Alamo Group Announces 1Q Results
Full Report: http://alamo-group.com/assets/files/ALG-2015-1Q.pdf
Sales by Division
Net sales for the Company’s North American Industrial Division were $116.9 million in the first quarter of 2015, an increase of 50% compared to net sales of $77.7 million in 2014. Excluding the acquisition of the Specialized units, net sales for the Division were $72.7 million, a decrease of 6% as sales in the quarter were impacted by adverse winter weather conditions that affected both our internal operations and our customers ) .
Alamo Group’s North American Agricultural Division net sales in the first quarter of 2015 were $48.5 million compared to net sales of $50.8 million in the comparable period of 2014, a decrease of 5%. Excluding the acquisition of Fieldquip the Division’s sales were $47.7 million ) . These results reflect the continued weakness in the U.S. agricultural sector.
Alamo’s European Division net sales were $42.4 million in the first quarter of 2015 versus $44.1 million in the prior year’s first quarter, a decrease of 4%. The decrease was primarily related to changes in exchange rates as sales in local currency were up compared to last year. Excluding the acquisition of Kellands the Division’s sales were $40.0 million ) .
Ron Robinson, Alamo Group’s President and Chief Executive Officer, commented: “While the results for the first quarter of 2015 were a record for Alamo Group in both sales and earnings, there were certainly headwinds that affected the Company’s performance. Our North American Industrial Division exhibited strong growth, mainly from the acquisition of the units of Specialized WausauEverest, Super Products and H.P. Fairfield. This acquisition has been an excellent addition for Alamo and continues to be accretive to our results. Excluding Specialized’s contributions, the Division’s results were down for the quarter. We feel this was related more to adverse winter weather conditions rather than a change in the market. This Division, which has exhibited nice growth for the last several years, lost some production days due to winter storms plus saw weakness in demand for spare parts for equipment other than snow removal products as end users were focused on dealing with the heavy snowfall. In spite of this, backlog for the Division, excluding acquisitions, increased 18% compared to the prior year’s first quarter as demand for our products in this sector remained steady.
“Our North American Agricultural Division continued to experience weak market conditions which have been impacting this sector for more than a year. We believe this weakness will continue throughout 2015. Despite lower sales, reflecting declines in overall farm incomes, the Division is holding up better than many other agricultural equipment manufacturers, particularly those focused heavily on row crops. We believe the wide applicability of our products has helped mitigate some of the broader declines.
“Our international operations are feeling the impact of the strong U.S. dollar which is reducing the contributions of our sales and earnings outside the U.S. Our European Division in particular had sales increases in local currency, but showed a decrease of 4% when translated back to U.S. dollars. Our operations there have been showing improvement despite the lingering effects of the general economic weakness, but were unable to overcome the effects of the currency changes in the last quarter and this will likely impact our results throughout 2015.
“The various headwinds we encountered in the first quarter have affected our short term results and some will likely persist throughout the year. Despite this, we feel good about the long term prospects for Alamo Group as we should continue to benefit from the historically steady demand for our core products as well as the contributions from recent acquisitions.”