Alamo Group Reports Record Q3 Sales and Earnings
Alamo Group Inc. has reported record results for the third quarter ended September 30, 2022.
Third quarter 2022 net sales were $368.8 million compared to $338.3 million in the third quarter of 2021, an increase of 9.0%. Gross margin improved in the quarter versus the third quarter of 2021 by $6.1 million or 7.0%.
The positive results reported for the quarter were achieved through a combination of effective price management and disciplined control of operating expenses. These results were achieved despite material cost inflation, elevated transportation costs, and unfavorable manufacturing efficiencies directly related to supply chain disruptions and skilled labor shortages.
The Vegetation Management Division’s third quarter net sales were $228.5 million, up 8.9% compared to $209.8 million for the same period in 2021. The increase in net sales was driven by strong retail demand for forestry, tree care, agricultural and governmental mowing products in both North America and Europe.
Jeff Leonard, Alamo Group’s President and Chief Executive Officer, commented, “We were pleased that our third quarter and year-to-date sales and earnings again set Company records despite a stubbornly challenging operating environment. Supply chain re-shoring by larger equipment manufacturers continues to stress North American suppliers of specialty components. Labor remained very tight in most areas where we operate, and this also contributed to constrained top line growth.”
Leonard emphasized that the combination of supply chain delays and labor shortages once again reduced operational efficiency and resulting gross margin during the third quarter.
“We continue to expect sales and earnings will expand nicely once the supply side issues resolve. The strength and health of our backlog continues to provide us with confidence about the performance of the Company for the remainder of this year and the near future,” Leonard said.