page 1 Exhibit 99.4 |
page 2 Management may make forward-looking statements during this presentation. Certain statements contained in this press release are forward-looking statements within the meaning of federal securities laws and Headwaters intends that such forward-looking statements be subject to the safe-harbor created thereby. Forward-looking statements include Headwaters’ expectations as to the managing and marketing of coal combustion products, the production and marketing of building materials and products, the production and marketing of cleaned coal, the production and marketing of hydrogen peroxide, the licensing of resid hydrocracking technology and catalyst sales to oil refineries, the availability of refined coal tax credits, the development, commercialization, and financing of new technologies and other strategic business opportunities and acquisitions, and other information about Headwaters. Such statements that are not purely historical by nature, including those statements regarding Headwaters’ future business plans, the operation of facilities, the availability of feedstocks, and the marketability of the coal combustion products, building products, cleaned coal, hydrogen peroxide, catalysts, and the availability of tax credits, are forward- looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding future events and our future results that are based on current expectations, estimates, forecasts, and projections about the industries in which we operate and the beliefs and assumptions of our management. Actual results may vary materially from such expectations. Words such as “may,” “should,” “intends,” “plans,” “expects,” “anticipates,” “targets,” “goals,” “projects,” “believes,” “seeks,” “estimates,” or variations of such words and similar expressions, or the negative of such terms, may help identify such forward-looking statements. Any statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, and other characterizations of future events or circumstances, are forward-looking. In addition to matters affecting the coal combustion products, building products, and energy industries or the economy generally, factors that could cause actual results to differ from expectations stated in forward-looking statements include, among others, the factors described in the caption entitled “Risk Factors” in Item 1A in Headwaters’ Annual Report on Form 10-K for the fiscal year ended September 30, 2008, Quarterly Reports on Form 10-Q, and other periodic filings and prospectuses. Although Headwaters believes that its expectations are based on reasonable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that our results of operations will not be adversely affected by such factors. Unless legally required, we undertake no obligation to revise or update any forward-looking statements for any reason. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Our internet address is www.headwaters.com. There we make available, free of charge, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Our reports can be accessed through the investor relations section of our web site. Forward Looking Statements |
Vision Statement Headwaters improves sustainability by transforming underutilized resources into valuable products page 3 |
Transaction Overview page 4 Issuer: Headwaters Incorporated Offering Type: Registered Direct Offering Size: $25 million Security Offered: Common Stock Use of Proceeds: Prepay a portion of Senior Debt Exchange / Ticker: NYSE:HW Pricing: Expected week of September 14 th |
page 5 Headwaters Incorporated Low cost coal producer Sustainable alternative energy platform Refined coal products qualify for tax credits Leading market positions Diversified revenue stream Extensive national distribution network Market leader in fly ash Increasing market share Broad national footprint 38% * Excludes Section 45K Business Headwaters Energy Services FY 2008 Revenue of $819 Million* Percentage of Total Revenue Building Products 56% 6% Headwaters Resources |
page 6 RESOURCES FISCAL YEAR 2008 Revenue $313 Million Operating Income: $59.0 Million |
page 7 Coal Combustion Products Converting Residual Waste Into Valuable Products Improved Product Performance – More durable – Greater long-term strength – More workable and pumpable – Mitigates problems caused by salts, chemicals, and some aggregates Cost Savings – 20% to 60% less expensive Positive Environmental Impacts – Reduces landfill utilization – Displaces portland cement production which emits approximately one ton of CO 2 for every ton of product Why Fly Ash? – |
Coal Combustion Products Competitive Advantages Exclusive Long-Term Contracts -100 power plants in 35 states -Control 50% of available supply Nationwide Infrastructure -Over 30 terminals -90 plant site supply facilities -100+ trucks -1,200+ railcars Technology Advancements -Ammonia Slip -Carbon Fixation Coal Ash Distribution Terminal, Riviera Beach, Florida page 8 |
page 9 Coal Combustion Products Headwaters Resources’ Fly Ash Shipments Estimated Market Share* Boral Lafarge Headwaters Other * Estimated Industry Data Provided by ACAA. |
page 10 Coal Combustion Products Our capital investments in storage and rail terminals have allowed us to increase market share * Estimated Industry Total provided by ACAA. |
Forecasted Cement Consumption *August 2009 Portland Cement Association Forecast |
page 12 Opportunities Increase and optimize supply – Continue to extend existing agreements – Continue to expand infrastructure – Acquire new supply Site service work – Leverage existing experience and expertise – Work is not economy dependent Continuous Improvement |
Headwaters Energy Services Coal Cleaning FISCAL YEAR 2008 Revenue: $38.7 Million |
page 14 Headwaters Coal Cleaning Business Coal is America's Most Abundant Energy Resource Inexpensive and abundant More than half of U.S. electricity generation Usage for electricity growing New market potential for synthetic natural gas or liquid transportation fuels Coal has Great Environmental Challenges Mining wastes Pollution emissions (SO2, NOx, Hg) Greenhouse gas emissions (CO 2 ) Residual products (Coal ash, FGD materials) |
page 15 Coal Recovery Converting Waste Coal Into a Valuable Product Eleven facilities (7 in operation) – Wet and dry processing technologies Large addressable market – 3-5 billion tons of waste High margins drive economic potential Environmental benefits – Solid waste utilization – Land reclamation – Emissions reductions from processed fuel Federal tax credit Coal Recovery Facility (Dry Technology) Wellington, Utah |
Annualized Production Capacity - 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 Annualized Production at Facilities Currently Operating Nameplate Capacity at Facilities Currently Operating Total Facility Capacity Tons page 16 |
page 17 Headwaters Building Products Fiscal Year 2008 Revenue: $457.0 Million *Operating Income: $18.5 Million *Excludes goodwill impairment |
page 18 Leading Positions in Attractive Markets Variety of concrete based masonry unit products Regional branding Regional distribution Most authentic natural manufactured stone Multiple national brands for optimal customer segmentation National manufacturing platform Low cost competitive manufacturing advantage Major supplier of products to Lowe’s and Home Depot Strong growth expected in emerging product lines 34% 43% 23% Fiscal 2008 Building Products Revenue of $457 Million Percentage of Revenue Southwest Concrete Products Eldorado Stone Tapco |
page 19 Building Products Competitors Source: management estimate |
Leading National Manufacturer #1 in resin shutters & siding accessories #1 in architectural stone veneer #1 Texas concrete block ESTIMATED REVENUE BY CATEGORY page 20 |
Building Products Growth Initiatives Developed and introduced new niche products featuring: – Early stage product life cycle – Faster than average growth – Examples • Specialty siding • Functional Shutters • Dutch Quality and Stone Craft brands • Synthetic slate roofing Leverage distribution channels 15.5 20.2 54 92 81 0 20 40 60 80 100 2004 2005 2006 2007 2008 ($ millions) Annual Revenue from New Products & Brands Introduced Since 2004 page 21 |
Sustainability Within Building Products Headwaters Building Products division is committed to continuous improvement in its processes and products – Tapco utilizes roughly 25% of its internal regrind material in various products – Foundry plans on purchasing 30% recycled raw materials from other sources in 2010 – SCP incorporates fly ash in approximately 25% of its products, and internal regrind is added to all gray products – Eldorado Stone incorporates fly ash and internal regrind into over 20% of its products page 22 Fly Ash Magnified 90x |
Financial Strategy Liquidity – ABL with availability up to $70 million (under negotiation) – Reduced capital expenditures 2010 Refinancing of 2011 and 2012 Maturities – Maturities balance as of June 30 was $352.4 million – Reduce maturities by $100 million • Successfully completed Equity for Convertible debt exchange ($35 MM) • Asset Sales • Other refinancings Ratio Goals – Senior indebtedness < 2.5 – Total indebtedness < 4.0 page 23 |
Consolidated Balance Sheet page 24 (in $ millions) For the period ended 6/30/2009 Assets: Cash & Equivalents $14.0 Other Current Assets 188.7 Total Current Assets $202.7 Property, Plant & Equipment (Net) $324.5 Goodwill 116.0 Other Intangibles 209.1 Other Long-Term Assets 50.3 Total Assets $902.6 Liabilities & Stockholders' Equity: Current Portion of Debt $30.0 Other Current Liabilities 92.7 Total Current Liabilities $122.7 Long-Term Debt (less current portion) $500.7 Other Long-Term Liabilities 37.9 Total Liabilities $661.3 Total Equity $241.3 Total Liabilities & Stockholders' Equity $902.6 |
Revenue (excludes Section 45K Results) (dollars in millions) $768 $861 $858 $819 $479* 2005 2006 2007 2008 YTD * Excludes sold mortar/stucco business page 25 $520 $573 $544 $457 $249 2005 2006 2007 2008 YTD Revenues for Building Products Segment Reported Revenue $1,065 $1,121 $1,208 $886 $479 2005 2006 2007 2008 YTD |
$117 $128 $145 $30 $11 $14 2006 2007* 2008* EBITDA Net Income Consolidated EBITDA & Net Income * Excludes goodwill impairment of $98 million and $205 million in 2007 and 2008 respectively ** Segment EBITDA calculated as operating income plus depreciation (Excludes Section 45K Business) (Dollars in Millions) Actual Consolidated EBITDA $269 $301 $142 2006 2007 2008 $120 $105 $74 2006 2007 2008 EBITDA For Building Products Segment** page 26 |
* Excludes goodwill impairment of $98 million ** Excludes goodwill impairment of $205 million ***Excludes goodwill impairment of $465.7 million Earnings per Share from Continuing Operations (Excludes Section 45K Business) * Excludes goodwill impairment $0.69 $0.29 $0.27 $0.02 2006 2007* 2008** YTD*** *EPS Including Section 45K Business $2.79 $2.19 $2.53 $0.60 2005 2006 2007 2008 page 27 |
page 28 HEADWATERS Company Update September 2009 “Improving sustainability by transforming underutilized resources into valuable products” |