Denali Reports Preliminary Second Quarter Estimated Results.

Business Editors

HOUSTON--(BUSINESS WIRE)--Jan. 20, 2000

Denali Incorporated (Nasdaq:DNLI) today announced preliminary estimated earnings per share results for the fiscal second quarter that ended Jan. 1, 2000. Based on a preliminary review, estimated loss per share should range from $0.09 to $0.11 for the second quarter of fiscal 2000 before restructuring charges.

&uot;During our second quarter, we were disappointed by the poor results of two large projects, the continued softness in the European market and the delay of expected second quarter revenue into the third and fourth quarters of fiscal 2000,&uot; stated Edward de Boer, president and chief executive officer of Denali Incorporated. &uot;Despite a three-year history of quality performance in our U.S. operations, we suffered a significant loss on a large highly specialized and technologically challenging project due to design problems. A loss was also realized on a large project within our European operations as a result of underestimating the material content of the project.

&uot;Overall, market conditions are improving as we are seeing increased bidding activity in the U.S. and in Europe. We do not expect third quarter results to reflect this improvement; however, fourth quarter results should be much improved,&uot; concluded de Boer.

As previously reported, the Company will report a non-recurring restructuring charge in the second quarter. The charge is the result of the closure of a domestic manufacturing facility, a reduction in overhead costs worldwide, and integration of Denali's businesses to improve operating and administrative efficiencies.

Denali is scheduled to report actual second quarter fiscal 2000 results on Feb. 7, 2000.

Denali Incorporated is a global provider of fluid handling products, specializing in corrosion-resistant applications in process industries such as: chemical, power, pulp and paper, petroleum equipment, and water/wastewater. The Company manufactures engineered fiberglass-composite tanks, vessels, and piping systems, as well as steel, aboveground storage tanks. The Company also distributes a wide range of engineered products and systems. Headquartered in Houston, Denali Incorporated has over 20 manufacturing facilities in the United States, the Netherlands, Germany, the United Kingdom, Poland, France, and Chile and joint ventures in Venezuela and Thailand. For more information on Denali Incorporated, please visit the Company's Website at http://www.denaliincorporated.com.

This news release contains certain forward-looking statements as such term is defined in the Private Securities Litigation Reform Act of 1995 and information relating to the company and its subsidiaries that are based on the beliefs of the company's management as well as assumptions made by and information currently available to the company management. When used in this report, the words, &uot;anticipate&uot;, &uot;believe&uot;, &uot;estimate&uot;, &uot;expect&uot;, and &uot;intend&uot; and words or phrases of similar import, as they relate to the company or its subsidiaries or company management, are intended to identify forward-looking statements. Such statements reflect the current risks, uncertainties and assumptions related to certain factors including, without limitations, competitive factors, general economic conditions, customer relations, relationships with vendors, the interest rate environment, governmental regulation and supervision, seasonality, distribution networks, product introductions and acceptance, technological change, changes in industry practices, onetime events and other factors described herein. Based upon changing conditions, should any one or more of these risks or uncertainties materialize, or should any underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected or intended.