AlaTenn Resources reports third quarter net income up 10%.

FLORENCE, Ala.--(BUSINESS WIRE)--Nov. 7, 1995--AlaTenn Resources, Inc. (Nasdaq/NM - ATNG) today announced higher net income for the third quarter and nine-month period ended September 30, 1995.

The Company's higher third quarter earnings primarily reflected increased margins at AlaTenn's medical and health care products unit.

Net income for the quarter increased 10% to $1.3 million or $.59 per share compared with $1.1 million or $.54 per share in the year-earlier period. Third quarter revenues increased 9% to $18.3 million versus $16.7 million last year.

Net income for the first nine months of 1995 rose 15% to $4.0 million or $1.91 per share compared with $3.5 million or $1.67 per share in the prior-year period. For the nine months ended September 30, 1995, revenues increased 7% to $57.2 million versus $53.7 million for the first nine months of 1994.

Commenting on the results, Jerry A. Howard, Chairman of the Board, President and Chief Executive Officer, said, "We are very pleased with AlaTenn's performance in the third quarter and particularly with the continued progress of our medical and health care products subsidiary, Ryder International. During the quarter, we witnessed ongoing improvements in manufacturing efficiencies and a more favorable product mix that resulted in lower unit costs and higher margins."

Regarding expansion of the medical and health care products business, Howard also stated, "We recently purchased from Chiron Vision Corporation the worldwide licensing and manufacturing rights to a semi-flexible balloon catheter used to clear obstructions in the nasolacrimal duct. These obstructions result in chronic tearing and infection, causing pain and discomfort in half a million people each year in the U.S. alone.

"We believe that if our market development efforts over the next couple of years are successful, this product line could make a material contribution to AlaTenn's earnings in the future".

Regarding AlaTenn's natural gas pipeline operations, Howard added, "Alabama-Tennessee Natural Gas reported significantly higher system volume for the third quarter due primarily to increased transportation of natural gas to one industrial customer. The contract for these deliveries was arranged through our natural gas marketing subsidiary, ATEMCO, which was the primary reason for a 28% increase in ATEMCO's sales volumes for the quarter compared with the year-earlier period, despite lower off-system sales during the period.

Separately, Howard noted that the cities of Decatur and Huntsville, Alabama, which together accounted for approximately 4% of AlaTenn's revenues and 16% of its gross margin for the first nine months of 1995, recently received a proposal from another interstate pipeline company for construction of a pipeline to serve their natural gas transportation requirements beginning in late 1997.

Howard reported that, as an inducement for those municipalities not to accept this proposal, the Company's interstate pipeline unit, in conjunction with an upstream interstate pipeline that currently also provides service for those municipalities, made a joint proposal to the two municipalities which would provide substantial cost reductions for them.

However, the competing pipeline company's proposal, which has been reported to be contingent on acceptance by both cities, has been accepted by Decatur and by the Huntsville Gas and Water Board and is pending action by the Huntsville City Council. Howard stated that AlaTenn would pursue its joint proposal with the Huntsville City Council.

Howard further stated that the Company's pipeline unit currently has firm transportation contracts with both cities, which expire with Decatur on November 1, 1997 for approximately 93% of that municipality's contract volume and on November 1, 2000 for the balance and with Huntsville on April 1, 1998 for approximately 86% of that municipality's contract volume and on November 1, 2000 for the balance.

Howard also said that the construction was well underway on the previously announced 22-mile gaseous oxygen pipeline that will link one of the Company's current industrial natural gas customers to its gaseous oxygen supplier. The pipeline is expected to be operational in the first quarter of 1996.

AlaTenn Resources, Inc. is a diversified holding company with interests in natural gas transmission and marketing and the design, development, manufacture, and marketing of products for the medical and health care industry. -0-

                     ALATENN RESOURCES, INC.
                  Unaudited Financial Highlights

                      Three Months Ended         Nine Months Ended
                        September 30,              September 30,
                      1995          1994         1995          1994

Revenues          $ 18,283,000 $ 16,716,000  $ 57,214,000 $ 53,685,000
Net income        $  1,254,000 $  1,139,000  $  4,046,000 $  3,523,000
Earnings
 per share        $        .59 $        .54  $       1.91 $       1.67
Average shares
 outstanding         2,118,010    2,114,888     2,116,490    2,112,499

CONTACT: AlaTenn Resources, Florence

George G. Petty, 205/383-3631