Slide 1: Headwaters Incorporated Shareholder Update
HEADWATERS INCORPORATED SHAREHOLDER UPDATE December 5, 2013
Slide 2: Forward Looking Statements
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 Hea
Slide 3: Improving Lives Through Innovative Advancements in Construction Materials
Improving Lives Through Innovative Advancements in Construction Materials Application – Design – Purpose Headwaters’ Vision Statement
Slide 4: Overview
Overview Our Acquisition History Our Acquisition Strategy The Roof Tile Acquisition Capital Structure and Leverage Growth
Slide 5: Headwaters Acquisition History
Headwaters Acquisition History Current business platform Light building products segment Siding accessories - #1 in US for shutters, mounting blocks, gable vents Architectural stone - #1 in US Block product group - #1 in significant Texas block market Heavy construction materials Coal combustion pro
Slide 6: Acquisition Strategy
Acquisition Strategy Bolt-on acquisitions Leverage distribution and add niche products, driving accretive growth Increase geographic penetration into attractive markets Synergy potential Adjacency Considerations Product category consistency – niche markets Roofing Siding accessories Synthetic lumber
Slide 7: Acquisition Strategy (continued)
Acquisition Strategy (continued) Pricing In-line with Adjusted EBITDA parameters Target robust rates of return, exceeding WACC Accretive to earnings Financing Balanced approach to capital structure Continue deleveraging strategy, with potential increases in net leverage in short-term
Slide 8: Roof Tile Acquisition
Roof Tile Acquisition Roof Tile manufactures and markets Entegra concrete roof tile and “Tag & Stick” roofing underlayment products for use in residential homes and commercial buildings primarily in Florida Tag & Stick has the potential to be marketed nationally One of the three market leaders in th
Slide 9: Excellent Strategic Fit for Headwaters
Excellent Strategic Fit for Headwaters Entegra Roof Tile is a high growth, market leading company operating in a very attractive niche market – consistent with Headwaters’ niche oriented strategy Primary customers include one-step roofing distributors which are among Headwaters’ customers, allowing
Slide 10: LBP's Enhanced High-Quality Product Offerings
LBP’s Enhanced High-Quality Product Offerings Leading Building Products Brands Comprehensive Set of Residential Exterior Products Mounting Block Gable Vent Specialty Siding Synthetic Slate Roofing Concrete Brick Molded Shutters Trim Boards Architectural Stone Trim Railings Decking Moulding Kleer Pro
Slide 11: Headwaters Has De-levered As Planned
Reduced net leverage ratio from 6.7x at June 30, 2011 to 3.3x at September 30, 2013 $150 million note offering increases net leverage ratio from 3.3x to 3.8x on pro forma basis at September 30, 2013 Anticipate meeting targeted net leverage ratio range of 2.5x to 3.0x at the end of fiscal 2014 Strong
Slide 12: Capital Priorities
Capital Priorities Bolt-on acquisitions like the Roof Tile acquisition Consistent with strategy Track record of generating solid returns with bolt-on acquisitions Close adjacencies Accretive Strategic growth capex Debt repayments Return capital to shareholders New notes – restricted payment mechanic
Slide 13: Revenue and Adjusted EBITDA Growth
Revenue and Adjusted EBITDA Growth Revenue Healthy compound growth rates for revenue and Adjusted EBITDA 2014 Adjusted EBITDA guidance range is $125-$140 million Current 2014 guidance range does not include Roof Tile acquisition Represents 8% and 20% growth in Adjusted EBITDA over 2013 levels 18% to
Slide 14: Improving Lives Through Innovative Advancements in Construction Materials Application – Design – Purpose
Improving Lives Through Innovative Advancements in Construction Materials Application – Design – Purpose