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Headwaters Incorporated Announces Results For First Quarter Of Fiscal 2013

Stocks in this article: HW

As a part of the sale transaction, Headwaters committed to identify 1 million tons of feedstock over the next 30 months for one of the facilities. Headwaters is subject to a $7 per ton liability for each ton that is not identified, and will work actively with the buyer to secure feedstock to meet the commitment.

As of January, we have sold all eleven of our coal cleaning facilities and no longer have any operating assets represented in discontinued operations. This is an important transition step away from our legacy energy operations and allows increased focus on our continuing business in light building products and heavy construction materials. We anticipate recording a gain in the March quarter from the sale transaction.

Income Taxes

For fiscal year 2013, Headwaters currently expects to record income taxes at an effective rate of approximately 12%, due to state income taxes in certain jurisdictions and a small amount of federal alternative minimum tax. Headwaters is not recognizing income tax benefits attributable to its pre-tax net operating loss (“NOL”) and tax credits because realization is dependent upon future income or capital gains from operations. Headwaters currently has a pre-tax NOL in the amount of $181.3 million and tax credits of $24.6 million, both of which can be carried forward for up to 20 years.

Outlook

“We are pleased with the underlying improvement in our business and expect to generate net income from continuing operations in 2013, marking our first annual profit since 2007,” said Don P. Newman, Headwaters’ Chief Financial Officer. “We expect our Adjusted EBITDA from continuing operations in 2013 to be in the range of $110 to $125 million, depending on the level of new housing starts, changes in stock price, and our ability to effectively manage increased transportation and raw material costs.

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