UGG announced today that its cash flow per share increased to a third quarter record 41 cents, from 34 cents in the same period one year ago. Net income for the quarter was $1.1 million. Operating income grew by 5 percent over the same quarter in fiscal 1998, to $5.9 million.

"It hasn't been an easy time to make money in Canadian agriculture,'' said Brian Hayward, UGG's Chief Executive Officer. "The fact that we've been able to improve our operating results over last year is really due to UGG's consistent, sustained focus on our core business of providing farmers with commercial services.''

UGG's Crop Production Services business - responsible for retailing seed, fertilizer, and crop protection products - increased its quarterly operating profit by $4 million from fiscal 1998. UGG has expanded its farm supply retailing operations significantly through the 1990's - through internal growth and a steady program of acquisitions. It is very likely that Crop Production Services will be the company's largest source of annual operating income in the current fiscal year - eclispsing grain operations for the first time in UGG's 93-year history.

UGG's Crop Production Services business is in the home stretch of the year. At the time of writing this quarterly report, prospects appear to be very good for this segment to post significantly improved results over the previous year.

The improvement in Crop Production Services third quarter operating results was largely offset by
declines in UGG Grain Operations and Livestock Services businesses - this, in turn, was due to external factors. Grain business operating income dropped by $3.0 million for the quarter, mainly due to lower Canadian Wheat Board sales. Canadian wheat exports are down by about 42 percent in the current grain marketing year, due to the modest size of 1998 production. For the nine months ended April 30, 1999, Grain Operations recorded an operating profit of $9.1 million - down $10 million from fiscal 1998.

Livestock Services operating income fell by about $600,000 for the quarter, mainly due to weakness in hog markets. Livestock Services recorded a nine-month operating profit of $4.4 million - down $1.9 million from fiscal 1998.

UGG earnings before interest, taxes, depreciation and amortization (EBITDA) was $11.1 million for the quarter, up 9.1 percent over the previous year. For the first nine months of the fiscal year, UGG's EBITDA declined by $10.5 million - directly attributable to the previously noted decline in grain volumes. Cash flow for the quarter rose to $7.1 million, from $5.9 million in the same quarter in fiscal 1998.

For its most recent twelve-month period, UGG EBITDA totaled $50 million ($2.99 per share). "UGG is weathering well through a challenging period in Canadian agribusiness,'' said Brian Hayward, UGG's CEO. "Cash flow for the twelve months ended April 30, 1999 was the second highest ever recorded for the same period, going back in time. The Company has positioned itself well with assets, alliances, and management information processes - and has the resources to continue to grow and prosper.''

UGG is one of western Canada's largest agribusiness firms. Founded in 1906, the Winnipeg based company is diversified into grain merchandising, crop input sales and distribution, livestock production services and farm business communications. UGG is publicly traded on the Toronto Stock Exchange and Winnipeg Stock Exchange, under the symbol "UGG''. For further information on UGG, contact company web sites at www.ugg.com or www.ugginvestor.com .

Company news release
N1885