Brantford, Ontario
July 30, 2002

The Nu-Gro Corporation (TSX-"NU") announced today its results for the quarter and the nine month period ended June 30, 2002.

Report to Shareholders

We are pleased to report a new record high in earnings for a quarter of $5.7 million, which represents an increase of $1.6 million or 39% over last year. Sales for the quarter are up $3.0 million or 5%, while net income is $0.36 per share diluted versus $0.30 per share diluted. Sales for the nine month period are down $1.5 million or 1%, while net income is $0.60 per share diluted versus $0.55 per share diluted on fewer shares outstanding in the prior period.

The sales and gross margin increase is most evident in the Fertilizer Raw Material segment. The sales increase is due largely to increased sales of SCU product. One of our U.S. based competitors of SCU has withdrawn from the market, which has contributed to our increased share of business in this segment. Gross profit is up in the segment due to the higher sales and improved profit margins. Profit margins last year were negatively impacted by increases in nitrogen cost fueled by natural gas cost increases and by a shutdown due to a mechanical problem at Terra's Courtright site. This year the natural gas market has been stable.

Cash provided by operating activities in the quarter is $30.2 million, which is up $8.4 million from last year. This increase is reflected in the improved cash position at June 30. The increase is due largely to a $1.6 million increase in profit and a $5 million decrease in inventory. The inventory reduction over the prior year is due to our S.K.U. (Stock Keeping Unit) reduction initiative as well as the emphasis on inventory control by our Production Management team without any compromise on service to our
customers.

Effective June 30, 2002, Nu-Gro acquired the right to distribute Pickseed's products. Prior to finalizing this agreement, Nu-Gro increased its ownership in EroGreen Seeds Inc. from 70% to 100%. The transaction includes a long term supply agreement under which Pickseed will source raw materials and package grass seed products at its Lindsay, ON and Sherwood Park, AB facilities, as well as a license to use the Pickseed (R) and Oseco (R) brands in Canada. Nu-Gro's customers will benefit from combining shipments of grass seed with our other product lines and from one source for in-store merchandising in the lawn & garden category.

Despite this past May being one of the coldest Mays on record we are extremely pleased with our third quarter results. June sales were higher than budget, making up for some lost ground in May and we see this trend continuing for the balance of the year.

Nu-Gro is Canada's leading manufacturer and seller of packaged consumer and commercial lawn and garden products. Popular brand names include CIL (R), Wilson (R), Vigoro (R), So-Green (R), Green Earth (R) and Alaskan (R). Through its subsidiaries in Canada and the United States, the company produces and distributes controlled release nitrogen raw material to the fertilizer industry worldwide.