Alamo Reports 3Q Results

Alamo Group Inc. reported results for the third quarter ended September 30, 2012. Net sales for the third quarter were $156.1 million compared to net sales of $155.1 million for the same quarter of 2011, an increase of 1%.

Net income for the quarter was $8.6 million, versus $10.1 million for the third quarter of 2011, a decrease of 15%. The decline in net income was attributed to some softness across all three of the company’s business segments.

Net sales for the first nine months of 2012 were a record $479.0 million and were 5% above 2011 nine-month net sales of $456.6 million. Net income in the 2012 nine month period was $24.7 million, compared to $24.6 million, for the same period in 2011. The company’s 2012 results include the effect of the acquisition of Tenco, which was completed in October 2011. In the third quarter of 2012, Tenco contributed $5.0 million to net sales and $0.1 million to net income. For the first nine months of 2012, Tenco contributed $20.1 million to net sales and $0.4 million to net income.

The company’s North American Agricultural Division net sales were $54.1 million in the third quarter of 2012, compared to net sales of $55.3 million in the same period of 2011, a decrease of 2%. For the nine-month period, net sales were $155.5 million, versus $160.5 million in the previous year, a decrease of 3%. This reflects slower overall market conditions compared to the high growth rates of the last two years, as well as the further impact of reduced demand in areas affected by recent droughts.

Alamo Group’s European Division net sales in the third quarter of 2012 were $40.0 million, a decrease of 7% compared to net sales of $42.8 million in the third quarter of 2011. For the first nine months of 2012, net sales in the division were $126.7 million, versus $130.8 million in the same period of the previous year, a decrease of 3%.

Ron Robinson, Alamo Group’s president and chief executive officer said, “Our results for the quarter reflected weakening global economic conditions. While our industrial mowing and vacuum truck products held up reasonably well in North America, sales of big ticket items, such as excavators and street sweepers, were below expectations as governmental end users, particularly municipalities, showed signs of slowing. Similarly, the softness we began to see in our agricultural division in the second quarter continued into the third quarter, especially in drought-affected areas. As expected, Europe remained our softest segment, as it continued to feel the effects of the financial turmoil and general economic uncertainty across that region.”

Alamo Group, Association member since 1952; alamo-group.com.