ALAMO : ANNOUNCES RECORD 2016 FIRST QUARTER RESULTS

ALAMO GROUP ANNOUNCES RECORD 2016 FIRST QUARTER RESULTS

SEGUIN, Texas, May 4, 2016 - Alamo Group Inc. (NYSE: ALG) today reported results for the first quarter ended March 31, 2016.

• Record net income for a first quarter of $8.7 million, up 17.7%
• Record net sales for a first quarter of $211.0 million, up 1.5%
  • Industrial Division up 5.4%
  • Agricultural Division up 0.4%
  • European Division down (8.0%)

Net sales for the first quarter of 2016 were $211.0 million compared to net sales of $207.8 million for the first quarter of 2015, an increase of 1.5%. Net income for the quarter was $8.7 million, or $0.75 per diluted share, compared to net income of $7.4 million, or $0.64 per diluted share in 2015, an increase in net income of 17.7% and 17.2% in earnings per share. Both net sales and net income were records for a first quarter for Alamo Group.

more than offset by a stronger start to the year in the sweeper and mowing equipment sectors, particularly in parts.

Alamo's Agricultural Division net sales in the first quarter of 2016 were $48.7 million compared to net sales of $48.5 million in 2015. The Division's results remained steady despite the continued soft conditions in the overall agricultural market.

Alamo Group's European Division net sales were $39.0 million in the first quarter of 2016 versus

$42.4 million in the prior year's first quarter, a decrease of 8%. Nearly half of the decrease was related to changes in exchange rates, though sales in Europe continue to be impacted by soft economic conditions and particularly by the weak agricultural market(1).

Ron Robinson, Alamo Group's President and Chief Executive Officer, commented, "We are generally pleased with our performance in the first quarter of 2016. While sales growth was limited by the ongoing weakness in the agricultural sector, both in North America and Europe, our earnings exhibited meaningful improvement as we benefited from ongoing initiatives aimed at strengthening our margins. Our asset utilization also benefited from these initiatives as we were able to lower our inventory over 8% year over year in a quarter that is traditionally one that requires a higher level of assets to support our preseason programs. This, along with other ongoing measures we have underway to improve our efficiencies, allowed us to reduce our debt year over year by over $35 million and our debt net of cash by over $48 million.

"The results of these cost control efforts give us confidence as we move forward, though we remain concerned about the ongoing headwinds we are likely to face throughout the current year. The agricultural market worldwide is likely to stay soft with farm incomes being down in nearly all of our major markets. In addition, Europe's overall economic outlook remains weak and the global situation is fragile. However, despite these conditions, we feel Alamo will continue to benefit from a historically more stable demand for our products relative to other industrial markets, though we are certainly not immune from general economic conditions. We feel we will also benefit from our backlog, which while down 3.8% in the quarter, remains at a

healthy level of $153 million. So, overall we remain optimistic about the prospects for Alamo Group and remain committed to our long term growth plans."

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The live broadcast of Alamo Group Inc.'s quarterly conference call will be available online at the Company's website,www.alamo-group.com (under "Investor Relations/Events & Presentations") on Thursday, May 12, 2016, beginning at 4:00 p.m. ET. The online replay will follow shortly after the call ends and will be archived on the Company's website for 60 days.

(1) In this earnings release, Alamo Group reports net sales excluding the impact of currency translation, which is a non-GAAP financial measure. The Company considers this information useful to investors to allow better comparability of period-to-period operating performance. Attachments 1 and 2 to this earnings release contain a reconciliation of the non-GAAP financial measure to the comparable GAAP financial measure.