Alamo Group Announces 2002 First Quarter Results.

Business Editors

SEGUIN, Texas--(BUSINESS WIRE)--May 7, 2002

Alamo Group Inc. (NYSE: ALG) today reported results for the first quarter ended March 31, 2002.

Net sales for the first quarter increased 14% to $64.8 million compared to $56.8 million for the same period last year. Net income for the quarter was $2.5 million, or $0.26 per diluted share, compared with $2.9 million, or $0.30 per diluted share, in the prior year period. Included in 2001 results were net gains of $0.08 per share relating to the sale of the Company's LaGrange, Illinois facility and Seguin, Texas trucking operations, partially offset by closure expenses at its Guymon, Oklahoma operation. The 2002 results include an increase of $0.04 per share, compared to the previous year, relating to the adoption of the Statement of Financial Accounting Standards No. 142 under which the Company will no longer amortize goodwill. Excluding these items in both periods, net income per share would have been $0.22 in 2002 compared to $0.22 in 2001.

Alamo's North American Agricultural Division sales increased by 26% to $29.1 million, compared to $23.1 million for the same period last year. The revenue growth in the first quarter was attributed to the acquisition of SMC in the third quarter of 2001. Excluding this, sales were down slightly; reflecting continued soft conditions in the overall agricultural sector.

North American Industrial Division sales grew 6% to $25.5 million, compared to $24.0 million for the same period last year. This increase reflected internal growth in all of our major Industrial product groups. However, during the quarter the Division experienced weakness in new orders from governmental agencies in response to lower tax revenues due to the slowdown in the U.S. economy. If this does not improve it could affect 2002 sales in the second and third quarters.

European sales showed improvement in the quarter, increasing 4% to $10.2 million, reflecting a return to normal conditions in the U.K. market, which was affected by the foot and mouth epidemic for much of 2001, and continued solid results from our French markets.

Ron Robinson, President and Chief Executive Officer of Alamo Group, commented, "Results in the first quarter were in line with our expectations despite weak overall conditions in many of the markets we serve. Our acquisition program, coupled with a comprehensive product offering that serves a diverse market, helped us grow our sales in all major product segments."

Mr. Robinson concluded, "While we believe our markets will remain soft in 2002, we feel we are on target to end the year with reasonable increases in both sales and earnings provided we do not see any further deterioration, particularly in our U.S. governmental business. And, we continue to look for external growth opportunities that can contribute to our profitability."

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 thirteen plants in the United States and Europe as of March 2002. 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
                                        3/31/02             3/31/01
                                ----------------      --------------
 North American
      Agricultural                     $ 29,116            $ 23,053
      Industrial                         25,504              23,984
 European                                10,157               9,793
                                ----------------      --------------
      Total Sales                        64,777              56,830

 Cost of sales                           50,416              42,439
                                ----------------      --------------
 Gross margin                            14,361              14,391

 Operating Expenses                       9,959               9,673
                                ----------------      --------------
 Income from Operations                   4,402               4,718
 Interest Expense                          (688)               (800)
 Interest Income                            125                 146
 Other Income (Expense)                       9                  70
                                ----------------      --------------

 Income before income taxes               3,848               4,134
 Provision for income taxes               1,339               1,241
                                ----------------      --------------

 Net Income                              $2,509              $2,893
                                ================      ==============

 Net income per common share:
                Basic                     $0.26               $0.30
                                ================      ==============
                Diluted                   $0.26               $0.30
                                ================      ==============

 Average common shares:
                Basic                     9,710               9,704
                                ================      ==============
                Diluted                   9,793               9,792
                                ================      ==============


                    Summary Balance Sheet Data

                                        3/31/02             3/31/01
                                ----------------      --------------
         Receivables                    $75,989             $66,240
         Inventories                    $63,287             $65,390
         Current Liabilities            $29,116             $31,511
         Long Term Debt                 $51,473             $43,750
         Equity                        $123,118            $114,915