alg-20220630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

FOR THE TRANSITION PERIOD FROM ____ TO ____

Commission file number 0-21220


ALAMO GROUP INC.
(Exact name of registrant as specified in its charter)

Delaware						74-1621248
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)

1627 East Walnut, Seguin, Texas 78155

(Address of principal executive offices, including zip code)

830-379-1480

(Registrant’s telephone number, including area code)


Securities registered pursuant to Section 12(b) of the Act:

	Title of each class	Trading symbol(s)	Name of each exchange on which registered
	Common Stock, par value $.10 per share	ALG	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

At July 29, 2022, 11,966,177 shares of common stock, $.10 par value, of the registrant were outstanding.

Alamo Group Inc. and Subsidiaries

INDEX


PART I.	FINANCIAL INFORMATION		PAGE

Item 1.	Interim Condensed Consolidated Financial Statements (Unaudited)

	Interim Condensed Consolidated Balance Sheets		3
		June 30, 2022 and December 31, 2021

	Interim Condensed Consolidated Statements of Income		4
		Three and Six Months Ended June 30, 2022 and June 30, 2021

	Interim Condensed Consolidated Statements of Comprehensive Income		5
		Three and Six Months Ended June 30, 2022 and June 30, 2021

	Interim Condensed Consolidated Statements of Stockholders' Equity		6
		Three and Six Months Ended June 30, 2022 and June 30, 2021

	Interim Condensed Consolidated Statements of Cash Flows		7
		Six Months Ended June 30, 2022 and June 30, 2021

	Notes to Interim Condensed Consolidated Financial Statements		8

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations		16

Item 3.	Quantitative and Qualitative Disclosures About Market Risks		21

Item 4.	Controls and Procedures		22

PART II.	OTHER INFORMATION		22

Item 1.	Legal Proceedings
Item 1A.	Risk Factors
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds
Item 3.	Defaults Upon Senior Securities
Item 4.	Mine Safety Disclosures
Item 5.	Other Information
Item 6.	Exhibits

	SIGNATURES		25

Alamo Group Inc. and Subsidiaries

Interim Condensed Consolidated Balance Sheets

(Unaudited)


(in thousands, except share amounts)	June 30, 2022			December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents		$	75,894		$	42,115
Accounts receivable, net		306,967			237,970
Inventories, net		352,915			320,917

Prepaid expenses and other current assets		11,095			9,500
Income tax receivable		1,432			1,666
Total current assets		748,303			612,168

Rental equipment, net		31,168			32,514

Property, plant and equipment		325,911			321,863
Less: Accumulated depreciation		(172,004)			(169,372)
Total property, plant and equipment, net		153,907			152,491

Goodwill		196,068			202,406
Intangible assets, net		178,781			183,466
Deferred income taxes		1,006			1,110
Other non-current assets		23,143			21,587

Total assets		$	1,332,376		$	1,205,742

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Trade accounts payable		$	107,003		$	101,396
Income taxes payable		1,498			2,613
Accrued liabilities		66,100			73,523
Current maturities of long-term debt and finance lease obligations		15,015			15,032

Total current liabilities		189,616			192,564

Long-term debt and finance lease obligations, net of current maturities		356,149			254,522
Long-term tax liability		2,444			4,416

Other long-term liabilities		24,642			27,119
Deferred income taxes		23,083			21,458

Stockholders’ equity:
Common stock, $0.10 par value, 20,000,000 shares authorized; 11,909,064 and 11,874,178 outstanding at June 30, 2022 and December 31, 2021, respectively		1,191			1,187
Additional paid-in-capital		127,180			124,228
Treasury stock, at cost; 82,600 shares at June 30, 2022 and December 31, 2021, respectively		(4,566)			(4,566)
Retained earnings		676,474			633,804
Accumulated other comprehensive loss		(63,837)			(48,990)
Total stockholders’ equity		736,442			705,663

Total liabilities and stockholders’ equity		$	1,332,376		$	1,205,742

See accompanying notes.

Alamo Group Inc. and Subsidiaries

Interim Condensed Consolidated Statements of Income

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands, except per share amounts)	2022		2021		2022		2021

Net sales:
Vegetation Management	$	255,003	$	214,665	$	476,009	$	398,549
Industrial Equipment	141,211		132,885		282,210		260,190

Total net sales	396,214		347,550		758,219		658,739
Cost of sales	296,497		259,410		571,861		494,173
Gross profit	99,717		88,140		186,358		164,566

Selling, general and administrative expenses	55,009		50,887		108,644		98,217
Amortization expense	3,792		3,663		7,679		7,321
Income from operations	40,916		33,590		70,035		59,028

Interest expense	(3,189)		(2,854)		(5,836)		(5,467)
Interest income	57		293		129		581
Other income (expense), net	(134)		3,253		(1,886)		2,623
Income before income taxes	37,650		34,282		62,442		56,765
Provision for income taxes	9,178		8,245		15,500		13,266
Net Income	$	28,472	$	26,037	$	46,942	$	43,499

Net income per common share:
Basic	$	2.39	$	2.20	$	3.95	$	3.68
Diluted	$	2.39	$	2.19	$	3.94	$	3.66
Average common shares:
Basic	11,880		11,842		11,870		11,831
Diluted	11,938		11,902		11,927		11,892

Dividends declared	$	0.18	$	0.14	$	0.36	$	0.28

See accompanying notes.

Alamo Group Inc. and Subsidiaries

Interim Condensed Consolidated Statements of Comprehensive Income

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2022		2021		2022		2021
Net income	$	28,472	$	26,037	$	46,942	$	43,499
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments, net of tax expense of $(654) and zero, and $(904) and $(115), respectively	(19,822)		4,566		(18,155)		556
Recognition of deferred pension and other post-retirement benefits, net of tax benefit and (expense) of $59 and $(67), and $314 and $(134), respectively	205		252		411		503
Unrealized income on derivative instruments, net of tax expense of $(371) and $(23), and $(738) and $(601), respectively	1,045		88		2,897		2,261


Other comprehensive (loss) income, net of tax	(

SEC Form 10-Q filed by Alamo Group Inc.