THE ARCTIC GROUP INC. ANNOUNCES RECORD SALES AND OPERATING RESULTS IN 2001 SECOND QUARTER

Winnipeg, Manitoba - The Arctic Group Inc.(TSE:AGP), a leading North American producer and distributor of high-quality packaged ice, today reported record results for its second quarter ending June 30, 2001.

Revenues for the second quarter of 2001 were a record $27.9 million, an increase of 11% over the same period last year. Earnings before interest, taxes, depreciation, amortization and non-recurring expenses (EBITDA) was a record $9.8 million for the second quarter of 2001, an increase of 18% over the same period last year. EBITDA margin continues to increase year over year, increasing to a record 35.1% for the second quarter of 2001 compared to 32.9% in the second quarter of the previous year, an increase of 7%.

During the second quarter ended June 30, 2001 the company recorded a non-cash charge of $4.7 million resulting from the settlement of debt. During the quarter, the terms of the subordinated convertible debentures were amended and the conversion privilege that had previously represented significant potential dilution to existing shareholders was eliminated. These amendments are deemed a settlement of the original debt and equity instruments for accounting purposes and a non-cash $4.7 million charge was recorded for the settlement of the liability component of the convertible debentures, fair value of warrants issued, and write off of the remaining unamortized balance of the deferred financing costs related to the convertible debentures. The settlement of the equity component of the convertible debentures resulted in an increase to retained earnings of $2.6 million.

Excluding the non-cash debt settlement and other non-recurring expenses and goodwill charges, the net earnings for the second quarter ended June 30, 2001 were $3.0 million or $0.08 per share (basic and fully diluted), an increase of approximately 80% over $1.6 million or $0.05 per share (basic and fully diluted) in the second quarter of 2000 as a result of the improved EBITDA results. The net loss for the second quarter of June 30, 2001 was $2.3 million or a loss per share of $0.07 (basic and fully diluted after goodwill charges) compared to earnings of $1.2 million or earnings per share of $0.03 (basic and fully diluted after goodwill charges) in the second quarter of 2000. The loss is primarily attributable to the non-cash debt settlement expenses of $4.7 million.

Robert Nagy, Arctic Group Chairman and CEO stated; "The record operating performance for the second quarter of 2001 is a result of the benefits of the Company's plan of restructuring inefficient markets, focusing on market positioning and developing long term relationships with our customers. In previous years we have invested significant capital into improving production facilities and rationalizing our distribution system. The investment into these programs is part of the long term plan to position the Company to achieve enhanced operating profitability and take advantage of our market presence. The results of this strategy are clearly evident in the results for the second quarter. During the past several years we have positioned the Company to achieve greater growth and to create long term value for our shareholders without further extensive capital spending."

For further information, call The Arctic Group Inc. TOLL FREE at 1-888-573-9237 or visit The Arctic Group's Web Site at - http://www.arcticgroup.com.

(Signed)
On behalf of the Management and the Board of Directors of The Arctic Group Inc.,
Robert Nagy, Chairman & CEO.

The Toronto Stock Exchange does not approve or disapprove of the adequacy or accuracy of this release.