SEGUIN,
Texas, Nov. 2, 2023 /PRNewswire/ -- Alamo Group
Inc. (NYSE: ALG) today reported results for the third quarter
ended September 30, 2023.
Highlights for the Quarter
- Eighth consecutive quarterly record for sales and
earnings
- Net sales of $419.6 million,
up 13.8%
- Vegetation Management net sales of $246.9 million, up 8.0%
- Industrial Equipment net sales of $172.7 million, up 23.1%
- Income from operations of $49.8
million, (11.9% of net sales), up 38.8%
- Net income of $34.9 million,
or $2.91 per diluted share, up
35.2%
- Trailing twelve-month EBITDA of $245.0 million, up 25.0% from full year
2022(1)
- Backlog of $890.9 million,
down 2.0% compared to prior year third quarter-end
Results for the Quarter
Record third quarter 2023 net sales of $419.6 million increased 13.8% compared to
$368.8 million in the third quarter
of 2022. Gross margin improved in the quarter versus the third
quarter of 2022 by $21.8 million or
23.6%. Third quarter net income improved 35.2% to
$34.9 million, or $2.91 per diluted share, compared to net income
of $25.8 million, or $2.16 per diluted share in the third quarter of
2022. The Company's backlog at the end of the third quarter
was $890.9 million, virtually
unchanged from the end of the second quarter of 2023 but slightly
down by 2.0% versus the backlog at the end of the third quarter of
2022, and down 11.5% compared to the Company's backlog at the
end of calendar year 2022.
Comments on Results
Jeff Leonard, Alamo Group's
President and Chief Executive Officer commented, "We are very
pleased that our results were in line with our expectations and
established new Company records for third quarter sales and
earnings. Double digit sales growth of almost 14% was driven
primarily by strong demand from governmental agencies and
industrial contractors. Following the pattern of the past few
quarters, further improvement in supply chain performance supported
higher sales, improved operating efficiency, and allowed us to
again approach our targeted 12% operating margin level.
"Conditions in our markets remained relatively strong across
most customer segments. Third quarter 2023 order bookings
were up 10% compared to the third quarter of 2022 and increased 25%
compared to the second quarter of this year. We were especially
pleased with the very strong orders received in the UK and
Europe across both operating
Divisions. In North America, the governmental sector
continued to exhibit significant strength, while activity in
forestry and tree care declined modestly. The farm and ranch
segment declined on a year-over-year basis but recovered very
nicely sequentially compared to the weakness we reported in the
second quarter as a result of the retail incentive programs we put
in place this year.
"We are also pleased to announce the recent acquisition of Royal
Truck and Equipment. Royal Truck is a premier producer of
specialized highway safety equipment including crash attenuator
trucks. This segment has been growing at a very high rate
over the past few years, and will continue to benefit from the
recent U.S. federal infrastructure bill. Royal Truck has
established a strong reputation as an innovative market leader and
high-quality producer of products designed to enhance the safety of
highway work crews. This business will be integrated with our
sweeper and debris collector group that forms a core part of our
Industrial Equipment Division. The acquisition is expected to
be modestly accretive for the balance of 2023.
"Looking ahead, we expect the trends of the past several
quarters to continue. Fleet and infrastructure investment by
government agencies is likely to remain elevated for the
foreseeable future. While weakness in the farm and ranch segment is
expected to persist, we don't anticipate that conditions will
further deteriorate in the near term.
"Our strong, high quality order backlog gives us excellent
forward visibility. Combined with the health of our markets,
this bodes well for our performance for the remainder of this year
and for the first several quarters of 2024. We are confident
that we can continue to execute our strategy efficiently, and in
doing so continue to grow at double digit rates and to further
optimize operating margin.
"I want to take this opportunity to thank all of our employees
for their exceptional dedication as well as our many suppliers, who
worked in close coordination with us to achieve these results. I
would also like to thank our dealers and customers who have
continued to support our company, and our family of well-known
brands."
Earnings Conference Call
The Company will host a
conference call to discuss the results on Friday, November 3, 2023 at 10:00 a.m. ET. Hosting the call will be members
of senior management.
Individuals wishing to participate in the conference call should
dial 1-877-317-6789 (domestic) or 1-412-317-6789 (international).
For interested individuals unable to join the call, a replay will
be available until Friday, November 10,
2023, by dialing 1-877-344-7529 (domestic) or 1-412-317-0088
(internationally), passcode 1294689.
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 and
Presentations") on Friday, November 3,
2023 beginning at 10:00 a.m.
ET. The online replay will follow shortly after the call
ends and will be archived on the Company's website for 60 days.
About Alamo Group
Alamo Group is a leader in the
design, manufacture, distribution and service of high quality
equipment for vegetation management, infrastructure maintenance and
other applications. Our products include truck and tractor
mounted mowing and other vegetation maintenance equipment, street
sweepers, snow removal equipment, excavators, vacuum trucks, other
industrial equipment, agricultural implements, forestry equipment
and related after-market parts and services. The Company,
founded in 1969, has approximately 4,350 employees and operates 27
plants in North America,
Europe, Australia and Brazil as of September
30, 2023. The corporate offices of Alamo Group Inc.
are located in Seguin, Texas.
Forward Looking Statements
This release contains
forward-looking statements that are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements involve known and unknown
risks and uncertainties, which may cause the Company's actual
results in future periods to differ materially from forecasted
results. Among those factors which could cause actual results
to differ materially are the following: adverse economic
conditions which could lead to a reduction in overall market
demand, supply chain disruptions, labor constraints, increasing
costs due to inflation, new or unanticipated effects of the
COVID-19 pandemic, geopolitical risks, including effects of the war
in Ukraine, competition, weather,
seasonality, currency-related issues, and other risk factors listed
from time to time in the Company's SEC reports. The Company
does not undertake any obligation to update the information
contained herein, which speaks only as of this date.
(Tables Follow)
# # #
(1) This is a non-GAAP financial measure or other
information relating to our GAAP financial measures that we have
provided to investors in order to allow greater transparency and a
deeper understanding of our financial condition and operating
results. For a reconciliation of the non-GAAP financial
measure or for a more detailed explanation of financial results,
refer to "Non-GAAP Financial Measure Reconciliation" below and the
Attachments thereto.
Alamo Group Inc. and
Subsidiaries Condensed Consolidated Balance
Sheets (in
thousands) (Unaudited)
|
|
|
September
30,
2023
|
September
30,
2022
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
113,534
|
|
|
$ 75,308
|
|
Accounts receivable,
net
|
|
378,107
|
|
|
301,919
|
|
Inventories
|
|
371,748
|
|
|
362,713
|
|
Other current
assets
|
|
9,976
|
|
|
10,685
|
|
Total current
assets
|
|
873,365
|
|
|
750,625
|
|
|
|
|
|
|
|
|
Rental equipment,
net
|
|
38,431
|
|
|
33,156
|
|
|
|
|
|
|
|
|
Property, plant and
equipment
|
|
164,519
|
|
|
153,062
|
|
|
|
|
|
|
|
|
Goodwill
|
|
195,863
|
|
|
192,946
|
|
Intangible
assets
|
|
159,884
|
|
|
173,508
|
|
Other non-current
assets
|
|
23,452
|
|
|
24,494
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
1,455,514
|
|
|
$
1,327,791
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Trade accounts
payable
|
|
$
110,944
|
|
|
$
100,886
|
|
Income taxes
payable
|
|
13,695
|
|
|
5,218
|
|
Accrued
liabilities
|
|
79,682
|
|
|
71,820
|
|
Current maturities of
long-term debt and finance lease obligations
|
|
15,008
|
|
|
15,010
|
|
Total current
liabilities
|
|
219,329
|
|
|
192,934
|
|
|
|
|
|
|
|
|
Long-term debt, net of
current maturities
|
|
308,892
|
|
|
348,463
|
|
Long-term tax
liability
|
|
2,634
|
|
|
3,781
|
|
Other long-term
liabilities
|
|
22,171
|
|
|
24,821
|
|
Deferred income
taxes
|
|
14,754
|
|
|
20,761
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
887,734
|
|
|
737,031
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
|
$
1,455,514
|
|
|
$
1,327,791
|
|
Alamo Group Inc. and
Subsidiaries Condensed Consolidated Statements of
Income (in thousands, except per share
amounts) (Unaudited)
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
9/30/2023
|
|
9/30/2022
|
|
9/30/2023
|
|
9/30/2022
|
Net sales:
|
|
|
|
|
|
|
|
|
Vegetation
Management
|
|
$
246,902
|
|
$
228,511
|
|
$
764,683
|
|
$
704,520
|
Industrial
Equipment
|
|
172,742
|
|
140,282
|
|
507,426
|
|
422,492
|
Total
net sales
|
|
419,644
|
|
368,793
|
|
1,272,109
|
|
1,127,012
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
305,501
|
|
276,428
|
|
927,385
|
|
848,289
|
Gross margin
|
|
114,143
|
|
92,365
|
|
344,724
|
|
278,723
|
|
|
27.2 %
|
|
25.0 %
|
|
27.1 %
|
|
24.7 %
|
|
|
|
|
|
|
|
|
|
Selling, general and
administration expense
|
|
60,564
|
|
52,723
|
|
180,090
|
|
161,367
|
Amortization
expense
|
|
3,826
|
|
3,802
|
|
11,465
|
|
11,481
|
Income from operations
|
|
49,753
|
|
35,840
|
|
153,169
|
|
105,875
|
|
|
11.9 %
|
|
9.7 %
|
|
12.0 %
|
|
9.4 %
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
(6,729)
|
|
(3,734)
|
|
(19,506)
|
|
(9,570)
|
Interest income
|
|
385
|
|
93
|
|
1,125
|
|
222
|
Other income (expense)
|
|
138
|
|
1,413
|
|
94
|
|
(473)
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
43,547
|
|
33,612
|
|
134,882
|
|
96,054
|
Provision for income taxes
|
|
8,632
|
|
7,791
|
|
30,244
|
|
23,291
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
$
34,915
|
|
$
25,821
|
|
$
104,638
|
|
$ 72,763
|
|
|
|
|
|
|
|
|
|
Net income per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
2.93
|
|
$
2.18
|
|
$
8.78
|
|
$
6.13
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
$
2.91
|
|
$
2.16
|
|
$
8.73
|
|
$
6.10
|
|
|
|
|
|
|
|
|
|
Average common shares:
|
|
|
|
|
|
|
|
|
Basic
|
|
11,928
|
|
11,883
|
|
11,916
|
|
11,875
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
11,996
|
|
11,941
|
|
11,983
|
|
11,932
|
Alamo Group Inc.
Non-GAAP Financial Measures
Reconciliation
From time to time, Alamo Group Inc. may disclose certain
"non-GAAP financial measures" in the course of its earnings
releases, earnings conference calls, financial presentations and
otherwise. For these purposes, "GAAP" refers to generally
accepted accounting principles in the United States. The
Securities and Exchange Commission (SEC) defines a "non-GAAP
financial measure" as a numerical measure of historical or future
financial performance, financial position, or cash flows that is
subject to adjustments that effectively exclude or include amounts
from the most directly comparable measure calculated and presented
in accordance with GAAP. Non-GAAP financial measures
disclosed by Alamo Group are provided as additional information to
investors in order to provide them with greater transparency about,
or an alternative method for assessing, our financial condition and
operating results. These measures are not in accordance with,
or a substitute for, GAAP and may be different from, or
inconsistent with, non-GAAP financial measures used by other
companies. Whenever we refer to a non-GAAP financial measure,
we will also generally present the most directly comparable
financial measure calculated and presented in accordance with GAAP,
along with a reconciliation of the differences between the non-GAAP
financial measure we reference and such comparable GAAP financial
measure.
Attachment 1 discloses a non-GAAP financial presentation related
to the impact of currency translation on net sales by division.
Attachment 2 shows the net change in our total debt net of cash and
earnings before interest, taxes, depreciation and amortization
("EBITDA") 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. Attachment
3 reflects Division performance inclusive of non-GAAP financial
measures such as backlog and earnings before interest, tax,
depreciation and amortization ("EBITDA").
Attachment 1
|
Alamo Group Inc.
Non-GAAP Financial Reconciliation
(in thousands)
(Unaudited)
|
|
Impact of Currency
Translation on Net Sales by Division
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September
30,
|
|
|
|
Change due to
currency
translation
|
|
2023
|
|
2022
|
|
% change
from 2022
|
|
$
|
|
%
|
|
|
|
|
|
|
|
|
|
|
Vegetation
Management
|
$
246,902
|
|
$
228,511
|
|
8.0 %
|
|
$
3,918
|
|
1.7 %
|
Industrial
Equipment
|
172,742
|
|
140,282
|
|
23.1 %
|
|
217
|
|
0.2 %
|
Total
net sales
|
$
419,644
|
|
$
368,793
|
|
13.8 %
|
|
$
4,135
|
|
1.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended
September
30,
|
|
|
|
Change due to
currency
translation
|
|
2023
|
|
2022
|
|
% change
from 2022
|
|
$
|
|
%
|
|
|
|
|
|
|
|
|
|
|
Vegetation
Management
|
$
764,683
|
|
$
704,520
|
|
8.5 %
|
|
$
(1,600)
|
|
(0.2) %
|
Industrial
Equipment
|
507,426
|
|
422,492
|
|
20.1 %
|
|
(3,047)
|
|
(0.7) %
|
Total
net sales
|
$
1,272,109
|
|
$
1,127,012
|
|
12.9 %
|
|
$
(4,647)
|
|
(0.4) %
|
|
|
|
|
|
|
|
|
|
|
Attachment 2
|
Alamo Group Inc.
Non-GAAP Financial Reconciliation
(in thousands)
(Unaudited)
|
|
Consolidated Net
Change of Total Debt, Net of Cash
|
|
|
September 30,
2023
|
|
September 30,
2022
|
|
Net
Change
|
|
|
|
|
|
|
|
Current
maturities
|
|
$
15,008
|
|
$
15,010
|
|
|
Long-term debt,net of
current
|
|
308,892
|
|
348,463
|
|
|
Total debt
|
|
$
323,900
|
|
$
363,473
|
|
|
|
|
|
|
|
|
|
Total cash
|
|
113,534
|
|
75,308
|
|
|
Total Debt Net of
Cash
|
|
$
210,366
|
|
$
288,165
|
|
$
(77,799)
|
|
|
|
|
|
|
|
EBITDA
|
|
|
Nine Months
Ended
|
|
Trailing Twelve
Months Ended
|
|
|
September 30,
2023
|
|
September 30,
2022
|
|
September 30,
2023
|
|
December 31,
2022
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
$
153,169
|
|
$
105,875
|
|
$
195,886
|
|
$
148,592
|
Depreciation
|
|
23,674
|
|
21,972
|
|
33,114
|
|
31,412
|
Amortization
|
|
11,992
|
|
11,981
|
|
15,955
|
|
15,944
|
EBITDA
|
|
$
188,835
|
|
$
139,828
|
|
$
244,955
|
|
$
195,948
|
|
|
|
|
|
|
|
|
|
Attachment 3
|
Alamo Group Inc.
Non-GAAP Financial Reconciliation
(in thousands)
(Unaudited)
|
|
Vegetation
Management Division Performance
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
Backlog
|
|
|
|
|
|
$ 390,206
|
|
$ 544,571
|
|
|
|
|
|
|
|
|
|
Net Sales
|
|
$ 246,902
|
|
$ 228,511
|
|
764,683
|
|
704,520
|
|
|
|
|
|
|
|
|
|
Income from
Operations
|
|
30,251
|
|
27,130
|
|
102,320
|
|
78,261
|
|
|
12.3 %
|
|
11.9 %
|
|
13.4 %
|
|
11.1 %
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
3,915
|
|
3,765
|
|
11,335
|
|
10,718
|
Amortization
|
|
3,038
|
|
2,999
|
|
9,124
|
|
9,188
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
37,204
|
|
33,894
|
|
122,779
|
|
98,167
|
|
|
15.1 %
|
|
14.8 %
|
|
16.1 %
|
|
13.9 %
|
Industrial Equipment
Division Performance
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
Backlog
|
|
|
|
|
|
$ 500,661
|
|
$ 364,286
|
|
|
|
|
|
|
|
|
|
Net Sales
|
|
$ 172,742
|
|
$ 140,282
|
|
507,426
|
|
422,492
|
|
|
|
|
|
|
|
|
|
Income from
Operations
|
|
19,502
|
|
8,710
|
|
50,849
|
|
27,614
|
|
|
11.3 %
|
|
6.2 %
|
|
10.0 %
|
|
6.5 %
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
4,230
|
|
3,794
|
|
12,339
|
|
11,254
|
Amortization
|
|
964
|
|
969
|
|
2,868
|
|
2,793
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
24,696
|
|
13,473
|
|
66,056
|
|
41,661
|
|
|
14.3 %
|
|
9.6 %
|
|
13.0 %
|
|
9.9 %
|
View original
content:https://www.prnewswire.com/news-releases/alamo-group-announces-record-2023-third-quarter-sales-and-earnings-301976424.html
SOURCE Alamo Group Inc.