FALSE000089707700008970772023-11-022023-11-02

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
 
Date of Report (Date of earliest event reported): November 2, 2023
 
Alamo Group Inc.
(Exact name of registrant as specified in its charter)
 
State of Delaware
0-21220
74-1621248
(State or other jurisdiction of incorporation)(Commission File No.)(IRS Employer Identification No.)
  
1627 E. Walnut, Seguin, Texas
78155
(Address of Registrant’s principal executive offices)(Zip Code)
(830) 379-1480
Registrant's telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common Stock, par value
$.10 per share
ALGNew York Stock Exchange
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) 
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) 
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) 
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of
the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of
1934 (§240.12b-2 of this chapter).Emerging growth company ☐ 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the
extended transition period for complying with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act. ☐ 


Item 2.02    Results of Operations and Financial Condition
On November 2, 2023, Alamo Group Inc. issued a press release announcing, among other things, financial results for the quarter ended September 30, 2023.  A copy of the press release is filed as Exhibit 99.1 to this Current Report on Form 8-K. The foregoing description is qualified by reference to such exhibit.
The information furnished in this report, including the exhibit, shall not be deemed to be incorporated by reference into any of Alamo Group filings with the SEC under the Securities Act of 1933, except as shall be expressly set forth by specific reference in any such filing, and shall not be deemed to be "filed" with the SEC under the Securities Exchange Act of 1934.

Item 9.01    Financial Statements and Exhibits
Exhibit 99.1 - Press Release dated November 2, 2023.
Exhibit 104 - Cover Page Interactive Data File - Inline XBRL for the cover page of this Current Report on Form 8-K



SIGNATURES
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
November 2, 2023
By:  /s/ Edward T. Rizzuti         
  Edward T. Rizzuti,
  General Counsel & Secretary



EXHIBIT INDEX
 
Exhibit No.
Description
 
99.1
104Cover Page Interactive Data File - Inline XBRL for the cover page of this Current Report on Form 8-K




logoforfiling.jpg
For:Alamo Group Inc.
Contact:Richard J. Wehrle
Executive Vice President & CFO
830-372-9615
Financial Relations Board
Joe Calabrese
212-827-3772


ALAMO GROUP ANNOUNCES RECORD 2023 THIRD QUARTER SALES AND EARNINGS

SEGUIN, Texas, November 2, 2023 -- Alamo Group Inc. (NYSE: ALG) today reported results for the third quarter ended September 30, 2023.

Highlights for the Quarter

•Eighth consecutive quarterly record for sales and earnings
•Net sales of $419.6 million, up 13.8%
◦Vegetation Management net sales of $246.9 million, up 8.0%
◦Industrial Equipment net sales of $172.7 million, up 23.1%
•Income from operations of $49.8 million, (11.9% of net sales), up 38.8%
•Net income of $34.9 million, or $2.91 per diluted share, up 35.2%
•Trailing twelve-month EBITDA of $245.0 million, up 25.0% from full year 2022(1)
•Backlog of $890.9 million, down 2.0% compared to prior year third quarter-end

Results for the Quarter

Record third quarter 2023 net sales of $419.6 million increased 13.8% compared to $368.8 million in the third quarter of 2022. Gross margin improved in the quarter versus the third quarter of 2022 by $21.8 million or 23.6%. Third quarter net income improved 35.2% to $34.9 million, or $2.91 per diluted share, compared to net income of $25.8 million, or $2.16 per diluted share in the third quarter of 2022. The Company’s backlog at the end of the third quarter was $890.9 million, virtually unchanged from the end of the second quarter of 2023 but slightly down by 2.0% versus the backlog at the end of the third quarter of 2022, and down 11.5% compared to the Company's backlog at the end of calendar year 2022.



ALAMO GROUP ANNOUNCES RECORD 2023 THIRD QUARTER SALES AND EARNINGS Page 2


Comments on Results
Jeff Leonard, Alamo Group’s President and Chief Executive Officer commented, “We are very pleased that our results were in line with our expectations and established new Company records for third
quarter sales and earnings. Double digit sales growth of almost 14% was driven primarily by strong demand from governmental agencies and industrial contractors. Following the pattern of the past few quarters, further improvement in supply chain performance supported higher sales, improved operating efficiency, and allowed us to again approach our targeted 12% operating margin level.

“Conditions in our markets remained relatively strong across most customer segments. Third quarter 2023 order bookings were up 10% compared to the third quarter of 2022 and increased 25% compared to the second quarter of this year. We were especially pleased with the very strong orders received in the UK and Europe across both operating Divisions. In North America, the governmental sector continued to exhibit significant strength, while activity in forestry and tree care declined modestly. The farm and ranch segment declined on a year-over-year basis but recovered very nicely sequentially compared to the weakness we reported in the second quarter as a result of the retail incentive programs we put in place this year.

“We are also pleased to announce the recent acquisition of Royal Truck and Equipment. Royal Truck is a premier producer of specialized highway safety equipment including crash attenuator trucks. This segment has been growing at a very high rate over the past few years, and will continue to benefit from the recent U.S. federal infrastructure bill. Royal Truck has established a strong reputation as an innovative market leader and high-quality producer of products designed to enhance the safety of highway work crews. This business will be integrated with our sweeper and debris collector group that forms a core part of our Industrial Equipment Division. The acquisition is expected to be modestly accretive for the balance of 2023.

“Looking ahead, we expect the trends of the past several quarters to continue. Fleet and infrastructure investment by government agencies is likely to remain elevated for the foreseeable future. While weakness in the farm and ranch segment is expected to persist, we don't anticipate that conditions will further deteriorate in the near term.

“Our strong, high quality order backlog gives us excellent forward visibility. Combined with the health of our markets, this bodes well for our performance for the remainder of this year and for the first several


ALAMO GROUP ANNOUNCES RECORD 2023 THIRD QUARTER SALES AND EARNINGS Page 3

quarters of 2024. We are confident that we can continue to execute our strategy efficiently, and in doing so continue to grow at double digit rates and to further optimize operating margin.

"I want to take this opportunity to thank all of our employees for their exceptional dedication as well as our many suppliers, who worked in close coordination with us to achieve these results. I would also like to thank our dealers and customers who have continued to support our company, and our family of well-known brands."


Earnings Conference Call
The Company will host a conference call to discuss the results on Friday, November 3, 2023 at 10:00 a.m. ET. Hosting the call will be members of senior management.

Individuals wishing to participate in the conference call should dial 1-877-317-6789 (domestic) or 1-412-317-6789 (international). For interested individuals unable to join the call, a replay will be available until Friday, November 10, 2023, by dialing 1-877-344-7529 (domestic) or 1-412-317-0088 (internationally), passcode 1294689.

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 Friday, November 3, 2023 beginning at 10:00 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 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 4,350 employees and operates 27 plants in North America, Europe, Australia and Brazil as of September 30, 2023. The corporate offices of Alamo Group Inc. are located in Seguin, Texas.


ALAMO GROUP ANNOUNCES RECORD 2023 THIRD QUARTER SALES AND EARNINGS Page 4


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, new or unanticipated effects of the COVID-19 pandemic, geopolitical risks, including effects of the war in Ukraine, 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.




Page 5
Alamo Group Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited) 
September 30,
2023		September 30,
2022
ASSETS
Current assets:
Cash and cash equivalents$113,534 $75,308 
Accounts receivable, net378,107 301,919 
Inventories371,748 362,713 
Other current assets9,976 10,685 
Total current assets873,365 750,625 
Rental equipment, net38,431 33,156 
Property, plant and equipment164,519 153,062 
Goodwill195,863 192,946 
Intangible assets159,884 173,508 
Other non-current assets23,452 24,494 
Total assets$1,455,514 $1,327,791 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Trade accounts payable$110,944 $100,886 
Income taxes payable13,695 5,218 
Accrued liabilities79,682 71,820 
Current maturities of long-term debt and finance lease obligations15,008 15,010 
Total current liabilities219,329 192,934 
Long-term debt, net of current maturities308,892 348,463 
Long-term tax liability2,634 3,781 
Other long-term liabilities22,171 24,821 
Deferred income taxes14,754 20,761 
Total stockholders’ equity887,734 737,031 
Total liabilities and stockholders’ equity$1,455,514 $1,327,791 

                                                                       




Page 6
Alamo Group Inc. and Subsidiaries 
Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
(Unaudited)
Three Months EndedNine Months Ended
9/30/20239/30/20229/30/20239/30/2022
Net sales:
  Vegetation Management$246,902 $228,511 $764,683 $704,520 
  Industrial Equipment172,742 140,282 507,426 422,492 
Total net sales419,644 368,793 1,272,109 1,127,012 
Cost of sales305,501 276,428 927,385 848,289 
Gross margin114,143 92,365 344,724 278,723 
27.2 %25.0 %27.1 %24.7 %
Selling, general and administration expense60,564 52,723 180,090 161,367 
Amortization expense3,826 3,802 11,465 11,481 
Income from operations49,753 35,840 153,169 105,875 
11.9 %9.7 %12.0 %9.4 %
Interest expense(6,729)(3,734)(19,506)(9,570)
Interest income385 93 1,125 222 
Other income (expense)138 1,413 94 (473)
Income before income taxes43,547 33,612 134,882 96,054 
Provision for income taxes8,632 7,791 30,244 23,291 
Net Income$34,915 $25,821 $104,638 $72,763 
Net income per common share:
Basic$2.93 $2.18 $8.78 $6.13 
Diluted$2.91 $2.16 $8.73 $6.10 
Average common shares:
Basic11,928 11,883 11,916 11,875 
Diluted11,996 11,941 11,983 11,932 



Page 7
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 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").


Page 8
Attachment 1

Alamo Group Inc.
Non-GAAP Financial Reconciliation
(in thousands)
(Unaudited)


Impact of Currency Translation on Net Sales by Division
Three Months Ended
September 30,		Change due to currency translation
20232022% change from 2022$%
Vegetation Management$246,902 $228,511 8.0 %$3,918 1.7 %
Industrial Equipment172,742 140,282 23.1 %217 0.2 %
Total net sales
$419,644 $368,793 13.8 %$4,135 1.1 %
Nine Months Ended
September 30,		Change due to currency translation
20232022% change from 2022$%
Vegetation Management$764,683 $704,520 8.5 %$(1,600)(0.2)%
Industrial Equipment507,426 422,492 20.1 %(3,047)(0.7)%
Total net sales
$1,272,109 $1,127,012 12.9 %$(4,647)(0.4)%
















Page 9
Attachment 2

Alamo Group Inc.
Non-GAAP Financial Reconciliation
(in thousands)
(Unaudited)

Consolidated Net Change of Total Debt, Net of Cash
September 30, 2023September 30, 2022Net Change
Current maturities$15,008 $15,010 
Long-term debt,net of current308,892 348,463 
Total debt$323,900 $363,473 
Total cash113,534 75,308 
     Total Debt Net of Cash$210,366 $288,165 $(77,799)

EBITDA
Nine Months EndedTrailing Twelve Months Ended
September 30, 2023September 30, 2022September 30, 2023December 31, 2022
Income from operations$153,169 $105,875 $195,886 $148,592 
Depreciation23,674 21,972 33,114 31,412 
Amortization 11,992 11,981 15,955 15,944 
     EBITDA$188,835 $139,828 $244,955 $195,948 












Page 10
Attachment 3

Alamo Group Inc.
Non-GAAP Financial Reconciliation
(in thousands)
(Unaudited)


Vegetation Management Division Performance
Three Months Ended
September 30,		Nine Months Ended
September 30,
2023202220232022
Backlog$390,206 $544,571 
Net Sales$246,902 $228,511 764,683 704,520 
Income from Operations30,251 27,130 102,320 78,261 
12.3 %11.9 %13.4 %11.1 %
Depreciation3,915 3,765 11,335 10,718 
Amortization3,038 2,999 9,124 9,188 
EBITDA37,204 33,894 122,779 98,167 
15.1 %14.8 %16.1 %13.9 %


Industrial Equipment Division Performance
Three Months Ended
September 30,		Nine Months Ended
September 30,
2023202220232022
Backlog$500,661 $364,286 
Net Sales$172,742 $140,282 507,426 422,492 
Income from Operations19,502 8,710 50,849 27,614 
11.3 %6.2 %10.0 %6.5 %
Depreciation4,230 3,794 12,339 11,254 
Amortization964 969 2,868 2,793 
EBITDA24,696 13,473 66,056 41,661 
14.3 %9.6 %13.0 %9.9 %








v3.23.3
Cover
Nov. 02, 2023
Cover [Abstract]  
Document Type 8-K
Document Period End Date Nov. 02, 2023
Entity Registrant Name Alamo Group Inc.
Entity Incorporation, State or Country Code DE
Entity File Number 0-21220
Entity Tax Identification Number 74-1621248
Entity Address, Address Line One 1627 E. Walnut
Entity Address, City or Town Seguin
Entity Address, State or Province TX
Entity Address, Postal Zip Code 78155
City Area Code 830
Local Phone Number 379-1480
Title of 12(b) Security Common Stock, par value$.10 per share
Trading Symbol ALG
Security Exchange Name NYSE
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Amendment Flag false
Entity Central Index Key 0000897077
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