Headwaters Incorporated (NYSE: HW), a building products company dedicated to improving lives through innovative advancements in construction materials, today announced that it completed the sale of its remaining eight coal cleaning facilities to Bowie Refined Coal, LLC and its affiliates (“BRC”) effective January 16, 2013.
Proceeds from the sale include approximately $3.8 million of cash paid at closing and approximately $10.0 million of additional cash to be paid by the end of calendar 2013, which includes release of bond collateral. Under terms of the sale, BRC agreed to pay Headwaters potential royalties and deferred purchase price totaling up to $43.7 million over approximately eight years, subject to BRC’s production of coal products. BRC also assumed certain plant liabilities, including lease and reclamation obligations. Payment of royalties and deferred purchase price based upon production is currently scheduled to begin in the latter part of calendar 2013.
As a part of the sale transaction, Headwaters committed to identifying 1 million tons of feedstock over the next 30 months for one of the facilities sold. Headwaters is subject to a $7 per ton liability for each ton that is not identified. Headwaters will work actively with BRC to secure feedstock to meet the commitment.
“We are pleased to have completed the sale of all of our coal cleaning facilities,” said Kirk A. Benson, Chairman and Chief Executive Officer of Headwaters. “In addition to eliminating a distraction from our light building products and heavy construction materials business, this transaction generates cash to further strengthen our balance sheet.”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 and services to the heavy construction materials and light building products industries. Because of Headwaters’ broad distribution system and superior reputation for quality, the Company has leading market positions in its key niche product categories. 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, discontinued cleaned coal operations, 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.