Despite the effects of the coronavirus (COVID-19) pandemic, Eagle Materials remains committed to the separation of its heavy and light-side businesses. COVID-19 has, however, caused the timeline of the separation to be altered. Eagle Materials said the company is continuing its preparation to ensure the heavy (cement, aggregates, and concrete) and light-side (gypsum wallboard and paperboard) businesses are well-positioned for separation when the markets recover.
Dallas, Texas-based Eagle Materials originally announced its business separation plans in 2019. The company plans to separate the two businesses into independent, publicly-traded companies. No timetable has been given for the separation.
Eagle Materials’ primary manufacturing facilities in the United States are located in areas where construction operations have been declared essential businesses. The facilities continue to deliver products to the company’s customers, according to a news release.
Eagle Materials said it has implemented enhanced health and safety protocols to safeguard employees who perform jobs in facilities or on jobsites. The company has implemented policies and practices “that are consistent with or exceed” CDC and government guidelines. Eagle Materials has also restricted visitor access to facilities, enforced social distancing protocols, and mandated regular, rigorous facility-cleaning procedures.
The company has taken several actions to reduce spending and maximize free cash flow, including limiting capital spending to critical maintenance, safety, and regulatory projects and managing the timing and duration of maintenance programs. The manufacturer also amended its bank credit facility and term loan to extend the maturity to August 2022 from August 2021. The company had a total liquidity of $295 million, including $115 million of cash on hand, as of March 31 with no near-term debt maturities.
“As our nation reacts to COVID-19 and the large-scale effort to contain it, we remain focused on navigating the crisis, keeping our employees and their families healthy, serving our customers as an essential business, and protecting the financial stability of Eagle during these uncertain times,” president and CEO Michael Haack said in a news release. “These steps are part of a broad array of internal actions we are taking to manage our cash flow and to be prepared in light of these conditions.”
The current, single entity of Eagle Materials manufactures and distributes cement, gypsum wallboard, recycled paperboard, concrete, aggregates, and sand from more than 75 manufacturing facilities across the United States.