Readjustment of Second Quarter Statement for Eagle Pacific Industries, Inc

Business Wire, August 24, 1999

MINNEAPOLIS--(BUSINESS WIRE)--Aug. 24, 1999--

Eagle Pacific Industries, Inc. (Nasdaq SmallCap: "EPII") announced that a portion of its valuation allowance related to its net operating loss carryforward can now be eliminated due to improved profitability and market conditions. As a result, Eagle Pacific will show an additional $2,000,000 of income for the three and six month periods ended June 30, 1999, or $.21 per diluted common share for both the three and six month periods then ended.

Accordingly, previously announced earnings have been revised upward to $3,803,845 and $3,932,924 or $.42 diluted common share and $.45 per diluted common share for the three and six month periods ended June 30, 1999.

Minneapolis-based Eagle Pacific Industries, Inc. is a leading extruder of PVC pipe and polyethylene pipe and tubing products. The Company operates manufacturing facilities in Hastings, Nebraska, Hillsboro, Oregon and West Jordan, Utah, and a distribution center in Baker City, Oregon. Eagle Pacific Industries' common stock is traded on the NASDAQ/Small Cap Market under the symbol "EPII". -0-

                    EAGLE PACIFIC INDUSTRIES, INC.
                    CONDENSED STATEMENTS OF INCOME

                        THREE MONTHS              SIX MONTHS
                        ENDED JUNE 30,            ENDED JUNE 30,
                      1998        1999        1998        1999
----------------------------------------------------------------------

NET SALES         $24,447,751  $20,396,580  $44,033,690   $38,906,644

COST OF
 GOODS SOLD        18,215,295   15,997,649   32,360,648    31,126,329
                   -----------  -----------  -----------   -----------
  Gross profit      6,232,456    4,398,931   11,673,042     7,780,315

OPERATING EXPENSES:
 Selling expenses   2,953,486    2,445,289    5,495,844     4,559,837
 General and
  administrative
   expenses           772,614      698,901    1,442,057     1,376,087
                    ----------  -----------   ----------    ----------
                    3,726,100    3,144,190    6,937,901     5,935,924
                    ----------  -----------   ----------    ----------

OPERATING INCOME    2,506,356    1,254,741    4,735,141     1,844,391

NON-OPERATING EXPENSES:
 Interest expense     541,171      727,376    1,102,811     1,385,292
 Other income        (171,317)      (6,129)    (190,907)      (31,679)
 Terminated
  acquisition
   costs                    -            -    1,325,000             -
                    ----------  -----------   ----------    ----------
                      369,854      721,247    2,236,904     1,353,613
                    ----------  -----------   ----------    ----------

INCOME BEFORE
 INCOME TAXES       2,136,502      533,494    2,498,237       490,778

INCOME TAX
 (BENEFIT)
  EXPENSE          (1,868,000)      43,000   (1,836,000)       50,000
                   -----------  -----------  -----------    ----------
NET INCOME          4,004,502      490,494    4,334,237       440,778

PREFERRED STOCK
 DIVIDENDS            200,657      200,657      401,313       401,313
                   -----------  -----------  -----------    ----------

NET INCOME APPLICABLE TO
COMMON STOCK       $3,803,845     $289,837   $3,932,924       $39,465
                   ===========  ===========  ===========    ==========

NET INCOME PER COMMON SHARE:
  Basic                  $.54         $.04         $.57          $.01
                      =======      =======      =======       =======
  Diluted                $.42         $.04         $.45          $.01
                      =======      =======      =======       =======

AVERAGE NUMBER OF
COMMON SHARES
OUTSTANDING:
  Basic             7,015,222    6,803,590    6,868,245     6,725,373
                   ===========  ===========  ===========   ===========
  Diluted           9,628,605    7,203,380    9,553,159     7,134,044
                   ===========  ===========  ===========   ===========