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INVESTMENT APPEALS

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


Premier market leadership positions

quality products and Strong Brands

Headwaters is the vendor of choice for both wholesalers and the leading U.S. home improvement retailers, including Lowe’s and Home Depot. Some of our brands include: Atlantic Premium Shutters™, Mid-America Siding Components™, Inspire Roofing Products™, Tapco Integrated Tool Systems™, Eldorado Stone®, and many more.

operational improvements and cost reductions

Headwaters’  Light Building Products margins are some of the highest in its peer group. From 2007 through the present, Headwaters Light Building Products’ EBITDA margins have averaged 17%, compared to an average EBITDA margin of roughly 10% generated by most of its peers.

Well positioned in construction markets

The company’s  operating metrics improved in fiscal 2010 compared to fiscal 2009, in spite of the overall weakness in the economy. Gross profits increased $16.8 million, or 11%; gross margins improved by 300 basis points to 24.9%; operating income, excluding goodwill and asset impairments, improved by $21.9 million; and adjusted EBITDA increased by $19.3 million.

national distribution network

Headwaters’ Light Building Products segment has more than 3,000 wholesale distributors across the country. Our Heavy Construction Materials segment is the only fly ash company in the U.S. with a nationwide infrastructure that includes 22 terminals, over 1,200 leased railcars, and approximately 200 trucks.

Improved balance sheet

The Company refinanced its senior debt in fiscal 2010, allowing for no additional maturities until 2014 (unless holders of the 16% convertible notes exercise their put option in 2012). We also repaid $39.0 million of our 16% convertible senior subordinated notes leaving a balance of $9.2 million.

Long-term relationships and exclusive contracts

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

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