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Alamo Group Announces Record 2013 First Quarter Results

  Alamo Group Announces Record 2013 First Quarter Results

Business Wire

SEGUIN, Texas -- May 1, 2013

Alamo Group Inc. (NYSE: ALG) today reported results for the first quarter
ended March 31, 2013.

Net sales for the first quarter were $158.4 million compared to net sales of
$155.9 million for the first quarter of 2012, an increase of 2%. Net income
for the quarter was $6.9 million, or $0.57 per diluted share, compared to net
income of $6.8 million, or $0.56 per diluted share, for the first quarter of
2012, an increase of 2%. The first quarter 2013 net sales and net income
levels were both records for Alamo during a first quarter as the Company
experienced steady demand for its products.

Net sales in the North American Industrial Division for the first quarter of
2013 were $69.3 million, an increase of 7% compared to net sales of $64.7
million for the first quarter of 2012. The Division benefited from stable
demand from governmental end users and was led by increases in sales for
mowers, street sweepers and vacuum trucks.

Alamo’s North American Agricultural Division recorded net sales of $49.6
million in the first quarter of 2013, a 3% increase compared to net sales of
$48.3 million in the prior year’s first quarter. The results reflected modest
increases in demand for its agricultural products in the U.S., though the
growth rates in this market are moderating.

The Company’s European Division net sales in the first quarter of 2013 were
$39.5 million, versus $42.9 million in the first quarter of 2012, a decrease
of 8%. The Division’s sales continued to be affected by general weakness in
the European economy and were further impacted by adverse weather conditions.

Alamo Group’s President and Chief Executive Officer, Ron Robinson, commented,
“We are pleased to start 2013 on a positive note, particularly given the
slower growth we are seeing in some of our U.S. markets and the continued
weakness in the overall European economy. During the quarter, our margins were
impacted by lower sales of higher margin spare parts due to the prolonged
winter conditions that affected large areas of the U.S. and resulted in a
later start of spring cleanup along roadways and a slower start to the
agricultural season. However, much of this effect was mitigated as we
continued to benefit from our operational initiatives, which have led to
further improvements in our asset utilization and manufacturing efficiencies.”

“Once again, our Industrial Division drove our performance with solid
year-over-year growth. While our snow removal products had a slow start to the
year, the majority of this Division’s products exhibited steady-to-improving
results. The increases in street sweeper and vacuum truck product lines were
particularly gratifying, as well as the continued strong performance in our
mower lines. The Division also saw backlogs improve during the quarter, which
should bode well as we progress through the rest of the year.”

“Our Agricultural Division experienced steady performance as well, though the
modest increase in sales reflects the slowing growth of the agricultural
market in North America as commodity prices in general have retreated somewhat
from the strong levels of the past few years. Similar to our Industrial
Division, improving backlogs during the quarter should benefit this Division
throughout 2013.”

“In Europe, our operations performed well considering weak economic conditions
that continued to impact all of our markets. These difficult conditions are
expected to linger in the near-term as governmental budgets remain tight,
agricultural markets feel the effects of lower commodity prices, and the
general economy is constrained due to the region’s overall economic
uncertainty.”

Mr. Robinson concluded, “While we continue to operate in a challenging
economic environment, we remain positive about the prospects for Alamo Group.
The record results in the first quarter, a stronger backlog and relatively
steady demand for our type of equipment, gives us confidence as we move
forward in 2013.”

Alamo Group is a leader in the design, manufacture, distribution and service
of high quality equipment for right-of-way maintenance and agriculture. Our
products include truck and tractor mounted mowing and other vegetation
maintenance equipment, street sweepers, snow removal equipment, pothole
patchers, excavators, vacuum trucks, agricultural implements and related
after-market parts and services. The Company, founded in 1969, had
approximately 2,500 employees and operates eighteen plants in North America
and Europe as of March 31, 2013. The corporate offices of Alamo Group Inc. are
located in Seguin, Texas and the headquarters for the Company’s European
operations are located in Salford Priors, England.

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: market demand,
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. This release may contain non-GAAP financial
measures. These measures, if included, are to help facilitate meaningful
comparisons of our results to those in prior periods and future periods and to
allow a better evaluation of our operating performance, in management’s
opinion. Our reference to any non-GAAP measures should not be considered as a
substitute for results that are presented in a manner consistent with GAAP.

                               (Tables Follow)

                                             
Alamo Group Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
(Unaudited)
                                                     
                                                     
                                   First Quarter Ended
                                    3/31/13         3/31/12 
North American
Industrial                         $ 69,334          $ 64,732
Agricultural                         49,636            48,271
European                            39,459          42,908  
Total Sales                          158,429           155,911
                                                     
Cost of sales                       123,517         120,673 
Gross margin                         34,912            35,238
                                     22.0    %         22.6    %
                                                     
Operating Expenses                  25,173          24,245  
Income from Operations               9,739             10,993
                                     6.1     %         7.1     %
                                                     
Interest Expense                     (242    )         (443    )
Interest Income                      44                55
Other Income (Expense)              289             (574    )
                                                     
Income before income taxes           9,830             10,031
Provision for income taxes          2,880           3,246   
                                                     
Net Income                         $ 6,950          $ 6,785   
                                                     
Net income per common share:
            Basic                  $ 0.58           $ 0.57    
                                                     
            Diluted                $ 0.57           $ 0.56    
                                                     
Average common shares:
            Basic                   12,006          11,873  
                                                     
            Diluted                 12,158          12,027  
                                                     


Alamo Group Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
                                                             
                                                                   
                                                   March 31,       March 31,
                                                   2013            2012
ASSETS
Current assets:
Cash and cash equivalents                        $ 33,491      $   37,858
Accounts receivable, net                           169,678         170,391
Inventories                                        118,224         128,212
Other current assets                               9,189           9,304
Total current assets                               330,582         345,765
                                                                   
Property, plant and equipment, net                 56,722          62,121
                                                                   
Goodwill                                           30,870          32,365
Intangible assets                                  5,500           5,500
Other non-current assets                           3,566           6,041
                                                                   
Total assets                                     $ 427,240     $   451,792
                                                                   
LIABILITIES AND STOCKHOLDERS ' EQUITY
Current liabilities:
Trade accounts payable                           $ 55,546      $   54,353
Income taxes payable                               2,935           3,575
Accrued liabilities                                30,941          28,848
Current maturities of long-term debt               571             3,272
Other current liabilities                          246             649
Total current liabilities                          90,239          90,697
                                                                   
Long-term debt, net of current maturities          10,049          53,512
Deferred pension liability                         9,448           10,487
Other long-term liabilities                        3,693           4,383
Deferred income taxes                              2,261           4,924
                                                                   
Total stockholders' equity                         311,550         287,789
                                                                   
Total liabilities and stockholders' equity       $ 427,240     $   451,792
                                                                   

Contact:

Alamo Group Inc.
Robert H. George
Vice President
830-372-9621
or
FTI Consulting Inc.
Katie Pyra/Matt Steinberg
212-850-5600
 
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