ALAMO GROUP ANNOUNCES STRONG OPERATING RESULTS FOR THE SECOND QUARTER 2025

Rhea-AI Summary

Alamo Group (NYSE: ALG) reported strong Q2 2025 results with net sales of $419.1 million, up 0.7% year-over-year. The company's Industrial Equipment Division showed impressive organic growth of 17.6% with sales of $240.7 million, while the Vegetation Management Division saw a 15.7% decline but improved 8.8% sequentially.

Net income reached $31.1 million ($2.57 per diluted share), up 9.8% from Q2 2024. Operating margin improved to 11.2%, an 83 basis point increase. The company maintains a strong backlog of $687.2 million and significantly reduced its net debt to just $11.3 million. During the quarter, ALG acquired Ring-O-Matic, expanding its vacuum excavation equipment portfolio.

The company expects continued operational improvements and growth through 2025, driven by strong Industrial Equipment Division performance and anticipated recovery in Vegetation Management.

Positive

• Net income increased 9.8% to $31.1 million with EPS of $2.57
• Industrial Equipment Division achieved strong 17.6% organic growth
• Operating margin improved 83 basis points to 11.2%
• Net debt reduced by 93.5% to $11.3 million year-over-year
• Healthy backlog of $687.2 million, up 2.8% from year-end 2024
• Strategic acquisition of Ring-O-Matic strengthens product portfolio
• SG&A expenses reduced by 6.1% through successful cost reduction efforts

Negative

• Vegetation Management Division sales declined 15.7% year-over-year
• Gross margin slightly decreased to 25.8% from 26.0% in Q2 2024
• Currency revaluation had unfavorable impact of $0.21 per share
• Ongoing uncertainty related to tariffs may impact future performance

Insights

Financial Analyst

Alamo's Q2 shows solid performance with improved margins, strong Industrial Equipment growth offsetting Vegetation Management weakness, and exceptional balance sheet strength.

Alamo Group delivered a mixed but fundamentally solid Q2 2025 with revenue growth of 0.7% year-over-year to $419.1 million, exceeding sequential growth of 7.2%. The performance reveals a tale of two divisions with the Industrial Equipment segment delivering impressive 17.6% organic growth while Vegetation Management declined 15.7% compared to the prior year.

The company significantly improved profitability metrics with operating income reaching $47.1 million or 11.2% of sales, an 83 basis point improvement year-over-year. This margin expansion was primarily driven by successful cost reduction initiatives that lowered SG&A expenses by 6.1% compared to Q2 2024. Net income increased 9.8% to $31.1 million, with EPS of $2.57 despite absorbing a $0.21 per share currency revaluation headwind.

The most impressive aspect of Alamo's results is its exceptional balance sheet strength. Net debt has been reduced by 93.5% year-over-year to just $11.3 million, while maintaining $201.8 million in cash. This financial flexibility positions the company well for both organic growth initiatives and potential acquisitions, as demonstrated by the recent Ring-O-Matic purchase.

Operational indicators suggest continued momentum with a healthy $687.2 million backlog, up 2.8% from year-end. Industrial Equipment's $509.6 million backlog provides strong visibility through year-end. Meanwhile, Vegetation Management is showing signs of recovery with five consecutive quarters of order volume increases, suggesting the division's underperformance may be temporary as operational improvements from facility consolidations take effect.

The Industrial Equipment Division continues to be the growth engine with its 14.3% operating margin representing a 93 basis point improvement. Vacuum trucks and snow removal equipment sales grew over 20%, indicating strong market share gains in government and specialty contractor segments.

Looking ahead, management expressed optimism about continued operational improvements in both divisions while acknowledging potential tariff-related headwinds. With trailing twelve-month EBITDA of $219.1 million representing 13.7% of sales, Alamo's operational efficiency continues to trend positively.

SEGUIN, Texas, Aug. 6, 2025 /PRNewswire/ -- Alamo Group Inc. (NYSE: ALG) today reported results for the second quarter ended June 30, 2025.

Highlights: 

• Net Sales of $419.1 million, up 0.7% vs. the second quarter of 2024 and up 7.2% vs. the first quarter of 2025
  • Industrial Equipment Division net sales of $240.7 million grew organically 17.6% year-over-year and 6.0% vs. the first quarter of 2025
  • Vegetation Management Division net sales of $178.4 million declined 15.7% year-over-year but grew 8.8% vs. the first quarter of 2025
• Income from operations of $47.1 million, 11.2% of net sales – an 83 basis point improvement versus the second quarter of 2024
• Net Income of $31.1 million up 9.8% versus the second quarter of 2024
• Fully diluted EPS was $2.57 per share, an improvement of $0.22 per share compared to the second quarter of 2024; EPS results for the quarter include an unfavorable currency revaluation impact of $0.21 per share
• Total debt was $213.1 million. Total debt net of cash was further reduced to $11.3 million, representing an improvement of $163.8 million or 93.5% compared to the second quarter in 2024 ⁽¹⁾
• Backlog at the end of the second quarter was $687.2 million – an improvement of 2.8% from year-end 2024
• Trailing twelve-month EBITDA of $219.1 million was 13.7% of Net Sales ⁽¹⁾

Second Quarter Results

Second quarter 2025 net sales of $419.1 million increased 0.7% compared to $416.3 million in the second quarter of 2024. Gross profit was $108.3 million or 25.8% of net sales compared to $108.2 million or 26.0% of net sales in the second quarter of 2024. SG&A expenses of $57.1 million or 13.6% of net sales declined by 6.1% compared to the second quarter in 2024, reflecting successful cost reduction efforts completed in 2024. Income from operations was $47.1 million or 11.2% of net sales, representing an increase of 83 basis points compared to the second quarter of 2024. The Vegetation Management Division second quarter sales of $178.4 million declined 15.7% versus second quarter of 2024 but increased sequentially by 8.8%.  Division operating margin of 7.1% included costs associated with manufacturing facility consolidations. The Industrial Equipment Division sales of $240.7 million delivered strong organic growth of 17.6% compared to the second quarter of 2024 and increased 6.0% sequentially. The division delivered an operating margin of 14.3%, representing 93 basis points improvement versus the second quarter of 2024.

Net income was $31.1 million, or $2.57 per diluted share, compared to $28.3 million or $2.35 per diluted share, in the second quarter of 2024.  The 9.8% increase year-over-year was driven by stronger operating results.  Second quarter EPS included an unfavorable impact to net income of $2.5 million, or approximately $0.21 per share, primarily due to the revaluation of US dollar-denominated monetary assets held in our Canadian entities.  By comparison, EPS in the second quarter of 2024 included a favorable impact of $0.2 million to net income, or approximately $0.02 per share.

The Company's backlog at the end of the second quarter remained healthy at $687.2 million. The Vegetation Management Division backlog held steady at $177.6 million, while the Industrial Equipment Division backlog remained strong at $509.6 million.

The Company's balance sheet was exceptionally strong. Accounts receivable were $356.2 million with DSO of 81 days, an improvement versus prior year of 3 days.  Inventory was $372.1 million compared to $385.1 million in the second quarter of 2024.  Operating cash flow year-to-date was $36.9 million, resulting in cash and cash equivalents of $201.8 million at the end of the quarter.

As we look forward to the remainder of the year, we anticipate continued operational gains driven in part by improved productivity in the Vegetation Management Division.  While the economic situation related to tariffs remains somewhat uncertain, we remain confident in our ability to navigate these headwinds and remain committed to capitalizing on growth opportunities.

Comments on Results

Jeff Leonard, Alamo Group's President and Chief Executive Officer commented, "The Company's solid second quarter results reflected improved operating margin performance.  The results were primarily driven by sustained strong demand from governmental agencies and specialty contractors for products offered by the Industrial Equipment Division, coupled with encouraging sequential recovery in markets served by the Vegetation Management Division.  While consolidated net sales growth was modest compared to a strong prior year second quarter, sequential improvement exceeded 7%.

We were pleased to have again demonstrated strong organic growth in the Industrial Equipment Division, where net sales in the quarter rose by nearly 18% compared to the same period last year. Notably, sales of vacuum trucks and snow removal equipment increased more than 20%, supported by healthy demand and market share gains. Strong sales and improved operating efficiencies in this division drove nearly one hundred basis point margin expansion to 14.3%. Ordering activity remained robust across all product groups, and backlog at quarter end in this division remained above $0.5 billion, providing solid visibility and a positive view of demand through year end.

The Vegetation Management Division continued to show modest but steady improvements in its key markets.  As expected, net sales in this division were down approximately 16% compared to the second quarter of 2024 but rose nearly 9% sequentially.  The division's operating margin reflected the effects of recent facility consolidation costs, which are now nearing completion.  While backlog was reduced due to improving lead-times in the consolidated facilities, we were encouraged to see order volumes increase for the fifth consecutive quarter, resulting in a year-over-year increase for the first half of 2025.

The Company's consolidated operating margin of 11.2% improved by eighty three basis points from the second quarter of 2024.  Growth in the Industrial Equipment Division, combined with greater factory efficiencies, helped to offset some early-quarter softness in the Vegetation Management Division. 

During the second quarter of 2025, we were pleased to welcome Ring-O-Matic to our Alamo Group family.  Ring-O-Matic manufactures a full line of industrial vacuum excavation equipment, specializing in trailer-mounted units.  The acquired business aligns well with our strategic focus on expanding market share and strengthening our current product portfolio and will be part of our Excavator and Vacuum Trucks group.  The acquisition was funded with existing cash on hand.

Looking ahead, we remain optimistic regarding the Company's prospects for at least the next several quarters.  Most market indicators during the second quarter were positive.  Operationally, we expect that our Industrial Equipment Division will continue its strong performance through at least the end of the year and into 2026, while the Vegetation Management Division is poised to improve further, driven by stronger order flow supported by enhanced operational gains following the completion of our plant consolidations.  While we remain mindful of ongoing global trade uncertainty, we firmly believe the Company is well positioned for continued improvement in operating performance.  In addition, we expect to leverage our strong balance sheet to accelerate both organic and inorganic growth."

Earnings Conference Call
The Company will host a conference call to discuss the second quarter results on Thursday, August 7, 2025, at 8:30 a.m. ET. Hosting the call will be members of senior management. Individuals wishing to participate in the conference call should dial (866) 524-3159 (domestic) or (412) 317-6759 (international). For interested individuals unable to join the call, a replay will be available until Thursday, August 21, by dialing (877) 344-7529 (domestic) or (412) 317-0088 (internationally), passcode 7888480.

The live broadcast of Alamo Group Inc.'s quarterly conference call will be available online at the Company's website, www.alamo-group.com (under "Investor Relations/Events and Presentations") on Thursday, August 7, 2025, beginning at 8:30 a.m. ET. The online replay will follow shortly after the call ends and will be archived on the Company's website for 60 days.

About Alamo Group
Alamo Group is a leader in the design, manufacture, distribution, and service of high-quality equipment for vegetation management, infrastructure maintenance and other applications. Our products include truck and tractor mounted mowing and other vegetation maintenance equipment, street sweepers, snow removal equipment, excavators, vacuum trucks, other industrial equipment, agricultural implements, forestry equipment and related after-market parts and services. The Company, founded in 1969, has approximately 3,800 employees and operates 27 plants in North America, Europe, Australia, and Brazil as of June 30, 2025. The corporate offices of Alamo Group Inc. are located in Seguin, Texas.

Forward Looking StatementsThis release contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements involve known and unknown risks and uncertainties, which may cause the Company's actual results in future periods to differ materially from forecasted results.  Among those factors which could cause actual results to differ materially are the following:  adverse economic conditions which could lead to a reduction in overall market demand, supply chain disruptions, labor constraints, increasing costs due to inflation, disease outbreaks, geopolitical risks, including tariffs, trade wars, and the effects of the war in the Ukraine and the Middle East, competition, weather, seasonality, currency-related issues, and other risk factors listed from time to time in the Company's SEC reports.  The Company does not undertake any obligation to update the information contained herein, which speaks only as of this date.

(Tables Follow)

^{(1) This is a non-GAAP financial measure or other information relating to our GAAP financial measures that we have provided to investors in order to allow greater transparency and a deeper understanding of our financial condition and operating results. For a reconciliation of the non-GAAP financial measure or for a more detailed explanation of financial results, refer to "Non-GAAP Financial Measure Reconciliation" below and the Attachments thereto.}

 

Alamo Group Inc. and Subsidiaries  Condensed Consolidated Statements of Income (in thousands, except per share amounts) (Unaudited)
		Three Months Ended				Six Months Ended
		6/30/2025		6/30/2024		6/30/2025		6/30/2024
Net sales:
Vegetation Management		$        178,358		$        211,535		$    342,248		$    435,282
Industrial Equipment		240,715		204,768		467,775		406,607
Total net sales		419,073		416,303		810,023		841,889
Cost of sales		310,781		308,122		598,890		622,076
Gross margin		108,292		108,181		211,133		219,813
		25.8 %		26.0 %		26.1 %		26.1 %
Selling, general and administration expense		57,136		60,817		111,466		121,411
Amortization expense		4,078		4,055		8,127		8,114
Income from operations		47,078		43,309		91,540		90,288
		11.2 %		10.4 %		11.3 %		10.7 %
Interest expense		(3,684)		(6,098)		(6,878)		(12,189)
Interest income		1,195		514		2,433		1,315
Other income (expense)		(3,183)		(65)		(3,846)		33
Income before income taxes		41,406		37,660		83,249		79,447
Provision for income taxes		10,300		9,336		20,343		19,003
Net Income		$          31,106		$          28,324		$      62,906		$      60,444
Net income per common share:
Basic		$              2.59		$              2.36		$           5.24		$           5.05
Diluted		$              2.57		$              2.35		$           5.21		$           5.02
Average common shares:
Basic		12,020		11,974		12,005		11,959
Diluted		12,083		12,044		12,066		12,032

 

Alamo Group Inc. and Subsidiaries Condensed Consolidated Balance Sheets (in thousands) (Unaudited)
	June 30, 2025			June 30, 2024
ASSETS
Current assets:
Cash and cash equivalents		$  201,823			$   118,535
Accounts receivable, net		356,236			388,512
Inventories		372,074			385,136
Other current assets		12,461			15,293
Total current assets		942,594			907,476
Rental equipment, net		59,606			46,630
Property, plant and equipment		160,716			161,603
Goodwill		221,607			204,766
Intangible assets		145,040			159,708
Other non-current assets		28,086			25,787
Total assets		$  1,557,649			$  1,505,970
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable		$     111,820			$     102,947
Income taxes payable		3,973			12,829
Accrued liabilities		76,113			76,772
Current maturities of long-term debt and finance lease obligations		15,000			15,008
Total current liabilities		206,906			207,556
Long-term debt, net of current maturities		198,115			278,591
Long-term tax liability		626			490
Other long-term liabilities		25,975			23,964
Deferred income taxes		10,631			15,653
Total liabilities		442,253			526,254
Total stockholders' equity		1,115,396			979,716
Total liabilities and stockholders' equity		$  1,557,649			$  1,505,970

Alamo Group Inc.

Non-GAAP Financial Measures Reconciliation

From time to time, Alamo Group Inc. may disclose certain "non-GAAP financial measures" in the course of its earnings releases, earnings conference calls, financial presentations and otherwise.  For these purposes, "GAAP" refers to generally accepted accounting principles in the United States.  The Securities and Exchange Commission (SEC) defines a "non-GAAP financial measure" as a numerical measure of historical or future financial performance, financial position, or cash flows that is subject to adjustments that effectively exclude or include amounts from the most directly comparable measure calculated and presented in accordance with GAAP.  Non-GAAP financial measures disclosed by Alamo Group are provided as additional information to investors in order to provide them with greater transparency about, or an alternative method for assessing, our financial condition and operating results.  These measures are not in accordance with, or a substitute for, GAAP and may be different from, or inconsistent with, non-GAAP financial measures used by other companies.  Whenever we refer to a non-GAAP financial measure, we will also generally present the most directly comparable financial measure calculated and presented in accordance with GAAP, along with a reconciliation of the differences between the non-GAAP financial measure we reference and such comparable GAAP financial measure.

Attachment 1 discloses Operating Income, Adjusted Net Income and Adjusted Diluted EPS,  related to the impact of non-recurring items, of which are non-GAAP financial measures. Attachment 2 discloses a non-GAAP financial presentation related to the impact of currency translation on net sales by division. Attachment 3 shows the net change in our total debt net of cash and earnings before interest, taxes, depreciation and amortization ("EBITDA") which is a non-GAAP financial measure. The Company considers this information useful to investors to allow better comparability of period-to-period operating performance. Attachment 4 reflects Division performance inclusive of non-GAAP financial measures such as backlog and earnings before interest, tax, depreciation and amortization ("EBITDA").

Attachment 1   Alamo Group Inc. Non-GAAP Financial Reconciliation (in thousands, except per share numbers) (Unaudited)
Impact of Non-recurring Items
		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2025		2024		2025		2024
Operating Income - GAAP		$       47,078		$       43,309		$       91,540		$       90,288
(add: workforce reduction)		—		1,138		82		1,619
Adjusted Operating Income - non-GAAP		$       47,078		$       44,447		$       91,622		$       91,907
Net Income - GAAP		$       31,106		$       28,324		$       62,906		$       60,444
(add: workforce reduction)		—		866		62		1,232
Adjusted Net Income - non-GAAP		$       31,106		$       29,190		$       62,968		$       61,676
Diluted EPS - GAAP		$           2.57		$           2.35		$           5.21		$           5.02
(add: workforce reduction)		—		0.07		0.01		0.10
Adjusted Diluted EPS - non-GAAP		$           2.57		$           2.42		$           5.22		$           5.12

 

Attachment 2   Alamo Group Inc. Non-GAAP Financial Reconciliation (in thousands) (Unaudited)
Impact of Currency Translation on Net Sales by Division
	Three Months Ended June 30,						Change due to currency translation
	2025		2024		% change from 2024		$		%
Vegetation Management	$           178,358		$           211,535		(15.7) %		$                   652		0.3 %
Industrial Equipment	240,715		204,768		17.6 %		415		0.2 %
Total net sales	$           419,073		$           416,303		0.7 %		$                1,067		0.3 %
	Six Months Ended  June 30,						Change due to currency translation
	2025		2024		% change from 2024		$		%
Vegetation Management	$           342,248		$           435,282		(21.4) %		$              (1,900)		(0.4) %
Industrial Equipment	467,775		406,607		15.0 %		(2,475)		(0.6) %
Total net sales	$           810,023		$           841,889		(3.8) %		$              (4,375)		(0.5) %

 

Attachment 3   Alamo Group Inc. Non-GAAP Financial Reconciliation (in thousands) (Unaudited)
Consolidated Net Change of Total Debt, Net of Cash
		June 30, 2025		June 30, 2024		Net Change
Current maturities		$             15,000		$             15,008
Long-term debt,net of current		198,115		278,591
Total debt		$           213,115		$           293,599
Total cash		201,823		118,535
Total Debt Net of Cash		$             11,292		$           175,064		$       (163,772)

 

EBITDA
		Six Months Ended				Trailing Twelve Months Ended
		June 30, 2025		June 30, 2024		June 30, 2025		December 31, 2024
Net Income		$        62,906		$        60,444		$      118,392		$         115,930
Interest, net		4,445		10,874		11,482		17,911
Provision for income taxes		20,343		19,003		35,038		33,698
Depreciation		19,217		18,093		37,981		36,857
Amortization		8,127		8,114		16,240		16,227
EBITDA		$      115,038		$      116,528		$      219,133		$         220,623

 

Attachment 4   Alamo Group Inc. Non-GAAP Financial Reconciliation (in thousands) (Unaudited)
Vegetation Management Division Performance
		Three Months Ended June 30,				Six Months Ended  June 30,
		2025		2024		2025		2024
Backlog						$     177,625		$      217,967
Net Sales		$      178,358		$      211,535		342,248		435,282
Income from Operations		12,751		16,006		26,063		37,685
		7.1 %		7.6 %		7.6 %		8.7 %
Depreciation		4,253		4,434		8,305		8,767
Amortization		2,946		2,928		5,866		5,859
Other income (expense)		(2,288)		102		(2,591)		274
EBITDA		17,662		23,470		37,643		52,585
		9.9 %		11.1 %		11.0 %		12.1 %
Industrial Equipment Division Performance
		Three Months Ended June 30,				Six Months Ended  June 30,
		2025		2024		2025		2024
Backlog						$      509,610		$      550,922
Net Sales		$      240,715		$      204,768		467,775		406,607
Income from Operations		34,327		27,303		65,477		52,603
		14.3 %		13.3 %		14.0 %		12.9 %
Depreciation		5,519		4,724		10,912		9,326
Amortization		1,132		1,127		2,261		2,255
Other income (expense)		(895)		(167)		(1,255)		(241)
EBITDA		40,083		32,987		77,395		63,943
		16.7 %		16.1 %		16.5 %		15.7 %

 

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SOURCE Alamo Group Inc.

FAQ

What were Alamo Group's (ALG) Q2 2025 earnings results?

Alamo Group reported net income of $31.1 million ($2.57 per share), up 9.8% year-over-year, with net sales of $419.1 million, representing a 0.7% increase from Q2 2024.

How did Alamo Group's Industrial Equipment Division perform in Q2 2025?

The Industrial Equipment Division achieved strong organic growth of 17.6% with sales of $240.7 million and improved operating margin to 14.3%, up 93 basis points year-over-year.

What is Alamo Group's current backlog as of Q2 2025?

Alamo Group's backlog stands at $687.2 million, with Industrial Equipment Division at $509.6 million and Vegetation Management Division at $177.6 million.

How much debt does Alamo Group (ALG) have in Q2 2025?

Alamo Group's total debt was $213.1 million, but net debt (total debt minus cash) was only $11.3 million, representing a 93.5% reduction from Q2 2024.

What company did Alamo Group acquire in Q2 2025?

Alamo Group acquired Ring-O-Matic, a manufacturer of industrial vacuum excavation equipment specializing in trailer-mounted units, to expand their market share and strengthen their product portfolio.