Headwaters Incorporated Completes First Shipment of Fly Ash to Puerto Rico

SOUTH JORDAN, Utah--(BUSINESS WIRE)--Sept. 19, 2003--Headwaters Incorporated (NASDAQ: HDWR) announced today that it has successfully completed its first shipment of fly ash to Puerto Rico. The fly ash was produced at a Louisiana power plant and shipped out of the Natchitoches, La., port facilities. Ecoloigical Carmelo purchased the fly ash from Headwaters. Ecoloigica Carmelo is part of Grupo Carmelo, Puerto Rico's largest producer of construction aggregates and the leader in the production of concrete construction materials. Grupo Carmelo has invested capital to provide for storage and handling of the fly ash in Puerto Rico.

"We are pleased with our relationship with Grupo Carmelo and the opportunity to provide fly ash into the Puerto Rico market," said Bill Gehrmann, senior vice president of ISG, Headwaters' coal combustion products unit. "The first shipment consisted of 12,000 tons and is the beginning of a long-term relationship. Puerto Rico will benefit from receiving some excellent fly ash for its concrete construction industry."

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The fly ash shipments also provide economic benefits to Louisiana, creating jobs and utilization of valuable coal combustion products. Raul Deju, president of ISG, said, "We have been working with local officials in Louisiana to make this partnership work and bring value to the local economy. Local officials have been very responsive and helpful to us."

About Headwaters Incorporated

Headwaters Incorporated is a world leader in providing technology and services that maximize the value of fossil fuels. The company is focused on providing services to energy companies, conversion of fossil fuels into alternative energy products, and generally adding value to energy. Headwaters generates revenue from managing coal combustion products (CCPs) and from licensing its innovative chemical technology to produce an alternative fuel. Through its CCP business and its solid alternative fuels business, the company earns a growing revenue stream that provides the capital needed to expand and acquire synergistic new business opportunities.

Forward-Looking Statements

Certain statements contained in this document may be deemed to be forward-looking statements under federal securities laws, and Headwaters intends that such forward-looking statements be subject to the safe harbor created thereby.

Such forward-looking statements relate to: (i) the growth of Headwaters' revenues, earnings or earnings per share; (ii) the expectation that operating results will be higher for the June and September quarters; (iii) the ability of Headwaters to sustain the earnings stream from its alternative fuels, coal combustion products and other businesses; (iv) the expectation that Headwaters' stock is undervalued or will increase in value in the future; (v) the identification and completion of any future acquisitions and the expectation that the value of such acquisitions will increase; (vi) the commercialization of any technology acquired or developed.

Headwaters cautions that these statements are qualified by important factors that could cause actual results to differ materially from those reflected by the forward-looking statements contained herein.

Such factors include, but are not limited to: (a) the availability of tax credits to us and our licensees under the tax code; (b) our dependence on licensees to use our technology; (c) collection of payments outstanding; (d) the company's ability to repay its debt and comply with covenants in financing agreements; limitations in the capital available to Headwaters to execute on its business plan, and the cost of that capital; (e) the ability of Headwaters to locate and close on attractive acquisition opportunities; (f) Headwaters' limited operating history with its new business strategy and its ability to sustain and manage its growth under that strategy; and (g) the success of Headwaters in replacing and growing its financial performance before its legacy alternative fuels business declines.

More information about potential factors which could affect either company's business and financial results is included in Headwaters' Annual Report on Form 10-K for the fiscal year ended Sept. 30, 2002, Quarterly Reports on Form 10-Q, and other periodic filings and prospectuses. All forward-looking statements are based on information available to Headwaters on the date hereof, and Headwaters assumes no obligation to update such statements. Investors and security holders may obtain a free copy of the Annual and Quarterly Reports and other documents filed by Headwaters with the Securities and Exchange Commission at the commission's Web site at http://www.sec.gov. Free copies of Headwaters' Annual Report and other filings with the commission may also be obtained by directing a request to smadden@hdwtrs.com.