Headwaters Incorporated Announces Two J.A. Holmes Safety Awards.

Business Editors

SOUTH JORDAN, Utah--(BUSINESS WIRE)--May 28, 2003

Headwaters Incorporated (Nasdaq: HDWR) today announced that the DTE River Hill facility, operated by Covol Fuels, has received two J.A. Holmes Safety Association awards for its outstanding safety record. The first award, the Pennsylvania State Council 2002 Safety Award, was received for achieving the lowest incidence rate (0.00) in the state of Pennsylvania among Group IV coal facilities.

DTE River Hill, also received the Clearfield Council's Coal Processing Plant No Lost-Time Safety Award for 2002. This is the second consecutive year that the facility has received this award. Of note, at the end of the March 2003 quarter, DTE River Hill had worked 177,099 man-hours without a lost time or reportable accident, dating back to October 1999.

Another Covol Fuels' operation, DTE Utah Synfuels, located in eastern Utah, has also achieved a stellar safety record, having worked over 123,000 man-hours without a lost-time or reportable accident, dating back to March 1998. The Utah operation has also achieved an almost unheard of workers' compensation experience modifier rating of 0.57. The industry average rating is l.0. The 0.57 rating is an outstanding accomplishment, especially in the light of the heavy industrial nature of the operation.

Corporate Manager Layne Ashton stated, "Safety and accident prevention are the highest priorities at each of Headwaters' operations. The company's commitment to safety extends from the boardroom to the plant operator. Headwaters has worked hard to establish a positive corporate culture of safety. Headwaters certainly recognizes that without the support of each facility's respective plant management and employees' personal commitment to safety, none of these outstanding safety records would have been accomplished."

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 [e-mail].