Alanco Environmental Resources Corp. Announces First Quarter Results - Fiscal Year 1999.

SCOTTSDALE, Ariz.--(BUSINESS WIRE)--Nov. 5, 1998--Alanco Environmental Resources Corp. (NASDAQ:ALAN) Thursday reported an increase in income for the first quarter ended Sept. 30, 1998 to $151,000 or $.03 per share, compared to a loss of $51,000 or $.01 per share for the comparable prior year quarter.

The increase in earnings resulted from reduced administrative expenses and a reduction in depreciation and amortization expenses.

Sales for the period amounted to $2,326,000, a decrease of $280,800 or 10.8 percent compared to the $2,606,000 reported for the quarter ended Sept. 30, 1997. The decrease in sales was due primarily to a reduction in contract billings to Wal-Mart in the company's Fry Guy subsidiary food service program.

The Wal-Mart contract, which accounted for 45 percent of the consolidated revenues in the fiscal year ended June 30, 1998, terminated in August of 1998.

Robert R. Kauffman, new Alanco chairman and chief executive (July 1998), stated, "The first quarter's results should not be considered indicative of future performance due to the anticipated cessation of Wal-Mart revenues in the second quarter."

"In response to the Wal-Mart contract loss, the company has revitalized its national Fry Guy sales and distribution program to place returned fryer units in new food service accounts," said Kauffman. "Initial results have been promising, and we anticipate placing approximately 200 units in new retail accounts by the end of November, including 75 locations of a major nationwide fast food chain."

Alanco Environmental Resources Corp. is an Arizona corporation headquartered in Scottsdale, primarily engaged in the environmental products and food service businesses. The company's wholly-owned subsidiaries include Fry Guy Inc., (Scottsdale); Alanco Environmental Manufacturing Inc. (AEMI, Falls City, Neb.); and Alanco Beijing Environmental Technology Co. Ltd. (Beijing, China). Alanco is traded on the NASDAQ stock market under the symbol ALAN. -0-

                 Alanco Environmental Resources Corp.
                 Consolidated Statement of Operations

               For the Three Months Ended Sept. 30, 1998

                                         1998        1997

Total sales                          $2,325,600   $2,606,400

Operating expenses
 Direct service and cost of
  goods sold                          1,101,500    1,294,500
 Selling, general and
  administrative                        880,700    1,023,100
 Depreciation and amortization          155,000      275,300
 Total operating expenses             2,137,200    2,592,900

Profit from operations                  188,400       13,500

Other income (expense)-net              (37,000)     (64,600)

Net profit/loss                        $151,400     ($51,100)

Net income/loss per share                 $0.03       $(0.01)

Weight average common share
 outstdg.                              5,050,683    5,050,683

Note to Editors: This press release contains statements that may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are inherently uncertain, and the actual results may differ from management's expectations.