American Eco Reports 34% Third Quarter Sales Gain; Per-Share Income of 15 Cents.

HOUSTON--(BUSINESS WIRE)--Oct. 2, 1998--American Eco Corporation (NASDAQ NMS:ECGOF, TSE:ECX) announced today US dollar results for the fiscal third quarter and nine months ended August 31, 1998.

For the third quarter, revenue rose 34% to $64,602,000 from $48,176,000 in the third quarter of fiscal 1997. Sales from ongoing operations, particularly American Eco's specialty manufacturing units, and from Canadian joint ventures were the major contributors to the strong revenue gain. Net income totaled $3,170,000 compared to $4,548,000 in the prior year period, reflecting a substantial increase in interest expense and provision for income taxes in the 1998 quarter. The 1997 numbers for the quarter and first nine months did not include a provision for taxes as the Company was using a tax-loss carryforward. Basic per-share results for the third quarter amounted to $0.15 compared to $0.28 per share in the prior year. There were 5.3 million more shares outstanding in the third quarter of 1998.

For the first nine months of fiscal 1998, revenue rose to $182,498,000 from $149,775,000 in the same period a year earlier. Net income totaled 3,700,000, or $0.18 basic earnings per share, compared to $12,515,000, or $0.83 basic earnings per share. There were 5.6 million more shares outstanding in the 1998 nine months.

Commenting on the third quarter results, Frank Fradella, President of American Eco, said: "During the quarter, we began implementation of a new strategic plan focusing on improving operations and financial controls and reporting at the regional level. The return to profitability from a one-time quarterly loss in the second quarter of fiscal 1998 reflected early benefits of our recently initiated program of reducing fixed costs, which is expected to have a greater effect on earnings by the first quarter of fiscal 1999. A rebound in our specialty manufacturing businesses, including Canadian joint ventures, was the primary driver of our strong revenue growth."

"Looking ahead, we are committed to expanding the scope of division-by-division improvements and further significant reduction of overhead expenses. This effort is expected to enhance earnings performance during the first half of fiscal 1999," Mr. Fradella added. American Eco's total backlog for the coming 12-to-18 months is $435 million, up from backlog of $345.5 million reported in July.

American Eco is a leading North American provider of single-source industrial support and specialty fabrication services in the energy, pulp & paper, and power generating industries.

This release includes 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. Although the company believes that its expectations are based on reasonable assumptions, it can give no assurance that such expectations will be achieved. Important factors that could cause actual results to differ materially from those in the forward looking statements made herein include the ability of the company to continue to expand through acquisitions, the availability of capital to fund the company's expansion program, the ability of the company to manage its expansion effectively, economic conditions that could affect demand for the company's services, the ability of the company to complete projects profitably and severe weather conditions that could delay projects. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date on which such statements are made. The company does not undertake to update any forward-looking statement that may be made from time to time by or on behalf of the company.

                       American Eco Corporation
                         Summary of Operations
                              (Unaudited)
                     (in thousands of US dollars)
                       Three Months Ended          Nine Months Ended
                            August 31,                      August 31,
                        1998             1997          1998               1997
                        ----             ----          ----               ----
Revenue            $        64,602        $    48,176  $         182,498  $   149,775
Direct costs of
 revenue           $        48,160        $    32,418  $         142,637  $   110,683
SG&A                   $         9,003        $     8,617  $          25,315  $    20,256
Interest expense,
 net                   $         1,535        $     1,163  $           3,206  $        3,028
Loss on early
 extinguishment
 of debt           $            --        $         --  $           2,400  $           --
Depreciation and
 amortization           $         1,113        $        778  $           3,334  $        2,640
Provision for
 income taxes           $         1,621        $        653  $           1,906  $          653
Net Income           $         3,170        $     4,548  $           3,700  $    12,517
Earnings per share
 - basic           $          0.15        $      0.28  $            0.18  $         0.83
Weighted Average
 Number of Shares
 Outstanding
 - Basic            21,494,654         16,238,637   20,751,435   15,166,715

                       American Eco Corporation
                         Summary Balance Sheet
                              (Unaudited)
                     (in thousands of US dollars)
                                               August 31, November 30,
                                                    1998       1997
                                                 ---------  ---------
Assets
   Current Assets
     Cash                                         $  19,912  $        1,259
     Accounts receivable                            53,652     50,349
     Current portion of notes receivable            15,970     17,757
     Costs and estimated earnings in excess
      of billings                                    16,575     13,145
     Inventory                                            20,494     18,079
     Deferred income tax                             1,281        1,133
     Prepaid expenses and other current assets             9,610        6,920
                                                  ---------  ---------
   Total Current Assets                            137,494    108,642
   Property, plant & equipment                            43,920     33,023
   Other Assets
     Goodwill                                            30,860     30,484
     Notes receivable                                    22,299     28,578
     Investments                                    35,688        9,142
     Other assets                                     7,582        1,917
                                                  ---------  ---------
Total Assets                                         $ 277,843  $ 211,786
                                                  =========  =========

Liabilities & Shareholders' Equity
   Current liabilities
     Accounts payable and accrued liabilities         $  27,470  $  28,400
     Notes payable                                       341        8,904
     Current portion of long-term debt                       112        8,081
     Billings in excess of costs and estimated
      earnings                                             2,892        3,350
                                                  ---------  ---------
   Total Current Liabilities                            30,815     48,735
                                                  ---------  ---------
   Long-Term Liabilities
     Long-term debt                                   120,831     51,722
     Deferred income tax liability                     3,234        3,144
     Other liabilities                                       840        1,086
                                                  ---------  ---------
   Total Long-Term Liabilities                           124,905     55,952
                                                  ---------  ---------
   Shareholders' Equity                            122,123    107,099
                                                  ---------  ---------
Total Liabilities & Shareholders' Equity         $ 277,843  $ 211,786
                                                  =========  =========