Headwaters (HW) Tops Q2 EPS by 3c, Offers Outlook

Headwaters (NYSE: HW) reported Q2 EPS of $0.13, $0.03 better than the analyst estimate of $0.10. Revenue for the quarter came in at $202 million versus the consensus estimate of $198.8 million.

Outlook

“We saw strong fundamental demand during the second quarter in both our core business segments,” said Don P. Newman, Headwaters’ Chief Financial Officer. “Due to our performance in the first half of our fiscal year combined with the acquisitions that we recently closed, we are raising the bottom end of our Adjusted EBITDA guidance by $5 million to a range of $185 million to $200 million, representing growth of between 12% and 21% from 2015.

“Our Adjusted EBITDA increased by 20% for the first half of our fiscal year, consistent with our compounded annual growth rate since 2011. We believe further margin expansion in 2016 and 2017 is possible, due to revenue growth and synergies associated with recent acquisitions.

“We anticipate generating free cash flow between $80 million and $90 million in fiscal 2016 and continue to see opportunities to invest in growth capex and bolt-on acquisitions at returns above our weighted average cost of capital. Our plans to continue to reduce debt during the last half of the fiscal year include the partial redemption of senior unsecured notes.”

For earnings history and earnings-related data on Headwaters (HW) click here.

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