Alamo Group Inc. Reports 2Q Results
Alamo Group has reported second quarter 2022 net sales of $396.2 million compared to $347.6 million in the second quarter of 2021, an increase of 14.0%. Gross margin improved in the quarter versus the second quarter of 2021 by $11.6 million or 13.1%. Second quarter net income improved 9.4% to $28.5 million, compared to net income of $26.0 million, in the second quarter of 2021.
The Company’s backlog at the end of the second quarter of 2022 was $894.0 million, an increase of $390.5 million, or 77.5%, from the backlog at the end of the second quarter of 2021, and up 11.6% from the end of calendar year 2021.
The Vegetation Management Division had a strong second quarter of 2022 as markets remained solid compared to the second quarter of 2021. The Division’s second quarter net sales were $255.0 million, up 18.8% compared to $214.7 million for the same period in 2021. The increase in net sales was driven by strong retail demand for agricultural, forestry, tree care, and governmental mowing products in both North America and Europe.
Comments on Results – Jeff Leonard, Alamo Group’s President and Chief Executive Officer, commented, “We are pleased to report that, in the second quarter, Alamo Group achieved the highest quarterly sales and earnings in the Company’s history. While the second quarter is normally seasonally strong for the Company, both sales and earnings for the quarter comfortably exceeded previous records. It is especially satisfying that our teams were able to produce robust results in a business environment that certainly remains turbulent and challenging.
“Modest improvements in supply chain performance helped our teams increase customer shipments and improve production efficiencies during the quarter. The improvement in efficiency, combined with better pricing, supported gross margin performance despite persistent cost inflation pressures. Good cost discipline was evident across the Company during the quarter and helped us drive double-digit Income from Operations growth for the first time since the third quarter of 2020.
“Orders received during the quarter declined modestly compared to the second quarter of 2021, however overall, our markets continued to show significant strength. . . The decline in order bookings during the quarter was primarily the result of gradually softening demand in the North American agriculture market. With an improving supply chain situation, our inventory levels should also naturally decline. Most importantly, our backlog remains close to the historic high set at the end of the first quarter of 2022 and the margin in backlog is increasingly healthy.”