Alamo Group Announces 2001 First Quarter Results.

Business Editors

SEGUIN, Texas--(BUSINESS WIRE)--May 2, 2001

Alamo Group Inc. (NYSE: ALG) today reported results for the first quarter ended March 31, 2001.

Net sales for the first quarter increased 14% to $56.8 million compared to $50.0 million for the same period last year. Net income for the quarter was $2.9 million, or $0.30 per diluted share, compared with $2.7 million, or $0.28 per diluted share, in the prior year period.

Alamo's North American Agricultural Division sales increased by 14% in the quarter over last year primarily due to the acquisition of Schulte Industries on November 7, 2000, as well as sales growth of Rhino branded mowing equipment. Sales of products related to land preparation and harvesting were down on a quarter to quarter basis as this division continues to be affected by the depressed agricultural market in the U.S.

North American Industrial Division sales grew 26% compared to last year largely as a result of the acquisition of Schwarze Industries on February 29, 2000. The Industrial Division performed well despite some delays related to more severe winter weather conditions compared to the last several years and higher fuel costs which affected the operational budgets of some customers.

European sales declined 7% mainly due to the negative impact of the foot and mouth epidemic in the UK, the Company's largest European market. The ongoing concern over mad cow disease and the general sluggishness in the overall European agricultural markets have resulted in continued weakness in that market. In addition, the strength of the British pound compared to the Euro and French franc negatively affected sales throughout Europe.

Alamo's Chief Executive Officer, Ron Robinson, commented, "Given the adverse conditions in many of the markets we serve, we are generally pleased with our first quarter results which were roughly in line with expectations. We believe this stable performance underscores the contribution from our acquisitions as well as the breadth of our product offerings and diversity of our business across niche markets."

Mr. Robinson continued, "While we face many challenges today, we continue to focus on increasing the productivity of our manufacturing operations and improving customer deliveries, in addition to looking for synergistic acquisitions. Further, we are looking to exploit cross-selling opportunities in Canada and Mexico to leverage our Schulte and Schwarze acquisitions by building on our sales and marketing organizations in those markets."

Mr. Robinson concluded, "We are encouraged by our backlogs at the end of the quarter, which were 16% greater than a year ago. Going forward we still feel we should meet our expectations for the year provided there is resolution to the foot and mouth situation in the UK in a timely manner and that there is no further softening in the overall agricultural markets in both Europe and North America or any deterioration in the general economic situation affecting our customers, such as fuel prices and weather."

Alamo Group is a leader in the design, manufacture, distribution and service of high quality equipment for right-of-way maintenance and agriculture. Our products include tractor-mounted mowing and other vegetation maintenance equipment, street sweepers, agricultural implements and related after market parts and services. The Company, founded in 1969, has over 1,400 employees and operates eleven plants in the United States and Europe as of March 2001. The corporate offices of Alamo Group Inc. are located in Seguin, Texas and the headquarters for the Company's European operations are located in Salford Priors, England.

This release contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause the Company's actual results in future periods to differ materially from forecasted results. Among those factors which could cause actual results to differ materially are the following: market demand, competition, weather, seasonality, currency-related issues, and other risk factors listed from time to time in the Company's SEC reports. The Company does not undertake any obligation to update the information contained herein, which speaks only as of this date.

             Alamo Group Inc. and Subsidiaries (NYSE:ALG)
              Condensed Consolidated Statements of Income
               (in thousands, except per share amounts)
                              (Unaudited)

                                              First Quarter Ended
                                            3/31/01         3/31/00
                                           --------        --------
North American
   Agricultural                            $ 24,626        $ 21,594
   Industrial                                22,411          17,834
European                                      9,793          10,538
                                           --------        --------
   Total Sales                               56,830          49,966

Cost of sales                                42,439          37,321
                                           --------        --------
Gross margin                                 14,391          12,645

Operating Expenses                            9,673           7,931
                                           --------        --------
Income from Operations                        4,718           4,714

Interest Expense                               (800)           (360)
Interest Income                                 146             190
Other Income (Expense)                           70            (194)
                                           --------        --------

Income before income taxes                    4,134           4,350
Provision for income taxes                    1,241           1,668
                                           --------        --------

Net Income                                 $  2,893        $  2,682
                                           ========        ========

Net income per common share:
     Basic                                    $0.30           $0.28
                                           ========        ========
     Diluted                                  $0.30           $0.28
                                           ========        ========

Average common shares:
     Basic                                    9,704           9,695
                                           ========        ========
     Diluted                                  9,792           9,752
                                           ========        ========

                      Summary Balance Sheet Data

                                            3/31/01         3/31/00
                                           --------        --------
Receivables                                 $66,240         $61,475
Inventories                                 $65,390         $53,241
Current Liabilities                         $31,511         $29,256
Long Term Debt                              $43,750         $29,235
Equity                                     $114,915        $109,247