SOUTH JORDAN, Utah--(BUSINESS WIRE)--
HEADWATERS INCORPORATED (HW), a building products company dedicated to improving lives through innovative advancements in construction materials, today announced takeaways from its Eleventh Annual Analyst and Investor Day Conference, which was held Friday, March 22, 2013 in Salt Lake City, UT. The event featured presentations by Chairman & Chief Executive Officer Kirk A. Benson, Chief Financial Officer, Don Newman and Senior Executives: Bill Gehrmann, Jerry Smith, Murphy Lents and Dave Ulmer.
Special Guest Speaker—Ivy Zelman, Zelman & Associates
Headwaters’ Analyst & Investor Day also featured special guest speaker, Ivy Zelman, Chief Executive Officer of Zelman & Associates, a preeminent housing market industry expert, well-known for calling the peak of the housing market in 2005. Ms. Zelman shared her views on the market today noting key trends including population growth, household formation, inventory trends, and consumer psychology that support an unfolding housing recovery that remains in its early stages. Ms. Zelman stated, “We believe that the housing market is at the front end of a multi-year appreciation cycle and remain increasingly bullish. There are huge opportunities for companies serving the residential real estate end markets.”
CEO Commentary—Kirk A. Benson
“Headwaters’ goal is to be among the world’s elite construction materials businesses and well-known for focusing on niche, high margin product categories,” said Kirk A. Benson, Chairman and Chief Executive Officer of Headwaters. “We are well positioned to capitalize on the new up-cycle in demand that is occurring in a number of our end markets, particularly in the new residential construction market and feel quite confident about our business prospects.”
“Our light building products business has a portfolio of market leading brands in six key product categories. We look to grow this business through a combination of new product development, geographic expansion, and market share gains, as well as through strategic product acquisitions, such as our recent acquisition of Kleer Lumber, a manufacturer of high quality and eco-friendly cellular PVC trim board and moulding products. These types of bolt-on acquisitions enable us to expand and leverage our existing distribution channels in order to drive incremental revenue.”
“Our heavy construction materials segment will continue to benefit from the ongoing increase in demand for cement in the U.S., which is also primarily being driven by new housing starts. Additionally, we expect that, over time, we will see increased penetration of fly ash as an admixture in ready mix concrete and other concrete products as U.S. cement producers find it challenging to fully meet the expected increase in demand from domestic production alone.”
CFO Commentary—Don Newman
“Both of our operating segments have strong contribution margins that will provide significant flow through to our profitability as revenues increase,” said Don Newman, Chief Financial Officer of Headwaters. “We also have a culture of continuous improvement, driving efficiencies and lowering costs that we expect will lead to increased profits in the future.”
“Strong contribution margins, coupled with the up-cycle in demand that is occurring in a number of our end markets should result in solid cash generation that can be used to repay debt and fund accretive growth, as well as create opportunities to return capital to our shareholders.”
“We have relatively low capital requirements and when combined with our tax NOL carry forwards and tax credits, we are positioned to generate significant free cash flow. We remain committed to continuing to de-risk the balance sheet, having reduced total debt by nearly $500 million since the peak in 2004, and over $63 million in the last seven quarters. Our leverage ratio of 4.7x is down from 6.7x in June 2011 and is trending towards our long-term goal of between 2.5x and 3.0x.”
Headwaters reaffirmed its recently raised guidance of expected 2013 Adjusted EBITDA of $110 million to $125 million.
About Headwaters Incorporated
Headwaters Incorporated is improving lives through innovative advancements in construction materials through application, design, and purpose. Headwaters is a diversified growth company providing products, technologies and services to the heavy construction materials, light building products, and energy technology industries. Through its coal combustion products, building products, and energy businesses, the Company has been able to improve sustainability by transforming underutilized resources into valuable products. www.headwaters.com
Forward Looking Statements
Certain statements contained in this press release are forward-looking statements within the meaning of federal securities laws and Headwaters intends that such forward-looking statements be subject to the safe-harbor created thereby. Forward-looking statements include Headwaters’ expectations as to the managing and marketing of coal combustion products, the production and marketing of building products, the sale of its discontinued cleaned coal operations, the licensing of residue hydrocracking technology and catalyst sales to oil refineries, the availability of refined coal tax credits, the development, commercialization, and financing of new technologies and other strategic business opportunities and acquisitions, and other information about Headwaters. Such statements that are not purely historical by nature, including those statements regarding Headwaters’ future business plans, the operation of facilities, the availability of feedstocks, and the marketability of the coal combustion products, building products, cleaned coal, catalysts, and the availability of tax credits, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding future events and our future results that are based on current expectations, estimates, forecasts, and projections about the industries in which we operate and the beliefs and assumptions of our management. Actual results may vary materially from such expectations. Words such as “may,” “should,” “intends,” “plans,” “expects,” “anticipates,” “targets,” “goals,” “projects,” “believes,” “seeks,” “estimates,” “forecasts,” or variations of such words and similar expressions, or the negative of such terms, may help identify such forward-looking statements. Any statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, and other characterizations of future events or circumstances, are forward-looking. In addition to matters affecting the coal combustion products, building products, and energy industries or the economy generally, factors that could cause actual results to differ from expectations stated in forward-looking statements include, among others, the factors described in the caption entitled “Risk Factors” in Item 1A in Headwaters’ Annual Report on Form 10-K for the fiscal year ended September 30, 2012, Quarterly Reports on Form 10-Q, and other periodic filings and prospectuses.
Although Headwaters believes that its expectations are based on reasonable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that our results of operations will not be adversely affected by such factors. Unless legally required, we undertake no obligation to revise or update any forward-looking statements for any reason. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Our internet address is www.headwaters.com. There we make available, free of charge, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Our reports can be accessed through the investor relations section of our web site.