The following tables set forth, for the periods indicated, certain financial
data:

                                     Three Months Ended                            Six Months Ended
                                          June 30,                                     June 30,
               As a
       Percent of Net Sales          2020              2019         2020              2019

      Industrial                          67.8  %      68.1  %      70.7  %               67.2  %
      Agricultural                        32.2  %      31.9  %      29.3  %               32.8  %

      Total sales, net                   100.0  %     100.0  %     100.0  %              100.0  %



                                           Three Months Ended                           Six Months Ended
                                                June 30,                                    June 30,
  Cost Trends and Profit Margin, as
      Percentages of Net Sales              2020              2019        2020             2019

 Gross profit                                    25.2  %     25.6  %     25.2  %               24.9  %
 Income from operations                           8.4  %     10.3  %      8.0  %                9.5  %
 Income before income taxes                       6.6  %      9.6  %      6.6  %                8.8  %
 Net income                                       4.8  %      7.2  %      4.9  %                6.6  %



Overview

This report contains forward-looking statements that are based on Alamo Group's
current expectations.  Actual results in future periods may differ materially
from those expressed or implied because of a number of risks and uncertainties
which are discussed below and in the Forward-Looking Information section. Unless
the context otherwise requires, the terms the "Company", "we", "our" and "us"
means Alamo Group Inc.

In March 2020, the World Health Organization categorized the current coronavirus
disease ("COVID-19") as a pandemic, and the President of the United States
declared the COVID-19 outbreak a national emergency. The outbreak, which is
continuing to spread worldwide, has adversely affected our operations,
customers, suppliers, and the economies in which we operate. Thus far, we have
continued to focus on the health and safety of our employees and have taken
steps to ensure their continued well-being while we work on meeting the demands
of our customers. Some of our facilities were forced to closed for varying
periods of time due to government orders and other pandemic related reasons, but
many of our products and/or operations fall within the "essential" designation
which has allowed us to continue operations, albeit at a reduced capacity.
Currently, all of our manufacturing plants are open and functioning at various
levels of operation based on demand. While shelter-in-place or stay-at-home
orders have been relaxed or eliminated in many locations, recent case surges
could lead to new restrictions or lockdowns, which may limit our operational
capabilities. This is dependent on future developments relating to the pandemic
which are highly uncertain and unpredictable. As a result of the pandemic, both
of our divisions have also experienced some softness in customer demand and we
expect this trend to continue in the near term or even longer, should the
pandemic continue unabated.

For the first six months of 2020, the Company's net sales increased by 6.6% but
net income decreased by 20.6% when compared to the same period in 2019. The
increase in net sales was due to the acquisitions of Morbark and Dutch Power.
The decrease in net income was attributable to the COVID-19 pandemic which began
to materially affect our operations in March of this year and continued to
negatively impact the Company's overall financial performance during the first
six months of 2020.

The Company's Industrial Division experienced a 12.1% increase in sales for the
first six months of 2020 compared to the first six months of 2019 all due to the
acquisitions of Morbark and Dutch Power. Without factoring in contributions from
Morbark and Dutch Power, sales across all legacy Industrial product groups (with
the exception of vegetation control, which was slightly up) were down during the
first six months of 2020 compared to the same period in 2019, primarily as a
result of adverse impacts from the COVID-19 pandemic which included
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temporary plant closures in the U.S., France and Canada, other operational disruptions across the Division and softness in customer demand.



The Company's Agricultural Division sales were down in the first six months of
2020 by 4.7% compared to the first six months of 2019. Agricultural sales were
negatively affected by the COVID-19 pandemic which began to hurt Agricultural
sales as well as operations in late March of this year. During the second
quarter of 2020, North American sales and profitability showed some improvement
and held up better than the Division's operations in the UK and France which
experienced temporary plant closures during the months of March and April.

Consolidated income from operations was $46.5 million in the first six months of
2020 which included $2.7 million of non-cash inventory step-up expense related
to the Morbark acquisition. This was a 10.5% decline when compared to the first
six months of 2019. The Company's backlog decreased 6.9% to $216.6 million at
the end of the second quarter of 2020 versus the backlog of $228.8 million at
the end of the second quarter of 2019. The decrease in the Company's backlog was
primarily attributable to negative effects from the COVID-19 pandemic.

We believe the COVID-19 pandemic will continue to adversely impact our business
for the remainder of 2020. At this time, however, it is not clear how
significant these impacts will be given the current level of uncertainty. The
impacts will depend on numerous evolving factors which cannot be predicted,
including the duration and scope of the pandemic, the effectiveness of
containment and treatment efforts, and the immediate and longer term economic
consequences felt by our dealers and government customers, which could result in
budgetary tightening and weaker demand for our products. In light of the current
situation and outlook, we have taken various steps to contain costs, improve
cash flow and reduce overall debt, which include, among other things, rolling
back pay increases for salaried employees in the U.S. and most of our
international operations, restricting travel, reducing inventory levels to match
current demand, limiting capital expenditures, temporarily suspending the
Company's share repurchase program and delaying other discretionary spending. We
will continue to focus on improving our financial stability while ensuring the
continued health and safety of our employees. We feel confident there will be a
continuing need for products such as ours that are critical for agricultural
operations and infrastructure maintenance, and believe that our current focus on
employee well-being and financial stability will allow us to be well positioned
for long term growth after the pandemic situation eases. However, since we
cannot reasonably estimate the duration and severity of the COVID-19 pandemic,
we cannot predict the ultimate impact it will have on our business, results of
operations, and financial condition.

While the direct and indirect consequences of the COVID-19 pandemic will
certainly pose the greatest risk for the Company during 2020, the Company may
also be negatively affected by several other factors such as an increase in
tariff rates, ongoing trade disputes, changes in U.S. fiscal policy such as
changes in the federal tax rate, weakness in the overall world-wide economy;
significant changes in currency exchange rates; negative economic impacts
resulting from geopolitical events, changes in trade policy, increased levels of
government regulations; weakness in the agricultural sector; acquisition
integration issues; budget constraints or revenue shortfalls in governmental
entities; and other risks and uncertainties as described in "Risk Factors"
section in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K
for the year ended December 31, 2019 (the "2019 Form 10-K").

Results of Operations

Three Months Ended June 30, 2020 vs. Three Months Ended June 30, 2019



Net sales for the second quarter of 2020 were $268.6 million, a decrease of
$16.6 million or 5.8% compared to $285.2 million for the second quarter of
2019.  Net sales during the second quarter of 2020 were negatively affected by
the ongoing COVID-19 pandemic which began to impact the business in the latter
part of the first quarter. The acquisition of Morbark contributed $46.5 million
in net sales for the second quarter of 2020.

Net Industrial sales decreased by $12.0 million or 6.2% to $182.3 million for
the second quarter of 2020 compared to $194.3 million during the same period in
2019. The impact from COVID-19 issues materially affected the Division beginning
at the end of the first quarter of 2020. This included the temporary suspension
of manufacturing in two of its North American locations and one in France which
have since reopened. The acquisition of Morbark added $46.5 million of net sales
during the second quarter of 2020.

Net Agricultural sales were $86.4 million in the second quarter of 2020 compared to $90.9 million for the same period in 2019, a decrease of $4.5 million or 5.0%. The decrease was primarily the result of the


                                       18
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COVID-19 pandemic. North American operations experienced modest growth over the
prior years second quarter and benefited from the contributions of Dixie Chopper
but the division was hurt by both the U.K. and French Agricultural businesses as
they experienced temporary plant closures during the quarter.

Gross profit for the second quarter of 2020 was $67.8 million (25.2% of net
sales) compared to $73.1 million (25.6% of net sales) during the same period in
2019, a decrease of $5.3 million.  The decrease in gross profit during the
second quarter of 2020 was primarily from lower net sales due to the COVID-19
pandemic. Negatively affecting the gross margin and gross margin percentage
during the second quarter of 2020 was $0.7 million of inventory step-up charge
related to the Morbark acquisition.

Selling, general and administrative expenses ("SG&A") were $41.6 million (15.5%
of net sales) during the second quarter of 2020 compared to $42.7 million (15.0%
of net sales) during the same period of 2019, a decrease of $1.1 million. The
second quarter of 2020 includes $6.2 million of additional expense related to
the acquisition of Morbark. Amortization expense in the second quarter of 2020
was $3.6 million compared to $1.1 million in the same period in 2019, an
increase of $2.5 million. The increased amortization expense was primarily
attributable to the Morbark acquisition.

Interest expense was $3.9 million for the second quarter of 2020 compared to
$1.9 million during the same period in 2019, an increase of $2.0 million.  The
increase during the second quarter of 2020 resulted from increased borrowings
due to the Morbark acquisition which was completed in October of 2019.

Other income (expense), net was $1.3 million of expense for the second quarter of 2020 compared to $0.3 million of expense during the same period in 2019.

The

expense in 2020 was primarily the result of changes in currency exchange rates offset slightly by the gain from the sale of the RPM building.



Provision for income taxes was $4.7 million (26.8% of income before income tax)
in the second quarter of 2020 compared to $6.8 million (24.7% of income before
income tax) during the same period in 2019.

The Company's net income after tax was $13.0 million or $1.10 per share on a
diluted basis for the second quarter of 2020 compared to $20.7 million or $1.75
per share on a diluted basis for the second quarter of 2019.  The decrease of
$7.7 million resulted from the factors described above.

Six Months Ended June 30, 2020 vs. Six Months Ended June 30, 2019



Net sales for the first six months of 2020 were $583.1 million, an increase of
$36.0 million or 6.6% compared to $547.1 million for the first six months of
2019. The increase was attributable to the acquisitions of Morbark and Dutch
Power which contributed net sales of $106.9 million. Negatively affecting sales
during the first six months of 2020, was the outbreak of the COVID-19 virus
which began to affect the Company's operations late in the first quarter.

Net Industrial sales increased during the first six months by $44.4 million or
12.1% to $412.2 million for 2020 compared to $367.8 million during the same
period in 2019. The increase came from the acquisitions of Morbark and Dutch
Power mentioned above. Impacts from the COVID-19 pandemic began to materially
affect the Division late in the first quarter of 2020. This included temporary
plant closures in the U.S., France and Canada along and other operational
disruptions throughout the countries we sell in mainly from health concerns and
governmental directives, governmental spending and customer delivery
restrictions.

Net Agricultural sales were $170.9 million during the first six months of 2020
compared to $179.3 million for the same period in 2019, a decrease of $8.4
million or 4.7%. The decrease in sales for the first six months of 2020 compared
to the first six months of 2019 was a result of the COVID-19 pandemic. Before
the impact of the virus affected the Division, sales during the first two and a
half months of 2020 had begun to show signs of improvement from the soft
agricultural market conditions that have negatively impacted this Division for
the last several years. This Division's North American operations did reasonably
well and benefited from the contributions of Dixie Chopper but the ongoing
pandemic affected both sales and operations in late first quarter of 2020 and
specifically hurt both the U.K. and French Agricultural business as they
experienced temporary plant closures.

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Gross profit for the first six months of 2020 was $146.8 million (25.2% of net
sales) compared to $136.4 million (24.9% of net sales) during the same period in
2019, an increase of $10.4 million. The increase in gross profit for the first
six months of 2020 came from the acquisitions of Morbark and Dutch Power.
Negatively affecting the gross margin and gross margin percentage during the
first six months of 2020 were $2.7 million of inventory step-up charge related
to the Morbark acquisition.

SG&A expenses were $92.8 million (15.9% of net sales) during the first six
months of 2020 compared to $82.5 million (15.1% of net sales) during the same
period of 2019, an increase of $10.3 million. The acquisitions of Morbark and
Dutch Power accounted for $15.4 million of net additional expense during the
first six months of 2020. Amortization expense in the first six months of 2020
was $7.4 million compared to $2.0 million in the same period in 2019, an
increase of $5.4 million. The increased amortization expense was primarily from
the acquisitions of Dutch Power and Morbark.

Interest expense was $9.5 million for the first six months of 2020 compared to
$3.4 million during the same period in 2019, an increase of $6.1 million. The
increase during the first six months of 2020 came from increased borrowings due
to the Morbark acquisition in October of 2019.

Other income (expense), net was $1.1 million of income during the first six
months of 2020 compared to $0.7 million of expense in the first six months of
2019. The income in 2020 and expense in 2019 were primarily the result of
changes in exchange rates. To a lessor extent, gains from the sale of the Super
Products and RPM buildings are included in the 2020 income.

Provision for income taxes was $10.3 million (26.4% of income before income taxes) in the first six months of 2020 compared to $12.5 million (25.8% of income before income taxes) during the same period in 2019.

The Company's net income after tax was $28.5 million or $2.41 per share on a diluted basis for the first six months of 2020 compared to $35.9 million or $3.05 per share on a diluted basis for the first six months of 2019. The decrease of $7.4 million resulted from the factors described above.

Liquidity and Capital Resources



In addition to normal operating expenses, the Company has ongoing cash
requirements which are necessary to operate the Company's business, including
inventory purchases and capital expenditures.  The Company's inventory and
accounts payable levels typically build in the first half of the year and in the
fourth quarter in anticipation of the spring and fall selling seasons.  Accounts
receivable historically build in the first and fourth quarters of each year as a
result of fall preseason sales programs and out of season sales, particularly in
our Agricultural Division.  Preseason sales, primarily in the Agricultural
Division, help level the Company's production during the off season.

As of June 30, 2020, the Company had working capital of $438.4 million which
represents an increase of $30.4 million from working capital of $408.0 million
at December 31, 2019. The increase in working capital was primarily from
increase in cash and lower trade accounts payable due to reductions in inventory
levels related to the COVID-19 virus.

Capital expenditures were $12.5 million for the first six months of 2020,
compared to $12.4 million during the first six months of 2019. The Company
initially expected to continue capital expenditures at a rate consistent with
the rate of spending for the entire year of 2019. In response to the COVID-19
pandemic, we began to limit new capital expenditures in the first quarter of
2020, however any previously approved projects and related spending have carried
over. The Company will fund any future expenditures from operating cash flows or
through our revolving credit facility, described below.

Net cash used for investing activities was $9.4 million during the first six
months of 2020 compared to $64.3 million during the first six months of 2019.
The 2019 increase in the use of funds was to acquire Dutch Power which was
approximately $52.5 million.

Net cash used in financing activities was $8.5 million and net cash provided by
was $76.7 million during the six month periods ended June 30, 2020 and June 30,
2019, respectively. Net cash used in financing activities for the first six
months of 2020 relates to the increase repayments on the revolving credit
facility and the principal payments
                                       20
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on long-term debt and financing leases. The majority of the net cash provided by
financing activities in 2019 was due to borrowings to finance the acquisition of
Dutch Power.

The Company had $78.7 million in cash and cash equivalents held by its foreign
subsidiaries as of June 30, 2020. The majority of these funds are at our
European and Canadian facilities. The Company will continue to repatriate
European and Canadian cash and cash equivalents in excess of amounts needed to
fund operating and investing activities, but will need to monitor exchange rates
to determine the appropriate timing of such repatriation given the current
relative strength of the U.S. dollar. Repatriated funds will initially be used
to reduce funded debt levels under the Company's current credit facility and
subsequently used to fund working capital, capital investments and acquisitions
company-wide.

On October 24, 2019, the Company, as Borrower, and each of its domestic
subsidiaries as guarantors, entered into a Second Amended and Restated Credit
Agreement (the Credit Agreement) with Bank of America, N.A., as Administrative
Agent. The Credit Agreement provides the Company with the ability to request
loans and other financial obligations in an aggregate amount of up to $650.0
million and, subject to certain conditions, the Company has the option to
request an increase in aggregate commitments of up to an additional $200.0
million. Pursuant to the Credit Agreement, the Company has borrowed $300.0
million pursuant to a Term Facility repayable with interest quarterly at a
percentage of the initial principal amount of the Term Facility of 5.0% per year
with the remaining principal due in 5 years. Up to $350.0 million is available
under the Credit Agreement pursuant to a Revolver Facility which terminates in 5
years. The Agreement requires the Company to maintain two financial covenants, a
maximum consolidated leverage ratio and a minimum consolidated fixed charge
coverage ratio. The Agreement also contains various covenants relating to
limitations on indebtedness, limitations on investments and acquisitions,
limitations on sale of properties and limitations on liens and capital
expenditures. The Agreement also contains other customary covenants,
representations and events of defaults. The expiration date of the Term Facility
and the Revolver Facility is October 24, 2024. As of June 30, 2020, $439.8
million was outstanding under the Credit Agreement, $288.8 million on the Term
Facility and $151.0 million on the Revolver Facility. On June 30, 2020, $4.0
million of the revolver capacity was committed to irrevocable standby letters of
credit issued in the ordinary course of business as required by vendors'
contracts resulting in $122.3 million in available borrowings. The Company is in
compliance with the covenants under the Agreement as of June 30, 2020.

Management believes the Agreement and the Company's ability to internally
generate funds from operations should be sufficient to meet the Company's cash
requirements for the foreseeable future. However, future challenges affecting
the banking industry and credit markets in general could potentially cause
changes to credit availability, which creates a level of uncertainty.

Critical Accounting Estimates



Management's Discussion and Analysis of Financial Condition and Results of
Operations are based upon our Consolidated Financial Statements, which have been
prepared in accordance with GAAP.  The preparation of these financial statements
requires management to make estimates and assumptions that affect the reported
amounts of assets, liabilities, revenue and expenses, and related disclosure of
contingent assets and liabilities.  Management bases its estimates on historical
experience and on various other assumptions that are believed to be reasonable
under the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities that are not
readily apparent from other sources.  Actual results may differ from these
estimates under different assumptions or conditions, particularly given the
uncertainty created by the COVID-19 pandemic.

Critical Accounting Policies



An accounting policy is deemed to be critical if it requires an accounting
estimate to be made based on assumptions about matters that are highly uncertain
at the time the estimate is made, and if different estimates that reasonably
could have been used, or changes in the accounting estimates that are reasonably
likely to occur periodically, could materially impact the financial statements.
Management believes that of the Company's significant accounting policies, which
are set forth in Note 1 of the Notes to Consolidated Financial Statements in the
2019 Form 10-K, the policies relating to the business combinations, sales
discounts, and goodwill and other intangible assets involved a higher degree of
judgment and complexity. There have been no material changes to the nature of
estimates, assumptions and levels of subjectivity and judgment related to
critical accounting estimates disclosed in Item 7 "Management's Discussion and
Analysis of Financial Condition and Results of Operations" of the 2019 Form
10-K.
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Off-Balance Sheet Arrangements

There are no off-balance sheet arrangements that have or are likely to have a current or future material effect on our financial condition.

Forward-Looking Information



Part I of this Quarterly Report on Form 10-Q and the "Management's Discussion
and Analysis of Financial Condition and Results of Operations" included in Item
2 of this Quarterly Report contain forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934.  In addition, forward-looking statements may be made
orally or in press releases, conferences, reports or otherwise, in the future by
or on behalf of the Company.

Statements that are not historical are forward-looking.  When used by or on
behalf of the Company, the words "estimate," "anticipate," "expect," "believe,"
"intend", "will", "would", "should", "could" and similar expressions generally
identify forward-looking statements made by or on behalf of the Company.

Forward-looking statements involve risks and uncertainties.  These uncertainties
include factors that affect all businesses operating in a global market, as well
as matters specific to the Company and the markets it serves.  Particular risks
and uncertainties facing the Company include changes in market conditions; the
impact of the current COVID-19 outbreak; ongoing weakness in the agricultural
sector; changes in tariff regulations and the imposition of new tariffs; a
strong U.S. dollar; increased competition; trade wars or other negative economic
impacts resulting from geopolitical events; decreases in the prices of
agricultural commodities, which could affect our customers' income levels;
increase in input costs; our inability to increase profit margins through
continuing production efficiencies and cost reductions; repercussions from the
pending exit by the U.K. from the European Union (EU); acquisition integration
issues; budget constraints or income shortfalls which could affect the purchases
of our type of equipment by governmental customers; credit availability for both
the Company and its customers, adverse weather conditions such as droughts,
floods, snowstorms, etc. which can affect buying patterns of the Company's
customers and related contractors; the price and availability of critical raw
materials, particularly steel and steel products; energy cost; increased cost of
governmental regulations which effect corporations including related fines and
penalties (such as the European General Data Protection Regulation and the
California Consumer Privacy Act); the potential effects on the buying habits of
our customers due to animal disease outbreaks and other epidemics; the Company's
ability to develop and manufacture new and existing products profitably; market
acceptance of new and existing products; the Company's ability to maintain good
relations with its employees; the Company's ability to successfully complete
acquisitions and operate acquired businesses or assets; the ability to hire and
retain quality skilled employees; cyber security risks affecting information
technology or data security breaches; and the possible effects of events beyond
our control, such as political unrest, acts of terror, natural disasters and
pandemics, on the Company or its customers, suppliers and the economy in
general. The Company continued to experience the impacts of COVID-19 on its
markets and operations including operational disruption and softening demand.
The full extent to which COVID-19 will adversely impact the Company's business
depends on future developments, which are highly uncertain and unpredictable,
including new information concerning the severity of the outbreak and the
effectiveness of actions globally to contain or mitigate its effects. While this
situation will negatively impact the Company's results of operations, cash flows
and financial position, the current level of uncertainty over the economic and
operational impacts of COVID-19 means the full financial impact cannot be
reasonably estimated at this time.

In addition, the Company is subject to risks and uncertainties facing the
industry in general, including changes in business and political conditions and
the economy in general in both domestic and international markets; weather
conditions affecting demand; slower growth in the Company's markets; financial
market changes including increases in interest rates and fluctuations in foreign
exchange rates; actions of competitors; the inability of the Company's
suppliers, customers, creditors, public utility providers and financial service
organizations to deliver or provide their products or services to the Company;
seasonal factors in the Company's industry; litigation; government actions
including budget levels, regulations and legislation, primarily relating to the
environment, commerce, infrastructure spending, health and safety; and
availability of materials.

The Company wishes to caution readers not to place undue reliance on any
forward-looking statements and to recognize that the statements are not
predictions of actual future results.  Actual results could differ materially
from those anticipated in the forward-looking statements and from historical
results, due to the risks and uncertainties
                                       22
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described above, as well as others not now anticipated.  The foregoing
statements are not exclusive and further information concerning the Company and
its businesses, including factors that could potentially materially affect the
Company's financial results, may emerge from time to time.  It is not possible
for management to predict all risk factors or to assess the impact of such risk
factors on the Company's businesses.

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