Alamo Group Announces 2001 Year End Results.

Business Editors

SEGUIN, Texas--(BUSINESS WIRE)--Feb. 20, 2002

Alamo Group Inc. (NYSE: ALG) today reported results for the fourth quarter and year ended December 31, 2001.

Net sales in the fourth quarter were $58.6 million, an increase of 18% from the $49.5 million reported for the same period of 2000. The increase in sales were the result of the acquisitions of Schulte Industries and SMC Corporation and to a lesser extent internal sales increases. Net income for the quarter was $660,000 or $0.07 per diluted share compared with $270,000 or $0.03 per diluted share in the prior year period.

For 2001, net sales grew 14% to $246.0 million from $215.9 million in 2000. Net income for the year was $10.81 million, or $1.11 per diluted share which was nominally above the prior year's net income of $10.77 million or $1.11 per diluted share.

North American Agricultural sales increased by 23% in the year and 43% in the fourth quarter compared to the respective periods of 2000. While much of this increase was from acquisitions, there was real internal growth as well, primarily from our Rhino line of mowing equipment. This increase is encouraging given the continued soft conditions in the agricultural market where many in the industry are experiencing reduced demand.

North America Industrial sales increased 13% in the year and 2% in the quarter compared to respective periods of 2000. Again, this increase came in spite of weakening general economic conditions that were further exacerbated by the tragic events of September 11th.

European sales were down slightly for the year as they were also affected by sluggish economic conditions as well as the foot and mouth epidemic which had a severe effect, mainly in the United Kingdom, our largest European market.

Ron Robinson, President and Chief Executive Officer of Alamo Group, commented "Results for the year 2001 were in line with the guidance we provided in August. Throughout 2001, we met many challenges in the markets we serve and the economy in general. Despite these conditions, overall sales were up and more importantly profitability improved marginally at a time when many of our peers are showing declines."

Mr. Robinson continued, "We are pleased with the continued improvements we have made to our operations during the year. In 2001 we completed the closure of our Guymon operation and are continuing with the implementation of our new computer operating system. Also during the year, more than half of our entire workforce received training in Lean methods as part of our ongoing commitment to streamline our processes."

Mr. Robinson concluded, "While we hope 2002 will bring improvements to the markets we serve, we are confident in our ability to respond to whatever conditions exist. And, we feel, 2002 should show solid growth in both sales and profitability as long as market conditions do not deteriorate. In addition, we expect a positive benefit from the accounting change which eliminates goodwill amortization expense beginning in 2002."

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 1,700 employees and operates twelve plants in North America and Europe as of December 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)

                            Fourth Quarter Ended        Year Ended
                            --------------------        ----------
                            12/31/01    12/31/00    12/31/01  12/31/00
                            --------    --------    --------  --------
North American
   Agricultural              $26,520     $18,599     $97,978   $79,752
   Industrial                 22,912      22,363     108,001    95,867
European                       9,127       8,568      40,068    40,255
                             -------     -------    --------  --------
     Total sales              58,559      49,530     246,047   215,874

Cost of sales                 46,595      40,036     186,710   163,723
                             -------     -------    --------  --------
Gross margin                  11,964       9,494      59,337    52,151

Operating expenses            10,283       8,998      40,173    34,650
                             -------     -------    --------  --------
Income from operations         1,681         496      19,164    17,501

Interest expense                (637)       (662)     (3,284)   (2,190)
Interest income                  152         199         609       760
Other income (Expense)           180          35         117      (181)
                             -------     -------    --------  --------

Income before income taxes     1,376          68      16,606    15,890
Provision for income taxes       716        (202)      5,794     5,120
                             -------     -------    --------  --------

Net income                    $  660      $  270   $  10,812 $  10,770
                             =======     =======    ========  ========
Net income per common share:
   Basic                    $   0.07    $   0.03    $   1.11  $   1.11
                            ========    ========    ========  ========
   Diluted                  $   0.07    $   0.03    $   1.11  $   1.11
                            ========    ========    ========  ========

Average common shares:
   Basic                       9,706       9,704       9,705     9,698
                            ========       =====    ========     =====
   Diluted                     9,775       9,774       9,785     9,759
                            ========       =====    ========     =====

Summary Balance Sheet Data

                           12/31/01    12/31/00
                           --------    --------

Receivables                $57,768     $  50,359
Inventories                $64,044     $  59,608
Current Liabilities        $25,361     $  27,071
Long Term Debt             $36,315     $  30,355
Equity                    $121,728     $ 114,539