ALAMO GROUP ANNOUNCES THIRD QUARTER FINANCIAL RESULTS AND COST REDUCTION ACTIONS
Alamo Group reported Q3 2024 results with net sales of $401.3 million, down 4.4% year-over-year. The Industrial Equipment Division saw sales growth of 22.3% to $211.2 million, while the Vegetation Management Division declined 23% to $190.1 million. Net income was $27.4 million, with EPS of $2.28. The company is implementing cost-saving initiatives targeting annual savings of $25-30 million, including workforce reductions and plant consolidations. Total debt net of cash improved by 60% to $84.1 million compared to Q3 2023. The company's backlog stands at $728.8 million, with Industrial Equipment Division showing 8.5% growth while Vegetation Management Division declined 52%.
Alamo Group ha riportato i risultati del terzo trimestre 2024 con vendite nette di 401,3 milioni di dollari, in calo del 4,4% rispetto all'anno precedente. La Divisione Attrezzature Industriali ha registrato una crescita delle vendite del 22,3% a 211,2 milioni di dollari, mentre la Divisione Gestione della Vegetazione ha visto un calo del 23% a 190,1 milioni di dollari. Il reddito netto è stato di 27,4 milioni di dollari, con un utile per azione di 2,28 dollari. L'azienda sta attuando iniziative di risparmio sui costi con l'obiettivo di risparmi annuali di 25-30 milioni di dollari, comprese riduzioni della forza lavoro e consolidamenti degli stabilimenti. Il debito totale al netto della liquidità è migliorato del 60% a 84,1 milioni di dollari rispetto al terzo trimestre 2023. L'ordine arretrato dell'azienda ammonta a 728,8 milioni di dollari, con la Divisione Attrezzature Industriali che mostra una crescita dell'8,5% mentre la Divisione Gestione della Vegetazione è diminuita del 52%.
Alamo Group reportó resultados del tercer trimestre de 2024 con ventas netas de 401.3 millones de dólares, una disminución del 4.4% en comparación con el año anterior. La División de Equipos Industriales vio un crecimiento en las ventas del 22.3% a 211.2 millones de dólares, mientras que la División de Manejo de Vegetación cayó un 23% a 190.1 millones de dólares. La ganancia neta fue de 27.4 millones de dólares, con un EPS de 2.28 dólares. La empresa está implementando iniciativas de ahorro de costos con un objetivo de ahorros anuales de 25 a 30 millones de dólares, que incluyen reducciones de personal y consolidaciones de plantas. La deuda total neta de efectivo mejoró un 60% a 84.1 millones de dólares en comparación con el tercer trimestre de 2023. La cartera de pedidos de la empresa se sitúa en 728.8 millones de dólares, con la División de Equipos Industriales mostrando un crecimiento del 8.5%, mientras que la División de Manejo de Vegetación cayó un 52%.
알라모 그룹은 2024년 3분기 결과를 보고했으며, 순매출은 4억 1,300만 달러로, 작년 대비 4.4% 감소했습니다. 산업 장비 부문은 22.3% 성장하여 2억 1,120만 달러에 이르렀고, 식물 관리 부문은 23% 감소하여 1억 9,010만 달러에 달했습니다. 순이익은 2천740만 달러였고, 주당 순이익(EPS)은 2.28달러였습니다. 회사는 연간 2,500만에서 3,000만 달러의 비용 절감 목표를 가지고 인력 감축과 공장 통합을 포함한 비용 절감 이니셔티브를 시행하고 있습니다. 현금을 제외한 총 부채는 작년 3분기 대비 60% 개선되어 8천410만 달러에 이릅니다. 회사의 수주 잔고는 7억 2,880만 달러로, 산업 장비 부문이 8.5% 성장한 반면 식물 관리 부문은 52% 감소했습니다.
Alamo Group a rapporté les résultats du troisième trimestre 2024 avec un chiffre d'affaires net de 401,3 millions de dollars, en baisse de 4,4% par rapport à l'année précédente. La division des équipements industriels a connu une croissance des ventes de 22,3% atteignant 211,2 millions de dollars, tandis que la division de gestion de la végétation a diminué de 23% pour atteindre 190,1 millions de dollars. Le bénéfice net s'est élevé à 27,4 millions de dollars, avec un bénéfice par action de 2,28 dollars. L'entreprise met en œuvre des initiatives d'économie de coûts visant des économies annuelles de 25 à 30 millions de dollars, y compris des réductions de personnel et des consolidations d'usines. La dette totale nette de trésorerie s'est améliorée de 60% pour s'établir à 84,1 millions de dollars par rapport au troisième trimestre 2023. Le carnet de commandes de l'entreprise s'élève à 728,8 millions de dollars, la division des équipements industriels montrant une croissance de 8,5% tandis que la division de gestion de la végétation a diminué de 52%.
Alamo Group berichtete über die Ergebnisse des 3. Quartals 2024 mit netto Verkaufszahlen von 401,3 Millionen Dollar, was einem Rückgang von 4,4% im Vergleich zum Vorjahr entspricht. Die Industrieausrüstungsabteilung verzeichnete einen Verkaufsanstieg von 22,3% auf 211,2 Millionen Dollar, während die Abteilung für Vegetationsmanagement um 23% auf 190,1 Millionen Dollar zurückging. Der Nettoertrag betrug 27,4 Millionen Dollar, mit einem Gewinn pro Aktie von 2,28 Dollar. Das Unternehmen setzt Kostensenkungsinitiativen um, die auf jährliche Einsparungen von 25 bis 30 Millionen Dollar abzielen, einschließlich Stellenabbau und Werkskonsolidierungen. Die Gesamtschuld abzüglich der liquiden Mittel verbesserte sich im Vergleich zum 3. Quartal 2023 um 60% auf 84,1 Millionen Dollar. Der Auftragsbestand des Unternehmens beläuft sich auf 728,8 Millionen Dollar, wobei die Abteilung für Industrieausrüstung ein Wachstum von 8,5% zeigt, während die Abteilung für Vegetationsmanagement um 52% zurückging.
- Industrial Equipment Division sales grew 22.3% to $211.2 million
- Total debt net of cash improved by 60% to $84.1 million
- Cost-saving initiatives expected to yield $25-30 million in annual savings
- Industrial Equipment Division backlog increased 8.5% year-over-year
- Overall net sales decreased 4.4% to $401.3 million
- Vegetation Management Division sales declined 23%
- Net income dropped to $27.4 million from $34.9 million year-over-year
- Gross margin declined 206 basis points to 25.1%
- Vegetation Management Division backlog declined 52%
- Workforce reduction of approximately 10% since January 2024
Insights
The Q3 results reveal significant divergence between Alamo Group's divisions. The Industrial Equipment Division showed robust growth with
The company's cost reduction initiatives, targeting
Market dynamics show a clear split: government and industrial sectors remain robust, while agricultural and forestry segments face significant pressure. The housing market slowdown continues to impact forestry equipment demand, though recent storm damage in the Southeast could provide a temporary boost. The
The strategic divestment of Herschel Parts and facility consolidations indicate a significant restructuring to align capacity with market reality. This rightsizing, reducing production capacity by
Highlights for the Quarter
- Net Sales of
, down$401.3 million 4.4% versus prior year- Industrial Equipment Division net sales of
, up$211.2 million 22.3% - Vegetation Management Division net sales of
, down$190.1 million 23.0%
- Industrial Equipment Division net sales of
- Income from operations of
,$40.1 million 10.0% of net sales - Net income of
$27.4 million - Fully diluted EPS of
per share, including$2.28 of expense associated with workforce reductions; EPS of$0.10 per share excluding such expense (1)$2.38 - Total debt net of cash of
improved by$84.1 million or$126.2 million 60.0% compared to third quarter 2023 (1) - Backlog at the end of the third quarter was
$728.8 million - Trailing twelve-month EBITDA of
holds at$228.2 million 13.7% of Net Sales (1) - The Company is implementing cost saving actions targeting annualized savings of
to$25 $30 million - Workforce reduction expenses for the third quarter and first nine months were approximately
and$1.6 , respectively$3.2 million
- Workforce reduction expenses for the third quarter and first nine months were approximately
Third Quarter Results
Third quarter 2024 net sales of
Net income was
Year-to-Date Results
For the first nine months of 2024, net sales of
Net income for the first nine months was
As part of our commitment to optimize operations and enhance shareholder value, we are diligently executing cost saving initiatives inclusive of plant consolidations and workforce reductions. In the first nine months of 2024, we incurred approximately
Comments on Results
Jeff Leonard, Alamo Group's President, and Chief Executive Officer commented, "Our financial results for the third quarter were largely in line with our expectations given the conditions prevalent in our markets. As we experienced in the second quarter, market activity across our two segments continued to diverge.
"Demand for products and services offered by the Industrial Equipment Division remained historically strong in all areas during the third quarter. Spending by governmental agencies to upgrade and modernize maintenance fleets continued at a good pace. In addition, demand from industrial contractors remained strong, and rental fleet utilization was at a healthy level. We were pleased that demand for snow removal equipment remained strong in the third quarter. This Division reported solid sales growth and excellent profitability in the third quarter and its backlog remained elevated.
"The softness in markets for Vegetation Management equipment continued during the quarter as elevated interest rates and a challenging macro economy constrained demand. Sales for agricultural mowers and related equipment were muted as farm incomes remained under pressure. Farm equipment dealer inventory, despite coming down most of this year, remained elevated. Weakness in the US housing sector continued to suppress demand for our forestry and tree care products during the quarter. Governmental mowing was once again a bright spot for this Division, and we were pleased to see that our new Mantis prime mover continued to gain acceptance among state and municipal agencies. With difficulties in forestry and agriculture, the Division's net sales declined
"To address the weakness in our Vegetation Management Division, during the third quarter we initiated additional efficiency improvement measures aimed at further reducing excess manufacturing capacity. These measures include the sale of our Herschel Parts business to F.P. Bourgalt Tillage Tools Ltd., consolidation of manufacturing of the rotary mowers and other agricultural products, and consolidation of manufacturing of forestry and tree care products. These consolidations will improve the efficiency and utilization of our larger facilities while reducing longer-term capital requirements.
"When completed, these measures will reduce the Company's worldwide total production capacity by approximately
"As we look to the end of 2024, our outlook remains cautious as we are not expecting material changes in market conditions in the final weeks of 2024. We continue to anticipate that governmental demand for our products will be strong for the remainder of 2024 and well into the first half of 2025 at least. Our optimism in the strength of the governmental markets is only modestly tempered by the fact that National elections are imminent in the
"As we look further, we are currently not anticipating significant improvement in the agricultural equipment market until late 2025. The outlook in forestry and tree care is somewhat better. The significant damage caused by the recent storms in the
"Given this background, and with confidence in our ability to complete the consolidation activities now underway as well as the strength in our industrial and governmental businesses, we remain encouraged about the Company's prospects for 2025 and beyond."
Earnings Conference Call
The Company will host a conference call to discuss the results on Friday, November 1st, 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 (833) 816-1163 (domestic) or (412) 317-1898 (international). For interested individuals unable to join the call, a replay will be available until Friday, November 8, 2024, by dialing (877) 344-7529 (domestic) or (412) 317-0088 (internationally), passcode 6101611.
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 1st, 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 4,000 employees and operates 28 plants in
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. |
Alamo Group Inc. and Subsidiaries Condensed Consolidated Balance Sheets (in thousands) (Unaudited) | ||||||
September 30, | September 30, | |||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ 140,038 | $ 113,534 | ||||
Accounts receivable, net | 356,617 | 378,107 | ||||
Inventories | 371,999 | 371,748 | ||||
Other current assets | 10,950 | 9,976 | ||||
Total current assets | 879,604 | 873,365 | ||||
Rental equipment, net | 47,260 | 38,431 | ||||
Property, plant and equipment | 163,374 | 164,519 | ||||
Goodwill | 206,458 | 195,863 | ||||
Intangible assets | 156,399 | 159,884 | ||||
Other non-current assets | 28,246 | 23,452 | ||||
Total assets | $ 1,481,341 | $ 1,455,514 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Current liabilities: | ||||||
Trade accounts payable | $ 97,259 | $ 110,944 | ||||
Income taxes payable | 15,687 | 13,695 | ||||
Accrued liabilities | 84,061 | 79,682 | ||||
Current maturities of long-term debt and finance lease obligations | 15,009 | 15,008 | ||||
Total current liabilities | 212,016 | 219,329 | ||||
Long-term debt, net of current maturities | 209,157 | 308,892 | ||||
Long-term tax liability | 708 | 2,634 | ||||
Other long-term liabilities | 28,886 | 22,171 | ||||
Deferred income taxes | 12,854 | 14,754 | ||||
Total stockholders' equity | 1,017,720 | 887,734 | ||||
Total liabilities and stockholders' equity | $ 1,481,341 | $ 1,455,514 |
Alamo Group Inc. and Subsidiaries Condensed Consolidated Statements of Income (in thousands, except per share amounts) (Unaudited) | ||||||||
Three Months Ended | Nine Months Ended | |||||||
9/30/2024 | 9/30/2023 | 9/30/2024 | 9/30/2023 | |||||
Net sales: | ||||||||
Vegetation Management | $ 190,115 | $ 246,902 | $ 625,397 | $ 764,683 | ||||
Industrial Equipment | 211,186 | 172,742 | 617,793 | 507,426 | ||||
Total net sales | 401,301 | 419,644 | 1,243,190 | 1,272,109 | ||||
Cost of sales | 300,414 | 305,501 | 922,490 | 927,385 | ||||
Gross margin | 100,887 | 114,143 | 320,700 | 344,724 | ||||
25.1 % | 27.2 % | 25.8 % | 27.1 % | |||||
Selling, general and administration expense | 56,747 | 60,564 | 178,158 | 180,090 | ||||
Amortization expense | 4,061 | 3,826 | 12,175 | 11,465 | ||||
Income from operations | 40,079 | 49,753 | 130,367 | 153,169 | ||||
10.0 % | 11.9 % | 10.5 % | 12.0 % | |||||
Interest expense | (4,886) | (6,729) | (17,075) | (19,506) | ||||
Interest income | 562 | 385 | 1,877 | 1,125 | ||||
Other income (expense) | (32) | 138 | 1 | 94 | ||||
Income before income taxes | 35,723 | 43,547 | 115,170 | 134,882 | ||||
Provision for income taxes | 8,318 | 8,632 | 27,321 | 30,244 | ||||
Net Income | $ 27,405 | $ 34,915 | $ 87,849 | $ 104,638 | ||||
Net income per common share: | ||||||||
Basic | $ 2.29 | $ 2.93 | $ 7.34 | $ 8.78 | ||||
Diluted | $ 2.28 | $ 2.91 | $ 7.30 | $ 8.73 | ||||
Average common shares: | ||||||||
Basic | 11,977 | 11,928 | 11,965 | 11,916 | ||||
Diluted | 12,041 | 11,996 | 12,035 | 11,983 | ||||
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 Operating Income, Adjusted Net Income and Adjusted Diluted EPS, related to the impact of non-recurring items, of which are non-GAAP financial measures. Attachment 2 discloses a non-GAAP financial presentation related to the impact of currency translation on net sales by division. Attachment 3 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 4 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, except per share numbers) (Unaudited)
| ||||||||
Impact of Non-recurring Items | ||||||||
Three Months Ended | Nine Months Ended | |||||||
September 30, | September 30, | |||||||
2024 | 2023 | 2024 | 2023 | |||||
Operating Income - GAAP | $ 40,079 | $ 49,753 | $ 130,367 | $ 153,169 | ||||
(add: workforce reduction) | 1,607 | — | 3,226 | — | ||||
Adjusted Operating Income - non-GAAP | $ 41,686 | $ 49,753 | $ 133,593 | $ 153,169 | ||||
Net Income - GAAP | $ 27,405 | $ 34,915 | $ 87,849 | $ 104,638 | ||||
(add: workforce reduction) | 1,226 | — | 2,461 | — | ||||
Adjusted Net Income - non-GAAP | $ 28,631 | $ 34,915 | $ 90,310 | $ 104,638 | ||||
Diluted EPS - GAAP | $ 2.28 | $ 2.91 | $ 7.30 | $ 8.73 | ||||
(add: workforce reduction) | 0.10 | — | 0.20 | — | ||||
Adjusted Diluted EPS - non-GAAP | $ 2.38 | $ 2.91 | $ 7.50 | $ 8.73 |
Attachment 2 | |||||||||
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 | ||||||||
2024 | 2023 | % change | $ | % | |||||
Vegetation Management | $ 190,115 | $ 246,902 | (23.0) % | $ (336) | (0.1) % | ||||
Industrial Equipment | 211,186 | 172,742 | 22.3 % | (330) | (0.2) % | ||||
Total net sales | $ 401,301 | $ 419,644 | (4.4) % | $ (666) | (0.2) % | ||||
Nine Months Ended September 30, | Change due to currency | ||||||||
2024 | 2023 | % change | $ | % | |||||
Vegetation Management | $ 625,397 | $ 764,683 | (18.2) % | $ 926 | 0.1 % | ||||
Industrial Equipment | 617,793 | 507,426 | 21.8 % | (816) | (0.2) % | ||||
Total net sales | $ 1,243,190 | $ 1,272,109 | (2.3) % | $ 110 | — % | ||||
Attachment 3 | ||||||
Alamo Group Inc. Non-GAAP Financial Reconciliation (in thousands) (Unaudited)
| ||||||
Consolidated Net Change of Total Debt, Net of Cash | ||||||
September 30, | September 30, | Net Change | ||||
Current maturities | $ 15,009 | $ 15,008 | ||||
Long-term debt, net of current | 209,157 | 308,892 | ||||
Total debt | $ 224,166 | $ 323,900 | ||||
Total cash | 140,038 | 113,534 | ||||
Total Debt Net of Cash | $ 84,128 | $ 210,366 | $ (126,238) | |||
EBITDA | ||||||||
Nine Months Ended | Trailing Twelve Months Ended | |||||||
September 30, | September 30, | September 30, | December 31, | |||||
Income from operations | $ 130,367 | $ 153,169 | $ 175,165 | $ 197,967 | ||||
Depreciation | 27,284 | 23,674 | 36,064 | 32,454 | ||||
Amortization | 12,702 | 11,992 | 16,932 | 16,222 | ||||
EBITDA | $ 170,353 | $ 188,835 | $ 228,161 | $ 246,643 | ||||
Attachment 4 | ||||||||
Alamo Group Inc. Non-GAAP Financial Reconciliation (in thousands) (Unaudited)
| ||||||||
Vegetation Management Division Performance | ||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
2024 | 2023 | 2024 | 2023 | |||||
Backlog | $ 185,353 | $ 390,206 | ||||||
Net Sales | $ 190,115 | $ 246,902 | 625,397 | 764,683 | ||||
Income from Operations | 12,404 | 30,251 | 50,089 | 102,320 | ||||
6.5 % | 12.3 % | 8.0 % | 13.4 % | |||||
Depreciation | 4,457 | 3,915 | 13,224 | 11,335 | ||||
Amortization | 3,032 | 3,038 | 9,109 | 9,124 | ||||
EBITDA | 19,893 | 37,204 | 72,422 | 122,779 | ||||
10.5 % | 15.1 % | 11.6 % | 16.1 % | |||||
Industrial Equipment Division Performance | ||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
2024 | 2023 | 2024 | 2023 | |||||
Backlog | $ 543,425 | $ 500,661 | ||||||
Net Sales | $ 211,186 | $ 172,742 | 617,793 | 507,426 | ||||
Income from Operations | 27,675 | 19,502 | 80,278 | 50,849 | ||||
13.1 % | 11.3 % | 13.0 % | 10.0 % | |||||
Depreciation | 4,734 | 4,230 | 14,060 | 12,339 | ||||
Amortization | 1,205 | 964 | 3,593 | 2,868 | ||||
EBITDA | 33,614 | 24,696 | 97,931 | 66,056 | ||||
15.9 % | 14.3 % | 15.9 % | 13.0 % |
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SOURCE Alamo Group Inc.
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