Alamo Group Inc. recently reported results for the third quarter ended September 30. Among highlights:
- Net sales for the third quarter increased by 5.5 percent and reached a new record.
- Net income for the quarter decreased by 26 percent.
- Industrial Division net sales increased by 1.1 percent.
- Agricultural Division net sales decreased by 2.7 percent.
- European Division net sales increased by 35.9 percent.
- Net sales for the first nine months hit a record and increased by 8.8 percent.
- Net income for the first nine months was down by 6.3 percent.
The results for the third quarter and first nine months of 2019 included the effect of the acquisitions of Dutch Power, which was completed in March, and Dixie Chopper, which was completed in August, though Dixie Chopper’s results are immaterial for the quarter and year-to-date.
Results in the Ag Division continue to be impacted by weak overall agricultural market conditions and lower farm incomes, the company said. In addition to unfavorable sales volume, operating margins were further impacted by production cuts and unfavorable product mix, which more than offset lower material costs and spending reductions.
President and CEO Ron Robinson characterized the quarterly results as a “mixed bag.”
“While there were a number of accomplishments during the quarter, including record net sales and successful negotiations toward completing our largest acquisition to date, there were certainly some disappointments in the quarter as well, which resulted in lower earnings,” Robinson said.
“In the past few years, we have produced an impressive stream of record results despite a variety of headwinds that have impacted us and our markets,” he said. “But, in the third quarter, these challenges all came together to culminate in reducing our results, that appear even worse due to a large $3 million one-time gain from tax reform that boosted our 2018 third quarter results.”
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