Alamo Announces 2010 4Q Results & Full Year Earnings

Alamo Group Inc., Seguin, TX recently reported results for the fourth quarter and year ended December 31, 2010. Net sales in the fourth quarter were $129.5 million, compared to net sales of $112.8 million in the fourth quarter of 2009, an increase of 15%. Net income for the quarter was $4.1 million, versus net income of $9.5 million.

The results include the effects of the acquisition of Bush Hog, which took place in October 2009 and contributed $19.1 million in incremental sales and $1.2 million in incremental net income during the 2010 fourth quarter. Adjusted net income for the fourth quarter of 2010 was $2.9 million, versus $4.0 million in 2009.

The company’s North American Agricultural Division net sales were $39.5 million in the fourth quarter of 2010, compared to $29.2 million in the fourth quarter of 2009, an increase of 35%. For the full year, net sales in 2010 were $173.5 million, versus $92.4 million in fiscal 2009. The increase in 2010 was primarily related to the acquisition of Bush Hog, which accounted for $88.9 million in net sales in 2010 and $10.9 million in net sales in 2009. The division was aided by improvements in the agricultural market, which began in the second half of the year and shows signs of continuing in 2011, the company said.

For the full year, net sales in 2010 were $524.5 million, versus $446.5 million in 2009, an increase of 17%. Net income for fiscal 2010 was $21.1 million, compared to $18.6 million in 2009. For the 2009 fiscal year, adjusting for the acquisition of Bush Hog and the other restructuring and non-cash charges and gains, net sales would have been $435.6 million and net income would have been $13.4 million.

Alamo Group’s President and Chief Executive Officer, Ron Robinson, said, “While we continue to be affected by overall weak economic conditions, we are pleased with our 2010 performance. We achieved record full year earnings as a result of our diligent focus on cost control and asset management measures, as well as the successful integration of Bush Hog, which has resulted in a substantial increase in profitability for this business. Our actions have positioned us for long-term growth while mitigating near-term challenges. These efforts have allowed us to steadily improve our margins and strengthen our balance sheet.”

The company also said Founder and Chairman of the Board, Donald J. Douglass will not stand for re-election and will retire from the Board after the Annual Meeting of Shareholders, May 5, 2011. Douglass founded Alamo Group in 1969 with the acquisition of Engler Manufacturing Company in Houston, TX.

Douglass served as Chairman and CEO of the Company from its founding until his retirement in 1999 from day to day operations, though he has remained as Chairman of the Board of Directors.

The company said a search is under way to elect a new director to fill the vacancy that will be created by Douglass’ departure. ◆