INVESTMENT APPEALS

Headwaters improves lives through innovative advancements in construction materials. We are leading participants in the Light Building Products and Heavy Construction Materials business segments. Our light building products include: architectural stone, resin-based exterior siding accessories, concrete block and brick, as well as other building products. We’re also the largest manager and marketer of coal combustion products in the heavy construction materials industry with a primary focus on recycling high quality fly ash as a replacement for portland cement.

Premier market leadership positions

Headwaters’ Siding Accessories products control approximately 75% of their niche market.
The Company’s Manufactured Stone products control approximately 30% of their niche market.
Headwaters’ Texas Concrete Block business dominates the Texas block market with roughly 65% of the market.
Headwaters Resources / Heavy Construction Materials segment controls almost half of all fly ash sales in the U.S. today.

quality products and Strong Brands

Headwaters is the vendor of choice for both wholesalers and the leading U.S. home improvement retailers, including Lowe’s and Home Depot. Some of our brands include: Atlantic Premium Shutters™, Mid-America Siding Components™, Inspire Roofing Products™, Tapco Integrated Tool Systems™, Eldorado Stone®, Kleer Lumber®, and many more.

operational improvements and cost reductions

Headwaters’ delivered strong operating results in FY 2012, driven primarily by improvements in new residential, remodeling, and construction end markets and market share gains. Fiscal 2012 also reflects the positive impact of its 2011 restructuring and strong operating leverage, which allowed for contributions of more than 45%.

Well positioned in construction markets

The Company remains committed to its mission of providing innovative building materials to its customers and to carefully managing its business and capital structure to deliver profitability to its shareholders. As we start to see positive signs of recovery in the Company's end markets, Headwaters will be well-positioned to benefit as it continues to improve operations.

national distribution network

Headwaters’ Light Building Products segment has more than 3,000 wholesale distributors across the country. Our Heavy Construction Materials segment is the only fly ash company in the U.S. with a nationwide infrastructure that includes 22 terminals, over 1,000 leased railcars, and approximately 250 trucks.

Improved balance sheet

Headwaters has maintained exceptional operating leverage with contribution margins that are some of the highest in the industry. The Company continues to de-leverage its debt by paying down $63.4 million over the past seven quarters, improving its debt to EBITDA ratio from a high of 6.7 to 4.7x.

During the fiscal 2012 year, Headwaters restructured its maturity dates on its subordinated debt to coincide with free cash flow, significantly reducing Headwaters' balance sheet risk.

Long-term relationships and exclusive contracts

Headwaters’ Heavy Construction Materials business has over 100 long-term, exclusive contracts with coal-fired utilities in the U.S. today.