Alamo Group Inc. reports third quarter and nine month results; Declares regular quarterly dividend.

SEGUIN, Texas--(BUSINESS WIRE)--Oct. 30, 1996--Alamo Group Inc. (NYSE:ALG) today reported improved financial results for the 1996 third quarter and nine month periods ended September 28, 1996.

Total sales in the third quarter increased 8% to $46.8 million compared to $43.3 million in the year ago quarter ended September 30, 1995. Net income rose 7% to $4.19 million, or $0.43 per share, from $3.90 million, or $0.41 per share in the 1995 third quarter.

The Company realized a 25% increase in agricultural sales in the third quarter reflecting the return of more normal domestic weather patterns and strong replacement parts sales including those of Herschel which was acquired in late 1995. Governmental sales were modestly lower due to the delay in shipment of certain whole goods orders caused by lower availability of tractor supplies from the Company's major OEM suppliers. These orders are expected to be completed in the fourth quarter. European sales were level with the prior year but profits continued to improve.

For the first nine months of 1996, total sales increased 16% to $142.6 million versus sales of $123.1 million in the comparable nine month period of 1995. Net income rose 12% to $10.75 million, or $1.11 per share, compared with $9.57 million, or $1.15 per share in the nine month period last year. The 1996 nine month results reflect a 16% increase in the number of weighted average common shares outstanding due to the Company's 2,000,000 share secondary offering in July, 1995.

Donald J. Douglass, Chairman and CEO, commented: "The third quarter marked the return to more acceptable levels of operation after unfavorable weather conditions impacted both our agricultural and governmental customers during the first half of 1996. We are also achieving measurable progress with our recently acquired businesses which should demonstrate their full benefits in 1997."

Mr. Douglass continued: "Despite the weather-related challenges of the first half of the year, Alamo Group realized a 12% increase in net income during the first nine months of 1996. At the same time, shareholders' equity was increased by $8 million, long-term debt was reduced by 14% and nearly $3 million in dividends was paid to shareholders."

Separately, the Company announced the declaration of its regular quarterly dividend of $0.10 per share, payable on November 4, 1996, to holders of record on October 16, 1996.

Alamo Group is a leader in the design, manufacturing and distribution of heavy duty, tractor-mounted mowing and growth maintenance equipment in America and Europe. The Company has 909 employees in the U.S., 315 in the U.K. and 59 in continental Europe, and operates ten manufacturing facilities. The corporate offices of Alamo Group Inc. is located in Seguin, Texas, near San Antonio. -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
                             09/28/96     09/30/95   09/28/96    09/30/95

American
   Agricultural               $21,771     $17,368     $66,139    $48,538
   Governmental                12,486      13,559      40,018     41,001
European                       12,578      12,416      36,451     33,555
     Total Sales               46,835      43,343     142,608    123,094

Cost of sales                  32,669      30,434     103,786     89,437
Gross margin                   14,166      12,909      38,822     33,657
                                30.2%       29.8%       27.2%      27.3%

Operating expenses              6,809       6,088      19,766     16,557
Amortization of intangibles       423         413       1,023        942
Income from operations          6,934       6,408      18,033     16,158
                                14.8%       14.8%       12.6%      13.1%

Interest, net                    (475)       (448)     (1,568)   (1,798)
Other income (expense)             72         164         533       818

Income before income taxes      6,531       6,124      16,998     15,178
Provision for income taxes      2,346       2,220       6,253      5,612

Net income                     $4,185      $3,904     $10,745     $9,566

Net income per common share    $ 0.43      $ 0.41      $ 1.11     $ 1.15

Weighted average common         9,643       9,567       9,667      8,301
     shares and equivalents
-0-
                      Summary Balance Sheet Data
                           (in thousands)
                             (Unaudited)

                             09/28/96         12/30/95         09/30/95

Receivables                    43,358           45,509           41,365
Inventories                    64,602           58,624           51,249
Current Liabilities            26,417           22,048           22,004
Long Term Debt                 32,121           37,309           19,531
Equity                         98,411           90,705           90,584

CONTACT: Alamo Group Inc.

Donald J. Douglass

Chairman and Chief Executive Officer

210-738-1339

or

June Filingeri/Jonathan Schaffer

Media Contact: Stan Froelich/Nancy Gallinghouse

Morgen-Walke Associates

212-850-5600