Headwaters Incorporated Enters into an Agreement to Acquire the Assets of Kleer Lumber, Inc.

  Headwaters Incorporated Enters into an Agreement to Acquire the Assets of
  Kleer Lumber, Inc.

Business Wire

SOUTH JORDAN, Utah -- December 17, 2012

HEADWATERS INCORPORATED (NYSE: HW), a building products company dedicated to
improving lives through innovative advancements in construction materials,
today announced it has entered into an agreement to acquire the assets of
Kleer Lumber, Inc., a manufacturer of high quality and eco-friendly cellular
PVC trim board and moulding products. The acquisition of Kleer Lumber will add
a full range of cellular PVC products to Headwaters' Light Building Products
offerings, including trim boards, millwork, sheet stock, paneling, and
moulding, as well as the company's recently introduced decking and railing
products. Kleer Lumber's trim boards offer the TruEDGE feature, a proprietary
and innovative technology that seals edges, improving trim board performance
and appearance. Kleer Lumber's products are manufactured at its Westfield,
Massachusetts manufacturing and research and development facility.

Headwaters believes the demand for cellular PVC building products is growing
due to the ability to cut, mill, shape, and install in the same manner as wood
products, but with the added benefit of cellular PVC requiring significantly
less maintenance than wood.

Headwaters intends to introduce Kleer Lumber's product offerings into its
large, national distribution network, expanding its point of sale locations.
In addition, Kleer Lumber primarily distributes its products into independent
lumber yards and home improvement centers located in the Northeast and
Mid-Atlantic states. Headwaters’ increased access to this distribution channel
for its existing products will expand Headwaters’ already extensive light
building products distribution network.

Since commencement of operations in 2005, Kleer Lumber has exhibited
increasing sales and profit growth despite the recent declines in the broader
repair and remodel and new residential construction markets. From 2009 to
date, Kleer Lumber's sales increased at a compound annual growth rate of more
than 18%, with sales of approximately $38 million for the twelve months ended
October 31, 2012. This increase in sales growth reflects a combination of the
introduction of new products and an increase in sales of existing products.
The Kleer Lumber acquisition is expected to be immediately accretive to
Headwaters’ earnings per share.

Headwaters’ proposed acquisition of Kleer Lumber, which is targeted to close
by December 31, 2012, is subject to customary closing conditions. Accordingly,
Headwaters cannot be certain that the acquisition will close on this timeframe
or at all.

Stifel Nicolaus Weisel served as exclusive financial advisor to Headwaters in
connection with the acquisition.

About Headwaters Incorporated

Headwaters Incorporated is dedicated to improving the design, remodeling and
construction experience through advancements in construction materials.
Headwaters is focused on growing its operations within the light building
products and heavy construction material industries. Because of Headwaters'
broad distribution system and superior reputation for quality, it is a market
leader in all of its key niche product categories. www.headwaters.com

Forward Looking Statements

Certain statements contained in this press release 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, the production
and marketing of building products, the sale of its discontinued cleaned coal
operations, the licensing of residue hydrocracking technology and catalyst
sales to oil refineries, the availability of refined coal tax credits, 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 feedstocks, and the marketability
of the coal combustion products, building products, discontinued cleaned coal
operations, catalysts, and the availability of tax credits, 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 “may,” “should,” “intends,” “plans,” “expects,” “anticipates,”
“targets,” “goals,” “projects,” “believes,” “seeks,” “estimates,” “forecasts,”
or variations of such words and similar expressions, or the negative of such
terms, may help 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, building products, and energy industries or the
economy generally, factors that could cause actual results to differ from
expectations stated in forward-looking statements include, among others, the
factors described in the caption entitled “Risk Factors” in Item 1A in
Headwaters’ Annual Report on Form 10-K for the fiscal year ended September 30,
2012, 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 press release. Our internet address is
www.headwaters.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.

Contact:

Headwaters Incorporated
AT THE COMPANY:
Sharon Madden
Vice President of Investor Relations
801-984-9400
or
ANALYST CONTACT:
Financial Profiles
Tricia Ross, 916-939-7285
 
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