Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Dec. 31, 2013 | Jan. 24, 2014 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'HEADWATERS INC | ' |
Entity Central Index Key | '0001003344 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 31-Dec-13 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--09-30 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 73,347,747 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2013 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $175,327 | $75,316 |
Trade receivables, net | 76,106 | 109,868 |
Inventories | 45,811 | 37,383 |
Current and deferred income taxes | 15,070 | 14,036 |
Other | 8,461 | 7,280 |
Total current assets | 320,775 | 243,883 |
Property, plant and equipment, net | 165,768 | 159,619 |
Other assets: | ' | ' |
Goodwill | 194,885 | 137,198 |
Intangible assets, net | 134,590 | 139,797 |
Other | 47,472 | 43,512 |
Total other assets | 376,947 | 320,507 |
Total assets | 863,490 | 724,009 |
Current liabilities: | ' | ' |
Accounts payable | 14,471 | 21,810 |
Accrued personnel costs | 31,996 | 47,746 |
Accrued interest | 10,176 | 16,077 |
Current income taxes | 0 | 120 |
Other accrued liabilities | 54,130 | 55,268 |
Current portion of long-term debt | 7,654 | 7,553 |
Total current liabilities | 118,427 | 148,574 |
Long-term liabilities: | ' | ' |
Long-term debt | 599,460 | 449,420 |
Income taxes | 24,515 | 24,637 |
Other | 22,940 | 16,968 |
Total long-term liabilities | 646,915 | 491,025 |
Total liabilities | 765,342 | 639,599 |
Commitments and contingencies | ' | ' |
Stockholders' equity: | ' | ' |
Common stock, $0.001 par value; authorized 200,000 shares; issued and outstanding: 73,149 shares at September 30, 2013 and 73,346 shares at December 31, 2013 | 73 | 73 |
Capital in excess of par value | 721,711 | 720,828 |
Retained earnings (accumulated deficit) | -637,400 | -635,972 |
Treasury stock | -617 | -519 |
Total Headwaters Incorporated stockholders' equity | 83,767 | 84,410 |
Non-controlling interest in consolidated subsidiary | 14,381 | 0 |
Total stockholders' equity | 98,148 | 84,410 |
Total liabilities and stockholders' equity | $863,490 | $724,009 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2013 | Sep. 30, 2013 |
In Thousands, except Per Share data, unless otherwise specified | ||
CONDENSED CONSOLIDATED BALANCE SHEETS | ' | ' |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, authorized shares | 200,000 | 200,000 |
Common stock, issued shares | 73,346 | 73,149 |
Common stock, outstanding shares | 73,346 | 73,149 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Revenue: | ' | ' |
Light building products | $93,012 | $76,688 |
Heavy construction materials | 71,521 | 68,158 |
Energy technology | 1,082 | 4,727 |
Total revenue | 165,615 | 149,573 |
Cost of revenue: | ' | ' |
Light building products | 69,338 | 56,501 |
Heavy construction materials | 54,765 | 53,584 |
Energy technology | 619 | 2,243 |
Total cost of revenue | 124,722 | 112,328 |
Gross profit | 40,893 | 37,245 |
Operating expenses: | ' | ' |
Amortization | 5,106 | 4,936 |
Selling, general and administrative | 28,227 | 26,277 |
Total operating expenses | 33,333 | 31,213 |
Operating income | 7,560 | 6,032 |
Other income (expense): | ' | ' |
Net interest expense | -10,056 | -10,472 |
Other, net | 12 | 36 |
Total other income (expense), net | -10,044 | -10,436 |
Loss from continuing operations before income taxes | -2,484 | -4,404 |
Income tax benefit | 350 | 530 |
Loss from continuing operations | -2,134 | -3,874 |
Income (loss) from discontinued operations, net of income taxes | 700 | -1,998 |
Net loss | -1,434 | -5,872 |
Net loss attributable to non-controlling interest | 6 | 0 |
Net loss attributable to Headwaters Incorporated | ($1,428) | ($5,872) |
Basic and diluted income (loss) per share attributable to Headwaters Incorporated: | ' | ' |
From continuing operations (in dollars per share) | ($0.03) | ($0.06) |
From discontinued operations (in dollars per share) | $0.01 | ($0.03) |
Earnings (loss) per share, basic and diluted, total (in dollars per share) | ($0.02) | ($0.09) |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (USD $) | Total | Common stock | Capital in excess of par value | Retained earnings (accumulated deficit) | Treasury stock | Headwaters Incorporated stockholders' equity | Non-controlling interest |
In Thousands, unless otherwise specified | |||||||
Balances at Sep. 30, 2013 | $84,410 | $73 | $720,828 | ($635,972) | ($519) | $84,410 | $0 |
Balances (in shares) at Sep. 30, 2013 | ' | 73,149 | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' |
Issuance of common stock pursuant to employee stock purchase plan | 319 | 0 | 319 | ' | ' | 319 | ' |
Issuance of common stock pursuant to employee stock purchase plan (in shares) | ' | 39 | ' | ' | ' | ' | ' |
Issuance of restricted stock, net of cancellations | 0 | 0 | ' | ' | ' | 0 | ' |
Issuance of restricted stock, net of cancellations (in shares) | ' | 150 | ' | ' | ' | ' | ' |
Exercise of stock appreciation rights | 0 | 0 | ' | ' | ' | 0 | ' |
Exercise of stock appreciation rights (in shares) | ' | 8 | ' | ' | ' | ' | ' |
Stock-based compensation | 466 | ' | 466 | ' | ' | 466 | ' |
Net 10 share increase in treasury stock held for deferred compensation plan obligations, at cost | 0 | ' | 98 | ' | -98 | 0 | ' |
Non-controlling interest in acquired subsidiary | 14,387 | ' | ' | ' | ' | ' | 14,387 |
Net loss | -1,434 | ' | ' | -1,428 | ' | -1,428 | -6 |
Balances at Dec. 31, 2013 | $98,148 | $73 | $721,711 | ($637,400) | ($617) | $83,767 | $14,381 |
Balances (in shares) at Dec. 31, 2013 | ' | 73,346 | ' | ' | ' | ' | ' |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities: | ' | ' |
Net loss | ($1,434) | ($5,872) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ' | ' |
Depreciation and amortization | 13,047 | 12,436 |
Interest expense related to amortization of debt issue costs and debt discount | 570 | 1,219 |
Stock-based compensation | 466 | 384 |
Net loss (gain) on disposition of property, plant and equipment | 361 | -261 |
Gain on sale of discontinued operations, net of income taxes | -964 | 0 |
Net loss of unconsolidated joint ventures | 49 | 0 |
Decrease in trade receivables | 38,929 | 32,164 |
Increase in inventories | -4,782 | -461 |
Decrease in accounts payable and accrued liabilities | -32,850 | -36,123 |
Other changes in operating assets and liabilities, net | -2,329 | -7,732 |
Net cash provided by (used in) operating activities | 11,063 | -4,246 |
Cash flows from investing activities: | ' | ' |
Payments for acquisitions | -57,550 | -42,950 |
Payments for investments in unconsolidated joint ventures | -750 | 0 |
Purchase of property, plant and equipment | -6,888 | -6,553 |
Proceeds from disposition of property, plant and equipment | 111 | 296 |
Proceeds from sale of discontinued operations | 4,666 | 0 |
Net change in other assets | 2,945 | -48 |
Net cash used in investing activities | -57,466 | -49,255 |
Cash flows from financing activities: | ' | ' |
Net proceeds from issuance of long-term debt | 146,200 | 0 |
Other debt issue costs | -105 | 0 |
Net proceeds from issuance of common stock | 0 | 77,823 |
Employee stock purchases | 319 | 316 |
Net cash provided by financing activities | 146,414 | 78,139 |
Net increase in cash and cash equivalents | 100,011 | 24,638 |
Cash and cash equivalents, beginning of period | 75,316 | 53,782 |
Cash and cash equivalents, end of period | $175,327 | $78,420 |
Nature_of_Operations_and_Basis
Nature of Operations and Basis of Presentation | 3 Months Ended |
Dec. 31, 2013 | |
Nature of Operations and Basis of Presentation | ' |
Nature of Operations and Basis of Presentation | ' |
1. Nature of Operations and Basis of Presentation | |
Description of Business and Organization — Headwaters Incorporated (Headwaters) is a building products company incorporated in Delaware, providing products and services in the light and heavy building materials segments. Headwaters’ vision is to improve lives through innovative advancements in construction materials. | |
The light 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 and concrete block. Headwaters believes that many of its branded products have a leading market position. Revenues from Headwaters’ light building products businesses are diversified geographically and also by market, including the new housing and residential repair and remodeling markets, as well as commercial construction markets. | |
The heavy construction materials segment is the nationwide leader in the management and marketing of coal combustion products (CCPs), including fly ash which is primarily used as a mineral admixture for the partial replacement of portland cement in concrete. Headwaters’ heavy 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 coal and oil. 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 4, 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 presented. In oil, Headwaters believes that its upgrading technology represents a substantial improvement over current heavy oil refining technologies. 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. | |
Basis of Presentation — Headwaters’ fiscal year ends on September 30 and unless otherwise noted, references to years refer to Headwaters’ fiscal year rather than a calendar year. The unaudited interim condensed consolidated financial statements include the accounts of Headwaters, all of its subsidiaries and other entities in which Headwaters has a controlling interest. All significant intercompany transactions and accounts are eliminated in consolidation. Due to the seasonality of most of Headwaters’ operations and other factors, the consolidated results of operations for any particular period are not indicative of the results to be expected for a full fiscal year. During the December 2012 quarter, approximately 15% of Headwaters’ total revenue and cost of revenue was for services. During the December 2013 quarter, approximately 14% of Headwaters’ total revenue and cost of revenue was for services. Substantially all service-related revenue for both periods was in the heavy construction materials segment. | |
The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (SEC) for quarterly reports on Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included, and consist of normal recurring adjustments. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted. These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in Headwaters’ Annual Report on Form 10-K for the year ended September 30, 2013 (Form 10-K). | |
Recent Accounting Pronouncements — Headwaters has reviewed 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 that review, 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 have been reclassified to conform to the current period’s presentation. The reclassifications had no effect on net income or total assets. |
Segment_Reporting
Segment Reporting | 3 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Segment Reporting | ' | ||||||||||||||||
Segment Reporting | ' | ||||||||||||||||
2. Segment Reporting | |||||||||||||||||
Headwaters currently operates three business segments: light building products, heavy construction materials and energy technology. These segments are managed and evaluated separately by management due to differences in their markets, operations, products and services. Revenues for the light building products segment consist of product sales to wholesale and retail distributors, contractors and other users of building products. Revenues for the heavy construction materials segment consist primarily of CCP product sales to ready-mix concrete businesses, with a smaller amount from services provided to coal-fueled electric generating utilities. Historically, revenues for the energy technology segment consisted primarily of coal sales; however, as described in Note 4, Headwaters sold all of its coal cleaning facilities in fiscal 2012 and 2013. Coal sales revenue and results of operations have been reflected as discontinued operations in the accompanying statements of operations for all periods. Currently, continuing revenues for the energy technology segment consist primarily of catalyst sales to oil refineries. 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. 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. The energy technology segment assets in 2012 include the coal cleaning assets held for sale. | |||||||||||||||||
Three Months Ended December 31, 2012 | |||||||||||||||||
(in thousands) | Light | Heavy | Energy | Corporate | Totals | ||||||||||||
building | construction | technology | |||||||||||||||
products | materials | ||||||||||||||||
Segment revenue | $ | 76,688 | $ | 68,158 | $ | 4,727 | $ | 0 | $ | 149,573 | |||||||
Depreciation and amortization | $ | (8,675 | ) | $ | (3,140 | ) | $ | (566 | ) | $ | (55 | ) | $ | (12,436 | ) | ||
Operating income (loss) | $ | 3,127 | $ | 7,607 | $ | 82 | $ | (4,784 | ) | $ | 6,032 | ||||||
Net interest expense | (10,472 | ) | |||||||||||||||
Other income (expense), net | 36 | ||||||||||||||||
Income tax benefit | 530 | ||||||||||||||||
Loss from continuing operations | (3,874 | ) | |||||||||||||||
Loss from discontinued operations, net of income taxes | (1,998 | ) | |||||||||||||||
Net loss | $ | (5,872 | ) | ||||||||||||||
Capital expenditures | $ | 5,045 | $ | 683 | $ | 152 | $ | 673 | $ | 6,553 | |||||||
Segment assets as of September 30, 2013 | $ | 306,686 | $ | 358,684 | $ | 34,509 | $ | 24,130 | $ | 724,009 | |||||||
Three Months Ended December 31, 2013 | |||||||||||||||||
(in thousands) | Light | Heavy | Energy | Corporate | Totals | ||||||||||||
building | construction | technology | |||||||||||||||
products | materials | ||||||||||||||||
Segment revenue | $ | 93,012 | $ | 71,521 | $ | 1,082 | $ | 0 | $ | 165,615 | |||||||
Depreciation and amortization | $ | (9,212 | ) | $ | (3,286 | ) | $ | (488 | ) | $ | (61 | ) | $ | (13,047 | ) | ||
Operating income (loss) | $ | 5,086 | $ | 9,933 | $ | (2,286 | ) | $ | (5,173 | ) | $ | 7,560 | |||||
Net interest expense | (10,056 | ) | |||||||||||||||
Other income (expense), net | 12 | ||||||||||||||||
Income tax benefit | 350 | ||||||||||||||||
Loss from continuing operations | (2,134 | ) | |||||||||||||||
Income from discontinued operations, net of income taxes | 700 | ||||||||||||||||
Net loss | $ | (1,434 | ) | ||||||||||||||
Capital expenditures | $ | 4,452 | $ | 1,185 | $ | 230 | $ | 1,021 | $ | 6,888 | |||||||
Segment assets | $ | 364,086 | $ | 340,458 | $ | 32,268 | $ | 126,678 | $ | 863,490 |
Acquisitions
Acquisitions | 3 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Acquisitions | ' | |||||||
Acquisitions | ' | |||||||
3. 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 light 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 boards, but also millwork, sheet stock, railing, 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 primarily distributes its products into independent lumber yards located in the Northeast and Mid-Atlantic states. Headwaters’ access to Kleer Lumber’s distribution channel may expand the light building products distribution network for existing Headwaters products. | ||||||||
Total consideration paid for Kleer Lumber, all of which was cash, was approximately $43.3 million. 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 operations for the December 2012 quarter. | ||||||||
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 | $ | 5,818 | ||||||
Current liabilities | (3,093 | ) | ||||||
Property, plant and equipment | 4,098 | |||||||
Intangible assets: | ||||||||
Customer relationships (15 year life) | 11,100 | |||||||
Trade name (indefinite life) | 4,800 | |||||||
Goodwill | 20,527 | |||||||
Net assets acquired | $ | 43,250 | ||||||
Kleer Lumber’s future growth attributable to new customers, geographic market 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. All of Headwaters’ goodwill plus the indefinite-lived trade name are tested for impairment annually, and all acquired goodwill and intangible assets are subject to review for impairment if indicators of impairment develop in the future. | ||||||||
Roof Tile — On December 12, 2013, Headwaters acquired 80% of the equity interests of Roof Tile, a privately-held Florida-based company in the light building products industry. Roof Tile’s results of operations have been included with Headwaters’ consolidated results beginning December 13, 2013. | ||||||||
Roof Tile is a leading manufacturer of high quality concrete roof tiles and accessories sold under the Entegra brand, primarily into the Florida market. The acquisition of Roof Tile will provide additional product offerings to Headwaters’ current roofing products portfolio. Headwaters believes the strategic location of Roof Tile’s centralized manufacturing plant in Florida, the quality of its contractor/customer relationships, and the scope of its products and services provide a strong competitive advantage. Many of its customers are currently customers of Headwaters, and provide Headwaters the opportunity to expand existing sales and distribution within the Florida market, which is the third fastest growing state in the U.S. in terms of population. | ||||||||
Total consideration paid for Roof Tile, all of which was cash, was approximately $57.6 million; however, the purchase price is subject to adjustment for the final calculation of acquisition-date working capital, which calculation is currently expected to be finalized in the March 2014 quarter. 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 operations for the December 2013 quarter. No later than five years from the date of acquisition, Headwaters has the right, but not the obligation, to acquire the non-controlling 20% equity interest in Roof Tile, for a stipulated multiple of EBITDA. No later than 18 months from the date of acquisition, 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. | ||||||||
The Roof Tile 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, using available information and assumptions Headwaters deems to be reasonable at the current time. Headwaters is in the process of finalizing all of the estimated amounts shown below, particularly the third-party valuations of the fair values of the acquired intangible assets and the non-controlling interest; therefore, the provisional measurements shown in the table are subject to change. | ||||||||
(in thousands) | ||||||||
Current assets | $ | 8,952 | ||||||
Current liabilities | (2,521 | ) | ||||||
Property, plant and equipment | 7,819 | |||||||
Goodwill and intangible assets | 57,687 | |||||||
Net assets acquired | 71,937 | |||||||
Less non-controlling interest | (14,387 | ) | ||||||
Net assets attributable to Headwaters | $ | 57,550 | ||||||
The process of identifying and valuing the intangible assets that were acquired is in the early stages and all intangible assets have been included with goodwill in the December 31, 2013 condensed consolidated balance sheet and in the above table. When the intangible assets have been identified and valued, and estimated useful lives are determined, amortization of those intangible assets will begin effective as of December 13, 2013. | ||||||||
No revenue or earnings of Roof Tile were included in Headwaters’ statement of operations for the December 2012 quarter and the revenue and earnings for the December 2013 quarter were not material. The following represents the pro forma consolidated revenue and net loss for Headwaters for the periods indicated as if Roof Tile had been included in Headwaters’ consolidated results of operations beginning October 1, 2012. | ||||||||
Three months ended | ||||||||
December 31, | ||||||||
(in thousands) | 2012 | 2013 | ||||||
Revenue | $ | 156,646 | $ | 174,015 | ||||
Net loss | (6,312 | ) | (78 | ) | ||||
The above pro forma results have been calculated by combining the historical results of Headwaters and Roof Tile as if the acquisition had occurred on October 1, 2012, and adjusting the income tax provision as if it had been calculated on the resulting, combined results. The pro forma results include an estimate for both periods for intangible asset amortization (which is subject to change when the final asset values have been determined) and also reflect the following December 2013 expenses in the December 2012 quarter instead of in December 2013: $0.3 million of direct acquisition costs and $0.3 million of nonrecurring expense related to the fair value adjustment to acquisition-date inventory. No other material pro forma adjustments were deemed necessary, either to conform Roof Tile 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 transaction occurred on October 1, 2012 or that may be achieved in the future. | ||||||||
Discontinued_Operations
Discontinued Operations | 3 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Discontinued Operations | ' | |||||||
Discontinued Operations | ' | |||||||
4. Discontinued Operations | ||||||||
In September 2011, the Board of Directors committed to a plan to sell the 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 Headwaters’ 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. | ||||||||
Three Months Ended | ||||||||
December 31, | ||||||||
(in thousands) | 2012 | 2013 | ||||||
Revenue | $ | 4,249 | $ | 0 | ||||
Loss from operations of discontinued operations before income taxes | $ | (1,998 | ) | $ | (264 | ) | ||
Gain on disposal | 0 | 964 | ||||||
Income tax provision | 0 | 0 | ||||||
Income (loss) from discontinued operations, net of income taxes | $ | (1,998 | ) | $ | 700 | |||
Headwaters sold all of its coal cleaning facilities in fiscal 2012 and 2013, and recognized estimated gains at the time of sale. Subsequent to the dates of sale, some adjustments of the previously recognized estimated gains on the sales transactions have been recognized, including the reported gain on disposal reflected in the table above. Headwaters currently expects that additional adjustments to the estimated gains and losses may be recognized in 2014 as certain contingencies are resolved. The loss from operations reflected in the table for both periods includes expenses for certain litigation which commenced prior to disposal of the business. | ||||||||
For all sales transactions, a majority of the consideration is in the form of potential production royalties and deferred purchase price, which amounts are dependent upon future plant production levels over several years. While maximum potential future production royalties and deferred purchase price on the sales transactions could total more than $50 million, such potential proceeds were not considered in the gain calculations and will be accounted for in future periods when any such amounts are received. In the December 2013 quarter, Headwaters received $2.7 million of deferred purchase price payments, along with 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, Headwaters amended the purchase agreement to provide the buyer with additional time to make payments to Headwaters, as well as fulfill contractual requirements related to the assumed reclamation obligations. The buyer continues to make progress, but as of December 31, 2013, Headwaters remains contingently liable for some of the assumed obligations and has accrued approximately $10.2 million to meet those contingent liabilities if necessary, representing an increase of $3.5 million in the estimated liability during the December 2013 quarter. Headwaters has also reserved certain receivables due from the buyer 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 contingencies related to the sale of the business are resolved. |
Inventories
Inventories | 3 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Inventories | ' | |||||||
Inventories | ' | |||||||
5. Inventories | ||||||||
Inventories consisted of the following at: | ||||||||
(in thousands) | September 30, 2013 | December 31, 2013 | ||||||
Raw materials | $ | 9,909 | $ | 11,606 | ||||
Finished goods | 27,474 | 34,205 | ||||||
$ | 37,383 | $ | 45,811 |
Intangible_Assets
Intangible Assets | 3 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Intangible Assets | ' | |||||||||||||||
Intangible Assets | ' | |||||||||||||||
6. Intangible Assets | ||||||||||||||||
The following table summarizes the gross carrying amounts and related accumulated amortization of intangible assets as of: | ||||||||||||||||
September 30, 2013 | December 31, 2013 | |||||||||||||||
(in thousands of dollars) | Estimated | Gross | Accumulated | Gross | Accumulated | |||||||||||
useful lives | Carrying | Amortization | Carrying | Amortization | ||||||||||||
Amount | Amount | |||||||||||||||
Trade name | Indefinite | $ | 4,800 | — | $ | 4,800 | — | |||||||||
CCP contracts | 20 years | 106,400 | $ | 58,699 | 106,400 | $ | 60,029 | |||||||||
Customer relationships | 5 - 15 years | 83,564 | 44,129 | 83,564 | 45,612 | |||||||||||
Trade names | 5 - 20 years | 67,790 | 30,502 | 67,790 | 31,371 | |||||||||||
Patents and patented technologies | 6 - 19 years | 55,099 | 46,954 | 54,970 | 48,264 | |||||||||||
Other | 6 - 17 years | 3,960 | 1,532 | 3,835 | 1,493 | |||||||||||
$ | 321,613 | $ | 181,816 | $ | 321,359 | $ | 186,769 | |||||||||
The above table does not include any amounts for potential intangible assets acquired in the Roof Tile acquisition described in Note 3 because the process of identifying and valuing those intangible assets is in the early stages. Total amortization expense related to intangible assets was approximately $4.9 million and $5.1 million for the quarters ended December 31, 2012 and 2013, respectively. | ||||||||||||||||
Total estimated annual amortization expense for 2014 through 2019 is shown in the following table, which estimates do not include any amortization for Roof Tile’s intangible assets. | ||||||||||||||||
Year ending September 30: | (in thousands) | |||||||||||||||
2014 | $ | 19,943 | ||||||||||||||
2015 | 15,812 | |||||||||||||||
2016 | 15,555 | |||||||||||||||
2017 | 14,677 | |||||||||||||||
2018 | 14,627 | |||||||||||||||
2019 | 13,599 | |||||||||||||||
Longterm_Debt
Long-term Debt | 3 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Long-term Debt | ' | |||||||
Long-term Debt | ' | |||||||
7. Long-term Debt | ||||||||
The total undiscounted face amount of Headwaters’ outstanding long-term debt was approximately $457.5 million as of September 30, 2013 and $607.5 million as of December 31, 2013. As of those dates, the discounted carrying value of long-term debt consisted of the following: | ||||||||
(in thousands) | September 30, | December 31, | ||||||
2013 | 2013 | |||||||
7-5/8% Senior secured notes, due April 2019 | $ | 400,000 | $ | 400,000 | ||||
7¼% Senior notes, due January 2019 | 0 | 150,000 | ||||||
Convertible senior subordinated notes: | ||||||||
2.50%, due February 2014 (face amount $7,687), net of discount | 7,553 | 7,654 | ||||||
8.75%, due February 2016 (face amount $49,791), net of discount | 49,420 | 49,460 | ||||||
Total convertible senior subordinated notes, net of applicable discounts | 56,973 | 57,114 | ||||||
Carrying amount of long-term debt, net of discounts | 456,973 | 607,114 | ||||||
Less current portion | (7,553 | ) | (7,654 | ) | ||||
Long-term debt | $ | 449,420 | $ | 599,460 | ||||
7-5/8% Senior Secured Notes — In 2011, Headwaters issued $400.0 million of 7-5/8% senior secured notes for net proceeds of approximately $392.8 million. The 7-5/8% notes mature in April 2019 and bear interest at a rate of 7.625%, payable semiannually. The notes are secured by substantially all assets of Headwaters; however, the note holders have a second priority position with respect to the assets that secure the ABL Revolver described below, currently consisting of certain trade receivables and inventories of Headwaters’ light building products and heavy construction materials segments. The notes are senior in priority to the 7¼% senior notes described below to the extent of the value of the assets securing the 7-5/8% notes, and are senior to all other outstanding and future subordinated debt. | ||||||||
Headwaters can redeem the 7-5/8% notes, in whole or in part, at any time after March 2015 at redemption prices ranging from 103.8% to 100.0%, depending on the redemption date. In addition, through March 2014 Headwaters can redeem at a price of 107.6% up to 35% of the outstanding notes with the net proceeds from one or more equity offerings. Headwaters can also redeem up to 10% of the notes in any 12-month period through March 2014 at a price of 103%, and can redeem any portion of the notes at any time through March 2015 at a price equal to 100% plus a make-whole premium. | ||||||||
The senior secured notes limit Headwaters in the incurrence of additional debt and liens on assets, prepayment of future new 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 debt covenants as of December 31, 2013. | ||||||||
ABL Revolver — Since entering into the ABL Revolver, Headwaters has not borrowed any funds under the arrangement and has no borrowings outstanding as of December 31, 2013. 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’ light building products and heavy 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 December 31, 2013, Headwaters had secured letters of credit under the ABL Revolver of approximately $22.7 million for various purposes and had availability under the ABL Revolver of approximately $37.0 million. | ||||||||
The ABL Revolver terminates in October 2018. There is a contingent provision for early termination at any time within three months prior to the earliest maturity date of the senior secured notes or any of the convertible senior subordinated notes, at which time any amounts borrowed must be repaid. The contingent provision for early termination is precluded if borrowing base capacity under the ABL Revolver and/or cash collateral is at least equivalent to the amount of notes maturing on such date. | ||||||||
Outstanding borrowings under the ABL Revolver accrue interest at Headwaters’ option, at either i) the London Interbank Offered Rate (LIBOR) plus 1.75%, 2.0% or 2.25%, depending on Headwaters’ average net excess availability under the ABL; or ii) the “Base Rate” plus 0.5%, 0.75% or 1.0%, 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 LIBOR 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 December 31, 2013, the interest rate on those borrowings would have been approximately 2.0%. | ||||||||
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 15%, 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 December 31, 2013. | ||||||||
7¼% Senior Notes — In December 2013, Headwaters issued $150.0 million of 7¼% senior notes for net proceeds of approximately $146.2 million. The 7¼% notes are unsecured, mature in January 2019 and bear interest at a rate of 7.25%, payable semiannually. The notes are effectively subordinate in priority to the 7-5/8% senior secured notes and the ABL Revolver described above, to the extent of the value of the assets securing such debt, and are senior to all other outstanding and future subordinated debt. | ||||||||
Headwaters can redeem the 7¼% notes, in whole or in part, at any time after January 15, 2016 at redemption prices ranging 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 7¼% 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 debt covenants as of December 31, 2013. | ||||||||
Convertible Senior Subordinated Notes — The Form 10-K includes a detailed description of all of Headwaters’ currently outstanding convertible senior subordinated notes. Except for the amortization of debt discount, there were no changes in this debt during the December 2013 quarter. | ||||||||
Interest and Debt Maturities — During the December 2012 and 2013 quarters, Headwaters incurred total interest costs of approximately $10.6 million and $10.2 million, respectively, including approximately $1.2 million and $0.6 million, respectively, of non-cash interest expense. 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 amortization of debt discount and debt issue costs, was approximately 7.7% at September 30, 2013 and 7.6% at December 31, 2013. All of the outstanding 2.50% convertible notes mature in February 2014, after which there are no debt maturities until February 2016. |
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 3 Months Ended |
Dec. 31, 2013 | |
Fair Value of Financial Instruments | ' |
Fair Value of Financial Instruments | ' |
8. Fair Value of Financial Instruments | |
Headwaters’ financial instruments consist primarily of cash and cash equivalents, trade receivables, accounts payable and long-term debt. All of these financial instruments except 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, 2013 and December 31, 2013 was fixed-rate. Using fair values for the debt, the aggregate fair value of Headwaters’ long-term debt as of September 30, 2013 would have been approximately $484.0 million, compared to a carrying value of $457.5 million, and the aggregate fair value as of December 31, 2013 would have been approximately $650.0 million, compared to a carrying value of $607.1 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 differences between Headwaters’ common stock price at the balance sheet measurement dates and the conversion prices for the convertible senior subordinated notes. |
Income_Taxes
Income Taxes | 3 Months Ended |
Dec. 31, 2013 | |
Income Taxes | ' |
Income Taxes | ' |
9. Income Taxes | |
Headwaters’ estimated effective income tax rate for continuing operations for the fiscal year ending September 30, 2014, exclusive of discrete items, is currently expected to be approximately 14%, and this estimated rate was used to record income taxes for the December 2013 quarter. For the December 2012 quarter, Headwaters used an estimated effective income tax rate for continuing operations of 12%. Headwaters did not recognize any tax expense for discrete items in either period. | |
Beginning in 2011, Headwaters has 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 in either the December 2012 or 2013 quarters, except to the extent of projected fiscal year earnings. The reported income tax rates of 12% and 14% for these periods resulted primarily from 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. | |
A valuation allowance is required when there is significant uncertainty as to the realizability of deferred tax assets. Because the realization of Headwaters’ deferred tax assets is dependent upon future income in domestic and foreign jurisdictions that have generated losses, management determined that Headwaters does not meet the “more likely than not” threshold that NOLs, tax credits and other deferred tax assets will be realized. Accordingly, a valuation allowance is required. During fiscal 2014, Headwaters may realize a three-year cumulative accounting profit. If this occurs, Headwaters will also consider other positive and negative evidence such as current financial performance, financial and taxable income projections, the market environment and other factors, in evaluating the continued need for a full, or partial, valuation allowance. Any reversal of the valuation allowance will favorably impact Headwaters’ results of operations in the period of reversal. | |
As of December 31, 2013, Headwaters’ NOL and capital loss carryforwards totaled approximately $78.6 million (tax effected). The U.S. and state NOLs expire from 2014 to 2033. Substantially all of the non-U.S. NOLs, which are not material, do not expire. In addition, there are approximately $25.6 million of tax credit carryforwards as of December 31, 2013, which expire from 2014 to 2033. | |
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 for the years 2010 through 2012 and by other taxing authorities for the years 2009 through 2012. 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 the amount of Headwaters’ unrecognized income tax benefits could change significantly within the next 12 months. These changes could be the result of Headwaters’ ongoing tax audits, the settlement of outstanding audit issues or the lapse of tax statutes of limitation. However, due to the issues being examined, at the current time, an estimate of the range of reasonably possible outcomes cannot be made, beyond amounts currently accrued. |
Equity_Securities_and_StockBas
Equity Securities and Stock-Based Compensation | 3 Months Ended |
Dec. 31, 2013 | |
Equity Securities and Stock-Based Compensation | ' |
Equity Securities and Stock-Based Compensation | ' |
10. Equity Securities and Stock-Based Compensation | |
Issuance of Common Stock — In the December 2012 quarter, 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 February 2012, Headwaters filed a universal shelf registration statement with the SEC under which $210.0 million was available for offerings of securities. Following the above-described issuance of common stock, there is approximately $126.6 million available for future securities offerings. A prospectus supplement describing the terms of any additional securities to be issued is required to be filed before any future 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, and 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 December 31, 2013, the treasury stock and related deferred compensation obligation had fair values of approximately $0.7 million, which was $0.1 million higher than the carrying values at cost. | |
Stock-Based Compensation — During the December 2013 quarter, the Compensation Committee of Headwaters’ Board of Directors (the Committee) approved the grant of approximately 0.5 million stock-based awards to officers and employees. The awards were granted under terms of the 2010 Incentive Compensation Plan (2010 ICP) and vest over an approximate three-year period. Vesting is also subject to a 60-day average stock price hurdle that precludes vesting unless Headwaters’ stock price exceeds by a predetermined amount the stock price on the date of grant, which threshold must be reached prior to the final vest date. | |
Stock-based compensation expense was approximately $0.4 million and $0.5 million for the December 2012 and 2013 quarters, respectively. As of December 31, 2013, there was approximately $3.7 million of total compensation cost related to unvested awards not yet recognized, which will be recognized in future periods in accordance with applicable vesting terms. |
Earnings_per_Share
Earnings per Share | 3 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Earnings per Share | ' | |||||||
Earnings per Share | ' | |||||||
11. Earnings per Share | ||||||||
The following table sets forth the computations of basic and diluted EPS for the periods indicated, reflecting the amounts attributable to Headwaters and excluding the amounts attributable to the non-controlling interest in Roof Tile. In accordance with ASC 260, income (loss) 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. | ||||||||
Three Months Ended | ||||||||
December 31, | ||||||||
(in thousands, except per-share amounts) | 2012 | 2013 | ||||||
Numerator: | ||||||||
Loss from continuing operations | $ | (3,874 | ) | $ | (2,134 | ) | ||
Loss from continuing operations attributable to non-controlling interest | 0 | 6 | ||||||
Numerator for basic and diluted earnings per share from continuing operations — loss from continuing operations attributable to Headwaters Incorporated | (3,874 | ) | (2,128 | ) | ||||
Numerator for basic and diluted earnings per share from discontinued operations — income (loss) from discontinued operations, net of income taxes | (1,998 | ) | 700 | |||||
Numerator for basic and diluted earnings per share — net loss attributable to Headwaters Incorporated | $ | (5,872 | ) | $ | (1,428 | ) | ||
Denominator: | ||||||||
Denominator for basic and diluted earnings per share — weighted-average shares outstanding | 61,982 | 73,066 | ||||||
Basic and diluted loss per share from continuing operations | $ | (0.06 | ) | $ | (0.03 | ) | ||
Basic and diluted income (loss) per share from discontinued operations | (0.03 | ) | 0.01 | |||||
Basic and diluted loss per share | $ | (0.09 | ) | $ | (0.02 | ) | ||
Anti-dilutive securities not considered in diluted EPS calculation: | ||||||||
SARs | 4,087 | 3,937 | ||||||
Stock options | 1,110 | 618 |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Dec. 31, 2013 | |
Commitments and Contingencies | ' |
Commitments and Contingencies | ' |
12. Commitments and Contingencies | |
Significant new commitments, material changes in commitments and ongoing contingencies as of December 31, 2013, not disclosed elsewhere, are as follows: | |
Compensation Arrangements — Cash Performance Unit Awards. The Compensation Committee has approved various grants of performance unit awards to certain officers and employees, to be settled in cash, based on the achievement of certain stipulated goals, all of which are described in detail in the Form 10-K (including fiscal 2014 grants made during the December 2013 quarter). Since September 30, 2013, there have been no significant changes in any of Headwaters’ commitments or in the amounts accrued under these awards, except for the payment during the December 2013 quarter of amounts contractually due under the terms of certain awards. Headwaters currently expects that additional amounts could be earned during the June and September 2014 quarters under the terms of the fiscal 2014 awards. | |
Cash-Settled SAR Grants. In fiscal 2011, the Committee approved grants to certain employees of approximately 0.4 million cash-settled SARs, approximately 0.2 million of which remain outstanding as of December 31, 2013. These SARs vested in annual installments through September 30, 2013, provided the participant was still employed by Headwaters at the respective vest dates, and are settled in cash upon exercise by the employee. The SARs terminate on September 30, 2015 and must be exercised on or before that date. As of December 31, 2013, approximately $1.2 million has been accrued for outstanding awards because the stock price at December 31, 2013 was above the grant-date stock price of $3.81. Future changes in Headwaters’ stock price in any amount above $3.81 through September 30, 2015 will result in adjustment to the expected remaining liability, which adjustment (whether positive or negative) will be reflected in Headwaters’ consolidated statement of operations each quarter. | |
In fiscal 2012, the Committee approved grants to certain officers and employees of approximately 1.0 million cash-settled SARs, approximately 0.8 million of which remain outstanding as of December 31, 2013. These SARs have terms similar to those described above, except they could not vest until and unless the 60-day average stock price exceeded approximately 135% of the stock price on the date of grant (or $2.50), which occurred during 2012. Approximately $5.5 million has been accrued for outstanding awards as of December 31, 2013. Changes in Headwaters’ stock price in any amount above the grant-date stock price of $1.85 through September 30, 2016, the date these SARs expire, will result in adjustment to the expected remaining liability, which adjustment (whether positive or negative) will be reflected in Headwaters’ statement of operations each quarter. Compensation expense for all cash-settled SARs was approximately $2.2 million and $0.9 million for the December 2012 and 2013 quarters, respectively. | |
Property, Plant and Equipment — As of December 31, 2013, Headwaters was committed to spend approximately $4.7 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 $0.6 million and $0.5 million of expense for legal matters during the December 2012 and 2013 quarters, respectively. Historically, except for the fiscal year 2011, costs paid to outside legal counsel have comprised a majority of Headwaters’ litigation-related costs. Headwaters currently believes the range of potential loss for all unresolved legal matters, excluding costs for outside counsel, is from $16.0 million up to the amounts sought by claimants and has recorded a liability as of December 31, 2013 of $16.0 million, of which $15.0 million was incurred in 2011. 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 amounts 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 estimates 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. | |
AES Thames Bankruptcy. Headwaters Resources, Inc. (HRI) had a contract to perform fly ash disposal services for AES Thames, L.L.C. (AES Thames) related to its coal-fired power plant located in Montville, Connecticut. AES Thames filed a petition for relief under the United States Bankruptcy Code in February 2011. In January 2013, the trustee filed an adversary proceeding complaint in the United States Bankruptcy Court for the District of Delaware alleging that certain payments made before the bankruptcy by AES Thames to HRI were avoidable preferential transfers under the Bankruptcy Code. The complaint seeks to recover $1.6 million plus interest, attorney fees, and costs. HRI answered denying the allegations of the complaint. 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. | |
Edwards. In May 2013, James W. Edwards, purportedly a stockholder of Headwaters Incorporated, filed a complaint in the United States District Court for the District of Utah against current and former members of the Board of Directors of the Company and against Headwaters Incorporated. The complaint alleges that the Board breached its fiduciary duties and wasted corporate assets in connection with the Compensation Committee’s grant of certain stock appreciation rights to the Company’s Chief Executive Officer in November 2011 under the 2010 Incentive Plan (Plan). The complaint alleges that the 2011 grant exceeded Plan limits and that the 2013 Proxy Statement in connection with the Company’s 2013 Annual Meeting of Stockholders contained false and misleading information concerning the 2011 grant. The complaint seeks an order rescinding the 2011 grant, unspecified damages and other remedies, plus interest, attorney fees, and costs. The complaint is brought derivatively on behalf of Headwaters Incorporated and as a purported class action on behalf of all shareholders of record as of December 31, 2012. Defendants filed their initial responses to the complaint in January 2014. 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. | |
Boynton. In 1998, Headwaters entered into a technology purchase agreement with James G. Davidson and Adtech, Inc. The transaction transferred certain patent and royalty rights to Headwaters related to a synthetic fuel technology invented by Davidson. In 2002, Headwaters received a summons and complaint from the United States District Court for the Western District of Tennessee filed by former stockholders of Adtech alleging, among other things, fraud, conspiracy, constructive trust, conversion, patent infringement and interference with contract arising out of the 1998 technology purchase agreement entered into between Davidson and Adtech on the one hand, and Headwaters on the other. All claims against Headwaters were dismissed in pretrial proceedings except claims of conspiracy and constructive trust. The District Court certified a class comprised of substantially all purported stockholders of Adtech, Inc. The plaintiffs sought compensatory damages from Headwaters in the approximate amount of $43.0 million plus prejudgment interest and punitive damages. In June 2009, a jury reached a verdict in a trial in the amount of $8.7 million for the eight named plaintiffs representing a portion of the class members. In September 2010, a jury reached a verdict after a trial for the remaining 46 members of the class in the amount of $7.3 million. In April 2011, the trial court entered an order for a constructive trust in the amount of approximately $16.0 million (the same amount as the sum of the previous jury verdicts), and entered judgment against Headwaters in the total approximate amount of $16.0 million, in accordance with the verdicts and order on constructive trust. Headwaters filed a supersedeas bond and a notice of appeal from the judgment to the United States Court of Appeals for the Federal Circuit. Plaintiffs also filed notice of an appeal. The Federal Circuit transferred the case to the United States Court of Appeals for the Sixth Circuit on the basis of jurisdiction. A panel of the Sixth Circuit held oral arguments in March 2013 but no decision has been announced. Because the resolution of the litigation is uncertain, legal counsel and management cannot express an opinion as to the ultimate amount, if any, of Headwaters’ liability. | |
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 alleges that the EPA has failed to review, and where necessary, revise applicable RCRA subtitle D regulations applicable to the disposal of coal ash within the timeframe required by statute. Other parties also have 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 seeks declaratory relief and should provide HRI an opportunity to represent its interests before the court makes orders 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 has 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. The parties filed a proposed schedule with the District Court for the EPA to review its coal ash disposal regulations by December 2014. Because the final resolution of the litigation is uncertain, legal counsel and management cannot express an opinion as to the ultimate outcome. | |
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. 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 Virginia Electric and Power Company (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 new 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 some of its insurers. One insurer denied coverage based on allegations in the 2009 Fentress complaints, and a trial court ruled in the insurer’s favor, which ruling HRI appealed in February 2013 to the United States Court of Appeals for the Tenth Circuit. The parties have completed appeal briefing and oral argument was held in January 2014 but no decision has been announced. Another insurer continues to pay for the defense of the underlying cases. 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. | |
Neil Wallace and CPM. In February 2012, Neil Wallace filed a complaint in the State of Virginia Chesapeake Circuit Court against Virginia Electric and Power Company and related entities (VEPCO), VFL and Headwaters alleging personal injuries arising from exposure to the fly ash used to build the golf course described in the Fentress Families Trust case. Wallace claims that he worked on the golf course site from 2002-2007 and that as a result, he contracted kidney cancer. Plaintiff was the managing member and corporate counsel of CPM Virginia, LLC (CPM). CPM was a fly ash manager for VEPCO and was an owner and developer of the golf course. Wallace claims damages of $10.0 million. The trial court dismissed Wallace’s complaint and Wallace filed a notice of appeal. In January 2014, the Supreme Court of Virginia refused Wallace’s appeal. Separately, in December 2012 CPM filed a complaint in the same court against HRI alleging breach of contract and seeking declaratory judgment and compensatory damages in the amount of $0.5 million plus attorney fees and costs. CPM alleges that HRI should indemnify CPM for past and future expenses incurred in defending against the Fentress complaints. Because resolution of this 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. | |
Archstone. Archstone owns an apartment complex in Westbury, New York. Archstone alleges that moisture penetrated the building envelope and damaged moisture sensitive parts of the buildings which began to rot and grow mold. In 2008, Archstone evicted its tenants and began repairing the 21 apartment buildings. Also in 2008, Archstone filed a complaint in the Nassau County Supreme Court of the State of New York against the prime contractor and its performance bond surety, the designer, and Eldorado Stone, LLC which supplied architectural stone that was installed by others during construction. The prime contractor then sued over a dozen subcontractors who in turn sued others. Most parties filed cross-claims for contribution and indemnity against Eldorado Stone and others. Archstone claims as damages approximately $36.0 million in repair costs, $19.0 million in lost lease payments and rent abatement, $7.0 million paid to tenants who sued Archstone, and $7.0 million for class action defense fees, plus prejudgment interest and attorney’s fees. Eldorado Stone answered denying liability and tendered the matter to its insurers who are paying for the defense of the case. Eldorado Stone sought summary judgment on three of Archstone’s four claims. After an interlocutory appeal, the three claims were dismissed. Archstone is seeking further review. The remaining Archstone claim of common law indemnification applies to damages paid to the tenants and associated attorney’s fees. Meanwhile, discovery is underway. Because the resolution of the action is uncertain, legal counsel and management cannot express an opinion concerning the likely outcome of this matter, the liability of Eldorado Stone, if any, or the insurers’ obligation to indemnify Eldorado Stone against loss, if any. | |
Headwaters Building Products Matters. There are litigation and pending and threatened claims made against certain subsidiaries of Headwaters Building Products (HBP), a division within Headwaters’ light 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 have alleged that the structures have suffered damage from latent or progressive water penetration due to some alleged failure of the building product or wall system. The claims involve alleged liabilities associated with certain stucco and architectural stone products which are produced and sold by certain subsidiaries of HBP. The Archstone case summarized above is an example of these types of claims. | |
The foregoing litigation and claims typically cite damages for alleged personal injuries, property damage, economic loss, unfair business practices and punitive damages. To date, claims made against Headwaters and its subsidiaries have been paid by their insurers, with the exception 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 HBP, 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, Headwaters cannot assure that such insurance coverage will remain available, that Headwaters’ insurance carriers will remain viable, or that the insured amounts will cover all claims in excess of uninsured retentions. Future rate increases may also make such insurance uneconomical for Headwaters to maintain. In addition, the insurance policies maintained by Headwaters and its subsidiaries exclude claims for damages resulting from exterior insulating finish systems, or EIFS, that have manifested after March 2003. Because resolution of the litigation and claims is uncertain, legal counsel and management cannot express an opinion as to the ultimate amount, if any, of HBP’s liability. | |
Heavy Construction Materials Matters. In addition, there are litigation and pending and threatened claims made against HRI, Headwaters’ Heavy 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 to use adequate protection. The Fentress Family Trust and Wallace cases summarized above are two examples of these types of claims. Because resolution of the litigation, claims, and insurance coverage disputes are uncertain, legal counsel and management cannot express an opinion as to the ultimate amount, if any, of HRI’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. |
Condensed_Consolidating_Financ
Condensed Consolidating Financial Information | 3 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Condensed Consolidating Financial Information | ' | |||||||||||||
Condensed Consolidating Financial Information | ' | |||||||||||||
13. Condensed Consolidating Financial Information | ||||||||||||||
Headwaters’ 7-5/8% senior secured notes and 7¼% senior notes are jointly and severally, fully and unconditionally guaranteed by Headwaters Incorporated and by all of Headwaters’ wholly-owned domestic subsidiaries. The non-guaranteeing entities include primarily immaterial joint ventures in which Headwaters has a non-controlling ownership interest (and are included with the guarantor subsidiaries in the following condensed consolidating financial statements). 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. The non-guaranteeing entities represent less than 3% of consolidated assets, stockholders’ equity, revenues, income from continuing operations before taxes and cash flows from operating activities. Accordingly, the following condensed consolidating financial information does not present separately the non-guarantor entities’ information. | ||||||||||||||
CONDENSED CONSOLIDATING BALANCE SHEET — September 30, 2013 | ||||||||||||||
Guarantor | Parent | Eliminations | Headwaters | |||||||||||
and | ||||||||||||||
(in thousands) | Subsidiaries | Company | Reclassifications | Consolidated | ||||||||||
ASSETS | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | 70,747 | $ | 4,569 | $ | — | $ | 75,316 | ||||||
Trade receivables, net | 109,868 | 109,868 | ||||||||||||
Inventories | 37,383 | 37,383 | ||||||||||||
Deferred income taxes | 25,828 | 17,895 | (29,687 | ) | 14,036 | |||||||||
Other | 6,548 | 732 | 7,280 | |||||||||||
Total current assets | 250,374 | 23,196 | (29,687 | ) | 243,883 | |||||||||
Property, plant and equipment, net | 155,499 | 4,120 | — | 159,619 | ||||||||||
Other assets: | ||||||||||||||
Goodwill | 137,198 | 137,198 | ||||||||||||
Intangible assets, net | 139,797 | 139,797 | ||||||||||||
Investments in subsidiaries and intercompany accounts | 360,482 | 98,016 | (458,498 | ) | — | |||||||||
Intercompany notes | 637,046 | (637,046 | ) | — | ||||||||||
Deferred income taxes | 53,228 | 22,179 | (75,407 | ) | — | |||||||||
Other | 22,300 | 21,212 | 43,512 | |||||||||||
Total other assets | 713,005 | 778,453 | (1,170,951 | ) | 320,507 | |||||||||
Total assets | $ | 1,118,878 | $ | 805,769 | $ | (1,200,638 | ) | $ | 724,009 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable | $ | 21,051 | $ | 759 | $ | — | $ | 21,810 | ||||||
Accrued personnel costs | 14,622 | 33,124 | 47,746 | |||||||||||
Accrued interest | 16,077 | 16,077 | ||||||||||||
Current and deferred income taxes | 20,073 | 9,734 | (29,687 | ) | 120 | |||||||||
Other accrued liabilities | 52,898 | 2,370 | 55,268 | |||||||||||
Current portion of long-term debt | 7,553 | 7,553 | ||||||||||||
Total current liabilities | 108,644 | 69,617 | (29,687 | ) | 148,574 | |||||||||
Long-term liabilities: | ||||||||||||||
Long-term debt | 449,420 | 449,420 | ||||||||||||
Income taxes | 80,877 | 19,167 | (75,407 | ) | 24,637 | |||||||||
Intercompany notes | 637,046 | (637,046 | ) | — | ||||||||||
Other | 9,332 | 7,636 | 16,968 | |||||||||||
Total long-term liabilities | 727,255 | 476,223 | (712,453 | ) | 491,025 | |||||||||
Total liabilities | 835,899 | 545,840 | (742,140 | ) | 639,599 | |||||||||
Stockholders’ equity: | ||||||||||||||
Common stock | 73 | 73 | ||||||||||||
Capital in excess of par value | 458,498 | 720,828 | (458,498 | ) | 720,828 | |||||||||
Retained earnings (accumulated deficit) | (175,519 | ) | (460,453 | ) | (635,972 | ) | ||||||||
Treasury stock | (519 | ) | (519 | ) | ||||||||||
Total stockholders’ equity | 282,979 | 259,929 | (458,498 | ) | 84,410 | |||||||||
Total liabilities and stockholders’ equity | $ | 1,118,878 | $ | 805,769 | $ | (1,200,638 | ) | $ | 724,009 | |||||
CONDENSED CONSOLIDATING BALANCE SHEET — December 31, 2013 | ||||||||||||||
Guarantor | Parent | Eliminations | Headwaters | |||||||||||
and | ||||||||||||||
(in thousands) | Subsidiaries | Company | Reclassifications | Consolidated | ||||||||||
ASSETS | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | 77,078 | $ | 98,249 | $ | — | $ | 175,327 | ||||||
Trade receivables, net | 76,106 | 76,106 | ||||||||||||
Inventories | 45,811 | 45,811 | ||||||||||||
Current and deferred income taxes | 25,828 | 17,895 | (28,653 | ) | 15,070 | |||||||||
Other | 6,450 | 3,011 | (1,000 | ) | 8,461 | |||||||||
Total current assets | 231,273 | 119,155 | (29,653 | ) | 320,775 | |||||||||
Property, plant and equipment, net | 160,760 | 5,008 | — | 165,768 | ||||||||||
Other assets: | ||||||||||||||
Goodwill | 194,885 | 194,885 | ||||||||||||
Intangible assets, net | 134,590 | 134,590 | ||||||||||||
Investments in subsidiaries and intercompany accounts | 336,919 | 121,579 | (458,498 | ) | — | |||||||||
Intercompany notes | 637,046 | (637,046 | ) | — | ||||||||||
Deferred income taxes | 53,228 | 22,143 | (75,371 | ) | — | |||||||||
Other | 20,594 | 26,878 | 47,472 | |||||||||||
Total other assets | 740,216 | 807,646 | (1,170,915 | ) | 376,947 | |||||||||
Total assets | $ | 1,132,249 | $ | 931,809 | $ | (1,200,568 | ) | $ | 863,490 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable | $ | 13,853 | $ | 618 | $ | — | $ | 14,471 | ||||||
Accrued personnel costs | 7,448 | 24,548 | 31,996 | |||||||||||
Accrued interest | 10,176 | 10,176 | ||||||||||||
Current and deferred income taxes | 21,000 | 7,653 | (28,653 | ) | 0 | |||||||||
Other accrued liabilities | 50,551 | 4,579 | (1,000 | ) | 54,130 | |||||||||
Current portion of long-term debt | 7,654 | 7,654 | ||||||||||||
Total current liabilities | 92,852 | 55,228 | (29,653 | ) | 118,427 | |||||||||
Long-term liabilities: | ||||||||||||||
Long-term debt | 599,460 | 599,460 | ||||||||||||
Income taxes | 80,807 | 19,079 | (75,371 | ) | 24,515 | |||||||||
Intercompany notes | 637,046 | (637,046 | ) | — | ||||||||||
Other | 12,533 | 10,407 | 22,940 | |||||||||||
Total long-term liabilities | 730,386 | 628,946 | (712,417 | ) | 646,915 | |||||||||
Total liabilities | 823,238 | 684,174 | (742,070 | ) | 765,342 | |||||||||
Stockholders’ equity: | ||||||||||||||
Common stock | 73 | 73 | ||||||||||||
Capital in excess of par value | 458,498 | 721,711 | (458,498 | ) | 721,711 | |||||||||
Retained earnings (accumulated deficit) | (163,868 | ) | (473,532 | ) | (637,400 | ) | ||||||||
Treasury stock | (617 | ) | (617 | ) | ||||||||||
Total Headwaters Incorporated stockholders’ equity | 294,630 | 247,635 | (458,498 | ) | 83,767 | |||||||||
Non-controlling interest in consolidated subsidiary | 14,381 | 14,381 | ||||||||||||
Total stockholders’ equity | 309,011 | 247,635 | (458,498 | ) | 98,148 | |||||||||
Total liabilities and stockholders’ equity | $ | 1,132,249 | $ | 931,809 | $ | (1,200,568 | ) | $ | 863,490 | |||||
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS | ||||||||||||||
Three Months Ended December 31, 2012 | ||||||||||||||
Guarantor | Parent | Headwaters | ||||||||||||
(in thousands) | Subsidiaries | Company | Consolidated | |||||||||||
Revenue: | ||||||||||||||
Light building products | $ | 76,688 | $ | — | $ | 76,688 | ||||||||
Heavy construction materials | 68,158 | 68,158 | ||||||||||||
Energy technology | 4,727 | 4,727 | ||||||||||||
Total revenue | 149,573 | — | 149,573 | |||||||||||
Cost of revenue: | ||||||||||||||
Light building products | 56,501 | 56,501 | ||||||||||||
Heavy construction materials | 53,584 | 53,584 | ||||||||||||
Energy technology | 2,243 | 2,243 | ||||||||||||
Total cost of revenue | 112,328 | — | 112,328 | |||||||||||
Gross profit | 37,245 | — | 37,245 | |||||||||||
Operating expenses: | ||||||||||||||
Amortization | 4,936 | 4,936 | ||||||||||||
Selling, general and administrative | 21,493 | 4,784 | 26,277 | |||||||||||
Total operating expenses | 26,429 | 4,784 | 31,213 | |||||||||||
Operating income (loss) | 10,816 | (4,784 | ) | 6,032 | ||||||||||
Other income (expense): | ||||||||||||||
Net interest expense | (14 | ) | (10,458 | ) | (10,472 | ) | ||||||||
Other, net | 36 | 36 | ||||||||||||
Total other income (expense), net | 22 | (10,458 | ) | (10,436 | ) | |||||||||
Income (loss) from continuing operations before income taxes | 10,838 | (15,242 | ) | (4,404 | ) | |||||||||
Income tax benefit (provision) | (1,300 | ) | 1,830 | 530 | ||||||||||
Income (loss) from continuing operations | 9,538 | (13,412 | ) | (3,874 | ) | |||||||||
Loss from discontinued operations, net of income taxes | (1,998 | ) | (1,998 | ) | ||||||||||
Net income (loss) | $ | 7,540 | $ | (13,412 | ) | $ | (5,872 | ) | ||||||
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS | ||||||||||||||
Three Months Ended December 31, 2013 | ||||||||||||||
Guarantor | Parent | Headwaters | ||||||||||||
(in thousands) | Subsidiaries | Company | Consolidated | |||||||||||
Revenue: | ||||||||||||||
Light building products | $ | 93,012 | $ | — | $ | 93,012 | ||||||||
Heavy construction materials | 71,521 | 71,521 | ||||||||||||
Energy technology | 1,082 | 1,082 | ||||||||||||
Total revenue | 165,615 | — | 165,615 | |||||||||||
Cost of revenue: | ||||||||||||||
Light building products | 69,338 | 69,338 | ||||||||||||
Heavy construction materials | 54,765 | 54,765 | ||||||||||||
Energy technology | 619 | 619 | ||||||||||||
Total cost of revenue | 124,722 | — | 124,722 | |||||||||||
Gross profit | 40,893 | — | 40,893 | |||||||||||
Operating expenses: | ||||||||||||||
Amortization | 5,106 | 5,106 | ||||||||||||
Selling, general and administrative | 23,054 | 5,173 | 28,227 | |||||||||||
Total operating expenses | 28,160 | 5,173 | 33,333 | |||||||||||
Operating income (loss) | 12,733 | (5,173 | ) | 7,560 | ||||||||||
Other income (expense): | ||||||||||||||
Net interest income (expense) | (21 | ) | (10,035 | ) | (10,056 | ) | ||||||||
Other, net | 12 | 12 | ||||||||||||
Total other income (expense), net | (9 | ) | (10,035 | ) | (10,044 | ) | ||||||||
Income (loss) from continuing operations before income taxes | 12,724 | (15,208 | ) | (2,484 | ) | |||||||||
Income tax benefit (provision) | (1,779 | ) | 2,129 | 350 | ||||||||||
Income (loss) from continuing operations | 10,945 | (13,079 | ) | (2,134 | ) | |||||||||
Income from discontinued operations, net of income taxes | 700 | 700 | ||||||||||||
Net income (loss) | 11,645 | (13,079 | ) | (1,434 | ) | |||||||||
Net loss attributable to non-controlling interest | 6 | 6 | ||||||||||||
Net income (loss) attributable to Headwaters Incorporated | $ | 11,651 | $ | (13,079 | ) | $ | (1,428 | ) | ||||||
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS | ||||||||||||||
Three Months Ended December 31, 2012 | ||||||||||||||
Guarantor | Parent | Headwaters | ||||||||||||
(in thousands) | Subsidiaries | Company | Consolidated | |||||||||||
Cash flows from operating activities: | ||||||||||||||
Net income (loss) | $ | 7,540 | $ | (13,412 | ) | $ | (5,872 | ) | ||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||||||||
Depreciation and amortization | 12,381 | 55 | 12,436 | |||||||||||
Interest expense related to amortization of debt issue costs and debt discount | 1,219 | 1,219 | ||||||||||||
Stock-based compensation | 180 | 204 | 384 | |||||||||||
Net gain on disposition of property, plant and equipment | (261 | ) | (261 | ) | ||||||||||
Decrease in trade receivables | 32,164 | 32,164 | ||||||||||||
Increase in inventories | (461 | ) | (461 | ) | ||||||||||
Decrease in accounts payable and accrued liabilities | (19,464 | ) | (16,659 | ) | (36,123 | ) | ||||||||
Other changes in operating assets and liabilities, net | 11,763 | (19,495 | ) | (7,732 | ) | |||||||||
Net cash provided by (used in) operating activities | 43,842 | (48,088 | ) | (4,246 | ) | |||||||||
Cash flows from investing activities: | ||||||||||||||
Payment for acquisition | (42,950 | ) | (42,950 | ) | ||||||||||
Purchase of property, plant and equipment | (5,880 | ) | (673 | ) | (6,553 | ) | ||||||||
Proceeds from disposition of property, plant and equipment | 296 | 296 | ||||||||||||
Net change in other assets | (119 | ) | 71 | (48 | ) | |||||||||
Net cash used in investing activities | (48,653 | ) | (602 | ) | (49,255 | ) | ||||||||
Cash flows from financing activities: | ||||||||||||||
Net proceeds from issuance of common stock | 77,823 | 77,823 | ||||||||||||
Employee stock purchases | 217 | 99 | 316 | |||||||||||
Net cash provided by financing activities | 217 | 77,922 | 78,139 | |||||||||||
Net increase (decrease) in cash and cash equivalents | (4,594 | ) | 29,232 | 24,638 | ||||||||||
Cash and cash equivalents, beginning of period | 44,111 | 9,671 | 53,782 | |||||||||||
Cash and cash equivalents, end of period | $ | 39,517 | $ | 38,903 | $ | 78,420 | ||||||||
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS | ||||||||||||||
Three Months Ended December 31, 2013 | ||||||||||||||
Guarantor | Parent | Headwaters | ||||||||||||
(in thousands) | Subsidiaries | Company | Consolidated | |||||||||||
Cash flows from operating activities: | ||||||||||||||
Net income (loss) | $ | 11,645 | $ | (13,079 | ) | $ | (1,434 | ) | ||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||||||||
Depreciation and amortization | 12,986 | 61 | 13,047 | |||||||||||
Interest expense related to amortization of debt issue costs and debt discount | 570 | 570 | ||||||||||||
Stock-based compensation | 197 | 269 | 466 | |||||||||||
Net loss on disposition of property, plant and equipment | 316 | 45 | 361 | |||||||||||
Gain on sale of discontinued operations, net of income taxes | (964 | ) | (964 | ) | ||||||||||
Net loss of unconsolidated joint ventures | 49 | 49 | ||||||||||||
Decrease in trade receivables | 38,929 | 38,929 | ||||||||||||
Increase in inventories | (4,782 | ) | (4,782 | ) | ||||||||||
Decrease in accounts payable and accrued liabilities | (20,442 | ) | (12,408 | ) | (32,850 | ) | ||||||||
Other changes in operating assets and liabilities, net | 25,111 | (27,440 | ) | (2,329 | ) | |||||||||
Net cash provided by (used in) operating activities | 63,045 | (51,982 | ) | 11,063 | ||||||||||
Cash flows from investing activities: | ||||||||||||||
Payment for acquisition | (57,550 | ) | (57,550 | ) | ||||||||||
Payments for investments in unconsolidated joint ventures | (750 | ) | (750 | ) | ||||||||||
Purchase of property, plant and equipment | (5,867 | ) | (1,021 | ) | (6,888 | ) | ||||||||
Proceeds from disposition of property, plant and equipment | 111 | 111 | ||||||||||||
Proceeds from sale of discontinued operations | 4,666 | 4,666 | ||||||||||||
Net change in other assets | 2,436 | 509 | 2,945 | |||||||||||
Net cash used in investing activities | (56,954 | ) | (512 | ) | (57,466 | ) | ||||||||
Cash flows from financing activities: | ||||||||||||||
Net proceeds from issuance of long-term debt | 146,200 | 146,200 | ||||||||||||
Other debt issue costs | (105 | ) | (105 | ) | ||||||||||
Employee stock purchases | 240 | 79 | 319 | |||||||||||
Net cash provided by financing activities | 240 | 146,174 | 146,414 | |||||||||||
Net increase in cash and cash equivalents | 6,331 | 93,680 | 100,011 | |||||||||||
Cash and cash equivalents, beginning of period | 70,747 | 4,569 | 75,316 | |||||||||||
Cash and cash equivalents, end of period | $ | 77,078 | $ | 98,249 | $ | 175,327 |
Segment_Reporting_Tables
Segment Reporting (Tables) | 3 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Segment Reporting | ' | ||||||||||||||||
Schedule Of Segment Reporting | ' | ||||||||||||||||
Three Months Ended December 31, 2012 | |||||||||||||||||
(in thousands) | Light | Heavy | Energy | Corporate | Totals | ||||||||||||
building | construction | technology | |||||||||||||||
products | materials | ||||||||||||||||
Segment revenue | $ | 76,688 | $ | 68,158 | $ | 4,727 | $ | 0 | $ | 149,573 | |||||||
Depreciation and amortization | $ | (8,675 | ) | $ | (3,140 | ) | $ | (566 | ) | $ | (55 | ) | $ | (12,436 | ) | ||
Operating income (loss) | $ | 3,127 | $ | 7,607 | $ | 82 | $ | (4,784 | ) | $ | 6,032 | ||||||
Net interest expense | (10,472 | ) | |||||||||||||||
Other income (expense), net | 36 | ||||||||||||||||
Income tax benefit | 530 | ||||||||||||||||
Loss from continuing operations | (3,874 | ) | |||||||||||||||
Loss from discontinued operations, net of income taxes | (1,998 | ) | |||||||||||||||
Net loss | $ | (5,872 | ) | ||||||||||||||
Capital expenditures | $ | 5,045 | $ | 683 | $ | 152 | $ | 673 | $ | 6,553 | |||||||
Segment assets as of September 30, 2013 | $ | 306,686 | $ | 358,684 | $ | 34,509 | $ | 24,130 | $ | 724,009 | |||||||
Three Months Ended December 31, 2013 | |||||||||||||||||
(in thousands) | Light | Heavy | Energy | Corporate | Totals | ||||||||||||
building | construction | technology | |||||||||||||||
products | materials | ||||||||||||||||
Segment revenue | $ | 93,012 | $ | 71,521 | $ | 1,082 | $ | 0 | $ | 165,615 | |||||||
Depreciation and amortization | $ | (9,212 | ) | $ | (3,286 | ) | $ | (488 | ) | $ | (61 | ) | $ | (13,047 | ) | ||
Operating income (loss) | $ | 5,086 | $ | 9,933 | $ | (2,286 | ) | $ | (5,173 | ) | $ | 7,560 | |||||
Net interest expense | (10,056 | ) | |||||||||||||||
Other income (expense), net | 12 | ||||||||||||||||
Income tax benefit | 350 | ||||||||||||||||
Loss from continuing operations | (2,134 | ) | |||||||||||||||
Income from discontinued operations, net of income taxes | 700 | ||||||||||||||||
Net loss | $ | a(1,434 | ) | ||||||||||||||
Capital expenditures | $ | 4,452 | $ | 1,185 | $ | 230 | $ | 1,021 | $ | 6,888 | |||||||
Segment assets | $ | 364,086 | $ | 340,458 | $ | 32,268 | $ | 126,678 | $ | 863,490 |
Acquisitions_Tables
Acquisitions (Tables) | 3 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Acquisition | ' | |||||||
Schedule of pro forma consolidated revenue and net loss | ' | |||||||
Three months ended | ||||||||
December 31, | ||||||||
(in thousands) | 2012 | 2013 | ||||||
Revenue | $ | 156,646 | $ | 174,015 | ||||
Net loss | (6,312 | ) | (78 | ) | ||||
Kleer Lumber, Inc. | ' | |||||||
Acquisition | ' | |||||||
Schedule of estimated fair values of assets acquired and liabilities assumed as of the acquisition date | ' | |||||||
(in thousands) | ||||||||
Current assets | $ | 5,818 | ||||||
Current liabilities | (3,093 | ) | ||||||
Property, plant and equipment | 4,098 | |||||||
Intangible assets: | ||||||||
Customer relationships (15 year life) | 11,100 | |||||||
Trade name (indefinite life) | 4,800 | |||||||
Goodwill | 20,527 | |||||||
Net assets acquired | $ | 43,250 | ||||||
Roof Tile, Inc. | ' | |||||||
Acquisition | ' | |||||||
Schedule of estimated fair values of assets acquired and liabilities assumed as of the acquisition date | ' | |||||||
(in thousands) | ||||||||
Current assets | $ | 8,952 | ||||||
Current liabilities | (2,521 | ) | ||||||
Property, plant and equipment | 7,819 | |||||||
Goodwill and intangible assets | 57,687 | |||||||
Net assets acquired | 71,937 | |||||||
Less non-controlling interest | (14,387 | ) | ||||||
Net assets attributable to Headwaters | $ | 57,550 |
Discontinued_Operations_Tables
Discontinued Operations (Tables) | 3 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Discontinued Operations | ' | |||||||
Schedule Of Information For The Discontinued Coal Cleaning Business | ' | |||||||
Three Months Ended | ||||||||
December 31, | ||||||||
(in thousands) | 2012 | 2013 | ||||||
Revenue | $ | 4,249 | $ | 0 | ||||
Loss from operations of discontinued operations before income taxes | $ | (1,998 | ) | $ | (264 | ) | ||
Gain on disposal | 0 | 964 | ||||||
Income tax provision | 0 | 0 | ||||||
Income (loss) from discontinued operations, net of income taxes | $ | (1,998 | ) | $ | 700 |
Inventories_Tables
Inventories (Tables) | 3 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Inventories | ' | |||||||
Schedule of components of inventory | ' | |||||||
(in thousands) | September 30, 2013 | December 31, 2013 | ||||||
Raw materials | $ | 9,909 | $ | 11,606 | ||||
Finished goods | 27,474 | 34,205 | ||||||
$ | 37,383 | $ | 45,811 |
Intangible_Assets_Tables
Intangible Assets (Tables) | 3 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Intangible Assets | ' | |||||||||||||||
Schedule of gross carrying amounts and accumulated amortization of intangible assets | ' | |||||||||||||||
September 30, 2013 | December 31, 2013 | |||||||||||||||
(in thousands of dollars) | Estimated | Gross | Accumulated | Gross | Accumulated | |||||||||||
useful lives | Carrying | Amortization | Carrying | Amortization | ||||||||||||
Amount | Amount | |||||||||||||||
Trade name | Indefinite | $ | 4,800 | — | $ | 4,800 | — | |||||||||
CCP contracts | 20 years | 106,400 | $ | 58,699 | 106,400 | $ | 60,029 | |||||||||
Customer relationships | 5 - 15 years | 83,564 | 44,129 | 83,564 | 45,612 | |||||||||||
Trade names | 5 - 20 years | 67,790 | 30,502 | 67,790 | 31,371 | |||||||||||
Patents and patented technologies | 6 - 19 years | 55,099 | 46,954 | 54,970 | 48,264 | |||||||||||
Other | 6 - 17 years | 3,960 | 1,532 | 3,835 | 1,493 | |||||||||||
$ | 321,613 | $ | 181,816 | $ | 321,359 | $ | 186,769 | |||||||||
Schedule of total currently estimated annual amortization expense | ' | |||||||||||||||
Year ending September 30: | (in thousands) | |||||||||||||||
2014 | $ | 19,943 | ||||||||||||||
2015 | 15,812 | |||||||||||||||
2016 | 15,555 | |||||||||||||||
2017 | 14,677 | |||||||||||||||
2018 | 14,627 | |||||||||||||||
2019 | 13,599 | |||||||||||||||
Longterm_Debt_Tables
Long-term Debt (Tables) | 3 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Long-term Debt | ' | |||||||
Schedule of the discounted carrying value of long-term debt | ' | |||||||
(in thousands) | September 30, | December 31, | ||||||
2013 | 2013 | |||||||
7-5/8% Senior secured notes, due April 2019 | $ | 400,000 | $ | 400,000 | ||||
7¼% Senior notes, due January 2019 | 0 | 150,000 | ||||||
Convertible senior subordinated notes: | ||||||||
2.50%, due February 2014 (face amount $7,687), net of discount | 7,553 | 7,654 | ||||||
8.75%, due February 2016 (face amount $49,791), net of discount | 49,420 | 49,460 | ||||||
Total convertible senior subordinated notes, net of applicable discounts | 56,973 | 57,114 | ||||||
Carrying amount of long-term debt, net of discounts | 456,973 | 607,114 | ||||||
Less current portion | (7,553 | ) | (7,654 | ) | ||||
Long-term debt | $ | 449,420 | $ | 599,460 |
Earnings_per_Share_Tables
Earnings per Share (Tables) | 3 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Earnings per Share | ' | |||||||
Schedule of computation of basic and diluted EPS | ' | |||||||
Three Months Ended | ||||||||
December 31, | ||||||||
(in thousands, except per-share amounts) | 2012 | 2013 | ||||||
Numerator: | ||||||||
Loss from continuing operations | $ | (3,874 | ) | $ | (2,134 | ) | ||
Loss from continuing operations attributable to non-controlling interest | 0 | 6 | ||||||
Numerator for basic and diluted earnings per share from continuing operations — loss from continuing operations attributable to Headwaters Incorporated | (3,874 | ) | (2,128 | ) | ||||
Numerator for basic and diluted earnings per share from discontinued operations — income (loss) from discontinued operations, net of income taxes | (1,998 | ) | 700 | |||||
Numerator for basic and diluted earnings per share — net loss attributable to Headwaters Incorporated | $ | (5,872 | ) | $ | (1,428 | ) | ||
Denominator: | ||||||||
Denominator for basic and diluted earnings per share — weighted-average shares outstanding | 61,982 | 73,066 | ||||||
Basic and diluted loss per share from continuing operations | $ | (0.06 | ) | $ | (0.03 | ) | ||
Basic and diluted income (loss) per share from discontinued operations | (0.03 | ) | 0.01 | |||||
Basic and diluted loss per share | $ | (0.09 | ) | $ | (0.02 | ) | ||
Anti-dilutive securities not considered in diluted EPS calculation: | ||||||||
SARs | 4,087 | 3,937 | ||||||
Stock options | 1,110 | 618 |
Condensed_Consolidating_Financ1
Condensed Consolidating Financial Information (Tables) | 3 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Condensed Consolidating Financial Information | ' | |||||||||||||
Schedule of condensed consolidating balance sheet | ' | |||||||||||||
CONDENSED CONSOLIDATING BALANCE SHEET — September 30, 2013 | ||||||||||||||
Guarantor | Parent | Eliminations | Headwaters | |||||||||||
and | ||||||||||||||
(in thousands) | Subsidiaries | Company | Reclassifications | Consolidated | ||||||||||
ASSETS | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | 70,747 | $ | 4,569 | $ | — | $ | 75,316 | ||||||
Trade receivables, net | 109,868 | 109,868 | ||||||||||||
Inventories | 37,383 | 37,383 | ||||||||||||
Deferred income taxes | 25,828 | 17,895 | (29,687 | ) | 14,036 | |||||||||
Other | 6,548 | 732 | 7,280 | |||||||||||
Total current assets | 250,374 | 23,196 | (29,687 | ) | 243,883 | |||||||||
Property, plant and equipment, net | 155,499 | 4,120 | — | 159,619 | ||||||||||
Other assets: | ||||||||||||||
Goodwill | 137,198 | 137,198 | ||||||||||||
Intangible assets, net | 139,797 | 139,797 | ||||||||||||
Investments in subsidiaries and intercompany accounts | 360,482 | 98,016 | (458,498 | ) | — | |||||||||
Intercompany notes | 637,046 | (637,046 | ) | — | ||||||||||
Deferred income taxes | 53,228 | 22,179 | (75,407 | ) | — | |||||||||
Other | 22,300 | 21,212 | 43,512 | |||||||||||
Total other assets | 713,005 | 778,453 | (1,170,951 | ) | 320,507 | |||||||||
Total assets | $ | 1,118,878 | $ | 805,769 | $ | (1,200,638 | ) | $ | 724,009 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable | $ | 21,051 | $ | 759 | $ | — | $ | 21,810 | ||||||
Accrued personnel costs | 14,622 | 33,124 | 47,746 | |||||||||||
Accrued interest | 16,077 | 16,077 | ||||||||||||
Current and deferred income taxes | 20,073 | 9,734 | (29,687 | ) | 120 | |||||||||
Other accrued liabilities | 52,898 | 2,370 | 55,268 | |||||||||||
Current portion of long-term debt | 7,553 | 7,553 | ||||||||||||
Total current liabilities | 108,644 | 69,617 | (29,687 | ) | 148,574 | |||||||||
Long-term liabilities: | ||||||||||||||
Long-term debt | 449,420 | 449,420 | ||||||||||||
Income taxes | 80,877 | 19,167 | (75,407 | ) | 24,637 | |||||||||
Intercompany notes | 637,046 | (637,046 | ) | — | ||||||||||
Other | 9,332 | 7,636 | 16,968 | |||||||||||
Total long-term liabilities | 727,255 | 476,223 | (712,453 | ) | 491,025 | |||||||||
Total liabilities | 835,899 | 545,840 | (742,140 | ) | 639,599 | |||||||||
Stockholders’ equity: | ||||||||||||||
Common stock | 73 | 73 | ||||||||||||
Capital in excess of par value | 458,498 | 720,828 | (458,498 | ) | 720,828 | |||||||||
Retained earnings (accumulated deficit) | (175,519 | ) | (460,453 | ) | (635,972 | ) | ||||||||
Treasury stock | (519 | ) | (519 | ) | ||||||||||
Total stockholders’ equity | 282,979 | 259,929 | (458,498 | ) | 84,410 | |||||||||
Total liabilities and stockholders’ equity | $ | 1,118,878 | $ | 805,769 | $ | (1,200,638 | ) | $ | 724,009 | |||||
CONDENSED CONSOLIDATING BALANCE SHEET — December 31, 2013 | ||||||||||||||
Guarantor | Parent | Eliminations | Headwaters | |||||||||||
and | ||||||||||||||
(in thousands) | Subsidiaries | Company | Reclassifications | Consolidated | ||||||||||
ASSETS | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | 77,078 | $ | 98,249 | $ | — | $ | 175,327 | ||||||
Trade receivables, net | 76,106 | 76,106 | ||||||||||||
Inventories | 45,811 | 45,811 | ||||||||||||
Current and deferred income taxes | 25,828 | 17,895 | (28,653 | ) | 15,070 | |||||||||
Other | 6,450 | 3,011 | (1,000 | ) | 8,461 | |||||||||
Total current assets | 231,273 | 119,155 | (29,653 | ) | 320,775 | |||||||||
Property, plant and equipment, net | 160,760 | 5,008 | — | 165,768 | ||||||||||
Other assets: | ||||||||||||||
Goodwill | 194,885 | 194,885 | ||||||||||||
Intangible assets, net | 134,590 | 134,590 | ||||||||||||
Investments in subsidiaries and intercompany accounts | 336,919 | 121,579 | (458,498 | ) | — | |||||||||
Intercompany notes | 637,046 | (637,046 | ) | — | ||||||||||
Deferred income taxes | 53,228 | 22,143 | (75,371 | ) | — | |||||||||
Other | 20,594 | 26,878 | 47,472 | |||||||||||
Total other assets | 740,216 | 807,646 | (1,170,915 | ) | 376,947 | |||||||||
Total assets | $ | 1,132,249 | $ | 931,809 | $ | (1,200,568 | ) | $ | 863,490 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable | $ | 13,853 | $ | 618 | $ | — | $ | 14,471 | ||||||
Accrued personnel costs | 7,448 | 24,548 | 31,996 | |||||||||||
Accrued interest | 10,176 | 10,176 | ||||||||||||
Current and deferred income taxes | 21,000 | 7,653 | (28,653 | ) | 0 | |||||||||
Other accrued liabilities | 50,551 | 4,579 | (1,000 | ) | 54,130 | |||||||||
Current portion of long-term debt | 7,654 | 7,654 | ||||||||||||
Total current liabilities | 92,852 | 55,228 | (29,653 | ) | 118,427 | |||||||||
Long-term liabilities: | ||||||||||||||
Long-term debt | 599,460 | 599,460 | ||||||||||||
Income taxes | 80,807 | 19,079 | (75,371 | ) | 24,515 | |||||||||
Intercompany notes | 637,046 | (637,046 | ) | — | ||||||||||
Other | 12,533 | 10,407 | 22,940 | |||||||||||
Total long-term liabilities | 730,386 | 628,946 | (712,417 | ) | 646,915 | |||||||||
Total liabilities | 823,238 | 684,174 | (742,070 | ) | 765,342 | |||||||||
Stockholders’ equity: | ||||||||||||||
Common stock | 73 | 73 | ||||||||||||
Capital in excess of par value | 458,498 | 721,711 | (458,498 | ) | 721,711 | |||||||||
Retained earnings (accumulated deficit) | (163,868 | ) | (473,532 | ) | (637,400 | ) | ||||||||
Treasury stock | (617 | ) | (617 | ) | ||||||||||
Total Headwaters Incorporated stockholders’ equity | 294,630 | 247,635 | (458,498 | ) | 83,767 | |||||||||
Non-controlling interest in consolidated subsidiary | 14,381 | 14,381 | ||||||||||||
Total stockholders’ equity | 309,011 | 247,635 | (458,498 | ) | 98,148 | |||||||||
Total liabilities and stockholders’ equity | $ | 1,132,249 | $ | 931,809 | $ | (1,200,568 | ) | $ | 863,490 | |||||
Schedule of condensed consolidating statement of operations | ' | |||||||||||||
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS | ||||||||||||||
Three Months Ended December 31, 2012 | ||||||||||||||
Guarantor | Parent | Headwaters | ||||||||||||
(in thousands) | Subsidiaries | Company | Consolidated | |||||||||||
Revenue: | ||||||||||||||
Light building products | $ | 76,688 | $ | — | $ | 76,688 | ||||||||
Heavy construction materials | 68,158 | 68,158 | ||||||||||||
Energy technology | 4,727 | 4,727 | ||||||||||||
Total revenue | 149,573 | — | 149,573 | |||||||||||
Cost of revenue: | ||||||||||||||
Light building products | 56,501 | 56,501 | ||||||||||||
Heavy construction materials | 53,584 | 53,584 | ||||||||||||
Energy technology | 2,243 | 2,243 | ||||||||||||
Total cost of revenue | 112,328 | — | 112,328 | |||||||||||
Gross profit | 37,245 | — | 37,245 | |||||||||||
Operating expenses: | ||||||||||||||
Amortization | 4,936 | 4,936 | ||||||||||||
Selling, general and administrative | 21,493 | 4,784 | 26,277 | |||||||||||
Total operating expenses | 26,429 | 4,784 | 31,213 | |||||||||||
Operating income (loss) | 10,816 | (4,784 | ) | 6,032 | ||||||||||
Other income (expense): | ||||||||||||||
Net interest expense | (14 | ) | (10,458 | ) | (10,472 | ) | ||||||||
Other, net | 36 | 36 | ||||||||||||
Total other income (expense), net | 22 | (10,458 | ) | (10,436 | ) | |||||||||
Income (loss) from continuing operations before income taxes | 10,838 | (15,242 | ) | (4,404 | ) | |||||||||
Income tax benefit (provision) | (1,300 | ) | 1,830 | 530 | ||||||||||
Income (loss) from continuing operations | 9,538 | (13,412 | ) | (3,874 | ) | |||||||||
Loss from discontinued operations, net of income taxes | (1,998 | ) | (1,998 | ) | ||||||||||
Net income (loss) | $ | 7,540 | $ | (13,412 | ) | $ | (5,872 | ) | ||||||
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS | ||||||||||||||
Three Months Ended December 31, 2013 | ||||||||||||||
Guarantor | Parent | Headwaters | ||||||||||||
(in thousands) | Subsidiaries | Company | Consolidated | |||||||||||
Revenue: | ||||||||||||||
Light building products | $ | 93,012 | $ | — | $ | 93,012 | ||||||||
Heavy construction materials | 71,521 | 71,521 | ||||||||||||
Energy technology | 1,082 | 1,082 | ||||||||||||
Total revenue | 165,615 | — | 165,615 | |||||||||||
Cost of revenue: | ||||||||||||||
Light building products | 69,338 | 69,338 | ||||||||||||
Heavy construction materials | 54,765 | 54,765 | ||||||||||||
Energy technology | 619 | 619 | ||||||||||||
Total cost of revenue | 124,722 | — | 124,722 | |||||||||||
Gross profit | 40,893 | — | 40,893 | |||||||||||
Operating expenses: | ||||||||||||||
Amortization | 5,106 | 5,106 | ||||||||||||
Selling, general and administrative | 23,054 | 5,173 | 28,227 | |||||||||||
Total operating expenses | 28,160 | 5,173 | 33,333 | |||||||||||
Operating income (loss) | 12,733 | (5,173 | ) | 7,560 | ||||||||||
Other income (expense): | ||||||||||||||
Net interest income (expense) | (21 | ) | (10,035 | ) | (10,056 | ) | ||||||||
Other, net | 12 | 12 | ||||||||||||
Total other income (expense), net | (9 | ) | (10,035 | ) | (10,044 | ) | ||||||||
Income (loss) from continuing operations before income taxes | 12,724 | (15,208 | ) | (2,484 | ) | |||||||||
Income tax benefit (provision) | (1,779 | ) | 2,129 | 350 | ||||||||||
Income (loss) from continuing operations | 10,945 | (13,079 | ) | (2,134 | ) | |||||||||
Income from discontinued operations, net of income taxes | 700 | 700 | ||||||||||||
Net income (loss) | 11,645 | (13,079 | ) | (1,434 | ) | |||||||||
Net loss attributable to non-controlling interest | 6 | 6 | ||||||||||||
Net income (loss) attributable to Headwaters Incorporated | $ | 11,651 | $ | (13,079 | ) | $ | (1,428 | ) | ||||||
Schedule of condensed consolidating statement of cash flows | ' | |||||||||||||
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS | ||||||||||||||
Three Months Ended December 31, 2012 | ||||||||||||||
Guarantor | Parent | Headwaters | ||||||||||||
(in thousands) | Subsidiaries | Company | Consolidated | |||||||||||
Cash flows from operating activities: | ||||||||||||||
Net income (loss) | $ | 7,540 | $ | (13,412 | ) | $ | (5,872 | ) | ||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||||||||
Depreciation and amortization | 12,381 | 55 | 12,436 | |||||||||||
Interest expense related to amortization of debt issue costs and debt discount | 1,219 | 1,219 | ||||||||||||
Stock-based compensation | 180 | 204 | 384 | |||||||||||
Net gain on disposition of property, plant and equipment | (261 | ) | (261 | ) | ||||||||||
Decrease in trade receivables | 32,164 | 32,164 | ||||||||||||
Increase in inventories | (461 | ) | (461 | ) | ||||||||||
Decrease in accounts payable and accrued liabilities | (19,464 | ) | (16,659 | ) | (36,123 | ) | ||||||||
Other changes in operating assets and liabilities, net | 11,763 | (19,495 | ) | (7,732 | ) | |||||||||
Net cash provided by (used in) operating activities | 43,842 | (48,088 | ) | (4,246 | ) | |||||||||
Cash flows from investing activities: | ||||||||||||||
Payment for acquisition | (42,950 | ) | (42,950 | ) | ||||||||||
Purchase of property, plant and equipment | (5,880 | ) | (673 | ) | (6,553 | ) | ||||||||
Proceeds from disposition of property, plant and equipment | 296 | 296 | ||||||||||||
Net change in other assets | (119 | ) | 71 | (48 | ) | |||||||||
Net cash used in investing activities | (48,653 | ) | (602 | ) | (49,255 | ) | ||||||||
Cash flows from financing activities: | ||||||||||||||
Net proceeds from issuance of common stock | 77,823 | 77,823 | ||||||||||||
Employee stock purchases | 217 | 99 | 316 | |||||||||||
Net cash provided by financing activities | 217 | 77,922 | 78,139 | |||||||||||
Net increase (decrease) in cash and cash equivalents | (4,594 | ) | 29,232 | 24,638 | ||||||||||
Cash and cash equivalents, beginning of period | 44,111 | 9,671 | 53,782 | |||||||||||
Cash and cash equivalents, end of period | $ | 39,517 | $ | 38,903 | $ | 78,420 | ||||||||
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS | ||||||||||||||
Three Months Ended December 31, 2013 | ||||||||||||||
Guarantor | Parent | Headwaters | ||||||||||||
(in thousands) | Subsidiaries | Company | Consolidated | |||||||||||
Cash flows from operating activities: | ||||||||||||||
Net income (loss) | $ | 11,645 | $ | (13,079 | ) | $ | (1,434 | ) | ||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||||||||
Depreciation and amortization | 12,986 | 61 | 13,047 | |||||||||||
Interest expense related to amortization of debt issue costs and debt discount | 570 | 570 | ||||||||||||
Stock-based compensation | 197 | 269 | 466 | |||||||||||
Net loss on disposition of property, plant and equipment | 316 | 45 | 361 | |||||||||||
Gain on sale of discontinued operations, net of income taxes | (964 | ) | (964 | ) | ||||||||||
Net loss of unconsolidated joint ventures | 49 | 49 | ||||||||||||
Decrease in trade receivables | 38,929 | 38,929 | ||||||||||||
Increase in inventories | (4,782 | ) | (4,782 | ) | ||||||||||
Decrease in accounts payable and accrued liabilities | (20,442 | ) | (12,408 | ) | (32,850 | ) | ||||||||
Other changes in operating assets and liabilities, net | 25,111 | (27,440 | ) | (2,329 | ) | |||||||||
Net cash provided by (used in) operating activities | 63,045 | (51,982 | ) | 11,063 | ||||||||||
Cash flows from investing activities: | ||||||||||||||
Payment for acquisition | (57,550 | ) | (57,550 | ) | ||||||||||
Payments for investments in unconsolidated joint ventures | (750 | ) | (750 | ) | ||||||||||
Purchase of property, plant and equipment | (5,867 | ) | (1,021 | ) | (6,888 | ) | ||||||||
Proceeds from disposition of property, plant and equipment | 111 | 111 | ||||||||||||
Proceeds from sale of discontinued operations | 4,666 | 4,666 | ||||||||||||
Net change in other assets | 2,436 | 509 | 2,945 | |||||||||||
Net cash used in investing activities | (56,954 | ) | (512 | ) | (57,466 | ) | ||||||||
Cash flows from financing activities: | ||||||||||||||
Net proceeds from issuance of long-term debt | 146,200 | 146,200 | ||||||||||||
Other debt issue costs | (105 | ) | (105 | ) | ||||||||||
Employee stock purchases | 240 | 79 | 319 | |||||||||||
Net cash provided by financing activities | 240 | 146,174 | 146,414 | |||||||||||
Net increase in cash and cash equivalents | 6,331 | 93,680 | 100,011 | |||||||||||
Cash and cash equivalents, beginning of period | 70,747 | 4,569 | 75,316 | |||||||||||
Cash and cash equivalents, end of period | $ | 77,078 | $ | 98,249 | $ | 175,327 |
Nature_of_Operations_and_Basis1
Nature of Operations and Basis of Presentation (Details) | 3 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
item | ||
Nature of Operations and Basis of Presentation | ' | ' |
Number of building materials segments | 2 | ' |
Percentage of total revenue and cost of revenue for services | 14.00% | 15.00% |
Segment_Reporting_Details
Segment Reporting (Details) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2013 |
segment | |||
Segment Reporting | ' | ' | ' |
Number of business segments | 3 | ' | ' |
Segment reporting | ' | ' | ' |
Segment revenue | $165,615 | $149,573 | ' |
Depreciation and amortization | -13,047 | -12,436 | ' |
Operating income (loss) | 7,560 | 6,032 | ' |
Net interest expense | -10,056 | -10,472 | ' |
Other income (expense), net | 12 | 36 | ' |
Income tax benefit | 350 | 530 | ' |
Loss from continuing operations | -2,134 | -3,874 | ' |
Income (loss) from discontinued operations, net of income taxes | 700 | -1,998 | ' |
Net loss | -1,434 | -5,872 | ' |
Capital expenditures | 6,888 | 6,553 | ' |
Segment assets | 863,490 | ' | 724,009 |
Operating Segments | Light Building Products | ' | ' | ' |
Segment reporting | ' | ' | ' |
Segment revenue | 93,012 | 76,688 | ' |
Depreciation and amortization | -9,212 | -8,675 | ' |
Operating income (loss) | 5,086 | 3,127 | ' |
Capital expenditures | 4,452 | 5,045 | ' |
Segment assets | 364,086 | ' | 306,686 |
Operating Segments | Heavy Construction Materials | ' | ' | ' |
Segment reporting | ' | ' | ' |
Segment revenue | 71,521 | 68,158 | ' |
Depreciation and amortization | -3,286 | -3,140 | ' |
Operating income (loss) | 9,933 | 7,607 | ' |
Capital expenditures | 1,185 | 683 | ' |
Segment assets | 340,458 | ' | 358,684 |
Operating Segments | Energy Technology | ' | ' | ' |
Segment reporting | ' | ' | ' |
Segment revenue | 1,082 | 4,727 | ' |
Depreciation and amortization | -488 | -566 | ' |
Operating income (loss) | -2,286 | 82 | ' |
Capital expenditures | 230 | 152 | ' |
Segment assets | 32,268 | ' | 34,509 |
Corporate | ' | ' | ' |
Segment reporting | ' | ' | ' |
Segment revenue | 0 | 0 | ' |
Depreciation and amortization | -61 | -55 | ' |
Operating income (loss) | -5,173 | -4,784 | ' |
Capital expenditures | 1,021 | 673 | ' |
Segment assets | $126,678 | ' | $24,130 |
Acquisitions_Details
Acquisitions (Details) (USD $) | 3 Months Ended | 3 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | |||||
Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 12, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
Kleer Lumber, Inc. | Kleer Lumber, Inc. | Kleer Lumber, Inc. | Kleer Lumber, Inc. | Roof Tile, Inc. | Roof Tile, Inc. | Roof Tile, Inc. | ||||
Trade name | Customer relationships | |||||||||
Acquisition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total cash consideration of acquisition | ' | ' | ' | ' | $43,300,000 | ' | ' | $57,600,000 | ' | ' |
Fees for advisory, legal and other professional services | ' | ' | ' | ' | 900,000 | ' | ' | ' | 300,000 | ' |
Estimated fair values of assets acquired and liabilities assumed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Current assets | ' | ' | ' | ' | 5,818,000 | ' | ' | ' | 8,952,000 | ' |
Current liabilities | ' | ' | ' | ' | -3,093,000 | ' | ' | ' | -2,521,000 | ' |
Property, plant and equipment | ' | ' | ' | ' | 4,098,000 | ' | ' | ' | 7,819,000 | ' |
Goodwill | 194,885,000 | ' | 137,198,000 | ' | 20,527,000 | ' | ' | ' | ' | ' |
Goodwill and intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | 57,687,000 | ' |
Net assets acquired | ' | ' | ' | ' | 43,250,000 | ' | ' | ' | 71,937,000 | ' |
Less non-controlling interest | ' | ' | ' | ' | ' | ' | ' | ' | -14,387,000 | ' |
Net assets attributable to Headwaters | ' | ' | ' | ' | ' | ' | ' | ' | 57,550,000 | ' |
Intangible assets acquired: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Finite lived intangible assets | ' | ' | ' | ' | ' | ' | 11,100,000 | ' | ' | ' |
Indefinite lived intangible assets | ' | ' | ' | ' | ' | 4,800,000 | ' | ' | ' | ' |
Estimated useful lives | ' | ' | ' | ' | ' | ' | '15 years | ' | ' | ' |
Period over which goodwill is expected to be deductible for tax purpose | ' | ' | ' | '15 years | ' | ' | ' | ' | ' | ' |
Percentage of equity interests acquired | ' | ' | ' | ' | ' | ' | ' | 80.00% | 20.00% | ' |
Maximum period to acquire the non-controlling equity interest | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | ' |
Maximum period allowed for non-controlling owners to require the entity to acquire the non-controlling equity interest | ' | ' | ' | ' | ' | ' | ' | ' | '18 months | ' |
Revenue | 165,615,000 | 149,573,000 | ' | ' | ' | ' | ' | ' | ' | 0 |
Net loss | -1,428,000 | -5,872,000 | ' | ' | ' | ' | ' | ' | ' | 0 |
Pro forma consolidated revenue and net income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | 174,015,000 | 156,646,000 |
Net loss | ' | ' | ' | ' | ' | ' | ' | ' | -78,000 | -6,312,000 |
Nonrecurring expense related to the fair value adjustment to acquisition-date inventory | ' | ' | ' | ' | ' | ' | ' | ' | ' | 300,000 |
Amortization expense for acquired intangible assets | $5,100,000 | $4,900,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Discontinued_Operations_Detail
Discontinued Operations (Details) (USD $) | 3 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Jan. 31, 2013 | |
Discontinued operations | ' | ' | ' |
Income (loss) from discontinued operations, net of income taxes | $700,000 | ($1,998,000) | ' |
Coal cleaning business | ' | ' | ' |
Discontinued operations | ' | ' | ' |
Remaining assets held for sale | ' | ' | 0 |
Revenue | 0 | 4,249,000 | ' |
Loss from operations of discontinued operations before income taxes | -264,000 | -1,998,000 | ' |
Gain on disposal | 964,000 | 0 | ' |
Income tax provision | 0 | 0 | ' |
Income (loss) from discontinued operations, net of income taxes | 700,000 | -1,998,000 | ' |
Maximum potential future consideration | 50,000,000 | ' | ' |
Accrued contingent liability for reclamation obligations | 10,200,000 | ' | ' |
Proceeds from deferred purchase price payments | 2,700,000 | ' | ' |
Increase in the estimated liability for reclamation obligations | $3,500,000 | ' | ' |
Inventories_Details
Inventories (Details) (USD $) | Dec. 31, 2013 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | ||
Inventories | ' | ' |
Raw materials | $11,606 | $9,909 |
Finished goods | 34,205 | 27,474 |
Inventories | $45,811 | $37,383 |
Intangible_Assets_Details
Intangible Assets (Details) (USD $) | 3 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | |
Gross carrying amount and accumulated amortization of intangible assets | ' | ' | ' |
Gross Carrying Amount | $321,359,000 | ' | $321,613,000 |
Accumulated Amortization | 186,769,000 | ' | 181,816,000 |
Amortization expense related to intangible assets | 5,100,000 | 4,900,000 | ' |
CCP contracts | ' | ' | ' |
Gross carrying amount and accumulated amortization of intangible assets | ' | ' | ' |
Estimated useful lives | '20 years | ' | ' |
Gross Carrying Amount | 106,400,000 | ' | 106,400,000 |
Accumulated Amortization | 60,029,000 | ' | 58,699,000 |
Customer relationships | ' | ' | ' |
Gross carrying amount and accumulated amortization of intangible assets | ' | ' | ' |
Gross Carrying Amount | 83,564,000 | ' | 83,564,000 |
Accumulated Amortization | 45,612,000 | ' | 44,129,000 |
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 | '15 years | ' | ' |
Trade names | ' | ' | ' |
Gross carrying amount and accumulated amortization of intangible assets | ' | ' | ' |
Gross Carrying Amount | 67,790,000 | ' | 67,790,000 |
Accumulated Amortization | 31,371,000 | ' | 30,502,000 |
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 | 54,970,000 | ' | 55,099,000 |
Accumulated Amortization | 48,264,000 | ' | 46,954,000 |
Patents And patented technologies | Minimum | ' | ' | ' |
Gross carrying amount and accumulated amortization of intangible assets | ' | ' | ' |
Estimated useful lives | '6 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 | 3,835,000 | ' | 3,960,000 |
Accumulated Amortization | 1,493,000 | ' | 1,532,000 |
Other Intangible Assets | Minimum | ' | ' | ' |
Gross carrying amount and accumulated amortization of intangible assets | ' | ' | ' |
Estimated useful lives | '6 years | ' | ' |
Other Intangible Assets | Maximum | ' | ' | ' |
Gross carrying amount and accumulated amortization of intangible assets | ' | ' | ' |
Estimated useful lives | '17 years | ' | ' |
Trade name | ' | ' | ' |
Gross carrying amount and accumulated amortization of intangible assets | ' | ' | ' |
Gross Carrying Amount | $4,800,000 | ' | $4,800,000 |
Intangible_Assets_Details_2
Intangible Assets (Details 2) (USD $) | Sep. 30, 2013 |
In Thousands, unless otherwise specified | |
Total currently estimated annual amortization expense | ' |
2014 | $19,943 |
2015 | 15,812 |
2016 | 15,555 |
2017 | 14,677 |
2018 | 14,627 |
2019 | $13,599 |
Longterm_Debt_Details
Long-term Debt (Details) (USD $) | Dec. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2011 |
In Thousands, unless otherwise specified | |||
Long-term debt | ' | ' | ' |
Debt instrument, face amount | $607,500 | $457,500 | ' |
Carrying amount of long-term debt, net of discounts | 607,114 | 456,973 | ' |
Less current portion | -7,654 | -7,553 | ' |
Long-term debt | 599,460 | 449,420 | ' |
7-5/8% Senior secured notes, due April 2019 | ' | ' | ' |
Long-term debt | ' | ' | ' |
Carrying amount of long-term debt, net of discounts | 400,000 | 400,000 | ' |
Interest rate on long-term debt (as a percent) | 7.63% | 7.63% | 7.63% |
Convertible senior subordinated notes | ' | ' | ' |
Long-term debt | ' | ' | ' |
Carrying amount of long-term debt, net of discounts | 57,114 | 56,973 | ' |
2.50% Convertible senior subordinated notes due February 2014 | ' | ' | ' |
Long-term debt | ' | ' | ' |
Debt instrument, face amount | 7,687 | 7,687 | ' |
Carrying amount of long-term debt, net of discounts | 7,654 | 7,553 | ' |
Interest rate on long-term debt (as a percent) | 2.50% | 2.50% | ' |
8.75% Convertible senior subordinated notes due February 2016 | ' | ' | ' |
Long-term debt | ' | ' | ' |
Debt instrument, face amount | 49,791 | 49,791 | ' |
Carrying amount of long-term debt, net of discounts | 49,460 | 49,420 | ' |
Interest rate on long-term debt (as a percent) | 8.75% | 8.75% | ' |
71/4% Senior notes, due January 2019 | ' | ' | ' |
Long-term debt | ' | ' | ' |
Carrying amount of long-term debt, net of discounts | $150,000 | $0 | ' |
Interest rate on long-term debt (as a percent) | 7.25% | 7.25% | ' |
Longterm_Debt_Details_2
Long-term Debt (Details 2) (USD $) | 12 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 3 Months Ended | ||||||||||||
In Millions, unless otherwise specified | Sep. 30, 2011 | Dec. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
7-5/8% Senior secured notes | 7-5/8% Senior secured notes | 7-5/8% Senior secured notes | 7-5/8% Senior secured notes | 7-5/8% Senior secured notes | 7-5/8% Senior secured notes | 7-5/8% Senior secured notes | 7-5/8% Senior secured notes | 7-5/8% Senior secured notes | 7-5/8% Senior secured notes | 71/4% Senior notes, due January 2019 | 71/4% Senior notes, due January 2019 | 71/4% Senior notes, due January 2019 | 71/4% Senior notes, due January 2019 | 71/4% Senior notes, due January 2019 | 71/4% Senior notes, due January 2019 | 71/4% Senior notes, due January 2019 | |
Period commencing after March 31, 2015 | Period commencing after March 31, 2015 | On or prior to March 31, 2014 | On or prior to March 31, 2014 | Any 12-month period ending on or prior to March 31, 2014 | Any 12-month period ending on or prior to March 31, 2014 | On or prior to March 31, 2015 | Period commencing after January 15, 2016 | Period commencing after January 15, 2016 | On or prior to January 15, 2016 | On or prior to January 15, 2016 | |||||||
Maximum | Minimum | Maximum | Maximum | Maximum | Minimum | Maximum | |||||||||||
Long-term debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional borrowings | $400 | ' | ' | ' | ' | ' | ' | ' | ' | ' | $150 | ' | ' | ' | ' | ' | ' |
Net proceeds from senior secured notes | $392.80 | ' | ' | ' | ' | ' | ' | ' | ' | ' | $146.20 | ' | ' | ' | ' | ' | ' |
Interest rate on secured notes (as a percent) | 7.63% | 7.63% | 7.63% | ' | ' | ' | ' | ' | ' | ' | 7.25% | 7.25% | 7.25% | ' | ' | ' | ' |
Debt instrument redemption price (as a percent) | ' | ' | ' | 103.80% | 100.00% | ' | ' | 103.00% | ' | ' | ' | ' | ' | 103.63% | 100.00% | ' | ' |
Percentage of the principal amount of the debt instrument which the entity may redeem with proceeds from qualified equity offerings | ' | ' | ' | ' | ' | ' | 35.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | 35.00% |
Percentage of the outstanding principal amount of the debt instrument which the entity may redeem | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Redemption price of debt instrument if redeemed with proceeds from qualified equity offerings (as a percent) | ' | ' | ' | ' | ' | 107.60% | ' | ' | ' | ' | ' | ' | ' | ' | ' | 107.25% | ' |
Debt instrument redemption price in addition to a make-whole premium (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | 100.00% | ' |
Purchase price of debt instrument, if there is a change in control (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 101.00% | ' | ' | ' | ' | ' |
Longterm_Debt_Details_3
Long-term Debt (Details 3) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 |
ABL Revolver | ' |
Long-term debt | ' |
Revolving credit arrangement amount outstanding | $0 |
Maximum borrowing capacity | 70 |
Current borrowing capacity | 37 |
Line of credit facility, interest rate at period end (as a percent) | 2.00% |
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% |
Coverage ratio | 1 |
ABL Revolver | Maximum | ' |
Long-term debt | ' |
Line of credit facility unused capacity commitment fee percentage | 0.38% |
Specified percentage of availability in which a monthly fixed charge coverage ratio applies | 15.00% |
ABL Revolver | LIBOR | ' |
Long-term debt | ' |
Variable interest rate base | 'LIBOR |
Percentage points added to the reference rate, one | 1.75% |
Percentage points added to the reference rate, two | 2.00% |
Percentage points added to the reference rate, three | 2.25% |
ABL Revolver | Base rate | ' |
Long-term debt | ' |
Variable interest rate base | 'Base rate |
Percentage points added to the reference rate, one | 0.50% |
Percentage points added to the reference rate, two | 0.75% |
Percentage points added to the reference rate, three | 1.00% |
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 | 30-day LIBOR | ' |
Long-term debt | ' |
Variable interest rate base | '30-day LIBOR |
Interest rate margin (as a percent) | 1.00% |
Letters of credit | ' |
Long-term debt | ' |
Maximum borrowing capacity | 35 |
Outstanding standby letters of credit | 22.7 |
Swingline facility | ' |
Long-term debt | ' |
Maximum borrowing capacity | $10.50 |
Longterm_Debt_Details_4
Long-term Debt (Details 4) (USD $) | 3 Months Ended | 23 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Jan. 31, 2016 | Sep. 30, 2013 | |
Long-term Debt | ' | ' | ' | ' |
Interest expense | $10,200,000 | $10,600,000 | ' | ' |
Non-cash interest expense | 570,000 | 1,219,000 | ' | ' |
Weighted average interest rate (as a percent) | 7.60% | ' | ' | 7.70% |
Long-term debt | ' | ' | ' | ' |
Amount of debt due to mature during a specified period | ' | ' | 0 | ' |
Convertible senior subordinated notes | ' | ' | ' | ' |
Long-term debt | ' | ' | ' | ' |
Amount of changes in debt | $0 | ' | ' | ' |
2.50% Convertible senior subordinated notes due February 2014 | ' | ' | ' | ' |
Long-term debt | ' | ' | ' | ' |
Interest rate on long-term debt (as a percent) | 2.50% | ' | ' | 2.50% |
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments (Details) (USD $) | Dec. 31, 2013 | Sep. 30, 2013 |
In Millions, unless otherwise specified | ||
Fair Value of Financial Instruments | ' | ' |
Long-term debt, fair value | $650 | $484 |
Long-term debt, carrying value | $607.10 | $457.50 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 |
Income tax | ' | ' | ' |
Estimated effective income tax rate (as a percent) | 14.00% | 12.00% | 14.00% |
Period of cumulative accounting profit that may be realized | '3 years | ' | ' |
Net operating loss carryforwards | $78.60 | ' | ' |
Tax credit carryforwards | $25.60 | ' | ' |
Minimum | ' | ' | ' |
Income tax | ' | ' | ' |
Operating loss carryforwards expiration date | 30-Sep-14 | ' | ' |
Tax credit carryforwards, expiration date | 30-Sep-14 | ' | ' |
Maximum | ' | ' | ' |
Income tax | ' | ' | ' |
Operating loss carryforwards expiration date | 30-Sep-33 | ' | ' |
Tax credit carryforwards, expiration date | 30-Sep-33 | ' | ' |
Equity_Securities_and_StockBas1
Equity Securities and Stock-Based Compensation (Details) (USD $) | 1 Months Ended | 3 Months Ended | |
Share data in Millions, unless otherwise specified | Feb. 29, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
Equity Securities and Stock-Based Compensation | ' | ' | ' |
Common stock, shares issued | ' | ' | 11.5 |
Gross proceeds from issuance of common stock | ' | ' | $83,400,000 |
Offering costs | ' | ' | 5,400,000 |
Net proceeds from issuance of common stock | ' | 0 | 77,823,000 |
Amount available for future offerings of securities | 210,000,000 | ' | 126,600,000 |
Treasury stock and related deferred compensation obligation at fair value | ' | 700,000 | ' |
Amount that the fair values of treasury stock and related deferred compensation obligation exceed the carrying values at cost | ' | 100,000 | ' |
Stock-based compensation | ' | 466,000 | 384,000 |
Total compensation cost related to unvested awards not yet recognized | ' | $3,700,000 | ' |
2010 Incentive Compensation Plan | ' | ' | ' |
Equity Securities and Stock-based Compensation | ' | ' | ' |
Board approved share-based award grants to officers, employees, and directors (in shares) | ' | 0.5 | ' |
Awards granted vesting period | ' | '3 years | ' |
Period of average stock price hurdles that precluded vesting | ' | '60 days | ' |
Earnings_per_Share_Details
Earnings per Share (Details) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Numerator: | ' | ' |
Loss from continuing operations | ($2,134) | ($3,874) |
Loss from continuing operations attributable to non-controlling interest | 6 | 0 |
Numerator for basic and diluted earnings per share from continuing operations - loss from continuing operations attributable to Headwaters Incorporated | -2,128 | -3,874 |
Numerator for basic and diluted earnings per share from discontinued operations - income (loss) from discontinued operations, net of income taxes | 700 | -1,998 |
Net loss attributable to Headwaters Incorporated | ($1,428) | ($5,872) |
Denominator: | ' | ' |
Denominator for basic earnings per share - weighted-average shares outstanding (in shares) | 73,066 | 61,982 |
Basic and diluted loss per share from continuing operations (in dollars per share) | ($0.03) | ($0.06) |
Basic and diluted income (loss) per share from discontinued operations (in dollars per share) | $0.01 | ($0.03) |
Earnings (loss) per share, basic and diluted, total (in dollars per share) | ($0.02) | ($0.09) |
SARs | ' | ' |
Statement | ' | ' |
Anti-dilutive securities not considered in diluted EPS calculation (in shares) | 3,937 | 4,087 |
Stock Options | ' | ' |
Statement | ' | ' |
Anti-dilutive securities not considered in diluted EPS calculation (in shares) | 618 | 1,110 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (USD $) | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Sep. 30, 2011 | Dec. 31, 2013 | Sep. 30, 2012 | Dec. 31, 2013 |
SARs | SARs | SARs - 2011 Awards | SARs - 2011 Awards | SARs - 2012 Awards | SARs - 2012 Awards | Minimum | |
SARs - 2012 Awards | |||||||
Commitments and Contingencies | ' | ' | ' | ' | ' | ' | ' |
Average stock price period | ' | ' | ' | ' | ' | '60 days | ' |
Grants approved by committee to employees for cash settled stock appreciation rights (in shares) | ' | ' | ' | 0.4 | ' | 1 | ' |
Grants approved by committee to employees for cash settled stock appreciation rights that remain outstanding (in shares) | ' | ' | 0.2 | ' | 0.8 | ' | ' |
Ending period for expected liability adjustment | ' | ' | '30-Sep-15 | ' | '30-Sep-16 | ' | ' |
Amount accrued for awards | ' | ' | $1.20 | ' | $5.50 | ' | ' |
Grant-date stock price (in dollars per share) | ' | ' | $3.81 | ' | $1.85 | ' | ' |
Percentage of stock price on grant date | ' | ' | ' | ' | ' | ' | 135.00% |
Threshold stock price at which SARS will vest (in dollars per share) | ' | ' | ' | ' | ' | ' | $2.50 |
Compensation expense | $0.90 | $2.20 | ' | ' | ' | ' | ' |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2009 | Apr. 30, 2011 | Dec. 31, 2013 | Feb. 29, 2012 | Dec. 31, 2013 | Feb. 29, 2012 | Dec. 31, 2012 | Dec. 31, 2013 | Sep. 30, 2008 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
Legal Matters | Legal Matters | Legal Matters | Boynton | Boynton | Boynton | AES Thames Bankruptcy | Fentress Families Trust | Fentress Families Trust | Neil Wallace | CPM | Archstone | Archstone | Repair cost | Lost lease payments | Tenant lawsuit against Archstone | Class action defense fees | ||
item | item | item | item | item | item | Archstone | Archstone | Archstone | Archstone | |||||||||
Commitments and Contingencies | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long term capital commitments on property, plant and equipment | $4,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Legal fees | ' | 500,000 | 600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Potential loss for unresolved matters | ' | 16,000,000 | ' | ' | ' | 43,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total liability accrued | ' | 16,000,000 | ' | 15,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Verdict for damages | ' | ' | ' | ' | 7,300,000 | 8,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of plaintiffs | ' | ' | ' | ' | 46 | 8 | ' | ' | 383 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Constructive trust amount ordered by trial court | ' | ' | ' | ' | ' | ' | 16,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Court ordered judgment | ' | ' | ' | ' | ' | ' | 16,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of defendants | ' | ' | ' | ' | ' | ' | ' | ' | 15 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Damages for removal and remediation of fly ash and water supply | ' | ' | ' | ' | ' | ' | ' | ' | 850,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Damages for vexation | ' | ' | ' | ' | ' | ' | ' | ' | 1,900,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Damages for others | ' | ' | ' | ' | ' | ' | ' | ' | 8,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Damages for properties plus prejudgment interest, attorney fees and costs | ' | ' | ' | ' | ' | ' | ' | ' | 55,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional damages sought by other plaintiffs | ' | ' | ' | ' | ' | ' | ' | ' | 307,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of insurers who have denied coverage | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' |
Loss contingency damages sought value | ' | ' | ' | ' | ' | ' | ' | $1,600,000 | ' | ' | $10,000,000 | $500,000 | ' | ' | $36,000,000 | $19,000,000 | $7,000,000 | $7,000,000 |
Number of buildings | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 21 | ' | ' | ' | ' |
Number of claims for which summary judgment was sought | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3 | ' | ' | ' | ' | ' |
Number of claims | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4 | ' | ' | ' | ' | ' |
Number of claims dismissed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3 | ' | ' | ' | ' | ' |
Condensed_Consolidating_Financ2
Condensed Consolidating Financial Information (Details) | Dec. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2011 |
Long-term debt | ' | ' | ' |
Non-guarantor entities consolidated percentage | 3.00% | ' | ' |
7-5/8% Senior secured notes | ' | ' | ' |
Long-term debt | ' | ' | ' |
Interest rate on secured notes (as a percent) | 7.63% | 7.63% | 7.63% |
71/4% Senior notes | ' | ' | ' |
Long-term debt | ' | ' | ' |
Interest rate on secured notes (as a percent) | 7.25% | 7.25% | ' |
Condensed_Consolidating_Financ3
Condensed Consolidating Financial Information (Details 2) (USD $) | Dec. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 |
In Thousands, unless otherwise specified | ||||
Current assets: | ' | ' | ' | ' |
Cash and cash equivalents | $175,327 | $75,316 | $78,420 | $53,782 |
Trade receivables, net | 76,106 | 109,868 | ' | ' |
Inventories | 45,811 | 37,383 | ' | ' |
Current and deferred income taxes | 15,070 | 14,036 | ' | ' |
Other | 8,461 | 7,280 | ' | ' |
Total current assets | 320,775 | 243,883 | ' | ' |
Property, plant and equipment, net | 165,768 | 159,619 | ' | ' |
Other assets: | ' | ' | ' | ' |
Goodwill | 194,885 | 137,198 | ' | ' |
Intangible assets, net | 134,590 | 139,797 | ' | ' |
Other | 47,472 | 43,512 | ' | ' |
Total other assets | 376,947 | 320,507 | ' | ' |
Total assets | 863,490 | 724,009 | ' | ' |
Current liabilities: | ' | ' | ' | ' |
Accounts payable | 14,471 | 21,810 | ' | ' |
Accrued personnel costs | 31,996 | 47,746 | ' | ' |
Accrued interest | 10,176 | 16,077 | ' | ' |
Current and deferred income taxes | 0 | 120 | ' | ' |
Other accrued liabilities | 54,130 | 55,268 | ' | ' |
Current portion of long-term debt | 7,654 | 7,553 | ' | ' |
Total current liabilities | 118,427 | 148,574 | ' | ' |
Long-term liabilities: | ' | ' | ' | ' |
Long-term debt | 599,460 | 449,420 | ' | ' |
Income taxes | 24,515 | 24,637 | ' | ' |
Other | 22,940 | 16,968 | ' | ' |
Total long-term liabilities | 646,915 | 491,025 | ' | ' |
Total liabilities | 765,342 | 639,599 | ' | ' |
Stockholders' equity: | ' | ' | ' | ' |
Common stock | 73 | 73 | ' | ' |
Capital in excess of par value | 721,711 | 720,828 | ' | ' |
Retained earnings (accumulated deficit) | -637,400 | -635,972 | ' | ' |
Treasury stock | -617 | -519 | ' | ' |
Total Headwaters Incorporated stockholders' equity | 83,767 | 84,410 | ' | ' |
Non-controlling interest in consolidated subsidiary | 14,381 | 0 | ' | ' |
Total stockholders' equity | 98,148 | 84,410 | ' | ' |
Total liabilities and stockholders' equity | 863,490 | 724,009 | ' | ' |
Eliminations and Reclassifications | ' | ' | ' | ' |
Current assets: | ' | ' | ' | ' |
Current and deferred income taxes | -28,653 | -29,687 | ' | ' |
Other | -1,000 | ' | ' | ' |
Total current assets | -29,653 | -29,687 | ' | ' |
Other assets: | ' | ' | ' | ' |
Investments in subsidiaries and intercompany accounts | -458,498 | -458,498 | ' | ' |
Intercompany notes | -637,046 | -637,046 | ' | ' |
Deferred income taxes | -75,371 | -75,407 | ' | ' |
Total other assets | -1,170,915 | -1,170,951 | ' | ' |
Total assets | -1,200,568 | -1,200,638 | ' | ' |
Current liabilities: | ' | ' | ' | ' |
Current and deferred income taxes | -28,653 | -29,687 | ' | ' |
Other accrued liabilities | -1,000 | ' | ' | ' |
Total current liabilities | -29,653 | -29,687 | ' | ' |
Long-term liabilities: | ' | ' | ' | ' |
Income taxes | -75,371 | -75,407 | ' | ' |
Intercompany notes | -637,046 | -637,046 | ' | ' |
Total long-term liabilities | -712,417 | -712,453 | ' | ' |
Total liabilities | -742,070 | -742,140 | ' | ' |
Stockholders' equity: | ' | ' | ' | ' |
Capital in excess of par value | -458,498 | -458,498 | ' | ' |
Total Headwaters Incorporated stockholders' equity | -458,498 | -458,498 | ' | ' |
Total stockholders' equity | -458,498 | -458,498 | ' | ' |
Total liabilities and stockholders' equity | -1,200,568 | -1,200,638 | ' | ' |
Guarantor Subsidiaries | ' | ' | ' | ' |
Current assets: | ' | ' | ' | ' |
Cash and cash equivalents | 77,078 | 70,747 | 39,517 | 44,111 |
Trade receivables, net | 76,106 | 109,868 | ' | ' |
Inventories | 45,811 | 37,383 | ' | ' |
Current and deferred income taxes | 25,828 | 25,828 | ' | ' |
Other | 6,450 | 6,548 | ' | ' |
Total current assets | 231,273 | 250,374 | ' | ' |
Property, plant and equipment, net | 160,760 | 155,499 | ' | ' |
Other assets: | ' | ' | ' | ' |
Goodwill | 194,885 | 137,198 | ' | ' |
Intangible assets, net | 134,590 | 139,797 | ' | ' |
Investments in subsidiaries and intercompany accounts | 336,919 | 360,482 | ' | ' |
Deferred income taxes | 53,228 | 53,228 | ' | ' |
Other | 20,594 | 22,300 | ' | ' |
Total other assets | 740,216 | 713,005 | ' | ' |
Total assets | 1,132,249 | 1,118,878 | ' | ' |
Current liabilities: | ' | ' | ' | ' |
Accounts payable | 13,853 | 21,051 | ' | ' |
Accrued personnel costs | 7,448 | 14,622 | ' | ' |
Current and deferred income taxes | 21,000 | 20,073 | ' | ' |
Other accrued liabilities | 50,551 | 52,898 | ' | ' |
Total current liabilities | 92,852 | 108,644 | ' | ' |
Long-term liabilities: | ' | ' | ' | ' |
Income taxes | 80,807 | 80,877 | ' | ' |
Intercompany notes | 637,046 | 637,046 | ' | ' |
Other | 12,533 | 9,332 | ' | ' |
Total long-term liabilities | 730,386 | 727,255 | ' | ' |
Total liabilities | 823,238 | 835,899 | ' | ' |
Stockholders' equity: | ' | ' | ' | ' |
Capital in excess of par value | 458,498 | 458,498 | ' | ' |
Retained earnings (accumulated deficit) | -163,868 | -175,519 | ' | ' |
Total Headwaters Incorporated stockholders' equity | 294,630 | 282,979 | ' | ' |
Non-controlling interest in consolidated subsidiary | 14,381 | ' | ' | ' |
Total stockholders' equity | 309,011 | ' | ' | ' |
Total liabilities and stockholders' equity | 1,132,249 | 1,118,878 | ' | ' |
Parent Company | ' | ' | ' | ' |
Current assets: | ' | ' | ' | ' |
Cash and cash equivalents | 98,249 | 4,569 | 38,903 | 9,671 |
Current and deferred income taxes | 17,895 | 17,895 | ' | ' |
Other | 3,011 | 732 | ' | ' |
Total current assets | 119,155 | 23,196 | ' | ' |
Property, plant and equipment, net | 5,008 | 4,120 | ' | ' |
Other assets: | ' | ' | ' | ' |
Investments in subsidiaries and intercompany accounts | 121,579 | 98,016 | ' | ' |
Intercompany notes | 637,046 | 637,046 | ' | ' |
Deferred income taxes | 22,143 | 22,179 | ' | ' |
Other | 26,878 | 21,212 | ' | ' |
Total other assets | 807,646 | 778,453 | ' | ' |
Total assets | 931,809 | 805,769 | ' | ' |
Current liabilities: | ' | ' | ' | ' |
Accounts payable | 618 | 759 | ' | ' |
Accrued personnel costs | 24,548 | 33,124 | ' | ' |
Accrued interest | 10,176 | 16,077 | ' | ' |
Current and deferred income taxes | 7,653 | 9,734 | ' | ' |
Other accrued liabilities | 4,579 | 2,370 | ' | ' |
Current portion of long-term debt | 7,654 | 7,553 | ' | ' |
Total current liabilities | 55,228 | 69,617 | ' | ' |
Long-term liabilities: | ' | ' | ' | ' |
Long-term debt | 599,460 | 449,420 | ' | ' |
Income taxes | 19,079 | 19,167 | ' | ' |
Other | 10,407 | 7,636 | ' | ' |
Total long-term liabilities | 628,946 | 476,223 | ' | ' |
Total liabilities | 684,174 | 545,840 | ' | ' |
Stockholders' equity: | ' | ' | ' | ' |
Common stock | 73 | 73 | ' | ' |
Capital in excess of par value | 721,711 | 720,828 | ' | ' |
Retained earnings (accumulated deficit) | -473,532 | -460,453 | ' | ' |
Treasury stock | -617 | -519 | ' | ' |
Total Headwaters Incorporated stockholders' equity | 247,635 | 259,929 | ' | ' |
Total stockholders' equity | 247,635 | ' | ' | ' |
Total liabilities and stockholders' equity | $931,809 | $805,769 | ' | ' |
Condensed_Consolidating_Financ4
Condensed Consolidating Financial Information (Details 3) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Revenue: | ' | ' |
Light building products | $93,012 | $76,688 |
Heavy construction materials | 71,521 | 68,158 |
Energy technology | 1,082 | 4,727 |
Total revenue | 165,615 | 149,573 |
Cost of revenue: | ' | ' |
Light building products | 69,338 | 56,501 |
Heavy construction materials | 54,765 | 53,584 |
Energy technology | 619 | 2,243 |
Total cost of revenue | 124,722 | 112,328 |
Gross profit | 40,893 | 37,245 |
Operating expenses: | ' | ' |
Amortization | 5,106 | 4,936 |
Selling, general and administrative | 28,227 | 26,277 |
Total operating expenses | 33,333 | 31,213 |
Operating income | 7,560 | 6,032 |
Other income (expense): | ' | ' |
Net interest expense | -10,056 | -10,472 |
Other, net | 12 | 36 |
Total other income (expense), net | -10,044 | -10,436 |
Loss from continuing operations before income taxes | -2,484 | -4,404 |
Income tax benefit (provision) | 350 | 530 |
Loss from continuing operations | -2,134 | -3,874 |
Income (loss) from discontinued operations, net of income taxes | 700 | -1,998 |
Net loss | -1,434 | -5,872 |
Net loss attributable to non-controlling interest | 6 | 0 |
Net loss attributable to Headwaters Incorporated | -1,428 | -5,872 |
Guarantor Subsidiaries | ' | ' |
Revenue: | ' | ' |
Light building products | 93,012 | 76,688 |
Heavy construction materials | 71,521 | 68,158 |
Energy technology | 1,082 | 4,727 |
Total revenue | 165,615 | 149,573 |
Cost of revenue: | ' | ' |
Light building products | 69,338 | 56,501 |
Heavy construction materials | 54,765 | 53,584 |
Energy technology | 619 | 2,243 |
Total cost of revenue | 124,722 | 112,328 |
Gross profit | 40,893 | 37,245 |
Operating expenses: | ' | ' |
Amortization | 5,106 | 4,936 |
Selling, general and administrative | 23,054 | 21,493 |
Total operating expenses | 28,160 | 26,429 |
Operating income | 12,733 | 10,816 |
Other income (expense): | ' | ' |
Net interest expense | -21 | -14 |
Other, net | 12 | 36 |
Total other income (expense), net | -9 | 22 |
Loss from continuing operations before income taxes | 12,724 | 10,838 |
Income tax benefit (provision) | -1,779 | -1,300 |
Loss from continuing operations | 10,945 | 9,538 |
Income (loss) from discontinued operations, net of income taxes | 700 | -1,998 |
Net loss | 11,645 | 7,540 |
Net loss attributable to non-controlling interest | 6 | ' |
Net loss attributable to Headwaters Incorporated | 11,651 | ' |
Parent Company | ' | ' |
Operating expenses: | ' | ' |
Selling, general and administrative | 5,173 | 4,784 |
Total operating expenses | 5,173 | 4,784 |
Operating income | -5,173 | -4,784 |
Other income (expense): | ' | ' |
Net interest expense | -10,035 | -10,458 |
Total other income (expense), net | -10,035 | -10,458 |
Loss from continuing operations before income taxes | -15,208 | -15,242 |
Income tax benefit (provision) | 2,129 | 1,830 |
Loss from continuing operations | -13,079 | -13,412 |
Net loss | -13,079 | -13,412 |
Net loss attributable to Headwaters Incorporated | ($13,079) | ' |
Condensed_Consolidating_Financ5
Condensed Consolidating Financial Information (Details 4) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities: | ' | ' |
Net income (loss) | ($1,434) | ($5,872) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ' | ' |
Depreciation and amortization | 13,047 | 12,436 |
Interest expense related to amortization of debt issue costs and debt discount | 570 | 1,219 |
Stock-based compensation | 466 | 384 |
Net loss (gain) on disposition of property, plant and equipment | 361 | -261 |
Gain (loss) on sale of discontinued operations, net of income taxes | -964 | 0 |
Net income (loss) of unconsolidated joint ventures | 49 | 0 |
Decrease in trade receivables | 38,929 | 32,164 |
Increase in inventories | -4,782 | -461 |
Decrease in accounts payable and accrued liabilities | -32,850 | -36,123 |
Other changes in operating assets and liabilities, net | -2,329 | -7,732 |
Net cash provided by (used in) operating activities | 11,063 | -4,246 |
Cash flows from investing activities: | ' | ' |
Payments for acquisitions | -57,550 | -42,950 |
Payments for investments in unconsolidated joint ventures | -750 | 0 |
Purchase of property, plant and equipment | -6,888 | -6,553 |
Proceeds from disposition of property, plant and equipment | 111 | 296 |
Proceeds from sale of discontinued operations | 4,666 | 0 |
Net change in other assets | 2,945 | -48 |
Net cash used in investing activities | -57,466 | -49,255 |
Cash flows from financing activities: | ' | ' |
Proceeds from issuance of common stock | 0 | 77,823 |
Net proceeds from issuance of long-term debt | 146,200 | 0 |
Other debt issue costs | -105 | 0 |
Employee stock purchases | 319 | 316 |
Net cash provided by financing activities | 146,414 | 78,139 |
Net increase in cash and cash equivalents | 100,011 | 24,638 |
Cash and cash equivalents, beginning of period | 75,316 | 53,782 |
Cash and cash equivalents, end of period | 175,327 | 78,420 |
Guarantor Subsidiaries | ' | ' |
Cash flows from operating activities: | ' | ' |
Net income (loss) | 11,645 | 7,540 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ' | ' |
Depreciation and amortization | 12,986 | 12,381 |
Stock-based compensation | 197 | 180 |
Net loss (gain) on disposition of property, plant and equipment | 316 | -261 |
Gain (loss) on sale of discontinued operations, net of income taxes | -964 | ' |
Net income (loss) of unconsolidated joint ventures | 49 | ' |
Decrease in trade receivables | 38,929 | 32,164 |
Increase in inventories | -4,782 | -461 |
Decrease in accounts payable and accrued liabilities | -20,442 | -19,464 |
Other changes in operating assets and liabilities, net | 25,111 | 11,763 |
Net cash provided by (used in) operating activities | 63,045 | 43,842 |
Cash flows from investing activities: | ' | ' |
Payments for acquisitions | -57,550 | -42,950 |
Payments for investments in unconsolidated joint ventures | -750 | ' |
Purchase of property, plant and equipment | -5,867 | -5,880 |
Proceeds from disposition of property, plant and equipment | 111 | 296 |
Proceeds from sale of discontinued operations | 4,666 | ' |
Net change in other assets | 2,436 | -119 |
Net cash used in investing activities | -56,954 | -48,653 |
Cash flows from financing activities: | ' | ' |
Employee stock purchases | 240 | 217 |
Net cash provided by financing activities | 240 | 217 |
Net increase in cash and cash equivalents | 6,331 | -4,594 |
Cash and cash equivalents, beginning of period | 70,747 | 44,111 |
Cash and cash equivalents, end of period | 77,078 | 39,517 |
Parent Company | ' | ' |
Cash flows from operating activities: | ' | ' |
Net income (loss) | -13,079 | -13,412 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ' | ' |
Depreciation and amortization | 61 | 55 |
Interest expense related to amortization of debt issue costs and debt discount | 570 | 1,219 |
Stock-based compensation | 269 | 204 |
Net loss (gain) on disposition of property, plant and equipment | 45 | ' |
Decrease in accounts payable and accrued liabilities | -12,408 | -16,659 |
Other changes in operating assets and liabilities, net | -27,440 | -19,495 |
Net cash provided by (used in) operating activities | -51,982 | -48,088 |
Cash flows from investing activities: | ' | ' |
Purchase of property, plant and equipment | -1,021 | -673 |
Net change in other assets | 509 | 71 |
Net cash used in investing activities | -512 | -602 |
Cash flows from financing activities: | ' | ' |
Proceeds from issuance of common stock | ' | 77,823 |
Net proceeds from issuance of long-term debt | 146,200 | ' |
Other debt issue costs | -105 | ' |
Employee stock purchases | 79 | 99 |
Net cash provided by financing activities | 146,174 | 77,922 |
Net increase in cash and cash equivalents | 93,680 | 29,232 |
Cash and cash equivalents, beginning of period | 4,569 | 9,671 |
Cash and cash equivalents, end of period | $98,249 | $38,903 |