Alanco Revenue, Profits Again Up Sharply; Third Quarter Results.

SCOTTSDALE, Ariz.--(BUSINESS WIRE)--April 28, 1998--Citing significant growth in each of its operating divisions, Alanco Environmental Resources Corp. (NASDAQ:ALAN) today reported sharply higher revenue and earnings for the third quarter and the nine months ending March 31, 1998.

Revenue for the quarter of $2,732,000, and net income of $309,000, or $0.01 per share, compare to revenue of $1,744,000, and a loss of $730,000, or $0.02 per share for the same quarter a year earlier.

For the nine months ended March 31, 1998, Alanco reported net income of $461,000 or $0.01 per share on revenue of $7,952,000. That compares with a net loss of $1,325,000, or $0.04 per share on revenue of $4,840,000 for the period a year ago.

Edward J. Maley, chief executive officer of Alanco, said, "We are pleased to report another quarter of consecutive profits for Alanco. In fact we have posted a 52% increase in profits over the quarter ended December 31."

"Alanco has demonstrated substantial growth in each of its divisions for the nine months this year over last," said Maley. "Alanco Environmental Manufacturing revenue is up 25%, Fry Guy revenue is up 107%, and environmental revenue for our CDSI operation is up 180%."

"We expect to finish the fiscal year on a strong note, showing additional revenue increases in the fourth quarter," said Maley. "We shipped eight CDSI systems in April, which will provide yet another sharp boost to our environmental revenue in the fourth quarter. We also expect continued substantial growth in the Fry Guy program as evidenced by new machine orders already in hand for the next six months."

Alanco's primary businesses are industrial air pollution control technology and food services marketing. In November, Alanco announced an agreement to install three of its Charged Dry Sorbent Injection (CDSI) industrial air pollution control systems in the SINOPEC Lanzhou Chemical Industry Corp. plant in Gansu Province, China. SINOPEC (China Petrochemical Corp.) is China's largest refining and petroleum company.

Alanco's Fry Guy Inc. food services program operates in more than 1,300 Wal-Mart discount stores nationwide. In October, Alanco announced the Fry Guy program was being introduced to select Wal-Mart Supercenter locations. The Fry Guy Integrated Food Services Marketing Program supplies a patented, self-ventilating fryer in a convenient counter top unit that requires little shelf space and operates on 110-volt power. Under the private label SGT.FRY, Fry Guy provides end users the finest quality finger food products in conjunction with prominent food suppliers as its strategic partners. Fry Guy participates in the food revenue on a per order basis.

"Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: This release contains forward looking statements that are subject to risks and uncertainties, including, but not limited to, the impact of competitive products, product demand and market acceptance risks, reliance on key strategic alliances, fluctuations in operating results and other risks detailed from time to time in the company's filings with the Securities and Exchange Commission. These risks could cause the company's actual results for 1998 and beyond to differ materially from those expressed in any forward looking statements made by, or on behalf of, the company. -0-

              ALANCO ENVIRONMENTAL RESOURCES CORPORATION
                 CONSOLIDATED STATEMENT OF OPERATIONS

               For the Three Months Ended March 31, 1998
                            (in thousands)

                                          March 31
                                  1998                1997

Total Sales                     $ 2,732             $ 1,744

Net Income                      $   309              $ (730)

Net Income Per Share              $0.01              ($0.02)

Weighted Average
 Common Shares Outstanding   35,346,527           34,765,533


               For the Nine Months Ended March 31, 1998
                            (in thousands)

                                           March 31
                                  1998                 1997

Total Sales                     $ 7,952              $ 4,840

Net Income                      $   461              $(1,325)

Net Income Per Share              $0.01               ($0.04)

Weighted Average
 Common Shares Outstanding   35,346,527           33,982,095

-0-

CONTACT: Alanco Shareholder Relations

Charles Goyette, 602/607-1010