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
	DENALI INCREASES SHORT-TERM FINANCIAL FLEXIBILITY Sells $1.4 million in Private Equity, Extends Forbearance by Lenders AUGUST 7, 2000 ­ HOUSTON, TEXAS ­ Denali Incorporated (NASDAQ:DNLI) today announced that it has completed the sale of $1.4 million in private equity in the form of 700,000 shares of common stock at $2.00 per share to two of its founding directors. Denali also announced that it has obtained an extension on the agreement of its U.S. bank facility lenders not to enforce their remedies against the Company through September 30, 2000 for the Company¹s ongoing financial covenant defaults and for the Company¹s failure to make required principal payments due under the facility on June 30, 2000. In addition, the bank group has agreed to expand the Company¹s revolving line of credit from $25 million to $27 million through September 30, 2000. The Company also extended an agreement with its subordinated note holders not to enforce their remedies against the Company through September 30, 2000 for the Company¹s ongoing financial covenant defaults and the Company¹s failure to make required interest payments due under the subordinated debt on June 30, 2000. "We are gratified to receive this support and expression of confidence from our two founding directors, as well as from our lenders," stated Richard W. Volk, Denali¹s Chairman and CEO. "This additional funding improves our financial flexibility to complete the Company¹s recapitalization through William Blair Mezzanine Capital Fund III, L.P and provides additional working capital to pursue opportunities and build shareholder value." 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, 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 Web site at www.denaliincorporated.com. This press release does not constitute an offer of any securities for sale. 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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