HEADWATERS INCORPORATED

INVESTMENT APPEALS

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

Premier Leadership Positions in Niche Markets

  • Estimated that Headwaters meets 75% of national demand for decorative shutters, gable units, and mounting blocks.
  • The Company’s Stone Products segment controls approximately 30% of their niche market.
  • Headwaters’ Concrete Block business is the largest manufacturer of concrete block products in the Texas block market today.
  • Headwaters Resources / 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.

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.  Headwaters continues to see improvements in its end markets, and is well-positioned to benefit as it continues to improve and grow its ongoing operations.

National Distribution Network

Headwaters’ Building Products segment has more than 1,000 wholesale distributors across the country. Our Construction Materials segment is the only fly ash company in the U.S. with a nationwide infrastructure that includes 25 terminals, roughly 825 railcars, and approximately 100 trucks.

Improved Balance Sheet

Headwaters has maintained exceptional operating leverage with contribution margins that are some of the highest in the industry.  The Company has also continued to successfully de-leverage its debt.  At the end of the June 2011 quarter, the Company's Net Debt to Adjusted EBITDA ratio was at an all-time high of 6.7x.  At the end of Q3 FY 2016, the Net Debt to Adjusted EBITDA ratio stood at 2.6x.

Long-Term Relationships and Exclusive Contracts

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

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