ZCL Composites Reports Net Earnings, End of Litigation

Edmonton, Alberta, June 11, 2001 - ZCL Composites Inc. reports net earnings of $1,534,000 for the year ended March 31, 2001, up significantly from a net loss of $1,120,000 for the year ended March 31, 2000. After adjusting for the costs of the convertible subordinated debenture, basic and diluted earnings per share was $0.11 before goodwill charges and $0.09 after goodwill charges for 2001, as compared to a net loss per share of $0.17 before goodwill charges and $0.19 after goodwill charges for 2000.

Revenue for the year increased by over 14% to $29.3 million from $25.7 million in 2000. This increase reflects the continuing strong markets in both the upstream and downstream sectors of the Canadian petroleum industry, diversification into new market sectors, as well as increasing revenue from new products introduced over the past few years.

Net earnings from continuing operations were $1,534,000 compared to a net loss of $895,000 last year. There were no discontinued operations this year, while discontinued operations generated a net loss of $225,000 in 2000. Operating earnings increased by almost $3.2 million to $2,484,000 for 2001 from an operating loss of $695,000 in 2000. Results were reduced by restructuring costs of $861,000 ($637,000 for 2000) related to the shutdown and sale of the Belleville, Ontario plant, management restructuring and termination, and legal and other costs to review the operations and resolve a dispute with the non-controlling shareholder of ZCL-USA, Inc., and license litigation costs of $75,000 ($2,945,000 for 2000) related to the settled litigation with Xerxes Corporation.

Net earnings for the fourth quarter this year were $157,000 (basic and diluted earnings per share of $0.00) compared to a net loss of $1,103,000 (basic and diluted net loss per share of $0.14) for the fourth quarter last year. License litigation costs related to the settlement with Xerxes were $1.6 million in the fourth quarter last year ($nil in the fourth quarter this year). Revenue for the fourth quarter was $5.9 million this year and $6.8 million last year.

"Growth in our core operations, improvements in our manufacturing processes, and reductions in costs relating to USA license litigation, have resulted in very significant improvements in our earnings," said Ven Côté, President. "The costs related to both the recently announced acquisition of the business assets and proprietary know-how of ZCL-USA, as well as the settled license litigation with Xerxes, were incurred to create growth opportunities and improve future performance. These costs are behind us and we can now move forward to take full advantage of the opportunities in the North American marketplace. With continued strength in our primary markets, we expect to sustain these improvements in our earnings over the next year."

ZCL Composites Inc. is Canada's largest manufacturer of fibreglass underground storage tanks and the leading supplier of tanks to the retail petroleum market. ZCL markets its tanks under the "Greentank", "Prezerver" and "Protektor" trademarks and provides complete fuel storage systems carrying a $2 million insurance-backed warranty against pollution. ZCL Composites Inc. trades on the Toronto Stock Exchange under the symbol "ZCL".

For further information, contact:

Ven Côté
President & CEO
ZCL Composites Inc.
(780) 466-6648
ven.cote@zcl.com

Tony Barlott
Vice-President & CFO
ZCL Composites Inc.
(780) 466-6648
tony.barlott@zcl.com