Headwaters Incorporated Receives International Code Council -'ICC'- Certification for Its FlexCrete Building Material.

SOUTH JORDAN, Utah -- Headwaters Incorporated (NASDAQ: HDWR) today announced that the International Code Council ("ICC") published an evaluation report which was submitted jointly by FlexCrete Building Systems, LC and Electric Power and Research Institute ("EPRI") for an aerated concrete building product which will be marketed as "FlexCrete(TM)."

The evaluation report is distributed to building officials across the United States and certifies that the material has been approved for use in both residential and commercial construction. The report covers the use of FlexCrete blocks, as well as roof and floor panels up to 22 feet in length.

This evaluation was originally sought by EPRI to certify a version of Autoclaved Aerated Concrete ("AAC") product that used a high volume of coal combustion products ("CCPs"). FlexCrete aerated concrete materials underwent comprehensive equivalency testing, yielding the same physical properties as the AAC products that had been previously tested.

Ryan Creamer, vice president of technology for FlexCrete Building Systems, commented, "We are excited to have completed the ICC evaluation process; it will enable us to work in communities across the nation. The report also gives clients the assurance that our products will meet or exceed the properties exhibited by AAC, a technology that has been in continuous use in Europe since the 1920s."

Dr. George Offen, technical executive of EPRI, said, "We feel that this is an important step in increasing the utilization of CCPs in the U.S. market. It will provide a market for a wider range of fly ash and thereby reduce the amount of fly ash that needs to be land filled."

About Headwaters Incorporated

Headwaters Incorporated is a world leader in creating value through innovative advancements in the utilization of natural resources. The company is focused on providing services to energy companies, conversion of fossil fuels into alternative energy products, and 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, fly ash building products 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 report are forward-looking statements within the meaning of federal securities laws and Headwaters intends that such forward-looking statements be subject to the safe-harbor created thereby.

Forward-looking statements include Headwaters' expectations as to the managing and marketing of coal combustion products and building products, operation of facilities utilizing alternative fuel technologies, the marketing of synthetic fuels, the receipt of licensing fees, royalties, and product sales revenues, the development, commercialization, and financing of new technologies and other strategic business opportunities and acquisitions, and other information about Headwaters. Such statements that are not purely historical by nature, including those statements regarding Headwaters' future business plans, the operation of facilities, the availability of tax credits, the availability of feed stocks, and the marketability of the coal combustion products, building products, and synthetic fuel, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding future events and our future results that are based on current expectations, estimates, forecasts, and projections about the industries in which we operate and the beliefs and assumptions of our management. Actual results may vary materially from such expectations. Words such as "expects," "anticipates," "targets," "goals," "projects," "believes," "seeks," "estimates," variations of such words, and similar expressions are intended to identify such forward-looking statements. Any statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, and other characterizations of future events or circumstances, are forward-looking.

In addition to matters affecting the coal combustion products, synthetic fuel and building products industries or the economy generally, factors which could cause actual results to differ from expectations stated in forward-looking statements include, among others, the factors described in the captions entitled "Forward-looking Statements" and "Risk Factors" in Item 7 in Headwaters' Annual Report on Form 10-K for the fiscal year ended Sept. 30, 2003, Quarterly Reports on Form 10-Q, and other periodic filings and prospectuses.

Although Headwaters believes that its expectations are based on reasonable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that our results of operations will not be adversely affected by such factors. Unless legally required, we undertake no obligation to revise or update any forward-looking statements for any reason. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report.

Our Internet address is www.hdwtrs.com. There we make available, free of charge, our annual report on Form 10-K, Quarterly Reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Our reports can be accessed through the investor relations section of our Web site.