SEGUIN,
Texas, May 4, 2023 /PRNewswire/ -- Alamo Group
Inc. (NYSE: ALG) today reported results for the first quarter ended
March 31, 2023.
Highlights for the Quarter
- Net sales of $411.8 million, up
13.7%
-
- Vegetation Management net sales of $256.4 million, up 16.0%
- Industrial Equipment net sales of $155.3
million, up 10.2%
- Income from operations of $49.0
million, up 68.4%
- Net income of $33.3 million, or
$2.79 per diluted share, up
80.6%
- Trailing twelve-month EBITDA of $216.3
million, up 10.4% from full year 2022(1)
- Backlog of $994.8 million, up
8.4% compared to prior year first quarter-end
Results for the Quarter
Record first quarter 2023 net sales of $411.8 million increased 13.7% compared to
$362.0 million in the first quarter
of 2022. Gross margin improved in the quarter versus the first
quarter of 2022 by $25.9 million or
29.9%. First quarter net income improved 80.6% to
$33.3 million, or $2.79 per diluted share, compared to net income
of $18.5 million, or $1.55 per diluted share in the first quarter of
2022. The Company's backlog at the end of the first quarter
was $994.8 million, an increase of
$77.0 million, or 8.4%, from the
backlog at the end of the first quarter of 2022, but was down
slightly from the end of calendar year 2022.
The positive results reported for the quarter were achieved
through a combination of improved supply chain performance, higher
manufacturing throughput and effective price management.
These results were achieved despite certain challenges that remain
within our supply chain, ongoing skilled labor constraints, as well
as negative currency impacts.
Results by Division
Vegetation Management
The Vegetation Management Division's first quarter net sales
were $256.4 million, up 16.0%
compared to $221.0 million for the
same period in 2022. The increase in net sales was driven by
strong shipments of forestry, tree care, agricultural and
governmental mowing products in both North America and Europe.
The Division's income from operations for the first quarter 2023
was $36.5 million, up 99.1% compared
to $18.3 million for the first
quarter of 2022. The Division's performance benefited from
improved pricing and effective cost controls, despite ongoing
supply chain issues and continued labor shortages. Outstanding
performance in the Division's North American operations was
complemented by strong results in the United Kingdom, France, Australia and to a lesser extent Brazil during the quarter.
Industrial Equipment
The Industrial Equipment Division's first quarter 2023 net sales
were $155.3 million, up 10.2%
compared to $141.0 million during the
same period in 2022. The increase was attributable to higher
sales in all product lines with sweepers and debris collectors
leading the way. The Division's income from operations for the
first quarter of 2023 was $12.5
million compared to $10.8
million for first quarter of 2022, an increase of
16.1%. Limited allocations of truck chassis and ongoing
shortages of other industrial components continued to constrain
this Division's sales growth during the first quarter of 2023.
Comments on Results
Jeff Leonard, Alamo Group's
President, and Chief Executive Officer commented, "Our first
quarter results validated our expectation for sequential
improvement in our operations, and marked the best quarter in
Company history. Enhanced supply chain performance supported
higher sales, while moderated material cost inflation, improved
efficiencies, and our own spending restraint, supported margin
expansion. The 340-basis point improvement in gross margin relative
to the first quarter of 2022 was driven by determined price
discipline over the past year, better manufacturing flows and
improved capacity utilization. Our ongoing facility consolidation
and make-in-market initiatives also contributed to margin
expansion. Overall, it was an excellent quarter and we are very
pleased that the Company is approaching the upgraded 12 percent
operating income target that we established in early
2022.
"Conditions in our markets remained relatively strong during the
first quarter, although order bookings were down 17% compared to
the exceptional pace in the first quarter of 2022. The
decline in bookings was related mainly to lower orders for forestry
and tree care equipment, and to a lesser extent modestly lower
sales of mowers and agricultural attachments to farm and ranch
customers in North America. Orders for vegetation management
equipment from governmental customers in North America and Europe increased nicely. First quarter
bookings in our Industrial Equipment Division also improved, driven
by sharply higher orders for street sweepers, debris collectors,
and vacuum trucks while orders for excavators and snow removal
equipment were relatively flat compared to the same period last
year. Consolidated order backlog of $995 million was approximately 8% higher than the
prior year's first quarter.
"As we anticipated, supply chain performance began to improve as
we started 2023. While shortages continued and quantities of
big-ticket items like truck chassis remained limited by
allocations, the volume of parts, components, and chassis we
received during the quarter increased appreciably. Thanks to
outstanding support from our key suppliers, our teams were able to
complete manufacturing of additional machines that had been
partially assembled previously, but were awaiting delivery of
delayed parts.
"Moving forward, our outlook for the next few quarters remains
quite positive. We expect that the trends evident in our first
quarter results will continue. Our backlog remains strong, and we
anticipate continued, positive pricing contribution in the coming
quarters. Our conservative approach to spending will also continue
given the economic uncertainty that remains evident.
"Our longer-term outlook is a bit more cautious. We believe that
the somewhat softer order activity we experienced in the first
quarter was at least partly due to dealer concerns over higher
interest rates. U.S. net farm income is forecast to decline
this year for the first time in several years, but is expected to
remain at historically high levels. Agriculture equipment dealer
inventories continue to rise, and are approaching pre-pandemic
levels. A weakening U.S. housing market and falling prices
for industrial wood pellets could indicate a more cautious outlook
for the forestry segment.
"More positively, the outlook for our governmental customers,
who represent the majority of Company sales, remains
positive. While recent forecasts of U.S. state revenues are
mixed, it appears that state finances remain in excellent shape,
with historically elevated revenues, and healthy rainy-day
funds. U.S. municipal finances also remain in good condition
as tax receipts have risen in recent years due to asset price
inflation. The longer-term outlook for municipalities is somewhat
less bullish as asset values have begun to decline in many areas
due to fiscal tightening. However, on balance, the financial
condition of most governmental agencies appears to be quite good in
both North America and
Europe.
"Lastly, during the first quarter of 2023, we unveiled our first
fully electric and electric-hybrid versions of our flagship
products at the ConExpo show including, for example, an
all-electric excavator and street sweeper. We received
overwhelmingly positive customer feedback regarding these new, more
climate friendly products. We are encouraged that, based on this
feedback, we are on the right path with the development of our
product range. We will also be releasing our fourth annual
sustainability report in the coming days that will highlight the
consistent progress we have made across the spectrum of our
environmental, social and governance initiatives.
"I want to take this opportunity to thank all 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
end-customers who have remained loyal to our company, and to our
family of well-known equipment brands.
"In summary, given the continued strength and durability of our
markets, our large and healthy backlog, and the strength of our
balance sheet, we remain optimistic about the Company's prospects
for the remainder of 2023 and beyond."
Earnings Conference Call
The Company will host a conference call to discuss the results
on Friday, May 5, 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 1-877-407-0789 (domestic) or 1-201-689-8562 (international).
For interested individuals unable to join the call, a replay will
be available until Friday, May 12,
2023, by dialing 1-844-512-2921 (domestic) or 1-412-317-6671
(internationally), passcode 13738073.
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, May 5,
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 4,250 employees and operates 28 plants in
North America, Europe, Australia and Brazil as of March
31, 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)
|
|
|
March 31,
2023
|
March 31,
2022
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
109,320
|
|
|
$ 84,277
|
|
Accounts receivable,
net
|
|
363,525
|
|
|
296,857
|
|
Inventories
|
|
362,593
|
|
|
355,389
|
|
Other current
assets
|
|
9,978
|
|
|
12,740
|
|
Total current
assets
|
|
845,416
|
|
|
749,263
|
|
|
|
|
|
|
|
|
Rental equipment,
net
|
|
36,125
|
|
|
31,850
|
|
|
|
|
|
|
|
|
Property, plant and
equipment
|
|
158,388
|
|
|
151,684
|
|
|
|
|
|
|
|
|
Goodwill
|
|
196,533
|
|
|
198,726
|
|
Intangible
assets
|
|
167,832
|
|
|
182,305
|
|
Other non-current
assets
|
|
24,918
|
|
|
24,187
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
1,429,212
|
|
|
$
1,338,015
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Trade accounts
payable
|
|
$
101,549
|
|
|
$
114,312
|
|
Income taxes
payable
|
|
14,801
|
|
|
867
|
|
Accrued
liabilities
|
|
72,890
|
|
|
68,315
|
|
Current maturities of
long-term debt and finance lease obligations
|
|
15,008
|
|
|
15,022
|
|
Total current
liabilities
|
|
204,248
|
|
|
198,516
|
|
|
|
|
|
|
|
|
Long-term debt, net of
current maturities
|
|
356,259
|
|
|
357,834
|
|
Long-term tax
liability
|
|
3,781
|
|
|
4,416
|
|
Other long-term
liabilities
|
|
23,628
|
|
|
25,908
|
|
Deferred income
taxes
|
|
18,948
|
|
|
24,161
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
822,348
|
|
|
727,180
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
|
$
1,429,212
|
|
|
$
1,338,015
|
|
Alamo Group Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
|
3/31/2023
|
|
3/31/2022
|
Net sales:
|
|
|
|
|
Vegetation
Management
|
|
$
256,435
|
|
$
221,006
|
Industrial
Equipment
|
|
155,336
|
|
140,999
|
Total
net sales
|
|
411,771
|
|
362,005
|
|
|
|
|
|
Cost of sales
|
|
299,264
|
|
275,364
|
Gross margin
|
|
112,507
|
|
86,641
|
|
|
27.3 %
|
|
23.9 %
|
|
|
|
|
|
Selling, general and
administration expense
|
|
59,668
|
|
53,635
|
Amortization
expense
|
|
3,815
|
|
3,887
|
Income from operations
|
|
49,024
|
|
29,119
|
|
|
11.9 %
|
|
8.0 %
|
|
|
|
|
|
Interest expense
|
|
(5,940)
|
|
(2,647)
|
Interest income
|
|
383
|
|
72
|
Other income (expense)
|
|
1,002
|
|
(1,752)
|
|
|
|
|
|
Income before income taxes
|
|
44,469
|
|
24,792
|
Provision for income taxes
|
|
11,120
|
|
6,322
|
|
|
|
|
|
Net Income
|
|
$
33,349
|
|
$
18,470
|
|
|
|
|
|
Net income per common share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
2.80
|
|
$
1.56
|
|
|
|
|
|
Diluted
|
|
$
2.79
|
|
$
1.55
|
|
|
|
|
|
Average common shares:
|
|
|
|
|
Basic
|
|
11,899
|
|
11,860
|
|
|
|
|
|
Diluted
|
|
11,962
|
|
11,916
|
|
|
|
|
|
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
1
|
|
Alamo Group
Inc.
Non-GAAP Financial
Reconciliation
(in
thousands)
(Unaudited)
|
|
Impact of Currency
Translation on Net Sales by Division
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
|
|
Change due to
currency
translation
|
|
2023
|
|
2022
|
|
% change
from 2022
|
|
$
|
|
%
|
|
|
|
|
|
|
|
|
|
|
Vegetation
Management
|
$
256,435
|
|
$
221,006
|
|
16.0 %
|
|
$
(5,538)
|
|
(2.5) %
|
Industrial
Equipment
|
155,336
|
|
140,999
|
|
10.2 %
|
|
(2,002)
|
|
(1.4) %
|
Total
net sales
|
$
411,771
|
|
$
362,005
|
|
13.7 %
|
|
$
(7,540)
|
|
(2.1) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attachment
2
|
|
Alamo Group
Inc.
Non-GAAP Financial
Reconciliation
(in
thousands)
(Unaudited)
|
|
Consolidated Net
Change of Total Debt, Net of Cash
|
|
|
March 31,
2023
|
|
March 31,
2022
|
|
Net
Change
|
|
|
|
|
|
|
|
Current
maturities
|
|
$
15,008
|
|
$
15,022
|
|
|
Long-term debt,net of
current
|
|
356,259
|
|
357,834
|
|
|
Total debt
|
|
$
371,267
|
|
$
372,856
|
|
|
|
|
|
|
|
|
|
Total cash
|
|
109,320
|
|
84,277
|
|
|
Total Debt Net of
Cash
|
|
$
261,947
|
|
$
288,579
|
|
$
(26,632)
|
|
|
|
|
|
|
|
EBITDA
|
|
|
Three Months
Ended
|
|
Trailing Twelve
Months Ended
|
|
|
March 31,
2023
|
|
March 31,
2022
|
|
March 31,
2023
|
|
December 31,
2022
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
$
49,024
|
|
$
29,119
|
|
$
168,497
|
|
$
148,592
|
Depreciation
|
|
7,626
|
|
7,126
|
|
31,912
|
|
31,412
|
Amortization
|
|
3,991
|
|
4,054
|
|
15,881
|
|
15,944
|
EBITDA
|
|
$
60,641
|
|
$
40,299
|
|
$
216,290
|
|
$
195,948
|
|
|
|
|
|
|
|
|
|
View original
content:https://www.prnewswire.com/news-releases/alamo-group-announces-record-2023-first-quarter-sales-and-earnings-301816528.html
SOURCE Alamo Group Inc.