SEGUIN, Texas, March 4, 2015 /PRNewswire/ -- Alamo Group Inc.
(NYSE: ALG) today reported results for the fourth quarter and year
ended December 31, 2014.
Highlights
- Record net sales for the fourth quarter of $223.9 million
- North American Industrial Division up 62%
- North American Agricultural Division up 6%
- European Division up 14%
- Record net income for the fourth quarter of $11.4 million
- Record net sales for full year of $839.1
million
- Record net income for full year of $41.2
million
Net sales for the fourth quarter of 2014 were $223.9 million compared to net sales of
$166.7 million for the fourth quarter
of 2013, an increase of 34%. Net income for the quarter was
$11.4 million, or $1.00 per diluted share, versus net income of
$6.0 million, or $0.49 per diluted share in 2013, an increase of
104%. The results for the quarter included the effects of
recent acquisitions, primarily the units of Specialized, which
Alamo completed in May of 2014 and
to a lesser extent Kellands, a UK company acquired in April, 2014
and Fieldquip in Australia,
acquired in April, 2014. A summary outlining the effects
these acquisitions had on the Company's results is included as
Attachments 1 and 2 to this earnings release. Excluding these
acquisitions, net sales for the quarter were $173.5 million, and net income for the quarter
was $8.6 million.
Full Year Results
For full year 2014, net sales were $839.1
million versus $682.1 million
in 2013, an increase of 23%. Net income for the year was
$41.2 million, or $3.42 per diluted share, compared to $36.1 million, or $2.96 per diluted share in 2013, an increase of
14.0%. Net sales and net income for both the fourth quarter
and full year of 2014 were records for Alamo Group.
On September 25, 2014, Alamo Group
completed a repurchase and retirement of 849,690 shares of its
common stock from Capital Southwest Venture Corporation for
approximately $34.2 million in cash
which was financed under the Company's Amended and Restated
Revolving Credit Agreement.
Sales by Division
The Company's North American Industrial Division net sales in
the fourth quarter of 2014 were $126.5
million compared to $78.1
million in the fourth quarter of 2013, an increase of
62%. For the full year the Division's net sales were
$436.0 million in 2014 compared to
$297.9 million in 2013, an increase
of 46%. The acquisition of the Specialized units accounted
for the majority of the sales increase although organic growth was
also strong in the Division, adding 10% in 2014 compared to
2013.
Alamo's North American
Agricultural Division had net sales of $51.0
million in the fourth quarter of 2014 compared to
$48.1 million in the prior year, an
increase of 6%. The Division's full year net sales were
$214.3 million in 2014 versus
$219.4 million in 2013, a decrease of
2%. The decrease for the year reflected overall weaker
agricultural market conditions in North
America which were somewhat offset by the acquisitions of
Fieldquip and Superior in Australia.
Net sales in Alamo Group's European Division in the fourth
quarter of 2014 were $46.4 million,
an increase of 14% over net sales of $40.6
million achieved in 2013. The Division's full year net
sales were $188.7 million in 2014,
14% above the $164.9 million achieved
in the prior year. Despite continued weakness in the overall
European economy, the Company experienced organic growth mainly
from its U.K. operations which were further enhanced by the
acquisition of Kellands. In the fourth quarter, the
Division's results were negatively impacted by the effects of the
strengthening U.S. Dollar compared to the U.K. Pound Sterling and
the Euro.
Alamo Group's President and Chief Executive Officer,
Ron Robinson commented, "This was a
good quarter and a good year for our Company. It was also a
very busy quarter as we worked hard to bring the year to a
satisfactory close, continued with the integration of our recent
acquisitions and successfully completed a public offering of 17% of
our shares on behalf of a long term major shareholder. This
offering was a follow on to our repurchase and retirement of 7% of
the Company's outstanding shares in the third quarter from the same
shareholder, which together with the offering was substantially
their total position in Alamo.
"We were pleased with the record results for both the quarter
and the year, which were favorably impacted by our recent
acquisitions. Even without the inclusion of these
acquisitions, our results for the quarter and full year were at
record levels with our organic growth in both the quarter and the
year outpacing the overall growth in the economy. And, they
were achieved despite certain headwinds that continue to affect
some of the segments in which we operate.
"Our Industrial Division led the way as most of our product
groups in the sector benefited from strong demand for our
infrastructure maintenance equipment. This market has
benefited by improving budget conditions at many governmental
entities who are the primary end users for much of the Division's
products. Internal developments including the
continuous introduction of an array of innovative, new and improved
products contributed to this growth as well.
"While sales in our Agricultural Division were down slightly for
the year, we believe they did better than the sector in general
with nearly all equipment manufacturers having been impacted by
lower commodity prices and declining farm incomes. We
feel the broad applicability of our products across the sector from
large commercial farms down to small hobby farms is benefiting
us. In addition, our products are used across a wide array of
agriculture endeavors including row crop farming, ranching,
orchards, and specialty farms. And, while we expect overall
conditions in the ag sector will remain soft throughout 2015, we
currently think we should perform somewhat better than the market
itself for the same reasons described above.
"We were particularly pleased with the results achieved in our
European Division in 2014 as here again we outpaced the overall
market conditions which remained weak in most of the
Eurozone. Our U.K. operations led the way as they benefited
from improving local market conditions. They also did well in
exports throughout the markets they serve. These improvements
were achieved despite the effects, primarily in the fourth quarter,
of currency changes as the stronger U.S. dollar reduced the
translated value of earnings in the local currencies in which we
conduct business in Europe, mainly
the U.K. Pound Sterling and the Euro. While we feel good
about the prospects for further improvement in our European
Division in 2015, a continuing strong dollar will negatively impact
our consolidated results there. It will also have a negative
effect in other countries in which we operate such as Canada and Australia.
"As noted above, we are pleased with the progress we made
excluding acquisitions, but we are even more pleased with our
results with the acquisitions. All three acquisitions
completed in 2014 were strategic fits for Alamo, and the scale of the addition of the
units of Specialized was an important step in Alamo's development. This was the
largest acquisition we have done by any measure and its partial
year contribution to our Company was significantly accretive to our
results. The ongoing integration of Specialized is proceeding
at a good pace and we feel they will be a major contributor to our
results in 2015 and beyond.
"As a result we are optimistic about the outlook for 2015.
While we remain concerned by weakness in the agriculture sector,
uncertain economic conditions in Europe and other parts of the world, and the
impact of the strong dollar, we are confident about the long term
prospects for Alamo."
Earnings Conference Call
Alamo Group will host a conference call to discuss fourth
quarter and year end 2014 financial results on Thursday, March 5, 2015 at 11:00 a.m. Eastern (10
a.m. Central, 9:00 a.m.
Mountain and 8:00 a.m.
Pacific). Hosting the call will be members of senior
management.
Individuals wishing to participate in the conference call should
dial 888-539-3678 (domestic) or 719-325-2144 (internationally). For
interested individuals unable to join the call, a replay will be
available until Thursday, March 12,
2015 by dialing 888-203-1112 (domestic) or 719-457-0820
(internationally), passcode 5181685.
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, March 5,
2015, beginning at 11:00 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 infrastructure
maintenance, agriculture 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 and related after-market parts and services. The
Company, founded in 1969, has approximately 3,070 employees and
operates 24 plants in North
America, Europe and
Australia as of December 31, 2014. 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.
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: 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.
(Tables
Follow)
|
Alamo Group Inc.
and Subsidiaries
|
Interim Condensed
Consolidated Balance Sheets
|
(in
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
|
December
31,
|
|
|
2014
|
|
|
2013
|
ASSETS
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
39,533
|
|
$
|
63,960
|
Accounts receivable,
net
|
|
175,008
|
|
|
151,396
|
Inventories
|
|
166,088
|
|
|
109,104
|
Other current
assets
|
|
12,673
|
|
|
12,493
|
Total current assets
|
|
393,302
|
|
|
336,953
|
|
|
|
|
|
|
Rental
equipment, net
|
|
33,631
|
|
|
-
|
|
|
|
|
|
|
Property,
plant and equipment, net
|
|
71,170
|
|
|
61,904
|
|
|
|
|
|
|
Goodwill
|
|
72,407
|
|
|
32,073
|
Intangible
assets
|
|
56,984
|
|
|
5,500
|
Other
non-current assets
|
|
2,108
|
|
|
2,046
|
|
|
|
|
|
|
Total assets
|
$
|
629,602
|
|
$
|
438,476
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS ' EQUITY
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Trade accounts
payable
|
$
|
47,741
|
|
$
|
45,593
|
Income taxes
payable
|
|
52
|
|
|
1,126
|
Accrued
liabilities
|
|
41,002
|
|
|
33,482
|
Current maturities of
long-term debt and capital lease obligations
|
|
551
|
|
|
420
|
Other current
liabilities
|
|
21
|
|
|
-
|
Total current liabilities
|
|
89,367
|
|
|
80,621
|
|
|
|
|
|
|
Long-term
debt, net of current maturities
|
|
190,024
|
|
|
8
|
Deferred
pension liability
|
|
5,714
|
|
|
2,538
|
Other
long-term liabilities
|
|
5,656
|
|
|
3,494
|
Deferred
income taxes
|
|
1,171
|
|
|
1,350
|
|
|
|
|
|
|
Total
stockholders' equity
|
|
337,670
|
|
|
350,465
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
$
|
629,602
|
|
$
|
438,476
|
|
|
|
|
|
|
Alamo Group Inc.
and Subsidiaries
|
Condensed
Consolidated Statements of Income
|
(in thousands,
except per share amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter
Ended
|
|
Year
Ended
|
|
|
|
12/31/14
|
|
12/31/13
|
|
12/31/14
|
|
12/31/13
|
North
American
|
|
|
|
|
|
|
|
|
Industrial
|
|
$126,475
|
|
$78,075
|
|
$436,018
|
|
$297,857
|
Agricultural
|
|
51,011
|
|
48,108
|
|
214,326
|
|
219,354
|
European
|
|
46,425
|
|
40,559
|
|
188,711
|
|
164,879
|
Total Sales
|
|
223,911
|
|
166,742
|
|
839,055
|
|
682,090
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
175,539
|
|
130,391
|
|
649,827
|
|
523,580
|
Gross
margin
|
|
48,372
|
|
36,351
|
|
189,228
|
|
158,510
|
|
|
|
21.6%
|
|
21.8%
|
|
22.6%
|
|
23.2%
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses
|
|
32,661
|
|
28,240
|
|
126,564
|
|
107,773
|
Goodwill
Impairment
|
|
-
|
|
-
|
|
-
|
|
-
|
Income from
Operations
|
|
15,711
|
|
8,111
|
|
62,664
|
|
50,737
|
|
|
|
7.0%
|
|
4.9%
|
|
7.5%
|
|
7.4%
|
|
|
|
|
|
|
|
|
|
|
Interest
Expense
|
|
(1,257)
|
|
(264)
|
|
(4,037)
|
|
(1,161)
|
Interest
Income
|
|
74
|
|
57
|
|
211
|
|
186
|
Other Income
(Expense)
|
|
719
|
|
436
|
|
1,767
|
|
1,626
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
15,247
|
|
8,340
|
|
60,605
|
|
51,388
|
Provision for income
taxes
|
|
3,896
|
|
2,316
|
|
19,454
|
|
15,294
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
$11,351
|
|
$6,024
|
|
$41,151
|
|
$36,094
|
|
|
|
|
|
|
|
|
|
|
Net income per common
share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$1.01
|
|
$0.50
|
|
$3.47
|
|
$3.00
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
$1.00
|
|
$0.49
|
|
$3.42
|
|
$2.96
|
|
|
|
|
|
|
|
|
|
|
Average common
shares:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
11,268
|
|
12,080
|
|
11,875
|
|
12,050
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
11,403
|
|
12,262
|
|
12,039
|
|
12,212
|
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 positions, 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.
In this earnings release, Alamo Group reports each of net sales,
operating income and net income excluding the impact of
acquisitions which are non-GAAP financial measures. The
Company considers this information useful to investors to allow
better comparability of period-to-period operating
performance. Attachment 1 to this earnings release contains a
revenue reconciliation of these non-GAAP financial measures to the
comparable GAAP financial measure. Attachment 2 discloses
Adjusted Operating Income, Adjusted Net Income, Adjusted Diluted
EPS each adjusted to exclude the impact of inventory step up charge
and transaction costs connected to the acquisitions and additional
stock expense related to the accelerated vesting options to
retirement eligible recipients, all of which are non-GAAP financial
measures. The Company believes that providing Operating
Income and Net Income exclusive of these adjustments, is useful to
investors to allow better comparability of period-to-period
operating preference. Attachment 2 sets forth a
reconciliation of each such non-GAAP financial measure to its most
directly comparable GAAP measure.
Attachment
1
|
|
|
|
|
|
|
|
|
|
Alamo Group
Inc.
|
Non-GAAP Financial
Reconciliation
|
(in thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
Net Sales
(Consolidated) - GAAP
|
|
$ 223,911
|
|
$ 166,742
|
|
$ 839,055
|
|
$ 682,090
|
(less:
net sales attributable to acquisition)
|
|
(50,402)
|
|
(621)
|
|
(120,536)
|
|
(845)
|
Net Sales less
acquisitions (Consolidated) - non-GAAP
|
|
$ 173,509
|
|
$ 166,121
|
|
$ 718,519
|
|
$ 681,245
|
|
|
|
|
|
|
|
|
|
Net Sales (N.A.
Industrial Division) - GAAP
|
|
$ 126,475
|
|
$ 78,075
|
|
$ 436,018
|
|
$ 297,857
|
(less:
net sales attributable to acquisition)
|
|
(46,294)
|
|
-
|
|
(107,370)
|
|
-
|
Net Sales less
acquisitions (N.A. Industrial Division) - non-GAAP
|
|
$ 80,181
|
|
$ 78,075
|
|
$ 328,648
|
|
$ 297,857
|
|
|
|
|
|
|
|
|
|
Net Sales (N.A.
Agricultural Division) - GAAP
|
|
$ 51,011
|
|
$ 48,108
|
|
$ 214,326
|
|
$ 219,354
|
(less:
net sales attributable to acquisition)
|
|
(1,661)
|
|
(621)
|
|
(4,965)
|
|
(845)
|
Net Sales less
acquisitions (N.A. Agricultural Division) - non-GAAP
|
|
$ 49,350
|
|
$ 47,487
|
|
$ 209,361
|
|
$ 218,509
|
|
|
|
|
|
|
|
|
|
Net Sales (N.A.
European Division) - GAAP
|
|
$ 46,425
|
|
$ 40,559
|
|
$ 188,711
|
|
$ 164,879
|
(less:
net sales attributable to acquisition)
|
|
(2,447)
|
|
-
|
|
(8,201)
|
|
-
|
Net Sales less
acquisitions (N.A. European Division) - non-GAAP
|
|
$ 43,978
|
|
$ 40,559
|
|
$ 180,510
|
|
$ 164,879
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
(Consolidated) - GAAP
|
|
$ 15,711
|
|
$ 8,111
|
|
$ 62,664
|
|
$ 50,737
|
(less:
operating income attributable to acquisition)
|
|
(3,643)
|
|
39
|
|
(9,841)
|
|
46
|
Operating Income less
acquisitions (Consolidated) - non-GAAP
|
|
$ 12,068
|
|
$ 8,150
|
|
$ 52,823
|
|
$ 50,783
|
|
|
|
|
|
|
|
|
|
Net Income
(Consolidated) - GAAP
|
|
$ 11,351
|
|
$ 6,024
|
|
$ 41,151
|
|
$ 36,094
|
(less:
net income attributable to acquisition)
|
|
(2,729)
|
|
25
|
|
(4,347)
|
|
34
|
Net Income less
acquisitions (Consolidated) - non-GAAP
|
|
$ 8,622
|
|
$ 6,049
|
|
$ 36,804
|
|
$ 36,128
|
Attachment
2
|
|
|
|
|
|
|
|
|
|
Alamo Group
Inc.
|
Non-GAAP Financial
Reconciliation
|
(in thousands,
except per share numbers)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income -
GAAP
|
|
$ 15,711
|
|
$ 8,111
|
|
$ 62,664
|
|
$ 50,737
|
(add: inventory
step charge)
|
|
1,439
|
|
-
|
|
2,578
|
|
-
|
(add:
transaction costs relating to acquisitions)
|
|
240
|
|
-
|
|
2,079
|
|
-
|
(add: stock
option expense)
|
|
-
|
|
-
|
|
1,015
|
|
-
|
Adjusted Operating Income - non-GAAP
|
|
$ 17,390
|
|
$ 8,111
|
|
$ 68,336
|
|
$ 50,737
|
|
|
|
|
|
|
|
|
|
Net Income -
GAAP
|
|
$ 11,351
|
|
$ 6,024
|
|
$ 41,151
|
|
$ 36,094
|
Adjustments
(after tax):
|
|
|
|
|
|
|
|
|
(add: inventory
step charge)
|
|
923
|
|
-
|
|
1,654
|
|
-
|
(add:
transaction costs relating to acquisitions)
|
|
154
|
|
-
|
|
1,334
|
|
-
|
(add: stock
option expense)
|
|
-
|
|
-
|
|
651
|
|
-
|
Adjusted Net Income - non-GAAP
|
|
$ 12,428
|
|
$ 6,024
|
|
$ 44,791
|
|
$ 36,094
|
|
|
|
|
|
|
|
|
|
Diluted EPS -
GAAP
|
|
$ 1.00
|
|
$ 0.49
|
|
$ 3.42
|
|
$ 2.96
|
(add: Inventory
step charge)
|
|
0.08
|
|
-
|
|
0.14
|
|
-
|
(add:
Transaction Costs relating to acquisitions)
|
|
0.01
|
|
-
|
|
0.11
|
|
-
|
(add: stock
option expense)
|
|
-
|
|
-
|
|
0.05
|
|
-
|
Adjusted Diluted
EPS - non-GAAP
|
|
$ 1.09
|
|
$ 0.49
|
|
$ 3.72
|
|
$ 2.96
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/alamo-group-announces-2014-fourth-quarter-and-year-end-results-300045808.html
SOURCE Alamo Group Inc.