AERT Announces Earnings -- Third Consecutive Profitable Quarter Results in First Profitable Year.

Business Editors

SPRINGDALE, Ark.--(BUSINESS WIRE)--March 29, 2002

Advanced Environmental Recycling Technologies Inc. (Nasdaq:AERTA), a leader in wood composite technology, announced that the fourth quarter net sales exceeded $7.89 million, up from $6.16 million a year ago, an increase of 28%, resulting in net income of $22,863, for the quarter ended Dec. 31, 2001. This compares with a loss of $1.298 million for the comparable period ended Dec. 31, 2000, a $1.3 million improvement.

Net sales for the year ended Dec. 31, 2001, were $33.2 million vs. $27.5 million, an increase of more than 20%. Net income for the year ended Dec. 31, 2001, was $312,000 vs. a loss of $2.2 million, for the prior year, an improvement of $2.5 million. Cash flow available for debt service increased to $4.5 million for the period ended Dec. 31, 2001, up from $1.36 million for the prior year; a $3.14 million improvement or 231% increase.

"Our associates cut costs, improved efficiencies and realigned product lines during a very difficult fourth quarter environment," said Joe G. Brooks, AERT chairman. "In particular they designed and implemented an exceptional new handrail system that was introduced at the International Home Builders Show at Atlanta in February, which compliments our existing decking products and was extraordinarily well received," stated Brooks.

"All sectors of our decking sales experienced significant growth and increased market share during 2001," Brooks said. "With the recent introduction of ChoiceDek(R) Premium into more than 700 Lowe's Home Improvement Warehouse stores throughout United States, the Company has commenced an aggressive expansion plan intended to significantly augment existing production at both facilities in order to meet the increased demand for AERT products. Our associates are continuing to strive towards improving efficiencies, increasing production and lowering production costs, as we move forward in this exciting time in our corporate history," said Brooks.

The Company will be holding its conference call with media representatives, investment professionals and market analysts on Wednesday, April 3, 2002, at 3:00 p.m. Eastern time and will be webcast live on the www.streetevents.com Web site. Be sure to go early and sign the guest book for the event.

The statements in this press release as well as in the upcoming conference call regarding the Company's sales performance and operating results constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are subject to risks and uncertainties that could cause the Company's actual operating results to differ materially. Such risks and uncertainties include the extent of market acceptance of the Company's products, the sensitivity of the Company's business to general economic conditions, and the highly competitive markets in which the Company operates. Additional information concerning these risks and uncertainties is contained in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended Dec. 31, 2001.