Citation Corporation announces sales for October and November 1995.

BIRMINGHAM, Ala.--(BUSINESS WIRE)--Dec. 18, 1995--Citation Corporation (Nasdaq:CAST) announced today that sales for October and November, 1995 were approximately $65.5 million versus $42.1 million for October and November 1994, an increase of about 56 per cent.

However, while the quarter is not yet complete, the company stated that sales and earnings projections for the quarter were less than analysts' expectations for the company's first fiscal quarter, ended December 31, 1995.

Although total sales volume was substantially ahead of last year, after excluding acquisitions made by Citation since September 30, 1994, volume of the existing units for October and November 1995 was down by 5.4 per cent from the same period for 1994.

T. Morris Hackney, Chairman and CEO, said, "While volume of existing units is down from the same period of 1994, it is important to note that the company was operating consistently at six-days-a-week during much of the last fiscal year. Today," he said, "the company is generally operating at five-days-a-week, two-shifts-a-day with an occasional Saturday or extended shift added. At that level of operations, the company is quite capable of operating well and meeting profit margin goals."

"The reason for results below analysts' projections," Mr. Hackney said, "are largely based on issues related to our Texas Foundries Company, Lufkin, Texas, which is our largest unit. A major capital expansion, adding approximately $40 million capacity, is behind schedule, which reduced sales volume and has disrupted existing operations there, making us operate inefficiently. That expansion is now undergoing start-up and debugging, and we expect improvement in the second fiscal quarter beginning in January," he said.

"Inability to accomplish a major product mix change at the company's Mansfield Foundry in Mansfield, Ohio will also negatively affect results this quarter," he noted. "We expect new business in the second fiscal quarter to begin to improve that situation also," Mr. Hackney said.

"Beyond this," he stated, "an acquisition we made late in the year, Castwell Products, Skokie, Ill., suffered a reduction in volume of an automotive part which reduced results. We expect new business in the January quarter to improve results for that company," he said.

"The shortfall between analysts' sales volume projections, made last summer, and our expectations for the current quarter are about $10 million and this shortfall was exacerbated by inefficiencies primarily at Texas Foundries and Mansfield Foundry. We have made appropriate management changes and other responses to improve these situations and we expect improved results in our second fiscal quarter beginning in January," he said.

Citation Corporation, headquartered in Birmingham, Ala., is one of the largest independent U.S. manufacturers of precision ductile, gray, and high-alloy iron, steel and aluminum castings for various industrial markets. The company currently operates 14 foundries in Alabama, Illinois, New York, North Carolina, Ohio, Pennsylvania, Texas and Wisconsin and employs nearly 4,000 employees.

CONTACT: Citation Corporation, Birmingham

Stanley B. Atkins , 205/871-5731