SEGUIN, Texas, Aug. 2, 2017 /PRNewswire/ -- Alamo Group
Inc. (NYSE: ALG) today reported results for the second quarter
ended June 30, 2017.
Highlights for the Quarter
- Record net income for a second quarter of $12.3 million, up 16.6%
- Net sales for the quarter of $213.3
million, up 0.8%
-
- Industrial Division net sales $117.3
million, up 0.2%
- Agricultural Division net sales $54.2
million, up 4.6%
- European Division net sales $41.7
million, down 1.8%
- Record net income for the first six months of $24.5 million, up 27.4%
- Record net sales for the first six months of $428.7 million, up 1.5%
- Backlog at $157.2 million, up
20.7% versus previous year's second quarter
Alamo Group's net sales for the second quarter of 2017 were
$213.3 million compared to
$211.5 million in the second quarter
of 2016, an increase of 0.8%. Net income for the quarter was
$12.3 million, or $1.05 per diluted share, compared to net income
of $10.6 million, or $0.92 per diluted share, in 2016. This is
an increase of 16.6% in net income and 14.1% in earnings per
share.
For the first six months of 2017 net sales were $428.7 million compared to $422.5 million in the previous year, an increase
of 1.5%. Net income for the first half of 2017 was
$24.5 million, or $2.10 per diluted share, versus $19.2 million, or $1.67 per diluted share for the same period in
2016. This is an increase of 27.4% in net income and 25.7% in
earnings per share. Net income and diluted earnings per share
for both the second quarter and first six months of 2017 were at
record levels for Alamo Group.
Sales by Division
Alamo Group's Industrial Division net sales in the second
quarter of 2017 were $117.3 million
compared to $117.1 million in the
second quarter of 2016, an increase of 0.2%. Sales in the
division were flat in the second quarter as decreases in snow
removal products offset increases in sweeper, vacuum truck and
excavator products. For the first six months of 2017 net
sales in the Division were $243.2
million versus $240.4 million
in 2016, an increase of 1.1%.
The Company's Agricultural Division recorded net sales of
$54.2 million in the second quarter
of 2017, an increase of 4.6% compared with net sales of
$51.8 million for the same period in
the prior year. We believe this increase reflects signs of
modest improvement in certain sectors of the agricultural
market. For the first six months of 2017 net sales in the
Agricultural Division were $106.0
million compared to net sales of $100.5 million in the first half of the previous
year, an increase of 5.5%.
Alamo Group's European Division net sales in the second quarter
of 2017 were $41.7 million, a
decrease of 1.8% compared to net sales of $42.5 million in the comparable period of
2016. While net sales were down in U.S. dollars, in local
currency they were up 5.0% as the European market is starting to
show some indications of a return to growth. For the first
six months of 2017 net sales in the Division were $79.5 million compared to $81.5 million in the first six months of 2016, a
decrease of 2.5% in U.S. dollars, though up 5.1% in local
currency.(1)
Ron Robinson, Alamo Group's
President and Chief Executive Officer, commented, "We continue to
be pleased with the progress we are making in 2017. Margins are
steadily improving and earnings growth is strong despite very
moderate sales growth. We are particularly pleased that all
three of our operating divisions contributed to the earnings growth
we have experienced in the first six months of 2017.
"Alamo's Industrial Division
continues to be a solid performer, even though sales were
essentially flat in the second quarter due to weakness in sales of
our snow removal products which offset increases in other Division
products, most notably sweepers, excavators and even our vacuum
truck products, which have been particularly weak for the last
year, showed improvement.
"Our Agricultural Division had sales growth of 4.6% and
continued strong margin performance. Plus, we feel we are
finally starting to see some improvement in parts of the
agricultural market. Though these indications are modest and
spotty, we feel this bodes well for the Division's results for the
rest of the year and into 2018.
"Our European Division is also seeing signs of improved market
activity. While our sales in US dollars were down slightly in
the second quarter, they were up 5.0% in local currency. This
was heavily affected by the declines in the value of the British
pound and Euro following the Brexit vote at the end of the second
quarter in 2016. Both of these currencies are now trading
above the lows they were a year ago. This should make the
comparables for our results more favorable in the second half of
2017. With better comparables and slight market improvement
we believe the outlook for our European Division is looking up for
the remainder of 2017. Significant improvements in European
bookings and backlog are also adding to our
confidence.(1)
"For Alamo in total, while
market conditions remain soft, we are encouraged that there are
some signs of improvement and we feel with any top line growth we
can continue to exhibit reasonable margin improvement and earnings
growth, though probably not at the pace we have experienced in the
first half of 2017. Certainly our improvements in backlog in
the second quarter, up over 20% from a year ago, further support
this outlook. In addition, we should start to benefit from
the recent acquisitions we have announced. Old Dominion Brush
Company in the U.S. and Santa Izabel
in Brazil should both provide
marginal, but accretive contributions to Alamo's results in the second half of
2017.
"As a result, while we feel our markets will remain challenged
and sales growth will be modest, we are optimistic about the
outlook for Alamo Group in the second half of 2017 and feel further
improving market conditions should continue to benefit us as we
move into 2018."
Earnings Conference Call
Alamo Group will host a conference call to discuss second
quarter financial results on Thursday,
August 3, 2017 at 11:00 a.m.
Eastern (10:00 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 800-723-6498 (domestic) or 785-830-7989 (international). For
interested individuals unable to join the call, a replay will be
available until Thursday, August 10,
2017 by dialing 888-203-1112 (domestic) or 719-457-0820
(internationally), passcode 2726481.
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, August 3,
2017, 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 3,225 employees and
operates 25 plants in North
America, Europe,
Australia and Brazil as of June
30, 2017. 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,
acquisition integration 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) In this earnings release, Alamo Group reports net
sales excluding the impact of currency translation, 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. Attachments 1 and 2
to this earnings release contain a reconciliation of the non-GAAP
financial measure to the comparable GAAP financial measure.
Alamo Group Inc.
and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
|
|
|
|
|
June 30,
2017
|
June 30,
2016
|
ASSETS
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
74,637
|
|
|
$
|
44,972
|
|
Accounts receivable,
net
|
|
200,223
|
|
|
196,901
|
|
Inventories
|
|
153,150
|
|
|
159,840
|
|
Other current
assets
|
|
9,980
|
|
|
6,559
|
|
Total current
assets
|
|
437,990
|
|
|
408,272
|
|
|
|
|
|
|
Rental equipment,
net
|
|
31,441
|
|
|
34,063
|
|
|
|
|
|
|
Property, plant and
equipment
|
|
71,233
|
|
|
70,673
|
|
|
|
|
|
|
Goodwill
|
|
82,430
|
|
|
75,919
|
|
Intangible
assets
|
|
55,353
|
|
|
51,724
|
|
Other non-current
assets
|
|
2,417
|
|
|
4,677
|
|
|
|
|
|
|
Total
assets
|
|
$
|
680,864
|
|
|
$
|
645,328
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Trade accounts
payable
|
|
$
|
57,164
|
|
|
$
|
55,702
|
|
Income taxes
payable
|
|
2,210
|
|
|
1,159
|
|
Accrued
liabilities
|
|
35,994
|
|
|
33,081
|
|
Current maturities of
long-term debt and capital lease obligations
|
|
80
|
|
|
1,211
|
|
Total current
liabilities
|
|
95,448
|
|
|
91,153
|
|
|
|
|
|
|
Long-term debt, net
of current maturities
|
|
146,017
|
|
|
164,003
|
|
Deferred pension
liability
|
|
2,409
|
|
|
3,926
|
|
Other long-term
liabilities
|
|
7,407
|
|
|
5,843
|
|
Deferred income
taxes
|
|
6,672
|
|
|
4,165
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
422,911
|
|
|
376,238
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
|
$
|
680,864
|
|
|
$
|
645,328
|
|
Alamo Group Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
(Unaudited)
|
|
|
|
|
|
Second Quarter
Ended
|
|
Six Months
Ended
|
|
6/30/2017
|
|
6/30/2016
|
|
6/30/2017
|
|
6/30/2016
|
|
|
|
|
|
|
|
|
Industrial
|
$
|
117,342
|
|
|
$
|
117,146
|
|
|
$
|
243,158
|
|
|
$
|
240,424
|
|
Agricultural
|
54,221
|
|
|
51,845
|
|
|
105,998
|
|
|
100,507
|
|
European
|
41,713
|
|
|
42,498
|
|
|
79,509
|
|
|
81,529
|
|
Total
net sales
|
213,276
|
|
|
211,489
|
|
|
428,665
|
|
|
422,460
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
158,597
|
|
|
159,311
|
|
|
319,822
|
|
|
320,005
|
|
Gross margin
|
54,679
|
|
|
52,178
|
|
|
108,843
|
|
|
102,455
|
|
|
25.6
|
%
|
|
24.7
|
%
|
|
25.4
|
%
|
|
24.3
|
%
|
|
|
|
|
|
|
|
|
Operating expenses
|
34,522
|
|
|
34,137
|
|
|
68,585
|
|
|
68,125
|
|
Income from operations
|
20,157
|
|
|
18,041
|
|
|
40,258
|
|
|
34,330
|
|
|
9.5
|
%
|
|
8.5
|
%
|
|
9.4
|
%
|
|
8.1
|
%
|
|
|
|
|
|
|
|
|
Interest expense
|
(1,500)
|
|
|
(1,523)
|
|
|
(2,827)
|
|
|
(2,929)
|
|
Interest income
|
81
|
|
|
56
|
|
|
157
|
|
|
118
|
|
Other income (expense)
|
(665)
|
|
|
242
|
|
|
(873)
|
|
|
(380)
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
18,073
|
|
|
16,816
|
|
|
36,715
|
|
|
31,139
|
|
Provision for income taxes
|
5,757
|
|
|
6,254
|
|
|
12,232
|
|
|
11,918
|
|
|
|
|
|
|
|
|
|
Net Income
|
$
|
12,316
|
|
|
$
|
10,562
|
|
|
$
|
24,483
|
|
|
$
|
19,221
|
|
|
|
|
|
|
|
|
|
Net income per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
1.07
|
|
|
$
|
0.93
|
|
|
$
|
2.13
|
|
|
$
|
1.69
|
|
|
|
|
|
|
|
|
|
Diluted
|
$
|
1.05
|
|
|
$
|
0.92
|
|
|
$
|
2.10
|
|
|
$
|
1.67
|
|
|
|
|
|
|
|
|
|
Average common shares:
|
|
|
|
|
|
|
|
Basic
|
11,547
|
|
|
11,422
|
|
|
11,509
|
|
|
11,405
|
|
|
|
|
|
|
|
|
|
Diluted
|
11,671
|
|
|
11,550
|
|
|
11,646
|
|
|
11,529
|
|
|
|
|
|
|
|
|
|
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.
Attachment 1 discloses a non-GAAP financial presentation related
to the impact of currency translation on net sales by division. We
also disclose in Attachment 1, the net change in our total debt,
net of cash, which is a non-GAAP financial measure.
Attachment 2 shows a non-GAAP financial presentation that describes
adjusted earnings before interest, taxes, depreciation and
amortization ("Adjusted EBITDA"). 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
June 30,
|
|
|
|
Change due to
currency translation
|
|
2017
|
|
2016
|
|
% change
from 2016
|
|
$
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial
|
$
|
117,342
|
|
|
$
|
117,146
|
|
|
0.2
|
%
|
|
$
|
(392)
|
|
|
(0.3)
|
%
|
Agricultural
|
54,221
|
|
|
51,845
|
|
|
4.6
|
%
|
|
(115)
|
|
|
(0.2)
|
%
|
European
|
41,713
|
|
|
42,498
|
|
|
(1.8)
|
%
|
|
(2,898)
|
|
|
(6.8)
|
%
|
Total
net sales
|
$
|
213,276
|
|
|
$
|
211,489
|
|
|
0.8
|
%
|
|
$
|
(3,405)
|
|
|
(1.6)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
June 30,
|
|
|
|
Change due to
currency translation
|
|
2017
|
|
2016
|
|
% change
from 2016
|
|
$
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial
|
$
|
243,158
|
|
|
$
|
240,424
|
|
|
1.1
|
%
|
|
$
|
(36)
|
|
|
—
|
%
|
Agricultural
|
105,998
|
|
|
100,507
|
|
|
5.5
|
%
|
|
244
|
|
|
0.2
|
%
|
European
|
79,509
|
|
|
81,529
|
|
|
(2.5)
|
%
|
|
(6,167)
|
|
|
(7.6)
|
%
|
Total
net sales
|
$
|
428,665
|
|
|
$
|
422,460
|
|
|
1.5
|
%
|
|
$
|
(5,959)
|
|
|
(1.4)
|
%
|
Consolidated Net
Change of Total Debt, Net of Cash
|
|
|
|
|
|
|
|
|
|
June 30,
2017
|
|
June 30,
2016
|
|
Net
Change
|
|
|
|
|
|
|
|
Current
maturities
|
|
$
|
80
|
|
|
$
|
1,211
|
|
|
|
Long-term debt, net
of current
|
|
146,017
|
|
|
164,003
|
|
|
|
Total debt
|
|
$
|
146,097
|
|
|
$
|
165,214
|
|
|
|
|
|
|
|
|
|
|
Total cash
|
|
74,637
|
|
|
44,972
|
|
|
|
Total debt net of
cash
|
|
$
|
71,460
|
|
|
$
|
120,242
|
|
|
$
|
48,782
|
|
|
|
|
|
|
|
Attachment
2
|
|
Alamo Group
Inc.
Non-GAAP Financial Reconciliation
(in thousands)
(Unaudited)
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
Trailing Twelve
Months
Ended
|
|
|
June 30,
2017
|
June 30,
2016
|
|
June 30,
2017
|
December 31,
2016
|
|
|
|
|
|
|
|
Income from operations
|
|
$
|
40,258
|
$
|
34,330
|
|
|
$
|
73,548
|
$
|
67,620
|
Depreciation
|
|
8,364
|
9,155
|
|
|
16,905
|
17,696
|
Amortization
|
|
1,664
|
1,655
|
|
|
3,326
|
3,317
|
EBITDA
|
|
$
|
50,286
|
$
|
45,140
|
|
|
$
|
93,779
|
$
|
88,633
|
|
|
|
|
|
|
|
Fourth quarter 2016
non-cash expense related to pension termination
|
|
|
|
|
2,889
|
2,889
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
|
|
|
$
|
96,668
|
$
|
91,522
|
|
|
|
|
|
|
|
|
View original
content:http://www.prnewswire.com/news-releases/alamo-group-announces-record-2017-second-quarter-results-300498655.html
SOURCE Alamo Group Inc.