Alamo Group Inc. (ALG) Bundle
A Brief History of Alamo Group Inc.
Founded in 1969, Alamo Group Inc. has established itself as a leader in the manufacturing of equipment for the agricultural, industrial, and municipal markets. The company operates through two primary segments: Vegetation Management and Industrial Equipment.
Financial Performance Overview
As of September 30, 2024, Alamo Group reported net sales of $1,243.2 million for the first nine months of 2024, reflecting a decrease of 2% compared to $1,272.1 million in the same period of 2023. This decline is primarily attributed to weaker demand in the Vegetation Management segment, which saw a decrease of 18%, while the Industrial Equipment segment experienced a 22% increase in sales.
| Period | Net Sales (in millions) | Net Income (in millions) | Earnings Per Share (EPS) |
|---|---|---|---|
| Q3 2024 | $401.3 | $27.4 | $2.28 |
| Q3 2023 | $419.6 | $34.9 | $2.91 |
| 9M 2024 | $1,243.2 | $87.8 | $7.30 |
| 9M 2023 | $1,272.1 | $104.6 | $8.73 |
Segment Performance
The Vegetation Management segment generated net sales of $625.4 million in the first nine months of 2024, down from $764.7 million in the same period of 2023. In contrast, the Industrial Equipment segment achieved net sales of $617.8 million, up from $507.4 million year-over-year.
| Segment | Net Sales (9M 2024, in millions) | Net Sales (9M 2023, in millions) | Change (%) |
|---|---|---|---|
| Vegetation Management | $625.4 | $764.7 | -18% |
| Industrial Equipment | $617.8 | $507.4 | +22% |
Operating Expenses and Profitability
Gross profit for the first nine months of 2024 was $320.7 million, or 26% of net sales, compared to $344.7 million, or 27% of net sales, in the prior year. Selling, general, and administrative (SG&A) expenses were $178.2 million, a slight decrease from $180.1 million in 2023.
Net income after tax for the first nine months of 2024 was $87.8 million, equating to $7.30 per share on a diluted basis, down from $104.6 million or $8.73 per share in the same period of 2023.
| Metric | 9M 2024 | 9M 2023 |
|---|---|---|
| Gross Profit (in millions) | $320.7 | $344.7 |
| SG&A Expenses (in millions) | $178.2 | $180.1 |
| Net Income (in millions) | $87.8 | $104.6 |
Capital Structure and Liquidity
As of September 30, 2024, Alamo Group had total debt of $224.2 million, down from $235.3 million at the end of 2023. The company reported working capital of $667.6 million, an increase from $590.0 million at the end of 2023.
Capital expenditures for the first nine months of 2024 totaled $19.0 million, down from $27.1 million during the same period in 2023. The company anticipates capital expenditures for the full year 2024 to be between $30.0 million and $35.0 million.
| Metric | As of September 30, 2024 | As of December 31, 2023 |
|---|---|---|
| Total Debt (in millions) | $224.2 | $235.3 |
| Working Capital (in millions) | $667.6 | $590.0 |
| Capital Expenditures (in millions) | $19.0 | $27.1 |
Dividends and Shareholder Returns
Alamo Group declared a quarterly cash dividend of $0.26 per share in October 2024, compared to $0.22 per share in October 2023. For the first nine months of 2024, total dividends paid were $9.3 million, up from $7.9 million in the same period of 2023.
| Dividends | Q3 2024 | Q3 2023 |
|---|---|---|
| Dividends Declared (per share) | $0.26 | $0.22 |
| Total Dividends Paid (in millions) | $9.3 | $7.9 |
A Who Owns Alamo Group Inc. (ALG)
Major Shareholders
As of 2024, Alamo Group Inc. (ALG) has a diverse ownership structure. The following table outlines the major shareholders and their respective ownership percentages:
| Shareholder | Ownership Percentage | Number of Shares Owned |
|---|---|---|
| BlackRock, Inc. | 10.2% | 1,227,946 |
| Vanguard Group, Inc. | 9.8% | 1,150,000 |
| Dimensional Fund Advisors LP | 8.5% | 1,016,000 |
| Wellington Management Group LLP | 7.3% | 877,000 |
| State Street Corporation | 5.6% | 670,000 |
| Insider Ownership | 3.7% | 442,000 |
| Other Institutional Investors | 54.9% | 6,586,000 |
Institutional Ownership
Institutional investors hold a significant portion of Alamo Group Inc.'s shares, representing approximately 54.9% of total shares outstanding. This indicates strong institutional confidence in the company’s operational and financial strategies.
Insider Ownership
Insider ownership stands at approximately 3.7%, which includes shares held by executives and board members. This ownership aligns the interests of management with those of shareholders.
Shareholder Composition
The overall shareholder composition reflects a mix of institutional and retail investors, which aids in stabilizing the stock price against volatility. The following table summarizes the ownership distribution:
| Ownership Type | Percentage |
|---|---|
| Institutional Investors | 54.9% |
| Insiders | 3.7% |
| Retail Investors | 41.4% |
Recent Stock Performance
As of the end of September 2024, Alamo Group Inc. reported a diluted earnings per share of $7.30 for the first nine months, compared to $8.73 in the same period of 2023. The company’s net income for the first nine months of 2024 was $87.8 million, a decrease from $104.6 million year-over-year.
Market Capitalization
As of September 30, 2024, Alamo Group Inc. had a market capitalization of approximately $1.2 billion, reflecting its standing in the market and the impact of ownership on stock liquidity.
Alamo Group Inc. (ALG) Mission Statement
Company Overview
Alamo Group Inc. (ALG) specializes in manufacturing and distributing equipment for infrastructure maintenance and agricultural applications. The company's mission focuses on delivering high-quality products and services that enhance the productivity of its customers while ensuring sustainable practices.
Mission Statement
As of 2024, Alamo Group's mission statement emphasizes its commitment to providing innovative and superior equipment solutions that meet the evolving needs of its customers in the vegetation management and industrial equipment sectors. The company aims to achieve operational excellence while fostering an environment of integrity, respect, and teamwork.
Key Components of the Mission Statement
- Customer Commitment: Focused on understanding and meeting customer needs.
- Innovation: Striving for continuous improvement and innovation in product development.
- Sustainability: Committed to environmentally responsible practices.
- Employee Engagement: Valuing and investing in employees as key assets of the company.
Financial Performance Overview
In the first nine months of 2024, Alamo Group reported net sales of $1,243.2 million, a decrease of 2% compared to $1,272.1 million in the same period of 2023. This decline is largely attributed to reduced market demand in the Vegetation Management segment.
Sales Breakdown
| Segment | Net Sales (2024) | Net Sales (2023) | Change (%) |
|---|---|---|---|
| Vegetation Management | $625.4 million | $764.7 million | -18% |
| Industrial Equipment | $617.8 million | $507.4 million | +22% |
| Total | $1,243.2 million | $1,272.1 million | -2% |
Profitability Metrics
For the first nine months of 2024, Alamo Group's gross profit was $320.7 million, representing 26% of net sales, compared to $344.7 million or 27% of net sales in the same period of 2023. The decline in gross profit reflects challenges in the Vegetation Management division.
Income Metrics
Net income after tax for the first nine months of 2024 was $87.8 million, or $7.30 per share, down from $104.6 million or $8.73 per share in the same period of 2023, marking a decrease of 16%.
Operational Challenges and Responses
The company faced several challenges in 2024, including a significant decline in demand for forestry and agricultural mowing products. The backlog of orders decreased 52% year-over-year, contributing to operational adjustments aimed at improving efficiency and reducing costs.
Liquidity and Capital Resources
As of September 30, 2024, Alamo Group reported working capital of $667.6 million, an increase from $590.0 million at the end of 2023. This increase was primarily due to cash and cash equivalents.
Debt and Credit Facilities
The company has a revolving credit facility of up to $400.0 million and a term loan of $255.0 million under its 2022 Credit Agreement with Bank of America. As of September 30, 2024, total debt stood at $224.2 million.
Dividends
Alamo Group declared a quarterly cash dividend of $0.26 per share in October 2024, reflecting a commitment to returning value to shareholders.
Conclusion on Mission Alignment
Alamo Group Inc.'s mission statement aligns with its operational and financial strategies as it navigates through market challenges while focusing on sustainability, innovation, and customer satisfaction.
How Alamo Group Inc. (ALG) Works
Company Overview
Alamo Group Inc. operates primarily in the manufacturing and distribution of equipment used in infrastructure maintenance and vegetation management. The company is divided into two main segments: Vegetation Management and Industrial Equipment.
Financial Performance
For the first nine months of 2024, Alamo Group reported the following financial metrics:
| Metric | 2024 (9 Months) | 2023 (9 Months) |
|---|---|---|
| Net Sales | $1,243.2 million | $1,272.1 million |
| Net Income | $87.8 million | $104.6 million |
| Gross Profit | $320.7 million (26% of net sales) | $344.7 million (27% of net sales) |
| SG&A Expenses | $178.2 million (14% of net sales) | $180.1 million (14% of net sales) |
| Interest Expense | $17.1 million | $19.5 million |
| Capital Expenditures | $19.0 million | $27.1 million |
Segment Performance
In the first nine months of 2024, the performance of Alamo Group's segments was as follows:
| Segment | Net Sales (2024) | Net Sales (2023) | Change (%) |
|---|---|---|---|
| Vegetation Management | $625.4 million | $764.7 million | -18% |
| Industrial Equipment | $617.8 million | $507.4 million | +22% |
Operational Challenges
Alamo Group faced operational challenges, including:
- Decrease in Vegetation Management sales due to lower market demand.
- Production inefficiencies and costs associated with capacity reductions in the Vegetation Management Division.
- A five-week strike at Gradall Industries affecting the Industrial Equipment Division.
Income Statement Highlights
The income statement for the third quarter of 2024 showed:
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Sales | $401.3 million | $419.6 million |
| Gross Profit | $100.9 million (25% of net sales) | $114.1 million (27% of net sales) |
| Net Income | $27.4 million | $34.9 million |
| Basic Earnings per Share | $2.29 | $2.93 |
| Diluted Earnings per Share | $2.28 | $2.91 |
Balance Sheet Overview
As of September 30, 2024, the balance sheet reflected the following:
| Metric | Value |
|---|---|
| Total Assets | $1,481.3 million |
| Total Liabilities | $463.6 million |
| Long-term Debt | $209.2 million |
| Working Capital | $667.6 million |
Cash Flow Analysis
For the nine months ended September 30, 2024, cash flow from operating activities was:
| Metric | Amount |
|---|---|
| Net Cash Provided by Operating Activities | $130.6 million |
| Net Cash Used in Investing Activities | ($16.1 million) |
| Net Cash Used in Financing Activities | ($25.4 million) |
Dividends
Dividends declared and paid for the first nine months of 2024 were:
| Period | Dividends Declared | Dividends Paid |
|---|---|---|
| Q3 2024 | $0.26 per share | $0.26 per share |
| First Nine Months 2024 | $0.78 per share | $0.78 per share |
Market Outlook
As of 2024, Alamo Group's outlook is affected by various factors including:
- Weakness in the forestry and agricultural mowing markets.
- Continued strong demand for Industrial Equipment.
- Operational adjustments in response to market conditions.
How Alamo Group Inc. (ALG) Makes Money
Revenue Segmentation
Alamo Group Inc. generates revenue primarily through two segments: Vegetation Management and Industrial Equipment. In the first nine months of 2024, the company reported net sales of $1,243.2 million, a decrease of 2% from $1,272.1 million during the same period in 2023.
| Segment | 2024 Net Sales (in millions) | 2023 Net Sales (in millions) | Change (%) |
|---|---|---|---|
| Vegetation Management | $625.4 | $764.7 | -18% |
| Industrial Equipment | $617.8 | $507.4 | +22% |
Sales Breakdown by Product Type
In the third quarter of 2024, Alamo Group's net sales were $401.3 million, with a product type breakdown as follows:
| Product Type | Q3 2024 Net Sales (in thousands) | Q3 2023 Net Sales (in thousands) |
|---|---|---|
| Wholegoods | $307,401 | $326,843 |
| Parts | $75,525 | $78,739 |
| Other | $18,375 | $14,062 |
Market Demand
The decrease in sales for the Vegetation Management segment was primarily due to a steep decline in market demand in the forestry, tree care, and agricultural mowing sectors. Conversely, the Industrial Equipment segment saw robust demand, particularly in excavators, vacuum trucks, and snow removal equipment.
Gross Profit and Margins
Alamo Group's gross profit for the first nine months of 2024 was $320.7 million, representing 26% of net sales, compared to $344.7 million (27% of net sales) during the same period in 2023. The decline was attributed to lower sales volume and production inefficiencies in the Vegetation Management segment.
Operating Income
For the first nine months of 2024, consolidated income from operations was $130.4 million, down from $153.2 million in the same period of 2023, reflecting a decrease of 15%. The income from operations for each segment was:
| Segment | 2024 Income from Operations (in millions) | 2023 Income from Operations (in millions) |
|---|---|---|
| Vegetation Management | $50.1 | $102.3 |
| Industrial Equipment | $80.3 | $50.8 |
Expenses and Profitability
In the first nine months of 2024, selling, general and administrative expenses (SG&A) were $178.2 million, which is 14% of net sales, slightly down from $180.1 million (14% of net sales) in the prior year. The company incurred amortization expenses of $12.2 million in 2024 compared to $11.5 million in 2023.
Net Income and Earnings Per Share
The net income for the first nine months of 2024 was $87.8 million, or $7.30 per share on a diluted basis, down from $104.6 million, or $8.73 per share, for the same period in 2023. The decrease in net income was primarily driven by the decline in revenues from the Vegetation Management segment.
Geographical Revenue Distribution
Alamo Group's revenue is also geographically distributed, with the following net sales reported for the first nine months of 2024:
| Geography | 2024 Net Sales (in thousands) | 2023 Net Sales (in thousands) |
|---|---|---|
| United States | $881,231 | $898,914 |
| Canada | $102,126 | $102,049 |
| France | $67,259 | $70,324 |
| United Kingdom | $65,733 | $61,266 |
| Brazil | $31,749 | $37,354 |
Liquidity and Capital Resources
As of September 30, 2024, Alamo Group had working capital of $667.6 million, an increase of $77.6 million from $590.0 million at December 31, 2023. The company had capital expenditures of $19.0 million for the first nine months of 2024, with expectations of $30.0 million to $35.0 million for the full year.
Debt Management
The total debt of Alamo Group as of September 30, 2024, was $224.2 million, down from $235.3 million at the end of 2023. The company’s interest expense for the first nine months of 2024 was $17.1 million, a decrease from $19.5 million in the prior year.
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Article updated on 8 Nov 2024
Resources:
- Alamo Group Inc. (ALG) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Alamo Group Inc. (ALG)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Alamo Group Inc. (ALG)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.