits as well as environmental benefits utilizing alternative fuels and lowering our CO2 intensity per ton. Lastly, we announced last week we have initiated a project to modernize and expand our Duke, Oklahoma gypsum wallboard facility. The modernized plant takes advantage of our decades-long natural gypsum position at Duke and upgrades the facility with state-of-the-art technology, enhancing Eagle's low-cost producer position and strengthening our competitive advantage as the rest of the industry continues to struggle to source synthetic gypsum. Duke has advanced geographically, allowing the plant to serve customers throughout the high-growth south and southeast markets. The project is expected to cost about $330 million, and startup is scheduled for the second half of calendar 2027. Our ability to execute on these investment opportunities is underpinned by our capital allocation principles and our balance sheet strengths. In fiscal 2025, we completed over $175 million of M&A transactions and increased our capital expenditure for the mountain cement project, while ending the year with a net leverage ratio of 1.5 times. And even while investing our excess free cash flow in these high return projects, we continue to return capital to shareholders, distributing $332 million of cash to shareholders through share repurchases and dividends. In summary, FY 2025 was a good year for Eagle. We held to our strategy that has always served us well and demonstrates that in periods of uncertainty, like we're facing today, Eagle's steady focus on investing through cycles, not just for a point in the cycle, enables us to navigate through turbulence, continue to perform well, and position ourselves for the future. In fact, as a 100% U.S. domestic manufacturer, we feel well equipped to weather the variety of potential tariff outcomes and the uncertainty as created for the U.S. economy more broadly. Let me now give some color on our fourth quarter performance and outlook. Our fourth quarter results reflect the impact of adverse weather on our cement and concrete and aggregate businesses, which was severe enough to cause production interruptions at some of our facilities. We made the decision to constructively use the downtime caused by the poor weather to pull forward the annual maintenance outage at our Texas Lehigh cement facility. Despite the recent choppiness in our heavy materials financial performance, we believe the underlying fundamentals in the sector remain solid. Demand and supply dynamics remain favorable across all of our business lines, and we are positioned to benefit from these dynamics. In the cement sector, we have seen no material disruption in award funding for public infrastructure projects. Our customers report healthy bidding activities and are anticipating a rebound from the softer 2023 and 2024 demand realization. Looking out further, there's continued bipartisan support for infrastructure funding, which should be additive to cement consumption for the next several years. Turning to the residential outlook, which is a primary end market driver for our wallboard businesses, in many ways we are in a similar place to where we've been for the last several years. While high mortgage rates and housing affordability challenges continue to exert downward pressure on single family housing starts, this pressure is mitigated somewhat by the clear need for new housing and overall pent-up buyer demand. Ultimately, new home construction will be needed to address the affordability issue. Thus, we believe it's a matter of when, not if, single family housing starts will rebound. Turning to supply, we believe the outlook in both cement and wallboard is unlikely to change in the medium term. Significant capacity constraints persist in both cement and wallboard. As a result, even in an environment like last year where cement volumes were down and wallboard volumes remained subdued versus historical figures, both sectors continued to see relatively elevated utilization rates. As we look forward three to five years and beyond, we believe both the demand and supply dynamics will continue to support our business. Our strategy of steady investment through economic cycles and volatile market conditions positions us well to capture the benefits of these dynamics. We are committed to health, safety, sustainability, investing in every one of our plants to maintain our reserves position and keep them in like-new condition. expanding our geographic and customer footprint through compelling organic and M&A investments, and maintaining capital allocation discipline. Those are just some of the reasons why we've been able to outperform and provide value for our shareholders through varied economic cycles and why we continue to do so. Lastly, before I turn it over to Craig, I want to highlight a governance-related announcement we made earlier this month. On May 15th, we announced the appointment of David Rush to our board of directors. Dave is the retired CEO of Builders FirstSource, and prior to being CEO at Builders, he held a variety of senior executive roles over his nearly 30-year career there. Dave brings a wealth of valuable industry and management experience, and we're thrilled to add him to the board. With that, I'll turn it over to Craig.

Thank you, Michael. fiscal year 2025 revenue was a record $2.3 billion, up slightly from the prior year. The increase primarily reflects higher prices across all of our business lines, partially offset by lower cement and concrete and aggregate sales volume. Revenue for the fourth quarter was down 1% to $470 million, primarily reflecting lower cement and gypsum wallboard sales volumes, partially offset by higher cement and aggregate prices. Diluted earnings per share for the full fiscal year increased 1% to $13.77. The increase was due to the reduced share count resulting from our share repurchase program, which more than offset the net earnings decline. Fully diluted shares were down 4% from the prior year and are down 20% in the last five years. Fourth quarter earnings per share was down 11%, largely because of heavy materials results in the quarter when the cement and concrete and aggregates businesses were affected by adverse weather and maintenance costs in the cement business increased. Our quarterly results were also affected by approximately $3.4 million of acquisition, accounting, and related expenses. Adjusting for these items, fourth quarter diluted earnings per share were down 7%. Turning now to segment performance, highlighted on the next slide. In our heavy materials sector, which includes our cement and concrete and aggregate segments, annual revenue declined 2% to $1.4 billion. The decline reflects lower cement sales volume, which was down 5%, and was partially offset by higher sales prices. The two aggregates businesses acquired during the year contributed approximately $12 million to annual revenue. Annual operating earnings in the heavy materials sector declined 11% to $311 million, again reflecting lower sales volume, partially offset by higher cement prices. During the fourth quarter, heavy materials operating earnings declined 50% to $18.3 million. As Michael mentioned, adverse weather conditions during the fourth quarter, most notably in February, caused disruption to not only cement sales opportunities, but also to cement operations. We estimate the operational impact from equipment downtime to be $4 to $5 million. In addition, we pulled forward our annual maintenance outage at the joint venture to March versus April in the prior year, and the joint venture started up its new slag cement facility in Houston. The combined impact on joint venture results from the timing change of the annual outage and the commissioning cost for the new facility was approximately $4 million. Our fourth quarter cement price was up 2%. Moving to the light materials sector on the next slide, annual revenue in our light materials sector increased 3% to $969 million, driven by higher wallboard sales prices and record recycled paperboard sales volume. Annual operating earnings increased 3% to $389 million, also because of higher wallboard sales prices and record paperboard sales volume, plus lower energy and freight costs. Looking now at our cash flow, we continue to generate healthy cash flow and allocate capital in line with our strategic priorities and rigorous financial return criteria. Operating cash flow in fiscal 2025 totaled $549 million. Capital spending increased to $195 million as we continued to invest in and improve our operations. Most of the increase in capital spending was associated with the modernization and expansion of our mountain cement plant, which began construction in July. As a reminder, the plant is being upgraded from the existing two long dry kilns to a single modern pre-calciner kiln line, which will significantly improve energy efficiency and simplify maintenance programs, resulting in cost savings of approximately 25%. The project will also increase plant capacity by 50%, enhancing our ability to serve the growing northern Colorado market. And as Michael mentioned, last week we announced plans to modernize our Oklahoma wallboard plant, which will further improve its competitive position. The total investment is $330 million, and construction is expected to start later this year. Considering these two projects, as well as our sustaining capital spending, We expect total company capital spending in fiscal 2026 to increase to a range of $475 million to $525 million. During fiscal 2025, we acquired two aggregates businesses for approximately $175 million. The previously announced acquisition of Bullskin Stone & Lime was completed in early January and was funded with cash on hand and borrowings under our bank credit facility. Also during the year, we paid $34 million in dividends and repurchased approximately 1.2 million shares of our common stock or 4% of the outstanding for $298 million. We have 4.7 million shares remaining under our current repurchase authorization. Finally, a look at our capital structure, which continues to give us significant financial flexibility. At March 31st, 2025, our net debt to cap ratio was 46%, and our net debt to EBITDA leverage ratio was 1.5 times. We ended the year with $20 million of cash on hand. Total liquidity at the end of the fiscal year was approximately $560 million, and we have no meaningful near-term debt maturities, giving us substantial financial flexibility. Thank you for attending today's call. Jamie will now move to the question and answer session.

Ladies and gentlemen, at this time, if you would like to ask a question, please press star and then 1 using a touch-tone telephone. To withdraw your question, 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 Groom. Actually, it comes from Brian Brophy from Stiefel. Please go ahead with your question.

Yeah, thanks. Good morning, everybody. Appreciate you taking the question. So just at a high level, you guys have had a number of large modernization expansion efforts here recently. Can you remind us how you philosophically think about deploying capital into these projects? How do you think about return on capital hurdles, payback periods, or anything else we should keep in mind? Thanks.

Yeah, I'll answer part of that, and Craig will probably jump in with some. We've always been pretty open on how we look at our operations and how we keep them in as good a condition as possible and in favorable markets. We've run strategies on basically every single one of our facilities, and these two have just shown themselves as great investments for us.

uh we we like to invest in assets we know and markets we know and we think both of these uh are high return projects that will add significant value to our customers yeah and brian look i'd add to that you know yes these are two significant projects good returns we have bogeys uh internal hurdle rates of 15 cash on cash after tax type of returns um and these are projects and we've done similar projects in our history that have been fantastic return projects for us, really improving the competitive position of both of these facilities in really good returning markets or growing markets. And then last but not least, given where the balance sheet sits today, you know, right around one and a half times, that also these projects don't preclude us from continuing to explore M&A opportunities and continuing to return capital. So we position ourselves really well here.

Thanks. Yeah, that's really helpful. And then in the deck you talked about and your comments talked about some expansion to utilize alternative fuels on the cement side of the business. Can you add any more color here? What type of alternative fuels are able to utilize and how should we be thinking about that impacting your ability to manage costs on the energy side? Thanks.

Yeah, so we look at all of our facilities for what we're burning as fuels. The two that I mentioned today are really using tires at our Cosmo Cement facility and an alternative fuel feeder at Illinois Cement. That feeder will allow us to burn multiple different products. Right now we're burning tire chips at that facility with it. How we view these projects is for a CO2 benefit and also for flexibility in the fuel source themselves that we could switch from one fuel source to another opportunistically as the pricing looks beneficial for us at the facilities. We will continue to look for other alternative fuel source projects across our cement plants.

That's really helpful. I'll pass it on. Thank you.

And our next question comes from Traeger. It's from Steven. Please go ahead with your question.

Hey, good morning, Craig and Michael. Thanks for taking my questions. So if we could maybe dive into the wallboard pricing down a few dollars sequentially in the quarter. You mentioned increased freight costs, and clearly your wallboard price is reported net of freight, so that makes sense. But how did the like-for-like wallboard pricing trend through the quarter and maybe thus far through your fiscal 1Q change? And should this higher kind of freight costs in the quarter, should that continue here?

Yeah, look, Trey, I would tell you the kind of exit price was not that far off of what the quarterly average was. And, you know, we are moving forward on a price increase in wallboard here this spring. And so, you know, we really won't talk much about kind of post the quarter pricing until we get to the next call in July where we can talk about the realization of that. But, you know, look, it's interesting. The freight costs being higher, that's, you know, at least half of the sequential decline. We've seen that in a couple of markets where You know, things are a little busier than I think people expected, at least on the trucking side. So that was the majority of the change there.

Yep. Okay, got it. Makes sense. And then on that note, with wallboard volume, you know, held in well in the quarter, maybe, you know, a little better than some of the, you know, industry numbers may have suggested through the quarter period. Can you talk about maybe your expectations around volume here as we move into the seasonally busier season? Should it continue this kind of level of change, or should there be any shifts there? Anything, any update on kind of what you're seeing on the demand front?

Yeah, you know, Trey, as we've said for years, I think we are well positioned geographically in better than average markets. So we look at the performance of our business, not just quarterly, but over a trailing 12-month basis. And I think our markets may be outperformed slightly, but pretty much in line with the marketplace. You know, look, as it comes to the overall demand picture here, It's been interesting. Home building, which has been pretty tepid for the last three or four years, and annual consumption of wallboard in the U.S. has been pretty flat for several years now. Sitting here today, our outlook is home building to kind of remain in this same level. Michael mentioned it, and we've talked a lot about interest rates and the sensitivities around home building affordability. The demand is there. It's just how do you have people being able to afford getting to these homes. But, you know, we're underbuilt in the U.S., and we've been underbuilt for quite some time. But until you can fix the interest rate and affordability issue, I think you're range-bound here for a while.

Okay. All right. That makes sense. Thanks, Craig. I'll pass it on.

Our next question comes from Anthony Patanari from Citigroup. Please go ahead with your question.

Hi, this is Asher Sonnen on for Anthony. Thanks for taking my question. I think you mentioned that there wasn't really any impact on, like, public demand from macro uncertainty, but I was wondering, you know, what that might look like for your private non-res or commercial end markets, you know, and what you're seeing there right now, quarter to date.

Yeah, you know, and good question. It really is a bigger driver on the cement side. You know, private non-res, not a big driver for wall boards. But it's probably, call it 25% or so for the cement demand. And the private non-res has so many different subcategories, including data centers and warehouses and large manufacturing facilities, in addition to hospitals and commercial office buildings and the like. So very different. And then geographically, the answer can be very different. But as we look at the overall picture, There's a large number of big projects that are multi-years in length. So, you know, again, it's been a growing market for us for a while. I think it remains a pretty steady business for us, and especially in our geographic markets.

Got it. That's helpful. I'm just switching gears, and forgive me if I missed this, but how should we think about the cadence of spending for the Duke modernization project?

Yeah, as we said, we should start up construction sometime later this year, you know, late summer, fall time frame. And, you know, cadence will be, you know, pretty heavy here in the fiscal 26 in the, you know, $475 to $525 million level for total company capital spending. You know, obviously that includes mountain cement plus the Duke wallboard facility and our sustaining capital. And then I would expect to see that, you know, start to trail off a little bit into fiscal 27 as the Mountain Cement Project will complete late calendar 26 or late fiscal 27.

Okay, that's very helpful. I'll turn it over.

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

Yes, hi. Good morning, everyone. I'm wondering if we could just talk about in cement, obviously the cadence of pricing for the industry is slowing a bit. Can you folks just talk about, based on the pricing cost visibility that you see over the next three to six months, do you expect pricing to be ahead of inflation? I know we've got moving pieces in terms of maintenance, timing, et cetera, but conceptually, how do you feel about price costs in cement over the next three to six months?

Yeah, Jerry, I think I would tell you, rather than looking at just the next three to six months, because our primary outage season is April and May, so the June quarter always has quite a bit of costs associated with that program. But as you look at the year, on the cost side, energy prices or costs have been pretty flat here for a little while. Electricity costs are up slightly. But on the balance, I think as we look across our network, we think we can continue to improve margins from here. The exact cadence of that over the next year or two years to be determined, and obviously a lot of that is going to be driven by the volume outlook as well. The incrementals on additional volume is important, and whereas we've come off of two years in a row with lower volume across the country for the U.S. cement business. You know, a rebound in volumes would also go a long way towards improving the margins of the business.

And then in terms of the wallboard business, you know, in Texas there's a significant importer of wallboard from Mexico. Can you just talk about what impact you're seeing on pricing from tariffs and wallboard? And then, you know, Cement, can you just talk about what benefits you could

Yeah, Jerry, when we look at it, you know, for both Mexico and Canada, wallboard and cement are both excluded. So there is no tariff impact to any imports coming in from either of those countries. So really the tariffs are very low impact to us as a domestic manufacturer, and there's not really a lot of other imports other than the cement side. When you look at the tariffs on cement, most of the countries right now are at a 10% tariff for their product. That's off of really the cost loaded into the ship. So when you're looking at a large component of a cement ton landing in the United States is the shipping cost. So when you back that out, you know, a lot of the cement coming into the U.S. only has a $4 to $5, maybe $6 tariff associated with it. So it's not a substantial impact to the business one way or the other.

Appreciate it. And then, you know, lastly, can I ask you in terms of wallboard really attractive margins considering, you know, we're sitting at just north of 1.3 million starts. As you folks think about price costs in that business over the next, you know, call it three to six months, can you just talk about the ebbs and flows and how do you expect margins to play out on a year-over-year basis? You've got some tough comps coming up in the June quarter.

Yeah, you know, look, similar, Jerry. I would say, you know, looking at it over a longer time period, you know, I think we're very well positioned to, you know, as an overall business, given the certainty that we have around our raw material reserves, you know, notably on the gypsum side. And, you know, and so I think that is well positioned for us as home building, you know, when it does recover in a more meaningful way to continue to see some margin expansion from here. But, I mean, look, in the immediate term, you know, home building, a lot of uncertainty, again, back around interest rates. And so the question is, when does home building recover? And that's when, you know, the real big opportunity to move pricing and therefore margins. You know, on the shorter end of the curve, you know, natural gas has come down here recently. OCC prices are down recently. So those are all favorable from that perspective. But we're more focused on the longer term and When does Houghton Building actually turn in our favor and therefore wallboard demand really meaningfully move higher? I'd point out, Jerry, we've shipped in this country 36 billion square feet of product before, and we're shipping at an annual pace for the last four years around 28 billion square feet, plus or minus a couple percent. So we're well off historical type of higher levels of shipments.

That's clear. Thank you.

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

Thank you. Good morning, guys. Craig, the operating loss in concrete and aggregates in Q4, are you looking at that basically as a one-off?

Yes, good question, Adam. Look, we had an acquisition that closed during the fourth quarter. As I mentioned, you've got some purchase accounting that added some incremental additional costs there, not to mention you've got a full quarter of depreciation and amortization related to that business. So I would tell you really look at the concrete and aggregates business. on an EBITDA basis. And again, a lot of noise in this fourth quarter given the acquisition closing. But more broadly, look at it on an EBITDA basis. And once you peel through that, actually, we're pretty happy with where we are positioned with the aggregates business. And we've increased the production capacity there by 50% with these two acquisitions this year. So it's starting to really move the needle.

OK. And then at the cement, joint venture, are you looking at fiscal year 26 as a nice recovery year for that business?

Yeah, we certainly put some investments into that business over the last 12 to 18 months. If you recall, we had a pretty large clinker cooler work done in the fall. We started up the slag business during the winter. That's been a drag on earnings. As that business really starts to improve here with the paving season this summer, we would expect to see a meaningful improvement there.

And then just lastly, for modeling purposes, is there anything more to come from purchase accounting? So an impact there in the first half of 26, and then how much is left in the ERP costs you called out?

Yeah, from a purchase accounting perspective, no, that was all contained really in our fourth quarter. And then on the IT side with our ERP system implementation, that will continue here into fiscal 26. So I would model the corporate SG&A at this same level.

Perfect. Thanks, Craig. Our next question comes from Philip Ong from Jefferies. Please go ahead with your question.

Hey, guys. You know, cement volumes have been pretty muted the last few quarters, and, you know, part of that's water-related. So any update in color in terms of what activity you're seeing right now? Have you seen demand kind of bounce back with weather clearing out? Any color on orders, backlogs? Helpful to kind of get a little perspective now. Demand is shaping up thus far on your heavy material side of things.

Yeah, no, you're right, Phil. It's been a slog for a couple of years, quite frankly, on the US cement side. Some of it's certainly weather, but there's no doubt infrastructure spending has been very slow to materialize. We spent not quite even 35% of the infrastructure bill at this point. That's several years old. We would have expected those dollars to have benefited the business well before now. But encouragingly, as the weather has improved here in March and April, we've seen volumes start to improve. So that's been very encouraging from our perspective.

Okay. So you're seeing positive year volumes at this point, April and March, correct? That's right. That's right. Okay. Super. And then on the cement price increases, I believe you guys had some in the marketplace in April. Any update on how that has progressed? I know weather's been a little choppy. Cement is very regional in nature. So any color and how that's kind of shaping up across your portfolio?

Yeah, most of those were slated for the April timeframe. We try not to talk too much forward looking around pricing. So we'll certainly give you that update as we get into on our July call as we talk about our first fiscal quarter.

Okay, helpful. And then from a wallboard demand standpoint, volumes were certainly down, call it three points in the fourth quarter. Spring selling season has been pretty muted. Are you seeing choppy orders from your distributors in any color on how we should think about inventory in the channel? Because we cover some other housing-related sectors like insulation, for example. Order patterns do seem to be very choppy there. So curious if you're seeing any of that as well.

Yeah, Bill, I tell you, it's been choppy for a couple of years, you know, just with a very muted single-family housing environment, you know, here in the U.S. And so, you know, not a lot of visibility. As you said, though, volumes have hung in there reasonably well in the grand scheme of things. So I would tell you inventory in the channel, not as big of a thing in wallboard given that it's, you know, a perishable product, so you're not going to store it outside anywhere. And so, you know, not a lot of inventory in the grand scheme of things within the channel, either at the manufacturer level or even at the distributor level. But, you know, look, I think we're all waiting for the turnaround affordability and interest rates to kind of move the needle.

Okay. Thank you. Appreciate all the great call.

And our next question comes from Jonathan Bettenhausen from U.S. Please go ahead with your question.

Hey, guys. I'm on for key cues this morning. Thanks for taking my question. What kind of production downtimes, if any, do you expect from the existing lines at the Duke wallboard facility while you work on that plant?

The existing lines will continue to operate as they have until the new line is complete. So very similar to the mountain cement project.

Okay. Got it. And then what are your thoughts on the aggregates deal pipeline? Are you guys going to target to do more of those

acquisitions here in fiscal 26 yeah so you know we we always look at aggregate deals when they come come around with it you know the pipeline is pretty cyclical you know we get a few every now and then that comes through you know from our past history you can see that you know we are a buyer in that space with it if the if it meets our criteria which we will not stray from our criteria You know, we like them that tie into our network, have a way we feel we can get a great financial return from, and that, you know, our entire network could benefit from those. So, you know, as they come available, we will continue to look in that space along with the other spaces we look in.

Great. Thanks.

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, and thanks to all of you for joining the call today. Before we conclude, I want to acknowledge the hard work of our dedicated team members. It's their daily focus on operational excellence, safety, and incremental efficiency gains that enables us to perform steadily in economic cycles. Regardless of the day-to-day noise around us, we will continue to invest wisely in our businesses and capitalize on high-value enhancing opportunities in the year ahead and beyond. We look forward to talking to you in the summer.

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