Headwaters Q3 Profit Misses Estimates; Backs FY View; To Buy Krestmark

(RTTNews) - Headwaters Inc. (HW), a building products company, reported Tuesday that its third-quarter net income attributable to the company declined to $17.516 million from $22.817 million last year. Earnings per share were $0.23, compared to $0.30 per share for the third quarter of 2015.

The company attributed the decrease primarily due to increases in GAAP tax expense following the release of deferred tax asset valuation allowances in the fourth quarter.

Adjusted income from continuing operations was $22.7 million, or $0.30 per share in 2016, compared to $19.1 million, or $0.25 per share in 2015.

On average, 8 analysts polled by Thomson Reuters expected earnings of $0.38 per share. Analysts' estimates typically exclude special items.

Revenue increased 8% to $262.47 million from $243.29 million last year, despite adverse weather impact. Analysts were looking for $276.83 million.

Looking ahead, the company reaffirmed its fiscal 2016 adjusted EBITDA Guidance.

The company said it is pleased with the overall performance of the business and remain very optimistic that key end markets will continue to grow in 2017.

Further, the company said that on August 1, it entered into a definitive agreement to acquire the assets of Krestmark Industries, LP, a high-growth, high-margin manufacturer of vinyl windows in South Central U.S. for $240 million.

Dallas, Texas-based Krestmark is a top-performing manufacturer of high quality vinyl windows in the U.S. The acquisition is a natural extension of Headwaters' focus on supplying customers and homeowners with attractive products for the exterior of the home.