ALAMO GROUP ANNOUNCES STRONG OPERATING RESULTS FOR THE SECOND QUARTER 2025
SEGUIN, Texas, Aug. 6, 2025 /PRNewswire/ -- Alamo Group Inc. (NYSE: ALG) today reported results for the second quarter ended June 30, 2025.
Highlights:
Net Sales of $419.1 million, up 0.7% vs. the second quarter of 2024 and up 7.2% vs. the first quarter of 2025
Industrial Equipment Division net sales of $240.7 million grew organically 17.6% year-over-year and 6.0% vs. the first quarter of 2025
Vegetation Management Division net sales of $178.4 million declined 15.7% year-over-year but grew 8.8% vs. the first quarter of 2025
Income from operations of $47.1 million, 11.2% of net sales, an 83 basis point improvement versus the second quarter of 2024
Net Income of $31.1 million up 9.8% versus the second quarter of 2024
Fully diluted EPS was $2.57 per share, an improvement of $0.22 per share compared to the second quarter of 2024; EPS results for the quarter include an unfavorable currency revaluation impact of $0.21 per share
Total debt was $213.1 million. Total debt net of cash was further reduced to $11.3 million, representing an improvement of $163.8 million or 93.5% compared to the second quarter in 2024 (1)
Backlog at the end of the second quarter was $687.2 million, an improvement of 2.8% from year-end 2024
Trailing twelve-month EBITDA of $219.1 million was 13.7% of Net Sales (1)
Second Quarter Results
Second quarter 2025 net sales of $419.1 million increased 0.7% compared to $416.3 million in the second quarter of 2024. Gross profit was $108.3 million or 25.8% of net sales compared to $108.2 million or 26.0% of net sales in the second quarter of 2024. SG&A expenses of $57.1 million or 13.6% of net sales declined by 6.1% compared to the second quarter in 2024, reflecting successful cost reduction efforts completed in 2024. Income from operations was $47.1 million or 11.2% of net sales, representing an increase of 83 basis points compared to the second quarter of 2024. The Vegetation Management Division second quarter sales of $178.4 million declined 15.7% versus second quarter of 2024 but increased sequentially by 8.8%. Division operating margin of 7.1% included costs associated with manufacturing facility consolidations. The Industrial Equipment Division sales of $240.7 million delivered strong organic growth of 17.6% compared to the second quarter of 2024 and increased 6.0% sequentially. The division delivered an operating margin of 14.3%, representing 93 basis points improvement versus the second quarter of 2024.
Net income was $31.1 million, or $2.57 per diluted share, compared to $28.3 million or $2.35 per diluted share, in the second quarter of 2024. The 9.8% increase year-over-year was driven by stronger operating results. Second quarter EPS included an unfavorable impact to net income of $2.5 million, or approximately $0.21 per share, primarily due to the revaluation of US dollar-denominated monetary assets held in our Canadian entities. By comparison, EPS in the second quarter of 2024 included a favorable impact of $0.2 million to net income, or approximately $0.02 per share.
The Company's backlog at the end of the second quarter remained healthy at $687.2 million. The Vegetation Management Division backlog held steady at $177.6 million, while the Industrial Equipment Division backlog remained strong at $509.6 million.
The Company's balance sheet was exceptionally strong. Accounts receivable were $356.2 million with DSO of 81 days, an improvement versus prior year of 3 days. Inventory was $372.1 million compared to $385.1 million in the second quarter of 2024. Operating cash flow year-to-date was $36.9 million, resulting in cash and cash equivalents of $201.8 million at the end of the quarter.
As we look forward to the remainder of the year, we anticipate continued operational gains driven in part by improved productivity in the Vegetation Management Division. While the economic situation related to tariffs remains somewhat uncertain, we remain confident in our ability to navigate these headwinds and remain committed to capitalizing on growth opportunities.
Comments on Results
Jeff Leonard, Alamo Group's President and Chief Executive Officer commented, "The Company's solid second quarter results reflected improved operating margin performance. The results were primarily driven by sustained strong demand from governmental agencies and specialty contractors for products offered by the Industrial Equipment Division, coupled with encouraging sequential recovery in markets served by the Vegetation Management Division. While consolidated net sales growth was modest compared to a strong prior year second quarter, sequential improvement exceeded 7%.
We were pleased to have again demonstrated strong organic growth in the Industrial Equipment Division, where net sales in the quarter rose by nearly 18% compared to the same period last year. Notably, sales of vacuum trucks and snow removal equipment increased more than 20%, supported by healthy demand and market share gains. Strong sales and improved operating efficiencies in this division drove nearly one hundred basis point margin expansion to 14.3%. Ordering activity remained robust across all product groups, and backlog at quarter end in this division remained above $0.5 billion, providing solid visibility and a positive view of demand through year end.
The Vegetation Management Division continued to show modest but steady improvements in its key markets. As expected, net sales in this division were down approximately 16% compared to the second quarter of 2024 but rose nearly 9% sequentially. The division's operating margin reflected the effects of recent facility consolidation costs, which are now nearing completion. While backlog was reduced due to improving lead-times in the consolidated facilities, we were encouraged to see order volumes increase for the fifth consecutive quarter, resulting in a year-over-year increase for the first half of 2025.
The Company's consolidated operating margin of 11.2% improved by eighty three basis points from the second quarter of 2024. Growth in the Industrial Equipment Division, combined with greater factory efficiencies, helped to offset some early-quarter softness in the Vegetation Management Division.
During the second quarter of 2025, we were pleased to welcome Ring-O-Matic to our Alamo Group family. Ring-O-Matic manufactures a full line of industrial vacuum excavation equipment, specializing in trailer-mounted units. The acquired business aligns well with our strategic focus on expanding market share and strengthening our current product portfolio and will be part of our Excavator and Vacuum Trucks group. The acquisition was funded with existing cash on hand.
Looking ahead, we remain optimistic regarding the Company's prospects for at least the next several quarters. Most market indicators during the second quarter were positive. Operationally, we expect that our Industrial Equipment Division will continue its strong performance through at least the end of the year and into 2026, while the Vegetation Management Division is poised to improve further, driven by stronger order flow supported by enhanced operational gains following the completion of our plant consolidations. While we remain mindful of ongoing global trade uncertainty, we firmly believe the Company is well positioned for continued improvement in operating performance. In addition, we expect to leverage our strong balance sheet to accelerate both organic and inorganic growth."
Earnings Conference CallThe Company will host a conference call to discuss the second quarter results on Thursday, August 7, 2025, at 8:30 a.m. ET. Hosting the call will be members of senior management. Individuals wishing to participate in the conference call should dial (866) 524-3159 (domestic) or (412) 317-6759 (international). For interested individuals unable to join the call, a replay will be available until Thursday, August 21, by dialing (877) 344-7529 (domestic) or (412) 317-0088 (internationally), passcode 7888480.
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 7, 2025, beginning at 8:30 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 GroupAlamo 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 3,800 employees and operates 27 plants in North America, Europe, Australia, and Brazil as of June 30, 2025. The corporate offices of Alamo Group Inc. are located in Seguin, Texas.
Forward Looking StatementsThis 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 tariffs, trade wars, and the effects of the war in the Ukraine and the Middle East, 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 Statements of Income
(in thousands, except per share amounts)
(Unaudited)
Three Months Ended
Six Months Ended
6/30/2025
6/30/2024
6/30/2025
6/30/2024
Net sales:
Vegetation Management
$ 178,358
$ 211,535
$ 342,248
$ 435,282
Industrial Equipment
240,715
204,768
467,775
406,607
Total net sales
419,073
416,303
810,023
841,889
Cost of sales
310,781
308,122
598,890
622,076
Gross margin
108,292
108,181
211,133
219,813
25.8 %
26.0 %
26.1 %
26.1 %
Selling, general and administration expense
57,136
60,817
111,466
121,411
Amortization expense
4,078
4,055
8,127
8,114
Income from operations
47,078
43,309
91,540
90,288
11.2 %
10.4 %
11.3 %
10.7 %
Interest expense
(3,684)
(6,098)
(6,878)
(12,189)
Interest income
1,195
514
2,433
1,315
Other income (expense)
(3,183)
(65)
(3,846)
33
Income before income taxes
41,406
37,660
83,249
79,447
Provision for income taxes
10,300
9,336
20,343
19,003
Net Income
$ 31,106
$ 28,324
$ 62,906
$ 60,444
Net income per common share:
Basic
$ 2.59
$ 2.36
$ 5.24
$ 5.05
Diluted
$ 2.57
$ 2.35
$ 5.21
$ 5.02
