Covol Technologies Inc. Announces Second Quarter 1999 Financial Results.

LEHI, Utah--(BUSINESS WIRE)--APRIL 27, 1999--

Covol Technologies Inc., (NASDAQ: CVOL), Tuesday announced results for the second quarter and six months ended March 31, 1999.

Revenues for the quarter were $917,000, which resulted in a net loss of ($4,682,000) or ($.38) per share, compared to revenues of $1,155,000 with a net loss of ($4,737,000) or ($.40) per share for the quarter ended December 31, 1998.

For the six months ended March 31, 1999, revenues were $2,072,000 with a net loss of ($9,419,000) or ($.78) per share. This compares to revenues of $6,652,000, which included $6,490,000 of one time license fees and other non-recurring revenues, with a net loss of ($185,000) or ($.03) per share for the six months ended March 31, 1998.

Steven G. Stewart, Covol's chief financial officer, commented, "While we are disappointed with the net operating results reported for this quarter, we are pleased with the reduction in operating costs realized during the second quarter which are a direct result of specific cost reduction actions.

"Management remains committed and optimistic about recent ramp-up improvements and the impact it will have on Covol's future net operating results."

Coal briquetting operating costs decreased approximately $1,200,000 during the current quarter while revenues declined from the previous quarter by about $200,000. The decrease in revenues was due in part to winter conditions normal for the March quarter.

The reduction in operating costs is a direct result of management's focus on cost reductions in areas that would not jeopardize Covol's ability to provide necessary technical and operational support to its licensees.

Net non-operating expenses increased by approximately $600,000 from the first quarter. This increase was due primarily to a reduction in interest income of $500,000, an increase in interest expense of $300,000 and other miscellaneous items. The combined effect of all of the above factors was a small reduction in the reported net loss for the quarter ended March 31, 1999 when compared to the prior quarter.

Steven G. Stewart continued, "We believe the major impact of Covol's cost containment measures were realized in the current quarter. However, sale of company-owned facilities will result in additional significant reductions in the future. Covol continues to focus its efforts on selling the four remaining company-owned facilities.

"These sales will result in a significant reduction in our debt burden and the operating costs related to holding these facilities. Covol continues to work with its licensees in resolving ramp-up issues related to production at the licensee's synthetic fuel facilities and in establishing a viable market for this fuel."

The company has scheduled a conference call for April 29, 1999 at 2:15 p.m. MDT (4:15 p.m. EDT). To participate in this call individuals may phone in ahead of time by dialing 303/633-6100. For those who cannot participate, they may listen to the recorded call, between Friday, April 30, 1999 and Friday, May 7, 1999, by dialing 800/633-8625-access code 12264296.

Covol is a technology licensing company which engineers industrial waste and other by-products into value-added fuels and resources.

Certain statements contained herein that relate to future plans, financial results or projections, events or performance that are not purely historical in nature, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including any statements with respect to anticipated products to be produced using Covol's technologies and Covol's strategy.

Such statements are subject to risks and uncertainties that could cause actual results to differ materially. Actual results may differ, which variance could be significant, from such forward-looking statements as a result of a number of factors, including but not limited to Covol's ability to sell company-owned synthetic fuel facilities, the ability of the Company to conserve its capital through cost reductions until operating revenues exceed expenses, favorable IRS tax treatment, the ability of the Company to complete specific research and development projects, commercial viability of technologies, the availability of natural resources and suitable raw materials, ability to achieve expected production levels at the synthetic fuel and engineered resource facilities, ability to market synthetic fuel and engineered resources produced, market penetration by competing technologies, the ability of the Company to meet performance criteria required in financing agreements, the Company's ability to continue to find suitable partners and licensees, and the ability to locate appropriate sites for production facilities. -0-

                       Covol Technologies Inc.

            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                              (unaudited)
           (thousands of dollars, except per-share amounts)

               Three Months Ended
              March 31  December 31 March 31 Six Months Ended March 31
                1998       1998       1999          1998    1999

Revenues:
 License fees  $3,586      $474       $320         $4,586    $794
 Other          2,025       681        597          2,066   1,278

Total revenues  5,611     1,155        917          6,652   2,072

Operating costs
  and expenses:
 Cost of
  briquetting
  operations    2,634     3,896      2,664          3,091   6,560
 Other          1,461     1,244      1,586          2,565   2,830

Total operating
 expenses       4,095     5,140      4,250          5,656   9,390


Operating income
 (loss)         1,516    (3,985)    (3,333)           996  (7,318)

Interest income
 (expense), net  (999)     (205)    (1,071)        (1,989) (1,276)
Other income
 (expense), net   415      (547)      (278)           808    (825)

Net income (loss)$932   ($4,737)   ($4,682)         ($185)($9,419)

Net income (loss)
 per share      $0.08    ($0.40)     ($0.38)       ($0.03) ($0.78)

Weighted average
 shares
 outstanding   12,031    11,976      12,472         9,382  12,224


                 CONDENSED CONSOLIDATED BALANCE SHEETS
                             (unaudited)
                        (thousands of dollars)

                                     September 30    March 31
Assets:                                 1998            1999

Current assets:
 Cash and cash equivalents              $727          $6,879
 Receivables                           4,120           4,652
 Inventories and advances on
  inventories                          4,167           2,512
 Facilities held for sale             28,405          28,389
 Other                                   682             664

Total current assets                  38,101          43,096

Property, plant and equipment, net    14,902          14,499

Notes and interest receivable,
 non-current                          10,515          10,605
Intangible assets and other            4,391           9,177

Total assets                         $67,909         $77,377

Liabilities:
Current liabilities:
 Accounts payable                     $3,036          $2,616
 Notes payable, current               22,049          19,689
 Other                                 4,467           4,573

Total current liabilities             29,552          26,878

Notes and interest payable,
 non-current                          14,077          22,681
Other non-current liabilities          2,202           1,808
Total liabilities                     45,831          51,367

Minority interest                        507             109

Redeemable convertible preferred stock     0           4,354

Stockholders' equity:
 Convertible preferred stock               1               1
 Common stock                             11              12
 Capital in excess of par value       69,284          77,763
 Accumulated deficit                 (36,177)        (45,755)
 Related party receivables
  collateralized by stock             (7,773)         (7,024)
 Deferred compensation from stock
  options                             (3,775)         (3,450)
Total stockholders' equity            21,571          21,547
Total liabilities and stockholders'
 equity                              $67,909         $77,377