Denali news & news releases                                                                                      

  Contacts:

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 00/12
	DENALI ANNOUNCES LATE FILING OF ITS FORM 10-K SEPTEMBER 29, 2000 ­ HOUSTON, TEXAS ­ Denali Incorporated (NASDAQ:DNLI) today announced that it filed a Form 12b-25 with the Securities and Exchange Commission which is notification of the Company¹s late filing of Form 10-K for the year ended July 1, 2000. As disclosed in the Form 10-Q for Denali Incorporated (the"Company") for the quarter ended April 1, 2000, the Company is engaged in negotiations with a private equity fund whereby the fund proposes to invest in excess of $20 million in the Company. Due to the Company's recent operating losses and significantly decreased cash flow from operations, the Company's liquidity has reached extremely low levels. Management believes that the investment by the private equity fund, if completed, will resolve the Company's liquidity problems. Since the Company's corporate staff has devoted substantially all of its resources to the proposed financing, the Company has not been able to complete the Form 10-K for the 2000 fiscal year on a timely basis. The Company anticipates that there will be a significant change in results in operations from its fiscal year ended July 3, 1999 reflected by the earnings statements to be included in the Form 10-K for the fiscal year ended July 1, 2000. The Company anticipates that net income of $4.1 million for the fiscal year ended July 3, 1999 will decrease to a net loss of approximately $9.0 million for the fiscal year ended July 1, 2000. The anticipated decrease is primarily the result of (i) a decrease in revenues attributable to the Company's petroleum storage tank business due to a decrease in demand associated with the expiration of the EPA mandated deadline for the replacement of underground storage tanks that did not meet EPA requirements, (ii) lower operating margins on engineered products, (iii) an increase in interest expense due to borrowings incurred to finance the acquisition of Welna, N.V., and (iv) restructuring charges attributable to workforce reductions and other costs related to plant closures. The results of operations of the Company for the fiscal year ended July 1, 2000 have not been finalized and amounts referred to herein are estimates, subject to revision. The Company is currently working to obtain extensions through October 31, 2000 to the agreements with its U.S. bank facility lenders and subordinated note holders not to enforce their remedies against the Company for the Company¹s failure to make required principal and interest payments due under the facilities. The Company expects to execute these agreements within the next several days. 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 Website at 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, "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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