ALAMO GROUP ANNOUNCES FINANCIAL RESULTS FOR THE SECOND QUARTER OF 2024
Highlights for the Quarter
-
Net Sales of$416.3 million , down 5.5% versus prior year-
Industrial Equipment net sales of
$204.8 million , up 14.2% -
Vegetation Management net sales of
$211.5 million , down 19.1%
-
Industrial Equipment net sales of
-
Income from operations of
$43.3 million , 10.4% of net sales -
Net income of
$28.3 million -
Second quarter fully diluted EPS of
$2.35 per share; EPS results of$2.35 per share include the unfavorable impact of Gradall strike of approximately$0.22 per share -
Total debt net of cash improved
$60.5 million or 25.7% compared to second quarter 2023 (1) -
Backlog remained healthy at
$768.9 million at the end of the second quarter 2024 (1) -
Trailing twelve-month EBITDA of
$236.6 million , at 14.1% ofNet Sales (1) -
Cost reduction actions taken expected to achieve approximately
$10 million of savings in the remainder of 2024, net of restructuring costs
Results for the Quarter
Second quarter 2024 net sales were
Net income was
Comments on Results
"We were pleased that our Industrial Equipment Division had another outstanding quarter with second quarter net sales of
"
"As a result of the market situation in Vegetation Management, we have taken actions to improve our operating efficiencies, reduce costs and eliminate excess capacity. In the first six months of 2024, the Company has reduced its global employee population by nearly 7% with most of the reduction made in the second quarter. We have also accelerated planning for several additional facility consolidations, and plans are underway to convert one of our Vegetation Management manufacturing facilities for the production of industrial products. Savings associated with efficiency and cost reduction actions taken in the first half of 2024 are expected to be approximately
"Our outlook for the third quarter and the balance of 2024 remains somewhat cautious. While progress is being made and dealer inventories are moving lower, more work remains to be done to reduce channel inventory. However, the prospects for our Industrial Equipment Division remain excellent for the remainder of 2024 and into the first quarter of 2025, given this Division's robust order backlog and healthy pipeline of active sales opportunities. Despite the cautious near-term outlook, we are encouraged by the cost reduction measures we have already taken and the further actions we plan to implement in the coming months, which we expect will benefit our results in the second half of 2024 and beyond."
Earnings Conference Call
The Company will host a conference call to discuss the results on
Individuals wishing to participate in the conference call should dial (833) 816-1163 (domestic) or (412) 317-1898 (international). For interested individuals unable to join the call, a replay will be available until
The live broadcast of
About
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: adverse economic conditions which could lead to a reduction in overall market demand, supply chain disruptions, labor constraints, increasing costs due to inflation, disease outbreaks, geopolitical risks, including effects of the war in the
(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.
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Condensed Consolidated Balance Sheets |
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(in thousands) |
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(Unaudited) |
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ASSETS |
|
|
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|
|
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Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ 118,535 |
|
|
$ 112,061 |
|
Accounts receivable, net |
|
388,512 |
|
|
378,675 |
|
Inventories |
|
385,136 |
|
|
369,319 |
|
Other current assets |
|
15,293 |
|
|
11,916 |
|
Total current assets |
|
907,476 |
|
|
871,971 |
|
|
|
|
|
|
|
|
Rental equipment, net |
|
46,630 |
|
|
36,375 |
|
|
|
|
|
|
|
|
Property, plant and equipment |
|
161,603 |
|
|
163,434 |
|
|
|
|
|
|
|
|
|
|
204,766 |
|
|
197,445 |
|
Intangible assets |
|
159,708 |
|
|
164,376 |
|
Other non-current assets |
|
25,787 |
|
|
24,158 |
|
|
|
|
|
|
|
|
Total assets |
|
$ 1,505,970 |
|
|
$ 1,457,759 |
|
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|
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|
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|
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LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Trade accounts payable |
|
$ 102,947 |
|
|
$ 116,287 |
|
Income taxes payable |
|
12,829 |
|
|
11,284 |
|
Accrued liabilities |
|
76,772 |
|
|
72,266 |
|
Current maturities of long-term debt and finance lease obligations |
|
15,008 |
|
|
15,008 |
|
Total current liabilities |
|
207,556 |
|
|
214,845 |
|
|
|
|
|
|
|
|
Long-term debt, net of current maturities |
|
278,591 |
|
|
332,576 |
|
Long-term tax liability |
|
490 |
|
|
2,464 |
|
Other long-term liabilities |
|
23,964 |
|
|
22,804 |
|
Deferred income taxes |
|
15,653 |
|
|
19,128 |
|
|
|
|
|
|
|
|
Total stockholders' equity |
|
979,716 |
|
|
865,942 |
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity |
|
$ 1,505,970 |
|
|
$ 1,457,759 |
|
Alamo Group Inc. and Subsidiaries |
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Condensed Consolidated Statements of Income |
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(in thousands, except per share amounts) |
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(Unaudited) |
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Three Months Ended |
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Six Months Ended |
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|
|
|
|
|
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Net sales: |
|
|
|
|
|
|
|
|
Vegetation Management |
|
$ 211,535 |
|
$ 261,346 |
|
$ 435,282 |
|
$ 517,781 |
Industrial Equipment |
|
204,768 |
|
179,348 |
|
406,607 |
|
334,684 |
Total net sales |
|
416,303 |
|
440,694 |
|
841,889 |
|
852,465 |
|
|
|
|
|
|
|
|
|
Cost of sales |
|
308,122 |
|
322,620 |
|
622,076 |
|
621,884 |
Gross margin |
|
108,181 |
|
118,074 |
|
219,813 |
|
230,581 |
|
|
26.0 % |
|
26.8 % |
|
26.1 % |
|
27.0 % |
|
|
|
|
|
|
|
|
|
Selling, general and administration expense |
|
60,817 |
|
59,858 |
|
121,411 |
|
119,526 |
Amortization expense |
|
4,055 |
|
3,824 |
|
8,114 |
|
7,639 |
Income from operations |
|
43,309 |
|
54,392 |
|
90,288 |
|
103,416 |
|
|
10.4 % |
|
12.3 % |
|
10.7 % |
|
12.1 % |
|
|
|
|
|
|
|
|
|
Interest expense |
|
(6,098) |
|
(6,837) |
|
(12,189) |
|
(12,777) |
Interest income |
|
514 |
|
357 |
|
1,315 |
|
740 |
Other income (expense) |
|
(65) |
|
(1,046) |
|
33 |
|
(44) |
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
37,660 |
|
46,866 |
|
79,447 |
|
91,335 |
Provision for income taxes |
|
9,336 |
|
10,492 |
|
19,003 |
|
21,612 |
|
|
|
|
|
|
|
|
|
Net Income |
|
$ 28,324 |
|
$ 36,374 |
|
$ 60,444 |
|
$ 69,723 |
|
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|
|
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Net income per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Basic |
|
$ 2.36 |
|
$ 3.05 |
|
$ 5.05 |
|
$ 5.85 |
|
|
|
|
|
|
|
|
|
Diluted |
|
$ 2.35 |
|
$ 3.03 |
|
$ 5.02 |
|
$ 5.82 |
|
|
|
|
|
|
|
|
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Average common shares: |
|
|
|
|
|
|
|
|
Basic |
|
11,974 |
|
11,921 |
|
11,959 |
|
11,910 |
|
|
|
|
|
|
|
|
|
Diluted |
|
12,044 |
|
11,993 |
|
12,032 |
|
11,977 |
Non-GAAP Financial Measures Reconciliation
From time to time,
Attachment 1 discloses a non-GAAP financial presentation related to the impact of currency translation on net sales by division. Attachment 2 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 3 reflects Division performance inclusive of non-GAAP financial measures such as backlog and earnings before interest, tax, depreciation and amortization ("EBITDA").
Attachment 1 |
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Non-GAAP Financial Reconciliation |
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(in thousands) |
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(Unaudited) |
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Impact of Currency Translation on |
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|
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Three Months Ended
|
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Change due to currency |
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|
2024 |
|
2023 |
|
% change |
|
$ |
|
% |
|
|
|
|
|
|
|
|
|
|
Vegetation Management |
$ 211,535 |
|
$ 261,346 |
|
(19.1) % |
|
$ (844) |
|
(0.3) % |
Industrial Equipment |
204,768 |
|
179,348 |
|
14.2 % |
|
(696) |
|
(0.4) % |
Total net sales |
$ 416,303 |
|
$ 440,694 |
|
(5.5) % |
|
$ (1,540) |
|
(0.3) % |
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Six Months Ended
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Change due to currency |
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|
2024 |
|
2023 |
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% change |
|
$ |
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% |
|
|
|
|
|
|
|
|
|
|
Vegetation Management |
$ 435,282 |
|
$ 517,781 |
|
(15.9) % |
|
$ 1,331 |
|
0.3 % |
Industrial Equipment |
406,607 |
|
334,684 |
|
21.5 % |
|
(478) |
|
(0.1) % |
Total net sales |
$ 841,889 |
|
$ 852,465 |
|
(1.2) % |
|
$ 853 |
|
0.1 % |
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Attachment 2 |
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Non-GAAP Financial Reconciliation |
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(in thousands) |
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(Unaudited) |
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|
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|
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Consolidated Net Change of Total Debt, Net of Cash |
||||||
|
|
|
|
|
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Net Change |
|
|
|
|
|
|
|
Current maturities |
|
$ 15,008 |
|
$ 15,008 |
|
|
Long-term debt,net of current |
|
278,591 |
|
332,576 |
|
|
Total debt |
|
$ 293,599 |
|
$ 347,584 |
|
|
|
|
|
|
|
|
|
Total cash |
|
118,535 |
|
112,061 |
|
|
Total Debt Net of Cash |
|
$ 175,064 |
|
$ 235,523 |
|
$ (60,459) |
|
|
|
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|
|
EBITDA |
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|
Six Months Ended |
|
Trailing Twelve Months Ended |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Income from operations |
|
$ 90,288 |
|
$ 103,416 |
|
$ 184,839 |
|
$ 197,967 |
Depreciation |
|
18,093 |
|
15,529 |
|
35,018 |
|
32,454 |
Amortization |
|
8,465 |
|
7,990 |
|
16,697 |
|
16,222 |
EBITDA |
|
$ 116,846 |
|
$ 126,935 |
|
$ 236,554 |
|
$ 246,643 |
|
|
|
|
|
|
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|
|
Attachment 3 |
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|
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|
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Non-GAAP Financial Reconciliation |
||||||||
(in thousands) |
||||||||
(Unaudited) |
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|
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|
||||||||
Vegetation Management Division Performance |
||||||||
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|
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|
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Three Months Ended
|
|
Six Months Ended
|
||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
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Backlog |
|
|
|
|
|
$ 217,967 |
|
$ 415,727 |
|
|
|
|
|
|
|
|
|
|
|
$ 211,535 |
|
$ 261,346 |
|
435,282 |
|
517,781 |
|
|
|
|
|
|
|
|
|
Income from Operations |
|
16,006 |
|
35,561 |
|
37,685 |
|
72,069 |
|
|
7.6 % |
|
13.6 % |
|
8.7 % |
|
13.9 % |
|
|
|
|
|
|
|
|
|
Depreciation |
|
4,434 |
|
3,829 |
|
8,767 |
|
7,420 |
Amortization |
|
3,033 |
|
3,047 |
|
6,076 |
|
6,086 |
|
|
|
|
|
|
|
|
|
EBITDA |
|
23,473 |
|
42,437 |
|
52,528 |
|
85,575 |
|
|
11.1 % |
|
16.2 % |
|
12.1 % |
|
16.5 % |
Industrial Equipment Division Performance |
||||||||
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
|
Backlog |
|
|
|
|
|
$ 550,922 |
|
$ 475,464 |
|
|
|
|
|
|
|
|
|
|
|
$ 204,768 |
|
$ 179,348 |
|
406,607 |
|
334,684 |
|
|
|
|
|
|
|
|
|
Income from Operations |
|
27,303 |
|
18,831 |
|
52,603 |
|
31,347 |
|
|
13.3 % |
|
10.5 % |
|
12.9 % |
|
9.4 % |
|
|
|
|
|
|
|
|
|
Depreciation |
|
4,724 |
|
4,074 |
|
9,326 |
|
8,109 |
Amortization |
|
1,197 |
|
952 |
|
2,389 |
|
1,904 |
|
|
|
|
|
|
|
|
|
EBITDA |
|
33,224 |
|
23,857 |
|
64,318 |
|
41,360 |
|
|
16.2 % |
|
13.3 % |
|
15.8 % |
|
12.4 % |
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