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Headwaters eyes leverage goal, ends Q1 with $212 million of liquidity
By Lisa Kerner
Charlotte, N.C., Feb. 4 - Headwaters Inc. chairman and chief executive officer Kirk Benson said the company is committed to deleveraging.
The net debt-to-adjusted EBITDA goal is between 2.5 and 3 times, said Benson during the company's fiscal first-quarter earnings call on Tuesday.
"Given our trajectory, we would have easily been in that range in 2014," Benson said.
However, in December, Headwaters borrowed $150 million to finance "transactions similar to our trim board acquisition - that is, adjacent products in core markets sold to our customer base."
The company closed the quarter on Dec. 31 with a net debt-to-EBITDA ratio of 3.6 to 1, said chief financial officer Don Newman on the call.
According to Newman, the deleveraging trajectory may be impacted by the timing and size of the investment of proceeds from its new debt.
At quarter-end, Headwaters had $7.7 million of debt maturing within the next two years, cash on hand of $175.3 million and total liquidity of $212.3 million.
Financial highlights
Headwaters' first-quarter 2014 consolidated revenue increased by 11% to $165.6 million from the prior-year period.
Gross profit was up 10% to $40.9 million.
Operating income improved 27%, from $6 million in 2013 to $7.6 million in 2014, according to the company's earnings news release.
Headwaters reported a first-quarter loss from continuing operations of $2.1 million, or three cents per diluted share, for the first quarter. This compares to a loss of $3.9 million, or six cents per diluted share, for the first quarter of 2013.
Adjusted EBITDA increased by 11% over 2013. The company increased its adjusted EBITDA guidance for the full year to a range of $130 million to $145 million from a range of $125 million to $140 million.
Headwaters is a South Jordan, Utah-based manufacturer of light building products and heavy construction materials.
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