Alamo Reports Record 3Q Results

Alamo Group Inc., Seguin, TX, reported record results for the third quarter ended September 30, 2010. Net sales for the third quarter were $132.3 million compared to net sales of $110.3 million for the same quarter in 2009, an increase of 20%. Net income for the quarter was $8.2 million, versus the 2009 third quarter net income of $4.6 million, an increase of 48% per diluted share.

The net income was a record for a third quarter for Alamo Group as was the nine month net income. The results for the quarter include the acquisition of Bush Hog which occurred in October 2009 and contributed $25.7 million to sales and $1.9 million to net income in the quarter. Additionally, results for the third quarter included tax credits related to prior years’ research and development expenses, which reduced the provision for income tax by $0.9 million. Without these factors, net sales for the quarter would have been $106.6 million and net income would have been $5.4 million.

Net sales for the first nine months of 2010 were $395.0 million versus $333.7 million in the comparable period of 2009, an increase of 18%. Net income in the nine month period was $17.0 million, or $1.43 per diluted share, compared to $9.1 million for the same period in 2009. Excluding the effects of the acquisition and the tax credit referenced above, net sales would have been $325.3 million and net income would have been $13.0 million.

For the Company as a whole, without Bush Hog, sales were down slightly for both the quarter and year to date periods due to weaker market conditions in the Company’s European operations that were mostly offset by steady to gradually improving conditions in North America. Net earnings for these periods were up as the company continues to benefit from its cost control initiatives.

The company’s North American Agricultural Division net sales were $48.9 million in the third quarter of 2010 compared to $20.2 million the previous year. For the nine month period, net sales were $134.0 million versus $63.3 million in the same period of 2009. The acquisition of Bush Hog, which is included in this Division’s results, accounted for $25.7 million of net sales in the quarter and $69.8 million for the nine month period. ◆