Eagle Materials Inc

NYSE:EXP

Earnings Call Analysis

Record Quarterly Performance with EPS Growth

Eagle Materials reported a record first-quarter revenue of $609 million, driven primarily by higher Cement and Wallboard sales prices, despite lower Cement volumes caused by wet weather. Earnings per share surged by 16% to $3.94, reflecting increased earnings and a reduction in fully diluted shares. The company achieved a 14% rise in operating earnings for the Heavy Materials sector and a 5% increase in the Light Materials sector. Strong cash flow enabled disciplined capital allocation, including $85.5 million in stock repurchases. The company maintains a robust balance sheet with significant financial flexibility and continues to pursue strategic investments and shareholder returns.

A Strong Start Amidst Challenges

Eagle Materials began their fiscal year 2025 on a strong note with record first-quarter revenue of $609 million and a 16% increase in earnings per share, reaching $3.94. This performance, achieved despite challenging weather conditions, underscores the company's consistent and disciplined approach to business operations. Their success can largely be attributed to operational excellence and a relentless focus on safety, which remains a cornerstone of their strategy.

Segment Performance Highlights

In the Heavy Materials sector, encompassing Cement, Concrete, and Aggregates, revenue rose by 1%. This increase was primarily driven by higher Cement sales prices, although volume was hindered by wet weather delaying construction projects. Lower fuel and maintenance costs during planned outages also contributed to a 14% increase in operating earnings for this segment. In contrast, the Light Materials sector, which includes Wallboard and recycled Paperboard, saw a 2% increase in revenue and a 5% rise in operating earnings due to higher sales prices and reduced input costs.

Financial Flexibility and Shareholder Returns

Eagle Materials continues to generate substantial cash flow, emphasizing disciplined capital allocation. Operating cash flow for the first quarter decreased by 6% to $133 million, affected by increased working capital. Capital spending was reduced to $33 million. The company repurchased 348,000 shares for $85.5 million and paid out $94 million in dividends. With a leverage ratio of 1.3x net debt to EBITDA, the company boasts significant financial flexibility, ending the quarter with $47 million in cash and total committed liquidity of $607 million.

Outlook and Strategic Initiatives

Looking ahead, Eagle Materials is optimistic about the demand for its products. The company is strategically positioned to benefit from multiyear public infrastructure projects driven by the IIJA bill, particularly in the Cement sector. Nonresidential construction projects are expected to maintain high levels of demand. Although the Wallboard business faces uncertainty due to macroeconomic factors, the medium- and long-term prospects remain positive, supported by an aging housing stock and a persistent housing shortage. The company is also making significant investments in sustainability, including projects to reduce water usage and expand alternative fuel systems.

Operational Excellence and Strategic Investments

Eagle Materials remains committed to running its businesses efficiently and safely, setting industry benchmarks for operational performance. The company plans to continue investing in its core businesses, both organically and through mergers and acquisitions, aiming to strengthen its market position across Heavy and Light Materials segments. Maintaining a strong balance sheet, with leverage generally kept at or below 1.5x, provides the flexibility for such investments, while also enabling substantial return of excess free cash flow to shareholders.

Guidance and Market Conditions

The company expects to see continued strong performance in its Cement business due to limited U.S. manufacturing supply response and sustained high demand. However, Wallboard demand in the near term will depend on broader economic conditions and policy responses. Energy costs, particularly natural gas, are expected to remain low, benefiting the company's cost structure. While the construction season experienced delays due to weather, the company anticipates a busy second half of the year as projects push forward to catch up on deferred demand.

Earnings Call Transcript 2025-Q1

[Operator]

Good day, everyone, and welcome to Eagle 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 Eagle's President and Chief Executive Officer, Mr. Michael Haack. Mr. Haack, please go ahead.

[Michael Haack, executive]

Thank you, Jamie. Good morning. Welcome to Eagle Materials conference call for our first quarter of fiscal year 2025. This is Michael Haack. Joining me today are Craig Kesler, 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 Eagle, 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 2 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. [ PBO ] data shows years of public infrastructure spend ahead, largely driven by the IIJA bill. Nonresidential construction, especially as it relates to heavy manufacturing projects, should continue to remain at elevated levels. Both infrastructure and nonresidential projects are typically multiyear 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 our -- 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 U.S. 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 led us to believe -- 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 [ proved ] now, we believe both demand and supply financials 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 Materials 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 tenet to maintaining a strong core is keeping our balance sheet healthy. We have generally kept our leverage at or below 1.5x 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.

[D. Kesler, executive]

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 Aggregates 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 2 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 1.3x. 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?

[Operator]

[Operator Instructions]. Our first question today comes from Trey Grooms from Stephens Inc.

[Trey Grooms, analyst]

First off, nice improvement on the margins in both Cement and Wallboard. But I guess maybe first on Wallboard. OCC costs have been rising, Paperboard margins up, a little bit of compression in the quarter.

So given the timing differences 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 nat gas 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 nat gas.

[D. Kesler, executive]

Yes. Thanks, Trey. From an OCC recycled fiber costs, which are the primary raw material for the Paper business, 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 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 in a little higher pricing.

And you're right, natural gas, again, down lower in the last few days. We did see a nice benefit year-over-year from lower gas prices. We're right around to the 40% hedged for the rest -- the remainder of fiscal 2025, just right around here at these market prices. 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.

[Trey Grooms, analyst]

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 cost, 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, given the nice margin improvement you've seen here in the quarter?

[D. Kesler, executive]

Yes. The fuel cost, we talked about it now for several quarters. We had good visibility into lower fuel costs around some of the solid fuels that we use, and that's largely 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 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, we did a good job of managing those costs during the quarter.

[Trey Grooms, analyst]

Yes. Good work with all that. And then last one for me is you mentioned the pricing in Wallboard that you guys put up and a nice sequential improvement, as you guys had talked about on the prior call. Is there -- can you give us kind of the ending number for the quarter maybe relative to the reported ASP?

[D. Kesler, executive]

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

[Operator]

Our next question comes from Stanley Elliott from Stifel.

[Stanley Elliott, analyst]

Nice work in a very tough operating environment. I guess starting off, you mentioned kind of resi side being a little less certain in terms of how that's going to end up playing out. I'm 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?

[D. Kesler, executive]

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. So it comes and goes.

And look, I think we've said weather more than once this morning, especially if you get into the South Texas market, that amount of rain, we don't -- 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 and extreme wet weather that market has faced. So again, maybe a little bit of inventory build here and there, but it's not significant.

And in terms of the residential outlook, there's obviously a lot of factors that influence that. Interest rates are one of them. They've come down nicely here over the last 4 to 6 weeks. We'll see you again tomorrow what tomorrow brings. But overall, given the low supply of homes in the country, that has continued to support a pretty resilient level of construction activity.

[Stanley Elliott, analyst]

And I guess one more on weather. To what extent do you see the weather impacting in the quarter? Obviously, pricing was very nice. Do you think that has any impact on pricing pressures later in the year or maybe even into -- 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?

[D. Kesler, executive]

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

[Stanley Elliott, analyst]

And then lastly, I mean, balance sheet, very manageable. You do have the larger Wyoming project coming up in [ '25 ]. You started on it. Is the plan to kind of continue to build cash ahead of that to support that or still remain opportunistic on the M&A front or even the share repurchases?

[D. Kesler, executive]

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 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.

[Stanley Elliott, analyst]

Congrats and best of luck.

[Operator]

Our next question comes from Brent Thielman from D.A. Davidson.

[Brent Thielman, analyst]

Just I 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 realization of those price increases been impacted at all by sort of weather-related issues? I'm just curious, your thoughts there.

[D. Kesler, executive]

No. I think they moved forward as we had expected. And 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.

[Brent Thielman, analyst]

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 presumably going over the next few years, do you anticipate sort of your mix of -- sort of in sector and 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?

[Michael Haack, executive]

It depends really regionally where you look at this, these items with it. As we -- as I said in the comments, too, we see these as multiyear 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. We have a customer base that we support.

And those projects you see as great projects to pick up, certain aspects of them and keep our demand profile looking strong. So across our network, we see this as just a good visibility for the Cement side of the business for multiyears to come.

[Operator]

Our next question comes from Anthony Pettinari from Citi.

[Anthony Pettinari, analyst]

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?

[D. Kesler, executive]

Yes, Anthony, to the first part of your question, it's really hard to quantify the exact impact that weather had. 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 [ whether ] 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 is still right that you're -- 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.

[Anthony Pettinari, analyst]

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 or...

[D. Kesler, executive]

Yes, pretty much in line with the average.

[Operator]

Our next question comes from Jerry Revich from Goldman Sachs.

[Jerry Revich, analyst]

Congratulations on the strong performance. I want to ask, so normal seasonality for your Cement business is margins are up about 8 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?

[D. Kesler, executive]

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 that are completed during the June quarter. Those are quite heavy spends, and then that doesn't happen in the September and December quarters.

[Jerry Revich, analyst]

Got it. So the full benefit from the improved energy costs and all the other moving pieces there fully baked in the strong [ June ] quarter results?

[D. Kesler, executive]

Right.

[Jerry Revich, analyst]

Okay. And then in terms of the sequential price cadence, so over the past 2 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 couple of years?

[D. Kesler, executive]

Yes, 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.

[Jerry Revich, analyst]

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 could just give us any additional color on how those conversations are headed, particularly in Cement ahead of '25?

[D. Kesler, executive]

Yes. 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 look, I think as Michael has 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 in different economic climates, just given the changes that have occurred in our industries.

And so that without getting into specifics for timing, we just do continue to see pricing opportunity in front of us.

[Operator]

Our next question comes from Adam Thalhimer from Thompson, Davis.

[Adam Thalhimer, analyst]

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 are your thoughts are on sustainability?

[D. Kesler, executive]

Yes. 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. They did -- again, our teams did a fantastic job this quarter, just like the Cement group did as well.

And 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 years worth of either raw material reserves or a supply contract for synthetic gypsum. And so we really positioned this business very, very well. And yes, it's a good margin performance, but that's been a hallmark of that business for many years now.

[Adam Thalhimer, analyst]

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

[D. Kesler, executive]

Yes. The 91,000 tons is a record quarter for the paper mill. We mentioned that we have gone through the expansion project a couple of years ago, really starting to see the benefit of that volume improvement. Again, the mill is running very well. That team is doing a fantastic job.

We -- if you just annualize that, you could get a pretty decent run rate. And we're always looking to debottleneck all of these facilities. And 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 is going to continue to do that.

[Operator]

Our next question comes from Phil Ng from Jefferies.

[Philip Ng, analyst]

I had a question. How did Cement volumes track intra-quarter, especially when weather cleared out in perhaps June, July? I know June has got 2 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 on how you're thinking about the [ Cement ] volumes and how it's progressed since a very wet spring.

[D. Kesler, executive]

Yes. Phil, good question. The first part of your question, and you look at our business, Texas, 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, 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 2 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.

[Philip Ng, analyst]

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 out to August?

[D. Kesler, executive]

Yes. 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 earth work that happens. And so I know they're gearing up for a busy second half of the year.

[Philip Ng, analyst]

Okay. And then from a margin standpoint, a really impressive quarter, 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 -- that will roll off just because based on what you're putting up, 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 for the rest of the year in that or Wallboard or Cement?

[D. Kesler, executive]

Yes. Look, sequentially, while natural gas is down, it's been down at these levels between [ $2, $2.5 a million ] for quite some time. So sequentially, I don't see a significant change there. As I mentioned in 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 there's going to be some puts and takes, where margins are concerned.

In the Cement business, again, we're largely through the large maintenance programs. And with fuel costs being low, we'd expect to continue to see that business perform very well.

[Philip Ng, analyst]

Okay. And just one last one for me. The commentary on Wallboard [ terms ] outlook was a little more contingent on the macro. And then [ housing ] starts have been 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 start the next quarter, do you still see decent demand? Is that how we should think about Wallboard? Because your volumes lagged the industry. For [ Smidge, ] I don't know if that was related, but any more perspective would be helpful.

[D. Kesler, executive]

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 than -- and it's always hard to forecast. But certainly, the last 3 to 6 months have been even tougher.

[Operator]

Our next question comes from Tyler Brown from Raymond James.

[Patrick Brown, analyst]

Craig, I think you mentioned transportation was a good guy on the cost side on Wallboard. 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?

[D. Kesler, executive]

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

[Patrick Brown, analyst]

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?

[D. Kesler, executive]

Yes. In Wallboard, very little rail, pretty inefficient commodity to move on the rail.

[Patrick Brown, analyst]

Okay. And then I think you're guiding to, call it, [ $310 million, $340 million ] 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?

[D. Kesler, executive]

Yes, I wouldn't say it's a slow strat, 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 tick 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.

[Patrick Brown, analyst]

Okay. Good. And then my last one, just a couple of 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 guide. Just curious if that was a gain? Just how we should think about that line? Appreciate it.

[D. Kesler, executive]

Yes. 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, 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, that could be other asset sales, a little minor things that are hard to predict. But I don't expect it to continue to be at that same level for -- in the second, third and fourth quarter.

[Operator]

And our next question comes from Keith Hughes from Truist.

[Keith Hughes, analyst]

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?

[D. Kesler, executive]

Yes, Keith, I've always said, it's hard to predict that exact timing. 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 if construction season starts in March. But this year just got extended.

That doesn't mean -- or that doesn't preclude next year from being 2 increases. We just got to see how the year unfolds and how the second half of this year goes through. But remains to be seen in terms of exact timing.

[Operator]

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 Haack for any closing comments.

[Michael Haack, executive]

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 help 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.

[Operator]

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.