Headwaters Business Update - Analyst Blog

Headwaters Incorporated ( HW ) in a business update reaffirmed its fiscal 2013 EBITDA (Earnings before interest, income tax, depreciation and amortization) guidance and its long-term goals. The update was presented at the Investor Day Conference in Salt Lake City, UT.

Headwaters confirms that adjusted EBITDA for 2013 will be in the range of $110 million to $125 million. Headwaters is committed to strengthening its liquidity by reducing debts and driving efficiencies, thereby reducing costs.

Macro drivers comprising population growth, household formation, inventory trends and psychology of customers facilitate the company's long-term growth. Headwaters will be successful in achieving its goal largely due to multi-year appreciation cycle and positive remodel trends in the housing market, which will provide significant opportunities to serve the residential real estate end markets.

According to the company, the light building products segment will expand its top line, driven by new product development and geographic expansion through acquisitions. At the same time, increased demand for cement in the U.S. will enhance the performance of heavy construction materials segment.

Headwaters, in Jan 2013, reported a loss per share of 9 cents in the first-quarter 2013 compared with the year-ago loss of 39 cents per share. Total revenues for the quarter increased 9% to $149.6 million, reflecting its exposure to new residential construction and increased retail sales.

The company is well positioned to benefit from its strong presence in light building products and heavy construction materials. Strong contribution margins together with the up-cycle in demand will help Headwaters to generate strong cash, facilitating debt reduction and promising capital return to investors.

South Jordan, UT based Headwaters is a diversified growth company providing building products, technologies and services to the heavy construction materials, light building products, and energy technology industries.

Headwaters currently retains a Zacks Rank #3 (Hold). James Hardie Industries plc ( JHX ), Masco Corporation ( MAS ) and Trex Co. Inc. ( TREX ) also belong to the building and construction industry. Each of them holds a Zacks Rank #2 (Buy).

HEADWATERS INC (HW): Free Stock Analysis Report

JAMES HARDI-ADR (JHX): Free Stock Analysis Report

MASCO (MAS): Free Stock Analysis Report

TREX COMPANY (TREX): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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