Algo Group's Nine Month Profit Up 74 Percent - States Company is Headed for a Profitable Year.

MONTREAL--(BUSINESS WIRE)--Nov. 12, 1996--ALGO GROUP. (ME, TSE AO.A.) Algo Group Inc. today reported a 74 percent increase in net earnings for the nine months ended September 30, 1996 and stated that during the current fiscal year, the company will earn its first profit in three years. Algo's substantial U.S. operations contributed to this turnaround.

Net earnings for the nine month period amounted to $3.04 million or $0.15 per share compared with net earnings of $1.75 million or $0.09 per share for the corresponding period last year. Fully diluted, EPS were $0.10 compared to $0.09 a year ago. Sales for the nine months were $154.33 million, compared to $221.32 million last year.

The 1996 earnings do not reflect preferred share dividends of $307,000 per annum.

Net earnings for the third quarter ended September 30, 1996 were $4.04 million or $0.20 per share. This compares with net earnings of $5.70 million or $0.28 per share for the same period last year. On a fully diluted basis, EPS were $0.13 compared to $0.26 last year. The dilution is a result of the August 1995 issuance of the Convertible Second Preferred Shares, Series 1. Third quarter sales totaled $64.92 million, compared to $90.22 million a year ago.

Two factors, both anticipated, affected current third quarter results. U.S. based Algo Apparel, disposed of during the year, contributed to profits during last year's third quarter, but lost money through fiscal 1995. As well, the company's Canadian children's wear sector, while profitable during the third quarter, earned less than the corresponding period last year. However, unlike fiscal 1995, the subsidiary will produce a profit for the current year.

"In fiscal 1995, Algo incurred a loss of $6.3 million. We have budgeted a profit for the current year. Our nine months performance is on plan. There is nothing we see that will change this turnaround in our operations. Our U.S. operations have become a very substantial part of our business and have contributed to our improved performance," said Algo President and Chief Operating Officer, Mr. Jack Wiltzer.

For the nine months, sales in the U.S. increased to 42 percent of the company's overall sales from 33 percent, while earnings from operations grew to 56 percent from 45 percent for the same period last year.

Wiltzer further stated that this year's fourth quarter will be vastly improved over the final quarter in 1995, which produced an $8 million dollar loss. "The issues which contributed to this poor performance have been addressed and corrected. During the past few years, our fourth quarter has been our nemesis. There will be a change for the better this year."

Algo Group is the leading Canadian manufacturer and importer of ladies', men's and children's fashion apparel which is marketed throughout North America. The company also markets dresses in Europe. As well, Algo designs and imports fashion fabric marketed through North American apparel manufacturers and retail outlets. Company shares trade publicly on both the Toronto Stock Exchange and the Montreal Exchange, under the stock symbol AO.A.

CONTACT: ALGO GROUP INC.

President, 514/382-1240

or

Maison Brison

Rick Leckner, 514/731-0000