Headwaters: Awaiting an Increase in Infrastructure Spending and Home Building

For the first quarter of its 2009 fiscal year Headwaters, Inc. (HW) reported a net loss of 2¢ per share against the consensus estimate of a 4¢ profit. For the same quarter in the prior year HW had a 1¢ per share loss excluding discontinued and sold business lines (Call Transcript).

I started following Headwaters a little over a year ago as the company started working its business plan to generate new revenues as the proceeds from its Section 45K clean energy business wound down when the section of the tax code expired. It has been working on transferring its clean energy technology to the building of facilities that process waste coal into usable / salable high quality coal. The fall in energy prices, the housing crash and the general economic slowdown have had significant impact on Headwaters’ three major business lines, slowing the companies return to strong profitability. Here is a quick outline of the company's major business lines: