HERNDON, Va.--(BUSINESS WIRE)-- Continental Building Products, Inc. (NYSE:CBPX) (the "Company"), a leading manufacturer of gypsum wallboard and complementary finishing products, announced today results for the second quarter ended June 30, 2018.

Highlights of Second Quarter 2018 as Compared to Second Quarter 2017

• Earnings per share increased 84.4% to $0.59
• Net income increased 76.6% to $21.9 million
• EBITDA¹ increased 21.3% to $41.4 million
• Net sales increased 15.5% to $139.3 million
• Gross margin increased to 29.4% compared to 25.5%
• Operating cash flow improved 62.9% to $39.0 million
• Deployed $7.4 million in capital investments
• Deployed $10.0 million to repurchase 0.3 million shares of common stock

"We delivered higher earnings per share reflecting strong momentum in sales and a rigorous focus on operating discipline," stated Jay Bachmann, President and Chief Executive Officer. "We are especially pleased by our 63% improvement in operating cash flows where we converted essentially all of our EBITDA into cash. This accomplishment is reflective of our relentless focus on improving our efficient, low cost operations while we continue to combat persistent inflationary pressures."

Mr. Bachmann continued, "We improved EBITDA in the quarter by 21% against the backdrop of tightening freight and labor markets. Higher earnings also reflected our commitment to the Bison Way continuous improvement effort as all of our associates work together to streamline operations and better serve our customers. As we look forward to the balance of the year, we expect demand to remain strong, and our volumes to be in line with industry wallboard growth, which we now anticipate will be 3% to 4% which represents the high end of our previously communicated range of 2% to 4% for the full year 2018. We are encouraged by the momentum of wallboard demand in our markets, and even more so by the commitment and hard work of everyone in the Company to ensure that we deliver exceptional value to our customers."

Second Quarter 2018 Results vs. Second Quarter 2017

Net sales were up 15.5% to $139.3 million for the second quarter 2018, compared to $120.6 million in the prior year quarter, primarily due to a 11.6% increase in wallboard volumes. Wallboard sales volumes increased to 722 million square feet (MMSF), compared to 647 MMSF in the prior year quarter, attributable to strong demand in the Company's markets.

Operating income was $30.6 million, compared to $21.6 million in the prior year quarter. This increase was primarily attributable to higher net sales which more than offset an increase in input costs per unit. SG&A expense was $10.4 million compared to $9.2 million in the prior year quarter, or 7.5% of net sales compared to 7.6% in the prior year quarter.

Interest expense decreased 12.0% to $2.7 million, compared to $3.1 million in the prior year quarter, reflecting higher investment income and capitalized interest, partially offset by the rise in LIBOR.

Net income for the second quarter 2018 increased 76.6% to $21.9 million, or $0.59 per share, compared to $12.4 million, or $0.32 per share, in the prior year quarter. The $9.5 million increase in net income is primarily a result of the increase in net sales and the decrease in provision for income taxes under the new federal and state tax rates effective for 2018.

Balance Sheet and Cash Flow

As of June 30, 2018, the Company had cash on hand of $84.4 million and total outstanding borrowing under the term loan agreement of $270.2 million. During the second quarter 2018, the Company generated cash flows from operations of $39.0 million and deployed $7.4 million in capital investments.

During the second quarter 2018, the Company repurchased 0.3 million shares of its common stock under its recently expanded repurchase program for an aggregate purchase price of $10.0 million, representing 0.9% of its outstanding shares as of December 31, 2017. As of June 30, 2018, against the program, the Company has repurchased $127.9 million of common stock at an average price of $22.27 per share and had a remaining capacity of $172.1 million for future repurchases.

Forward-Looking Outlook for the Full Year 2018

• SG&A is expected to be in the range of $39 - $40 million
• Cost of goods sold inflation per unit compared to the prior year is expected to be in the range of 3% - 4%, down from the prior guidance of 3% - 5%, partly offset by approximately $5 million of savings from high return capital projects
• Total capital expenditures are expected to be in the range of $29 - $33 million as compared to the prior guidance of $30 - $35 million
  • Maintenance capital spending is expected to be in the range of $14 - $15 million as compared to the prior guidance of $15 million
  • High-return capital spending is expected to be in the range of $15 - $18 million as compared to the prior guidance of $15 - $20 million
• Depreciation and amortization is expected to be in the range of $43 - $45 million
• Effective tax rate is expected to be in the range of 21% - 22% as compared to the prior guidance of 22% - 24%

Investor Conference Webcast and Conference Call

The Company will host a webcast and conference call on Thursday, August 2, 2018 at 5:00 p.m. Eastern Time to review second quarter 2018 financial results, discuss recent events and conduct a question-and-answer period. The live webcast will be available on the Investor Relations section of the Company's website at www.continental-bp.com. To participate in the call, please dial (877) 407-0789 (domestic) or (201) 689-8562 (international). A replay of the conference call will be available through September 2, 2018, by dialing (844) 512-2921 (domestic) or (412) 317-6671 (international) and entering the pass code number 13681324.

About Continental Building Products

Continental Building Products is a leading North American manufacturer of gypsum wallboard and complementary finishing products. The Company is headquartered in Herndon, Virginia with operations serving the residential, commercial and repair and remodel construction markets primarily in the eastern United States and eastern Canada. For additional information, visit www.continental-bp.com.

Forward-Looking Statements

This press release contains forward-looking statements. Forward-looking statements may be identified by the use of words such as "anticipate", "believe", "expect", "estimate", "plan", "outlook", and "project" and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on historical information available at the time the statements are made and are based on management's reasonable belief or expectations with respect to future events, and are subject to risks and uncertainties, many of which are beyond the Company's control, that could cause actual performance or results to differ materially from the belief or expectations expressed in or suggested by the forward-looking statements. Forward-looking statements speak only as of the date on which they are made and the Company undertakes no obligation to update any forward-looking statement to reflect future events, developments or otherwise, except as may be required by applicable law. Investors are referred to the Company's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q for additional information regarding the risks and uncertainties that may cause actual results to differ materially from those expressed in any forward-looking statement.

¹ See the financial schedules at the end of this press release for a reconciliation of EBITDA, adjusted net income and adjusted earnings per share, which are non-GAAP financial measures, to relevant GAAP financial measures, and a discussion of why they are useful to investors.

Reconciliation of Non-GAAP Measures

EBITDA, EBITDA Margin, Adjusted Net Income, and Adjusted Earnings Per Share have been presented in this press release as supplemental measures of financial performance that are not required by, or presented in accordance with, generally accepted accounting principles in the United States ("GAAP"). This release presents EBITDA, EBITDA Margin, Adjusted Net Income, and Adjusted Earnings Per Share as supplemental performance measures because management believes that they facilitate a comparative assessment of the Company's operating performance relative to its performance based on results under GAAP while isolating the effects of some items that vary from period to period without any correlation to core operating performance and eliminate certain charges that management believes do not reflect the Company's operations and underlying operational performance. Furthermore, the Company's Board of Directors' compensation committee uses EBITDA to evaluate management's compensation. Management also believes that EBITDA, EBITDA Margin, Adjusted Net Income, and Adjusted Earnings Per Share are useful to investors because they allow investors to view the business through the eyes of management and the Board of Directors, facilitating comparison of results across historical periods.

EBITDA, EBITDA Margin, Adjusted Net Income, and Adjusted Earnings Per Share may not be comparable to similarly titled measures of other companies because other companies may not calculate EBITDA, EBITDA Margin, Adjusted Net Income, and Adjusted Earnings Per Share in the same manner. EBITDA, EBITDA Margin, Adjusted Net Income, and Adjusted Earnings Per Share are not measurements of the Company's financial performance under GAAP and should not be considered in isolation or as alternatives to net income or earnings per share determined in accordance with GAAP or any other financial statement data presented as indicators of financial performance or liquidity, each as calculated and presented in accordance with GAAP.

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Continental Building Products, Inc.
Investor Relations:
Tel.: (703) 480-3980
Investorrelations@continental-bp.com

Source: Continental Building Products, Inc.