-
Revenue Increased 28% to $259 Million
-
Operating Income increased 20% to $15 Million
-
Adjusted EBITDA increased 62% to $47 Million
-
Reaffirm 2017 Adjusted EBITDA Guidance of $235 to $250 Million
HEADWATERS INCORPORATED (NYSE: HW), a building products company
dedicated to improving lives through innovative advancements in
construction materials, today announced results for its second quarter
of fiscal 2017.
Second Quarter 2017 Highlights
-
Building products revenue increased 43% and operating income increased
79%, compared to the March 2016 quarter
-
Building products Adjusted EBITDA increased 74% over 2016 and Adjusted
EBITDA margin increased 360 basis points to 20.2%
-
Construction materials revenue increased 13% and operating income
increased 11%, compared to the March 2016 quarter
-
Construction materials Adjusted EBITDA increased 16% over 2016 and
Adjusted EBITDA margin increased 50 basis points to 18.3%
CEO Commentary
“Headwaters grew Adjusted EBITDA by $18 million or 62% in the quarter, a
growth rate that exceeds the upper end of our 2017 guidance and brings
our fiscal year-to-date Adjusted EBITDA growth rate up to 28%. Our
strong performance allows us to confirm our Adjusted EBITDA guidance
range of $235 to $250 million for 2017,” said Kirk A. Benson, Chairman
and Chief Executive Officer of Headwaters. “We are continuing to work
toward the closing of our previously announced transaction with Boral
Limited (BLD:ASX), and we are pleased that we are on track to deliver
strong earnings potential to Boral.
“Increasing supply of high quality fly ash was one of our 2017
objectives, and we experienced a year-over-year increase of 112,000 tons
of high quality ash delivered to customers during the quarter. It is
exciting to see our supply increase to meet the demand for ash,”
continued Mr. Benson. “We opened our new state-of-the-art storage
facility in Houston and made progress in several other 2017 initiatives
as we continue to focus on increasing fly ash supply.
“Adjusted EBITDA in our Building Products segment increased by 74%
year-over-year. Window’s margins continue to be accretive, and we
completed a small acquisition in Atlanta, further expanding window sales
in the Southeast United States. We experienced a very positive quarter
in our siding group with double digit top-line growth and margin
accretion compared to last year.”
Second Quarter Summary
Headwaters’ second quarter 2017 consolidated revenue increased by 28% to
$259.3 million from $202.3 million for the second quarter of 2016. Gross
profit was $70.5 million, compared to $54.9 million in 2016, and
operating income was $14.7 million, compared to $12.2 million in 2016.
Certain non-routine merger and acquisition-related costs of
approximately $9.1 million, primarily related to the Boral transaction,
impacted operating income in 2017. Adjusted EBITDA increased by $18.0
million to $47.1 million, or 62% over 2016.
Income from continuing operations was $5.1 million, or $0.06 per diluted
share, for the second quarter of 2017, compared to $2.6 million, or
$0.03 per diluted share, for the second quarter of 2016. Second quarter
adjusted income from continuing operations was $16.1 million, or $0.21
per diluted share in 2017, compared to $6.7 million, or $0.09 per
diluted share in 2016. Discontinued operations were immaterial in both
2017 and 2016.
Six Months Ended March 31, 2017
Our total revenue for the six months ended March 31, 2017 was $514.9
million, up 22% from $420.8 million for 2016. Gross profit increased
18%, from $119.1 million in 2016 to $141.1 million in 2017. Operating
income of $37.0 million in 2016 decreased to $34.0 million in 2017, and
income from continuing operations of $15.5 million, or diluted income
per share of $0.20, decreased to $11.8 million, or $0.15 per diluted
share, in 2017. The 2017 results include non-routine merger and
acquisition-related costs of approximately $13.5 million, primarily
related to the Boral transaction. Discontinued operations were
immaterial in both 2017 and 2016.
Adjusted EBITDA increased by $19.7 million or 28%, from $69.3 million to
$89.0 million for the six months ended March 31, 2017, as compared to
2016, and Adjusted EPS increased by 30%, from $0.30 in 2016 to $0.39 in
2017.
Building Products Segment
Headwaters’ Building Products segment is a national brand leader in
innovative building products through superior design, manufacturing, and
channel distribution. The segment markets a wide variety of niche
building products, including siding accessories, manufactured
architectural stone, specialty roofing products, and windows.
Building Products revenue increased 43%, from $98.1 million in the
second quarter of 2016 to $140.7 million in the second quarter of 2017.
Gross profit was $40.9 million compared to $28.5 million in 2016 and
operating income was $11.4 million compared to $6.3 million in 2016.
Adjusted EBITDA increased 74% to $28.4 million, from $16.3 million in
2016, with a large portion of the growth due to our windows product
group which we acquired in late fiscal 2016. In January, we closed a
small window acquisition in the Atlanta market, which will further
expand our presence in the Southeast United States.
We are finishing the integration of our Metro and Gerard stone-coated
metal roofing manufacturing sites and have experienced a 30% increase in
manufacturing efficiency since the beginning of the fiscal year. We
anticipate continued improvement in roofing performance in the second
half of the fiscal year as we reduce fixed costs and optimize
manufacturing. Siding revenue increased by 19% during the March 2017
quarter and Adjusted EBITDA margins expanded over 500 basis points to
20% despite cost pressures from rising resin and other costs. Stone
continued its growth in the quarter with Adjusted EBITDA margins greater
than 20%. Our building products segment completed the quarter with its
highest Adjusted EBITDA margin for a March quarter since 2006.
Construction Materials Segment
Headwaters is the largest domestic manager and marketer of coal
combustion products (CCPs), including fly ash. Utilization of these
materials improves performance of concrete and concrete construction
products while creating significant environmental benefits. Beginning
last quarter, we have reported our concrete block group in the
construction materials segment. Prior period results have been adjusted
to reflect this reporting change.
Second quarter 2017 revenue increased by 13% to $116.0 million, compared
to $102.8 million in 2016. The increase in revenue was attributable to
organic growth as well as the acquisition of SynMat in March 2016.
SynMat had a very positive quarter, growing its top-line revenue over
30% year-over-year, and we continue to be optimistic concerning
synthetic gypsum opportunities. Including SynMat, service revenue
represented approximately 21% of total segment revenue for the second
quarter of 2017, compared to 17% for 2016.
Gross profit was $28.1 million in 2017, compared to $25.5 million in
2016 and operating income was $15.2 million in 2017, compared to $13.7
million in 2016. Adjusted EBITDA increased $3.0 million from $18.3
million in 2016 to $21.3 million in 2017.
We forecasted between 200,000 and 300,000 tons of net fly ash sales in
fiscal 2017 from new supply contracts. For the first six months of the
fiscal year we shipped over 170,000 tons of high quality fly ash from
four previously executed new contracts.
We also anticipated 150,000 to 250,000 tons of new fly ash in fiscal
2017 from storage and reclamation. Construction on our first 2017
storage project was completed in the second quarter and we have
commenced shipping tons from that facility. Negotiations are advancing
on our second new storage facility, which will be located in New
England. Minor modifications were made to our first reclamation project
which slowed mobilization of equipment, but we continue to believe that
the site will be operational this fiscal year.
We forecasted between 100,000 and 200,000 tons of additional fly ash
supply in fiscal 2017 resulting from enhanced utilization. Through the
first six months of the fiscal year we have achieved a total of 115,000
tons of high quality ash from enhanced utilization activities. We are
currently installing or planning to install our RestoreAir technology at
six sites in fiscal 2017. We expect to treat over 250,000 tons of fly
ash at those sites when the technology is fully operational.
Our block product group is experiencing strong demand, but shipments
were hampered in the second quarter by the number of rain days in the
Texas market, slowing construction projects. As the weather improved,
shipping volumes increased and inventory levels were reduced. Our new
block plant is fully operational and helping to improve overall margins
in the block group through efficient manufacturing of more sophisticated
high end products.
Outlook
“We are pleased with the March quarter’s financial performance and see
potential for a strong second half of fiscal 2017,” said Don P. Newman,
Headwaters’ Chief Financial Officer. “We have significantly improved our
fly ash supply situation through new contracts and storage capacity,
which should add to sales as we move into the summer construction
season. In addition, our building products segment experienced strong
revenue and Adjusted EBITDA growth in the March quarter, which is
typically our lowest seasonal quarter for sales and profitability.
“At the end of March, our pro forma net debt to Adjusted EBITDA ratio
was 3.1 times, and we expect our net debt ratio to be in the range of
2.5 times by the end of fiscal 2017. We anticipate cash flows to be
strong in the second half of the year and should position us to reduce
debt by an additional $85 million before the end of the calendar year.”
Financial Supplement Attached
Headwaters’ condensed consolidated statements of income for the quarters
and six-month periods ended March 31, 2016 and 2017 and balance sheets
as of September 30, 2016 and March 31, 2017, prepared in accordance with
generally accepted accounting principles (GAAP), are attached to this
press release in the financial supplement. In addition, Headwaters
currently uses two non-GAAP financial measures: Adjusted EBITDA and
Adjusted EPS. Headwaters’ calculations of Adjusted EBITDA, trailing
twelve months (TTM) Adjusted EBITDA and Adjusted EPS are also included
in the financial supplement, following the condensed consolidated GAAP
financial statements.
Headwaters defines Adjusted EBITDA as income from continuing operations
plus net interest expense, income taxes, depreciation and amortization,
equity-based compensation, cash-based compensation tied to stock price,
goodwill and other impairments, and other non-routine adjustments that
arise from time to time, all as presented in the table in the financial
supplement. Headwaters currently defines Adjusted EPS as diluted EPS
from continuing operations plus the effect of amortization expense
related to acquired intangible assets and other non-routine adjustments
that arise from time to time, as presented in the table in the financial
supplement.
Adjusted EBITDA and Adjusted EPS are used by management, investors and
analysts to measure operating performance, as a supplement to our
consolidated financial statements presented in accordance with GAAP.
Adjusted EBITDA is also used by management, investors and analysts as
one measure of a company’s ability to service its debt and meet its
other cash needs. Our presentations of Adjusted EBITDA and Adjusted EPS
have limitations as analytical tools, and should not be considered in
isolation, or as substitutes for analysis of our results as reported
under GAAP. Accordingly, they are not presented as alternative measures
of liquidity. Because the definitions of Adjusted EBITDA and Adjusted
EPS vary among companies and industries, our definitions of these
non-GAAP financial measures may not be comparable to similarly-titled
measures used by other companies.
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 construction materials and building
products markets. Through its construction materials and building
products businesses, the Company has been able to improve sustainability
by transforming underutilized resources into valuable products. www.headwaters.com
CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE
PURPOSE OF “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995
This press release contains forward-looking statements relating to
Headwaters’ operations that are based on management’s current
expectations, estimates and projections about the industries in which
Headwaters operates. Words such as “may,” “should,” “anticipates,”
“expects,” “intends,” “plans,” “targets,” “forecasts,” “projects,”
“believes,” “seeks,” “schedules,” “estimates,” “budgets,” “goals,”
“outlook” and similar expressions are intended to help identify such
forward-looking statements. Forward-looking statements include, without
limitation, Headwaters’ expectations as to the agreement and plan of
merger with Boral Limited (“Boral”), the managing and marketing of coal
combustion products, and other construction materials, the production
and marketing of building products, the sales to oil refineries of
residue hydrocracking catalysts, the development, commercialization, and
financing of new products and other strategic business opportunities and
acquisitions, and other information about Headwaters which 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 coal
combustion products, construction materials, building products and
catalysts. These statements are not guarantees of future performance and
are subject to certain risks, uncertainties and other factors, many of
which are beyond the Company’s control and are difficult to predict.
Therefore, actual outcomes and results may differ materially from what
is expressed or forecasted in such forward-looking statements. The
reader should not place undue reliance on these forward-looking
statements, which speak only as of the date of this press release.
Unless legally required, Headwaters undertakes no obligation to update
publicly any forward-looking statements, whether as a result of new
information, future events or otherwise. Among the important factors
that could cause actual results to differ materially from those in the
forward-looking statements are: changing feedstock and energy prices;
actions of competitors or regulators; technological developments;
potential disruption of the Company’s production facilities,
transportation networks and information technology systems due to war,
terrorism, malicious attack, civil accidents, political events, civil
unrest or severe weather; potential environmental liability or product
liability under existing or future laws and litigation; potential
liability resulting from other pending or future litigation; changed
accounting rules under generally accepted accounting principles
promulgated by rule-setting bodies; the factors set forth under the
heading “Risk Factors” in the Company’s Annual Report on Form
10-K, quarterly reports on Form 10-Q and other periodic reports; and
risks and considerations relating to the pending Boral transaction,
including that: conditions to the closing of the transaction with Boral
may not be satisfied and the merger may not be consummated, the
transaction with Boral may involve unexpected costs, liabilities or
delays, the business of the Company may suffer as a result of
uncertainty surrounding the transaction with Boral, an event, change or
other circumstance could give rise to the termination of the transaction
with Boral, the parties may not be able to recognize the benefits of the
transaction, the transaction may disrupt current plans and operations
and it may be difficult to retain employees as a result of the
transaction. In addition, such results could be affected by general
domestic and international economic and political conditions and other
unpredictable or unknown factors not discussed in this press release
which could have material adverse effects on forward-looking statements.
|
HEADWATERS INCORPORATED
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
|
(in thousands, except per-share amounts)
|
|
|
|
|
|
Quarter Ended
|
|
|
|
Six Months Ended
|
|
|
|
|
March 31,
|
|
|
|
March 31,
|
|
|
|
|
2016
|
|
|
|
2017
|
|
|
|
2016
|
|
|
|
2017
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Building products
|
|
|
|
$
|
98,101
|
|
|
|
|
$
|
140,716
|
|
|
|
|
$
|
199,696
|
|
|
|
|
$
|
275,757
|
|
Construction materials
|
|
|
|
|
102,849
|
|
|
|
|
|
116,037
|
|
|
|
|
|
219,097
|
|
|
|
|
|
236,028
|
|
Energy technology
|
|
|
|
|
1,382
|
|
|
|
|
|
2,540
|
|
|
|
|
|
1,957
|
|
|
|
|
|
3,083
|
|
Total revenue
|
|
|
|
|
202,332
|
|
|
|
|
|
259,293
|
|
|
|
|
|
420,750
|
|
|
|
|
|
514,868
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Building products
|
|
|
|
|
69,639
|
|
|
|
|
|
99,782
|
|
|
|
|
|
139,191
|
|
|
|
|
|
196,311
|
|
Construction materials
|
|
|
|
|
77,347
|
|
|
|
|
|
87,948
|
|
|
|
|
|
161,624
|
|
|
|
|
|
176,212
|
|
Energy technology
|
|
|
|
|
469
|
|
|
|
|
|
1,056
|
|
|
|
|
|
787
|
|
|
|
|
|
1,219
|
|
Total cost of revenue
|
|
|
|
|
147,455
|
|
|
|
|
|
188,786
|
|
|
|
|
|
301,602
|
|
|
|
|
|
373,742
|
|
Gross profit
|
|
|
|
|
54,877
|
|
|
|
|
|
70,507
|
|
|
|
|
|
119,148
|
|
|
|
|
|
141,126
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
|
|
37,882
|
|
|
|
|
|
49,394
|
|
|
|
|
|
72,764
|
|
|
|
|
|
94,375
|
|
Amortization
|
|
|
|
|
4,815
|
|
|
|
|
|
6,438
|
|
|
|
|
|
9,381
|
|
|
|
|
|
12,736
|
|
Total operating expenses
|
|
|
|
|
42,697
|
|
|
|
|
|
55,832
|
|
|
|
|
|
82,145
|
|
|
|
|
|
107,111
|
|
Operating income
|
|
|
|
|
12,180
|
|
|
|
|
|
14,675
|
|
|
|
|
|
37,003
|
|
|
|
|
|
34,015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest expense
|
|
|
|
|
(8,056
|
)
|
|
|
|
|
(8,222
|
)
|
|
|
|
|
(16,273
|
)
|
|
|
|
|
(17,141
|
)
|
Other income (expense), net
|
|
|
|
|
(12
|
)
|
|
|
|
|
1,973
|
|
|
|
|
|
(81
|
)
|
|
|
|
|
2,127
|
|
Income from continuing operations before income taxes
|
|
|
|
|
4,112
|
|
|
|
|
|
8,426
|
|
|
|
|
|
20,649
|
|
|
|
|
|
19,001
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax provision
|
|
|
|
|
(1,500
|
)
|
|
|
|
|
(3,300
|
)
|
|
|
|
|
(5,100
|
)
|
|
|
|
|
(7,200
|
)
|
Income from continuing operations
|
|
|
|
|
2,612
|
|
|
|
|
|
5,126
|
|
|
|
|
|
15,549
|
|
|
|
|
|
11,801
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from discontinued operations, net of income taxes
|
|
|
|
|
(228
|
)
|
|
|
|
|
6
|
|
|
|
|
|
(444
|
)
|
|
|
|
|
159
|
|
Net income
|
|
|
|
|
2,384
|
|
|
|
|
|
5,132
|
|
|
|
|
|
15,105
|
|
|
|
|
|
11,960
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to non-controlling interest
|
|
|
|
|
(283
|
)
|
|
|
|
|
(591
|
)
|
|
|
|
|
(579
|
)
|
|
|
|
|
(752
|
)
|
Net income attributable to Headwaters Incorporated
|
|
|
|
$
|
2,101
|
|
|
|
|
$
|
4,541
|
|
|
|
|
$
|
14,526
|
|
|
|
|
$
|
11,208
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income (loss) per share attributable to Headwaters
Incorporated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From continuing operations
|
|
|
|
$
|
0.03
|
|
|
|
|
$
|
0.06
|
|
|
|
|
$
|
0.20
|
|
|
|
|
$
|
0.15
|
|
From discontinued operations
|
|
|
|
|
0.00
|
|
|
|
|
|
0.00
|
|
|
|
|
|
(0.01
|
)
|
|
|
|
|
0.00
|
|
|
|
|
|
$
|
0.03
|
|
|
|
|
$
|
0.06
|
|
|
|
|
$
|
0.19
|
|
|
|
|
$
|
0.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares outstanding
|
|
|
|
|
75,341
|
|
|
|
|
|
75,982
|
|
|
|
|
|
75,353
|
|
|
|
|
|
75,827
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) by segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Building products
|
|
|
|
$
|
6,344
|
|
|
|
|
$
|
11,383
|
|
|
|
|
$
|
18,018
|
|
|
|
|
$
|
22,783
|
|
Construction materials
|
|
|
|
|
13,691
|
|
|
|
|
|
15,195
|
|
|
|
|
|
34,055
|
|
|
|
|
|
33,793
|
|
Energy technology
|
|
|
|
|
(1,163
|
)
|
|
|
|
|
(1,489
|
)
|
|
|
|
|
(2,884
|
)
|
|
|
|
|
(3,302
|
)
|
Corporate
|
|
|
|
|
(6,692
|
)
|
|
|
|
|
(10,414
|
)
|
|
|
|
|
(12,186
|
)
|
|
|
|
|
(19,259
|
)
|
Total
|
|
|
|
$
|
12,180
|
|
|
|
|
$
|
14,675
|
|
|
|
|
$
|
37,003
|
|
|
|
|
$
|
34,015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HEADWATERS INCORPORATED
|
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
|
(in thousands)
|
|
|
|
|
|
September 30,
|
|
|
|
March 31,
|
Assets:
|
|
|
|
2016
|
|
|
|
2017
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
65,298
|
|
|
|
|
$
|
58,128
|
|
Trade receivables, net
|
|
|
|
|
152,084
|
|
|
|
|
|
133,725
|
|
Inventories
|
|
|
|
|
72,668
|
|
|
|
|
|
89,997
|
|
Other
|
|
|
|
|
14,704
|
|
|
|
|
|
12,757
|
|
Total current assets
|
|
|
|
|
304,754
|
|
|
|
|
|
294,607
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
|
|
206,792
|
|
|
|
|
|
218,399
|
|
Goodwill
|
|
|
|
|
290,503
|
|
|
|
|
|
300,265
|
|
Intangible assets, net
|
|
|
|
|
319,162
|
|
|
|
|
|
306,304
|
|
Deferred income taxes
|
|
|
|
|
68,059
|
|
|
|
|
|
66,532
|
|
Other assets
|
|
|
|
|
49,173
|
|
|
|
|
|
43,530
|
|
Total assets
|
|
|
|
$
|
1,238,443
|
|
|
|
|
$
|
1,229,637
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity:
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
$
|
30,211
|
|
|
|
|
$
|
28,159
|
|
Accrued liabilities
|
|
|
|
|
109,151
|
|
|
|
|
|
94,470
|
|
Current portion of long-term debt
|
|
|
|
|
7,785
|
|
|
|
|
|
0
|
|
Total current liabilities
|
|
|
|
|
147,147
|
|
|
|
|
|
122,629
|
|
|
|
|
|
|
|
|
|
|
Long-term debt, net
|
|
|
|
|
746,716
|
|
|
|
|
|
741,048
|
|
Other long-term liabilities
|
|
|
|
|
41,230
|
|
|
|
|
|
44,498
|
|
Total liabilities
|
|
|
|
|
935,093
|
|
|
|
|
|
908,175
|
|
|
|
|
|
|
|
|
|
|
Redeemable non-controlling interest in consolidated subsidiary
|
|
|
|
|
13,363
|
|
|
|
|
|
13,458
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
|
Common stock - par value
|
|
|
|
|
74
|
|
|
|
|
|
75
|
|
Capital in excess of par value
|
|
|
|
|
733,117
|
|
|
|
|
|
739,905
|
|
Retained earnings (accumulated deficit)
|
|
|
|
|
(441,793
|
)
|
|
|
|
|
(430,585
|
)
|
Treasury stock
|
|
|
|
|
(1,411
|
)
|
|
|
|
|
(1,391
|
)
|
Total stockholders' equity
|
|
|
|
|
289,987
|
|
|
|
|
|
308,004
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
|
|
$
|
1,238,443
|
|
|
|
|
$
|
1,229,637
|
|
|
|
|
|
|
|
|
|
|
|
HEADWATERS INCORPORATED
|
Reconciliations of Non-GAAP Financial Measures (Unaudited)
|
(in millions, except per-share amounts)
|
|
|
|
|
|
|
Quarter Ended
|
|
|
|
Six Months Ended
|
|
|
|
|
March 31,
|
|
|
|
March 31,
|
|
|
|
|
2016
|
|
|
|
2017
|
|
|
|
2016
|
|
|
|
2017
|
Reconciliation of Income from Continuing Operations to
Adjusted EDITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations (GAAP)
|
|
|
|
$
|
2.6
|
|
|
|
|
$
|
5.1
|
|
|
|
|
$
|
15.5
|
|
|
|
|
$
|
11.8
|
|
Non-controlling interest of subsidiary
|
|
|
|
|
(0.3
|
)
|
|
|
|
|
(0.6
|
)
|
|
|
|
|
(0.6
|
)
|
|
|
|
|
(0.7
|
)
|
Net interest expense
|
|
|
|
|
8.1
|
|
|
|
|
|
8.2
|
|
|
|
|
|
16.3
|
|
|
|
|
|
17.1
|
|
Income taxes
|
|
|
|
|
1.5
|
|
|
|
|
|
3.3
|
|
|
|
|
|
5.1
|
|
|
|
|
|
7.2
|
|
Depreciation, amortization, and equity-based compensation
|
|
|
|
|
14.8
|
|
|
|
|
|
18.6
|
|
|
|
|
|
29.2
|
|
|
|
|
|
36.8
|
|
Non-routine customer and business acquisition-related costs and
adjustments
|
|
|
|
|
0.7
|
|
|
|
|
|
2.2
|
|
|
|
|
|
1.6
|
|
|
|
|
|
3.8
|
|
Consolidation of acquired businesses
|
|
|
|
|
1.7
|
|
|
|
|
|
-
|
|
|
|
|
|
2.2
|
|
|
|
|
|
0.5
|
|
Boral merger-related costs
|
|
|
|
|
-
|
|
|
|
|
|
8.0
|
|
|
|
|
|
-
|
|
|
|
|
|
10.2
|
|
Energy segment losses
|
|
|
|
|
-
|
|
|
|
|
|
2.3
|
|
|
|
|
|
-
|
|
|
|
|
|
2.3
|
|
Adjusted EBITDA
|
|
|
|
$
|
29.1
|
|
|
|
|
$
|
47.1
|
|
|
|
|
$
|
69.3
|
|
|
|
|
$
|
89.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Building Products
|
|
|
|
$
|
16.3
|
|
|
|
|
$
|
28.4
|
|
|
|
|
$
|
37.2
|
|
|
|
|
$
|
53.5
|
|
Construction materials
|
|
|
|
|
18.3
|
|
|
|
|
|
21.3
|
|
|
|
|
|
43.2
|
|
|
|
|
|
45.3
|
|
Energy technology
|
|
|
|
|
(0.8
|
)
|
|
|
|
|
1.6
|
|
|
|
|
|
(2.1
|
)
|
|
|
|
|
-
|
|
Corporate
|
|
|
|
|
(4.7
|
)
|
|
|
|
|
(4.2
|
)
|
|
|
|
|
(9.0
|
)
|
|
|
|
|
(9.8
|
)
|
Adjusted EBITDA
|
|
|
|
$
|
29.1
|
|
|
|
|
$
|
47.1
|
|
|
|
|
$
|
69.3
|
|
|
|
|
$
|
89.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended
|
|
|
|
|
|
|
|
|
9/30/2015
|
|
|
|
9/30/2016
|
|
|
|
3/31/2017
|
TTM Adjusted EBITDA Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations (GAAP)
|
|
|
|
|
|
|
|
$
|
132.1
|
|
|
|
|
$
|
49.6
|
|
|
|
|
$
|
45.9
|
|
Non-controlling interest of subsidiary
|
|
|
|
|
|
|
|
|
(0.9
|
)
|
|
|
|
|
(1.7
|
)
|
|
|
|
|
(1.8
|
)
|
Net interest expense
|
|
|
|
|
|
|
|
|
64.2
|
|
|
|
|
|
42.5
|
|
|
|
|
|
43.3
|
|
Income taxes
|
|
|
|
|
|
|
|
|
(94.5
|
)
|
|
|
|
|
22.8
|
|
|
|
|
|
24.9
|
|
Depreciation, amortization, and equity-based compensation
|
|
|
|
|
|
|
|
|
56.2
|
|
|
|
|
|
65.1
|
|
|
|
|
|
72.7
|
|
Non-routine customer and business acquisition-related costs and
adjustments
|
|
|
|
|
|
|
|
|
1.8
|
|
|
|
|
|
1.3
|
|
|
|
|
|
3.5
|
|
Consolidation of acquired businesses
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
7.8
|
|
|
|
|
|
6.1
|
|
Boral merger-related costs
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
10.2
|
|
Energy segment losses
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
2.3
|
|
Asset impairments, write-offs and other non-routine items
|
|
|
|
|
|
|
|
|
0.6
|
|
|
|
|
|
2.2
|
|
|
|
|
|
2.2
|
|
Cash-based compensation tied to stock price
|
|
|
|
|
|
|
|
|
6.1
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
TTM Adjusted EBITDA
|
|
|
|
|
|
|
|
$
|
165.6
|
|
|
|
|
$
|
189.6
|
|
|
|
|
$
|
209.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment TTM Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Building Products
|
|
|
|
|
|
|
|
$
|
86.2
|
|
|
|
|
$
|
101.1
|
|
|
|
|
$
|
117.5
|
|
Construction materials
|
|
|
|
|
|
|
|
|
96.2
|
|
|
|
|
|
110.7
|
|
|
|
|
|
112.7
|
|
Energy technology
|
|
|
|
|
|
|
|
|
2.2
|
|
|
|
|
|
(1.1
|
)
|
|
|
|
|
1.0
|
|
Corporate
|
|
|
|
|
|
|
|
|
(25.1
|
)
|
|
|
|
|
(21.1
|
)
|
|
|
|
|
(21.9
|
)
|
Cash-based compensation tied to stock price
|
|
|
|
|
|
|
|
|
6.1
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
TTM Adjusted EBITDA
|
|
|
|
|
|
|
|
$
|
165.6
|
|
|
|
|
$
|
189.6
|
|
|
|
|
$
|
209.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
|
Six Months Ended
|
|
|
|
|
March 31,
|
|
|
|
March 31,
|
|
|
|
|
2016
|
|
|
|
2017
|
|
|
|
2016
|
|
|
|
2017
|
Reconciliation of Diluted EPS from Continuing Operations to
Adjusted EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported numerator for diluted earnings per share from
continuing operations in accordance with GAAP - income from
continuing operations attributable to Headwaters Incorporated
|
|
|
|
$
|
2.3
|
|
|
|
|
$
|
4.5
|
|
|
|
|
$
|
14.9
|
|
|
|
|
$
|
11.1
|
|
Adjustments to numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization expense related to acquired intangible assets
|
|
|
|
|
4.7
|
|
|
|
|
|
6.4
|
|
|
|
|
|
9.2
|
|
|
|
|
|
12.6
|
|
Non-routine customer and business acquisition-related costs and
adjustments
|
|
|
|
|
0.7
|
|
|
|
|
|
2.2
|
|
|
|
|
|
1.6
|
|
|
|
|
|
3.8
|
|
Consolidation of acquired businesses
|
|
|
|
|
1.7
|
|
|
|
|
|
-
|
|
|
|
|
|
2.2
|
|
|
|
|
|
0.5
|
|
Boral merger-related costs
|
|
|
|
|
-
|
|
|
|
|
|
8.0
|
|
|
|
|
|
-
|
|
|
|
|
|
10.2
|
|
Energy segment losses
|
|
|
|
|
-
|
|
|
|
|
|
2.3
|
|
|
|
|
|
-
|
|
|
|
|
|
2.3
|
|
Non-routine interest expense related to early debt repayments,
repricings, new debt issuances
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
0.2
|
|
Income tax effect of above pretax adjustments
|
|
|
|
|
(2.7
|
)
|
|
|
|
|
(7.3
|
)
|
|
|
|
|
(5.0
|
)
|
|
|
|
|
(11.5
|
)
|
Total adjustments to income from continuing operations, net of
income tax effect
|
|
|
|
|
4.4
|
|
|
|
|
|
11.6
|
|
|
|
|
|
8.0
|
|
|
|
|
|
18.1
|
|
Numerator for adjusted diluted earnings per share from
continuing operations
|
|
|
|
$
|
6.7
|
|
|
|
|
$
|
16.1
|
|
|
|
|
$
|
22.9
|
|
|
|
|
$
|
29.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported denominator for diluted earnings per share in accordance
with GAAP and for adjusted earnings per share
|
|
|
|
|
75.3
|
|
|
|
|
|
76.0
|
|
|
|
|
|
75.4
|
|
|
|
|
|
75.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported diluted income per share from continuing operations
(GAAP)
|
|
|
|
$
|
0.03
|
|
|
|
|
$
|
0.06
|
|
|
|
|
$
|
0.20
|
|
|
|
|
$
|
0.15
|
|
Effect of adjustments on diluted income per share calculation
|
|
|
|
|
0.06
|
|
|
|
|
|
0.15
|
|
|
|
|
|
0.10
|
|
|
|
|
|
0.24
|
|
Adjusted diluted income per share from continuing operations
(Adjusted EPS)
|
|
|
|
$
|
0.09
|
|
|
|
|
$
|
0.21
|
|
|
|
|
$
|
0.30
|
|
|
|
|
$
|
0.39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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