SEGUIN,
Texas, Feb. 22, 2024 /PRNewswire/ -- Alamo Group
Inc. (NYSE: ALG) today reported results for the fourth quarter
and year ended December 31, 2023.
Highlights
- Ninth consecutive quarterly record for sales and
earnings
- Fourth quarter net sales of $417.5
million, up 8%
- Fourth quarter operating income of $44.8 million, up 5%
- Fourth quarter net income of $31.5
million, or $2.63 per diluted
share, up 8%
- Full year net sales of $1.69
billion, up 12%
- Full year operating income of $198.0
million, up 33%
- Full year net income of $136.2
million, up 34%
- Full year diluted EPS was $11.36, up 33%
- Record EBITDA of $246.6
million, up 26%
- Year-end 2023 backlog at $860
million
Fourth Quarter Results
Fourth quarter 2023 net sales were $417.5
million compared to $386.6
million in the fourth quarter of 2022, an increase of 8%.
Gross margin improved in the quarter versus the fourth quarter of
2022 by $11.1 million or 11%. Fourth
quarter net income improved 8% to $31.5
million, or $2.63 per diluted
share, compared to net income of $29.2
million, or $2.44 per diluted
share in the fourth quarter of 2022. The Company's backlog at the
end of 2023 was $860 million.
Full Year Results
Full year 2023 net sales increased to almost $1.7 billion, up 12% compared to $1.5 billion for the full year 2022. Gross margin
for 2023 increased $77.1 million or
20% versus the full year 2022. Net income for 2023 was $136.2 million, or $11.36 per diluted share, compared to net income
of $101.9 million, or $8.54 per diluted share in 2022, a year-over-year
EPS improvement of 33%.
Comments on Results
Jeff Leonard, Alamo Group's
President, and Chief Executive Officer, commented, "We are pleased
that our fourth quarter results established new records for sales
and earnings for the ninth consecutive quarter. The fourth quarter
is normally seasonally softer for us, and this year was no
exception as sales growth moderated relative to the pace set in the
third quarter.
"It was great to see that our fourth quarter gross margin
expanded by 80 basis points reflecting the durable quality of our
backlog. Improvements in supply chain performance and labor
availability drove operating efficiency higher and contributed to
the favorable gross margin. The combined benefits of the higher
gross margin and better operating efficiency were partially offset
by higher employee-related administrative expenses during the
quarter. Fourth quarter operating income of $44.8 million was five percent higher than the
comparison period of 2022.
"The Industrial Equipment Division had a very strong fourth
quarter with sales that were 32% higher than the fourth quarter of
2022. Governmental and industrial demand for this Division's
products remained robust although order bookings were 9% lower due
to a challenging comparable caused by an unusually large
snow-removal equipment order that we received in the fourth quarter
of 2022. Year-end backlog increased by 18% compared to 2022.
"The Vegetation Management Division faced challenging conditions
in several of its markets in the fourth quarter. Forestry and Tree
Care activity remained constrained by the combined effects of price
pressure for domestic wood pellets, slowing demand for
land clearing equipment and sluggish housing starts. The farm
and ranch market also remained soft due to lower cattle prices,
less favorable commodity prices and declining agricultural exports.
Channel inventories remained above optimal levels in the fourth
quarter and dealers were reluctant to place new stock orders while
interest rates remained elevated. The bright spot in the Vegetation
Management Division was its governmental mowing business which
enjoyed very strong, historically high sales in the fourth quarter
and for all of 2023. Vegetation Management Division fourth quarter
order bookings declined 34% and year-end backlog was 39% lower
compared to 2022. The Division's backlog has now returned to a more
normal level from a historical perspective.
"The Company's solid performance in the fourth quarter capped a
very strong performance in 2023. Full-year sales were up 12% and
net income improved by 34% versus the prior year. As we expected,
recent softness in several of the Vegetation Management Division's
markets was largely offset by increasing demand for the Company's
Industrial Equipment from governmental agencies and contractors. We
continue to like the way the Company is positioned as we enter
2024. At nearly $860 million, the
Company's backlog remains at a very healthy level and we believe
that the quality of the backlog remains excellent. Although the
noted softness in Vegetation Management may persist through the
first quarter, anticipated relief in the form of modestly lower
interest rates later in the year should help clear the inventory
overhang and invigorate dealer demand. We expect that the
Industrial Equipment Division will continue to display strength in
2024 driven by its sales to governmental agencies. Taken together,
we remain confident regarding the Company's performance in 2024 and
believe it will be another excellent year for us.
Earnings Conference Call
The Company will host a conference call to discuss fourth
quarter and year end 2023 financial results on Friday, February 23, 2024 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 877-317-6789 (domestic) or 412-317-6789 (international). For
interested individuals unable to join the call, a replay will be
available until Friday, March 01,
2024 by dialing 877-344-7529 (domestic) or 412-317-0088
(internationally), passcode 8022529.
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, February 23,
2024, 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 29 plants in North
America, Europe,
Australia and Brazil as of December
31, 2023. The corporate offices of Alamo Group Inc. are
located in Seguin, Texas.
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 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 Balance Sheets
(in thousands)
(Unaudited)
|
|
|
|
|
December 31,
2023
|
December 31,
2022
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
51,919
|
|
|
$
47,016
|
|
Accounts
receivable, net
|
|
362,007
|
|
|
317,581
|
|
Inventories
|
|
377,480
|
|
|
352,553
|
|
Other current
assets
|
|
12,551
|
|
|
10,060
|
|
Total current
assets
|
|
803,957
|
|
|
727,210
|
|
|
|
|
|
|
|
|
Rental equipment,
net
|
|
39,264
|
|
|
33,723
|
|
|
|
|
|
|
|
|
Property, plant and
equipment
|
|
166,660
|
|
|
155,007
|
|
|
|
|
|
|
|
|
Goodwill
|
|
206,536
|
|
|
195,858
|
|
Intangible
assets
|
|
168,296
|
|
|
171,341
|
|
Other non-current
assets
|
|
24,673
|
|
|
25,369
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
1,409,386
|
|
|
$
1,308,508
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Trade accounts
payable
|
|
$
99,678
|
|
|
$
97,537
|
|
Income taxes
payable
|
|
12,529
|
|
|
6,592
|
|
Accrued
liabilities
|
|
86,711
|
|
|
71,368
|
|
Current
maturities of long-term debt and finance lease
obligations
|
|
15,008
|
|
|
15,009
|
|
Total current
liabilities
|
|
213,926
|
|
|
190,506
|
|
|
|
|
|
|
|
|
Long-term debt,
net of current maturities
|
|
220,269
|
|
|
286,943
|
|
Long term tax
payable
|
|
2,634
|
|
|
3,781
|
|
Other long-term
liabilities
|
|
23,694
|
|
|
23,668
|
|
Deferred income
taxes
|
|
16,100
|
|
|
18,250
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
932,763
|
|
|
785,360
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
|
$
1,409,386
|
|
|
$
1,308,508
|
|
Alamo Group Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
(Unaudited)
|
|
|
|
|
|
Fourth Quarter
Ended
|
|
Year
Ended
|
|
12/31/2023
|
|
12/31/2022
|
|
12/31/2023
|
|
12/31/2022
|
Net sales:
|
|
|
|
|
|
|
|
Vegetation
Management
|
$
214,357
|
|
$
232,545
|
|
$
979,040
|
|
$
937,065
|
Industrial
Equipment
|
203,185
|
|
154,059
|
|
710,611
|
|
576,551
|
Total Net
Sales
|
417,542
|
|
386,604
|
|
1,689,651
|
|
1,513,616
|
|
|
|
|
|
|
|
|
Cost of Sales
|
308,622
|
|
288,809
|
|
1,236,007
|
|
1,137,098
|
Gross Margin
|
108,920
|
|
97,795
|
|
453,644
|
|
376,518
|
|
26.1 %
|
|
25.3 %
|
|
26.8 %
|
|
24.9 %
|
|
|
|
|
|
|
|
|
Selling, general and
administration expense
|
60,068
|
|
51,282
|
|
240,158
|
|
212,649
|
Amortization
Expense
|
4,054
|
|
3,796
|
|
15,519
|
|
15,277
|
Income from Operations
|
44,798
|
|
42,717
|
|
197,967
|
|
148,592
|
|
10.7 %
|
|
11.0 %
|
|
11.7 %
|
|
9.8 %
|
|
|
|
|
|
|
|
|
Interest Expense
|
(6,587)
|
|
(4,791)
|
|
(26,093)
|
|
(14,361)
|
Interest Income
|
360
|
|
530
|
|
1,485
|
|
752
|
Other Income
|
1,667
|
|
(200)
|
|
1,761
|
|
(673)
|
|
|
|
|
|
|
|
|
Income before income taxes
|
40,238
|
|
38,256
|
|
175,120
|
|
134,310
|
Provision for income taxes
|
8,715
|
|
9,091
|
|
38,959
|
|
32,382
|
|
|
|
|
|
|
|
|
Net Income
|
$
31,523
|
|
$
29,165
|
|
$
136,161
|
|
$
101,928
|
|
|
|
|
|
|
|
|
Net Income per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
2.64
|
|
$
2.45
|
|
$
11.42
|
|
$
8.58
|
|
|
|
|
|
|
|
|
Diluted
|
$
2.63
|
|
$
2.44
|
|
$
11.36
|
|
$
8.54
|
|
|
|
|
|
|
|
|
Average common shares:
|
|
|
|
|
|
|
|
Basic
|
11,930
|
|
11,884
|
|
11,920
|
|
11,877
|
|
|
|
|
|
|
|
|
Diluted
|
12,000
|
|
11,940
|
|
11,987
|
|
11,934
|
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").
Attachment
1
|
|
Alamo Group
Inc.
Non-GAAP Financial
Reconciliation
(in
thousands)
(Unaudited)
|
|
Impact of Currency
Translation on Net Sales by Division
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December
31,
|
|
|
|
Change due to
currency
translation
|
|
2023
|
|
2022
|
|
% change
from 2022
|
|
$
|
|
%
|
|
|
|
|
|
|
|
|
|
|
Vegetation
Management
|
$
214,357
|
|
$
232,545
|
|
(7.8) %
|
|
$
2,384
|
|
1.0 %
|
Industrial
Equipment
|
203,185
|
|
154,059
|
|
31.9 %
|
|
861
|
|
0.6 %
|
Total
Net Sales
|
$
417,542
|
|
$
386,604
|
|
8.0 %
|
|
$
3,245
|
|
0.8 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended
December 31,
|
|
|
|
Change due to
currency
translation
|
|
2023
|
|
2022
|
|
% change
from 2022
|
|
$
|
|
%
|
|
|
|
|
|
|
|
|
|
|
Vegetation
Management
|
$
979,040
|
|
$
937,065
|
|
4.5 %
|
|
$
1,663
|
|
0.2 %
|
Industrial
Equipment
|
710,611
|
|
576,551
|
|
23.3 %
|
|
(1,961)
|
|
(0.3) %
|
Total
Net Sales
|
$
1,689,651
|
|
$
1,513,616
|
|
11.6 %
|
|
$
(298)
|
|
— %
|
|
Attachment
2
|
|
Alamo Group
Inc.
Non-GAAP Financial
Reconciliation
(in
thousands)
(Unaudited)
|
|
Consolidated Net
Change of Total Debt, Net of Cash
|
|
|
|
|
|
|
|
|
|
December 31,
2023
|
|
December 31,
2022
|
|
Net
Change
|
|
|
|
|
|
|
|
Current
maturities
|
|
$
15,008
|
|
$
15,009
|
|
|
Long-term debt, net of
current
|
|
220,269
|
|
286,943
|
|
|
Total Debt
|
|
$
235,277
|
|
$
301,952
|
|
|
|
|
|
|
|
|
|
Total Cash
|
|
51,919
|
|
47,016
|
|
|
Total Debt Net of
Cash
|
|
$
183,358
|
|
$
254,936
|
|
$
71,578
|
|
EBITDA
|
|
|
|
Twelve Months
Ended
|
|
|
|
December 31,
2023
|
|
December 31,
2022
|
|
|
|
|
|
|
Income from operations
|
|
|
$
197,967
|
|
$
148,592
|
Depreciation
|
|
|
32,454
|
|
31,412
|
Amortization
|
|
|
16,222
|
|
15,944
|
EBITDA
|
|
|
$
246,643
|
|
$
195,948
|
|
Attachment
3
|
|
Alamo Group
Inc.
Non-GAAP Financial
Reconciliation
(in
thousands)
(Unaudited)
|
|
Vegetation
Management Division Performance
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December
31,
|
|
Twelve Months
Ended
December 31,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
Backlog
|
|
|
|
|
|
$ 352,080
|
|
$ 577,050
|
|
|
|
|
|
|
|
|
|
Net Sales
|
|
214,357
|
|
232,545
|
|
979,040
|
|
937,065
|
|
|
|
|
|
|
|
|
|
Income from
Operations
|
|
19,764
|
|
30,247
|
|
122,084
|
|
108,508
|
|
|
9.2 %
|
|
13.0 %
|
|
12.5 %
|
|
11.6 %
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
4,246
|
|
4,470
|
|
15,581
|
|
15,188
|
Amortization
|
|
3,031
|
|
3,005
|
|
12,155
|
|
12,193
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
27,041
|
|
37,722
|
|
149,820
|
|
135,889
|
|
|
12.6 %
|
|
16.2 %
|
|
15.3 %
|
|
14.5 %
|
|
|
Industrial Equipment
Division Performance
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December
31,
|
|
Twelve Months
Ended
December 31,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
Backlog
|
|
|
|
|
|
$ 507,715
|
|
$ 429,439
|
|
|
|
|
|
|
|
|
|
Net Sales
|
|
203,185
|
|
154,059
|
|
710,611
|
|
576,551
|
|
|
|
|
|
|
|
|
|
Income from
Operations
|
|
25,034
|
|
12,470
|
|
75,883
|
|
40,084
|
|
|
12.3 %
|
|
8.1 %
|
|
10.7 %
|
|
7.0 %
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
4,534
|
|
4,970
|
|
16,873
|
|
16,224
|
Amortization
|
|
1,199
|
|
958
|
|
4,067
|
|
3,751
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
30,767
|
|
18,398
|
|
96,823
|
|
60,059
|
|
|
15.1 %
|
|
11.9 %
|
|
13.6 %
|
|
10.4 %
|
View original
content:https://www.prnewswire.com/news-releases/alamo-group-announces-record-2023-fourth-quarter-and-year-end-results-302069268.html
SOURCE Alamo Group Inc.