Alamo Group Inc. (NYSE: ALG) today reported results for the
first quarter ended March 31, 2012.
Net sales for the first quarter were $155.9 million compared to
net sales of $140.7 million for the first quarter of 2011, an
increase of 11%. Net income for the quarter was $6.8 million, or
$0.56 per diluted share, compared to net income of $5.7 million, or
$0.47 per diluted share, for the first quarter of 2011, a 19%
increase. The Company’s 2012 results include the effect of the
acquisition of Tenco, which was completed in October 2011. Tenco
contributed $9.4 million to net sales in the first quarter of 2012
and $0.5 million to net income. The 2012 net sales and net income
levels were both records for Alamo for a first quarter as the
Company benefited from strong growth particularly in its North
American Industrial Division.
Net sales in the Industrial Division for the first quarter of
2012 were $64.7 million, a 32% increase compared to net sales of
$49.0 million in the first quarter of 2011. The results include the
contributions of Tenco outlined above. The Division also benefited
from increased sales of its mowing products and vacuum trucks.
Alamo’s North American Agricultural Division recorded net sales
of $48.3 million in the first quarter of 2012, a 3% decrease
compared to net sales of $49.7 million in the prior year’s first
quarter. The decrease reflected slower growth in the overall U.S.
agricultural market and slightly lower preseason sales, which
generally make up the majority of this Division’s first quarter
revenue.
The Company’s European Division net sales in the first quarter
of 2012 were $42.9 million, an increase of 2% versus $41.9 million
in the first quarter of 2011. The Division’s sales remained steady
despite the continuing economic slowdown affecting many of the
Company’s markets in Europe.
Ron Robinson, Alamo Group’s President and Chief Executive
Officer, commented, “Following a record year in 2011, we are
pleased to start 2012 with another strong quarter. Supported by the
acquisition of Tenco, our Industrial Division led the way with
solid year-over-year growth. Within this Division, our vegetation
maintenance products continued to perform well, aided by recent new
product introductions. The Company’s snow removal equipment also
did well despite the mild winter conditions, and our vacuum trucks
and sweepers further contributed to the sales growth in the first
quarter.”
“Our Agricultural Division experienced some softening as the
rate of growth in the overall U.S. agriculture market slowed
compared to stronger levels experienced in 2010 and 2011. For this
Division, the first quarter of each year is generally made up of
preseason sales of stocking orders from our dealers, and these
sales were below the previous year’s level as dealers ended 2011
with higher levels of inventory than in recent years. While it is
still too early to tell how the season will develop, we expect to
benefit from strong commodity prices and healthy levels of farm
income as the year progresses. In addition, the drought conditions
that have affected parts of Texas and other states in the southeast
for the last several years have moderated over recent months.”
“Our European Division also held up well even in challenging
economic conditions. Governmental markets continue to be affected
by budget constraints and the agricultural sector is experiencing
slower growth, similar to our U.S. markets. Yet, we benefited from
steady demand for our type of maintenance products which was
further helped by increased export sales.”
Mr. Robinson concluded, “Our strong results, during what is one
of our seasonally weaker quarters, provide confirmation we are
successfully executing on our growth strategies while keeping our
costs under control. Our industrial markets should benefit from
steady demand for our type of infrastructure maintenance products,
despite ongoing governmental budget limitations. And, growing
levels of demand for food globally should continue to provide
strength to our agricultural markets over the longer term. As a
result, we feel good about our prospects for the future.”
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 2,460
employees and operates eighteen plants in North America and Europe
as of March 31, 2012. 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
REPORTS 2012 FIRST QUARTER RESULTS Alamo Group Inc.
and Subsidiaries (NYSE:ALG) Condensed Consolidated
Statements of Income (in thousands, except per share
amounts) (Unaudited) First Quarter Ended
3/31/12 3/31/11 North
American Industrial $ 64,732 $ 49,033 Agricultural 48,271 49,739
European 42,908 41,943 Total Sales
155,911 140,715 Cost of sales 120,673
108,814 Gross margin 35,238 31,901 22.6 % 22.7 %
Operating Expenses 24,245 22,560 Income
from Operations 10,993 9,341 7.1 % 6.6 % Interest Expense
(443 ) (765 ) Interest Income 55 72 Other Income (Expense)
(574 ) (147 ) Income before income taxes 10,031 8,501
Provision for income taxes 3,246 2,834
Net Income $ 6,785 $ 5,667 Net income
per common share: Basic $ 0.57 $ 0.48 Diluted
$ 0.56 $ 0.47 Average common shares: Basic
11,873 11,832 Diluted
12,027 11,980
Summary Balance
Sheet Data 3/31/12
3/31/11 Receivables 170,391 154,614 Inventories
127,989 117,460 Current Liabilities 90,583 89,840 Long Term Debt
53,512 47,021 Equity 287,156 262,733
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