Ag-Bag International Limited Announces Strong 3rd Quarter.

WARRENTON, Ore.--(BUSINESS WIRE)--Oct. 14, 1999--

Ag-Bag International Limited (Nasdaq:AGBG) announced today that net sales for the third quarter ended September 30, 1999, were $12,846,414. This was an increase of 32.73% over third-quarter 1998 sales which were $9,678,591.

Net income was $869,845 for the third quarter just ended compared to $515,619 for the same period last year, an increase of 68.70%. Earnings for the quarter were $.07 per share, compared to $.04 per share reported for the third quarter of 1998.

Regarding the third-quarter results, Ag-Bag International Limited President and CEO Larry Inman, stated that "sales for the third quarter were up on continued improving milk prices in the U.S. after the sharp decline in February, coupled with continued low supplemental grain feed costs. These factors all helped to spur farmers' purchases for machinery during the quarter. We continue to see the benefits from the recent independent, university research articles published on the benefits of bagging over storage in bunkers or silos, as the company continues to see increases in its bag and machine sales." Inman went on to say "sales of machinery for the quarter were very strong compared to the same quarter of last year, up over 54%, and bag sales continued to increase with a 24% gain over the third quarter of last year."

Net sales for the nine-months ended September 30, 1999, were $28,382,079, an increase of 17.42% over net sales of $24,172,073 for the nine months ended September 30, 1998. Earnings for the nine-months ended September 30, 1999, were $.11 per share, compared to $.10 per share for the same period of 1998. -0-

                          3rd Quarter           Nine Month Period
                       1999        1998         1999         1998

Net Sales          $12,846,414 $ 9,678,591  $28,382,079  $24,172,073
Gross Profit from
 Operations        $ 3,229,834 $ 2,530,244  $ 7,065,805  $ 6,357,817
Income from
 Operations        $ 1,430,644 $   896,158  $ 2,253,621  $ 2,186,984
Income before Tax  $ 1,446,845 $   859,619  $ 2,224,309  $ 2,133,126
Net Income         $   869,845 $   515,619  $ 1,356,309  $ 1,306,926

Basic EPS          $       .07 $       .04  $       .11  $       .10

Ag-Bag International Limited is a Northwest company headquartered in Warrenton, Oregon, with a second major facility located in Blair, Nebraska. The company, through its international operations, manufactures and sells to the agricultural industry its farm feed management systems for the high moisture storage of silage and grains. The company also provides services within the area of composting.

This press release may include forward-looking statements. Investors are cautioned that forward-looking statements involve risks and uncertainties and various factors could cause actual results to differ materially from those in the forward-looking statements. Investors are directed to the company's filings with the Securities and Exchange Commission for a further description of the risks and uncertainties relating to forward-looking statements made by the company as well as to other aspects of the company's business.