Denali news & news releases                                                                                      

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R. Kevin Andrews
Chief Financial Officer
713-627-0933

Ken Dennard / kdennard@easterly.com
Lisa Elliot / lisae@easterly.com

Easterly Investor Relations
713-529-6600

	FOR IMMEDIATE RELEASE 00-05
	DENALI OBTAINS AMENDMENT AND CONDITIONAL WAIVERS FROM ITS U.S. BANK GROUP FEBRUARY 28, 2000 - HOUSTON, TEXAS - Denali Incorporated (NASDAQ:DNLI) today announced that it signed an amendment with its U.S. bank group on its domestic revolving credit facility. As previously reported, the covenants related to earnings were recently breached due to lower than expected results from its U.S. operations during the second quarter. The bank group agreed to waive financial covenant defaults conditional on receipt of executed waivers from the Company's subordinated note holders. As part of the agreement, the bank group will immediately provide $2 million of additional revolver capacity and the Company will attempt to raise at least $7.5 million in equity before July 31, 2000 in order to reduce its leverage ratio related to this domestic-based senior debt. If Denali fails to raise $7.5 million of equity, the banks will receive up to 1,000,000 warrants at nominal value to be issued on a schedule from August through December 2000. The agreement also amended the third quarter covenants, contingent on a similar agreement being reached with the Company's subordinated note holders, for which discussions are currently underway. "We are gratified to have completed this agreement with our bank group and look forward to working with our subordinated note holders to reach a satisfactory agreement," stated Richard W. Volk, Denali's Chairman and CEO. "We are confident that we will successfully raise the required $7.5 million in equity, thus providing us with additional resources to capitalize on opportunities in the world market." Denali Incorporated, with pro forma trailing twelve month revenues of over $200 million, 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, Texas, 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 the Company, please visit its Website at www.denaliincorporated.com. This press release does not constitute an offer of any securities for sale. The Company may elect not to register the equity securities that it is required to sell by the terms of its bank agreement amendment. The Company will not offer or sell any such securities in the United States absent registration or an applicable exemption from registration under applicable securities laws. 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, "anticipate", "believe", "estimate", "expect", and "intend" 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. # # #

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