Alamo Group Inc. reports record third quarter sales, net income and EPS; declares regular quarterly dividend.

SEGUIN, Texas--(BUSINESS WIRE)--Oct. 26, 1995--Alamo Group Inc. (NYSE:ALG) announced today its financial results for the third quarter and nine month periods ended September 30, 1995. The third quarter results reflect significant growth with increases of 44% in sales, 28% in net income, and increased earnings per share on more shares outstanding over the year ago quarter. Weighted average common shares outstanding increased 26% compared to 1994's third quarter due to the Company's secondary offering of 2,000,000 common shares completed in July 1995.

Alamo Group's sales in the recent quarter were $43.3 million compared to $30.1 million in the third quarter ended October 1, 1994. Net income rose to $3.90 million, or $0.41 per share, compared to $3.05 million, or $0.40 per share, in last year's quarter. For the nine month period, sales rose 35% to $123.1 million compared to $91.3 million for the nine months ended October 1, 1994. Net income increased by 28% to $9.57 million, or $1.15 per share, compared to net income of $7.48 million, or $0.98 per share, for the first nine months of 1994.

Donald J. Douglass, Chairman and CEO, commented, "In the third quarter, the European operations achieved excellent sales and net income growth and our recent acquisitions contributed to the profitability. Gross margin dollar contribution increased by 30% over the same period last year, although the gross margin as a percentage of sales was lower due principally to a change in product mix caused by the acquisitions. The change in inventory and receivables is due almost entirely to our recent acquisitions. Backlog remains at acceptable levels for this time of year and the agricultural pre-season sales program is currently up over last year."

Separately, the Company announced the declaration of its regular quarterly dividend of $0.10 per share, payable on November 1, 1995, to holders of record on October 16, 1995.

Alamo Group is a leader in the design, manufacturing and distribution of heavy duty, tractor-mounted mowing and growth maintenance equipment in North America and Europe. The Company has 818 employees in the U.S., 302 in the U.K. and 62 in continental Europe, and operates nine manufacturing facilities. The corporate offices of Alamo Group (USA) are located in Seguin, Texas, near San Antonio. The headquarters for Alamo Group (EUR) is in Salford Priors, England, near Birmingham. -0-

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

                       Third Quarter Ended  Nine Months Ended
                        9/30/95  10/1/94    9/30/95  10/1/94

American
   Agricultural         $17,368  $11,350    $48,538  $36,760
   Governmental          13,559    8,819     41,001   26,739
European                 12,416    9,949     33,555   27,784
     Total sales         43,343   30,118    123,094   91,283

Cost of sales            30,434   20,187     89,437   64,859
Gross margin             12,909    9,931     33,657   26,424
                           29.8%    33.0%      27.3%    28.9%

Operating expenses        6,088    4,343     16,557   13,030
Amortization of
 intangibles                413      242        942      532
Income from operations    6,408    5,346     16,158   12,862
                           14.8%    17.8%      13.1%    14.1%

Interest, net              (448)    (381)    (1,798)  (1,153)
Other income (expense)      164        0        818      304

Income before income
 taxes                    6,124    4,965     15,178   12,013
Provision for income
 taxes                    2,220    1,914      5,612    4,533

Net income               $3,904   $3,051     $9,566   $7,480

Net income per
 common share           $  0.41   $  0.40    $ 1.15  $  0.98

Weighted average common   9,567    7,605      8,301    7,624
     shares and equivalents

Employees                 1,182      963      1,182      963
Sales per employee      $36,669  $31,275   $104,140  $94,790
-0-

                    Summary Balance Sheet Data

                                 9/30/95   10/1/94

Receivables                       41,365    23,408
Inventories                       51,249    32,636
Current Liabilities               22,004    16,048
Long Term Debt                    19,531    22,382
Equity                            90,584    49,356
-0-

CONTACT: Alamo Group Inc.

Todd Binet

Treasurer

210-372-9504

or

June Filingeri/Robert Weiner

Media Contact: Stan Froelich

Morgen-Walke Associates

212-850-5600