Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Sep. 30, 2015 | Oct. 30, 2015 | Mar. 31, 2015 | |
Document and Entity Information | |||
Entity Registrant Name | HEADWATERS INC | ||
Entity Central Index Key | 1,003,344 | ||
Document Type | 10-K | ||
Document Period End Date | Sep. 30, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --09-30 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 1,313,782,947 | ||
Entity Common Stock, Shares Outstanding | 73,900,098 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2015 | Sep. 30, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 142,597 | $ 152,542 |
Trade receivables, net | 134,384 | 119,330 |
Inventories | 55,074 | 50,633 |
Current and deferred income taxes | 23,762 | 11,076 |
Other | 11,827 | 10,536 |
Total current assets | 367,644 | 344,117 |
Property, plant and equipment, net | 185,718 | 181,298 |
Other assets: | ||
Goodwill | 178,199 | 175,586 |
Intangible assets, net | 143,718 | 159,863 |
Deferred income taxes | 69,419 | 0 |
Other | 34,321 | 35,442 |
Total other assets | 425,657 | 370,891 |
Total assets | 979,019 | 896,306 |
Current liabilities: | ||
Accounts payable | 25,306 | 27,026 |
Accrued personnel costs | 52,544 | 48,902 |
Accrued interest | 2,295 | 18,273 |
Current income taxes | 0 | 368 |
Other accrued liabilities | 49,486 | 41,757 |
Current portion of long-term debt | 4,250 | 0 |
Total current liabilities | 133,881 | 136,326 |
Long-term liabilities: | ||
Long-term debt, net | 558,080 | 592,458 |
Income taxes | 6,590 | 23,242 |
Other | 30,186 | 28,586 |
Total long-term liabilities | 594,856 | 644,286 |
Total liabilities | $ 728,737 | $ 780,612 |
Commitments and contingencies | ||
Redeemable non-controlling interest in consolidated subsidiary | $ 12,431 | $ 13,252 |
Stockholders' equity: | ||
Common stock, $0.001 par value; authorized 200,000 shares; issued and outstanding: 73,510 shares at September 30, 2014 (including 61 shares held in treasury) and 73,896 shares at September 30, 2015 (including 83 shares held in treasury). | 74 | 74 |
Capital in excess of par value | 728,667 | 723,648 |
Retained earnings (accumulated deficit) | (489,889) | (620,688) |
Treasury stock | (1,001) | (592) |
Total stockholders' equity | 237,851 | 102,442 |
Total liabilities and stockholders' equity | $ 979,019 | $ 896,306 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2015 | Sep. 30, 2014 |
CONSOLIDATED BALANCE SHEETS | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized shares | 200,000,000 | 200,000,000 |
Common stock, issued shares | 73,896,000 | 73,510,000 |
Common stock, outstanding shares | 73,896,000 | 73,510,000 |
Common stock, held in treasury (in shares) | 83,000 | 61,000 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Revenue: | |||||||||||
Total revenue | $ 272,717 | $ 243,294 | $ 179,725 | $ 199,597 | $ 245,921 | $ 223,399 | $ 156,512 | $ 165,615 | $ 895,333 | $ 791,447 | $ 702,576 |
Cost of revenue: | |||||||||||
Total cost of revenue | 625,442 | 565,754 | 510,094 | ||||||||
Gross profit | 90,301 | 76,762 | 47,141 | 55,687 | 78,577 | 67,672 | 38,551 | 40,893 | 269,891 | 225,693 | 192,482 |
Operating expenses: | |||||||||||
Selling, general and administrative | 149,623 | 137,650 | 117,841 | ||||||||
Amortization | 18,161 | 21,319 | 20,230 | ||||||||
Total operating expenses | 167,784 | 158,969 | 138,071 | ||||||||
Operating income | 102,107 | 66,724 | 54,411 | ||||||||
Other income (expense): | |||||||||||
Net interest expense | (64,219) | (46,329) | (42,566) | ||||||||
Other, net | (218) | (348) | 364 | ||||||||
Total other income (expense), net | (64,437) | (46,677) | (42,202) | ||||||||
Income from continuing operations before income taxes | 37,670 | 20,047 | 12,209 | ||||||||
Income tax benefit (provision) | (96,800) | 94,458 | (3,574) | (3,924) | |||||||
Income from continuing operations | 132,128 | 16,473 | 8,285 | ||||||||
Loss from discontinued operations, net of income taxes | (460) | (415) | (1,148) | ||||||||
Net income | $ 126,774 | $ 23,008 | $ (25,198) | $ 7,084 | $ 16,681 | $ 10,893 | $ (10,082) | $ (1,434) | 131,668 | 16,058 | 7,137 |
Net income attributable to non-controlling interest | (869) | (774) | 0 | ||||||||
Net income attributable to Headwaters Incorporated | $ 130,799 | $ 15,284 | $ 7,137 | ||||||||
Basic income (loss) per share attributable to Headwaters Incorporated: | |||||||||||
From continuing operations (in dollars per share) | $ 1.79 | $ 0.21 | $ 0.12 | ||||||||
From discontinued operations (in dollars per share) | (0.01) | (0.01) | (0.02) | ||||||||
Basic income (loss) per share (in dollars per share) | $ 1.72 | $ 0.30 | $ (0.34) | $ 0.09 | 1.78 | 0.20 | 0.10 | ||||
Diluted income (loss) per share attributable to Headwaters Incorporated: | |||||||||||
From continuing operations (in dollars per share) | 1.74 | 0.21 | 0.12 | ||||||||
From discontinued operations (in dollars per share) | (0.01) | (0.01) | (0.02) | ||||||||
Diluted income (loss) per share (in dollars per share) | $ 1.68 | $ 0.30 | $ (0.34) | $ 0.09 | $ 1.73 | $ 0.20 | $ 0.10 | ||||
Building products | |||||||||||
Revenue: | |||||||||||
Total revenue | $ 523,643 | $ 472,434 | $ 394,324 | ||||||||
Cost of revenue: | |||||||||||
Total cost of revenue | 367,163 | 336,283 | 283,128 | ||||||||
Construction materials | |||||||||||
Revenue: | |||||||||||
Total revenue | 352,263 | 309,337 | 293,000 | ||||||||
Cost of revenue: | |||||||||||
Total cost of revenue | 249,077 | 224,888 | 219,996 | ||||||||
Energy Technology | |||||||||||
Revenue: | |||||||||||
Total revenue | 19,427 | 9,676 | 15,252 | ||||||||
Cost of revenue: | |||||||||||
Total cost of revenue | $ 9,202 | $ 4,583 | $ 6,970 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (NET CAPITAL DEFICIENCY) - USD ($) shares in Thousands, $ in Thousands | Common stock | Capital in excess of par value | Retained earnings (accumulated deficit) | Treasury stock and other | Total |
Balances at Sep. 30, 2012 | $ 61 | $ 640,047 | $ (643,109) | $ (128) | $ (3,129) |
Balances (in shares) at Sep. 30, 2012 | 61,146 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of common stock, net of offering costs of $5,418 | $ 12 | 77,945 | $ 77,957 | ||
Issuance of common stock, net of offering costs (in shares) | 11,500 | 11,500 | |||
Issuance of common stock pursuant to employee stock purchase plan | $ 0 | 742 | $ 742 | ||
Issuance of common stock pursuant to employee stock purchase plan (in shares) | 101 | ||||
Issuance of restricted stock, net of cancellations | $ 0 | 0 | |||
Issuance of restricted stock, net of cancellations (in shares) | 152 | ||||
Exercise of stock appreciation rights and restricted stock units | $ 0 | 0 | |||
Exercise of stock appreciation rights and restricted stock units (in shares) | 250 | ||||
Stock-based compensation | 1,703 | 1,703 | |||
Net 41, (4) and 22 share increase (decrease) in treasury stock held for deferred compensation plan obligations, at cost for the years 2013, 2014 and 2015 respectively | 391 | (391) | 0 | ||
Adjustment of estimated redemption value of non-controlling interest in consolidated subsidiary | 0 | ||||
Net income attributable to Headwaters Incorporated | 7,137 | 7,137 | |||
Balances at Sep. 30, 2013 | $ 73 | 720,828 | (635,972) | (519) | 84,410 |
Balances (in shares) at Sep. 30, 2013 | 73,149 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of common stock pursuant to employee stock purchase plan | $ 1 | 758 | 759 | ||
Issuance of common stock pursuant to employee stock purchase plan (in shares) | 78 | ||||
Issuance of restricted stock, net of cancellations | $ 0 | 0 | |||
Issuance of restricted stock, net of cancellations (in shares) | 150 | ||||
Exercise of stock appreciation rights and restricted stock units | $ 0 | 0 | |||
Exercise of stock appreciation rights and restricted stock units (in shares) | 133 | ||||
Stock-based compensation | 2,165 | 2,165 | |||
Net 41, (4) and 22 share increase (decrease) in treasury stock held for deferred compensation plan obligations, at cost for the years 2013, 2014 and 2015 respectively | 73 | (73) | 0 | ||
Adjustment of estimated redemption value of non-controlling interest in consolidated subsidiary | (176) | (176) | |||
Net income attributable to Headwaters Incorporated | 15,284 | 15,284 | |||
Balances at Sep. 30, 2014 | $ 74 | 723,648 | (620,688) | (592) | 102,442 |
Balances (in shares) at Sep. 30, 2014 | 73,510 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of common stock pursuant to employee stock purchase plan | $ 0 | 804 | 804 | ||
Issuance of common stock pursuant to employee stock purchase plan (in shares) | 58 | ||||
Issuance of restricted stock, net of cancellations | $ 0 | 0 | |||
Issuance of restricted stock, net of cancellations (in shares) | 112 | ||||
Exercise of stock appreciation rights | $ 0 | 0 | |||
Exercise of stock appreciation rights (in shares) | 216 | ||||
Tax benefit from exercise of stock appreciation rights and vesting of restricted stock | 980 | 980 | |||
Stock-based compensation | 2,826 | 2,826 | |||
Net 41, (4) and 22 share increase (decrease) in treasury stock held for deferred compensation plan obligations, at cost for the years 2013, 2014 and 2015 respectively | 409 | (409) | 0 | ||
Adjustment of estimated redemption value of non-controlling interest in consolidated subsidiary | 0 | ||||
Net income attributable to Headwaters Incorporated | 130,799 | 130,799 | |||
Balances at Sep. 30, 2015 | $ 74 | $ 728,667 | $ (489,889) | $ (1,001) | $ 237,851 |
Balances (in shares) at Sep. 30, 2015 | 73,896 |
CONSOLIDATED STATEMENT OF CHAN6
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (NET CAPITAL DEFICIENCY) | |||
Issuance of common stock, offering costs | $ 5,418 | ||
Increase (decrease) in treasury stock held for deferred compensation plan obligations (in shares) | 22 | (4) | 41 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Cash flows from operating activities: | |||
Net income | $ 131,668 | $ 16,058 | $ 7,137 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 53,973 | 55,134 | 52,317 |
Interest expense related to amortization of debt issue costs and debt discount | 6,180 | 2,175 | 5,841 |
Stock-based compensation | 2,826 | 2,165 | 1,703 |
Deferred income taxes | (96,742) | 1,666 | 698 |
Tax benefit from exercise of stock appreciation rights and vesting of restricted stock | (1,543) | 0 | 0 |
Net loss (gain) on disposition of property, plant and equipment | 49 | 95 | (649) |
Loss (gain) on sale of discontinued operations, net of income taxes | 229 | (2,727) | 55 |
Asset impairments | 0 | 1,815 | 0 |
Net loss of unconsolidated joint ventures | 262 | 529 | 0 |
Decrease (increase) in trade receivables | (14,194) | 517 | (5,035) |
Decrease (increase) in inventories | (1,007) | (2,347) | 2,221 |
Decrease in accounts payable and accrued liabilities | (11,557) | (13,225) | (4,218) |
Other changes in operating assets and liabilities, net | (6,756) | (1,478) | (1,507) |
Net cash provided by operating activities | 63,388 | 60,377 | 58,563 |
Cash flows from investing activities: | |||
Business acquisitions | (5,650) | (95,604) | (43,250) |
Investments in unconsolidated joint ventures | (125) | (1,875) | 0 |
Purchase of property, plant and equipment | (36,859) | (35,799) | (29,119) |
Proceeds from disposition of property, plant and equipment | 915 | 905 | 791 |
Proceeds from sale of discontinued operations | 0 | 4,666 | 4,813 |
Net decrease (increase) in long-term receivables and deposits | 3,450 | 7,445 | (1,171) |
Net change in other assets | (597) | (1,556) | (437) |
Net cash used in investing activities | (38,866) | (121,818) | (68,373) |
Cash flows from financing activities: | |||
Net proceeds from issuance of common stock | 0 | 0 | 77,957 |
Net proceeds from issuance of long-term debt | 414,675 | 146,650 | 0 |
Payments on long-term debt | (449,799) | (7,792) | (47,355) |
Dividends paid to non-controlling interest in consolidated subsidiary | (1,690) | (950) | 0 |
Employee stock purchases | 804 | 759 | 742 |
Tax benefit from exercise of stock appreciation rights and vesting of restricted stock | 1,543 | 0 | 0 |
Net cash provided by (used in) financing activities | (34,467) | 138,667 | 31,344 |
Net increase (decrease) in cash and cash equivalents | (9,945) | 77,226 | 21,534 |
Cash and cash equivalents, beginning of period | 152,542 | 75,316 | 53,782 |
Cash and cash equivalents, end of period | 142,597 | 152,542 | 75,316 |
Supplemental schedule of non-cash investing and financing activities: | |||
Increase in accrued liabilities for acquisition-related commitment | 0 | 2,614 | 0 |
Purchase of assets in exchange for future obligations | 4,203 | 2,875 | 0 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 58,681 | 42,572 | 37,290 |
Cash paid for income taxes | $ 3,295 | $ 1,729 | $ 2,537 |
Description of Business and Org
Description of Business and Organization | 12 Months Ended |
Sep. 30, 2015 | |
Description of Business and Organization | |
Description of Business and Organization | 1. Description of Business and Organization Headwaters Incorporated (Headwaters) is a building materials company incorporated in Delaware, providing products and services in two core business segments. The building products segment designs, manufactures, and sells a wide variety of building products, including exterior vinyl siding accessories (such as shutters, mounting blocks, and vents), manufactured architectural stone, roofing materials and concrete block. Revenues from Headwaters' building products businesses are diversified geographically and also by end use, including new housing construction and residential repair and remodeling, as well as commercial construction. The construction materials segment is the nationwide leader in the management and marketing of coal combustion products (CCPs), including fly ash which is primarily sold directly to concrete manufacturers who use it as a mineral admixture for the partial replacement of portland cement in concrete. Headwaters' construction materials business is comprised of a nationwide supply, storage and distribution network. Headwaters also provides services to electric utilities related to the management of CCPs. In addition to the two building materials segments described above, Headwaters also has a non-core energy technology segment which has been focused on reducing waste and increasing the value of energy-related feedstocks, primarily in the areas of low-value oil and coal. In oil, Headwaters' heavy oil upgrading process uses a liquid catalyst precursor to generate a highly active molecular catalyst to convert low-value residual oil into higher-value distillates that can be further refined into gasoline, diesel and other products. In coal, Headwaters owned and operated coal cleaning facilities that separate ash from waste coal to provide a refined coal product that is higher in Btu value and lower in impurities than the feedstock coal. As described in Note 5, Headwaters disposed of its remaining coal cleaning facilities in January 2013 and the results of Headwaters' coal cleaning operations have been presented as discontinued operations for all periods. Headwaters' fiscal year ends on September 30 and unless otherwise noted, references to years refer to Headwaters' fiscal year rather than a calendar year. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2015 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Principles of Consolidation —The consolidated financial statements include the accounts of Headwaters, all of its subsidiaries and other entities in which Headwaters has a controlling interest. In accordance with the requirements of Accounting Standards Codification (ASC) Topic 810 Consolidation, Headwaters is required to consolidate any variable interest entities for which it is the primary beneficiary. For investments in entities in which Headwaters has a significant influence over operating and financial decisions (generally defined as owning a voting or economic interest of 20% to 50%), Headwaters applies the equity method of accounting. In instances where Headwaters' investment is less than 20% and significant influence does not exist, investments are carried at cost. As of September 30, 2015, there are no material variable interest entities or equity-method investments. All significant intercompany transactions and accounts are eliminated in consolidation. Use of Estimates —The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect i) the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and ii) the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates. Segment Reporting, Major Customers and Other Concentrations of Risk —Headwaters currently operates three business segments: building products, construction materials and energy technology. Additional information about these segments is presented in Note 3. No customer accounted for over 10% of total revenue in any year presented and less than 10% of Headwaters' revenue was from sales outside the United States. Approximately 12%, 10% and 9% of Headwaters' total revenue and cost of revenue was for services in 2013, 2014 and 2015, respectively. Substantially all service-related revenue for all periods was in the construction materials segment. Headwaters normally purchases a majority of the polypropylene and poly vinyl chloride (PVC) used in its resin-based building products from a limited number of suppliers; however, both materials could be obtained from other suppliers if necessary and management currently believes any required change in suppliers would not be materially disruptive. Revenue Recognition and Cost of Revenue —Revenue from the sale of building products, CCPs and energy-related products is recognized upon passage of title to the customer, which coincides with physical delivery and assumption of risk of loss by the customer. Estimated sales rebates and discounts pertaining to the sale of building products are provided for at the time of sale and are based primarily upon established policies and historical experience. Revenues include transportation charges and shipping and handling fees associated with delivering products and materials to customers when the transportation and/or shipping and handling is contractually provided for between the customer and Headwaters. Cost of revenue includes shipping and handling fees. CCP service revenues are primarily earned under long-term contracts to dispose of residual materials created by coal-fired electric power generation. Generally, revenues under long-term site service contracts are recognized concurrently with the removal of material and are based on the volume of material removed at established prices per ton. Certain service revenue under these contracts is recognized on a time and materials basis in the period in which the services are performed. In compliance with contractual obligations, the cost of CCPs purchased from certain utilities is based on a percentage of the "net revenues" from sale of the CCPs purchased. Costs also include landfill fees and transportation charges to deliver non-marketable CCPs to landfills. Cash and Cash Equivalents —Headwaters considers all short-term, highly-liquid investments with a maturity of three months or less when purchased to be cash equivalents. Certain cash and cash equivalents are deposited with financial institutions, and at times such amounts exceed insured depository limits. Receivables —Allowances are provided for uncollectible accounts and notes when deemed necessary. Such allowances are based on an account-by-account analysis of collectability or impairment plus a provision for non-customer specific defaults based upon historical collection experience. Headwaters performs periodic credit evaluations of its customers but collateral is not required for trade receivables. Collateral is generally required for notes receivable, which were not material during the periods presented. Inventories —Inventories are stated at the lower of cost or market (net realizable value). Cost includes direct material, transportation, direct labor and allocations of manufacturing overhead costs and is determined primarily using the first-in, first-out method. Property, Plant and Equipment —Property, plant and equipment are recorded at cost. For significant self-constructed assets, cost includes direct labor and interest. Expenditures for major improvements are capitalized; expenditures for maintenance, repairs and minor improvements are charged to expense as incurred. Assets are depreciated using primarily the straight-line method over their estimated useful lives, limited to the lease terms for improvements to leased assets. The units-of-production method is used to depreciate certain building products segment assets. Upon the sale or retirement of property, plant and equipment, any gain or loss on disposition is reflected in results of operations and the related asset cost and accumulated depreciation are removed from the respective accounts. Intangible Assets and Goodwill —Intangible assets consist primarily of identifiable intangible assets obtained in connection with acquisitions. With the exception of certain indefinite-lived trade names, intangible assets are amortized using the straight-line method, Headwaters' best estimate of the pattern of economic benefit, over their estimated useful lives. Goodwill consists of the excess of the purchase price for acquired businesses over the fair value of assets acquired, net of liabilities assumed. As described in more detail in Note 7, in accordance with ASC Topic 350 Intangibles—Goodwill and Other, goodwill and indefinite-lived intangible assets are not amortized, but are tested at least annually for impairment. Amortizable intangible assets are tested for impairment only when an indicator of impairment exists. Valuation of Long-Lived Assets —Headwaters evaluates the carrying value of long-lived assets, including amortizable intangible assets, as well as the related depreciation and amortization periods, to determine whether adjustments to carrying amounts or to estimated useful lives are required based on current events and circumstances. The carrying value of a long-lived asset is considered impaired when the anticipated cumulative undiscounted cash flow from that asset is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. Debt Issue Costs and Debt Repayment Premiums —Debt issue costs represent direct costs incurred for the issuance of long-term debt and, except for costs related to the ABL Revolver (see Note 8), are reflected as a reduction of the carrying value of the respective long-term debt to which they relate. Debt issue costs related to the ABL Revolver are classified in other assets because the ABL Revolver has not been drawn since inception. Debt issue costs are amortized to interest expense over the terms of the respective debt using the effective interest method. When debt is repaid early, the portion of unamortized debt issue costs related to the early principal repayment is written off and included in interest expense. Any premiums associated with the repayment of debt are also charged to interest expense. Financial Instruments —Derivatives are recorded in the consolidated balance sheet at fair value, as required by ASC Topic 815 Derivatives and Hedging. Accounting for changes in the fair value of a derivative depends on the intended use of the derivative, which is established at inception. For derivatives designated as cash flow hedges and which meet the effectiveness guidelines of ASC Topic 815, changes in fair value, to the extent effective, are recognized in other comprehensive income until the hedged item is recognized in earnings. Hedge effectiveness is measured at least quarterly based on the relative changes in fair value between the derivative contract and the hedged item over time. Any change in fair value of a derivative resulting from ineffectiveness, or an excluded component of the gain or loss, is recognized immediately and is recorded as interest expense. Headwaters formally documents all hedge transactions at inception of the contract, including identification of the hedging instruments and the hedged items, as well as its risk management objectives and strategies for undertaking the hedge transaction. This process includes linking the derivatives that are designated as hedges to specific assets, liabilities, firm commitments or forecasted transactions. Headwaters also formally assesses the effectiveness of any hedging instruments on an ongoing basis. Historically, Headwaters has entered into hedge agreements primarily to limit its exposure for interest rate movements and certain commodity price fluctuations. In connection with the issuance of certain convertible senior subordinated notes, Headwaters entered into convertible note hedge and warrant transactions for the purpose of effectively increasing the common stock conversion price. This convertible note hedge terminated when the notes were repaid in full in 2014. Since that time, and as of September 30, 2015, Headwaters has had no material hedge agreements or other derivatives in place. Asset Retirement Obligations —From time to time Headwaters incurs asset retirement obligations associated with the restoration of certain CCP disposal sites. Headwaters records its legal obligations associated with the retirement of long-lived assets in accordance with the requirements of ASC Topic 410 Asset Retirements and Environmental Obligations. The fair value of a liability for an asset retirement obligation is recognized in the consolidated financial statements when the asset is placed in service. At such time, the fair value of the liability is estimated using discounted cash flows. In subsequent periods, the retirement obligation is accreted to its estimated future value as of the asset retirement date through charges to operating expenses. An asset equal in value to the retirement obligation is also recorded as a component of the carrying amount of the long-lived asset and is depreciated over the asset's useful life. As of September 30, 2014 and 2015, CCP asset retirement obligations totaled $0. However, as described in Note 5, one of Headwaters' subsidiaries is performing permit reclamation responsibilities at a former coal cleaning facility site. As of September 30, 2014 and 2015, approximately $8.0 million and $7.4 million, respectively, was accrued for this reclamation liability. Income Taxes —Headwaters files a consolidated federal income tax return with substantially all of its subsidiaries. Income taxes are determined on an entity-by-entity basis and are accounted for in accordance with ASC Topic 740 Income Taxes. Headwaters recognizes deferred tax assets or liabilities for the expected future tax consequences of events that have been recognized in the financial statements or in income tax returns. Deferred tax assets or liabilities are determined based upon the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates expected to apply when the differences are expected to be settled or realized. Deferred income tax assets are periodically reviewed for recoverability based on current events, and valuation allowances are provided as necessary. Expenses for interest and penalties related to income taxes are classified within the income tax provision. Advertising Costs —Advertising costs are expensed as incurred, except for the cost of certain materials which are capitalized and amortized to expense as the materials are distributed. Total advertising costs were approximately $6.2 million, $8.0 million and $7.1 million in 2013, 2014 and 2015, respectively. Warranty Costs —Provision is made for warranty costs at the time of sale, based upon established policies and historical experience. Contingencies —In accounting for legal matters and other contingencies, Headwaters follows the guidance in ASC Topic 450 Contingencies, under which loss contingencies are accounted for based upon the likelihood of an impairment of an asset or the incurrence of a liability. If a loss contingency is "probable" and the amount of loss can be reasonably estimated, it is accrued. If a loss contingency is "probable" but the amount of loss cannot be reasonably estimated, disclosure is made. If a loss contingency is "reasonably possible," disclosure is made, including the potential range of loss, if determinable. Loss contingencies that are "remote" are neither accounted for nor disclosed. Gain contingencies are given no accounting recognition until realized, but are disclosed if material. Headwaters records legal fees associated with loss contingencies when incurred and does not record estimated future legal fees. Stock-Based Compensation —Headwaters uses the fair value method of accounting for stock-based compensation required by ASC Topic 718 Compensation—Stock Compensation. ASC Topic 718 requires companies to expense the value of equity-based awards. Stock-based compensation expense is reported within the same expense line items as used for cash compensation expense. Excess tax benefits resulting from exercise of stock options and stock appreciation rights (SARs) are reflected as necessary in the consolidated statement of changes in stockholders' equity and in financing cash flows in the statement of cash flows. Headwaters recognizes compensation expense equal to the grant-date fair value of stock-based awards for all awards expected to vest, over the period during which the related service is rendered by grantees. The fair value of stock-based awards is determined primarily using the Black-Scholes-Merton option pricing model (B-S-M model), adjusted where necessary to account for specific terms of awards that the B-S-M model does not have the capability to consider; for example, awards which have a cap on allowed appreciation. For such awards, the output determined by the B-S-M model has been reduced by an amount determined by a Quasi-Monte Carlo simulation to reflect the reduction in fair value associated with the appreciation cap or other award feature. The B-S-M model was developed for use in estimating the fair value of traded options that have no vesting restrictions and that are fully transferable. Option valuation models require the input of certain subjective assumptions, including expected stock price volatility and expected term. For stock-based awards, Headwaters primarily uses the "graded vesting" or accelerated method to allocate compensation expense over the requisite service periods. Estimated forfeiture rates are based largely on historical data and ranged from 1% to 2% during the periods presented. As of September 30, 2015, the estimated forfeiture rate for most unvested awards was 1% per year. Earnings per Share Calculation —Earnings per share (EPS) has been computed based on the weighted-average number of common shares outstanding. Diluted EPS computations reflect the increase in weighted-average common shares outstanding that would result from the assumed exercise of outstanding stock-based awards calculated using the treasury stock method, and the assumed conversion of convertible securities using the if-converted method, when such stock-based awards or convertible securities are dilutive. In accordance with the requirements of ASC Topic 260 Earnings Per Share, the diluted EPS calculations consider all of the following as assumed proceeds in using the treasury stock method to calculate whether and to what extent options and SARs are dilutive: i) the amount employees must pay upon exercise; plus ii) the average amount of unrecognized compensation cost during the period attributed to future service; plus iii) the amount of tax benefits, if any, that would be credited to additional paid-in capital if the award were to be exercised. Recent Accounting Pronouncements —In April 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2015-03, Interest—Imputation of Interest (ASC Topic 835-30). This new rule was issued to simplify the presentation of debt issue costs to require that debt issue costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issue costs were not affected by the amendments in the ASU. Early adoption of ASU 2015-03 is permitted for financial statements that have not been previously issued and Headwaters elected to adopt the ASU effective as of March 31, 2015, with retrospective application to the September 30, 2014 balance sheet. The effect of the adoption of ASU 2015-03 was to reclassify debt issue costs of approximately $7.1 million as of September 30, 2014 as a deduction from the related debt liabilities. Accordingly, other assets and total assets in the 2014 balance sheet were reduced by that amount, and long-term debt and total liabilities were reduced by the same amount. There was no effect on net income. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (ASC Topic 606). This new revenue standard creates a single source of revenue guidance for all companies in all industries and is more principles-based than current revenue guidance. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which deferred the effective date of ASU 2014-09. The mandatory adoption date of ASC 606 for Headwaters is now October 1, 2018. There are two methods of adoption allowed, either a "full" retrospective adoption or a "modified" retrospective adoption. Headwaters is currently evaluating the impact of ASC 606, but at the current time does not know what impact the new standard will have on revenue recognized and other accounting decisions in future periods, if any, nor what method of adoption will be selected if the impact is material. Headwaters has reviewed other recently issued accounting standards which have not yet been adopted in order to determine their potential effect, if any, on the results of operations or financial position of Headwaters. Based on the review of these other recently issued standards, Headwaters does not currently believe that any of those accounting pronouncements will have a significant effect on its current or future financial position, results of operations, cash flows or disclosures. Reclassifications —Certain prior period amounts, including the changes described above for the accounting for debt issue costs, have been reclassified to conform to the current period's presentation. The reclassifications had no effect on net income, but the reclassification of debt issue costs did affect total assets and total liabilities. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Sep. 30, 2015 | |
Segment Reporting | |
Segment Reporting | 3. Segment Reporting Headwaters currently operates three business segments: building products, construction materials and energy technology. These segments are managed and evaluated separately by management due to differences in their operations, products and services. Revenues for the building products segment consist of product sales to wholesale and retail distributors, contractors and other users of building products. Revenues for the construction materials segment consist primarily of CCP sales to ready-mix concrete businesses, with a smaller amount from services provided to coal-fueled electric generating utilities. Continuing revenues for the energy technology segment consist primarily of catalyst sales to oil refineries. As described in Note 5, Headwaters sold all of its coal cleaning facilities in 2012 and 2013 and the results of operations have been reflected as discontinued operations in the accompanying statements of income for all periods. Intersegment sales are immaterial. The following segment information has been prepared in accordance with ASC Topic 280 Segment Reporting. Segment performance is evaluated primarily on revenue and operating income, although other factors are also used, such as Adjusted EBITDA, a non-GAAP financial measure. Headwaters defines Adjusted EBITDA as net income plus net interest expense, income taxes, depreciation and amortization, stock-based compensation, cash-based compensation tied to stock price, goodwill and other impairments, and other non-routine adjustments that arise from time to time. Segment costs and expenses considered in deriving segment operating income include cost of revenue, amortization, and segment-specific selling, general and administrative expenses. Amounts included in the Corporate column represent expenses that are not allocated to any segment and include administrative departmental costs and general corporate overhead. Segment assets reflect those specifically attributable to individual segments and primarily include cash, accounts receivable, inventories, property, plant and equipment, goodwill and intangible assets. Certain other assets are included in the Corporate column. The net operating results of the discontinued coal cleaning business are reflected in the single line item for discontinued operations. 2013 (in thousands) Building products Construction materials Energy technology Corporate Totals Segment revenue $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization $ ) $ ) $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (loss) $ $ $ ) $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest expense ) Other income (expense), net Income tax provision ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations Loss from discontinued operations, net of income taxes ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Capital expenditures $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Segment assets $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2014 (in thousands) Building products Construction materials Energy technology Corporate Totals Segment revenue $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization $ ) $ ) $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (loss) $ $ $ ) $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest expense ) Other income (expense), net ) Income tax provision ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations Loss from discontinued operations, net of income taxes ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Capital expenditures $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Segment assets $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2015 (in thousands) Building products Construction materials Energy technology Corporate Totals Segment revenue $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization $ ) $ ) $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (loss) $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest expense ) Other income (expense), net ) Income tax benefit ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations Loss from discontinued operations, net of income taxes ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Capital expenditures $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Segment assets $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Acquisitions
Acquisitions | 12 Months Ended |
Sep. 30, 2015 | |
Acquisitions | |
Acquisitions | 4. Acquisitions Kleer Lumber —On December 31, 2012, a subsidiary of Headwaters acquired certain assets and assumed certain liabilities of Kleer Lumber, Inc., a privately-held Massachusetts-based company in the building products industry. Kleer Lumber's results of operations have been included with Headwaters' consolidated results beginning January 1, 2013. Kleer Lumber is a manufacturer of high quality cellular PVC products, primarily trim board, but also millwork, sheet stock, paneling, and moulding. Headwaters believes the demand for cellular PVC building products is growing due to the ability to cut, mill, shape, and install in the same manner as wood products, but with the added benefit of cellular PVC requiring significantly less maintenance than wood. Kleer Lumber distributes its products to independent lumber yards located primarily in the Northeast and Mid-Atlantic states. Total consideration paid for Kleer Lumber was approximately $43.3 million, all of which was cash. Direct acquisition costs, consisting primarily of fees for advisory, legal and other professional services, totaled approximately $0.9 million and were included in selling, general and administrative expense in the statement of income for 2013. The Kleer Lumber acquisition was accounted for as a business combination in accordance with the requirements of ASC 805 Business Combinations. The following table sets forth the estimated fair values of assets acquired and liabilities assumed as of the acquisition date: (in thousands) Current assets $ Current liabilities ) Property, plant and equipment Intangible assets: Customer relationships (15 year life) Trade name (indefinite life) Goodwill ​ ​ ​ ​ ​ Net assets acquired $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Kleer Lumber's future growth attributable to new customers, geographic presence and assembled workforce are additional assets that are not separable and which contributed to recorded goodwill, all of which is tax deductible over 15 years. Entegra —On December 12, 2013, Headwaters acquired 80% of the equity interests of Roof Tile Acquisition, LLC, a privately-held Florida-based company in the building products industry, which sells its products primarily under the Entegra brand. Entegra's results of operations have been included with Headwaters' consolidated results beginning December 13, 2013. Entegra is a leading manufacturer of concrete roof tiles and accessories which are sold primarily in Florida. The acquisition of Entegra provides additional product offerings to Headwaters' current roofing products portfolio. Headwaters believes the strategic location of Entegra's centralized manufacturing plant in Florida, the quality of its contractor/customer relationships, and the scope of its products and services provide a competitive advantage. Many of its customers are currently customers of Headwaters, and provide Headwaters the opportunity to expand existing sales and distribution within Florida, which is one of the fastest growing states in the U.S. in terms of population. Total consideration paid for Entegra was approximately $57.5 million, all of which was cash. Direct acquisition costs, consisting primarily of fees for legal services, totaled approximately $0.4 million and were included in selling, general and administrative expense in the statement of income for fiscal 2014. Headwaters has the right, but not the obligation, to acquire the non-controlling 20% equity interest in Entegra for a stipulated multiple of EBITDA adjusted for certain prescribed items. This call right is exercisable at any time after five years following the date of acquisition, unless certain defined events occur prior to that time, in which case the right is exercisable earlier. The non-controlling owners have the right, but not the obligation, to require Headwaters to acquire the non-controlling 20% equity interest, again for a stipulated multiple of EBITDA adjusted for certain prescribed items. This put right became exercisable in June 2015. The Entegra acquisition has been accounted for as a business combination in accordance with the requirements of ASC 805 Business Combinations. The following table sets forth the estimated fair values of assets acquired and liabilities assumed as of the acquisition date: (in thousands) Current assets $ Current liabilities ) Property, plant and equipment Intangible assets: Customer relationships (15 year life) Trade name (indefinite life) Goodwill ​ ​ ​ ​ ​ Net assets acquired Less redeemable non-controlling interest ) ​ ​ ​ ​ ​ Net assets attributable to Headwaters $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Entegra's future growth attributable to new customers, geographic presence and assembled workforce are additional assets that are not separable and which contributed to recorded goodwill, most of which is tax deductible over 15 years. Gerard —On May 16, 2014, Headwaters acquired certain assets and assumed certain liabilities of the roofing products business of Metals USA Building Products, L.P., which products are sold under the Gerard and Allmet brands. Gerard's results of operations are being reported within the building products segment and have been included with Headwaters' consolidated results beginning May 16, 2014. Gerard is one of the largest manufacturers of stone coated metal roofing materials in the U.S. and sells niche roofing products that combine profiles resembling tile, shake, or slate with a fire proof material and a low lifetime installed cost. The acquisition of Gerard increases the number of specialty niche roofing products that Headwaters provides to its core customers and is an area of focus for Headwaters. With the addition of Gerard, Headwaters now has three product categories in niche roofing, including resin-based composite, concrete, and metal, which could increase opportunities for cross selling. Besides broadening the niche roofing product lines, Gerard also expands Headwaters geographic footprint in the roofing category. Total consideration paid for Gerard was approximately $27.6 million, all of which was cash. Direct acquisition costs, consisting primarily of fees for legal services, totaled approximately $0.3 million and were included in selling, general and administrative expense in the statement of income for fiscal 2014. The Gerard acquisition has been accounted for as a business combination in accordance with the requirements of ASC 805 Business Combinations. The following table sets forth the estimated fair values of assets acquired and liabilities assumed as of the acquisition date: (in thousands) Current assets $ Current liabilities ) Property, plant and equipment Intangible assets: Customer relationships (15 year life) Trade name (indefinite life) Goodwill Long-term liabilities ) ​ ​ ​ ​ ​ Net assets acquired $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gerard's future growth attributable to new customers, geographic presence and assembled workforce are additional assets that are not separable and which contributed to recorded goodwill, most of which is tax deductible over 15 years. Other —During the March 2014 quarter, Headwaters acquired the assets of a company in the construction materials industry located in the Northeast U.S. for initial cash consideration of approximately $3.1 million. This acquisition increased Headwaters' supply of fly ash and bottom ash, improving its competitive position in that region. During the September 2014 quarter, Headwaters acquired the assets of another company in the construction materials industry located in the Southeast U.S. for cash consideration of approximately $7.4 million. This acquisition increased Headwaters' supply of CCPs produced by industrial boilers and has strengthened the ability to meet customers' needs along the Gulf Coast. During the September 2015 quarter, Headwaters acquired the assets of a company in the building products industry located in Texas for initial cash consideration of approximately $4.5 million. This acquisition strengthens Headwaters' ability to market its block products in the central Texas region. Investments in entities in which Headwaters has a significant influence over operating and financial decisions are accounted for using the equity method of accounting. Headwaters acquired 100% of one such equity method investee in the December 2014 quarter for a cash payment of approximately $1.2 million. As a result of Headwaters obtaining a controlling financial interest, the investee has been consolidated within the building products segment. In November 2015, Headwaters acquired 100% of the equity interests in several related companies, together which comprise a business in the building products industry located in California known as Metro Roof Products. Consideration paid, net of cash acquired, was approximately $34.6 million, which amount is subject to adjustment for the final calculation of acquisition-date working capital. Direct acquisition costs were not material. Metro is a manufacturer of stone coated metal roofing materials in the U.S. and this acquisition is expected to expand Headwaters' presence in the roofing products sector. Headwaters' goodwill from all acquisitions plus all indefinite-lived trade names are tested for impairment annually. In addition, all acquired goodwill and intangible assets are subject to review for impairment if indicators of potential impairment develop in the future. Combined Financial Information —The actual revenue included in Headwaters' statements of income for 2013, 2014 and 2015 from the acquisitions that occurred in each fiscal year was approximately $28.6 million, $47.6 million and $3.2 million, respectively, and the actual earnings (loss) (including non-controlling interest) included in Headwaters' statements of income for 2013, 2014 and 2015 was approximately $1.6 million, $5.2 million and $(1.2) million, respectively. The following unaudited information presents the pro forma consolidated revenue and net income for Headwaters for the years indicated as if the 2013 Kleer Lumber acquisition had been included in Headwaters' consolidated results of operations prior to October 1, 2012, the 2014 acquisitions had been included in Headwaters' consolidated results of operations beginning October 1, 2012, and the 2015 acquisitions had been included in Headwaters' consolidated results of operations beginning October 1, 2013. Unaudited (in thousands) 2013 2014 2015 Revenue $ $ $ Net income $ $ $ The above unaudited pro forma results have been calculated by combining the historical results of Headwaters and the acquired businesses as if all acquisitions had occurred as of October 1 of the fiscal year prior to the respective acquisition dates, and then adjusting the income tax provisions as if they had been calculated on the resulting, combined results. The pro forma results include estimates for intangible asset amortization for the 2015 acquisitions which are subject to change when the final asset values have been determined. The pro forma results reflect elimination of the following 2013 expenses (since for purposes of the pro forma presentation they would be reflected in 2012 instead of in 2013): $0.9 million of direct acquisition costs, $0.5 million of nonrecurring expense related to the fair value adjustment to acquisition-date inventory, and $0.3 million of other costs. The pro forma results reflect the following 2014 expenses in 2013 instead of in 2014: $0.7 million of direct acquisition costs and $1.2 million of nonrecurring expense related to the fair value adjustments to acquisition-date inventories. There were no material 2015 expenses reflected in 2014 instead of in 2015. For all periods presented, historical depreciation and amortization expense of the acquired companies was adjusted to reflect the acquisition date fair value amounts of the related assets. No other material pro forma adjustments were deemed necessary, either to conform the acquisitions to Headwaters' accounting policies or for any other situation. The pro forma information is not necessarily indicative of the results that would have been achieved had the transactions occurred on the dates indicated or that may be achieved in the future. Non-controlling Interest in Consolidated Subsidiary —As described above, Headwaters acquired 80% of the equity interests of Entegra, and the non-controlling owners have the right to require Headwaters to acquire the non-controlling 20% equity interest. This put right is not deemed to be a freestanding financial instrument and because it is not solely within the control of Headwaters, the non-controlling interest does not qualify as permanent equity and has been reported outside the stockholders' equity section of the balance sheet as temporary, or mezzanine, equity. The value of the non-controlling interest was affected by the lack of control as well as the estimated fair values of the put and call rights. Because there is no fixed redemption date for the put right, Headwaters compares quarterly the carrying value of the non-controlling interest to its estimated redemption value. The estimated redemption value is calculated based on the EBITDA formula described previously to determine the price that would be paid if the put right were to have been exercised at the end of the reporting period. If applicable, the carrying amount is increased, but not decreased, to the estimated redemption value. The following table summarizes the activity of the non-controlling interest during 2014 and 2015: (in thousands) Estimated fair value as of acquisition date $ Net income attributable to non-controlling interest Dividends paid to non-controlling interest ) Adjustment of estimated redemption value ​ ​ ​ ​ ​ Balance as of September 30, 2014 Net income attributable to non-controlling interest Dividends paid to non-controlling interest ) ​ ​ ​ ​ ​ Balance as of September 30, 2015 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Sep. 30, 2015 | |
Discontinued Operations | |
Discontinued Operations | 5. Discontinued Operations In September 2011, the Board of Directors committed to a plan to sell Headwaters' coal cleaning business, which was part of the energy technology segment. At that time the business met all of the criteria for classification as held for sale and presentation as a discontinued operation. Following the sale of all remaining coal cleaning facilities in January 2013, there are no remaining assets held for sale. The results of operations for the coal cleaning business have been presented as discontinued operations for all periods presented and certain summarized information for the discontinued business is presented in the following table: (in thousands) 2013 2014 2015 Revenue $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss from operations of discontinued operations before income taxes $ ) $ ) $ ) Gain (loss) on disposal ) ) Income tax benefit ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss from discontinued operations, net of income taxes $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ In 2013, Headwaters recognized a tax benefit of approximately $2.7 million, due primarily to the reversal of unrecognized income tax benefits related to completion of the 2009 IRS audit. Headwaters sold all of its coal cleaning facilities in 2012 and 2013, and recognized estimated gains on the sales dates. Subsequent to the dates of sale, adjustments of the previously recognized estimated gains on the sales transactions have been recorded, including the reported amounts reflected in the table above. Headwaters currently expects that additional adjustments to the recognized gains and losses may be recorded in the future as certain contingencies are resolved. The loss from operations reflected in the table includes expenses for certain litigation which commenced prior to disposal of the business. For all sales transactions, a majority of the consideration was in the form of potential production royalties and deferred purchase price, which amounts are dependent upon future plant production levels. Potential future production royalties and deferred purchase price on the sales transactions were not considered as being probable in the original gain calculations and have been accounted for in the periods when such amounts were received. During 2014, Headwaters received approximately $4.7 million in deferred purchase price payments, royalties and the collection of certain receivables which had been reserved. In accordance with the terms of the asset purchase agreement for one of the sales transactions, the buyer of the coal cleaning facilities agreed to assume the lease and reclamation obligations related to certain of the facilities. Subsequent to the date of sale, the Headwaters subsidiaries which sold the facilities amended the purchase agreement to provide the buyer with additional time to make payments, as well as fulfill contractual requirements related to the assumed reclamation obligations. One of Headwaters' subsidiaries is performing permit reclamation responsibilities at one site. As of September 30, 2014 and 2015, approximately $8.0 million and $7.4 million, respectively, was accrued for this reclamation liability. Certain receivables due from the buyer have also been reserved until such time as collection is more certain. Headwaters currently expects to continue to reflect as discontinued operations all activity related to the former coal cleaning business, at least until such time as the significant reclamation obligation is satisfied. |
Current Assets and Current Liab
Current Assets and Current Liabilities | 12 Months Ended |
Sep. 30, 2015 | |
Current Assets and Current Liabilities | |
Current Assets and Current Liabilities | 6. Current Assets and Current Liabilities Receivables —Activity in the trade receivables allowance account was as follows for the three-year period ended September 30, 2015: (in thousands) Balance at beginning of year Charged to expense Accounts written off Balance at end of year 2013 $ $ $ ) $ 2014 ) 2015 ) In addition to the allowance for trade receivables, in 2013 Headwaters had additional activity of approximately $9.0 million in the allowance account for other receivables, all related to amounts owed to Headwaters by one of the buyers of some of the coal cleaning facilities described in Note 5. The $9.0 million represented a 100% reserve on a note receivable and other payments contractually agreed to by the buyer, given the level of uncertainty of collection from the buyer. In 2014, approximately $2.0 million of the $9.0 million receivable was collected, which amount was reflected as gain on disposal from discontinued operations. Inventories —Inventories consisted of the following at September 30: (in thousands) 2014 2015 Raw materials $ $ Finished goods ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Warranty Liabilities —Activity in the warranty liability account was as follows for the three-year period ended September 30, 2015: (in thousands) Balance at beginning of year Charged to expense Changes in prior year estimates Additions from acquisitions Payments for claims Balance at end of year 2013 $ $ $ $ $ ) $ 2014 ) 2015 ) ) Other Accrued Liabilities —Other accrued liabilities consisted of the following at September 30: (in thousands) 2014 2015 Products and services received but not yet invoiced $ $ Other ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Long-Lived Assets
Long-Lived Assets | 12 Months Ended |
Sep. 30, 2015 | |
Long-Lived Assets | |
Long-Lived Assets | 7. Long-Lived Assets Property, Plant and Equipment —Property, plant and equipment consisted of the following at September 30: (in thousands of dollars) Estimated useful lives 2014 2015 Land and improvements 15 - 40 years $ $ Buildings and improvements 5 - 40 years Equipment and vehicles 3 - 20 years Dies and molds 3 - 20 years Construction in progress — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less accumulated depreciation ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net property, plant and equipment $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation expense was approximately $32.1 million, $33.8 million and $35.8 million in 2013, 2014 and 2015, respectively. Intangible Assets —Headwaters' identified intangible assets are being amortized over the estimated useful lives shown in the table below. The table also summarizes the gross carrying amounts and related accumulated amortization of intangible assets as of September 30: 2014 2015 (in thousands of dollars) Estimated useful lives Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Trade names Indefinite $ $ — $ $ — CCP contracts 15 - 20 years Customer relationships 5 - 17 years Trade names 5 - 20 years Patents and patented technologies 5 - 19 years Other 5 - 17 years ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The above table includes provisional amounts for the intangible assets acquired in 2015 because the process of identifying and valuing those assets has not been completed. Total amortization expense related to intangible assets was approximately $20.2 million, $21.3 million and $18.2 million in 2013, 2014 and 2015, respectively. The primary reason for the decrease in amortization expense from 2014 to 2015 is that certain assets have been fully amortized. Total estimated annual amortization expense for 2016 through 2020 is shown in the following table: Year ending September 30: (in thousands) 2016 $ 2017 2018 2019 2020 Goodwill —Changes in the carrying amount of goodwill, by segment, are as follows for the two-year period ended September 30, 2015: (in thousands) Building products Construction materials Total Balances as of September 30, 2013 $ $ $ Goodwill related to 2014 acquisitions ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balances as of September 30, 2014 Goodwill related to 2015 acquisitions Adjustments to previously recorded amounts for 2014 acquisitions ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balances as of September 30, 2015 $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Impairment Testing —In accordance with the requirements of ASC Topic 350 Intangibles—Goodwill and Other, Headwaters does not amortize goodwill or indefinite-lived intangible assets, all of which relate to acquisitions. However, Headwaters is required to periodically test these assets for impairment at least annually, or sooner if indicators of possible impairment arise. Headwaters performs its annual impairment testing during the fourth quarter of its fiscal year using a June 30 test date and a one- to three-step process. Headwaters' reporting units for purposes of impairment testing are the same as its operating segments. Headwaters evaluates qualitative factors, including macroeconomic conditions, industry and market considerations, overall financial performance and cost factors, to determine whether it is necessary to perform step 1 of the two-step impairment test. This qualitative evaluation is commonly referred to as "step 0." After assessing the appropriate qualitative factors, only if it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, is it necessary to perform step 1. Step 1 of impairment testing consists of determining and comparing the fair value of a reporting unit, calculated primarily using discounted expected future cash flows, to the carrying value of the reporting unit. If step 1 is failed for a reporting unit, indicating a potential impairment, Headwaters is required to complete step 2, which is a more detailed test to calculate the implied fair value of goodwill and indefinite-lived intangible assets, and compare that value to the carrying value. If the carrying value of goodwill and indefinite-lived assets exceeds the implied fair value, an impairment loss is required to be recorded. For all years presented, Headwaters performed a step 0 qualitative evaluation for both the construction materials and building products reporting units and concluded that it was more likely than not that the fair values exceeded the carrying amounts of goodwill and indefinite-lived assets. Accordingly, further step 1 and step 2 testing for impairment was not required to be performed. |
Long-term Debt
Long-term Debt | 12 Months Ended |
Sep. 30, 2015 | |
Long-term Debt | |
Long-term Debt | 8. Long-Term Debt The total undiscounted face amount of Headwaters' outstanding long-term debt was approximately $599.8 million as of September 30, 2014 and $573.9 million as of September 30, 2015. As of those dates, the discounted carrying value of long-term debt consisted of the following: (in thousands) 2014 2015 Senior secured term loan, due March 2022 (face amount $423,938) $ $ 7 1 / 4 % Senior notes, due January 2019 (face amount $150,000) 7-5/8% Senior secured notes, repaid in March 2015 (face amount $400,000) 8.75% Convertible senior subordinated notes, repaid in February 2015 (face amount $49,791) ​ ​ ​ ​ ​ ​ ​ ​ Carrying amount of long-term debt, net of discounts and debt issue costs Less current portion ) ​ ​ ​ ​ ​ ​ ​ ​ Long-term debt $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Senior Secured Term Loan —In March 2015, Headwaters entered into a new Term Loan Facility, under which a senior secured loan for $425.0 million was obtained. The loan will mature in March 2022, subject to certain exceptions described below. The Term Loan Facility requires scheduled quarterly repayments in an aggregate annual amount equal to 1.0% of the original principal amount (subject to reduction for certain permitted prepayments), with the balance due at maturity. In the event that in October 2018 Headwaters has more than $50.0 million outstanding of the 7 1 / 4 % senior notes and has not received a binding commitment to refinance those notes, the maturity date of the Term Loan Facility will be October 2018. The Term Loan Facility allows Headwaters to request one or more incremental term loans and certain other types of incremental debt in an aggregate amount not to exceed $150.0 million plus an additional amount which is dependent on Headwaters' pro forma net leverage ratio, as defined. Any additional borrowings are contingent upon the receipt of commitments by existing or additional lenders. Borrowings under the Term Loan Facility bear interest at a rate equal to, at Headwaters' option, either (a) a base rate determined by reference to the highest of (i) the publicly announced prime rate of the administrative agent, (ii) the federal funds rate plus 0.50%, and (iii) the eurocurrency (LIBO) rate for a one-month interest period plus 1.0%, subject in all cases to a 2.0% floor; or (b) a eurocurrency (LIBO) rate determined by reference to the cost of funds for eurocurrency deposits in dollars, subject to a 1.0% floor; plus, in each case, an applicable margin of 3.5% for any eurocurrency loan and 2.5% for any alternate base rate loan. Interest is payable quarterly, and as of September 30, 2015, the interest rate on borrowings under the Term Loan Facility was 4.5%. Headwaters may voluntarily repay outstanding loans under the Term Loan Facility at any time without premium or penalty, other than customary breakage costs with respect to LIBO rate loans, which shall be subject to a prepayment premium of 1.0%. The Term Loan Facility requires Headwaters to prepay outstanding term loans, subject to certain exceptions, with (i) up to 50% of Headwaters' annual excess cash flow, as defined, to the extent such excess cash flow exceeds $1.0 million, commencing with fiscal year 2016, with such required prepayment to be reduced by the amount of voluntary prepayments of term loans and certain other types of senior secured debt; (ii) 100% of the net cash proceeds of certain non-ordinary course asset sales; and (iii) 100% of the net cash proceeds of certain issuances of debt. The Term Loan Facility is secured by substantially all assets of Headwaters, except that the obligations have a second priority position with respect to the assets that secure Headwaters' ABL Revolver, primarily consisting of certain trade receivables and inventories of Headwaters' building products and construction materials segments. The Term Loan Facility contains customary covenants restricting the ability of Headwaters to incur additional debt and liens on assets, prepay future new subordinated debt, merge or consolidate with another company, sell all or substantially all assets, make investments and pay dividends or distributions, among other things. The Term Loan Facility contains customary events of default, including with respect to a change in control of Headwaters. Headwaters was in compliance with all covenants as of September 30, 2015. The net proceeds from the initial borrowing under the Term Loan Facility were approximately $414.7 million, after giving effect to original issue discount of approximately $2.1 million and transaction costs of approximately $8.2 million. As described below, the net proceeds from the original borrowing under the Term Loan Facility were primarily used to pay the redemption price for all of the outstanding 7-5/8% senior secured notes. 7 1 / 4 % Senior Notes —In December 2013, Headwaters issued $150.0 million of 7 1 / 4 % senior notes for net proceeds of approximately $146.7 million. The 7 1 / 4 % notes are unsecured, mature in January 2019 and bear interest at a rate of 7.25%, payable semiannually. The notes are subordinate in priority to the senior secured Term Loan Facility described above and the ABL Revolver described below, to the extent of the value of the assets securing such debt, and are senior to all other future subordinated debt. Headwaters can redeem the 7 1 / 4 % notes, in whole or in part, at any time after January 15, 2016 at redemption prices that decline over time from 103.625% to 100.0%, depending on the redemption date. In addition, until January 15, 2016, Headwaters can redeem at a price of 107.25% up to 35% of the outstanding notes with the net proceeds from one or more equity offerings. Headwaters can also redeem any of the notes at any time prior to January 15, 2016 at a price equal to 100% of the principal amount plus a make-whole premium. If there is a change in control, Headwaters will be required to offer to purchase the notes from holders at a purchase price equal to 101% of the principal amount. The 7 1 / 4 % notes limit Headwaters in the incurrence of additional debt and liens on assets, prepayment of subordinated debt, merging or consolidating with another company, selling all or substantially all assets, making investments and the payment of dividends or distributions, among other things. Headwaters was in compliance with all covenants as of September 30, 2015. ABL Revolver —Since entering into the ABL Revolver, Headwaters has not borrowed any funds under the arrangement and has no borrowings outstanding as of September 30, 2015. Availability under the ABL Revolver cannot exceed $70.0 million, which includes a $35.0 million sub-line for letters of credit and a $10.5 million swingline facility. Availability under the ABL Revolver is further limited by the borrowing base valuations of the assets of Headwaters' building products and construction materials segments which secure the borrowings, currently consisting of certain trade receivables and inventories. In addition to the first lien position on these assets, the ABL Revolver lenders have a second priority position on substantially all other assets of Headwaters. As of September 30, 2015, Headwaters had secured letters of credit under the ABL Revolver of approximately $7.6 million for various purposes and had availability under the ABL Revolver of approximately $60.4 million. The ABL Revolver terminates in March 2020. There is a contingent provision for early termination at any time within three months prior to the earliest maturity date of the senior secured Term Loan Facility or the 7 1 / 4 % senior notes, at which time any amounts borrowed must be repaid. Outstanding borrowings under the ABL Revolver accrue interest at Headwaters' option, at either i) the London Interbank Offered Rate (LIBOR) plus 1.5%, 1.75% or 2.0%, depending on Headwaters' average net excess availability under the ABL; or ii) the "Base Rate" plus 0.25%, 0.5% or 0.75%, again depending on average net excess availability. The base rate is subject to a floor equal to the highest of i) the prime rate, ii) the federal funds rate plus 0.5%, and iii) the 30-day LIBO rate plus 1.0%. Fees on the unused portion of the ABL Revolver range from 0.25% to 0.375%, depending on the amount of the credit facility which is utilized. If there would have been borrowings outstanding under the ABL Revolver as of September 30, 2015, the interest rate on those borrowings would have been approximately 1.8%. The ABL Revolver contains restrictions and covenants common to such agreements, including limitations on the incurrence of additional debt and liens on assets, prepayment of subordinated debt, merging or consolidating with another company, selling assets, making acquisitions and investments and the payment of dividends or distributions, among other things. In addition, if availability under the ABL Revolver is less than 12.5%, Headwaters is required to maintain a monthly fixed charge coverage ratio of at least 1.0x for the preceding twelve-month period. Headwaters was in compliance with all covenants as of September 30, 2015. 7-5/8% Senior Secured Notes —In 2011, Headwaters issued $400.0 million of 7-5/8% senior secured notes. In March 2015, Headwaters irrevocably deposited with the trustee of the notes an amount sufficient to pay and discharge all obligations under the notes and the related indenture, which discharge the trustee acknowledged. This discharge resulted in a loss on extinguishment of debt of approximately $21.3 million, comprised of the early repayment premium of approximately $15.3 million, interest to the April 2015 redemption date totaling approximately $2.5 million, and accelerated amortization of unamortized debt issue costs of approximately $3.5 million. The loss on debt extinguishment is reflected as interest expense in Headwaters' statement of income for 2015. Convertible Senior Subordinated Notes —In 2013, Headwaters repurchased and canceled approximately $47.4 million in aggregate principal amount of 2.50% convertible senior subordinated notes for cash consideration of approximately $47.7 million. The premiums and accelerated debt discount and debt issue costs aggregating approximately $2.4 million were charged to interest expense. The remaining 2.50% notes, aggregating approximately $7.7 million, matured and were fully repaid in February 2014. Pursuant to open market transactions in February 2015, Headwaters repurchased and canceled substantially all of the outstanding 8.75% convertible senior subordinated notes, aggregating approximately $49.0 million. Premiums and accelerated amortization of debt discount and debt issue costs aggregating approximately $3.5 million were paid and charged to interest expense. Headwaters' Chairman and CEO was a holder of $1.16 million of the 2.50% notes referred to above that were exchanged for 8.75% notes in 2012, which holding and exchange were approved by the Board of Directors and occurred under the same terms as for other debt holders. Due to immateriality, the remaining balance of these 8.75% convertible notes, repayable in 2016, has been included with other accrued liabilities in the consolidated balance sheet as of September 30, 2015. Interest Costs and Debt Maturities —During 2013, Headwaters incurred total interest costs of approximately $42.9 million, including approximately $5.8 million of non-cash interest expense. During 2014, Headwaters incurred total interest costs of approximately $46.9 million, including approximately $2.2 million of non-cash interest expense. During 2015, Headwaters incurred total interest costs of approximately $64.9 million, including approximately $6.2 million of non-cash interest expense. As described above, approximately $21.3 million of interest expense incurred in 2015 resulted from the early repayment of the 7-5/8% senior secured notes. Neither capitalized interest nor interest income was material for any period presented. The weighted-average interest rate on the face amount of outstanding long-term debt, excluding amortizable debt discount and debt issue costs, was approximately 7.6% at September 30, 2014 and 5.2% at September 30, 2015. Except for the required repayments of the Term Loan Facility of approximately $1.1 million per quarter, Headwaters has no debt maturities until January 2019. Future maturities of long-term debt as of September 30, 2015 are shown in the following table: Year ending September 30, (in thousands) 2016 $ 2017 2018 2019 2020 Thereafter ​ ​ ​ ​ ​ Total long-term debt $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Sep. 30, 2015 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | 9. Fair Value of Financial Instruments Headwaters' material financial instruments consist primarily of cash and cash equivalents, trade receivables, accounts payable and long-term debt. All of these financial instruments except some long-term debt are either carried at fair value in the consolidated balance sheets or are short-term in nature. Accordingly, the carrying values for those financial instruments as reflected in the consolidated balance sheets closely approximate their fair values. All of Headwaters' outstanding long-term debt as of September 30, 2014 was fixed-rate. Using fair values for the debt, the aggregate fair value of Headwaters' long-term debt as of September 30, 2014 would have been approximately $626.0 million, compared to a carrying value of $592.5 million. As of September 30, 2015, only the 7 1 / 4 % senior notes have a fixed rate and the aggregate fair value of this debt as of September 30, 2015 would have been approximately $156.4 million, compared to a carrying value of $147.8 million. Fair value "Level 2" estimates for long-term debt were based primarily on price estimates from broker-dealers. The fair values for long-term debt differ from the carrying values primarily due to interest rates that differ from current market interest rates, and for the convertible senior subordinated notes that were outstanding at September 30, 2014, the difference between Headwaters' common stock price at that date and the conversion price. |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 30, 2015 | |
Income Taxes | |
Income Taxes | 10. Income Taxes Headwaters recorded income tax expense of approximately $3.9 million and $3.6 million in 2013 and 2014, respectively. For both years, Headwaters recorded a full valuation allowance on its net amortizable deferred tax assets and accordingly, did not recognize benefit for tax credit carryforwards, net operating loss (NOL) carryforwards or other deferred tax assets, except to the extent of earnings. The reported 32% and 18% effective tax rates for 2013 and 2014 were due primarily to state income taxes in certain state jurisdictions. In 2013, Headwaters also recognized a tax benefit of approximately $2.7 million in discontinued operations, due primarily to the reversal of unrecognized income tax benefits related to audit periods that closed. In 2015, Headwaters recorded an income tax benefit of approximately $94.5 million, primarily due to the release of approximately $109.3 million of the valuation allowance established in prior years. A valuation allowance is required when there is significant uncertainty as to the realizability of deferred tax assets. Realization of deferred tax assets is dependent upon Headwaters' ability to generate sufficient taxable income within the carryforward periods provided for in the tax law for each tax jurisdiction. Headwaters considered the following possible sources of taxable income when assessing the realization of its deferred tax assets: • future reversals of existing taxable temporary differences; • future taxable income or loss, exclusive of reversing temporary differences and carryforwards; • tax-planning strategies; and • taxable income in prior carryback years. Headwaters considered both positive and negative evidence in determining the continued need for a valuation allowance, including the following: Positive evidence: • Current forecasts indicate that Headwaters will generate pre-tax income and taxable income in the future. • Headwaters had a three-year cumulative income as of September 30, 2015. • A majority of Headwaters' tax attributes have significant carryover periods of 20 years or more. Negative evidence: • Headwaters operates in cyclical industries that are difficult to forecast. Headwaters placed more weight on objectively verifiable evidence than on other types of evidence and management believes that available positive evidence outweighed the available negative evidence. Management therefore determined that Headwaters met the "more likely than not" threshold that NOLs, tax credits and other deferred tax assets will be realized. Accordingly, a full valuation allowance was no longer deemed to be required as of September 30, 2015. A valuation allowance of approximately $10.1 million was maintained against capital loss carryforwards, certain state NOL carryforwards, and certain tax credit carryforwards as of September 30, 2015. All of the factors Headwaters considered in evaluating whether and when to release all or a portion of the deferred tax asset valuation allowance involved significant judgment. For example, there are many different interpretations of "cumulative income or losses in recent years" which can be used. Also, significant judgment is involved in making projections of future financial and taxable income, especially because Headwaters' financial results are significantly dependent upon industry trends, including new housing construction, repair and remodeling, and infrastructure construction. Most of the end use categories in which Headwaters sells its products and services are currently in varying states of recovery from the historic downturn experienced in recent years; however, it is not possible to accurately predict whether recovery will continue, and if it does, at what rate and for how long. As of September 30, 2015, Headwaters' U.S. and state NOL and capital loss carryforwards totaled approximately $67.5 million (tax effected). The NOLs expire from 2016 to 2035. In addition, there are approximately $25.0 million of tax credit carryforwards as of September 30, 2015, which expire from 2028 to 2033. The income tax provision consisted of the following for the years ended September 30: (in thousands) 2013 2014 2015 Current tax benefit (provision): Federal $ ) $ $ State ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current tax provision ) ) ) Deferred tax benefit (provision): Federal ) ) ) State Change in valuation allowance ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax benefit (provision) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total income tax benefit (provision) $ ) $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The provision for income taxes differs from the amount computed using the statutory federal income tax rate due to the following: (in thousands) 2013 2014 2015 Tax provision at U.S. statutory rate $ ) $ ) $ ) State income taxes, net of federal tax effect ) ) ) Valuation allowance Non-deductible executive compensation ) ) Unrecognized tax benefits ) Other ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income tax benefit (provision) $ ) $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The components of Headwaters' deferred income tax assets and liabilities were as follows as of September 30: (in thousands) 2014 2015 Deferred tax assets: NOL and capital loss carryforwards $ $ Tax credit carryforwards Estimated liabilities Stock-based compensation Debt repurchase premium Reserves and allowances Deferred revenue Other Valuation allowances ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets Deferred tax liabilities: Property, plant and equipment basis differences ) ) Goodwill and intangible asset basis differences ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax liabilities ) ) ​ ​ ​ ​ ​ ​ ​ ​ Net deferred tax asset (liability) $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ A reconciliation of the change in the amount of gross unrecognized income tax benefits, not including interest and penalties, is as follows: (in thousands) 2013 2014 2015 Gross unrecognized income tax benefits at beginning of year $ $ $ Changes based on tax positions related to the current year Increases for tax positions related to prior years Reductions for tax positions related to prior years ) Settlements ) Lapse of statute of limitations ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross unrecognized income tax benefits at end of year $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ During 2013, Headwaters accrued approximately $0.3 million of liabilities for interest and penalties. During 2014, Headwaters accrued approximately $0.1 million of liabilities for interest and penalties. During 2015, Headwaters released approximately $0.2 million of liabilities for interest and penalties and as of September 30, 2015, approximately $2.5 million was accrued for the payment of interest and penalties. Changes to the estimated liability during 2013 were primarily the result of additional state income tax reserves and the reversal in discontinued operations of unrecognized income tax benefits related to completion of the 2009 IRS audit. Changes to the estimated liability during 2014 were primarily the result of the expiration of statute of limitation time periods. Changes to the estimated liability during 2015 were primarily the result of the expiration of statute of limitation time periods. As of September 30, 2015, approximately $3.9 million of unrecognized income tax benefits would affect the 2015 effective tax rate if released into income. The calculation of tax liabilities involves uncertainties in the application of complex tax regulations in multiple tax jurisdictions. Headwaters currently has open tax years subject to examination by the IRS and state tax authorities for the years 2012 through 2014. Headwaters recognizes potential liabilities for anticipated tax audit issues in the U.S. and state tax jurisdictions based on estimates of whether, and the extent to which, additional taxes and interest will be due. If events occur (or do not occur) as expected and the payment of these amounts ultimately proves to be unnecessary, the reversal of the liabilities would result in tax benefits being recognized in the period when it is determined the liabilities are no longer required to be recorded in the consolidated financial statements. If the estimate of tax liabilities proves to be less than the ultimate assessment, a further charge to expense would result. It is reasonably possible that approximately $5.0 million of Headwaters' unrecognized income tax benefits will be released within the next 12 months. Most of this amount relates to state taxes and is currently expected to be released in the December 2015 quarter due to the expiration of statute of limitation time periods. |
Equity Securities and Stock-Bas
Equity Securities and Stock-Based Compensation | 12 Months Ended |
Sep. 30, 2015 | |
Equity Securities and Stock-Based Compensation | |
Equity Securities and Stock-Based Compensation | 11. Equity Securities and Stock-Based Compensation Authorized Stock —In addition to the 200.0 million shares of authorized common stock, Headwaters also has 10.0 million shares of authorized preferred stock. No preferred stock was issued or outstanding as of September 30, 2015 or at any time during the periods presented. Issuance of Common Stock —In 2013, Headwaters issued 11.5 million shares of common stock for gross cash proceeds of approximately $83.4 million. Offering costs totaled approximately $5.4 million, resulting in net proceeds of approximately $78.0 million. Shelf Registration —In August 2015, Headwaters filed a universal shelf registration statement with the SEC. A prospectus supplement describing the terms of any future securities to be issued is required to be filed before any offering can commence under the registration statement. Treasury Shares Held for Deferred Compensation Obligation —In accordance with the terms of the Directors' Deferred Compensation Plan (DDCP), non-employee directors can elect to defer certain compensation and choose from various options how the deferred compensation will be invested. One of the investment options is Headwaters common stock. When a director chooses Headwaters stock as an investment option, Headwaters purchases the common stock in accordance with the director's request and holds the shares until such time as the deferred compensation obligation becomes payable, normally when the director retires from the Board. At such time, the shares held by Headwaters are distributed to the director in satisfaction of the obligation. Headwaters accounts for the purchase of common stock as treasury stock, at cost. The corresponding deferred compensation obligation is reflected in capital in excess of par value. Changes in the fair value of the treasury stock are not recognized. As of September 30, 2015, the treasury stock and related deferred compensation obligation had fair values of approximately $1.6 million, which was $0.6 million higher than the carrying values at cost. Grants and Cancellations of Stock Incentive Awards —The Compensation Committee of Headwaters' Board of Directors (the Committee) approved grants of approximately 0.5 million, 0.5 million and 0.3 million stock-based awards during 2013, 2014 and 2015, respectively. The awards consisted of stock-settled SARs and restricted stock granted to officers and employees. Subsequent to September 30, 2015, the Committee approved grants of approximately 0.3 million stock-based awards to officers and employees. All stock-based awards for the years 2013 through 2015 and subsequent thereto were granted under the stockholder-approved 2010 Incentive Compensation Plan, and all of the SARs vest over an approximate three-year period, have an exercise price equal to the fair market value of Headwaters' common stock on the dates of grant and a contractual term of 10 years. Vesting of the SARs and restricted stock granted prior to September 30, 2015 was subject to 60-day average stock price hurdles that precluded vesting unless the stock price exceeded by predetermined amounts the stock prices on the dates of grant, which thresholds must be reached prior to the final vest dates. The stock price thresholds for all of those SAR and restricted stock grants have been met. When exercised by grantees, stock-settled SARs are settled in Headwaters' common stock. Headwaters has also granted cash-settled SARs as described in Note 13. Stock-Based Compensation —Stock-based compensation expense was approximately $1.7 million in 2013, $2.2 million in 2014 and $2.8 million in 2015. The total income tax benefit recognized for stock-based compensation in the consolidated statements of income was $0 for 2013 and 2014 and $1.0 million for 2015. Valuation Assumptions —The fair values of stock-settled SARs have been estimated using the B-S-M model. The following table summarizes the assumptions used in determining the fair values of these awards for the years indicated. 2013 2014 2015 Expected stock volatility 65% 60% 60% Risk-free interest rates 0.8% - 1.2% 1.4% - 2.0% 1.0% - 1.7% Expected lives (beyond vest dates) 4 years 4 years 4 years Dividend yield 0% 0% 0% Expected stock price volatility was estimated primarily using historical volatilities of Headwaters' stock. Implied volatilities of traded options on Headwaters' stock, volatility predicted by other models, and an analysis of volatilities used by other public companies in comparable lines of business to Headwaters were also considered. Risk-free interest rates used were the U.S. Treasury bond yields with terms corresponding to the expected terms of the awards being valued. In estimating expected lives, Headwaters considered the contractual and vesting terms of awards, along with historical experience; however, due to insufficient pertinent historical data from which to reliably estimate expected lives, Headwaters used estimates based on the "simplified method" set forth by the SEC in Staff Accounting Bulletins No. 107 and 110, where expected life is estimated by summing the award's vesting term and contractual term and dividing that result by two. Insufficient historical data from which to more reliably estimate expected lives is expected to exist for the foreseeable future due to the varying terms of awards granted in recent and past years, along with other factors. Equity Compensation Plans —Headwaters has five equity compensation plans under which outstanding awards have been granted, four of which have been approved by stockholders. In connection with stockholder approval of the newest plan, the 2010 Incentive Compensation Plan (2010 ICP), Headwaters agreed to not issue any additional stock-based awards under any of its other existing incentive compensation plans. Following the grants of equity-based awards made subsequent to September 30, 2015, approximately 3.3 million shares were available for future grants under the 2010 ICP. Headwaters uses newly issued shares to meet its obligations to issue stock when awards are exercised. The Committee, or in its absence the full Board, administers and interprets all equity compensation plans. This Committee is authorized to grant stock-based awards and other awards both under the plans and outside of any plan to eligible employees, officers, directors, and consultants of Headwaters. Terms of awards granted under the plans, including vesting requirements, are determined by the Committee and historically have varied significantly. Most outstanding awards granted under the plans vest over a three-year period, expire ten years from the date of grant and are not transferable other than by will or by the laws of descent and distribution. Stockholder Approval of Equity Compensation Plans —The following table presents information related to stockholder approval of equity compensation plans as of September 30, 2015: (in thousands of shares) Plan Category Maximum shares to be issued upon exercise of options and other awards Weighted-average exercise price of outstanding options and other awards Shares remaining available for future issuance under existing equity compensation plans (excluding shares reflected in the first column) Plans approved by stockholders $ Plan not approved by stockholders ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock Options —The following table summarizes the activity for all of Headwaters' stock options: (in thousands, except per-share amounts) Shares Weighted- average exercise price Weighted- average remaining contractual term in years Aggregate intrinsic value Outstanding at September 30, 2012 $ Forfeited or expired ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at September 30, 2013 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Forfeited or expired ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at September 30, 2014 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Forfeited or expired ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at September 30, 2015 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exercisable at September 30, 2013 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exercisable at September 30, 2014 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exercisable at September 30, 2015 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ SARs —The following table summarizes the activity for all of Headwaters' stock-settled SARs: (in thousands, except per-share amounts) Shares Weighted- average threshold price Weighted- average remaining contractual term in years Aggregate intrinsic value Outstanding at September 30, 2012 $ Granted $ Exercised ) Forfeited or expired ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at September 30, 2013 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Granted $ Exercised ) Forfeited or expired ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at September 30, 2014 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Granted $ Exercised ) Forfeited or expired ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at September 30, 2015 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exercisable at September 30, 2013 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exercisable at September 30, 2014 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exercisable at September 30, 2015 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The weighted-average grant-date fair value of SARs granted was $3.38, $4.40 and $6.41 in 2013, 2014 and 2015, respectively. The total intrinsic value of SARs exercised was approximately $1.8 million, $1.1 million and $3.9 million in 2013, 2014 and 2015, respectively. Other Stock-Based Awards and Unrecognized Compensation Cost —In addition to the SARs granted as reflected in the table above, during 2013 through 2015 Headwaters also issued approximately 0.4 million shares of restricted common stock to officers and employees, all of which vests over an approximate three-year period. The restricted stock was issued at no cost to the recipients and compensation expense equal to the trading price of the stock on the dates of grant is therefore recognized over the respective vesting periods, which also represent the requisite service periods. The following table summarizes the activity for Headwaters' nonvested restricted stock during 2015: (in thousands of shares) Shares Weighted- average grant date fair value Outstanding at beginning of year $ Granted Vested ) Forfeited ) ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at end of year $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Headwaters also recognizes compensation expense in connection with its Employee Stock Purchase Plan (ESPP). Compensation expense related to restricted stock and the ESPP was approximately $0.7 million, $0.9 million and $1.4 million in 2013, 2014 and 2015, respectively. As of September 30, 2015, there was approximately $2.3 million of total compensation cost related to unvested awards not yet recognized, which will be recognized over a weighted-average period of approximately 1.7 years. Due to the grant of stock-based awards subsequent to September 30, 2015 described above, the amount of total compensation cost related to nonvested awards has increased, and the weighted-average period over which compensation cost will be recognized has changed. |
Earnings per Share
Earnings per Share | 12 Months Ended |
Sep. 30, 2015 | |
Earnings per Share | |
Earnings per Share | 12. Earnings Per Share The following table sets forth the computations of basic and diluted EPS for the years indicated, reflecting the amounts attributable to Headwaters and excluding the amounts attributable to the non-controlling interest in Entegra. In accordance with ASC 260, income from continuing operations for each period is used as the control number in determining whether potentially dilutive common shares should be included in the diluted earnings per share computations for those periods, even when the effect of doing so is anti-dilutive to the other per-share amounts. (in thousands, except per-share amounts) 2013 2014 2015 Numerator: Income from continuing operations $ $ $ Income from continuing operations attributable to non-controlling interest ) ) Adjustment of estimated redemption value of non-controlling interest ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Numerator for basic and diluted earnings per share from continuing operations—income from continuing operations attributable to Headwaters Incorporated Numerator for basic and diluted earnings per share from discontinued operations—loss from discontinued operations, net of income taxes ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Numerator for basic and diluted earnings per share—net income attributable to Headwaters Incorporated $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Denominator: Denominator for basic earnings per share—weighted-average shares outstanding Effect of dilutive securities—shares issuable upon exercise of options and SARs and vesting of restricted stock ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Denominator for diluted earnings per share—weighted-average shares outstanding after assumed exercises and vesting ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic income (loss) per share attributable to Headwaters Incorporated: From continuing operations $ $ $ From discontinued operations ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted income (loss) per share attributable to Headwaters Incorporated: From continuing operations $ $ $ From discontinued operations ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Anti-dilutive securities not considered in diluted EPS calculation: Stock-settled SARs Stock options Restricted stock |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies | |
Commitments and Contingencies | 13. Commitments and Contingencies Commitments and contingencies as of September 30, 2015 not disclosed elsewhere, are as follows. Leases —Headwaters has noncancellable operating leases for certain facilities and equipment. These leases, most of which are in the construction materials segment, currently are set to expire in various years through 2032, but many have renewal options under which the lease term can be extended. Rental expense was approximately $34.9 million, $33.4 million and $34.4 million in 2013, 2014 and 2015, respectively. As of September 30, 2015, minimum rental payments due under these leases are as follows: Year ending September 30: (in thousands) 2016 $ 2017 2018 2019 2020 Thereafter ​ ​ ​ ​ ​ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Purchase Commitments —Certain CCP contracts with suppliers require Headwaters to make minimum purchases of CCP materials. Actual purchases under contracts with minimum requirements were approximately $14.9 million, $20.3 million and $32.7 million in 2013, 2014 and 2015, respectively. As of September 30, 2015, minimum future purchase requirements are as follows: Year ending September 30: (in thousands) 2016 $ 2017 2018 2019 2020 Thereafter ​ ​ ​ ​ ​ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Subsequent to September 30, 2015, certain contract extensions were executed that increased the minimum future purchase requirements shown in the above table by a total of approximately $43.0 million. Compensation Arrangements — Employment Agreements. Headwaters has entered into employment agreements with its Chief Executive Officer (CEO), Chief Financial Officer (CFO) and three other employees. The agreements have original terms of approximately three years and the CEO and CFO agreements are renewable for one-year terms. The CEO's agreement calls for supplemental retirement contributions equal to 72.5% of his salary during the term of the agreement. The aggregate commitment for salaries and other obligations for all future periods as of September 30, 2015, assuming no renewals, is approximately $3.3 million. The agreements also provide for certain termination benefits. If the officers' and employees' employment would have terminated on September 30, 2015 (but not by reason of a change in control, which is described hereafter), the aggregate termination benefits as of that date would have been approximately $10.3 million, of which approximately $4.0 million has been expensed and accrued. Executive Change in Control Agreements. The Compensation Committee (Committee) has approved "Executive Change in Control Agreements" with certain officers and employees. Upon a change in control, as defined, the agreements provide for immediate vesting and exercisability of all outstanding stock-based awards. In addition, if termination of employment occurs within a specified period of a change in control, the agreements provide for i) severance pay equal to a stipulated multiple of the sum of the person's current annual salary plus a bonus component based on either past bonuses paid or the target bonus for the fiscal year in which the change in control occurs; and ii) continuance of health and other benefits and perquisites for a stipulated period following the change in control. Further, if any long-term cash awards are not continued, payment shall be made based on the pro-rated level of performance achieved as of the end of the most recently completed fiscal quarter. If terminations associated with a change in control would have occurred on September 30, 2015, the cash severance payments due to the officers and employees (including amounts due under long-term cash awards and the estimated costs of continuing benefits and perquisites) and the excess of the market value of unvested stock-based awards on that date above related exercise prices would have aggregated approximately $25.6 million (of which approximately $10.8 million has been expensed and accrued). Cash Performance Unit Awards. In 2013, the Committee approved grants of performance unit awards to certain officers and employees, to be settled in cash, based on the achievement of cash flow generated during 2013. For purposes of these awards, cash flow is generally defined as operating income plus depreciation, amortization and asset impairments, reduced by capital expenditures. The number of awards granted was determined using a target compensation amount for each participant and was adjusted, subject to prescribed limitations, based on the actual cash flow generated during the 2013 performance year, using a threshold/target/maximum adjustment structure. The awards provided for 50% vesting as of September 30, 2014 and 50% vesting as of September 30, 2015, provided the participant was still employed by Headwaters on those vest dates. The terms of the awards also provided for adjustment for changes in Headwaters' average stock price for the 60 days prior to and including September 30, 2013 as compared to Headwaters' average stock price for the 60 days prior to and including September 30, 2012. Approximately $4.7 million of expense was recorded for the 2013 awards, all of which was recognized in 2013. In 2014 and 2015, the Committee approved grants of performance unit awards to certain officers and employees for cash flow generated during those fiscal years, with terms similar to the 2013 awards described above, with an added feature that provides for potential further adjustment based on cash flows generated in the two years subsequent to the year of grant, or the base performance year. Approximately $5.1 million and $8.6 million of expense was recognized for these awards during 2014 and 2015, which amounts are subject to adjustment, depending on cash flows generated in future years. As of September 30, 2015, approximately $15.7 million was accrued for all performance unit awards outstanding but unpaid as of that date. Subsequent to September 30, 2015, the Committee approved grants of performance unit awards to certain officers and employees for cash flow generated during 2016, with terms similar to those described above for 2014 and 2015. Expense for these awards will be recognized during 2016, subject to potential adjustments in 2017 and 2018, depending on cash flows generated in those years. Cash-Settled SAR Grants. In 2012, the Committee approved grants to certain officers and employees of approximately 1.0 million cash-settled SARs, approximately 0.1 million of which remain outstanding as of September 30, 2015. These SARs, which are considered liability awards, vested in annual installments through September 30, 2014 and are settled in cash upon exercise by the employee. As of September 30, 2015, approximately $1.6 million has been accrued for outstanding awards because the stock price at that date was above the grant-date stock price of $1.85. Changes in Headwaters' stock price through the dates employees exercise the SARs (whether positive or negative) will result in adjustments to compensation expense and will be reflected in Headwaters' statement of income each quarter in fiscal 2016, until the SARs are exercised or expire on September 30, 2016. In 2011, the Committee approved grants to certain employees of approximately 0.4 million cash-settled SARs, none of which remain outstanding as of September 30, 2015, the termination date of these awards. Compensation expense for all cash-settled SARs was approximately $4.6 million for both 2013 and 2014 and $3.1 million for 2015. Employee Benefit Plans —In addition to standard health and life insurance programs, Headwaters has six employee benefit plans that were operative during the years presented: the 401(k) Profit Sharing Plan (401(k) Plan), the 2000 Employee Stock Purchase Plan (ESPP), the Incentive Bonus Plan (IBP), the Deferred Compensation Plan (DCP), the 2010 Incentive Compensation Plan (2010 ICP) and an Executive Retirement Program (ERP). Substantially all employees of Headwaters are eligible to participate in the 401(k) Plan and the ESPP after meeting length of service requirements. Only designated employees are eligible to participate in the IBP, DCP, 2010 ICP and ERP. The total expense for all of Headwaters' benefit plans combined, including all general and discretionary bonuses and cash-settled SARs, but excluding stock-settled SARs and ESPP expenses (which are included in stock-based compensation) and standard health and life insurance programs, was approximately $23.0 million, $26.7 million and $34.8 million in 2013, 2014 and 2015, respectively. 401(k) Plan. Under the terms of the 401(k) Plan, eligible employees may elect to make tax-deferred contributions of up to 50% of their compensation, subject to statutory limitations. Headwaters has a "safe harbor" 401(k) plan which requires a mandatory minimum employer match of employee contributions and immediate vesting of employer contributions. Headwaters is not required to be profitable to make the matching contributions. ESPP. The ESPP provides eligible employees with an opportunity to purchase Headwaters common stock on favorable terms and to pay for such purchases through payroll deductions. Approximately 4.3 million shares of common stock have been reserved for issuance under the ESPP and approximately 2.3 million shares remain available for future issuance as of September 30, 2015. In accordance with terms of the ESPP, participating employees purchase shares of stock directly from Headwaters, which provides newly-issued shares to meet its commitment. The ESPP is intended to comply with Section 423 of the Internal Revenue Code, but is not subject to the requirements of ERISA. Employees purchase stock through payroll deductions of 1% to 10% of cash compensation, subject to certain limitations, which stock is purchased in a series of quarterly offerings. The cost per share to the employee is 85% of the stock's fair market value at the end of each quarterly offering period. IBP. The IBP, the specifics of which are approved annually by the Committee, provides for annual cash bonuses to be paid if Headwaters accomplishes certain financial goals and if participating employees meet individual goals. DCP. The DCP is a nonqualified plan that allows eligible employees to make tax-deferred contributions of up to 50% of their base compensation and 100% of their incentive compensation. Headwaters may match employee contributions up to a designated maximum rate, which matching contributions have historically vested after three years of plan eligibility. Effective January 1, 2013, Headwaters agreed to a match (similar to the "safe harbor" 401(k) match discussed above) of certain employee contributions, again with immediate vesting of employer contributions. Headwaters is not required to be profitable to make the matching contributions. 2010 ICP. Following stockholder approval of the 2010 ICP, Headwaters has issued long-term cash and equity awards under that plan. Significant obligations under the 2010 ICP include i) the cash performance unit awards described above; ii) the cash-settled SAR grants described above; and iii) grants of certain stock-based awards described in Note 11. ERP. In 2013, Headwaters initiated the ERP to provide retirement benefits to designated officers and employees. There is no formal plan document governing this program, which operates and is funded at the sole discretion of the Committee. Although it is the current intent of the Committee to consider funding the ERP annually, there is no obligation to make contributions in any amount for any period, irrespective of whether Headwaters is profitable. Headwaters' contributions to participants in the ERP vest 20% per year once a participant reaches the age of 61 and become fully vested at age 65. Self Insurance —Headwaters has adopted self-insured medical insurance plans that cover substantially all employees. There is stop-loss coverage for amounts in excess of approximately $0.2 million per individual per year. Headwaters also self insures for workers compensation claims in most states, limited by stop-loss coverage which begins for amounts in excess of $0.35 million per occurrence and approximately $5.2 million in the aggregate annually. Headwaters has contracted with third-party administrators to assist in the payment and administration of claims. Insurance claims are recognized as expense when incurred and include an estimate of costs for claims incurred but not reported at the balance sheet date. As of September 30, 2015, approximately $5.5 million was accrued for medical and workers compensation claims incurred on or before September 30, 2015 that have not been paid or reported. Property, Plant and Equipment —As of September 30, 2015, Headwaters was committed to spend approximately $1.3 million on capital projects that were in various stages of completion. Legal Matters —Headwaters has ongoing litigation and asserted claims which have been incurred during the normal course of business, including the specific matters discussed below. Headwaters intends to vigorously defend or resolve these matters by settlement, as appropriate. Management does not currently believe that the outcome of these matters will have a material adverse effect on Headwaters' operations, cash flow or financial position. Headwaters incurred approximately $3.3 million, $5.1 million and $2.2 million of expense for legal matters in 2013, 2014 and 2015, respectively. Except for 2014, when $2.8 million of expense was recorded for potential losses, costs for outside legal counsel comprised a majority of Headwaters' litigation-related costs in the years presented. Headwaters currently believes the range of potential loss for all unresolved legal matters, excluding costs for outside counsel, is from $2.5 million up to the amounts sought by claimants and has recorded a liability as of September 30, 2015 of $2.5 million. The substantial claims and damages sought by claimants in excess of this amount are not currently deemed to be probable. Headwaters' outside counsel and management currently believe that unfavorable outcomes of outstanding litigation beyond the amount accrued are neither probable nor remote. Accordingly, management cannot express an opinion as to the ultimate amount, if any, of Headwaters' liability, nor is it possible to estimate what litigation-related costs will be in future periods. The specific matters discussed below raise difficult and complex legal and factual issues, and the resolution of these issues is subject to many uncertainties, including the facts and circumstances of each case, the jurisdiction in which each case is brought, and the future decisions of juries, judges, and arbitrators. Therefore, although management believes that the claims asserted against Headwaters in the named cases lack merit, there is a possibility of material losses in excess of the amount accrued if one or more of the cases were to be determined adversely against Headwaters for a substantial amount of the damages asserted. It is possible that a change in the estimate of probable liability could occur, and the changes could be material. Additionally, as with any litigation, these proceedings require that Headwaters incur substantial costs, including attorneys' fees, managerial time and other personnel resources, in pursuing resolution. EPA. In April 2012, Headwaters Resources, Inc. (HRI) filed a complaint in the United States District Court for the District of Columbia against the United States Environmental Protection Agency (EPA). The complaint alleged that the EPA failed to review, and where necessary, revise RCRA subtitle D regulations applicable to the disposal of coal ash within the timeframe required by statute. Other parties also initiated litigation against the EPA alleging the same (and other) failures of the EPA to perform its duties regarding coal ash disposal regulations. HRI's complaint sought certain declaratory relief with respect to EPA rulemaking at issue in the case. The District Court consolidated HRI's case with related actions brought by other parties. In October 2013, the District Court granted summary judgment that the EPA failed to fulfill its statutory duty to review coal ash disposal regulations, among other things, ordering the EPA to propose a schedule to complete its review of coal ash disposal regulations, and, as necessary, revise the regulations. In May 2014, the District Court entered a consent decree ordering the EPA to take final action in December 2014 regarding EPA's proposed revisions of RCRA subtitle D regulations pertaining to coal combustion residuals. In December 2014, the EPA issued a prepublication notice of a final rule to regulate the disposal of coal combustion residuals as solid (non-hazardous) waste under subtitle D of RCRA, with national minimum criteria for CCR landfills and impoundments consisting of location restrictions, design and operating criteria, groundwater monitoring and corrective action, closure requirements, post closure care, recordkeeping and reporting, and other requirements. The final rule was published in the Federal Register in April 2015 and became effective October 19, 2015. The litigation has been terminated. Fentress Families Trust. VFL Technology Corporation (VFL), acquired by HRI in 2004, provides services related to fly ash management to Virginia Electric and Power Company (VEPCO). In February 2012, 383 plaintiffs, most of whom are residents living in the City of Chesapeake, Virginia, filed a complaint in the State of Virginia Chesapeake Circuit Court against 15 defendants, including VEPCO, and certain other persons associated with the Battlefield Golf Course, including owners, developers, contractors, and others, including VFL and Headwaters, alleging causes of action for nuisance and negligence. The complaint alleges that fly ash used to construct the golf course was carried in the air and contaminated water exposing plaintiffs to dangerous chemicals and causing property damage. Plaintiffs' complaint seeks injunctive relief and damages of approximately $850.0 million for removal and remediation of the fly ash and the water supply, $1.9 billion for vexation, $8.0 million and other unspecified amounts for personal injuries, and $55.0 million as damages to properties, plus prejudgment interest, attorney fees, and costs. In a related case, other plaintiffs have filed a separate lawsuit asserting the same claims against the same defendants claiming additional damages totaling approximately $307.2 million. In August 2013 the court ruled on VEPCO's demurrer ordering that claims for personal injury or property damage based upon allegations of groundwater contamination were dismissed but that claims of nuisance and negligence based upon allegations of air-borne ash and contaminated surface water would not be dismissed. These cases are based on substantially the same alleged circumstances asserted in complaints filed by the plaintiffs in 2009 and voluntarily dismissed in 2010. Discovery is underway. HRI has filed claims for defense and indemnity with several of its insurers. In 2010, HRI filed suit in the United States District Court for the District of Utah against two insurers that denied coverage based on allegations in the 2009 Fentress complaints. The District Court ruled in the insurers' favor, which ruling was affirmed in October 2014 by the United States Court of Appeals for the Tenth Circuit. Another insurer continues to pay for the defense of the underlying cases under a reservation of rights. The relatively novel fly ash claims of the plaintiffs together with multiple insurance policies and policy periods make insurance coverage issues complex and uncertain. Moreover, plaintiffs' total claims exceed the potential limits of insurance available to HRI. Because resolution of the litigation is uncertain, legal counsel and management cannot express an opinion as to the ultimate amount, if any, of HRI's liability, or the insurers' obligation to indemnify HRI against loss, if any. Clary. In August 2014, 77 plaintiffs filed suit in the State of West Virginia Circuit Court of Mason County against four defendants, including American Electric Power Co., Inc., Ohio Power Company and an individual. Plaintiffs claim injury resulting from exposure to coal combustion waste from the Gavin Power Plant in Cheshire, Ohio while working as employees of contractors in the Gavin landfill. Plaintiffs claim wrongful death, failure to warn and protect, negligence per se, negligence, negligent infliction of emotional distress, heightened duty, strict liability, battery, fraud, fraudulent concealment, misrepresentation and related causes of action, seeking unspecified damages for medical monitoring and other costs, loss of consortium, lost wages, personal injuries, and punitive damages. In September 2015, the Ohio Power Company filed a third-party complaint against Headwaters and two other entities who were contractors to Ohio Power Company. Ohio Power Company claims that the third-party defendant contractors operated the Gavin landfill and that plaintiffs are former employees or family members of the third-party defendants. Ohio Power Company denies the plaintiffs' allegations, but states that Headwaters and the other third-party defendants are required to indemnify Ohio Power and provide contribution to the extent that Ohio Power is found liable to plaintiffs, including interest, fees, and costs. The case is stayed while issues about the proper venue for the litigation are resolved. Because resolution of the litigation is uncertain, legal counsel and management cannot express an opinion as to the ultimate amount, if any, of Headwaters' liability, or whether insurers have an obligation to indemnify Headwaters against loss, if any. Building Products Matters. There are litigation and pending and threatened claims made against certain subsidiaries within Headwaters' building products segment, with respect to several types of exterior finish systems manufactured and sold by its subsidiaries for application by contractors on residential and commercial buildings. The plaintiffs or claimants in these matters typically allege that the structures have suffered damage from water penetration due to some alleged failure of the roofing product or wall system. The claims most often involve alleged liabilities associated with certain roofing, stucco, and architectural stone products which are produced and sold by certain subsidiaries of Headwaters. The foregoing litigation and claims typically cite damages for alleged personal injuries, property damage, economic loss, unfair business practices and punitive damages. Claims made against Headwaters and its subsidiaries generally have been paid by their insurers, subject to Headwaters' payment of deductibles or self-insured retentions, although such insurance carriers typically have issued "reservation of rights" letters. There is no guarantee of insurance coverage or continuing coverage. These and future proceedings may result in substantial costs to Headwaters and its subsidiaries, including attorneys' fees, managerial time and other personnel resources and costs. Adverse resolution of these proceedings could have a materially negative effect on Headwaters' businesses, financial condition, and results of operation, and its ability to meet its financial obligations. Although Headwaters carries general and product liability insurance, subject to exclusions and self-insured retentions, Headwaters cannot assure that such insurance coverage will remain available, that Headwaters' insurance carriers will remain viable, will accept claims or that the insured amounts will cover all claims in excess of self-insured retentions. Future rate increases may also make such insurance uneconomical for Headwaters to maintain. Because resolution of the litigation, claims, and insurance coverage is uncertain, legal counsel and management cannot express an opinion as to the ultimate amount, if any, of Headwaters' or its subsidiaries' liability. Construction Materials Matters. In addition, there are litigation and pending and threatened claims made against HRI within Headwaters' construction materials segment, with respect to coal combustion products. The plaintiffs or claimants in these matters have alleged that inhalation or other exposure to fly ash is unsafe, and that HRI has failed to warn about the alleged dangers of fly ash exposure and the use of adequate protection, resulting in personal injury, contamination of land and water, and diminution in property value. The Fentress Family Trust and Clary cases summarized above are examples of these types of claims. The application of relatively novel fly ash claims to insurance policies is complex and uncertain and HRI has had limited success in tendering defense of such claims to insurers, which is dependent upon the alleged facts and specific policy terms. Adverse resolution of these claims and insurance coverage disputes could have a materially negative effect on Headwaters' businesses, financial condition, and results of operation, and its ability to meet its financial obligations. Because resolution of the litigation, claims, and insurance coverage disputes is uncertain, legal counsel and management cannot express an opinion as to the ultimate amount, if any, of HRI's liability. Discontinued Coal Cleaning Operations. The following litigation relates to the discontinued coal cleaning business: RLF Chinook Properties. In September 2015, RLF Chinook Properties, LLC filed suit in the State of Indiana Circuit Court of Clay against Covol Fuels No. 2, LLC, Headwaters Energy Services Corp., other Covol companies (collectively, "Covol"), as well as BRC Chinook, LLC and other BRC affiliates (collectively, "BRC"). Covol entered into a coal recovery agreement with plaintiff in 2007 with respect to coal at the RLF Chinook site. Covol assigned the coal recovery agreement to BRC in 2013. Plaintiff alleges that BRC has failed to fulfill certain obligations under the coal recovery agreement, including failure to submit reclamation plans to State of Indiana for approval and to restore and reclaim the site per the approved plan. Plaintiff alleges that Covol is liable for the claimed breaches under the coal recovery agreement, and seeks unspecified damages, together with attorney fees and costs. Because resolution of the litigation is uncertain, legal counsel and management cannot express an opinion as to the ultimate amount, if any, of Covol's liability. Other. Headwaters and its subsidiaries are also involved in other legal proceedings that have arisen in the normal course of business. Because resolution of these proceedings is uncertain, legal counsel and management cannot express an opinion as to the ultimate amount, if any, of Headwaters' liability. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions | |
Related Party Transactions | 14. Related Party Transactions In addition to transactions disclosed elsewhere, Headwaters was involved in the following transactions with related parties. A director of Headwaters, who retired from the Board in 2014, was also a principal in one of the insurance brokerage companies Headwaters uses to purchase certain insurance benefits for its employees. Commissions paid to that company by providers of insurance services to Headwaters totaled approximately $0.1 million in both 2013 and 2014. Until December 2013, when the contract was terminated, a majority of one of Headwaters' subsidiary's transportation needs was provided by a company, two of the principals of which are related to an officer of the subsidiary. Costs incurred were approximately $6.4 million in 2013 and $1.4 million in 2014. |
Condensed Consolidating Financi
Condensed Consolidating Financial Information | 12 Months Ended |
Sep. 30, 2015 | |
Condensed Consolidating Financial Information | |
Condensed Consolidating Financial Information | 15. Condensed Consolidating Financial Information Headwaters' borrowings under the Term Loan Facility and the 7 1 / 4 % senior notes are jointly and severally, fully and unconditionally guaranteed by Headwaters Incorporated and by substantially all of Headwaters' 100%-owned domestic subsidiaries. Separate stand-alone financial statements and disclosures for Headwaters Incorporated and each of the guarantor subsidiaries are not presented because the guarantees are full and unconditional and the guarantor subsidiaries have joint and several liability. There are no significant restrictions on the ability of Headwaters Incorporated to obtain funds from the guarantor subsidiaries nor on the ability of the guarantor subsidiaries to obtain funds from Headwaters Incorporated or other guarantor subsidiaries. Non-guaranteeing entities include subsidiaries that are not 100% owned, foreign subsidiaries and joint ventures in which Headwaters has a non-controlling ownership interest. CONDENSED CONSOLIDATING BALANCE SHEET—September 30, 2014 (in thousands) Guarantor Subsidiaries Non-guarantor Subsidiaries Parent Company Eliminations and Reclassifications Headwaters Consolidated ASSETS Current assets: Cash and cash equivalents $ $ $ $ — $ Trade receivables, net Inventories Deferred income taxes ) Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current assets ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Property, plant and equipment, net — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other assets: Goodwill Intangible assets, net Investments in subsidiaries ) — Intercompany accounts and notes ) — Deferred income taxes ) — Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total other assets ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ $ $ $ — $ Accrued personnel costs Accrued interest Current income taxes ) Other accrued liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current liabilities ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Long-term liabilities: Long-term debt, net Income taxes ) Intercompany accounts and notes ) — Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total long-term liabilities ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Redeemable non-controlling interest in consolidated subsidiary ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stockholders' equity: Common stock Capital in excess of par value ) Retained earnings (accumulated deficit) ) ) ) Treasury stock ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total stockholders' equity ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities and stockholders' equity $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ CONDENSED CONSOLIDATING BALANCE SHEET—September 30, 2015 (in thousands) Guarantor Subsidiaries Non- guarantor Subsidiaries Parent Company Eliminations and Reclassifications Headwaters Consolidated ASSETS Current assets: Cash and cash equivalents $ $ $ $ — $ Trade receivables, net Inventories Current and deferred income taxes ) Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current assets ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Property, plant and equipment, net — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other assets: Goodwill Intangible assets, net Investments in subsidiaries ) — Intercompany accounts and notes ) — Deferred income taxes ) Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total other assets ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ $ $ $ — $ Accrued personnel costs Accrued interest Current and deferred income taxes ) — Other accrued liabilities Current portion of long-term debt ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current liabilities ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Long-term liabilities: Long-term debt, net Income taxes ) Intercompany accounts and notes ) — Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total long-term liabilities ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Redeemable non-controlling interest in consolidated subsidiary ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stockholders' equity: Common stock Capital in excess of par value ) Retained earnings (accumulated deficit) ) ) ) Treasury stock ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total stockholders' equity ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities and stockholders' equity $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ CONDENSED CONSOLIDATING STATEMENT OF INCOME Year Ended September 30, 2013 (in thousands) Guarantor Subsidiaries Parent Company Eliminations Headwaters Consolidated Revenue: Building products $ $ — $ — $ Construction materials Energy technology ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total revenue — — Cost of revenue: Building products Construction materials Energy technology ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total cost of revenue — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross profit — — Operating expenses: Selling, general and administrative Amortization ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total operating expenses — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (loss) ) — Other income (expense): Net interest expense ) ) ) Intercompany interest income (expense) ) — Equity in earnings of subsidiaries ) — Other, net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total other income (expense), net ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations before income taxes ) Income tax benefit (provision) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations ) Loss from discontinued operations, net of income taxes ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ CONDENSED CONSOLIDATING STATEMENT OF INCOME Year Ended September 30, 2014 (in thousands) Guarantor Subsidiaries Non- guarantor Subsidiaries Parent Company Eliminations Headwaters Consolidated Revenue: Building products $ $ $ — $ — $ Construction materials Energy technology ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total revenue — — Cost of revenue: Building products Construction materials Energy technology ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total cost of revenue — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross profit — — Operating expenses: Selling, general and administrative Amortization ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total operating expenses — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (loss) ) — Other income (expense): Net interest expense ) ) ) ) Intercompany interest income (expense) ) — Equity in earnings of subsidiaries ) — Other, net ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total other income (expense), net ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations before income taxes ) Income tax benefit (provision) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations ) Loss from discontinued operations, net of income taxes ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ) Net income attributable to non-controlling interest ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income attributable to Headwaters Incorporated $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ CONDENSED CONSOLIDATING STATEMENT OF INCOME Year Ended September 30, 2015 (in thousands) Guarantor Subsidiaries Non-guarantor Subsidiaries Parent Company Eliminations Headwaters Consolidated Revenue: Building products $ $ $ — $ — $ Construction materials Energy technology ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total revenue — — Cost of revenue: Building products Construction materials Energy technology ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total cost of revenue — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross profit — — Operating expenses: Selling, general and administrative Amortization ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total operating expenses — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (loss) ) — Other income (expense): Net interest expense ) ) ) Intercompany interest income (expense) ) ) — Equity in earnings of subsidiaries ) — Other, net ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total other income (expense), net ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (loss) from continuing operations before income taxes ) ) Income tax benefit (provision) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations ) Loss from discontinued operations, net of income taxes ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ) Net income attributable to non-controlling interest ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income attributable to Headwaters Incorporated $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Year Ended September 30, 2013 (in thousands) Guarantor Subsidiaries Parent Company Eliminations Headwaters Consolidated Cash flows from operating activities: Net income (loss) $ $ $ ) $ Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization Interest expense related to amortization of debt issue costs and debt discount Stock-based compensation Deferred income taxes Net gain on disposition of property, plant and equipment ) ) Loss on sale of discontinued operations, net of income taxes Equity in earnings of subsidiaries ) Increase in trade receivables ) ) Decrease in inventories Increase (decrease) in accounts payable and accrued liabilities ) ) Other changes in operating assets and liabilities, net ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by (used in) operating activities ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from investing activities: Business acquisitions ) ) Purchase of property, plant and equipment ) ) ) Proceeds from disposition of property, plant and equipment Proceeds from sale of discontinued operations Net decrease (increase) in long-term receivables and deposits ) ) Net change in other assets ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash used in investing activities ) ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from financing activities: Proceeds from issuance of common stock Payments on long-term debt ) ) Employee stock purchases Intercompany transfers ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by (used in) financing activities ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net increase (decrease) in cash and cash equivalents ) — Cash and cash equivalents, beginning of year ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents, end of year $ $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Year Ended September 30, 2014 (in thousands) Guarantor Subsidiaries Non- guarantor Subsidiaries Parent Company Eliminations Headwaters Consolidated Cash flows from operating activities: Net income $ $ $ $ ) $ Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization Interest expense related to amortization of debt issue costs and debt discount Stock-based compensation Deferred income taxes Net loss on disposition of property, plant and equipment Gain on sale of discontinued operations, net of income taxes ) ) Asset impairments Net loss of unconsolidated joint ventures Equity in earnings of subsidiaries ) Decrease (increase) in trade receivables ) Decrease (increase) in inventories ) ) Increase (decrease) in accounts payable and accrued liabilities ) ) Other changes in operating assets and liabilities, net ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by (used in) operating activities ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from investing activities: Business acquisitions ) ) ) Investments in unconsolidated joint ventures ) ) Purchase of property, plant and equipment ) ) ) ) Proceeds from disposition of property, plant and equipment Proceeds from sale of discontinued operations Net decrease in long-term receivables and deposits Net change in other assets ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash used in investing activities ) ) ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from financing activities: Net proceeds from issuance of long-term debt Payments on long-term debt ) ) Dividends paid to non-controlling interest in consolidated subsidiary ) ) Employee stock purchases Intercompany transfers ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by (used in) financing activities ) ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net increase (decrease) in cash and cash equivalents ) — Cash and cash equivalents, beginning of year ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents, end of year $ $ $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Year Ended September 30, 2015 (in thousands) Guarantor Subsidiaries Non-guarantor Subsidiaries Parent Company Eliminations Headwaters Consolidated Cash flows from operating activities: Net income $ $ $ $ ) $ Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization Interest expense related to amortization of debt issue costs and debt discount Stock-based compensation Deferred income taxes ) ) ) Tax benefit from exercise of stock appreciation rights and vesting of restricted stock ) ) ) Net loss (gain) on disposition of property, plant and equipment ) Loss on sale of discontinued operations, net of income taxes Net loss of unconsolidated joint ventures Equity in earnings of subsidiaries ) Decrease (increase) in trade receivables ) ) Increase in inventories ) ) ) Increase (decrease) in accounts payable and accrued liabilities ) ) ) Other changes in operating assets and liabilities, net ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by (used in) operating activities ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from investing activities: Business acquisitions ) ) Investment in unconsolidated joint venture ) ) Purchase of property, plant and equipment ) ) ) ) Proceeds from disposition of property, plant and equipment Net decrease in long-term receivables and deposits Net change in other assets ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash used in investing activities ) ) ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from financing activities: Net proceeds from issuance of long-term debt Payments on long-term debt ) ) Dividends paid to non-controlling interest in consolidated subsidiary ) ) Employee stock purchases Tax benefit from exercise of stock appreciation rights and vesting of restricted stock Intercompany transfers ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by (used in) financing activities ) ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net decrease in cash and cash equivalents ) ) ) — ) Cash and cash equivalents, beginning of year ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents, end of year $ $ $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Quarterly Financial Data (unaud
Quarterly Financial Data (unaudited) | 12 Months Ended |
Sep. 30, 2015 | |
Quarterly Financial Data (unaudited) | |
Quarterly Financial Data (unaudited) | 16. Quarterly Financial Data (unaudited) Summarized unaudited quarterly financial data for 2014 and 2015 is as follows. 2014(1)(2) (in thousands, except per-share amounts) First quarter Second quarter Third quarter Fourth quarter Full year Net revenue $ $ $ $ $ Gross profit Net income (loss)(3) ) ) Basic and diluted earnings (loss) per share(5) ) ) 2015(1)(2) (in thousands, except per-share amounts) First quarter Second quarter Third quarter Fourth quarter Full year Net revenue $ $ $ $ $ Gross profit Net income (loss)(3)(4) ) Basic earnings (loss) per share(5) ) Diluted earnings (loss) per share(5) ) (1) Headwaters' revenue is seasonal, typically with higher revenues in the third and fourth quarters of the fiscal year than in the first and second quarters. As a result, profitability is also usually higher in the last half of the fiscal year than in the first half of the year. (2) As described in Note 4, Headwaters acquired several businesses during 2014 and 2015 and these acquisitions have affected to a certain extent the comparability of the above information. (3) As described in Note 10, during 2014 and through the June 2015 quarter, Headwaters recorded a full valuation allowance on its net amortizable deferred tax assets and recorded income tax expense due to the combination of recognizing benefit for deferred tax assets only to the extent of projected fiscal year earnings, plus state income taxes in certain state jurisdictions. In the September 2015 quarter, Headwaters released a majority of the valuation allowance on NOL and tax credit carryforwards and certain other deferred tax assets. Approximately $96.8 million of the release represents a non-routine income tax benefit, which when combined with the 2015 utilization of $12.5 million, resulted in a total change in the valuation allowance of $109.3 million recorded in the year. (4) As described in Note 8, in the March 2015 quarter Headwaters incurred approximately $24.8 million of non-routine extinguishment loss related to early repayments of debt. (5) In accordance with ASC Topic 260 Earnings Per Share, EPS is computed independently for each of the four quarters in a fiscal year. The basic and diluted EPS computed for certain years may not equal the sum of the four quarterly computations due to the combination of profitable quarters and loss quarters and / or rounding conventions. |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 30, 2015 | |
Summary of Significant Accounting Policies | |
Principles of Consolidation | Principles of Consolidation —The consolidated financial statements include the accounts of Headwaters, all of its subsidiaries and other entities in which Headwaters has a controlling interest. In accordance with the requirements of Accounting Standards Codification (ASC) Topic 810 Consolidation, Headwaters is required to consolidate any variable interest entities for which it is the primary beneficiary. For investments in entities in which Headwaters has a significant influence over operating and financial decisions (generally defined as owning a voting or economic interest of 20% to 50%), Headwaters applies the equity method of accounting. In instances where Headwaters' investment is less than 20% and significant influence does not exist, investments are carried at cost. As of September 30, 2015, there are no material variable interest entities or equity-method investments. All significant intercompany transactions and accounts are eliminated in consolidation. |
Use of Estimates | Use of Estimates —The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect i) the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and ii) the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates. |
Segment Reporting, Major Customers and Other Concentrations of Risk | Segment Reporting, Major Customers and Other Concentrations of Risk —Headwaters currently operates three business segments: building products, construction materials and energy technology. Additional information about these segments is presented in Note 3. No customer accounted for over 10% of total revenue in any year presented and less than 10% of Headwaters' revenue was from sales outside the United States. Approximately 12%, 10% and 9% of Headwaters' total revenue and cost of revenue was for services in 2013, 2014 and 2015, respectively. Substantially all service-related revenue for all periods was in the construction materials segment. Headwaters normally purchases a majority of the polypropylene and poly vinyl chloride (PVC) used in its resin-based building products from a limited number of suppliers; however, both materials could be obtained from other suppliers if necessary and management currently believes any required change in suppliers would not be materially disruptive. |
Revenue Recognition and Cost of Revenue | Revenue Recognition and Cost of Revenue —Revenue from the sale of building products, CCPs and energy-related products is recognized upon passage of title to the customer, which coincides with physical delivery and assumption of risk of loss by the customer. Estimated sales rebates and discounts pertaining to the sale of building products are provided for at the time of sale and are based primarily upon established policies and historical experience. Revenues include transportation charges and shipping and handling fees associated with delivering products and materials to customers when the transportation and/or shipping and handling is contractually provided for between the customer and Headwaters. Cost of revenue includes shipping and handling fees. CCP service revenues are primarily earned under long-term contracts to dispose of residual materials created by coal-fired electric power generation. Generally, revenues under long-term site service contracts are recognized concurrently with the removal of material and are based on the volume of material removed at established prices per ton. Certain service revenue under these contracts is recognized on a time and materials basis in the period in which the services are performed. In compliance with contractual obligations, the cost of CCPs purchased from certain utilities is based on a percentage of the "net revenues" from sale of the CCPs purchased. Costs also include landfill fees and transportation charges to deliver non-marketable CCPs to landfills. |
Cash and Cash Equivalents | Cash and Cash Equivalents —Headwaters considers all short-term, highly-liquid investments with a maturity of three months or less when purchased to be cash equivalents. Certain cash and cash equivalents are deposited with financial institutions, and at times such amounts exceed insured depository limits. |
Receivables | Receivables —Allowances are provided for uncollectible accounts and notes when deemed necessary. Such allowances are based on an account-by-account analysis of collectability or impairment plus a provision for non-customer specific defaults based upon historical collection experience. Headwaters performs periodic credit evaluations of its customers but collateral is not required for trade receivables. Collateral is generally required for notes receivable, which were not material during the periods presented. |
Inventories | Inventories —Inventories are stated at the lower of cost or market (net realizable value). Cost includes direct material, transportation, direct labor and allocations of manufacturing overhead costs and is determined primarily using the first-in, first-out method. |
Property, Plant and Equipment | Property, Plant and Equipment —Property, plant and equipment are recorded at cost. For significant self-constructed assets, cost includes direct labor and interest. Expenditures for major improvements are capitalized; expenditures for maintenance, repairs and minor improvements are charged to expense as incurred. Assets are depreciated using primarily the straight-line method over their estimated useful lives, limited to the lease terms for improvements to leased assets. The units-of-production method is used to depreciate certain building products segment assets. Upon the sale or retirement of property, plant and equipment, any gain or loss on disposition is reflected in results of operations and the related asset cost and accumulated depreciation are removed from the respective accounts. |
Intangible Assets and Goodwill | Intangible Assets and Goodwill —Intangible assets consist primarily of identifiable intangible assets obtained in connection with acquisitions. With the exception of certain indefinite-lived trade names, intangible assets are amortized using the straight-line method, Headwaters' best estimate of the pattern of economic benefit, over their estimated useful lives. Goodwill consists of the excess of the purchase price for acquired businesses over the fair value of assets acquired, net of liabilities assumed. As described in more detail in Note 7, in accordance with ASC Topic 350 Intangibles—Goodwill and Other, goodwill and indefinite-lived intangible assets are not amortized, but are tested at least annually for impairment. Amortizable intangible assets are tested for impairment only when an indicator of impairment exists. |
Valuation of Long-Lived Assets | Valuation of Long-Lived Assets —Headwaters evaluates the carrying value of long-lived assets, including amortizable intangible assets, as well as the related depreciation and amortization periods, to determine whether adjustments to carrying amounts or to estimated useful lives are required based on current events and circumstances. The carrying value of a long-lived asset is considered impaired when the anticipated cumulative undiscounted cash flow from that asset is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. |
Debt Issue Costs and Debt Repayment Premiums | Debt Issue Costs and Debt Repayment Premiums —Debt issue costs represent direct costs incurred for the issuance of long-term debt and, except for costs related to the ABL Revolver (see Note 8), are reflected as a reduction of the carrying value of the respective long-term debt to which they relate. Debt issue costs related to the ABL Revolver are classified in other assets because the ABL Revolver has not been drawn since inception. Debt issue costs are amortized to interest expense over the terms of the respective debt using the effective interest method. When debt is repaid early, the portion of unamortized debt issue costs related to the early principal repayment is written off and included in interest expense. Any premiums associated with the repayment of debt are also charged to interest expense. |
Financial Instruments | Financial Instruments —Derivatives are recorded in the consolidated balance sheet at fair value, as required by ASC Topic 815 Derivatives and Hedging. Accounting for changes in the fair value of a derivative depends on the intended use of the derivative, which is established at inception. For derivatives designated as cash flow hedges and which meet the effectiveness guidelines of ASC Topic 815, changes in fair value, to the extent effective, are recognized in other comprehensive income until the hedged item is recognized in earnings. Hedge effectiveness is measured at least quarterly based on the relative changes in fair value between the derivative contract and the hedged item over time. Any change in fair value of a derivative resulting from ineffectiveness, or an excluded component of the gain or loss, is recognized immediately and is recorded as interest expense. Headwaters formally documents all hedge transactions at inception of the contract, including identification of the hedging instruments and the hedged items, as well as its risk management objectives and strategies for undertaking the hedge transaction. This process includes linking the derivatives that are designated as hedges to specific assets, liabilities, firm commitments or forecasted transactions. Headwaters also formally assesses the effectiveness of any hedging instruments on an ongoing basis. Historically, Headwaters has entered into hedge agreements primarily to limit its exposure for interest rate movements and certain commodity price fluctuations. In connection with the issuance of certain convertible senior subordinated notes, Headwaters entered into convertible note hedge and warrant transactions for the purpose of effectively increasing the common stock conversion price. This convertible note hedge terminated when the notes were repaid in full in 2014. Since that time, and as of September 30, 2015, Headwaters has had no material hedge agreements or other derivatives in place. |
Asset Retirement Obligations | Asset Retirement Obligations —From time to time Headwaters incurs asset retirement obligations associated with the restoration of certain CCP disposal sites. Headwaters records its legal obligations associated with the retirement of long-lived assets in accordance with the requirements of ASC Topic 410 Asset Retirements and Environmental Obligations. The fair value of a liability for an asset retirement obligation is recognized in the consolidated financial statements when the asset is placed in service. At such time, the fair value of the liability is estimated using discounted cash flows. In subsequent periods, the retirement obligation is accreted to its estimated future value as of the asset retirement date through charges to operating expenses. An asset equal in value to the retirement obligation is also recorded as a component of the carrying amount of the long-lived asset and is depreciated over the asset's useful life. As of September 30, 2014 and 2015, CCP asset retirement obligations totaled $0. However, as described in Note 5, one of Headwaters' subsidiaries is performing permit reclamation responsibilities at a former coal cleaning facility site. As of September 30, 2014 and 2015, approximately $8.0 million and $7.4 million, respectively, was accrued for this reclamation liability. |
Income Taxes | Income Taxes —Headwaters files a consolidated federal income tax return with substantially all of its subsidiaries. Income taxes are determined on an entity-by-entity basis and are accounted for in accordance with ASC Topic 740 Income Taxes. Headwaters recognizes deferred tax assets or liabilities for the expected future tax consequences of events that have been recognized in the financial statements or in income tax returns. Deferred tax assets or liabilities are determined based upon the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates expected to apply when the differences are expected to be settled or realized. Deferred income tax assets are periodically reviewed for recoverability based on current events, and valuation allowances are provided as necessary. Expenses for interest and penalties related to income taxes are classified within the income tax provision. |
Advertising Costs | Advertising Costs —Advertising costs are expensed as incurred, except for the cost of certain materials which are capitalized and amortized to expense as the materials are distributed. Total advertising costs were approximately $6.2 million, $8.0 million and $7.1 million in 2013, 2014 and 2015, respectively. |
Warranty Costs | Warranty Costs —Provision is made for warranty costs at the time of sale, based upon established policies and historical experience. |
Contingencies | Contingencies —In accounting for legal matters and other contingencies, Headwaters follows the guidance in ASC Topic 450 Contingencies, under which loss contingencies are accounted for based upon the likelihood of an impairment of an asset or the incurrence of a liability. If a loss contingency is "probable" and the amount of loss can be reasonably estimated, it is accrued. If a loss contingency is "probable" but the amount of loss cannot be reasonably estimated, disclosure is made. If a loss contingency is "reasonably possible," disclosure is made, including the potential range of loss, if determinable. Loss contingencies that are "remote" are neither accounted for nor disclosed. Gain contingencies are given no accounting recognition until realized, but are disclosed if material. Headwaters records legal fees associated with loss contingencies when incurred and does not record estimated future legal fees. |
Stock-Based Compensation | Stock-Based Compensation —Headwaters uses the fair value method of accounting for stock-based compensation required by ASC Topic 718 Compensation—Stock Compensation. ASC Topic 718 requires companies to expense the value of equity-based awards. Stock-based compensation expense is reported within the same expense line items as used for cash compensation expense. Excess tax benefits resulting from exercise of stock options and stock appreciation rights (SARs) are reflected as necessary in the consolidated statement of changes in stockholders' equity and in financing cash flows in the statement of cash flows. Headwaters recognizes compensation expense equal to the grant-date fair value of stock-based awards for all awards expected to vest, over the period during which the related service is rendered by grantees. The fair value of stock-based awards is determined primarily using the Black-Scholes-Merton option pricing model (B-S-M model), adjusted where necessary to account for specific terms of awards that the B-S-M model does not have the capability to consider; for example, awards which have a cap on allowed appreciation. For such awards, the output determined by the B-S-M model has been reduced by an amount determined by a Quasi-Monte Carlo simulation to reflect the reduction in fair value associated with the appreciation cap or other award feature. The B-S-M model was developed for use in estimating the fair value of traded options that have no vesting restrictions and that are fully transferable. Option valuation models require the input of certain subjective assumptions, including expected stock price volatility and expected term. For stock-based awards, Headwaters primarily uses the "graded vesting" or accelerated method to allocate compensation expense over the requisite service periods. Estimated forfeiture rates are based largely on historical data and ranged from 1% to 2% during the periods presented. As of September 30, 2015, the estimated forfeiture rate for most unvested awards was 1% per year. |
Earnings per Share Calculation | Earnings per Share Calculation —Earnings per share (EPS) has been computed based on the weighted-average number of common shares outstanding. Diluted EPS computations reflect the increase in weighted-average common shares outstanding that would result from the assumed exercise of outstanding stock-based awards calculated using the treasury stock method, and the assumed conversion of convertible securities using the if-converted method, when such stock-based awards or convertible securities are dilutive. In accordance with the requirements of ASC Topic 260 Earnings Per Share, the diluted EPS calculations consider all of the following as assumed proceeds in using the treasury stock method to calculate whether and to what extent options and SARs are dilutive: i) the amount employees must pay upon exercise; plus ii) the average amount of unrecognized compensation cost during the period attributed to future service; plus iii) the amount of tax benefits, if any, that would be credited to additional paid-in capital if the award were to be exercised. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements —In April 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2015-03, Interest—Imputation of Interest (ASC Topic 835-30). This new rule was issued to simplify the presentation of debt issue costs to require that debt issue costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issue costs were not affected by the amendments in the ASU. Early adoption of ASU 2015-03 is permitted for financial statements that have not been previously issued and Headwaters elected to adopt the ASU effective as of March 31, 2015, with retrospective application to the September 30, 2014 balance sheet. The effect of the adoption of ASU 2015-03 was to reclassify debt issue costs of approximately $7.1 million as of September 30, 2014 as a deduction from the related debt liabilities. Accordingly, other assets and total assets in the 2014 balance sheet were reduced by that amount, and long-term debt and total liabilities were reduced by the same amount. There was no effect on net income. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (ASC Topic 606). This new revenue standard creates a single source of revenue guidance for all companies in all industries and is more principles-based than current revenue guidance. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which deferred the effective date of ASU 2014-09. The mandatory adoption date of ASC 606 for Headwaters is now October 1, 2018. There are two methods of adoption allowed, either a "full" retrospective adoption or a "modified" retrospective adoption. Headwaters is currently evaluating the impact of ASC 606, but at the current time does not know what impact the new standard will have on revenue recognized and other accounting decisions in future periods, if any, nor what method of adoption will be selected if the impact is material. Headwaters has reviewed other recently issued accounting standards which have not yet been adopted in order to determine their potential effect, if any, on the results of operations or financial position of Headwaters. Based on the review of these other recently issued standards, Headwaters does not currently believe that any of those accounting pronouncements will have a significant effect on its current or future financial position, results of operations, cash flows or disclosures. |
Reclassifications | Reclassifications —Certain prior period amounts, including the changes described above for the accounting for debt issue costs, have been reclassified to conform to the current period's presentation. The reclassifications had no effect on net income, but the reclassification of debt issue costs did affect total assets and total liabilities. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Segment Reporting | |
Schedule Of Segment Reporting | 2013 (in thousands) Building products Construction materials Energy technology Corporate Totals Segment revenue $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization $ ) $ ) $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (loss) $ $ $ ) $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest expense ) Other income (expense), net Income tax provision ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations Loss from discontinued operations, net of income taxes ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Capital expenditures $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Segment assets $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2014 (in thousands) Building products Construction materials Energy technology Corporate Totals Segment revenue $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization $ ) $ ) $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (loss) $ $ $ ) $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest expense ) Other income (expense), net ) Income tax provision ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations Loss from discontinued operations, net of income taxes ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Capital expenditures $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Segment assets $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2015 (in thousands) Building products Construction materials Energy technology Corporate Totals Segment revenue $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization $ ) $ ) $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (loss) $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest expense ) Other income (expense), net ) Income tax benefit ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations Loss from discontinued operations, net of income taxes ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Capital expenditures $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Segment assets $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Acquisitions | |
Schedule of pro forma consolidated revenue and net loss | Unaudited (in thousands) 2013 2014 2015 Revenue $ $ $ Net income $ $ $ |
Schedule of activity of non-controlling interest | (in thousands) Estimated fair value as of acquisition date $ Net income attributable to non-controlling interest Dividends paid to non-controlling interest ) Adjustment of estimated redemption value ​ ​ ​ ​ ​ Balance as of September 30, 2014 Net income attributable to non-controlling interest Dividends paid to non-controlling interest ) ​ ​ ​ ​ ​ Balance as of September 30, 2015 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Kleer Lumber, Inc. | |
Acquisitions | |
Schedule of estimated fair values of assets acquired and liabilities assumed as of the acquisition date | (in thousands) Current assets $ Current liabilities ) Property, plant and equipment Intangible assets: Customer relationships (15 year life) Trade name (indefinite life) Goodwill ​ ​ ​ ​ ​ Net assets acquired $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Entegra | |
Acquisitions | |
Schedule of estimated fair values of assets acquired and liabilities assumed as of the acquisition date | (in thousands) Current assets $ Current liabilities ) Property, plant and equipment Intangible assets: Customer relationships (15 year life) Trade name (indefinite life) Goodwill ​ ​ ​ ​ ​ Net assets acquired Less redeemable non-controlling interest ) ​ ​ ​ ​ ​ Net assets attributable to Headwaters $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Gerard | |
Acquisitions | |
Schedule of estimated fair values of assets acquired and liabilities assumed as of the acquisition date | (in thousands) Current assets $ Current liabilities ) Property, plant and equipment Intangible assets: Customer relationships (15 year life) Trade name (indefinite life) Goodwill Long-term liabilities ) ​ ​ ​ ​ ​ Net assets acquired $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Discontinued Operations | |
Schedule Of Information For The Discontinued Coal Cleaning Business | (in thousands) 2013 2014 2015 Revenue $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss from operations of discontinued operations before income taxes $ ) $ ) $ ) Gain (loss) on disposal ) ) Income tax benefit ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss from discontinued operations, net of income taxes $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Current Assets and Current Li28
Current Assets and Current Liabilities (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Current Assets and Current Liabilities | |
Schedule of allowance for trade receivables | Receivables —Activity in the trade receivables allowance account was as follows for the three-year period ended September 30, 2015: (in thousands) Balance at beginning of year Charged to expense Accounts written off Balance at end of year 2013 $ $ $ ) $ 2014 ) 2015 ) |
Schedule of components of inventory | Inventories —Inventories consisted of the following at September 30: (in thousands) 2014 2015 Raw materials $ $ Finished goods ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of activity in the warranty liability account | Warranty Liabilities —Activity in the warranty liability account was as follows for the three-year period ended September 30, 2015: (in thousands) Balance at beginning of year Charged to expense Changes in prior year estimates Additions from acquisitions Payments for claims Balance at end of year 2013 $ $ $ $ $ ) $ 2014 ) 2015 ) ) |
Schedule of other accrued liabilities | Other Accrued Liabilities —Other accrued liabilities consisted of the following at September 30: (in thousands) 2014 2015 Products and services received but not yet invoiced $ $ Other ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Long-Lived Assets (Tables)
Long-Lived Assets (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Long-Lived Assets | |
Schedule of property, plant and equipment | Property, Plant and Equipment —Property, plant and equipment consisted of the following at September 30: (in thousands of dollars) Estimated useful lives 2014 2015 Land and improvements 15 - 40 years $ $ Buildings and improvements 5 - 40 years Equipment and vehicles 3 - 20 years Dies and molds 3 - 20 years Construction in progress — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less accumulated depreciation ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net property, plant and equipment $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of gross carrying amounts and accumulated amortization of intangible assets | The table also summarizes the gross carrying amounts and related accumulated amortization of intangible assets as of September 30: 2014 2015 (in thousands of dollars) Estimated useful lives Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Trade names Indefinite $ $ — $ $ — CCP contracts 15 - 20 years Customer relationships 5 - 17 years Trade names 5 - 20 years Patents and patented technologies 5 - 19 years Other 5 - 17 years ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of total currently estimated annual amortization expense | Year ending September 30: (in thousands) 2016 $ 2017 2018 2019 2020 |
Schedule of goodwill | Goodwill —Changes in the carrying amount of goodwill, by segment, are as follows for the two-year period ended September 30, 2015: (in thousands) Building products Construction materials Total Balances as of September 30, 2013 $ $ $ Goodwill related to 2014 acquisitions ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balances as of September 30, 2014 Goodwill related to 2015 acquisitions Adjustments to previously recorded amounts for 2014 acquisitions ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balances as of September 30, 2015 $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Long-term Debt (Tables)
Long-term Debt (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Long-term Debt | |
Schedule of the discounted carrying value of long-term debt | (in thousands) 2014 2015 Senior secured term loan, due March 2022 (face amount $423,938) $ $ 7 1 / 4 % Senior notes, due January 2019 (face amount $150,000) 7-5/8% Senior secured notes, repaid in March 2015 (face amount $400,000) 8.75% Convertible senior subordinated notes, repaid in February 2015 (face amount $49,791) ​ ​ ​ ​ ​ ​ ​ ​ Carrying amount of long-term debt, net of discounts and debt issue costs Less current portion ) ​ ​ ​ ​ ​ ​ ​ ​ Long-term debt $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule Of future maturities of long-term debt | Year ending September 30, (in thousands) 2016 $ 2017 2018 2019 2020 Thereafter ​ ​ ​ ​ ​ Total long-term debt $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Income Taxes | |
Schedule of income tax benefit (provision) | The income tax provision consisted of the following for the years ended September 30: (in thousands) 2013 2014 2015 Current tax benefit (provision): Federal $ ) $ $ State ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current tax provision ) ) ) Deferred tax benefit (provision): Federal ) ) ) State Change in valuation allowance ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax benefit (provision) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total income tax benefit (provision) $ ) $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of benefit (provision) for income taxes computed using statutory federal income tax rate | (in thousands) 2013 2014 2015 Tax provision at U.S. statutory rate $ ) $ ) $ ) State income taxes, net of federal tax effect ) ) ) Valuation allowance Non-deductible executive compensation ) ) Unrecognized tax benefits ) Other ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income tax benefit (provision) $ ) $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of deferred income tax assets and liabilities | The components of Headwaters' deferred income tax assets and liabilities were as follows as of September 30: (in thousands) 2014 2015 Deferred tax assets: NOL and capital loss carryforwards $ $ Tax credit carryforwards Estimated liabilities Stock-based compensation Debt repurchase premium Reserves and allowances Deferred revenue Other Valuation allowances ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets Deferred tax liabilities: Property, plant and equipment basis differences ) ) Goodwill and intangible asset basis differences ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax liabilities ) ) ​ ​ ​ ​ ​ ​ ​ ​ Net deferred tax asset (liability) $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of reconciliation of change in the amount of gross unrecognized income tax benefits | (in thousands) 2013 2014 2015 Gross unrecognized income tax benefits at beginning of year $ $ $ Changes based on tax positions related to the current year Increases for tax positions related to prior years Reductions for tax positions related to prior years ) Settlements ) Lapse of statute of limitations ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross unrecognized income tax benefits at end of year $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Equity Securities and Stock-B32
Equity Securities and Stock-Based Compensation (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Equity Securities and Stock-Based Compensation | |
Summary Of Assumptions Used In Determining The Fair Value Awards | 2013 2014 2015 Expected stock volatility 65% 60% 60% Risk-free interest rates 0.8% - 1.2% 1.4% - 2.0% 1.0% - 1.7% Expected lives (beyond vest dates) 4 years 4 years 4 years Dividend yield 0% 0% 0% |
Schedule Of Stockholder Approval Of Equity Compensation Plans | The following table presents information related to stockholder approval of equity compensation plans as of September 30, 2015: (in thousands of shares) Plan Category Maximum shares to be issued upon exercise of options and other awards Weighted-average exercise price of outstanding options and other awards Shares remaining available for future issuance under existing equity compensation plans (excluding shares reflected in the first column) Plans approved by stockholders $ Plan not approved by stockholders ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary Of Activity For Stock Options | (in thousands, except per-share amounts) Shares Weighted- average exercise price Weighted- average remaining contractual term in years Aggregate intrinsic value Outstanding at September 30, 2012 $ Forfeited or expired ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at September 30, 2013 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Forfeited or expired ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at September 30, 2014 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Forfeited or expired ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at September 30, 2015 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exercisable at September 30, 2013 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exercisable at September 30, 2014 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exercisable at September 30, 2015 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of Activity for Stock Settled SARs | (in thousands, except per-share amounts) Shares Weighted- average threshold price Weighted- average remaining contractual term in years Aggregate intrinsic value Outstanding at September 30, 2012 $ Granted $ Exercised ) Forfeited or expired ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at September 30, 2013 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Granted $ Exercised ) Forfeited or expired ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at September 30, 2014 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Granted $ Exercised ) Forfeited or expired ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at September 30, 2015 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exercisable at September 30, 2013 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exercisable at September 30, 2014 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exercisable at September 30, 2015 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary Of Activity For Nonvested Restricted Stock And Restricted Stock | (in thousands of shares) Shares Weighted- average grant date fair value Outstanding at beginning of year $ Granted Vested ) Forfeited ) ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at end of year $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Earnings per Share | |
Schedule of computation of basic and diluted EPS | (in thousands, except per-share amounts) 2013 2014 2015 Numerator: Income from continuing operations $ $ $ Income from continuing operations attributable to non-controlling interest ) ) Adjustment of estimated redemption value of non-controlling interest ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Numerator for basic and diluted earnings per share from continuing operations—income from continuing operations attributable to Headwaters Incorporated Numerator for basic and diluted earnings per share from discontinued operations—loss from discontinued operations, net of income taxes ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Numerator for basic and diluted earnings per share—net income attributable to Headwaters Incorporated $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Denominator: Denominator for basic earnings per share—weighted-average shares outstanding Effect of dilutive securities—shares issuable upon exercise of options and SARs and vesting of restricted stock ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Denominator for diluted earnings per share—weighted-average shares outstanding after assumed exercises and vesting ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic income (loss) per share attributable to Headwaters Incorporated: From continuing operations $ $ $ From discontinued operations ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted income (loss) per share attributable to Headwaters Incorporated: From continuing operations $ $ $ From discontinued operations ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Anti-dilutive securities not considered in diluted EPS calculation: Stock-settled SARs Stock options Restricted stock |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies | |
Schedule Of Minimum Rental Payments Due Under Leases | Year ending September 30: (in thousands) 2016 $ 2017 2018 2019 2020 Thereafter ​ ​ ​ ​ ​ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule Of Future Purchase Requirements | Year ending September 30: (in thousands) 2016 $ 2017 2018 2019 2020 Thereafter ​ ​ ​ ​ ​ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Condensed Consolidating Finan35
Condensed Consolidating Financial Information (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Condensed Consolidating Financial Information | |
Schedule of condensed consolidating balance sheet | CONDENSED CONSOLIDATING BALANCE SHEET—September 30, 2014 (in thousands) Guarantor Subsidiaries Non-guarantor Subsidiaries Parent Company Eliminations and Reclassifications Headwaters Consolidated ASSETS Current assets: Cash and cash equivalents $ $ $ $ — $ Trade receivables, net Inventories Deferred income taxes ) Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current assets ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Property, plant and equipment, net — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other assets: Goodwill Intangible assets, net Investments in subsidiaries ) — Intercompany accounts and notes ) — Deferred income taxes ) — Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total other assets ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ $ $ $ — $ Accrued personnel costs Accrued interest Current income taxes ) Other accrued liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current liabilities ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Long-term liabilities: Long-term debt, net Income taxes ) Intercompany accounts and notes ) — Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total long-term liabilities ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Redeemable non-controlling interest in consolidated subsidiary ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stockholders' equity: Common stock Capital in excess of par value ) Retained earnings (accumulated deficit) ) ) ) Treasury stock ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total stockholders' equity ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities and stockholders' equity $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ CONDENSED CONSOLIDATING BALANCE SHEET—September 30, 2015 (in thousands) Guarantor Subsidiaries Non- guarantor Subsidiaries Parent Company Eliminations and Reclassifications Headwaters Consolidated ASSETS Current assets: Cash and cash equivalents $ $ $ $ — $ Trade receivables, net Inventories Current and deferred income taxes ) Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current assets ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Property, plant and equipment, net — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other assets: Goodwill Intangible assets, net Investments in subsidiaries ) — Intercompany accounts and notes ) — Deferred income taxes ) Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total other assets ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ $ $ $ — $ Accrued personnel costs Accrued interest Current and deferred income taxes ) — Other accrued liabilities Current portion of long-term debt ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current liabilities ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Long-term liabilities: Long-term debt, net Income taxes ) Intercompany accounts and notes ) — Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total long-term liabilities ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Redeemable non-controlling interest in consolidated subsidiary ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stockholders' equity: Common stock Capital in excess of par value ) Retained earnings (accumulated deficit) ) ) ) Treasury stock ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total stockholders' equity ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities and stockholders' equity $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of condensed consolidating statement of operations | CONDENSED CONSOLIDATING STATEMENT OF INCOME Year Ended September 30, 2013 (in thousands) Guarantor Subsidiaries Parent Company Eliminations Headwaters Consolidated Revenue: Building products $ $ — $ — $ Construction materials Energy technology ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total revenue — — Cost of revenue: Building products Construction materials Energy technology ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total cost of revenue — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross profit — — Operating expenses: Selling, general and administrative Amortization ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total operating expenses — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (loss) ) — Other income (expense): Net interest expense ) ) ) Intercompany interest income (expense) ) — Equity in earnings of subsidiaries ) — Other, net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total other income (expense), net ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations before income taxes ) Income tax benefit (provision) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations ) Loss from discontinued operations, net of income taxes ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ CONDENSED CONSOLIDATING STATEMENT OF INCOME Year Ended September 30, 2014 (in thousands) Guarantor Subsidiaries Non- guarantor Subsidiaries Parent Company Eliminations Headwaters Consolidated Revenue: Building products $ $ $ — $ — $ Construction materials Energy technology ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total revenue — — Cost of revenue: Building products Construction materials Energy technology ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total cost of revenue — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross profit — — Operating expenses: Selling, general and administrative Amortization ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total operating expenses — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (loss) ) — Other income (expense): Net interest expense ) ) ) ) Intercompany interest income (expense) ) — Equity in earnings of subsidiaries ) — Other, net ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total other income (expense), net ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations before income taxes ) Income tax benefit (provision) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations ) Loss from discontinued operations, net of income taxes ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ) Net income attributable to non-controlling interest ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income attributable to Headwaters Incorporated $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ CONDENSED CONSOLIDATING STATEMENT OF INCOME Year Ended September 30, 2015 (in thousands) Guarantor Subsidiaries Non-guarantor Subsidiaries Parent Company Eliminations Headwaters Consolidated Revenue: Building products $ $ $ — $ — $ Construction materials Energy technology ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total revenue — — Cost of revenue: Building products Construction materials Energy technology ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total cost of revenue — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross profit — — Operating expenses: Selling, general and administrative Amortization ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total operating expenses — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (loss) ) — Other income (expense): Net interest expense ) ) ) Intercompany interest income (expense) ) ) — Equity in earnings of subsidiaries ) — Other, net ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total other income (expense), net ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (loss) from continuing operations before income taxes ) ) Income tax benefit (provision) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations ) Loss from discontinued operations, net of income taxes ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ) Net income attributable to non-controlling interest ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income attributable to Headwaters Incorporated $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of condensed consolidating statement of cash flows | CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Year Ended September 30, 2013 (in thousands) Guarantor Subsidiaries Parent Company Eliminations Headwaters Consolidated Cash flows from operating activities: Net income (loss) $ $ $ ) $ Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization Interest expense related to amortization of debt issue costs and debt discount Stock-based compensation Deferred income taxes Net gain on disposition of property, plant and equipment ) ) Loss on sale of discontinued operations, net of income taxes Equity in earnings of subsidiaries ) Increase in trade receivables ) ) Decrease in inventories Increase (decrease) in accounts payable and accrued liabilities ) ) Other changes in operating assets and liabilities, net ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by (used in) operating activities ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from investing activities: Business acquisitions ) ) Purchase of property, plant and equipment ) ) ) Proceeds from disposition of property, plant and equipment Proceeds from sale of discontinued operations Net decrease (increase) in long-term receivables and deposits ) ) Net change in other assets ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash used in investing activities ) ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from financing activities: Proceeds from issuance of common stock Payments on long-term debt ) ) Employee stock purchases Intercompany transfers ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by (used in) financing activities ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net increase (decrease) in cash and cash equivalents ) — Cash and cash equivalents, beginning of year ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents, end of year $ $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Year Ended September 30, 2014 (in thousands) Guarantor Subsidiaries Non- guarantor Subsidiaries Parent Company Eliminations Headwaters Consolidated Cash flows from operating activities: Net income $ $ $ $ ) $ Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization Interest expense related to amortization of debt issue costs and debt discount Stock-based compensation Deferred income taxes Net loss on disposition of property, plant and equipment Gain on sale of discontinued operations, net of income taxes ) ) Asset impairments Net loss of unconsolidated joint ventures Equity in earnings of subsidiaries ) Decrease (increase) in trade receivables ) Decrease (increase) in inventories ) ) Increase (decrease) in accounts payable and accrued liabilities ) ) Other changes in operating assets and liabilities, net ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by (used in) operating activities ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from investing activities: Business acquisitions ) ) ) Investments in unconsolidated joint ventures ) ) Purchase of property, plant and equipment ) ) ) ) Proceeds from disposition of property, plant and equipment Proceeds from sale of discontinued operations Net decrease in long-term receivables and deposits Net change in other assets ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash used in investing activities ) ) ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from financing activities: Net proceeds from issuance of long-term debt Payments on long-term debt ) ) Dividends paid to non-controlling interest in consolidated subsidiary ) ) Employee stock purchases Intercompany transfers ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by (used in) financing activities ) ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net increase (decrease) in cash and cash equivalents ) — Cash and cash equivalents, beginning of year ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents, end of year $ $ $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Year Ended September 30, 2015 (in thousands) Guarantor Subsidiaries Non-guarantor Subsidiaries Parent Company Eliminations Headwaters Consolidated Cash flows from operating activities: Net income $ $ $ $ ) $ Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization Interest expense related to amortization of debt issue costs and debt discount Stock-based compensation Deferred income taxes ) ) ) Tax benefit from exercise of stock appreciation rights and vesting of restricted stock ) ) ) Net loss (gain) on disposition of property, plant and equipment ) Loss on sale of discontinued operations, net of income taxes Net loss of unconsolidated joint ventures Equity in earnings of subsidiaries ) Decrease (increase) in trade receivables ) ) Increase in inventories ) ) ) Increase (decrease) in accounts payable and accrued liabilities ) ) ) Other changes in operating assets and liabilities, net ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by (used in) operating activities ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from investing activities: Business acquisitions ) ) Investment in unconsolidated joint venture ) ) Purchase of property, plant and equipment ) ) ) ) Proceeds from disposition of property, plant and equipment Net decrease in long-term receivables and deposits Net change in other assets ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash used in investing activities ) ) ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from financing activities: Net proceeds from issuance of long-term debt Payments on long-term debt ) ) Dividends paid to non-controlling interest in consolidated subsidiary ) ) Employee stock purchases Tax benefit from exercise of stock appreciation rights and vesting of restricted stock Intercompany transfers ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by (used in) financing activities ) ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net decrease in cash and cash equivalents ) ) ) — ) Cash and cash equivalents, beginning of year ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents, end of year $ $ $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Quarterly Financial Data (una36
Quarterly Financial Data (unaudited) (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Quarterly Financial Data (unaudited) | |
Summary Of Unaudited Quarterly Financial Data | Summarized unaudited quarterly financial data for 2014 and 2015 is as follows. 2014(1)(2) (in thousands, except per-share amounts) First quarter Second quarter Third quarter Fourth quarter Full year Net revenue $ $ $ $ $ Gross profit Net income (loss)(3) ) ) Basic and diluted earnings (loss) per share(5) ) ) 2015(1)(2) (in thousands, except per-share amounts) First quarter Second quarter Third quarter Fourth quarter Full year Net revenue $ $ $ $ $ Gross profit Net income (loss)(3)(4) ) Basic earnings (loss) per share(5) ) Diluted earnings (loss) per share(5) ) (1) Headwaters' revenue is seasonal, typically with higher revenues in the third and fourth quarters of the fiscal year than in the first and second quarters. As a result, profitability is also usually higher in the last half of the fiscal year than in the first half of the year. (2) As described in Note 4, Headwaters acquired several businesses during 2014 and 2015 and these acquisitions have affected to a certain extent the comparability of the above information. (3) As described in Note 10, during 2014 and through the June 2015 quarter, Headwaters recorded a full valuation allowance on its net amortizable deferred tax assets and recorded income tax expense due to the combination of recognizing benefit for deferred tax assets only to the extent of projected fiscal year earnings, plus state income taxes in certain state jurisdictions. In the September 2015 quarter, Headwaters released a majority of the valuation allowance on NOL and tax credit carryforwards and certain other deferred tax assets. Approximately $96.8 million of the release represents a non-routine income tax benefit, which when combined with the 2015 utilization of $12.5 million, resulted in a total change in the valuation allowance of $109.3 million recorded in the year. (4) As described in Note 8, in the March 2015 quarter Headwaters incurred approximately $24.8 million of non-routine extinguishment loss related to early repayments of debt. (5) In accordance with ASC Topic 260 Earnings Per Share, EPS is computed independently for each of the four quarters in a fiscal year. The basic and diluted EPS computed for certain years may not equal the sum of the four quarterly computations due to the combination of profitable quarters and loss quarters and / or rounding conventions. |
Description of Business and O37
Description of Business and Organization (Details) | 12 Months Ended |
Sep. 30, 2015item | |
Description of Business and Organization | |
Number of building materials segments | 2 |
Summary of Significant Accoun38
Summary of Significant Accounting Policies (Details) $ in Millions | 12 Months Ended | ||
Sep. 30, 2015USD ($)segmentitem | Sep. 30, 2014USD ($) | Sep. 30, 2013USD ($) | |
Summary of Significant Accounting Policies | |||
Number of business segments | segment | 3 | ||
Percentage of revenue from services | 9.00% | 10.00% | 12.00% |
Asset retirement obligations | $ 0 | $ 0 | |
Number of reclamation obligations | item | 1 | ||
Advertising costs | $ 7.1 | 8 | $ 6.2 |
Estimated forfeiture rate for unvested awards | 1.00% | ||
Reclassification of debt issue costs to offset related debt liabilities | 7.1 | ||
Coal Cleaning Business | |||
Summary of Significant Accounting Policies | |||
Number of reclamation obligations | item | 1 | ||
Accrued liability for reclamation obligations | $ 7.4 | $ 8 | |
Minimum | |||
Summary of Significant Accounting Policies | |||
Economic interest | 20.00% | ||
Estimated forfeiture rates | 1.00% | ||
Maximum | |||
Summary of Significant Accounting Policies | |||
Economic interest | 50.00% | ||
Ownership percentage - cost method | 20.00% | ||
Estimated forfeiture rates | 2.00% | ||
Maximum | Customer Concentration Risk | |||
Summary of Significant Accounting Policies | |||
Revenue accounted for, percentage | 10.00% | ||
Maximum | Geographic Concentration Risk | |||
Summary of Significant Accounting Policies | |||
Revenue accounted for, percentage | 10.00% |
Segment Reporting (Details)
Segment Reporting (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Sep. 30, 2015USD ($)segment | Sep. 30, 2014USD ($) | Sep. 30, 2013USD ($) | |
Segment Reporting | |||||||||||
Number of business segments | segment | 3 | ||||||||||
Segment revenue | $ 272,717 | $ 243,294 | $ 179,725 | $ 199,597 | $ 245,921 | $ 223,399 | $ 156,512 | $ 165,615 | $ 895,333 | $ 791,447 | $ 702,576 |
Depreciation and amortization | (53,973) | (55,134) | (52,317) | ||||||||
Operating income (loss) | 102,107 | 66,724 | 54,411 | ||||||||
Net interest expense | (64,219) | (46,329) | (42,566) | ||||||||
Other income (expense), net | (218) | (348) | 364 | ||||||||
Income tax benefit (provision) | (96,800) | 94,458 | (3,574) | (3,924) | |||||||
Income from continuing operations | 132,128 | 16,473 | 8,285 | ||||||||
Loss from discontinued operations, net of income taxes | (460) | (415) | (1,148) | ||||||||
Net income | 126,774 | $ 23,008 | $ (25,198) | $ 7,084 | 16,681 | $ 10,893 | $ (10,082) | $ (1,434) | 131,668 | 16,058 | 7,137 |
Capital expenditures | 36,859 | 35,799 | 29,119 | ||||||||
Segment assets | 979,019 | 896,306 | 979,019 | 896,306 | 718,527 | ||||||
Building products | |||||||||||
Segment Reporting | |||||||||||
Segment revenue | 523,643 | 472,434 | 394,324 | ||||||||
Construction materials | |||||||||||
Segment Reporting | |||||||||||
Segment revenue | 352,263 | 309,337 | 293,000 | ||||||||
Energy Technology | |||||||||||
Segment Reporting | |||||||||||
Segment revenue | 19,427 | 9,676 | 15,252 | ||||||||
Operating Segments | Building products | |||||||||||
Segment Reporting | |||||||||||
Segment revenue | 523,643 | 472,434 | 394,324 | ||||||||
Depreciation and amortization | (36,933) | (39,425) | (37,065) | ||||||||
Operating income (loss) | 64,418 | 46,888 | 34,194 | ||||||||
Capital expenditures | 25,454 | 25,307 | 21,455 | ||||||||
Segment assets | 412,867 | 411,968 | 412,867 | 411,968 | 306,686 | ||||||
Operating Segments | Construction materials | |||||||||||
Segment Reporting | |||||||||||
Segment revenue | 352,263 | 309,337 | 293,000 | ||||||||
Depreciation and amortization | (15,155) | (13,706) | (12,809) | ||||||||
Operating income (loss) | 64,984 | 51,503 | 43,519 | ||||||||
Capital expenditures | 5,855 | 5,721 | 4,851 | ||||||||
Segment assets | 294,057 | 325,140 | 294,057 | 325,140 | 358,684 | ||||||
Operating Segments | Energy Technology | |||||||||||
Segment Reporting | |||||||||||
Segment revenue | 19,427 | 9,676 | 15,252 | ||||||||
Depreciation and amortization | (1,372) | (1,731) | (2,153) | ||||||||
Operating income (loss) | 731 | (6,829) | (1,939) | ||||||||
Capital expenditures | 325 | 473 | 634 | ||||||||
Segment assets | 45,671 | 22,674 | 45,671 | 22,674 | 34,509 | ||||||
Corporate, Non-Segment | |||||||||||
Segment Reporting | |||||||||||
Segment revenue | 0 | 0 | 0 | ||||||||
Depreciation and amortization | (513) | (272) | (290) | ||||||||
Operating income (loss) | (28,026) | (24,838) | (21,363) | ||||||||
Capital expenditures | 5,225 | 4,298 | 2,179 | ||||||||
Segment assets | $ 226,424 | $ 136,524 | $ 226,424 | $ 136,524 | $ 18,648 |
Acquisitions (Details)
Acquisitions (Details) $ in Thousands | May. 16, 2014USD ($) | Dec. 12, 2013USD ($) | Dec. 31, 2012USD ($) | Nov. 30, 2015USD ($) | Sep. 30, 2015USD ($)item | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Sep. 30, 2015USD ($)item | Sep. 30, 2014USD ($) | Sep. 30, 2013USD ($) |
Acquisitions | |||||||||||||||
Consideration paid net of cash acquired | $ 5,650 | $ 95,604 | $ 43,250 | ||||||||||||
Number of product categories in niche roofing | item | 3 | 3 | |||||||||||||
Estimated fair values of assets acquired and liabilities assumed | |||||||||||||||
Goodwill | $ 178,199 | $ 175,586 | $ 178,199 | 175,586 | 137,198 | ||||||||||
Intangible assets acquired: | |||||||||||||||
Revenue | 272,717 | $ 243,294 | $ 179,725 | $ 199,597 | 245,921 | $ 223,399 | $ 156,512 | $ 165,615 | 895,333 | 791,447 | 702,576 | ||||
Net income | 126,774 | $ 23,008 | $ (25,198) | 7,084 | 16,681 | $ 10,893 | (10,082) | $ (1,434) | 131,668 | 16,058 | 7,137 | ||||
Non-controlling interest in consolidated subsidiary | |||||||||||||||
Balance | 13,252 | 13,252 | |||||||||||||
Net income attributable to non-controlling interest | 869 | 774 | 0 | ||||||||||||
Adjustment of estimated redemption value | 0 | 176 | 0 | ||||||||||||
Balance | 12,431 | 13,252 | 12,431 | 13,252 | |||||||||||
Construction materials | |||||||||||||||
Estimated fair values of assets acquired and liabilities assumed | |||||||||||||||
Goodwill | 118,435 | 118,899 | 118,435 | 118,899 | 115,999 | ||||||||||
Intangible assets acquired: | |||||||||||||||
Revenue | 352,263 | 309,337 | 293,000 | ||||||||||||
Building products | |||||||||||||||
Estimated fair values of assets acquired and liabilities assumed | |||||||||||||||
Goodwill | 59,764 | 56,687 | 59,764 | 56,687 | 21,199 | ||||||||||
Intangible assets acquired: | |||||||||||||||
Revenue | 523,643 | 472,434 | 394,324 | ||||||||||||
Acquisitions 2013, 2014 and 2015 | |||||||||||||||
Pro forma consolidated revenue and net income (loss) | |||||||||||||||
Revenue | 902,537 | 835,864 | 784,395 | ||||||||||||
Net income | 132,084 | 20,409 | 12,387 | ||||||||||||
Acquisitions 2013, 2014 and 2015 | Acquisition-related Costs | |||||||||||||||
Acquisitions | |||||||||||||||
Fees for advisory, legal and other professional services | 700 | 700 | 900 | ||||||||||||
Pro forma consolidated revenue and net income (loss) | |||||||||||||||
Other costs | 300 | ||||||||||||||
Acquisitions 2013, 2014 and 2015 | Fair Value Adjustment to Inventory | |||||||||||||||
Pro forma consolidated revenue and net income (loss) | |||||||||||||||
Nonrecurring expense related to the fair value adjustment to acquisition-date inventory | 1,200 | 1,200 | 500 | ||||||||||||
Acquisitions 2,013 | |||||||||||||||
Intangible assets acquired: | |||||||||||||||
Revenue | 28,600 | ||||||||||||||
Net income | 1,600 | ||||||||||||||
Kleer Lumber, Inc. | |||||||||||||||
Acquisitions | |||||||||||||||
Total cash consideration of acquisition | $ 43,300 | ||||||||||||||
Fees for advisory, legal and other professional services | $ 900 | ||||||||||||||
Estimated fair values of assets acquired and liabilities assumed | |||||||||||||||
Current assets | 5,818 | ||||||||||||||
Current liabilities | (3,093) | ||||||||||||||
Property, plant and equipment | 4,098 | ||||||||||||||
Goodwill | 20,527 | ||||||||||||||
Net assets acquired | $ 43,250 | ||||||||||||||
Intangible assets acquired: | |||||||||||||||
Period over which goodwill is expected to be deductible for tax purpose | 15 years | ||||||||||||||
Kleer Lumber, Inc. | Trade Names | |||||||||||||||
Intangible assets acquired: | |||||||||||||||
Indefinite lived intangible assets | $ 4,800 | ||||||||||||||
Kleer Lumber, Inc. | Customer Relationships | |||||||||||||||
Intangible assets acquired: | |||||||||||||||
Finite lived intangible assets | $ 11,100 | ||||||||||||||
Estimated useful lives | 15 years | ||||||||||||||
Acquisitions 2,014 | |||||||||||||||
Intangible assets acquired: | |||||||||||||||
Revenue | 47,600 | ||||||||||||||
Net income | 5,200 | ||||||||||||||
Roof Tile Acquisition LLC | |||||||||||||||
Intangible assets acquired: | |||||||||||||||
Percentage of equity interests acquired | 80.00% | ||||||||||||||
Entegra | |||||||||||||||
Acquisitions | |||||||||||||||
Total cash consideration of acquisition | $ 57,500 | ||||||||||||||
Fees for advisory, legal and other professional services | 400 | 400 | |||||||||||||
Estimated fair values of assets acquired and liabilities assumed | |||||||||||||||
Current assets | 8,261 | ||||||||||||||
Current liabilities | (3,422) | ||||||||||||||
Property, plant and equipment | 10,589 | ||||||||||||||
Goodwill | 28,156 | ||||||||||||||
Net assets acquired | 70,784 | ||||||||||||||
Less redeemable non-controlling interest | (13,252) | (13,252) | (13,252) | ||||||||||||
Net assets attributable to Headwaters | $ 57,532 | ||||||||||||||
Intangible assets acquired: | |||||||||||||||
Noncontrolling equity interest (as a percent) | 20.00% | ||||||||||||||
Minimum period following the acquisition date after which remaining noncontrolling equity interest may be acquired | 5 years | ||||||||||||||
Period over which goodwill is expected to be deductible for tax purpose | 15 years | ||||||||||||||
Non-controlling interest in consolidated subsidiary | |||||||||||||||
Balance | 13,252 | 13,252 | |||||||||||||
Estimated fair value as of acquisition date | $ 13,252 | 13,252 | 13,252 | ||||||||||||
Net income attributable to non-controlling interest | 869 | 774 | |||||||||||||
Dividends paid to non-controlling interest | (1,690) | (950) | |||||||||||||
Adjustment of estimated redemption value | 176 | ||||||||||||||
Balance | 12,431 | 13,252 | 12,431 | 13,252 | |||||||||||
Entegra | Trade Names | |||||||||||||||
Intangible assets acquired: | |||||||||||||||
Indefinite lived intangible assets | 6,600 | ||||||||||||||
Entegra | Customer Relationships | |||||||||||||||
Intangible assets acquired: | |||||||||||||||
Finite lived intangible assets | $ 20,600 | ||||||||||||||
Estimated useful lives | 15 years | ||||||||||||||
Gerard | |||||||||||||||
Acquisitions | |||||||||||||||
Total cash consideration of acquisition | $ 27,600 | ||||||||||||||
Fees for advisory, legal and other professional services | 300 | $ 300 | |||||||||||||
Estimated fair values of assets acquired and liabilities assumed | |||||||||||||||
Current assets | 9,236 | ||||||||||||||
Current liabilities | (1,691) | ||||||||||||||
Property, plant and equipment | 8,314 | ||||||||||||||
Goodwill and intangible assets | 7,719 | ||||||||||||||
Long-term liabilities | (3,906) | ||||||||||||||
Net assets acquired | $ 27,572 | ||||||||||||||
Intangible assets acquired: | |||||||||||||||
Period over which goodwill is expected to be deductible for tax purpose | 15 years | ||||||||||||||
Gerard | Trade Names | |||||||||||||||
Intangible assets acquired: | |||||||||||||||
Indefinite lived intangible assets | $ 3,900 | ||||||||||||||
Gerard | Customer Relationships | |||||||||||||||
Intangible assets acquired: | |||||||||||||||
Finite lived intangible assets | $ 4,000 | ||||||||||||||
Estimated useful lives | 15 years | ||||||||||||||
Acquisitions 2,015 | |||||||||||||||
Intangible assets acquired: | |||||||||||||||
Revenue | 3,200 | ||||||||||||||
Net income | $ (1,200) | ||||||||||||||
Other Business Acquisitions | Equity Method Investee | |||||||||||||||
Acquisitions | |||||||||||||||
Total cash consideration of acquisition | $ 1,200 | ||||||||||||||
Intangible assets acquired: | |||||||||||||||
Percentage of equity interests acquired | 100.00% | ||||||||||||||
Other Business Acquisitions | Construction materials | |||||||||||||||
Acquisitions | |||||||||||||||
Total cash consideration of acquisition | $ 7,400 | $ 3,100 | |||||||||||||
Other Business Acquisitions | Building products | |||||||||||||||
Acquisitions | |||||||||||||||
Total cash consideration of acquisition | $ 4,500 | ||||||||||||||
Metro Roof Products | Building products | |||||||||||||||
Acquisitions | |||||||||||||||
Consideration paid net of cash acquired | $ 34,600 | ||||||||||||||
Intangible assets acquired: | |||||||||||||||
Percentage of equity interests acquired | 100.00% |
Discontinued Operations (Detail
Discontinued Operations (Details) | 12 Months Ended | |||
Sep. 30, 2015USD ($)item | Sep. 30, 2014USD ($) | Sep. 30, 2013USD ($) | Jan. 31, 2013USD ($) | |
Discontinued operations | ||||
Gain (loss) on disposal | $ 2,000,000 | |||
Income (loss) from discontinued operations, net of income taxes | $ (460,000) | (415,000) | $ (1,148,000) | |
Reversal of unrecognized tax benefits in discontinued operations resulting from IRS audit | 2,700,000 | |||
Number of reclamation obligations | item | 1 | |||
Coal Cleaning Business | ||||
Discontinued operations | ||||
Remaining assets held for sale | $ 0 | |||
Revenue | $ 0 | 0 | 4,386,000 | |
Loss from operations of discontinued operations before income taxes | (496,000) | (3,175,000) | (3,752,000) | |
Gain (loss) on disposal | (229,000) | 2,727,000 | (55,000) | |
Income tax provision | 265,000 | 33,000 | 2,659,000 | |
Income (loss) from discontinued operations, net of income taxes | (460,000) | (415,000) | (1,148,000) | |
Reversal of unrecognized tax benefits in discontinued operations resulting from IRS audit | $ 2,700,000 | |||
Deferred purchase price and royalty payments received | 4,700,000 | |||
Number of sales transactions in which the buyer agreed to assume the lease and certain reclamation obligations | $ 1 | |||
Number of reclamation obligations | item | 1 | |||
Accrued liability for reclamation obligations | $ 7,400,000 | $ 8,000,000 |
Current Assets and Current Li42
Current Assets and Current Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Receivables | |||
Balance at beginning of year | $ 3,538 | $ 2,777 | $ 2,423 |
Charged to expense | 1,424 | 2,022 | 1,302 |
Accounts written off | (1,152) | (1,261) | (948) |
Balance at end of year | 3,810 | 3,538 | 2,777 |
Other Receivables | |||
Allowance for other receivables | $ 9,000 | ||
Reserve on note receivable and other contractual payments due from a specific buyer of some of the coal cleaning facilities (as a percent) | 100.00% | ||
Gain on disposal of discontinued operations resulting from collection of receivable | 2,000 | ||
Inventories | |||
Raw materials | 12,831 | 12,017 | |
Finished goods | 42,243 | 38,616 | |
Inventories | 55,074 | 50,633 | |
Warranty Liabilities | |||
Balance at beginning of year | 7,219 | 2,141 | $ 1,834 |
Charged to expense | 2,020 | 1,992 | 1,629 |
Changes to prior year estimates | (461) | 32 | 0 |
Additions from acquisitions | 0 | 4,842 | 40 |
Payments for claims | (2,010) | (1,788) | (1,362) |
Balance at end of year | 6,768 | 7,219 | $ 2,141 |
Other Accrued Liabilities | |||
Products and services received but not yet invoiced | 24,215 | 19,870 | |
Other | 25,271 | 21,887 | |
Other Accrued Liabilities, Current | $ 49,486 | $ 41,757 |
Long-Lived Assets (Details)
Long-Lived Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Property, Plant and Equipment | |||
Gross property, plant and equipment | $ 429,459 | $ 406,004 | |
Less accumulated depreciation | (243,741) | (224,706) | |
Net property, plant and equipment | 185,718 | 181,298 | |
Depreciation expense | 35,800 | 33,800 | $ 32,100 |
Land and Land Improvements | |||
Property, Plant and Equipment | |||
Gross property, plant and equipment | $ 15,904 | $ 15,298 | |
Land and Land Improvements | Minimum | |||
Property, Plant and Equipment | |||
Estimated useful lives | 15 years | 15 years | |
Land and Land Improvements | Maximum | |||
Property, Plant and Equipment | |||
Estimated useful lives | 40 years | 40 years | |
Building and Building Improvements | |||
Property, Plant and Equipment | |||
Gross property, plant and equipment | $ 69,645 | $ 69,018 | |
Building and Building Improvements | Minimum | |||
Property, Plant and Equipment | |||
Estimated useful lives | 5 years | 5 years | |
Building and Building Improvements | Maximum | |||
Property, Plant and Equipment | |||
Estimated useful lives | 40 years | 40 years | |
Equipment and Vehicles | |||
Property, Plant and Equipment | |||
Gross property, plant and equipment | $ 239,759 | $ 221,987 | |
Equipment and Vehicles | Minimum | |||
Property, Plant and Equipment | |||
Estimated useful lives | 3 years | 3 years | |
Equipment and Vehicles | Maximum | |||
Property, Plant and Equipment | |||
Estimated useful lives | 20 years | 20 years | |
Dies and Molds | |||
Property, Plant and Equipment | |||
Gross property, plant and equipment | $ 85,880 | $ 83,299 | |
Dies and Molds | Minimum | |||
Property, Plant and Equipment | |||
Estimated useful lives | 3 years | 3 years | |
Dies and Molds | Maximum | |||
Property, Plant and Equipment | |||
Estimated useful lives | 20 years | 20 years | |
Construction in Progress | |||
Property, Plant and Equipment | |||
Gross property, plant and equipment | $ 18,271 | $ 16,402 |
Long-Lived Assets (Details 2)
Long-Lived Assets (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Gross carrying amount and accumulated amortization of intangible assets | |||
Total Gross Carrying Amount | $ 322,749 | $ 321,234 | |
Accumulated Amortization | 179,031 | 161,371 | |
Amortization expense related to intangible assets | 18,200 | 21,300 | $ 20,200 |
CCP Contracts | |||
Gross carrying amount and accumulated amortization of intangible assets | |||
Gross Carrying Amount | 112,300 | 112,300 | |
Accumulated Amortization | $ 69,875 | 64,192 | |
CCP Contracts | Minimum | |||
Gross carrying amount and accumulated amortization of intangible assets | |||
Estimated useful lives | 15 years | ||
CCP Contracts | Maximum | |||
Gross carrying amount and accumulated amortization of intangible assets | |||
Estimated useful lives | 20 years | ||
Customer Relationships | |||
Gross carrying amount and accumulated amortization of intangible assets | |||
Gross Carrying Amount | $ 109,078 | 107,953 | |
Accumulated Amortization | $ 57,844 | 50,355 | |
Customer Relationships | Minimum | |||
Gross carrying amount and accumulated amortization of intangible assets | |||
Estimated useful lives | 5 years | ||
Customer Relationships | Maximum | |||
Gross carrying amount and accumulated amortization of intangible assets | |||
Estimated useful lives | 17 years | ||
Trade Names | |||
Gross carrying amount and accumulated amortization of intangible assets | |||
Gross Carrying Amount | $ 66,960 | 67,220 | |
Accumulated Amortization | $ 36,554 | 33,394 | |
Trade Names | Minimum | |||
Gross carrying amount and accumulated amortization of intangible assets | |||
Estimated useful lives | 5 years | ||
Trade Names | Maximum | |||
Gross carrying amount and accumulated amortization of intangible assets | |||
Estimated useful lives | 20 years | ||
Patents and Patented Technologies | |||
Gross carrying amount and accumulated amortization of intangible assets | |||
Gross Carrying Amount | $ 14,526 | 14,526 | |
Accumulated Amortization | $ 12,574 | 11,686 | |
Patents and Patented Technologies | Minimum | |||
Gross carrying amount and accumulated amortization of intangible assets | |||
Estimated useful lives | 5 years | ||
Patents and Patented Technologies | Maximum | |||
Gross carrying amount and accumulated amortization of intangible assets | |||
Estimated useful lives | 19 years | ||
Other Intangible Assets | |||
Gross carrying amount and accumulated amortization of intangible assets | |||
Gross Carrying Amount | $ 4,585 | 3,935 | |
Accumulated Amortization | $ 2,184 | 1,744 | |
Other Intangible Assets | Minimum | |||
Gross carrying amount and accumulated amortization of intangible assets | |||
Estimated useful lives | 5 years | ||
Other Intangible Assets | Maximum | |||
Gross carrying amount and accumulated amortization of intangible assets | |||
Estimated useful lives | 17 years | ||
Trade Names | |||
Gross carrying amount and accumulated amortization of intangible assets | |||
Gross Carrying Amount | $ 15,300 | $ 15,300 |
Long-Lived Assets (Details 3)
Long-Lived Assets (Details 3) $ in Thousands | Sep. 30, 2015USD ($) |
Total currently estimated annual amortization expense | |
2,016 | $ 17,974 |
2,017 | 17,096 |
2,018 | 17,046 |
2,019 | 16,018 |
2,020 | $ 11,771 |
Long-Lived Assets (Details 4)
Long-Lived Assets (Details 4) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Schedule of changes in the carrying amount of goodwill | ||
Goodwill, Beginning Balance | $ 175,586 | $ 137,198 |
Goodwill related to acquisitions | 2,687 | 38,388 |
Adjustments to previous recorded amounts for 2014 acquisitions | (74) | |
Goodwill, Ending Balance | 178,199 | 175,586 |
Building products | ||
Schedule of changes in the carrying amount of goodwill | ||
Goodwill, Beginning Balance | 56,687 | 21,199 |
Goodwill related to acquisitions | 2,687 | 35,488 |
Adjustments to previous recorded amounts for 2014 acquisitions | 390 | |
Goodwill, Ending Balance | 59,764 | 56,687 |
Construction materials | ||
Schedule of changes in the carrying amount of goodwill | ||
Goodwill, Beginning Balance | 118,899 | 115,999 |
Goodwill related to acquisitions | 0 | 2,900 |
Adjustments to previous recorded amounts for 2014 acquisitions | (464) | |
Goodwill, Ending Balance | $ 118,435 | $ 118,899 |
Long-term Debt (Details)
Long-term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Mar. 31, 2015 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2011 |
Long-term debt | |||||
Debt instrument, face amount | $ 573,900 | $ 599,800 | |||
Carrying amount of long-term debt, net of discount | 562,330 | 592,458 | |||
Less current portion | (4,250) | 0 | |||
Long-term debt, net | 558,080 | 592,458 | |||
Senior secured term loan, due March 2022 | |||||
Long-term debt | |||||
Debt instrument, face amount | 423,938 | $ 425,000 | |||
Carrying amount of long-term debt, net of discount | 414,490 | 0 | |||
7.25% Senior notes, due January 2019 | |||||
Long-term debt | |||||
Debt instrument, face amount | 150,000 | 150,000 | $ 150,000 | ||
Carrying amount of long-term debt, net of discount | $ 147,840 | $ 147,192 | |||
Interest rate on long-term debt (as a percent) | 7.25% | 7.25% | 7.25% | ||
Senior Secured Notes 7.625 Percent | |||||
Long-term debt | |||||
Debt instrument, face amount | $ 400,000 | $ 400,000 | |||
Carrying amount of long-term debt, net of discount | $ 0 | $ 396,058 | |||
Interest rate on long-term debt (as a percent) | 7.625% | 7.625% | |||
Convertible Senior Subordinated Notes 8.75 Percent Due 2016 | |||||
Long-term debt | |||||
Debt instrument, face amount | $ 49,791 | ||||
Carrying amount of long-term debt, net of discount | $ 0 | $ 49,208 | |||
Interest rate on long-term debt (as a percent) | 8.75% | 8.75% |
Long-term Debt (Details 2)
Long-term Debt (Details 2) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Dec. 31, 2013 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | Mar. 31, 2015 | |
Long-term debt | |||||
Net proceeds from initial borrowing | $ 414,675 | $ 146,650 | $ 0 | ||
Debt instrument, face amount | $ 573,900 | 599,800 | |||
Senior secured term loan, due March 2022 | |||||
Long-term debt | |||||
Percentage of original principal amount on which the aggregate amount of annual scheduled repayments is determined | 1.00% | ||||
Initial interest rate | 4.50% | ||||
Debt prepayment premium percentage | 1.00% | ||||
Maximum percentage of annual excess cash flow required to be used for prepayment | 50.00% | ||||
Annual excess cash flow threshold for required prepayment | $ 1,000 | ||||
Percentage of net cash proceeds of non-ordinary course asset sales required to be used for prepayment | 100.00% | ||||
Percentage of Net Proceeds of Certain Issuances of Debt Required to be Used for Prepayment of Debt | 100.00% | ||||
Net proceeds from initial borrowing | $ 414,700 | ||||
Original issue discount | 2,100 | ||||
Transaction costs | 8,200 | ||||
Debt instrument, face amount | $ 423,938 | $ 425,000 | |||
Senior secured term loan, due March 2022 | Prime Rate | |||||
Long-term debt | |||||
Variable interest rate base | prime rate | ||||
Minimum floor variable percentage under terms of the debt agreement | 2.00% | ||||
Secondary variable rate margin (as a percent) | 2.50% | ||||
Senior secured term loan, due March 2022 | Federal funds rate | |||||
Long-term debt | |||||
Variable interest rate base | federal funds rate | ||||
Interest rate margin (as a percent) | 0.50% | ||||
Minimum floor variable percentage under terms of the debt agreement | 2.00% | ||||
Secondary variable rate margin (as a percent) | 2.50% | ||||
Senior secured term loan, due March 2022 | Eurocurrency rate (LIBO) | |||||
Long-term debt | |||||
Variable interest rate base | LIBO | ||||
Minimum floor variable percentage under terms of the debt agreement | 1.00% | ||||
Secondary variable rate margin (as a percent) | 3.50% | ||||
Senior secured term loan, due March 2022 | Thirty Day LIBO | |||||
Long-term debt | |||||
Variable interest rate base | 30-day LIBO | ||||
Interest rate margin (as a percent) | 1.00% | ||||
Minimum floor variable percentage under terms of the debt agreement | 2.00% | ||||
Secondary variable rate margin (as a percent) | 3.50% | ||||
Incremental term loans | |||||
Long-term debt | |||||
Maximum borrowing capacity | 150,000 | ||||
7.25% Senior notes, due January 2019 | |||||
Long-term debt | |||||
Maximum outstanding balance of senior notes at a specified period that may trigger early maturity of term loan | $ 50,000 | ||||
Net proceeds from senior secured notes | $ 146,700 | ||||
Debt instrument, face amount | $ 150,000 | $ 150,000 | $ 150,000 | ||
Interest rate on secured notes (as a percent) | 7.25% | 7.25% | 7.25% | ||
Purchase price of debt instrument, if there is a change in control (as a percent) | 101.00% | ||||
7.25% Senior notes, due January 2019 | Debt Instrument Redemption Period Commencing after January 15, 2016 | Maximum | |||||
Long-term debt | |||||
Debt instrument redemption price (as a percent) | 103.625% | ||||
7.25% Senior notes, due January 2019 | Debt Instrument Redemption Period Commencing after January 15, 2016 | Minimum | |||||
Long-term debt | |||||
Debt instrument redemption price (as a percent) | 100.00% | ||||
7.25% Senior notes, due January 2019 | Debt Instrument Redemption Period on or Prior to January 15, 2016 | |||||
Long-term debt | |||||
Redemption price of debt instrument if redeemed with proceeds from qualified equity offerings (as a percent) | 107.25% | ||||
Debt instrument redemption price in addition to a make-whole premium (as a percent) | 100.00% | ||||
7.25% Senior notes, due January 2019 | Debt Instrument Redemption Period on or Prior to January 15, 2016 | Maximum | |||||
Long-term debt | |||||
Percentage of the principal amount of the debt instrument which the entity may redeem with proceeds from qualified equity offerings | 35.00% |
Long-term Debt (Details 3)
Long-term Debt (Details 3) $ in Millions | 12 Months Ended |
Sep. 30, 2015USD ($) | |
ABL Revolver | |
Long-term debt | |
Revolving credit arrangement amount outstanding | $ 0 |
Maximum borrowing capacity | 70 |
Current borrowing capacity | $ 60.4 |
Line of credit facility, interest rate at period end (as a percent) | 1.80% |
Termination date based on the earliest maturity date of the specified long-term debt | 3 months |
ABL Revolver | Minimum | |
Long-term debt | |
Line of credit facility unused capacity commitment fee percentage | 0.25% |
Specified percentage of availability below which a monthly fixed charge coverage ratio applies | 12.50% |
Coverage ratio | 1 |
ABL Revolver | Maximum | |
Long-term debt | |
Line of credit facility unused capacity commitment fee percentage | 0.375% |
ABL Revolver | London Interbank Offered Rate (LIBOR) | |
Long-term debt | |
Variable interest rate base | LIBOR |
Percentage points added to the reference rate, one | 1.50% |
Percentage points added to the reference rate, two | 1.75% |
Percentage points added to the reference rate, three | 2.00% |
ABL Revolver | Base Rate | |
Long-term debt | |
Variable interest rate base | Base Rate |
Percentage points added to the reference rate, one | 0.25% |
Percentage points added to the reference rate, two | 0.50% |
Percentage points added to the reference rate, three | 0.75% |
ABL Revolver | Prime Rate | |
Long-term debt | |
Variable interest rate base | prime rate |
ABL Revolver | Federal funds rate | |
Long-term debt | |
Variable interest rate base | federal funds rate |
Interest rate margin (as a percent) | 0.50% |
ABL Revolver | Thirty Day LIBO | |
Long-term debt | |
Variable interest rate base | 30-day LIBO |
Interest rate margin (as a percent) | 1.00% |
Letter of Credit | |
Long-term debt | |
Maximum borrowing capacity | $ 35 |
Outstanding standby letters of credit | 7.6 |
Swingline Facility | |
Long-term debt | |
Maximum borrowing capacity | $ 10.5 |
Long-term Debt (Details 4)
Long-term Debt (Details 4) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Feb. 28, 2014 | Mar. 31, 2015 | Sep. 30, 2015 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2012 | Sep. 30, 2011 | |
Long-term debt | |||||||
Debt instrument, face amount | $ 573,900 | $ 599,800 | |||||
Loss on extinguishment of debt | $ 24,800 | ||||||
Convertible Senior Subordinated Notes 2.50 Percent Due 2014 | |||||||
Long-term debt | |||||||
Interest rate on secured notes (as a percent) | 2.50% | ||||||
Repurchase and cancellation of convertible senior subordinated notes | $ 7,700 | $ 47,400 | |||||
Cash consideration paid for cancelation of convertible senior subordinated notes | 47,700 | ||||||
Write-off of unamortized balances of debt discount and debt issue costs | $ 2,400 | ||||||
Convertible Senior Subordinated Notes 2.50 Percent Due 2014 | Chairman and CEO | |||||||
Long-term debt | |||||||
Convertible senior subordinated notes | $ 1,160 | ||||||
Senior Secured Notes 7.625 Percent | |||||||
Long-term debt | |||||||
Interest rate on secured notes (as a percent) | 7.625% | 7.625% | |||||
Debt instrument, face amount | $ 400,000 | $ 400,000 | |||||
Loss on extinguishment of debt | 21,300 | ||||||
Early repayment premium amount | 15,300 | ||||||
Early repayment of interest amount | 2,500 | ||||||
Premiums and accelerated amortization of unamortized debt issue costs charged to interest expense | 3,500 | ||||||
Convertible Senior Subordinated Notes 8.75 Percent Due 2016 | |||||||
Long-term debt | |||||||
Interest rate on secured notes (as a percent) | 8.75% | 8.75% | |||||
Debt instrument, face amount | $ 49,791 | ||||||
Repurchase and cancellation of convertible senior subordinated notes | 49,000 | ||||||
Premiums and accelerated amortization of unamortized debt issue costs charged to interest expense | $ 3,500 |
Long-term Debt (Details 5)
Long-term Debt (Details 5) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Long-term debt | |||
Interest expense | $ 64,900 | $ 46,900 | $ 42,900 |
Non-cash interest expense | $ 6,180 | $ 2,175 | $ 5,841 |
Weighted average interest rate (as a percent) | 5.20% | 7.60% | |
Senior Secured Notes 7.625 Percent | |||
Long-term debt | |||
Interest expense | $ 21,300 | ||
Senior secured term loan, due March 2022 | |||
Long-term debt | |||
Required quarterly repayments due | $ 1,100 |
Long-term Debt (Details 6)
Long-term Debt (Details 6) $ in Thousands | Sep. 30, 2015USD ($) |
Future maturities of long-term debt | |
2,016 | $ 4,250 |
2,017 | 4,250 |
2,018 | 4,250 |
2,019 | 154,250 |
2,020 | 4,250 |
Thereafter | 402,688 |
Total long-term debt | $ 573,938 |
Fair Value of Financial Instr53
Fair Value of Financial Instruments (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2013 |
Fair value of financial instruments | |||
Long-term debt, fair value | $ 626 | ||
Long-term debt, carrying value | $ 592.5 | ||
7.25% Senior notes, due January 2019 | |||
Fair value of financial instruments | |||
Long-term debt, fair value | $ 156.4 | ||
Long-term debt, carrying value | $ 147.8 | ||
Debt Instrument, Interest Rate, Stated Percentage | 7.25% | 7.25% | 7.25% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2015 | |
Income tax | |||||
Income tax expense | $ 96,800 | $ (94,458) | $ 3,574 | $ 3,924 | |
Estimated effective income tax rate (as a percent) | 18.00% | 32.00% | |||
Reversal of unrecognized tax benefits in discontinued operations resulting from IRS audit | $ 2,700 | ||||
Release of deferred tax valuation allowance | $ (109,277) | $ (7,994) | $ (3,955) | ||
Cumulative period of income | 3 years | ||||
Valuation allowance | 10,146 | $ 10,146 | 119,424 | $ 12,500 | |
Net operating and capital loss carryforwards | 67,505 | 67,505 | 70,320 | ||
Tax credit carryforwards | $ 24,954 | $ 24,954 | $ 24,784 | ||
Minimum | |||||
Income tax | |||||
Carryover period for deferred tax attributes | 20 years | ||||
Operating loss carryforwards expiration date | Sep. 30, 2016 | ||||
Tax credit carryforwards, expiration date | Sep. 30, 2028 | ||||
Maximum | |||||
Income tax | |||||
Operating loss carryforwards expiration date | Sep. 30, 2035 | ||||
Tax credit carryforwards, expiration date | Sep. 30, 2033 |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Federal, Current | $ 8 | $ 65 | $ (1,292) | |
State, Current | (2,027) | (1,973) | (1,934) | |
Total current tax provision | (2,019) | (1,908) | (3,226) | |
Federal, Deferred | (14,100) | (10,956) | (5,473) | |
State, Deferred | 1,300 | 1,296 | 820 | |
Change in valuation allowance | 109,277 | 7,994 | 3,955 | |
Total deferred tax benefit (provision) | 96,477 | (1,666) | (698) | |
Income tax benefit (provision) | $ (96,800) | $ 94,458 | $ (3,574) | $ (3,924) |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Tax provision at U.S. statutory rate | $ (13,185) | $ (7,016) | $ (4,273) | |
State income taxes, net of federal tax effect | (931) | (1,973) | (1,934) | |
Valuation allowance | 109,277 | 7,994 | 3,955 | |
Non-deductible executive compensation | (105) | (1,242) | 0 | |
Unrecognized tax benefits | 706 | 101 | (1,245) | |
Other | (1,304) | (1,438) | (427) | |
Income tax benefit (provision) | $ (96,800) | $ 94,458 | $ (3,574) | $ (3,924) |
Income Taxes (Details 4)
Income Taxes (Details 4) - USD ($) $ in Thousands | Sep. 30, 2015 | Jun. 30, 2015 | Sep. 30, 2014 |
Income Taxes | |||
NOL and capital loss carryforwards | $ 67,505 | $ 70,320 | |
Tax credit carryforwards | 24,954 | 24,784 | |
Estimated liabilities | 19,240 | 15,925 | |
Stock-based compensation | 5,903 | 6,958 | |
Debt repurchase premium | 5,154 | 12,711 | |
Reserves and allowances | 2,469 | 4,860 | |
Deferred revenue | 170 | 5,898 | |
Other | 3,006 | 1,644 | |
Valuation allowances | (10,146) | $ (12,500) | (119,424) |
Total deferred tax assets | 118,255 | 23,676 | |
Property, plant and equipment basis differences | (15,797) | (20,483) | |
Goodwill and intangible asset basis differences | (9,606) | (8,062) | |
Total deferred tax liabilities | 25,403 | 28,545 | |
Net deferred tax (liability) | $ (4,869) | ||
Net deferred tax asset | $ 92,852 |
Income Taxes (Details 5)
Income Taxes (Details 5) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Income Taxes | |||
Gross unrecognized income tax benefits at beginning of year | $ 4,497 | $ 4,552 | $ 4,872 |
Changes based on tax positions related to the current year | 25 | 0 | 0 |
Increases for tax positions related to prior years | 1,055 | 0 | 1,214 |
Reductions for tax positions related to prior years | 0 | 0 | (1,439) |
Settlements | 0 | 0 | (16) |
Lapse of statute of limitations | (575) | (55) | (79) |
Gross unrecognized income tax benefits at end of year | 5,002 | 4,497 | 4,552 |
Accrued liabilities for interest and penalties | (200) | $ 100 | $ 300 |
Interest and penalties accrued | 2,500 | ||
Unrecognized tax benefits that would impact effective tax rate | 3,900 | ||
Unrecognized income tax benefits that may be released within next 12 months | $ 5,000 |
Equity Securities and Stock-B59
Equity Securities and Stock-Based Compensation (Details) - USD ($) $ in Thousands | 2 Months Ended | 12 Months Ended | ||
Nov. 17, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Equity Securities and Stock-Based Compensation | ||||
Common stock, authorized shares | 200,000,000 | 200,000,000 | ||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | ||
Preferred stock, shares issued | 0 | 0 | ||
Preferred stock, shares outstanding | 0 | 0 | ||
Common stock, shares issued | 11,500,000 | |||
Gross proceeds from issuance of common stock | $ 83,400 | |||
Net proceeds from issuance of common stock | $ 0 | $ 0 | 77,957 | |
Offering costs | $ 5,418 | |||
Treasury stock and related deferred compensation obligation at fair value | 1,600 | |||
Amount that the fair values of treasury stock and related deferred compensation obligation exceed the carrying values at cost | $ 600 | |||
Board approved share-based award grants to officers, employees, and directors (in shares) | 300,000 | 300,000 | 500,000 | 500,000 |
Stock-based compensation | $ 2,826 | $ 2,165 | $ 1,703 | |
Total income tax benefit recognized for stock-based compensation | $ 1,000 | $ 0 | $ 0 | |
Equity Securities and Stock-based Compensation | ||||
Awards granted vesting period | 3 years | |||
Contractual term | 10 years | |||
Stock Appreciation Rights (SARs) | ||||
Equity Securities and Stock-based Compensation | ||||
Awards granted vesting period | 3 years | |||
Contractual term | 10 years | |||
Period of average stock price hurdles that precluded vesting | 60 days |
Equity Securities and Stock-B60
Equity Securities and Stock-Based Compensation (Details 2) shares in Millions | 12 Months Ended | |||
Sep. 30, 2015item | Sep. 30, 2014 | Sep. 30, 2013 | Nov. 17, 2015shares | |
Equity Securities and Stock-based Compensation | ||||
Expected stock volatility | 60.00% | 60.00% | 65.00% | |
Risk-free interest rates, Minimum | 1.00% | 1.40% | 0.80% | |
Risk-free interest rates, Maximum | 1.70% | 2.00% | 1.20% | |
Expected lives (beyond vest dates) | 4 years | 4 years | 4 years | |
Dividend yield | 0.00% | 0.00% | 0.00% | |
Number of equity compensation plans | 5 | |||
Number of approved equity compensation plans | 4 | |||
Awards granted vesting period | 3 years | |||
Contractual term | 10 years | |||
2010 Incentive Compensation Plan | ||||
Equity Securities and Stock-based Compensation | ||||
Number of shares available for grant | shares | 3.3 |
Equity Securities and Stock-B61
Equity Securities and Stock-Based Compensation (Details 3) shares in Thousands | 12 Months Ended |
Sep. 30, 2015$ / sharesshares | |
Equity Securities and Stock-based Compensation | |
Maximum shares to be issued upon exercise of options and other awards | 3,827 |
Weighted-average exercise price of outstanding options and other awards | $ / shares | $ 7.73 |
Shares remaining available for future issuance under existing equity compensation plans | 3,625 |
Plans Approved by Stockholders | |
Equity Securities and Stock-based Compensation | |
Maximum shares to be issued upon exercise of options and other awards | 3,602 |
Weighted-average exercise price of outstanding options and other awards | $ / shares | $ 7.28 |
Shares remaining available for future issuance under existing equity compensation plans | 3,625 |
Plans Not Approved by Stockholders | |
Equity Securities and Stock-based Compensation | |
Maximum shares to be issued upon exercise of options and other awards | 225 |
Weighted-average exercise price of outstanding options and other awards | $ / shares | $ 14.97 |
Shares remaining available for future issuance under existing equity compensation plans | 0 |
Equity Securities and Stock-B62
Equity Securities and Stock-Based Compensation (Details 4) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Stock options | |||
Equity Securities and Stock-based Compensation | |||
Shares Outstanding, Beginning Balance | 181 | 618 | 1,262 |
Shares, Forfeited or expired | (85) | (437) | (644) |
Shares Outstanding, Ending Balance | 96 | 181 | 618 |
Shares, Exercisable | 96 | 181 | 618 |
Weighted-average exercise price, Beginning Balance | $ 30.17 | $ 27.42 | $ 22.95 |
Weighted-average exercise price, Forfeited or expired | 32.62 | 26.28 | 18.66 |
Weighted-average exercise price, Ending Balance | 27.99 | 30.17 | 27.42 |
Weighted-average exercise price, Exercisable | $ 27.99 | $ 30.17 | $ 27.42 |
Weighted-average remaining contractual term, Outstanding Ending Balance | 9 months 18 days | 1 year | 1 year 2 months 12 days |
Weighted-average remaining contractual term, Exercisable | 9 months 18 days | 1 year | 1 year 2 months 12 days |
Aggregate intrinsic value, Outstanding | $ 126 | $ 0 | $ 0 |
Aggregate intrinsic value, Exercisable | $ 126 | $ 0 | $ 0 |
Stock Appreciation Rights (SARs) | |||
Equity Securities and Stock-based Compensation | |||
Shares Outstanding, Beginning Balance | 3,730 | 3,639 | 3,894 |
Shares, Granted | 234 | 314 | 307 |
Shares Exercised | (344) | (146) | (322) |
Shares, Forfeited or expired | (42) | (77) | (240) |
Shares Outstanding, Ending Balance | 3,578 | 3,730 | 3,639 |
Shares, Exercisable | 3,320 | 3,418 | 3,027 |
Weighted-average exercise price, Beginning Balance | $ 7.31 | $ 7.25 | $ 7.41 |
Weighted-average exercise price, Granted | 13.03 | 9.19 | 6.79 |
Weighted-average exercise price, Exercised | 6.92 | 5.18 | 4.51 |
Weighted-average exercise price, Forfeited or expired | 24.83 | 16.15 | 12.93 |
Weighted-average exercise price, Ending Balance | 7.52 | 7.31 | 7.25 |
Weighted-average exercise price, Exercisable | $ 7.21 | $ 7.21 | $ 8.01 |
Weighted-average remaining contractual term, Outstanding Ending Balance | 5 years 1 month 6 days | 5 years 8 months 12 days | 6 years 4 months 24 days |
Weighted-average remaining contractual term, Exercisable | 4 years 9 months 18 days | 5 years 6 months | 6 years |
Aggregate intrinsic value, Outstanding | $ 41,685 | $ 22,893 | $ 13,157 |
Aggregate intrinsic value, Exercisable | $ 39,793 | $ 21,604 | $ 9,801 |
Weighted-average grant-date fair value of SARs granted | $ 6.41 | $ 4.40 | $ 3.38 |
Total intrinsic value | $ 3,900 | $ 1,100 | $ 1,800 |
Equity Securities and Stock-B63
Equity Securities and Stock-Based Compensation (Details 5) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | 36 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2015 | |
Equity Securities and Stock-based Compensation | ||||
Awards granted vesting period | 3 years | |||
Compensation expense related to restricted stock, restricted stock units and the ESPP | $ 1.4 | $ 0.9 | $ 0.7 | |
Total compensation cost related to unvested awards not yet recognized | $ 2.3 | $ 2.3 | ||
Weighted-average period for recognition of compensation cost | 1 year 8 months 12 days | |||
Restricted stock | ||||
Equity Securities and Stock-based Compensation | ||||
Awards granted vesting period | 3 years | |||
Shares Outstanding, Beginning Balance | 151 | |||
Shares, Granted | 116 | |||
Shares, Vested | (138) | |||
Shares, Forfeited | (3) | |||
Shares Outstanding, Ending Balance | 126 | 151 | 126 | |
Weighted-average exercise price, Beginning Balance | $ 8.38 | |||
Weighted-average exercise price, Granted | 13.03 | |||
Weighted-average exercise price, Vested | 9.38 | |||
Weighted-average exercise price, Forfeited | 9.85 | |||
Weighted-average exercise price, Ending Balance | $ 11.51 | $ 8.38 | $ 11.51 | |
Officers and Employees | Restricted stock | ||||
Equity Securities and Stock-based Compensation | ||||
Shares, Granted | 400 |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Numerator: | |||||||
Income (loss) from continuing operations | $ 132,128 | $ 16,473 | $ 8,285 | ||||
Net income attributable to non-controlling interest | (869) | (774) | 0 | ||||
Adjustment of estimated redemption value of non-controlling interest in consolidated subsidiary | 0 | (176) | 0 | ||||
Numerator for basic and diluted earnings per share from continuing operations - income from continuing operations attributable to Headwaters Incorporated | 131,259 | 15,523 | 8,285 | ||||
Numerator for basic and diluted earnings per share from discontinued operations - loss from discontinued operations, net of income taxes | (460) | (415) | (1,148) | ||||
Numerator for basic and diluted earnings per share - net income attributable to Headwaters Incorporated | $ 130,799 | $ 15,108 | $ 7,137 | ||||
Denominator: | |||||||
Denominator for basic earnings per share - weighted-average shares outstanding | 73,570 | 73,160 | 70,128 | ||||
Effect of dilutive securities - shares issuable upon exercise of options and SARs and vesting of restricted stock | 2,032 | 1,291 | 1,124 | ||||
Denominator for diluted earnings per share - weighted-average shares outstanding after assumed exercises and vesting | 75,602 | 74,451 | 71,252 | ||||
Basic income (loss) per share attributable to Headwaters Incorporated: | |||||||
From continuing operations (in dollars per share) | $ 1.79 | $ 0.21 | $ 0.12 | ||||
From discontinued operations (in dollars per share) | (0.01) | (0.01) | (0.02) | ||||
Basic income (loss) per share (in dollars per share) | $ 1.72 | $ 0.30 | $ (0.34) | $ 0.09 | 1.78 | 0.20 | 0.10 |
Diluted income (loss) per share attributable to Headwaters Incorporated: | |||||||
From continuing operations (in dollars per share) | 1.74 | 0.21 | 0.12 | ||||
From discontinued operations (in dollars per share) | (0.01) | (0.01) | (0.02) | ||||
Diluted income (loss) per share (in dollars per share) | $ 1.68 | $ 0.30 | $ (0.34) | $ 0.09 | $ 1.73 | $ 0.20 | $ 0.10 |
Earnings per Share (Details 2)
Earnings per Share (Details 2) - shares shares in Thousands | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Stock Appreciation Rights (SARs) | |||
Earnings per Share | |||
Anti-dilutive securities not considered in diluted EPS calculation (in shares) | 1,258 | 2,279 | 2,479 |
Stock options | |||
Earnings per Share | |||
Anti-dilutive securities not considered in diluted EPS calculation (in shares) | 89 | 446 | 906 |
Restricted stock | |||
Earnings per Share | |||
Anti-dilutive securities not considered in diluted EPS calculation (in shares) | 66 | 126 | 105 |
Commitments and Contingencies66
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Commitments and Contingencies | |||
Rental expense | $ 34,400 | $ 33,400 | $ 34,900 |
2,016 | 29,067 | ||
2,017 | 22,879 | ||
2,018 | 16,756 | ||
2,019 | 12,148 | ||
2,020 | 7,644 | ||
Thereafter | 16,443 | ||
Minimum rental payments, total | $ 104,937 | ||
Maximum | |||
Commitments and Contingencies | |||
Year in which lease with latest expiration is set to expire | 2,032 |
Commitments and Contingencies67
Commitments and Contingencies (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Commitments and Contingencies | |||
Actual purchases made under contracts with minimum requirements | $ 32,700 | $ 20,300 | $ 14,900 |
2,016 | 18,123 | ||
2,017 | 16,499 | ||
2,018 | 13,930 | ||
2,019 | 13,539 | ||
2,020 | 13,811 | ||
Thereafter | 62,096 | ||
Future purchase requirements, total | 137,998 | ||
Increase in future purchase requirements due to contract extensions subsequent to end of year | $ 43,000 |
Commitments and Contingencies68
Commitments and Contingencies (Details 3) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 2 Months Ended | 12 Months Ended | |||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2011 | |
Employment Agreements | |||||||
Commitments and Contingencies | |||||||
Compensation arrangements original term of employment agreements, maximum | 3 years | ||||||
Employee agreement terms | 1 year | ||||||
Percentage of CEO salary | 72.50% | ||||||
Aggregate salary commitment for salaries and other obligations under all employment agreements assuming no agreements are renewed | $ 3.3 | ||||||
Aggregate termination benefits | 10.3 | ||||||
Termination benefits expensed and accrued | 4 | ||||||
Executive Change in Control Agreements | |||||||
Commitments and Contingencies | |||||||
Aggregate value of severance payments and excess of market value of stock-based awards | 25.6 | ||||||
Aggregate value of severance payments and excess of market value of stock-based awards expensed and accrued | $ 10.8 | ||||||
Cash Performance Unit Awards 2013 Grants | |||||||
Commitments and Contingencies | |||||||
Percentage of performance units vested | 50.00% | 50.00% | |||||
Average stock price period | 60 days | 60 days | |||||
Amount recorded for performance unit award grants | $ 4.7 | ||||||
Cash Performance Unit Awards 2014 and 2015 Grants | |||||||
Commitments and Contingencies | |||||||
Amount recorded for performance unit award grants | $ 8.6 | $ 5.1 | |||||
Performance awards which remain accrued and unpaid | $ 15.7 | ||||||
Potential further adjustment period | 2 years | ||||||
Stock Appreciation Rights (SARs) | |||||||
Commitments and Contingencies | |||||||
Compensation expense | $ 3.1 | $ 4.6 | $ 4.6 | ||||
Stock Appreciation Rights (SARs), 2011 Awards | |||||||
Commitments and Contingencies | |||||||
Grants approved by committee to employees for cash settled stock appreciation rights (in shares) | 0.4 | ||||||
Grants approved by committee to employees for cash settled stock appreciation rights that remain outstanding (in shares) | 0 | ||||||
Stock Appreciation Rights (SARS), 2012 Awards | |||||||
Commitments and Contingencies | |||||||
Grants approved by committee to employees for cash settled stock appreciation rights (in shares) | 1 | ||||||
Grants approved by committee to employees for cash settled stock appreciation rights that remain outstanding (in shares) | 0.1 | ||||||
Amount accrued for awards | $ 1.6 | ||||||
Grant-date stock price (in dollars per share) | $ 1.85 |
Commitments and Contingencies69
Commitments and Contingencies (Details 4) $ in Thousands, shares in Millions | 12 Months Ended | ||
Sep. 30, 2015USD ($)itemshares | Sep. 30, 2014USD ($) | Sep. 30, 2013USD ($) | |
Commitments and Contingencies | |||
Number of employee benefit plans | item | 6 | ||
Benefit plan expenses, net | $ 34,800 | $ 26,700 | $ 23,000 |
Percentage of compensation as tax-deferred contributions | 50.00% | ||
Vesting period for matching contributions | 3 years | ||
Percentage of tax-deferred contributions of base compensation | 50.00% | ||
Percentage of tax deferred contributions of incentive compensation | 100.00% | ||
Annual vesting percentage under profit sharing program | 20.00% | ||
Participant age at which vesting of employer contribution begins | item | 61 | ||
Participant age at which full vesting of employer contribution is complete | item | 65 | ||
Employee Share Purchase Plan | |||
Commitments and Contingencies | |||
Shares held in reserve for issuance | shares | 4.3 | ||
ESPP shares available for future issuance | shares | 2.3 | ||
Percentage of cost per share of the fair market value at the end of each quarterly offering period | 85.00% | ||
Minimum | Employee Share Purchase Plan | |||
Commitments and Contingencies | |||
Percentage of cash compensation | 1.00% | ||
Maximum | Employee Share Purchase Plan | |||
Commitments and Contingencies | |||
Percentage of cash compensation | 10.00% | ||
Self Insurance | |||
Commitments and Contingencies | |||
Stop-loss coverage per individual per year | $ 200 | ||
Stop-loss coverage per occurrence | 350 | ||
Annual aggregate stop-loss coverage | 5,200 | ||
Accrued medical and workers compensation claims | $ 5,500 |
Commitments and Contingencies70
Commitments and Contingencies (Details 5) $ in Millions | 1 Months Ended | 12 Months Ended | ||||
Aug. 31, 2014item | Feb. 29, 2012USD ($)item | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2013USD ($) | Sep. 30, 2010item | |
Commitments and Contingencies | ||||||
Long term capital commitments on property, plant and equipment | $ 1.3 | |||||
Amount accrued for potential losses | $ 2.8 | |||||
Legal Matters | ||||||
Commitments and Contingencies | ||||||
Legal fees | 2.2 | $ 5.1 | $ 3.3 | |||
Total liability accrued | 2.5 | |||||
Legal Matters | Minimum | ||||||
Commitments and Contingencies | ||||||
Potential loss for unresolved matters | $ 2.5 | |||||
Fentress Families Trust | ||||||
Commitments and Contingencies | ||||||
Damages for removal and remediation of fly ash and water supply | $ 850 | |||||
Damages for vexation | 1,900 | |||||
Damages for others | 8 | |||||
Damages for properties plus prejudgment interest, attorney fees and costs | 55 | |||||
Additional damages sought by other plaintiffs | $ 307.2 | |||||
Number of insurers who have denied coverage | item | 2 | |||||
Number of plaintiffs | item | 383 | |||||
Number of defendants | item | 15 | |||||
Clary | ||||||
Commitments and Contingencies | ||||||
Number of plaintiffs | item | 77 | |||||
Number of defendants | item | 4 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Director | ||
Transactions with related parties | ||
Commissions paid related party by providers of insurance services | $ 0.1 | $ 0.1 |
Immediate Family Member of Management or Principal Owner | ||
Transactions with related parties | ||
Cost incurred for transportation facility provided by related party | $ 1.4 | $ 6.4 |
Condensed Consolidating Finan72
Condensed Consolidating Financial Information (Details) | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2013 | |
Long-term debt | |||
Ownership percentage in guarantor subsidiaries | 100.00% | ||
7.25% Senior notes, due January 2019 | |||
Long-term debt | |||
Interest rate on long-term debt (as a percent) | 7.25% | 7.25% | 7.25% |
Condensed Consolidating Finan73
Condensed Consolidating Financial Information (Details 2) - USD ($) $ in Thousands | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
Current assets: | ||||
Cash and cash equivalents | $ 142,597 | $ 152,542 | $ 75,316 | $ 53,782 |
Trade receivables, net | 134,384 | 119,330 | ||
Inventories | 55,074 | 50,633 | ||
Current and deferred income taxes | 23,762 | 11,076 | ||
Other | 11,827 | 10,536 | ||
Total current assets | 367,644 | 344,117 | ||
Property, plant and equipment, net | 185,718 | 181,298 | ||
Other assets: | ||||
Goodwill | 178,199 | 175,586 | 137,198 | |
Intangible assets, net | 143,718 | 159,863 | ||
Deferred income taxes | 69,419 | 0 | ||
Other | 34,321 | 35,442 | ||
Total other assets | 425,657 | 370,891 | ||
Total assets | 979,019 | 896,306 | 718,527 | |
Current liabilities: | ||||
Accounts payable | 25,306 | 27,026 | ||
Accrued personnel costs | 52,544 | 48,902 | ||
Accrued interest | 2,295 | 18,273 | ||
Current income taxes | 0 | 368 | ||
Other accrued liabilities | 49,486 | 41,757 | ||
Current portion of long-term debt | 4,250 | 0 | ||
Total current liabilities | 133,881 | 136,326 | ||
Long-term liabilities: | ||||
Long-term debt, net | 558,080 | 592,458 | ||
Income taxes | 6,590 | 23,242 | ||
Other | 30,186 | 28,586 | ||
Total long-term liabilities | 594,856 | 644,286 | ||
Total liabilities | 728,737 | 780,612 | ||
Redeemable non-controlling interest in consolidated subsidiary | 12,431 | 13,252 | ||
Stockholders' equity: | ||||
Common stock | 74 | 74 | ||
Capital in excess of par value | 728,667 | 723,648 | ||
Retained earnings (accumulated deficit) | (489,889) | (620,688) | ||
Treasury stock | (1,001) | (592) | ||
Total stockholders' equity | 237,851 | 102,442 | 84,410 | (3,129) |
Total liabilities and stockholders' equity | 979,019 | 896,306 | ||
Consolidation, Eliminations | ||||
Current assets: | ||||
Current and deferred income taxes | (145,679) | (23,149) | ||
Total current assets | (145,679) | (23,149) | ||
Other assets: | ||||
Investments in subsidiaries | (428,708) | (406,327) | ||
Intercompany accounts and notes | (694,839) | (637,046) | ||
Deferred income taxes | (19,725) | (64,586) | ||
Total other assets | (1,143,272) | (1,107,959) | ||
Total assets | (1,288,951) | (1,131,108) | ||
Current liabilities: | ||||
Current income taxes | (145,679) | (23,149) | ||
Total current liabilities | (145,679) | (23,149) | ||
Long-term liabilities: | ||||
Income taxes | (19,725) | (64,586) | ||
Intercompany accounts and notes | (694,839) | (637,046) | ||
Total long-term liabilities | (714,564) | (701,632) | ||
Total liabilities | (860,243) | (724,781) | ||
Stockholders' equity: | ||||
Capital in excess of par value | (540,715) | (519,127) | ||
Retained earnings (accumulated deficit) | 112,007 | 112,800 | ||
Total stockholders' equity | (428,708) | (406,327) | ||
Total liabilities and stockholders' equity | (1,288,951) | (1,131,108) | ||
Guarantor Subsidiaries | Reportable Legal Entities | ||||
Current assets: | ||||
Cash and cash equivalents | 25,819 | 33,552 | 70,747 | 44,111 |
Trade receivables, net | 129,095 | 113,940 | ||
Inventories | 52,699 | 48,482 | ||
Current and deferred income taxes | 7,754 | 15,509 | ||
Other | 10,666 | 9,286 | ||
Total current assets | 226,033 | 220,769 | ||
Property, plant and equipment, net | 164,413 | 162,458 | ||
Other assets: | ||||
Goodwill | 147,330 | 145,068 | ||
Intangible assets, net | 116,479 | 131,150 | ||
Investments in subsidiaries | 55,844 | |||
Intercompany accounts and notes | 57,793 | |||
Deferred income taxes | 41,658 | |||
Other | 11,243 | 14,388 | ||
Total other assets | 388,689 | 332,264 | ||
Total assets | 779,135 | 715,491 | ||
Current liabilities: | ||||
Accounts payable | 23,619 | 25,643 | ||
Accrued personnel costs | 14,542 | 13,483 | ||
Current income taxes | 137,646 | 23,198 | ||
Other accrued liabilities | 39,604 | 36,811 | ||
Total current liabilities | 215,411 | 99,135 | ||
Long-term liabilities: | ||||
Income taxes | 22,701 | 65,133 | ||
Intercompany accounts and notes | 191,274 | |||
Other | 1,481 | 16,167 | ||
Total long-term liabilities | 24,182 | 272,574 | ||
Total liabilities | 239,593 | 371,709 | ||
Stockholders' equity: | ||||
Capital in excess of par value | 486,069 | 458,498 | ||
Retained earnings (accumulated deficit) | 53,473 | (114,716) | ||
Total stockholders' equity | 539,542 | 343,782 | ||
Total liabilities and stockholders' equity | 779,135 | 715,491 | ||
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||||
Current assets: | ||||
Cash and cash equivalents | 3,577 | 5,764 | 34 | |
Trade receivables, net | 5,289 | 5,390 | ||
Inventories | 2,375 | 2,151 | ||
Current and deferred income taxes | 3,855 | 289 | ||
Other | 144 | 168 | ||
Total current assets | 15,240 | 13,762 | ||
Property, plant and equipment, net | 9,978 | 10,861 | ||
Other assets: | ||||
Goodwill | 30,869 | 30,518 | ||
Intangible assets, net | 27,239 | 28,713 | ||
Deferred income taxes | 21,349 | |||
Other | 2,291 | 2,194 | ||
Total other assets | 81,748 | 61,425 | ||
Total assets | 106,966 | 86,048 | ||
Current liabilities: | ||||
Accounts payable | 1,114 | 956 | ||
Accrued personnel costs | 501 | 418 | ||
Current income taxes | 5,474 | 319 | ||
Other accrued liabilities | 6,380 | 3,006 | ||
Total current liabilities | 13,469 | 4,699 | ||
Long-term liabilities: | ||||
Income taxes | 893 | |||
Intercompany accounts and notes | 178,179 | 4,061 | ||
Other | 13,897 | 774 | ||
Total long-term liabilities | 192,076 | 5,728 | ||
Total liabilities | 205,545 | 10,427 | ||
Redeemable non-controlling interest in consolidated subsidiary | 12,431 | 13,252 | ||
Stockholders' equity: | ||||
Capital in excess of par value | 54,470 | 60,453 | ||
Retained earnings (accumulated deficit) | (165,480) | 1,916 | ||
Total stockholders' equity | (111,010) | 62,369 | ||
Total liabilities and stockholders' equity | 106,966 | 86,048 | ||
Parent Company | Reportable Legal Entities | ||||
Current assets: | ||||
Cash and cash equivalents | 113,201 | 113,226 | $ 4,569 | $ 9,671 |
Current and deferred income taxes | 157,832 | 18,427 | ||
Other | 1,017 | 1,082 | ||
Total current assets | 272,050 | 132,735 | ||
Property, plant and equipment, net | 11,327 | 7,979 | ||
Other assets: | ||||
Investments in subsidiaries | 372,864 | 406,327 | ||
Intercompany accounts and notes | 637,046 | 637,046 | ||
Deferred income taxes | 67,795 | 22,928 | ||
Other | 20,787 | 18,860 | ||
Total other assets | 1,098,492 | 1,085,161 | ||
Total assets | 1,381,869 | 1,225,875 | ||
Current liabilities: | ||||
Accounts payable | 573 | 427 | ||
Accrued personnel costs | 37,501 | 35,001 | ||
Accrued interest | 2,295 | 18,273 | ||
Current income taxes | 2,559 | |||
Other accrued liabilities | 3,502 | 1,940 | ||
Current portion of long-term debt | 4,250 | |||
Total current liabilities | 50,680 | 55,641 | ||
Long-term liabilities: | ||||
Long-term debt, net | 558,080 | 592,458 | ||
Income taxes | 3,614 | 21,802 | ||
Intercompany accounts and notes | 516,660 | 441,711 | ||
Other | 14,808 | 11,645 | ||
Total long-term liabilities | 1,093,162 | 1,067,616 | ||
Total liabilities | 1,143,842 | 1,123,257 | ||
Stockholders' equity: | ||||
Common stock | 74 | 74 | ||
Capital in excess of par value | 728,843 | 723,824 | ||
Retained earnings (accumulated deficit) | (489,889) | (620,688) | ||
Treasury stock | (1,001) | (592) | ||
Total stockholders' equity | 238,027 | 102,618 | ||
Total liabilities and stockholders' equity | $ 1,381,869 | $ 1,225,875 |
Condensed Consolidating Finan74
Condensed Consolidating Financial Information (Details 3) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Revenue: | |||||||||||
Revenue | $ 272,717 | $ 243,294 | $ 179,725 | $ 199,597 | $ 245,921 | $ 223,399 | $ 156,512 | $ 165,615 | $ 895,333 | $ 791,447 | $ 702,576 |
Cost of revenue: | |||||||||||
Total cost of revenue | 625,442 | 565,754 | 510,094 | ||||||||
Gross profit | 90,301 | 76,762 | 47,141 | 55,687 | 78,577 | 67,672 | 38,551 | 40,893 | 269,891 | 225,693 | 192,482 |
Operating expenses: | |||||||||||
Selling, general and administrative | 149,623 | 137,650 | 117,841 | ||||||||
Amortization | 18,161 | 21,319 | 20,230 | ||||||||
Total operating expenses | 167,784 | 158,969 | 138,071 | ||||||||
Operating income | 102,107 | 66,724 | 54,411 | ||||||||
Other income (expense): | |||||||||||
Net interest expense | (64,219) | (46,329) | (42,566) | ||||||||
Equity in earnings of subsidiaries | 0 | 0 | 0 | ||||||||
Other, net | (218) | (348) | 364 | ||||||||
Total other income (expense), net | (64,437) | (46,677) | (42,202) | ||||||||
Income from continuing operations before income taxes | 37,670 | 20,047 | 12,209 | ||||||||
Income tax benefit (provision) | (96,800) | 94,458 | (3,574) | (3,924) | |||||||
Income from continuing operations | 132,128 | 16,473 | 8,285 | ||||||||
Loss from discontinued operations, net of income taxes | (460) | (415) | (1,148) | ||||||||
Net income | $ 126,774 | $ 23,008 | $ (25,198) | $ 7,084 | $ 16,681 | $ 10,893 | $ (10,082) | $ (1,434) | 131,668 | 16,058 | 7,137 |
Net income attributable to non-controlling interest | (869) | (774) | 0 | ||||||||
Net income attributable to Headwaters Incorporated | 130,799 | 15,284 | 7,137 | ||||||||
Building products | |||||||||||
Revenue: | |||||||||||
Revenue | 523,643 | 472,434 | 394,324 | ||||||||
Cost of revenue: | |||||||||||
Total cost of revenue | 367,163 | 336,283 | 283,128 | ||||||||
Construction materials | |||||||||||
Revenue: | |||||||||||
Revenue | 352,263 | 309,337 | 293,000 | ||||||||
Cost of revenue: | |||||||||||
Total cost of revenue | 249,077 | 224,888 | 219,996 | ||||||||
Energy Technology | |||||||||||
Revenue: | |||||||||||
Revenue | 19,427 | 9,676 | 15,252 | ||||||||
Cost of revenue: | |||||||||||
Total cost of revenue | 9,202 | 4,583 | 6,970 | ||||||||
Consolidation, Eliminations | |||||||||||
Other income (expense): | |||||||||||
Equity in earnings of subsidiaries | (54,350) | (62,719) | (47,117) | ||||||||
Total other income (expense), net | (54,350) | (62,719) | (47,117) | ||||||||
Income from continuing operations before income taxes | (54,350) | (62,719) | (47,117) | ||||||||
Income from continuing operations | (54,350) | (62,719) | (47,117) | ||||||||
Net income | (54,350) | (62,719) | (47,117) | ||||||||
Net income attributable to Headwaters Incorporated | (54,350) | (62,719) | |||||||||
Guarantor Subsidiaries | Reportable Legal Entities | |||||||||||
Revenue: | |||||||||||
Revenue | 851,028 | 757,486 | 702,576 | ||||||||
Cost of revenue: | |||||||||||
Total cost of revenue | 593,795 | 541,691 | 510,094 | ||||||||
Gross profit | 257,233 | 215,795 | 192,482 | ||||||||
Operating expenses: | |||||||||||
Selling, general and administrative | 115,423 | 108,602 | 96,478 | ||||||||
Amortization | 16,688 | 20,231 | 20,230 | ||||||||
Total operating expenses | 132,111 | 128,833 | 116,708 | ||||||||
Operating income | 125,122 | 86,962 | 75,774 | ||||||||
Other income (expense): | |||||||||||
Net interest expense | (205) | (349) | (54) | ||||||||
Intercompany interest income (expense) | (23,782) | (22,737) | (23,434) | ||||||||
Other, net | (56) | (24) | 329 | ||||||||
Total other income (expense), net | (24,043) | (23,110) | (23,159) | ||||||||
Income from continuing operations before income taxes | 101,079 | 63,852 | 52,615 | ||||||||
Income tax benefit (provision) | (48,213) | (3,296) | (4,350) | ||||||||
Income from continuing operations | 52,866 | 60,556 | 48,265 | ||||||||
Loss from discontinued operations, net of income taxes | (67) | (415) | (1,148) | ||||||||
Net income | 52,799 | 60,141 | 47,117 | ||||||||
Net income attributable to Headwaters Incorporated | 52,799 | 60,141 | |||||||||
Guarantor Subsidiaries | Reportable Legal Entities | Building products | |||||||||||
Revenue: | |||||||||||
Revenue | 479,338 | 438,473 | 394,324 | ||||||||
Cost of revenue: | |||||||||||
Total cost of revenue | 335,516 | 312,220 | 283,128 | ||||||||
Guarantor Subsidiaries | Reportable Legal Entities | Construction materials | |||||||||||
Revenue: | |||||||||||
Revenue | 352,263 | 309,337 | 293,000 | ||||||||
Cost of revenue: | |||||||||||
Total cost of revenue | 249,077 | 224,888 | 219,996 | ||||||||
Guarantor Subsidiaries | Reportable Legal Entities | Energy Technology | |||||||||||
Revenue: | |||||||||||
Revenue | 19,427 | 9,676 | 15,252 | ||||||||
Cost of revenue: | |||||||||||
Total cost of revenue | 9,202 | 4,583 | 6,970 | ||||||||
Non-Guarantor Subsidiaries | Reportable Legal Entities | |||||||||||
Revenue: | |||||||||||
Revenue | 44,305 | 33,961 | |||||||||
Cost of revenue: | |||||||||||
Total cost of revenue | 31,647 | 24,063 | |||||||||
Gross profit | 12,658 | 9,898 | |||||||||
Operating expenses: | |||||||||||
Selling, general and administrative | 6,174 | 4,209 | |||||||||
Amortization | 1,473 | 1,088 | |||||||||
Total operating expenses | 7,647 | 5,297 | |||||||||
Operating income | 5,011 | 4,601 | |||||||||
Other income (expense): | |||||||||||
Net interest expense | (2) | ||||||||||
Intercompany interest income (expense) | (280) | ||||||||||
Other, net | (162) | (324) | |||||||||
Total other income (expense), net | (442) | (326) | |||||||||
Income from continuing operations before income taxes | 4,569 | 4,275 | |||||||||
Income tax benefit (provision) | (1,756) | (923) | |||||||||
Income from continuing operations | 2,813 | 3,352 | |||||||||
Loss from discontinued operations, net of income taxes | (393) | ||||||||||
Net income | 2,420 | 3,352 | |||||||||
Net income attributable to non-controlling interest | (869) | (774) | |||||||||
Net income attributable to Headwaters Incorporated | 1,551 | 2,578 | |||||||||
Non-Guarantor Subsidiaries | Reportable Legal Entities | Building products | |||||||||||
Revenue: | |||||||||||
Revenue | 44,305 | 33,961 | |||||||||
Cost of revenue: | |||||||||||
Total cost of revenue | 31,647 | 24,063 | |||||||||
Parent Company | Reportable Legal Entities | |||||||||||
Operating expenses: | |||||||||||
Selling, general and administrative | 28,026 | 24,839 | 21,363 | ||||||||
Total operating expenses | 28,026 | 24,839 | 21,363 | ||||||||
Operating income | (28,026) | (24,839) | (21,363) | ||||||||
Other income (expense): | |||||||||||
Net interest expense | (64,014) | (45,978) | (42,512) | ||||||||
Intercompany interest income (expense) | 24,062 | 22,737 | 23,434 | ||||||||
Equity in earnings of subsidiaries | 54,350 | 62,719 | 47,117 | ||||||||
Other, net | 35 | ||||||||||
Total other income (expense), net | 14,398 | 39,478 | 28,074 | ||||||||
Income from continuing operations before income taxes | (13,628) | 14,639 | 6,711 | ||||||||
Income tax benefit (provision) | 144,427 | 645 | 426 | ||||||||
Income from continuing operations | 130,799 | 15,284 | 7,137 | ||||||||
Net income | 130,799 | 15,284 | $ 7,137 | ||||||||
Net income attributable to Headwaters Incorporated | $ 130,799 | $ 15,284 |
Condensed Consolidating Finan75
Condensed Consolidating Financial Information (Details 4) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Cash flows from operating activities: | |||||||||||
Net income (loss) | $ 126,774 | $ 23,008 | $ (25,198) | $ 7,084 | $ 16,681 | $ 10,893 | $ (10,082) | $ (1,434) | $ 131,668 | $ 16,058 | $ 7,137 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||||
Depreciation and amortization | 53,973 | 55,134 | 52,317 | ||||||||
Interest expense related to amortization of debt issue costs and debt discount | 6,180 | 2,175 | 5,841 | ||||||||
Stock-based compensation | 2,826 | 2,165 | 1,703 | ||||||||
Deferred income taxes | (96,742) | 1,666 | 698 | ||||||||
Tax benefit from exercise of stock appreciation rights and vesting of restricted stock | (1,543) | 0 | 0 | ||||||||
Net loss (gain) on disposition of property, plant and equipment | 49 | 95 | (649) | ||||||||
Loss (gain) on sale of discontinued operations, net of income taxes | 229 | (2,727) | 55 | ||||||||
Asset impairments | 0 | 1,815 | 0 | ||||||||
Net loss of unconsolidated joint ventures | 262 | 529 | 0 | ||||||||
Equity in earnings of subsidiaries | 0 | 0 | 0 | ||||||||
Decrease (increase) in trade receivables | (14,194) | 517 | (5,035) | ||||||||
Decrease (increase) in inventories | (1,007) | (2,347) | 2,221 | ||||||||
Increase (decrease) in accounts payable and accrued liabilities | (11,557) | (13,225) | (4,218) | ||||||||
Other changes in operating assets and liabilities, net | (6,756) | (1,478) | (1,507) | ||||||||
Net cash provided by operating activities | 63,388 | 60,377 | 58,563 | ||||||||
Cash flows from investing activities: | |||||||||||
Business acquisitions | (5,650) | (95,604) | (43,250) | ||||||||
Investments in unconsolidated joint ventures | (125) | (1,875) | 0 | ||||||||
Purchase of property, plant and equipment | (36,859) | (35,799) | (29,119) | ||||||||
Proceeds from disposition of property, plant and equipment | 915 | 905 | 791 | ||||||||
Proceeds from sale of discontinued operations | 0 | 4,666 | 4,813 | ||||||||
Net decrease (increase) in long-term receivables and deposits | 3,450 | 7,445 | (1,171) | ||||||||
Net change in other assets | (597) | (1,556) | (437) | ||||||||
Net cash used in investing activities | (38,866) | (121,818) | (68,373) | ||||||||
Cash flows from financing activities: | |||||||||||
Net proceeds from issuance of long-term debt | 414,675 | 146,650 | 0 | ||||||||
Net proceeds from issuance of common stock | 0 | 0 | 77,957 | ||||||||
Payments on long-term debt | (449,799) | (7,792) | (47,355) | ||||||||
Dividends paid to non-controlling interest in consolidated subsidiary | (1,690) | (950) | 0 | ||||||||
Employee stock purchases | 804 | 759 | 742 | ||||||||
Tax benefit from exercise of stock appreciation rights and vesting of restricted stock | 1,543 | 0 | 0 | ||||||||
Intercompany transfers | 0 | 0 | 0 | ||||||||
Net cash provided by (used in) financing activities | (34,467) | 138,667 | 31,344 | ||||||||
Net increase (decrease) in cash and cash equivalents | (9,945) | 77,226 | 21,534 | ||||||||
Cash and cash equivalents, beginning of period | 152,542 | 75,316 | 152,542 | 75,316 | 53,782 | ||||||
Cash and cash equivalents, end of period | 142,597 | 152,542 | 142,597 | 152,542 | 75,316 | ||||||
Consolidation, Eliminations | |||||||||||
Cash flows from operating activities: | |||||||||||
Net income (loss) | (54,350) | (62,719) | (47,117) | ||||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||||
Equity in earnings of subsidiaries | 54,350 | 62,719 | 47,117 | ||||||||
Guarantor Subsidiaries | Reportable Legal Entities | |||||||||||
Cash flows from operating activities: | |||||||||||
Net income (loss) | 52,799 | 60,141 | 47,117 | ||||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||||
Depreciation and amortization | 50,538 | 52,716 | 52,027 | ||||||||
Stock-based compensation | 1,014 | 843 | 765 | ||||||||
Deferred income taxes | 7,850 | 1,062 | 698 | ||||||||
Net loss (gain) on disposition of property, plant and equipment | (70) | 44 | (649) | ||||||||
Loss (gain) on sale of discontinued operations, net of income taxes | 45 | (2,727) | 55 | ||||||||
Asset impairments | 1,815 | ||||||||||
Decrease (increase) in trade receivables | (14,295) | (90) | (5,035) | ||||||||
Decrease (increase) in inventories | (783) | (3,927) | 2,221 | ||||||||
Increase (decrease) in accounts payable and accrued liabilities | (2,147) | (17,364) | (5,637) | ||||||||
Other changes in operating assets and liabilities, net | 41,907 | 33,349 | 31,000 | ||||||||
Net cash provided by operating activities | 136,858 | 125,862 | 122,562 | ||||||||
Cash flows from investing activities: | |||||||||||
Business acquisitions | (5,650) | (10,500) | (43,250) | ||||||||
Investments in unconsolidated joint ventures | (125) | ||||||||||
Purchase of property, plant and equipment | (30,972) | (30,672) | (26,940) | ||||||||
Proceeds from disposition of property, plant and equipment | 906 | 905 | 791 | ||||||||
Proceeds from sale of discontinued operations | 4,666 | 4,813 | |||||||||
Net decrease (increase) in long-term receivables and deposits | 2,382 | 7,145 | (1,890) | ||||||||
Net change in other assets | (718) | (2,275) | (294) | ||||||||
Net cash used in investing activities | (34,177) | (30,731) | (66,770) | ||||||||
Cash flows from financing activities: | |||||||||||
Employee stock purchases | 583 | 580 | 539 | ||||||||
Intercompany transfers | (110,997) | (132,872) | (29,695) | ||||||||
Net cash provided by (used in) financing activities | (110,414) | (132,292) | (29,156) | ||||||||
Net increase (decrease) in cash and cash equivalents | (7,733) | (37,161) | 26,636 | ||||||||
Cash and cash equivalents, beginning of period | 33,552 | 70,747 | 33,552 | 70,747 | 44,111 | ||||||
Cash and cash equivalents, beginning of period | 70,713 | 70,713 | |||||||||
Cash and cash equivalents, end of period | 25,819 | 33,552 | 25,819 | 33,552 | 70,747 | ||||||
Cash and cash equivalents, end of period | 70,713 | ||||||||||
Non-Guarantor Subsidiaries | Reportable Legal Entities | |||||||||||
Cash flows from operating activities: | |||||||||||
Net income (loss) | 2,420 | 3,352 | |||||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||||
Depreciation and amortization | 2,922 | 2,146 | |||||||||
Deferred income taxes | (25,808) | 604 | |||||||||
Tax benefit from exercise of stock appreciation rights and vesting of restricted stock | (965) | ||||||||||
Net loss (gain) on disposition of property, plant and equipment | 119 | 6 | |||||||||
Loss (gain) on sale of discontinued operations, net of income taxes | 184 | ||||||||||
Net loss of unconsolidated joint ventures | 262 | 529 | |||||||||
Decrease (increase) in trade receivables | 101 | 607 | |||||||||
Decrease (increase) in inventories | (224) | 1,580 | |||||||||
Increase (decrease) in accounts payable and accrued liabilities | 3,519 | 828 | |||||||||
Other changes in operating assets and liabilities, net | 17,832 | 129 | |||||||||
Net cash provided by operating activities | 362 | 9,781 | |||||||||
Cash flows from investing activities: | |||||||||||
Investments in unconsolidated joint ventures | (1,875) | ||||||||||
Purchase of property, plant and equipment | (662) | (829) | |||||||||
Proceeds from disposition of property, plant and equipment | 9 | ||||||||||
Net cash used in investing activities | (653) | (2,704) | |||||||||
Cash flows from financing activities: | |||||||||||
Dividends paid to non-controlling interest in consolidated subsidiary | (1,690) | (950) | |||||||||
Employee stock purchases | 45 | ||||||||||
Tax benefit from exercise of stock appreciation rights and vesting of restricted stock | 965 | ||||||||||
Intercompany transfers | (1,216) | (397) | |||||||||
Net cash provided by (used in) financing activities | (1,896) | (1,347) | |||||||||
Net increase (decrease) in cash and cash equivalents | (2,187) | 5,730 | |||||||||
Cash and cash equivalents, beginning of period | 5,764 | 34 | 5,764 | 34 | |||||||
Cash and cash equivalents, end of period | 3,577 | 5,764 | 3,577 | 5,764 | 34 | ||||||
Parent Company | Reportable Legal Entities | |||||||||||
Cash flows from operating activities: | |||||||||||
Net income (loss) | 130,799 | 15,284 | 7,137 | ||||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||||
Depreciation and amortization | 513 | 272 | 290 | ||||||||
Interest expense related to amortization of debt issue costs and debt discount | 6,180 | 2,175 | 5,841 | ||||||||
Stock-based compensation | 1,812 | 1,322 | 938 | ||||||||
Deferred income taxes | (78,784) | ||||||||||
Tax benefit from exercise of stock appreciation rights and vesting of restricted stock | (578) | ||||||||||
Net loss (gain) on disposition of property, plant and equipment | 45 | ||||||||||
Equity in earnings of subsidiaries | (54,350) | (62,719) | (47,117) | ||||||||
Increase (decrease) in accounts payable and accrued liabilities | (12,929) | 3,311 | 1,419 | ||||||||
Other changes in operating assets and liabilities, net | (66,495) | (34,956) | (32,507) | ||||||||
Net cash provided by operating activities | (73,832) | (75,266) | (63,999) | ||||||||
Cash flows from investing activities: | |||||||||||
Business acquisitions | (85,104) | ||||||||||
Purchase of property, plant and equipment | (5,225) | (4,298) | (2,179) | ||||||||
Net decrease (increase) in long-term receivables and deposits | 1,068 | 300 | 719 | ||||||||
Net change in other assets | 121 | 719 | (143) | ||||||||
Net cash used in investing activities | (4,036) | (88,383) | (1,603) | ||||||||
Cash flows from financing activities: | |||||||||||
Net proceeds from issuance of long-term debt | 414,675 | 146,650 | |||||||||
Net proceeds from issuance of common stock | 77,957 | ||||||||||
Payments on long-term debt | (449,799) | (7,792) | (47,355) | ||||||||
Employee stock purchases | 176 | 179 | 203 | ||||||||
Tax benefit from exercise of stock appreciation rights and vesting of restricted stock | 578 | ||||||||||
Intercompany transfers | 112,213 | 133,269 | 29,695 | ||||||||
Net cash provided by (used in) financing activities | 77,843 | 272,306 | 60,500 | ||||||||
Net increase (decrease) in cash and cash equivalents | (25) | 108,657 | (5,102) | ||||||||
Cash and cash equivalents, beginning of period | $ 113,226 | $ 4,569 | 113,226 | 4,569 | 9,671 | ||||||
Cash and cash equivalents, end of period | $ 113,201 | $ 113,226 | $ 113,201 | $ 113,226 | $ 4,569 |
Quarterly Financial Data (una76
Quarterly Financial Data (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Revenue | $ 272,717 | $ 243,294 | $ 179,725 | $ 199,597 | $ 245,921 | $ 223,399 | $ 156,512 | $ 165,615 | $ 895,333 | $ 791,447 | $ 702,576 |
Gross profit | 90,301 | 76,762 | 47,141 | 55,687 | 78,577 | 67,672 | 38,551 | 40,893 | 269,891 | 225,693 | 192,482 |
Net income (loss) | $ 126,774 | $ 23,008 | $ (25,198) | $ 7,084 | $ 16,681 | $ 10,893 | $ (10,082) | $ (1,434) | $ 131,668 | $ 16,058 | $ 7,137 |
Basic and diluted earnings (loss) per share | $ 0.22 | $ 0.14 | $ (0.14) | $ (0.02) | $ 0.20 | ||||||
Basic earnings (loss) per share (in dollars per share) | $ 1.72 | $ 0.30 | $ (0.34) | $ 0.09 | $ 1.78 | 0.20 | $ 0.10 | ||||
Diluted earnings (loss) per share (in dollars per share) | $ 1.68 | $ 0.30 | $ (0.34) | $ 0.09 | $ 1.73 | $ 0.20 | $ 0.10 | ||||
Income Tax Expense (Benefit) | $ 96,800 | $ (94,458) | $ 3,574 | $ 3,924 | |||||||
Additional valuation allowance | $ 10,146 | $ 12,500 | $ 119,424 | 10,146 | 119,424 | ||||||
Release of deferred tax valuation allowance | $ (109,277) | $ (7,994) | $ (3,955) | ||||||||
Loss on extinguishment of debt | $ 24,800 |