Headwaters Incorporated Announces Agreement to Sell 6,000,000 Shares o

    Business Editors

    SOUTH JORDAN, Utah--(BUSINESS WIRE)--Feb. 24, 2005--Headwaters Incorporated (Nasdaq:HDWR), announced today that it has agreed to sell 6,000,000 shares of its common stock at a public offering price of $30.50 per share, or net proceeds of $172,950,000 to the Company after deducting underwriting discounts and commissions and estimated offering expenses. In addition, the Company has granted the underwriters the option to purchase up to an additional 900,000 shares of common stock to cover over-allotments with respect to the offering.
    The Company expects to use the net proceeds from the sale of its common stock to repay a portion of the borrowings and applicable prepayment charges under the second lien term loan facility and the senior secured first lien facility, both of which are a part of its senior secured credit facilities.
    Morgan Stanley & Co. Incorporated is sole lead bookrunning manager for this offering. Adams Harkness, Inc., JPMorgan Securities Inc., RBC Capital Markets Corporation and Stephens Inc. are the co-managers.
    All of the shares of the common stock are being offered pursuant to shelf registrations that have been declared effective by the Securities and Exchange Commission. Closing of the offering is expected to take place on March 1, 2005.
    The offering is being made solely by means of a prospectus supplement dated February 23, 2005 and the accompanying prospectuses, which may be obtained from Morgan Stanley, Prospectus Department, 1585 Broadway, New York, NY 10036.

    About Headwaters Incorporated

    Headwaters Incorporated is a world leader in creating value through innovative advancements in the utilization of natural resources. Headwaters is a diversified growth company providing products, technologies and services to the energy, construction and home improvement industries. Through its alternative energy, coal combustion products, and building products businesses, the Company earns a growing revenue stream that provides the capital needed to expand and acquire synergistic new business opportunities.

--30--CS/la*

CONTACT: Headwaters Incorporated Sharon Madden, 801-984-9400 (Investor Relations) or Financial Relations Board Tricia Ross, 617-520-7064 (Analyst Contact)

KEYWORD: UTAH INDUSTRY KEYWORD: GOVERNMENT OIL/GAS CHEMICALS/PLASTICS MINING/METALS ENERGY SOURCE: Headwaters Incorporated

Copyright Business Wire 2005