John Hill, a board member since September of 1997 has resigned from the board and Ron Tanner has accepted a position as a new director.

Tanner has agreed to join the company's board of directors effective June 2001. Tanner has been a senior utility analyst for over 11 years, serving clients of Legg Mason, Goldman, Sachs & Co. and Duff & Phelps. Tanner also worked for Edison International for 10 years in various treasury capacities including financial planning and investor relations.

Tanner brings to the board a wealth of knowledge in the energy industry and a strong understanding of the financial markets.

Since Hill's appointment to the board in 1997 he has served in a variety of committee functions, including the compensation and audit committees. Hill was instrumental in assisting the company through its developmental stage, including providing both project and corporate financing.

These financings have all been repaid. Hill has also relinquished investment control over 976,018 shares of Headwaters' stock owned by Cherokee Associates. Hill is actively involved in a variety of managerial activities for several companies, including Trans Pacific Stores and will continue to devote his energies to those activities.

"John Hill has been a solid member of the board for Headwaters over the last several years. We wish him continued success in his business activities," said Kirk A. Benson, chief executive officer and chairman. Benson continued, "We believe that the addition of Ron Tanner to the board will be a good replacement for Mr. Hill and will broaden the experience and expertise of the board.

"Ron brings valuable energy industry background and expertise which will fit in well with Headwaters' business objectives."

About Headwaters Inc.

Headwaters Inc.'s business plan is to bring technology to the marketplace. It is focused on adding value to fossil fuels such as coal and heavy oils. Among its portfolio of technologies, Headwaters has developed an innovative chemical technology that interacts with carbon-based feedstock to produce an alternative fuel.

Through its existing alternative fuels business, the company earns a growing royalty stream that provides the capital needed to acquire and expand synergistic new business opportunities. Headwaters Inc. trades under the Nasdaq symbol HDWR.

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 ability of Headwaters to sustain the earnings stream from its alternative fuels business; iii) the expectation that Headwaters' stock is undervalued or will increase in value in the future; and iv) the completion of any future acquisitions and the expectation that the value of such acquisitions will increase.

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 our licensees under the tax code; b) our dependence on licensees to use our technology and make payments to us; c) limitations in the capital available to Headwaters to execute on its business plan, and the cost of that capital; d) the ability of Headwaters to locate and close on attractive acquisition opportunities; e) the company's limited operating history with its new business strategy and its ability to sustain and manage its growth under that strategy; f) the success of the company in replacing and growing its financial performance before its legacy alternative fuels business declines; and other risks as detailed in Headwaters' annual report on Form 10-K, quarterly report on Form 10-Q, and other filings from time to time with the Securities and Exchange Commission.