BHA Group, Inc. Announces Third Quarter 1996 Unaudited Operating Results.

KANSAS CITY, Mo.--(BUSINESS WIRE)--July 11, 1996--BHA Group, Inc. (NASDAQ - BHAG) today announced unaudited operating results for the third quarter and nine months ended June 30, 1996. Net sales for the three months ended June 30, 1996 increased 7% to $30,928,000 from $28,936,000 for the same period in fiscal 1995. Earnings per share increased 21% to $.29 from $.24 the prior year with net earnings increasing to $1,780,000 from $1,484,000 in 1995.

Net sales for the nine months ended June 30, 1996, increased 4% to $89,829,000 from $86,459,000 the prior year. Earnings per share for the nine month period increased 19% to $.82 from $.69 the prior year. Net earnings increased 12% to $5,026,000 from $4,476,000 in 1995. The Company announced a 10% stock dividend on its common stock in June of 1996. The weighted average number of shares used in the earnings per share calculations for all periods presented have been adjusted to reflect the stock dividend.

Commenting on the results, James E. Lund, President and Chief Executive Officer said, "The third quarter financial results reflect the continued rapid expansion of our international businesses. We are pleased to report that international sales volume for the quarter increased almost 70% over the previous year as we continue to see strong demand for our fabric filter and electrostatic precipitator replacement parts and services around the world.

"Our domestic fabric filter business remains strong with both sales volume and gross margins increasing as our newer product offerings continue to gain acceptance. The domestic market for electrostatic precipitator parts and services has not improved. We are managing the resources associated with this segment of our business to take advantage of both the domestic and international customer opportunities which will generate the highest profits.

"A favorable mix of business contributed to an improvement in our margin from operations. Earnings for the third quarter benefited from a reduction in the Company's year-to-date corporate income tax rate to reflect research and development tax credits earned, other tax benefits derived from the sharp increase in the Company's international business and a lower effective state income tax rate.

"Strong activity for new orders has generated a record backlog of $40 million at June of 1996 which provides momentum as we move into the fourth quarter of our fiscal year. The increase represents an improvement over our backlog of $36 million at March 1996 and $34 million at June 1995."

The Company also announced that the Board of Directors has declared a cash dividend of $.03 per share of common stock, payable on August 2, 1996 to shareholders of record on July 22, 1996.

BHA Group, Inc. manufactures and markets replacement parts and provides maintenance and rebuilding services for industrial air pollution control equipment on a worldwide basis. -0-

                 BHA GROUP, INC. AND SUBSIDIARIES
              CONSOLIDATED STATEMENTS OF OPERATIONS
            Three and Nine Months Ended June 30, 1996
               (With Comparative Figures for 1995)
                          (Unaudited)

                                       Three Months Ended June 30

                                         1996              1995

Net Sales                            $ 30,928,000      $ 28,936,000
Earnings Before Income Taxes            2,410,000         2,394,000
Net Earnings                            1,780,000         1,484,000

Earnings Per Share                            .29               .24

Weighted Average Shares
 Outstanding (a)                        6,166,024         6,278,127

                                        Nine Months Ended June 30

                                         1996              1995

Net Sales                            $ 89,829,000      $ 86,459,000
Earnings Before Income Taxes            7,516,000         7,216,000
Net Earnings                            5,026,000         4,476,000

Earnings Per Share                            .82               .69

Weighted Average Shares
 Outstanding (a)                        6,138,730         6,443,300

(a) The weighted average number of shares outstanding for all
periods presented have been adjusted to reflect the 10% stock
dividend announced in June of 1996.

CONTACT: BHA Group, Inc.

James C. King, 816/356-8400 x 279