SEGUIN,
Texas, Aug. 3, 2022 /PRNewswire/ -- Alamo Group
Inc. (NYSE: ALG) today reported results for the second quarter
ended June 30, 2022.
Highlights for the Quarter
- Net sales of $396.2 million, up
14.0%
-
- Vegetation Management net sales of $255.0 million, up 18.8%
- Industrial Equipment net sales of $141.2
million, up 6.3%
- Income from operations of $40.9
million, up 21.8%
- Net income of $28.5 million, or
$2.39 per diluted share, up 9.4%
- Trailing twelve-month EBITDA of $172.9
million, up 6.7% from full year 2021(1)
- Backlog of $894.0 million, up
77.5% compared to prior year second quarter-end
Results for the Quarter
Second quarter 2022 net sales were $396.2
million compared to $347.6
million in the second quarter of 2021, an increase of
14.0%. Gross margin improved in the quarter versus the second
quarter of 2021 by $11.6 million or
13.1%. Second quarter net income improved 9.4% to
$28.5 million, or $2.39 per diluted share, compared to net income
of $26.0 million, or $2.19 per diluted share in the second quarter of
2021. The Company's backlog at the end of the second quarter
of 2022 was $894.0 million, an
increase of $390.5 million, or 77.5%,
from the backlog at the end of the second quarter of 2021, and up
11.6% from the end of calendar year 2021.
The positive results reported for the quarter were achieved
through a combination of effective price management, improved
manufacturing efficiencies and disciplined control of operating
expenses. These results were achieved despite persistent
headwinds including material cost inflation, elevated
transportation costs, supply chain disruptions and skilled labor
shortages. They were also achieved net of the negative impact
of currency exchange rates on our consolidated financial
results.
Results by Division
Vegetation Management
The Vegetation Management Division had a strong second quarter
of 2022 as markets remained solid compared to the second quarter of
2021. The Division's second quarter net sales were
$255.0 million, up 18.8% compared to
$214.7 million for the same period in
2021. For the first six months of 2022, net sales in this Division
were $476.0 million, compared to
$398.5 million for the first six
months of 2021, up 19.4%. The increase in net sales was
driven by strong retail demand for agricultural, forestry, tree
care, and governmental mowing products in both North America and Europe.
The Division's income from operations for the second quarter
2022 was $32.8 million, up 44.7%
compared to $22.7 million for the
second quarter of 2021. For the first six months of 2022,
income from operations was $51.1
million versus $39.4 million
for the first six months of 2021, an increase of 29.7%.
Strong results in the United
Kingdom, France,
Brazil and Australia also contributed to this division's
outstanding performance during the quarter. The Division
benefited from strong sales, better pricing, a favorable product
mix and was able to effectively manage costs and expenses in spite
of the impact of ongoing supply chain issues, higher material and
inbound freight costs and related surcharges.
Industrial Equipment
The Industrial Equipment Division's second quarter 2022 net
sales were $141.2 million, up 6.3%
compared to $132.9 million during the
same period in 2021. The increase was primarily attributable
to pricing actions that drove higher sales of its excavator and
vacuum truck products and, to a lesser extent, other product lines
within the Division. Delays in deliveries of medium duty
truck chassis and other industrial components, negatively impacted
the Division during the second quarter of 2022.
For the first six months of 2022 net sales were $282.2 million compared to $260.2 million for the first six months of 2021,
an 8.5% increase. Strong net sales of excavators, vacuum
trucks, street sweepers and, to a lesser, extent snow removal
equipment were the primary reasons for the increase.
The Division's income from operations for the second quarter of
2022 was $8.1 million, down 25.7%,
compared to $10.9 million, for the
second quarter of 2021. For the first six months of 2022
income from operations was $18.9
million compared to $19.6
million for the first six months of 2021, a decrease of
3.6%. The Division was negatively impacted during the second
quarter and first six months of 2022 by supply chain disruptions,
constrained chassis deliveries and higher material and inbound
freight costs.
Comments on Results
Jeff Leonard, Alamo Group's
President and Chief Executive Officer, commented, "We are pleased
to report that, in the second quarter, Alamo Group achieved the
highest quarterly sales and earnings in the Company's
history. While the second quarter is normally seasonally
strong for the Company, both sales and earnings for the quarter
comfortably exceeded previous records. It is especially
satisfying that our teams were able to produce robust results in a
business environment that certainly remains turbulent and
challenging.
"Modest improvements in supply chain performance helped our
teams increase customer shipments and improve production
efficiencies during the quarter. The improvement in
efficiency, combined with better pricing, supported gross margin
performance despite persistent cost inflation pressures. Good
cost discipline was evident across the Company during the quarter
and helped us drive double-digit Income from Operations growth for
the first time since the third quarter of 2020.
"Orders received during the quarter declined modestly compared
to the second quarter of 2021, however overall, our markets
continued to show significant strength. The decline in order
bookings during the quarter was primarily the result of gradually
softening demand in the North American agriculture market.
This was partially offset by a nice increase in Industrial
Equipment orders led by strong pre-season demand for turn-key,
municipal snowplows. Consolidated backlog declined slightly
compared to the end of the first quarter but remained significantly
higher than it was at the end of the second quarter of 2021.
"Looking ahead to the second half of the year, we remain
encouraged regarding the Company's sales and earnings
prospects. Truck chassis delivery reliability improved in the
second quarter, and we are optimistic that gradual improvement in
chassis supply will support improved sales and profitability in our
Industrial Equipment Division during the third and fourth quarters
of this year. We anticipate that the modest improvement in
overall supply chain performance evident in the second quarter will
continue for the next few months, although shortages of certain
components are expected to extend into next year. With an
improving supply chain situation, our inventory levels should also
naturally decline. Most importantly, our backlog remains
close to the historic high set at the end of the first quarter of
2022 and the margin in backlog is increasingly healthy. This
gives us confidence that the Company will continue to perform well
for the remainder of 2022 and at least through the early months of
2023."
Earnings Conference Call
The Company will host a conference call to discuss the results
on Thursday, August 4, 2022 at
1:30 p.m. ET. Hosting the call will
be members of senior management.
Individuals wishing to participate in the conference call should
dial 888-394-8218 (domestic) or 323-794-2588 (international). For
interested individuals unable to join the call, a replay will be
available until Thursday, August 11,
2022, by dialing 888-203-1112 (domestic) or 719-457-0820
(internationally), passcode 4806226.
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 Thursday, August 4,
2022, beginning at 1:30 p.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 4,275 employees and operates 29 plants in
North America, Europe, Australia and Brazil as of June
30, 2022. 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: overall
market demand, continuing impacts from the COVID-19 pandemic
including more significant supply chain disruptions, reductions in
customer demand, sales and profitability declines, operational
disruptions, full or partial facility closures, and other similar
impacts, geopolitical risks, including effects of the war in
Ukraine, inflation, 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)
|
|
|
June 30,
2022
|
June 30,
2021
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$ 75,894
|
|
|
$ 85,630
|
|
Accounts receivable,
net
|
|
306,967
|
|
|
253,179
|
|
Inventories
|
|
352,915
|
|
|
277,070
|
|
Other current
assets
|
|
12,527
|
|
|
19,171
|
|
Total current
assets
|
|
748,303
|
|
|
635,050
|
|
|
|
|
|
|
|
|
Rental equipment,
net
|
|
31,168
|
|
|
38,619
|
|
|
|
|
|
|
|
|
Property, plant and
equipment
|
|
153,907
|
|
|
149,380
|
|
|
|
|
|
|
|
|
Goodwill
|
|
196,068
|
|
|
194,936
|
|
Intangible
assets
|
|
178,781
|
|
|
185,581
|
|
Other non-current
assets
|
|
24,149
|
|
|
17,790
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
1,332,376
|
|
|
$
1,221,356
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Trade accounts
payable
|
|
$
107,003
|
|
|
$
104,715
|
|
Income taxes
payable
|
|
1,498
|
|
|
2,724
|
|
Accrued
liabilities
|
|
66,100
|
|
|
62,107
|
|
Current maturities of
long-term debt and finance lease obligations
|
|
15,015
|
|
|
15,069
|
|
Total current
liabilities
|
|
189,616
|
|
|
184,615
|
|
|
|
|
|
|
|
|
Long-term debt, net of
current maturities
|
|
356,149
|
|
|
299,910
|
|
Long-term tax
liability
|
|
2,444
|
|
|
4,408
|
|
Other long-term
liabilities
|
|
24,642
|
|
|
28,140
|
|
Deferred income
taxes
|
|
23,083
|
|
|
23,042
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
736,442
|
|
|
681,241
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
|
$
1,332,376
|
|
|
$
1,221,356
|
|
Alamo Group Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
6/30/2022
|
|
6/30/2021
|
|
6/30/2022
|
|
6/30/2021
|
Net sales:
|
|
|
|
|
|
|
|
|
Vegetation
Management
|
|
$
255,003
|
|
$
214,665
|
|
$
476,009
|
|
$
398,549
|
Industrial
Equipment
|
|
141,211
|
|
132,885
|
|
282,210
|
|
260,190
|
Total
net sales
|
|
396,214
|
|
347,550
|
|
758,219
|
|
658,739
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
296,497
|
|
259,410
|
|
571,861
|
|
494,173
|
Gross margin
|
|
99,717
|
|
88,140
|
|
186,358
|
|
164,566
|
|
|
25.2 %
|
|
25.4 %
|
|
24.6 %
|
|
25.0 %
|
|
|
|
|
|
|
|
|
|
Selling, general and
administration expense
|
|
55,009
|
|
50,887
|
|
108,644
|
|
98,217
|
Amortization
expense
|
|
3,792
|
|
3,663
|
|
7,679
|
|
7,321
|
Income from operations
|
|
40,916
|
|
33,590
|
|
70,035
|
|
59,028
|
|
|
10.3 %
|
|
9.7 %
|
|
9.2 %
|
|
9.0 %
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
(3,189)
|
|
(2,854)
|
|
(5,836)
|
|
(5,467)
|
Interest income
|
|
57
|
|
293
|
|
129
|
|
581
|
Other income (expense)
|
|
(134)
|
|
3,253
|
|
(1,886)
|
|
2,623
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
37,650
|
|
34,282
|
|
62,442
|
|
56,765
|
Provision for income taxes
|
|
9,178
|
|
8,245
|
|
15,500
|
|
13,266
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
$
28,472
|
|
$
26,037
|
|
$ 46,942
|
|
$ 43,499
|
|
|
|
|
|
|
|
|
|
Net income per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
2.39
|
|
$
2.20
|
|
$
3.95
|
|
$
3.68
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
$
2.39
|
|
$
2.19
|
|
$
3.94
|
|
$
3.66
|
|
|
|
|
|
|
|
|
|
Average common shares:
|
|
|
|
|
|
|
|
|
Basic
|
|
11,880
|
|
11,842
|
|
11,870
|
|
11,831
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
11,938
|
|
11,902
|
|
11,927
|
|
11,892
|
|
|
|
|
|
|
|
|
|
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 Operating Income, Adjusted Net Income and
Adjusted Diluted EPS, related to the impact of non-recurring
items, of which are non-GAAP financial measures. Attachment 2
discloses a non-GAAP financial presentation related to the impact
of currency translation on net sales by division. Attachment 3
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,
except per share numbers)
(Unaudited)
|
|
Impact of
Non-recurring Items
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
|
Operating Income -
GAAP
|
|
$
40,916
|
|
$
33,590
|
|
$
70,035
|
|
$
59,028
|
|
|
|
|
|
|
|
|
|
Net Income -
GAAP
|
|
$
28,472
|
|
$
26,037
|
|
$
46,942
|
|
$
43,499
|
(less: gain on sales
of property)
|
|
—
|
|
(2,635)
|
|
—
|
|
(2,635)
|
(add: excise
tax)
|
|
—
|
|
—
|
|
983
|
|
—
|
Adjusted Net Income
- non-GAAP
|
|
$
28,472
|
|
$
23,402
|
|
$
47,925
|
|
$
40,864
|
|
|
|
|
|
|
|
|
|
Diluted EPS -
GAAP
|
|
$
2.39
|
|
$
2.19
|
|
$
3.94
|
|
$
3.66
|
(less: gain on sales
of property)
|
|
—
|
|
(0.22)
|
|
—
|
|
(0.22)
|
(add: excise
tax)
|
|
—
|
|
—
|
|
0.08
|
|
—
|
Adjusted Diluted EPS - non-GAAP
|
|
$
2.39
|
|
$
1.97
|
|
$
4.02
|
|
$
3.44
|
Attachment
2
|
|
Alamo Group
Inc.
Non-GAAP Financial
Reconciliation
(in
thousands)
(Unaudited)
|
|
Impact of Currency
Translation on Net Sales by Division
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June
30,
|
|
|
|
Change due to
currency
translation
|
|
2022
|
|
2021
|
|
% change
from 2021
|
|
$
|
|
%
|
|
|
|
|
|
|
|
|
|
|
Vegetation
Management
|
$
255,003
|
|
$
214,665
|
|
18.8 %
|
|
$
(5,774)
|
|
(2.7) %
|
Industrial
Equipment
|
141,211
|
|
132,885
|
|
6.3 %
|
|
(2,519)
|
|
(1.9) %
|
Total
net sales
|
$
396,214
|
|
$
347,550
|
|
14.0 %
|
|
$
(8,293)
|
|
(2.4) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
June
30,
|
|
|
|
Change due to
currency
translation
|
|
2022
|
|
2021
|
|
% change
from 2021
|
|
$
|
|
%
|
|
|
|
|
|
|
|
|
|
|
Vegetation
Management
|
$
476,009
|
|
$
398,549
|
|
19.4 %
|
|
$
(7,383)
|
|
(1.9) %
|
Industrial
Equipment
|
282,210
|
|
260,190
|
|
8.5 %
|
|
(3,530)
|
|
(1.4) %
|
Total
net sales
|
$
758,219
|
|
$
658,739
|
|
15.1 %
|
|
$
(10,913)
|
|
(1.7) %
|
|
|
|
|
|
|
|
|
|
|
Attachment
3
|
|
Alamo Group
Inc.
Non-GAAP Financial
Reconciliation
(in
thousands)
(Unaudited)
|
|
Consolidated Net
Change of Total Debt, Net of Cash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2022
|
|
June 30,
2021
|
|
Net
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
maturities
|
|
|
|
|
|
|
|
|
|
|
|
|
$
15,015
|
|
$
15,069
|
|
|
Long-term debt,net of
current
|
|
|
|
|
|
|
|
|
|
|
|
|
356,149
|
|
299,910
|
|
|
Total debt
|
|
|
|
|
|
|
|
|
|
|
|
|
$
371,164
|
|
$
314,979
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cash
|
|
|
|
|
|
|
|
|
|
|
|
|
75,894
|
|
85,630
|
|
|
Total Debt Net of
Cash
|
|
|
|
|
|
|
|
|
|
|
|
|
$
295,270
|
|
$
229,349
|
|
$
65,921
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
|
Six Months
Ended
|
|
Trailing Twelve
Months Ended
|
|
|
June 30,
2022
|
|
June 30,
2021
|
|
June 30,
2022
|
|
December 31,
2021
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
$
70,035
|
|
$
59,028
|
|
$
127,945
|
|
$
116,938
|
Depreciation
|
|
14,413
|
|
14,964
|
|
29,291
|
|
29,842
|
Amortization
|
|
8,013
|
|
7,655
|
|
15,662
|
|
15,304
|
EBITDA
|
|
$
92,461
|
|
$
81,647
|
|
$
172,898
|
|
$
162,084
|
|
|
|
|
|
|
|
|
|
View original
content:https://www.prnewswire.com/news-releases/alamo-group-announces-record-2022-second-quarter-sales-and-earnings-301599394.html
SOURCE Alamo Group Inc.