Alamo Group Inc. Announces 1999 First Quarter Results.

SEGUIN, Texas--(BUSINESS WIRE)--April 28, 1999--

Alamo Group Inc. (NYSE:ALG) today reported results for the first quarter ended March 31, 1999.

Net sales for the first quarter were $42.2 million compared with $48.7 million for the same period last year. Net income for the quarter was $1.6 million, or $0.17 per diluted share, compared with $1.9 million, or $0.20 per diluted share, in the prior-year period.

Our agricultural sales were down by 26% in the quarter as a result of the impact of a cyclical decline in the agricultural industry beginning in late 1998 and a decline in parts business due to the continued effect of the drought in principal market areas in the Southeast and Southwest. American industrial sales for the quarter were level with last year but increased by 7% from the 1998 fourth quarter. Despite strong backlogs in the first quarter, industrial sales were hampered by a slowdown in tractor delivery time. European sales increased 2% in the quarter and after-tax profits were up 54% from the year-ago period as a result of improved economic and market conditions in the U.K. and France and the Company's cost reduction efforts serving these markets.

Donald J. Douglass, Chairman and Chief Executive Officer, commented: "We anticipate the weak agricultural markets to continue for most of 1999 and that our sales and profits will be affected. We continue to focus on reducing our costs and taking appropriate measures in responding to this situation in order to maintain our leadership position in our agricultural markets. Our Industrial business continues to be our strongest operation, and we believe delivery times for tractors will improve in order to meet demand. Additionally, we are extremely pleased to see the turnaround in sales and profitability in our European business, which is the first time we have seen positive annual comparisons in eight quarters."

Mr. Douglass concluded: "With the termination of the Woods Equipment transaction and the disposal of assets of the Rhino International operation well underway, our top priority remains the growth and strengthening of our existing operations."

Alamo Group is a leader in the design, manufacture and distribution of heavy duty, tractor-mounted mowing and vegetation maintenance equipment in America and Europe. The Company has 873 employees in the U.S. and 334 in Europe, and operates eleven manufacturing facilities. The corporate offices of Alamo Group Inc. are located in Seguin, Texas, near San Antonio, and the headquarters for its European operations is located in Salford Priors, England, near Birmingham.

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. -0-

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

                                        First Quarter Ended
                                    3/31/99           3/31/98
American
   Agricultural                     $19,143           $25,949
   Industrial                        13,358            13,330
European                              9,667             9,448
     Total sales                     42,168            48,727

Cost of sales                        32,090            37,379
Gross margin                         10,078            11,348

Operating expenses                    6,864             7,397
Income from operations                3,214             3,951

Interest expense                       (658)             (712)
Interest income                         102               174
Other income (Expense)                 (132)             (229)

Income before income taxes            2,526             3,184
Provision for income taxes              906             1,258

Net income                           $1,620            $1,926

Net income per common share:
  Basic                              $ 0.17            $ 0.20
  Diluted                            $ 0.17            $ 0.20

Average common shares:
  Basic                               9,736             9,685
  Diluted                             9,736             9,715


                      Summary Balance Sheet Data

                                    3/31/99           3/31/98

Receivables                       $  60,188         $  57,657
Inventories                       $  62,941         $  75,956
Current Liabilities               $  21,506         $  26,687
Long Term Debt                    $  37,596         $  43,507
Equity                            $ 106,166         $ 107,196