CITATION CORPORATION
2 Office Park Circle, Suite 204
Birmingham, AL 35223
Contact: Stanley B. Atkins
205-871-5731

September 17, 1996

BIRMINGHAM, Alabama -- Citation Corporation (Nasdaq: CAST) today announced that based upon preliminary results, its earnings per share (EPS) for its fiscal year ending September 29, 1996 are expected to be approximately 15 to 20 per cent below published analyst forecasts due to an expected shortfall in its fiscal fourth quarter. Despite the expected EPS shortfall, the company believes it will report record sales and earnings for fiscal 1996.

Citation reported $1.27 EPS on sales of $307.7 million and earnings of $17.1 million for fiscal 1995. Due to a secondary offering of approximately four million shares in September 1995, EPS is currently based on 17.7 million shares versus 13.4 million shares outstanding for fiscal 1995.

The shortfall, which would affect fourth quarter EPS, was caused by a combination of factors including normal maintenance shutdowns of most divisions in July or August, continued slow progress of expansion iron casting production lines at the Texas Foundries division in Lufkin, Texas, the idling of a steel foundry at that same location, and equipment problems at the Iroquois Foundry division in Browntown, Wisconsin.

In addition, the Mansfield Foundry division in Mansfield, Ohio lost money in part due to excessive inventory which reduced operating levels. Mansfield Foundry had built inventory in expectation of a strike at that plant. The strike which occurred at the end of May 1996 was only a week in duration. The Oberdorfer Industries division in Syracuse, New York also lost money in July and August due to shutdown, low volume and losses on a major contract. Oberdorfer primarily serves aircraft engine and compressor markets.

T. Morris Hackney, Chairman and CEO of Citation, said, "Most of the shortfall in July and August is attributable to the maintenance shut down or to one-time equipment problems. The loss at the Iroquois division was due to equipment problems which are now resolved. The Mansfield division should reduce its excessive inventory by the end of September although it also needs to attract additional sales volume. The Oberdorfer division has new work coming in during the Fall.

"In addition, we expect to complete phase out of the steel foundry at the Texas Foundries division in September. That should stem losses which amounted to $2.3 million in fiscal 1995 and are expected to be approximately $1.6 million in fiscal 1996.

"The iron castings expansion at the Texas Foundries division continues a slow and difficult startup and is still experiencing equipment problems, low productivity and high scrap. We are concentrating significant attention on this area.

"The problems with the execution of this major expansion is a significant part of the reason we saw the need to strengthen the operations management of the corporation, including the addition of our new President and COO, Frederick F. (Rick) Sommer, as well as technical support. We believe the attention and experience now being brought to the Texas Foundries expansion startup will see results in the next quarter.

"There are a number of positives. The acquisitions weve made in fiscal 1996 (Texas Steel, Ft. Worth, Texas; Bohn Aluminum, Butler, Indiana; Hi Tech, Albion, Indiana; and Southern Aluminum, Bay Minette, Alabama) generally continue to meet or exceed our expectations.

"Our Alabama Ductile and Southern Ductile divisions continue to perform above expectations. Of our fiscal 1995 acquisitions, the Castwell Products division and the Berlin Foundry divisions are making a strong contribution.

"Our fiscal 1997 volume outlook appears good, based upon an economy which is approximately the same as this year. During the next two weeks, we will complete a detailed fiscal 1997 budget review process which should give us a better handle on our outlook."

Citation Corporation is a metal components producer for the durable goods industry with 16 manufacturing divisions located in nine states. Sales for the most recent nine-months period was $356.1 million.