Tuesday, Headwaters Inc. (HW) a provider for technology and services to building products, coal combustion products and energy industries reported a decline in net income for the third quarter, as there has been softness in demand for its fly ash business. The results also reflected a decline in revenues from building products.
Net income declined to $11.3 million or $0.27 per share from $13.7 million or $0.31 per diluted share for the same quarter last year.
Five analysts polled by Thomson Reuters expected the company to report earnings of $0.43 per share for third quarter. Analysts' estimates typically exclude one-time items.
During the quarter, there has been a decline in revenues from building products to $92.58 million from $129.28 million for the same quarter last year. Headwaters' tax benefit after excluding unusual items was $31.2 million due to which the net income adjusted for goodwill impairment was $35.7 million or $0.81 per share.
Kirk Benson, chief executive said, "Our fly ash business is experiencing softness in demand, resulting in lower revenue, but with improved efficiencies we have been able to mitigate the effects on margins."
For the nine months ended June 30, Headwaters reported net loss of $395.9 million or $9.53 per share compared with net income of $14.4 million or $0.35 per share for the same quarter previous year. Revenues declined to $479.1 million from $651.3 million for the same period last year. In second quarter of fiscal year, Headwaters recorded a goodwill impairment charge of $465.7 million.
Excluding march quarter $467.5 million of goodwill impairment charge and quarter quarterly loss anticipated in fourth quarter of fiscal year, Headwaters believes full-year earnings will be at the lower end of previous guidance of $0.00 to $0.20 per share . Headwaters said, the company does not expect any additional goodwill impairments in the last quarter of fiscal year.
Five analysts polled by Thomson Reuters expected the company to report earnings of $0.10 per share for the full year.
The South Jordan, Utah headquartered company in June had announced that it has obtained an amendment to its senior secured credit facility under which it currently has $227.5 million in outstanding loans, consisting of a first lien term loan in the amount of $197.5 million and $30.0 million of borrowings under a revolving credit arrangement.
The amendment provided a cushion to its total indebtedness covenant and allowed the establishment of a new asset based revolver to replace its current revolving credit facility that matures in September. The amended debt agreement includes a waiver of the total leverage covenant for the third quarter of fiscal year.
HW is currently trading at $3.05, down 2.24% on NYSE.
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