AERT -- $7.8 Million 1Q01 Net Sales Generates $258,583 Operating Income

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For Immediate Release

AERT -- $7.8 Million 1Q01 Net Sales Generates $258,583 Operating Income

SPRINGDALE, ARKANSAS, May. 15 -/E-Wire/-- Advanced Environmental Recycling Technologies Inc. (Nasdaq:AERTA), a leader in wood composite announced that net sales for the quarter ended March 31, 2001, increased 25% to $7,814,036 up from $6,269,244 for the quarter ended March 31, 2000.

Gross margin increased 94% to $2,000,356 for the period ended March 31, 2001, up

from $1,032,606 for the prior period. Operating income increased to a positive $258,583

for the period ended March 31, 2001, up from a negative $140,601 for the prior period, resulting in a $399,184 improvement.

Income, before accrued dividends, increased to a positive $41,348 for the quarter,

up from a negative $241,937 for the same period a year ago. Accrued dividends on preferred stock were $72,500 for the quarter, which resulted in a net loss of

$31,152, a $283,059 or 90% improvement over the prior period loss of $314,211.

According to AERT chairman, Joe G. Brooks, "The first quarter of 2001 yielded substantial operating and cost improvements resulting in positive operating income

of $258,583 for the company. Cash flow available for debt service increased to $925,000 for the quarter, up from $357,000 for the comparable period a year ago,' stated Brooks. "Many operations and sales improvements were underway and nearing

completion during the first quarter which are expected to come on-line and yield further improvements during subsequent periods,' stated Brooks. "We are pleased that the hard work and dedication of our AERT associates are now starting to show positive results for our shareholders.'

An earnings conference call will be held Wednesday, May 16, 2001, 2:00 P.M. ET and webcast live over the Internet at www.StreetFusion.com with an on-demand audio reply until July 1, 2001. Certain of the statements during the conference call by Joe G. Brooks will be considered forward-looking statements within the meaning of the Securities Litigation Reform Act of 1995.

Advanced Environmental Recycling Technologies Inc. manufactures a growing line of composite building materials made from recycled polyethylene plastic and waste wood fiber and are marketed under the trade names MoistureShieldÂ® and ChoiceDekÂ® for the North American homebuilding market. AERT currently operates a manufacturing facility in Texas and a recycling and manufacturing facility in Arkansas.

Certain of the statements made in this press release by Joe G. Brooks are forward-looking statements within the meaning of Section 27A of the Securities Act

of 1933 and Section 21E of the Securities Exchange Act of 1934. Including but not

limited to plans for operation and sales improvements, these and other such statements

involve certain risk and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Potential risks and other factors that could cause or contribute to actual results differing materially from such forward-looking statements are discussed in greater detail in the Company's

Securities Commission Filings.

Advanced Environmental Recycling Technologies Inc.

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