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

Headwaters’ Siding Accessories products control approximately 75% of their niche market
The Company’s Manufactured Stone products control approximately 25% of their niche market
Headwaters’ Texas Concrete Block business dominates the Texas block market with roughly 65% of the market
Headwaters Resources / Heavy Construction Materials segment controls almost half of all fly ash sales in the U.S. today

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 2009 (peak to trough), 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 remains committed to its mission of providing innovative building materials to its customers and to carefully managing its business and capital structure to deliver profitability to its shareholders. As an eventual recover in the Company's end markets occurs, Headwaters will be well-positioned to benefit as it continues to improve opertionsa.

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 1,000 leased railcars, and approximately 250 trucks.

Improved balance sheet

During fiscal 2011, Headwaters completed a company-wide restructuring, which should drive improvements in adjusted EBITDA in 2012 and beyond. The Company also completed a restructuring of its senior debt, extending debt maturities out to 2019, and reducing the interest rate from 11.375% to 7.625%. Headwaters was also able to pay down $24.4 million of high coupon subordinated debt. In the first half of fiscal 2012, the Company further reduced its debt by approximately $19.5 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.