Alamo Group Inc. Announces 2000 First Quarter Results.

Business Editors

SEGUIN, Texas--(BUSINESS WIRE)--May 2, 2000

Alamo Group Inc. (NYSE:ALG) today reported results for the first quarter ended March 31, 2000.

Net sales for the first quarter were $50.0 million, an 18.5% increase compared to $42.2 million for the same period last year. Net income for the quarter was $2.7 million, or $0.28 per diluted share, compared with $1.6 million, or $0.17 per diluted share, in the prior-year period.

Sales of Alamo's agricultural equipment increased by 13% in the quarter over last year due to improved conditions in some of the agricultural markets that began in late 1999 including higher cattle prices, and additional rainfall which is helping to alleviate the drought conditions in its core markets. American industrial sales for the quarter were 6% above last year, as the Company exited 1999 with strong order rates and backlog levels. Positive sales momentum in Europe continued, with first quarter sales 9% ahead of last year following a 6% increase in the fourth quarter of 1999, as Continental European markets remained good and the U.K. market continued to stabilize. Schwarze Industries, a leading manufacturer of sweeping equipment which was acquired by Alamo on February 29, 2000, contributed sales of $3.7 million to the quarter.

Ronald A. Robinson, Chief Executive Officer, commented: "We are very pleased with results for the first quarter. Continued improvement in nearly all of our markets drove a 9.8% sales increase over last year, excluding Schwarze, which resulted in one of our strongest first quarters. Agricultural segment sales were aided by improvements in the farm economy and continued good sales in the compact tractor market. Our industrial business entered the year with a good backlog, and margin performance benefited from a favorable sales mix in the quarter, with notably improved sales of replacement parts. Finally, we are pleased to be participating in a stable European market which resulted in improved first quarter sales in that segment."

Mr. Robinson continued, "A highlight of the quarter was our acquisition late in the period of Schwarze Industries. Schwarze is benefiting from steady demand from the contractor market, which enabled it to contribute to our earnings in the one month of the quarter they were part of Alamo Group."

Mr. Robinson concluded, "With the first quarter getting us off to a good start, we are generally positive about the outlook for the balance of the year. Prices for grains and livestock remain firm, generating improved conditions in the agricultural economy. If this trend continues we should benefit through 2000 and into next year. Industrial markets remain stable, although we have some concern over the availability of certain models of heavy-duty tractors, which may cause some shipments to be deferred from the second quarter into later periods. The economic health of the European community continues to firm, which should allow our business to strengthen further. Finally, we see opportunities to leverage Alamo's and Schwarze's shared customers and complementary products into our respective markets. Schwarze finished the first quarter with a good backlog of orders, which gives us confidence for the near term."

Alamo Group is a leader in the design, manufacture and 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 1,300 employees and operates eleven plants in the United States and Europe as of March 2000. 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.

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

                       First Quarter Ended
                        3/31/00    3/31/99
North American
   Agricultural         $21,594   $19,143
   Industrial           14,180    13,358
   Sweepers              3,654        -
European                10,538     9,667
     Total sales        49,966    42,168

Cost of sales           37,321    32,090
Gross margin            12,645    10,078

Operating expenses       7,931     6,864
Income from operations   4,714     3,214

Interest expense          (360)     (658)
Interest income            190       102
Other income (Expense)    (194)     (132)

Income before income
 taxes                   4,350     2,526
Provision for
 income taxes            1,668       906

Net income              $2,682  $  1,620

Net income per common share:
  Basic               $   0.28  $   0.17
  Diluted             $   0.28  $   0.17

Average common shares:
  Basic                  9,695     9,736
  Diluted                9,752     9,736

                  Summary Balance Sheet Data

                       3/31/00   3/31/99

Receivables          $  61,475 $  60,188
Inventories          $  53,241 $  62,941
Current Liabilities  $  29,256 $  21,506
Long Term Debt       $  29,235 $  37,596
Equity               $ 109,247 $ 106,166