- Record net income for a second quarter of $12.3 million, up 16.6%
Net sales for the quarter of $213.3 million, up 0.8%
- Industrial Division net sales $117.3 million, up 0.2%
- Agricultural Division net sales $54.2 million, up 4.6%
- European Division net sales $41.7 million, down 1.8%
- Record net income for the first six months of $24.5 million, up 27.4%
- Record net sales for the first six months of $428.7 million, up 1.5%
- Backlog at $157.2 million, up 20.7% versus previous year's second quarter
Alamo Group's net sales for the second quarter of 2017 were $213.3 million compared to $211.5 million in the second quarter of 2016, an increase of 0.8%. Net income for the quarter was $12.3 million, or $1.05 per diluted share, compared to net income of $10.6 million, or $0.92 per diluted share, in 2016. This is an increase of 16.6% in net income and 14.1% in earnings per share.
For the first six months of 2017 net sales were $428.7 million compared to $422.5 million in the previous year, an increase of 1.5%. Net income for the first half of 2017 was $24.5 million, or $2.10 per diluted share, versus $19.2 million, or $1.67 per diluted share for the same period in 2016. This is an increase of 27.4% in net income and 25.7% in earnings per share. Net income and diluted earnings per share for both the second quarter and first six months of 2017 were at record levels for Alamo Group.
Sales by Division
The Company's Agricultural Division recorded net sales of $54.2 million in the second quarter of 2017, an increase of 4.6% compared with net sales of $51.8 million for the same period in the prior year. We believe this increase reflects signs of modest improvement in certain sectors of the agricultural market. For the first six months of 2017 net sales in the Agricultural Division were $106.0 million compared to net sales of $100.5 million in the first half of the previous year, an increase of 5.5%.
Alamo Group's European Division net sales in the second quarter of 2017 were $41.7 million, a decrease of 1.8% compared to net sales of $42.5 million in the comparable period of 2016. While net sales were down in U.S. dollars, in local currency they were up 5.0% as the European market is starting to show some indications of a return to growth. For the first six months of 2017 net sales in the Division were $79.5 million compared to $81.5 million in the first six months of 2016, a decrease of 2.5% in U.S. dollars, though up 5.1% in local currency.(1)
Ron Robinson, Alamo Group's President and Chief Executive Officer, commented, "We continue to be pleased with the progress we are making in 2017. Margins are steadily improving and earnings growth is strong despite very moderate sales growth. We are particularly pleased that all three of our operating divisions contributed to the earnings growth we have experienced in the first six months of 2017.
"Alamo's Industrial Division continues to be a solid performer, even though sales were essentially flat in the second quarter due to weakness in sales of our snow removal products which offset increases in other Division products, most notably sweepers, excavators and even our vacuum truck products, which have been particularly weak for the last year, showed improvement.
"Our Agricultural Division had sales growth of 4.6% and continued strong margin performance. Plus, we feel we are finally starting to see some improvement in parts of the agricultural market. Though these indications are modest and spotty, we feel this bodes well for the Division's results for the rest of the year and into 2018.
"Our European Division is also seeing signs of improved market activity. While our sales in US dollars were down slightly in the second quarter, they were up 5.0% in local currency. This was heavily affected by the declines in the value of the British pound and Euro following the Brexit vote at the end of the second quarter in 2016. Both of these currencies are now trading above the lows they were a year ago. This should make the comparables for our results more favorable in the second half of 2017. With better comparables and slight market improvement we believe the outlook for our European Division is looking up for the remainder of 2017. Significant improvements in European bookings and backlog are also adding to our confidence.(1)
"For Alamo in total, while market conditions remain soft, we are encouraged that there are some signs of improvement and we feel with any top line growth we can continue to exhibit reasonable margin improvement and earnings growth, though probably not at the pace we have experienced in the first half of 2017. Certainly our improvements in backlog in the second quarter, up over 20% from a year ago, further support this outlook. In addition, we should start to benefit from the recent acquisitions we have announced. Old Dominion Brush Company in the U.S. and Santa Izabel in Brazilshould both provide marginal, but accretive contributions to Alamo's results in the second half of 2017.
"As a result, while we feel our markets will remain challenged and sales growth will be modest, we are optimistic about the outlook for Alamo Group in the second half of 2017 and feel further improving market conditions should continue to benefit us as we move into 2018."
SOURCE Alamo Group Inc. http://alamo-group.com