Alamo Group (NYSE: ALG) lifts sales with Petersen deal, margins tighten
Alamo Group Inc. reported second‑quarter 2026 net sales of $450.7 million, up 7.6% from $419.1 million a year earlier, driven mainly by acquisitions in the Industrial Equipment division and modest growth in agricultural and tree care markets. For the first six months, net sales were $867.9 million versus $810.0 million. Profitability softened: gross margin fell to 24.6% from 25.8%, operating margin to 10.2% from 11.2%, and net income was $30.9 million in the quarter and $60.1 million year‑to‑date, both slightly below prior‑year levels; diluted EPS was $2.55 for the quarter and $4.96 for the first half.
The company acquired Petersen Industries on January 26, 2026 for total consideration of $163.8 million, adding $78.3 million of identifiable intangibles and $57.6 million of goodwill to the Industrial Equipment division. Backlog at June 30, 2026 was $549.3 million, down 20% from $687.2 million as lead times improved and order patterns normalized. Working capital was $766.6 million, and liquidity is supported by a $602.5 million credit facility maturing in 2031, with $263.7 million outstanding and $334.3 million available, alongside capital returns through $0.34 per‑share quarterly dividends and 61,932 shares repurchased in 2026 under a $50.0 million authorization.
Positive
- Petersen Industries acquisition expands portfolio: Completed the purchase of Petersen Industries for approximately $163.8 million, adding $78.3 million of identifiable intangibles and $57.6 million of goodwill in adjacent truck‑mounted grapple loader markets.
- Industrial Equipment Division delivering double‑digit growth: Q2 2026 net sales in Industrial Equipment rose 13% to $271.6 million, with income from operations increasing to $36.9 million from $34.3 million a year earlier.
Negative
- Backlog and margins declined: Backlog at June 30, 2026 fell 20% to $549.3 million from $687.2 million, while Q2 gross margin slipped to 24.6% from 25.8% and operating margin to 10.2% from 11.2%.
- Earnings softer with higher interest burden: Net income for the first six months decreased to $60.1 million from $62.9 million, as borrowings under the 2026 Credit Agreement reached $263.7 million and interest expense rose to $9.4 million from $6.9 million.
Filing Explained
As of June 30, acquisition financing left Alamo with $194,995 thousand of cash, $262,742 thousand of debt, and $334.3 million of available borrowings.
This Form 10-Q is the company’s unaudited quarterly report for the period ended
The filing says the Petersen acquisition was financed with cash and credit-facility borrowings; at
The second-quarter repurchase table records 61,932 shares bought, leaving
The program’s stated termination date is
Key Figures
Net sales Q2 2026: $450.7 million
Net income Q2 2026: $30.9 million
Net sales first six months 2026: $867.9 million
+5 more
8 metrics
Net sales Q2 2026
$450.7 million
Three months ended June 30, 2026 consolidated net sales
Net income Q2 2026
$30.9 million
Three months ended June 30, 2026 consolidated net income
Net sales first six months 2026
$867.9 million
Six months ended June 30, 2026 consolidated net sales
Net income first six months 2026
$60.1 million
Six months ended June 30, 2026 consolidated net income
Petersen Industries total consideration
$163.8 million
Purchase price for Petersen Industries acquisition on January 26, 2026
Backlog at June 30, 2026
$549.3 million
Backlog at June 30, 2026, down from $687.2 million prior year
Debt outstanding under 2026 Credit Agreement
$263.7 million
Outstanding borrowings as of June 30, 2026 under Term Facility and Revolver Facility
Working capital June 30, 2026
$766.6 million
Working capital compared with $779.7 million at December 31, 2025
Key Terms
backlog, Term Secured Overnight Financing Rate, Revolver Facility, accumulated other comprehensive loss, +2 more
6 terms
backlog financial
"The Company's backlog at June 30, 2026 was $549.3 million, a 20% decrease"
A backlog is the amount of work or orders that a company has received but hasn't completed yet. It’s like a restaurant with many dishes to serve; the backlog shows how many orders are still waiting to be finished. It matters because a large backlog can indicate strong demand or potential delays in delivering products or services.
Term Secured Overnight Financing Rate financial
"Borrowings under the 2026 Credit Agreement bear interest at a Term Secured Overnight Financing Rate"
Revolver Facility financial
"up to $400.0 million is available to the Company pursuant to a Revolver Facility"
A revolver facility is a bank line of credit a company can draw from, repay, and draw again as needed—similar to a business credit card for short-term cash needs. It matters to investors because it supplies flexible liquidity to cover operating costs, seasonal swings, or quick opportunities, and the size, cost and usage of the revolver signal a company’s short-term financial health and risk of running out of cash.
accumulated other comprehensive loss financial
"The related gains and losses are reported as a component of accumulated other comprehensive loss"
Accumulated other comprehensive loss is the running negative total of certain gains and losses that companies record outside their regular profit-and-loss statement, such as changes in the value of some investments, pension adjustments, or currency translation effects. It matters to investors because it reduces shareholders’ equity and reveals economic swings that haven’t affected reported net income yet — like a side ledger showing pending ups and downs that could influence future cash flow or balance-sheet strength.
forward currency contracts financial
"Forward currency contracts are used to hedge against the earnings effects of such fluctuations"
A forward currency contract is an agreement to buy or sell a specific amount of one currency for another at a set exchange rate on a future date. Investors use these contracts to lock in costs or revenues in their home currency—like reserving today’s price for a product you’ll buy later—so they avoid surprises from shifting exchange rates and can plan cash flows and valuations more reliably.
stock repurchase program financial
"the Board authorized a stock repurchase program of up to $50.0 million"
A stock repurchase program is when a company buys back its own shares from the market. This can make each remaining share more valuable and shows that the company believes its stock is a good investment. It’s like a business treating its shares like a limited resource, hoping to boost confidence and share prices.
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FAQ
How did Alamo Group (ALG) perform financially in Q2 2026?
Alamo Group generated $450.7 million in net sales in Q2 2026, up 7.6% year over year. Net income was $30.9 million and diluted EPS was $2.55, with margins pressured by municipal market weakness and facility consolidation costs.
What is the impact of the Petersen Industries acquisition on ALG?
On January 26, 2026 Alamo acquired Petersen Industries for about $163.8 million, recording $78.3 million of intangible assets and $57.6 million of goodwill. Petersen broadens the Industrial Equipment division into truck‑mounted grapple loader equipment markets.
What are Alamo Group’s (ALG) backlog and order trends as of June 30, 2026?
Backlog was $549.3 million at June 30, 2026, down from $687.2 million, a 20% decrease. Management attributes this mainly to improved lead times and normalization of order patterns, while noting generally stable demand in core markets.
What does Alamo Group’s (ALG) debt and liquidity position look like?
Alamo has a $602.5 million credit facility maturing in 2031, with $263.7 million outstanding as of June 30, 2026 and $334.3 million available. Working capital totaled $766.6 million, and the company reports sufficient liquidity for operations and investments.
How are ALG’s business segments performing in 2026?
In the first half of 2026, Industrial Equipment net sales rose to $513.4 million from $467.8 million, helped by acquisitions. Vegetation Management net sales increased to $354.5 million, with growth in agricultural and tree care partly offset by weaker municipal mowing markets.
What capital returns did Alamo Group (ALG) provide to shareholders in 2026?
Alamo declared and paid quarterly cash dividends of $0.34 per share in the first two quarters of 2026. It also repurchased 61,932 shares under a $50.0 million stock repurchase authorization effective through October 30, 2029.
How did foreign exchange and interest rate risks affect ALG’s results?
Foreign currency translation reduced equity by $4.4 million in the quarter. A uniform 10% change in exchange rates would alter gross profit by about $6.2 million, while a two‑point interest rate move on current variable debt would change interest expense by roughly $1.3 million.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026
OR
ACT OF 1934
FOR THE TRANSITION PERIOD FROM ____ TO ____
Commission file number 0-21220
(Exact name of registrant as specified in its charter) | ||||||||
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | |||||||
(Address of principal executive offices, including zip code)
(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 | |||||||||||
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.
| ☒ | 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 24, 2026, 12,170,965 shares of common stock, $.10 par value, of the registrant were outstanding.
1
Alamo Group Inc. and Subsidiaries
INDEX
PART I. | FINANCIAL INFORMATION | PAGE | |||||||||
Item 1. | Interim Condensed Consolidated Financial Statements (Unaudited) | ||||||||||
Interim Condensed Consolidated Statements of Income | 3 | ||||||||||
| Three and Six Months Ended June 30, 2026 and June 30, 2025 | |||||||||||
Interim Condensed Consolidated Statements of Comprehensive Income | 4 | ||||||||||
| Three and Six Months Ended June 30, 2026 and June 30, 2025 | |||||||||||
Interim Condensed Consolidated Balance Sheets | 5 | ||||||||||
| June 30, 2026 and December 31, 2025 | |||||||||||
Interim Condensed Consolidated Statements of Stockholders' Equity | 6 | ||||||||||
| Three and Six Months Ended June 30, 2026 and June 30, 2025 | |||||||||||
Interim Condensed Consolidated Statements of Cash Flows | 7 | ||||||||||
| Six Months Ended June 30, 2026 and June 30, 2025 | |||||||||||
Notes to Interim Condensed Consolidated Financial Statements | 8 | ||||||||||
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 17 | |||||||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risks | 22 | |||||||||
Item 4. | Controls and Procedures | 23 | |||||||||
PART II. | OTHER INFORMATION | 24 | |||||||||
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 | 26 | ||||||||||
2
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) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net sales: | |||||||||||||||||||||||
Vegetation Management | $ | $ | $ | $ | |||||||||||||||||||
Industrial Equipment | |||||||||||||||||||||||
| Total net sales | |||||||||||||||||||||||
| Cost of sales | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Selling, general and administrative expenses | |||||||||||||||||||||||
| Amortization expense | |||||||||||||||||||||||
Income from operations | |||||||||||||||||||||||
| Interest expense | ( | ( | ( | ( | |||||||||||||||||||
| Interest income | |||||||||||||||||||||||
| Other income (expense), net | ( | ( | ( | ( | |||||||||||||||||||
Income before income taxes | |||||||||||||||||||||||
| Provision for income taxes | |||||||||||||||||||||||
Net Income | $ | $ | $ | $ | |||||||||||||||||||
| Net income per common share: | |||||||||||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||||||||||
Diluted | $ | $ | $ | $ | |||||||||||||||||||
| Average common shares: | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted | |||||||||||||||||||||||
| Dividends declared | $ | $ | $ | $ | |||||||||||||||||||
See accompanying notes.
3
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) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Other comprehensive income (loss), net of tax: | |||||||||||||||||||||||
Foreign currency translation adjustments, net of tax benefit and (expense) of $ | ( | ( | |||||||||||||||||||||
Recognition of deferred pension and other post-retirement benefits, net of tax expense of $( | |||||||||||||||||||||||
Unrealized income (loss) on derivative instruments, net of tax (expense) and benefit of $ | ( | ( | |||||||||||||||||||||
| Other comprehensive (loss) income, net of tax | ( | ( | |||||||||||||||||||||
| Comprehensive income | $ | $ | $ | $ | |||||||||||||||||||
See accompanying notes.
4
Alamo Group Inc. and Subsidiaries
Interim Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands, except share amounts) | June 30, 2026 | December 31, 2025 | ||||||||||||||||||
| ASSETS | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||||||||
Accounts receivable, net | ||||||||||||||||||||
Inventories, net | ||||||||||||||||||||
Prepaid expenses and other current assets | ||||||||||||||||||||
Income tax receivable | ||||||||||||||||||||
Total current assets | ||||||||||||||||||||
Rental equipment, net | ||||||||||||||||||||
Property, plant and equipment | ||||||||||||||||||||
Less: Accumulated depreciation | ( | ( | ||||||||||||||||||
Total property, plant and equipment, net | ||||||||||||||||||||
Goodwill | ||||||||||||||||||||
Intangible assets, net | ||||||||||||||||||||
Deferred income taxes | ||||||||||||||||||||
Other non-current assets | ||||||||||||||||||||
Total assets | $ | $ | ||||||||||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Trade accounts payable | $ | $ | ||||||||||||||||||
Income taxes payable | ||||||||||||||||||||
Accrued liabilities | ||||||||||||||||||||
Current maturities of long-term debt | ||||||||||||||||||||
Total current liabilities | ||||||||||||||||||||
Long-term debt, net of current maturities | ||||||||||||||||||||
Long-term tax liability | ||||||||||||||||||||
Other long-term liabilities | ||||||||||||||||||||
Deferred income taxes | ||||||||||||||||||||
Total liabilities | ||||||||||||||||||||
| Stockholders’ equity: | ||||||||||||||||||||
Additional paid-in-capital | ||||||||||||||||||||
Treasury stock, at cost; | ( | ( | ||||||||||||||||||
Retained earnings | ||||||||||||||||||||
Accumulated other comprehensive loss | ( | ( | ||||||||||||||||||
Total stockholders’ equity | ||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | $ | ||||||||||||||||||
See accompanying notes.
5
Alamo Group Inc. and Subsidiaries
Interim Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited)
| For six months ended June 30, 2026 | |||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Loss | Total Stock- holders’ Equity | ||||||||||||||||||
(in thousands) | Shares | Amount | |||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||
| Other comprehensive income (loss) | — | — | — | — | ( | ||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | ||||||||||||||||||
Stock-based compensation transactions | ( | — | — | — | ( | ||||||||||||||||||
Dividends paid ($ | — | — | — | — | ( | — | ( | ||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||
| Other comprehensive income | — | — | — | — | ( | ||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | ||||||||||||||||||
| Common stock repurchase | ( | — | — | ( | — | — | ( | ||||||||||||||||
Stock-based compensation transactions | — | — | — | ||||||||||||||||||||
Dividends paid ($ | — | — | — | — | ( | — | ( | ||||||||||||||||
| Balance at June 30, 2026 | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||
See accompanying notes.
| For six months ended June 30, 2025 | |||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Loss | Total Stock- holders’ Equity | ||||||||||||||||||
| (in thousands) | Shares | Amount | |||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||
Other comprehensive income | — | — | — | — | |||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | ||||||||||||||||||
Stock-based compensation transactions | ( | — | — | — | ( | ||||||||||||||||||
Dividends paid ($ | — | — | — | — | ( | — | ( | ||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||
| Other comprehensive income (loss) | — | — | — | — | |||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | ||||||||||||||||||
Stock-based compensation transactions | — | — | — | ||||||||||||||||||||
Dividends paid ($ | — | — | — | — | ( | — | ( | ||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||
See accompanying notes.
6
Alamo Group Inc. and Subsidiaries
Interim Condensed Consolidated Statements of Cash Flows
(Unaudited)
| Six Months Ended June 30, | |||||||||||
| (in thousands) | 2026 | 2025 | |||||||||
| Operating Activities | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustment to reconcile net income to net cash provided by operating activities: | |||||||||||
Provision for doubtful accounts | ( | ( | |||||||||
Depreciation - Property, plant and equipment | |||||||||||
Depreciation - Rental equipment | |||||||||||
Amortization of intangibles | |||||||||||
Amortization of debt issuance | |||||||||||
Stock-based compensation expense | |||||||||||
| Provision for deferred income tax expense (benefit) | ( | ||||||||||
Gain on sale of property, plant and equipment | ( | ( | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | ( | ( | |||||||||
Inventories | ( | ( | |||||||||
Rental equipment | ( | ( | |||||||||
Prepaid expenses and other assets | |||||||||||
Trade accounts payable and accrued liabilities | |||||||||||
Income taxes payable | ( | ||||||||||
Other long-term liabilities, net | ( | ( | |||||||||
| Net cash provided by operating activities | |||||||||||
| Investing Activities | |||||||||||
| Acquisitions, net of cash acquired | ( | ( | |||||||||
| Purchase of property, plant and equipment | ( | ( | |||||||||
| Proceeds from sale of property, plant and equipment | |||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| Financing Activities | |||||||||||
| Borrowings on bank revolving credit facility | |||||||||||
| Repayments on bank revolving credit facility | ( | ( | |||||||||
| Principal payments on long-term debt and finance leases | ( | ( | |||||||||
| Debt issuance cost | ( | ||||||||||
| Dividends paid | ( | ( | |||||||||
| Proceeds from exercise of stock options | |||||||||||
| Common stock repurchased | ( | ( | |||||||||
| Net cash provided by (used) in financing activities | ( | ||||||||||
| Effect of exchange rate changes on cash and cash equivalents | ( | ||||||||||
| Net change in cash and cash equivalents | ( | ||||||||||
| Cash and cash equivalents at beginning of the year | |||||||||||
| Cash and cash equivalents at end of the period | $ | $ | |||||||||
| Cash paid during the period for: | |||||||||||
Interest | $ | $ | |||||||||
Income taxes | |||||||||||
See accompanying notes.
7
Alamo Group Inc. and Subsidiaries
Notes to Interim Condensed Consolidated Financial Statements - (Unaudited)
June 30, 2026
1. Basis of Financial Statement Presentation
General
The accompanying unaudited interim condensed consolidated financial statements of Alamo Group Inc. and its subsidiaries (the “Company”) have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulations S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. The balance sheet at December 31, 2025 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2025 (the "2025 10-K").
Accounting Pronouncements Not Yet Adopted
In November 2024, the FASB issued ASU No. 2024-03, Expense Disaggregation Disclosures (Subtopic 220-40). The ASU requires disaggregated Income Statement Expenses. The ASU is effective for annual periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is also permitted. This ASU will result in the required additional disclosures being included in our consolidated financial statements, once adopted.
2. Business Combinations
On January 26, 2026, the Company acquired 100 % of the outstanding membership interest in Petersen Industries, LLC (“Petersen”) for approximately $163.8 million. The purchase price, which is subject to customary post-closing adjustments, was financed with a combination of cash on hand and availability under the Company's credit facility. The Company has engaged valuation specialists to use the income approach to value intangibles. However, the valuation estimates used are still preliminary. Petersen is a manufacturer and market leader in providing high-quality and innovative truck-mounted grapple loader equipment to end-customers for the handling of bulky waste collection. The purpose of the acquisition was to acquire business operations in an adjacent market, truck-mounted grapple loader equipment, where the Company sees compelling future opportunities.
| Accounts receivable | $ | ||||
| Inventory | |||||
| Prepaid and other assets | |||||
| Property, plant and equipment | |||||
| Intangible assets | |||||
| Other liabilities assumed | ( | ||||
| Net assets assumed | $ | ||||
| Goodwill | |||||
| Total Acquisition Price net cash | |||||
| Plus: Cash | |||||
| Total Consideration | $ | ||||
On October 31, 2025, the Company acquired certain UK assets of GreenMech Ltd. (GreenMech), and 100 % of the issued and outstanding equity capital of GreenMech subsidiaries in France and Germany. GreenMech is a manufacturer of woodchippers and tree care equipment. The acquisition price was approximately £2.6 million (about USD $3.6 million). The Company completed its review of the valuation of the purchase price allocation for
8
GreenMech during the fourth quarter of 2025. The Company has included the operating results of GreenMech in its consolidated financial statements since the date of acquisition; these results are considered immaterial.
On June 30, 2025, the Company acquired 100 % of the issued and outstanding equity capital of Ring-O-Matic, LLC. (“Ring-O-Matic”). Ring-O-Matic is a leading manufacturer of trailer-mounted and truck-mounted vacuum excavators and excavation systems. The primary reason for the Ring-O-Matic acquisition was to acquire business operations in an adjacent market, trailer-mounted vacuum excavators, where the Company sees compelling future opportunities. The acquisition price was approximately $17.5 million. The Company completed its review of the valuation of the purchase price allocation for Ring-O-Matic during the fourth quarter of 2025. The Company has included the operating results of Ring-O-Matic in its consolidated financial statements since the date of acquisition; these results are considered immaterial.
3. Accounts Receivable
Accounts receivable is shown net of sales discounts and the allowance for credit losses.
4. Inventories
Inventories are stated at the lower of cost or net realizable value. Net inventories consist of the following:
(in thousands) | June 30, 2026 | December 31, 2025 | ||||||||||||||||||
| Finished goods | $ | $ | ||||||||||||||||||
| Work in process | ||||||||||||||||||||
| Raw materials | ||||||||||||||||||||
| Inventories, net | $ | $ | ||||||||||||||||||
Inventory obsolescence reserves were $18.4 million at June 30, 2026 and $19.8 million at December 31, 2025.
5. Rental Equipment
Rental equipment is shown net of accumulated depreciation of $24.0 million and $24.5 million at June 30, 2026 and December 31, 2025, respectively. The Company recognized depreciation expense of $2.9 million and $2.9 million for the three months ended June 30, 2026 and 2025, and $5.9 million and $5.8 million for the six months ended June 30, 2026 and 2025, respectively.
6. Fair Value Measurements
Derivative Instruments and Hedging Activities
The Company records all derivatives in accordance with ASC 815, Derivatives and Hedging, which requires derivative instruments to be reported on the condensed consolidated balance sheets at fair value and establishes criteria for designation and effectiveness of hedging relationships. The Company is exposed to market risk such as changes in foreign currencies and interest rates. The Company does not hold or issue derivative financial instruments for trading purposes.
The Company may periodically utilize derivative instruments such as foreign currency or interest rate swaps in the normal course of business to partially offset exposure. The related gains and losses are reported as a component of accumulated other comprehensive loss ("AOCL") in the condensed consolidated balance sheets.
9
7. Goodwill and Intangible Assets
The following is the summary of changes to the Company's Goodwill for the six months ended June 30, 2026:
| (in thousands) | Vegetation Management | Industrial Equipment | Consolidated | ||||||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Translation adjustment | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Goodwill acquired | |||||||||||||||||||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | $ | ||||||||||||||||||||||||||||||||
The following is a summary of the Company's definite and indefinite-lived intangible assets net of the accumulated amortization:
(in thousands) | Estimated Useful Lives | June 30, 2026 | December 31, 2025 | |||||||||||||||||
Definite: | ||||||||||||||||||||
| Trade names and trademarks | $ | $ | ||||||||||||||||||
| Customer and dealer relationships | ||||||||||||||||||||
| Patents and drawings | ||||||||||||||||||||
| Favorable leasehold interests | ||||||||||||||||||||
| Noncompetition agreements | ||||||||||||||||||||
| Total at cost | ||||||||||||||||||||
| Less accumulated amortization | ( | ( | ||||||||||||||||||
| Total net | ||||||||||||||||||||
| Indefinite: | ||||||||||||||||||||
| Trade names and trademarks | ||||||||||||||||||||
| Total Intangible Assets | $ | $ | ||||||||||||||||||
8. Leases
The Company leases office space and equipment under various operating and finance leases, which generally are expected to be renewed or replaced by other leases. The finance leases currently held are considered immaterial. The components of lease cost were as follows:
| Components of Lease Cost | ||||||||||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Finance lease cost: | ||||||||||||||||||||||||||
| Amortization of right-of-use assets | $ | $ | $ | $ | ||||||||||||||||||||||
| Operating lease cost | ||||||||||||||||||||||||||
| Short-term lease cost | ||||||||||||||||||||||||||
| Variable lease cost | ||||||||||||||||||||||||||
| Total lease cost | $ | $ | $ | $ | ||||||||||||||||||||||
10
Maturities of operating lease liabilities were as follows:
| Future Minimum Lease Payments | |||||||||||||||||||||||||||||||||||
| (in thousands) | June 30, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||||
| 2026 | $ | * | $ | ||||||||||||||||||||||||||||||||
| 2027 | |||||||||||||||||||||||||||||||||||
| 2028 | |||||||||||||||||||||||||||||||||||
| 2029 | |||||||||||||||||||||||||||||||||||
| 2030 | |||||||||||||||||||||||||||||||||||
| Thereafter | |||||||||||||||||||||||||||||||||||
| Total minimum lease payments | $ | $ | |||||||||||||||||||||||||||||||||
| Less imputed interest | ( | ( | |||||||||||||||||||||||||||||||||
| Total operating lease liabilities | $ | $ | |||||||||||||||||||||||||||||||||
*Period ended June 30, 2026 represents the remaining six months of 2026. | |||||||||||||||||||||||||||||||||||
Future Lease Commencements
As of June 30, 2026, there are additional operating leases, primarily for buildings, that have not yet commenced in the amount of $5.5 million. These operating leases will commence in fiscal year 2026 with lease terms of 2 to 8 years.
Supplemental balance sheet information related to leases was as follows:
| Operating Leases | |||||||||||||||||||||||
| (in thousands) | June 30, 2026 | December 31, 2025 | |||||||||||||||||||||
Other non-current assets | $ | $ | |||||||||||||||||||||
| Accrued liabilities | |||||||||||||||||||||||
| Other long-term liabilities | |||||||||||||||||||||||
| Total operating lease liabilities | $ | $ | |||||||||||||||||||||
| Weighted Average Remaining Lease Term | |||||||||||||||||||||||
| Weighted Average Discount Rate | % | % | |||||||||||||||||||||
Supplemental cash flow information related to leases was as follows:
| Six Months Ended June 30, | ||||||||||||||
| (in thousands) | 2026 | 2025 | ||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | ||||||||||||||
| Operating cash flows from operating leases | $ | $ | ||||||||||||
11
9. Debt
The components of long-term debt are as follows:
(in thousands) | June 30, 2026 | December 31, 2025 | ||||||||||||||||||
| Bank revolving credit facility | $ | $ | ||||||||||||||||||
| Term debt | ||||||||||||||||||||
| Finance lease obligations | ||||||||||||||||||||
| Total debt | ||||||||||||||||||||
| Less current maturities | ||||||||||||||||||||
| Total long-term debt | $ | $ | ||||||||||||||||||
10. Common Stock and Dividends
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Dividends declared | $ | $ | $ | $ | |||||||||||||||||||
| Dividends paid | $ | $ | $ | $ | |||||||||||||||||||
On July 1, 2026, the Company announced that its Board of Directors had declared a quarterly cash dividend of $0.34 50 million of its outstanding common stock. During 2026, the Company purchased 61,932 shares.
12
11. Earnings Per Share
The following table sets forth the reconciliation from basic to diluted average common shares and the calculations of net income per common share. Net income for basic and diluted calculations do not differ.
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(In thousands, except per share) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net Income | $ | $ | $ | $ | |||||||||||||||||||
| Average Common Shares: | |||||||||||||||||||||||
Basic (weighted-average outstanding shares) | |||||||||||||||||||||||
Dilutive potential common shares from stock options | |||||||||||||||||||||||
Diluted (weighted-average outstanding shares) | |||||||||||||||||||||||
| Basic earnings per share | $ | $ | $ | $ | |||||||||||||||||||
| Diluted earnings per share | $ | $ | $ | $ | |||||||||||||||||||
12. Revenue and Segment Information
Revenues from Contracts with Customers
Disaggregation of revenue is presented in the tables below by product type and by geographical location. Management has determined that this level of disaggregation would be beneficial to users of the financial statements.
| Revenue by Product Type | |||||||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net Sales | |||||||||||||||||||||||
Wholegoods | $ | $ | $ | $ | |||||||||||||||||||
Parts | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
| Consolidated | $ | $ | $ | $ | |||||||||||||||||||
Other includes rental sales, extended warranty sales and service sales as they are considered immaterial.
| Revenue by Geographical Location | |||||||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net Sales | |||||||||||||||||||||||
United States | $ | $ | $ | $ | |||||||||||||||||||
Canada | |||||||||||||||||||||||
France | |||||||||||||||||||||||
United Kingdom | |||||||||||||||||||||||
Brazil | |||||||||||||||||||||||
| Netherlands | |||||||||||||||||||||||
Australia | |||||||||||||||||||||||
| Germany | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
| Consolidated | $ | $ | $ | $ | |||||||||||||||||||
Net sales are attributed to countries based on the location of the customer.
13
Segment Information
The Company’s Chief Operating Decision Maker (CODM) is the Chief Executive Officer. The CODM is responsible for evaluating the performance of the Company’s operating segments. This evaluation of operating segments supports the allocation of resources, both financial and human, to optimize income from operations as the measure of segment profit and loss.
Our reportable segments are our two Divisions: Vegetation Management and Industrial Equipment.
The CODM focuses heavily on operating performance and reviews mainly non-GAAP measures, such as bookings and backlog, absorption, and headcount. The CODM does not utilize asset metrics to evaluate the segment performance. The GAAP measures used are:
•Division Net Sales
•Division Cost of Sales
•Division Operating Expenses
•Division Income from Operations
The following includes a summary of the unaudited financial information by reporting segment at June 30, 2026:
| Three Months Ended June 30, 2026 | |||||||||||||||||
| Vegetation | Industrial | ||||||||||||||||
| (in thousands) | Management | Equipment | Consolidated | ||||||||||||||
| Net Sales | $ | $ | $ | ||||||||||||||
| Less: | |||||||||||||||||
| Cost of Sales | ( | ( | ( | ||||||||||||||
| Operating Expenses | ( | ( | ( | ||||||||||||||
| Income from Operations | |||||||||||||||||
| Interest Income | |||||||||||||||||
| Other Income (Expense) | ( | ||||||||||||||||
| Interest Expense | ( | ||||||||||||||||
| Income Before Taxes | |||||||||||||||||
| Taxes | |||||||||||||||||
| Net Income | $ | ||||||||||||||||
14
| Three Months Ended June 30, 2025 | |||||||||||||||||
| Vegetation | Industrial | ||||||||||||||||
| (in thousands) | Management | Equipment | Consolidated | ||||||||||||||
| Net Sales | $ | $ | $ | ||||||||||||||
| Less: | |||||||||||||||||
| Cost of Sales | ( | ( | ( | ||||||||||||||
| Operating Expenses | ( | ( | ( | ||||||||||||||
| Income from Operations | |||||||||||||||||
| Interest Income | |||||||||||||||||
| Other Income (Expense) | ( | ||||||||||||||||
| Interest Expense | ( | ||||||||||||||||
| Income Before Taxes | |||||||||||||||||
| Taxes | |||||||||||||||||
| Net Income | $ | ||||||||||||||||
| Six Months Ended June 30, 2026 | |||||||||||||||||
| Vegetation | Industrial | ||||||||||||||||
| (in thousands) | Management | Equipment | Consolidated | ||||||||||||||
| Net Sales | $ | $ | $ | ||||||||||||||
| Less: | |||||||||||||||||
| Cost of Sales | ( | ( | ( | ||||||||||||||
| Operating Expenses | ( | ( | ( | ||||||||||||||
| Income from Operations | |||||||||||||||||
| Interest Income | |||||||||||||||||
| Other Income (Expense) | ( | ||||||||||||||||
| Interest Expense | ( | ||||||||||||||||
| Income Before Taxes | |||||||||||||||||
| Taxes | |||||||||||||||||
| Net Income | $ | ||||||||||||||||
| Six Months Ended June 30, 2025 | |||||||||||||||||
| Vegetation | Industrial | ||||||||||||||||
| (in thousands) | Management | Equipment | Consolidated | ||||||||||||||
| Net Sales | $ | $ | $ | ||||||||||||||
| Less: | |||||||||||||||||
| Cost of Sales | ( | ( | ( | ||||||||||||||
| Operating Expenses | ( | ( | ( | ||||||||||||||
| Income from Operations | |||||||||||||||||
| Interest Income | |||||||||||||||||
| Other Income (Expense) | ( | ||||||||||||||||
| Interest Expense | ( | ||||||||||||||||
| Income Before Taxes | |||||||||||||||||
| Taxes | |||||||||||||||||
| Net Income | $ | ||||||||||||||||
15
(in thousands) | June 30, 2026 | December 31, 2025 | |||||||||
| Goodwill | |||||||||||
Vegetation Management | $ | $ | |||||||||
Industrial Equipment | |||||||||||
| Consolidated | $ | $ | |||||||||
| Total Identifiable Assets | |||||||||||
Vegetation Management | $ | $ | |||||||||
Industrial Equipment | |||||||||||
| Consolidated | $ | $ | |||||||||
13. Accumulated Other Comprehensive Loss
Changes in accumulated other comprehensive loss by component, net of tax, were as follows:
| Three Months Ended June 30, | |||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||
| (in thousands) | Foreign Currency Translation Adjustment | Defined Benefit Plans Items | Gains (Losses) on Cash Flow Hedges | Total | Foreign Currency Translation Adjustment | Defined Benefit Plans Items | Gains (Losses) on Cash Flow Hedges | Total | |||||||||||||||||||||
| Balance as of beginning of period | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||
| Other comprehensive income (loss) before reclassifications | ( | ( | ( | ||||||||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive (income) loss | |||||||||||||||||||||||||||||
| Other comprehensive income (loss) | ( | ( | ( | ||||||||||||||||||||||||||
| Balance as of end of period | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||
| Six Months Ended June 30, | |||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||
| (in thousands) | Foreign Currency Translation Adjustment | Defined Benefit Plans Items | Gains (Losses) on Cash Flow Hedges | Total | Foreign Currency Translation Adjustment | Defined Benefit Plans Items | Gains (Losses) on Cash Flow Hedges | Total | |||||||||||||||||||||
| Balance as of beginning of period | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||
| Other comprehensive income (loss) before reclassifications | ( | ( | ( | ||||||||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive (income) loss | |||||||||||||||||||||||||||||
| Other comprehensive income (loss) | ( | ( | ( | ||||||||||||||||||||||||||
| Balance as of end of period | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||
16
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following tables set forth, for the periods indicated, certain financial data:
As a Percent of Net Sales | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Vegetation Management | 39.7 | % | 42.6 | % | 40.8 | % | 42.3 | % | |||||||||||||||
| Industrial Equipment | 60.3 | % | 57.4 | % | 59.2 | % | 57.7 | % | |||||||||||||||
Total sales, net | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||||||
Cost Trends and Profit Margin, as Percentages of Net Sales | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Gross profit | 24.6 | % | 25.8 | % | 24.8 | % | 26.1 | % | |||||||||||||||
| Income from operations | 10.2 | % | 11.2 | % | 10.1 | % | 11.3 | % | |||||||||||||||
| Income before income taxes | 9.2 | % | 9.9 | % | 9.3 | % | 10.3 | % | |||||||||||||||
| Net income | 6.9 | % | 7.4 | % | 6.9 | % | 7.8 | % | |||||||||||||||
Overview
This report contains forward-looking statements that are based on Alamo Group’s current expectations. Actual results in future periods may differ materially from those expressed or implied because of a number of risks and uncertainties which are discussed below and in the Forward-Looking Information section. Unless the context otherwise requires, the terms "the Company", "we", "our" and "us" means Alamo Group Inc.
Net sales for the second quarter of 2026 were $450.7 million, an increase of 7.6% compared to $419.1 million in the second quarter of 2025. Revenue growth was driven primarily by the addition of Ring-O-Matic and Petersen Industries within the Industrial Equipment Division. Organic revenue growth in the second quarter of 2026 was approximately 1% compared to second quarter of 2025. The Company's backlog at June 30, 2026 was $549.3 million, a 20% decrease from $687.2 million in the prior-year period. The decrease primarily reflects improved lead times and the continued normalization of order patterns following the elevated demand environment experienced over the past several years within the Industrial Equipment Division. While backlog levels declined year over year, customer demand remained generally stable across most of our core markets during the quarter.
Consolidated income from operations in the second quarter of 2026 was $45.8 million, down 3% from $47.1 million in the same period 2025. Results were impacted by approximately $4.3 million of restructuring, acquisition-related and integration expenses incurred during the quarter. Of the $4.3 million, $3.5 million was recorded in SG&A. These costs were primarily associated with recent acquisitions and operational initiatives intended to support future growth and efficiency improvements. Excluding these costs operating performance benefited from contributions from recent acquisitions and operational improvement initiatives.
Net Sales in the Industrial Equipment Division increased by 13% (excluding acquisitions, growth was 3%) in the second quarter of 2026 compared to the same period in 2025. The Division’s backlog declined by 28% as lead times improved and demand normalized following elevated order levels in prior periods. New orders decreased approximately 2% year over year (excluding acquisitions, new orders declined 12%). Income from operations rose 7% versus the prior-year period, reflecting contributions from recent acquisitions and continued improvements in operating efficiency.
Net Sales in the Vegetation Management Division were flat in the second quarter of 2026 compared to the same period in 2025 as growth in agricultural and tree care markets was offset by weakness in municipal markets. The Division's backlog increased 4% and new orders were flat year over year in the second quarter of 2026. Income from operations decreased 30% versus the prior year period primarily due to the impact from lower sales in the municipal mowing businesses.
17
As part of our ongoing efforts to optimize operations in both of our Divisions, we have relocated applicable product families, sold the Gibson City, IL facility, repurposed one facility to support other brands, and completed initial setups for portions of the production lines. As we continue our optimization efforts throughout the rest of the year, we expect temporary production inefficiencies, duplicate costs, and shipment-timing effects that may pressure revenue and gross margin, along with potentially one-time expenses related to relocation and facility exit. Following completion, we expect improved capacity utilization, service levels and structural cost reductions. The anticipated timing, costs and benefits are forward-looking and subject to the risks and uncertainties described under “Forward- Looking Information.”
Results of Operations
Three Months Ended June 30, 2026 vs. Three Months Ended June 30, 2025
Net sales for the second quarter of 2026 were $450.7 million, an increase of $31.6 million or 8% compared to $419.1 million for the second quarter of 2025. Net sales during the second quarter of 2026 increased due to contributions from recent acquisitions in the Industrial Equipment Division and modest improvement in agricultural markets within the Vegetation Management Division. Our price/volume analysis indicates 0.4% of the 8% growth was due to currency movement.
Net sales in the Industrial Equipment Division were $271.6 million in the second quarter of 2026 compared to $240.7 million for the same period in 2025, an increase of $30.9 million or 13%. The increase was due to the addition of the Ring-O-Matic and Petersen Industries acquisitions. Organic net sales in the second quarter of 2026 increased 3% compared to the second quarter in 2025. Currency movement impacted sales favorably by 0.1%.
Net sales in the Vegetation Management Division increased by $0.7 million or 0% to $179.1 million for the second quarter of 2026 compared to $178.4 million during the same period in 2025. The increase was due to modest improvements in tree care and agricultural markets which offset lower municipal mowing activity. Currency movement was 0.8% in the second quarter of 2026.
Gross profit for the second quarter of 2026 was $110.9 million (25% of net sales) compared to $108.3 million (26% of net sales) during the same period in 2025, an increase of $2.6 million. Higher net sales in the Industrial Equipment Division supported the increase in gross profit. However, overall gross margin declined by 125 basis points due to lower municipal mowing volumes and temporary production inefficiencies associated with facility consolidation activities.
Selling, general and administrative expenses (“SG&A”) were $60.1 million (13% of net sales) during the second quarter of 2026 compared to $57.1 million (14% of net sales) during the same period of 2025, an increase of $3.0 million attributable primarily to recent acquisitions and restructuring-related costs. Amortization expense in the second quarter of 2026 was $5.0 million compared to $4.1 million in the same period in 2025, an increase due to addition of the Ring-O-Matic and Petersen Industries acquisitions.
Interest expense was $4.8 million for the second quarter of 2026 compared to $3.7 million during the same period in 2025 due to increased debt related to the Petersen Industries acquisition.
Other net income (expense) was $0.62 million of expense in the second quarter of 2026 compared to $3.2 million of expense during the same period in 2025, primarily due to lower foreign currency transaction losses.
Provision for income taxes was $10.7 million (26% of income before income tax) in the second quarter of 2026 compared to $10.3 million (25% of income before income tax) during the same period in 2025. The slight increase in the tax rate in the second quarter of 2026 was due to a lower expected R&D credit for 2026.
The Company’s net income after tax was $30.9 million or $2.55 per share on a diluted basis for the second quarter of 2026 compared to $31.1 million or $2.57 per share on a diluted basis for the second quarter of 2025, reflecting the factors discussed above, including restructuring, acquisition and integration expenses, lower municipal mowing volumes, and higher interest expense.
18
Six Months Ended June 30, 2026 vs. Six Months Ended June 30, 2025
Net sales for the first six months of 2026 were $867.9 million, an increase of $57.9 million or 7% compared to $810.0 million for the first six months of 2025. The increase in net sales during the first six months of 2026 was driven primarily by the acquisitions of Ring-O-Matic and Petersen Industries in the Industrial Equipment Division, along with improvement in agricultural and tree care markets within the Vegetation Management Division.
Net sales in the Industrial Equipment Division were $513.4 million during the first six months of 2026 compared to $467.8 million for the same period in 2025, an increase of $45.6 million or 10%. The increase in net sales for the first six months of 2026 compared to the first six months of 2025 was mainly due the acquisition of Ring-O-Matic and Petersen Industries.
Net sales in the Vegetation Management Division increased during the first six months by $12.3 million or 4% to $354.5 million for 2026 compared to $342.2 million during the same period in 2025. The increase was due to improvements in the agricultural and tree care businesses, partially offset by weakness in the municipal mowing markets.
Gross profit for the first six months of 2026 was $215.7 million (25% of net sales) compared to $211.1 million (26% of net sales) during the same period in 2025, an increase of $4.6 million. The increase in gross profit was mainly attributable to higher sales coming from the acquisitions in the Industrial Equipment Division. However, gross margin declined 122 basis points due to weakness in municipal mowing markets and temporary production inefficiencies associated with facility consolidation activities.
SG&A expenses were $117.8 million (14% of net sales) during the first six months of 2026 compared to $111.5 million (14% of net sales) during the same period of 2025, an increase of $6.3 million attributable primarily to recent acquisitions, including Ring-O-Matic and Petersen Industries, as well as restructuring-related costs. Amortization expense in the first six months of 2026 was $9.9 million compared to $8.1 million in the same period in 2025, an increase due to acquisitions.ease of $0.0 million.
Interest expense was $9.4 million for the first six months of 2026 compared to $6.9 million during the same period in 2025, an increase of $2.5 million following acquisition of Petersen Industries in January 2026.
Other income (expense), net was $0.6 million of expense during the first six months of 2026 compared to $3.8 million of expense in the first six months of 2025, primarily due to lower foreign currency transaction losses.
Provision for income taxes was $20.5 million (25% of income before income taxes) during the first six months of 2026 compared to $20.3 million (24% of income before income taxes) during the same period in 2025. The increase in the effective tax rate was primarily due to a lower expected R&D credit in 2026.
The Company's net income after tax was $60.1 million or $4.96 per share on a diluted basis for the first six months of 2026 compared to $62.9 million or $5.21 per share on a diluted basis for the first six months of 2025. The decrease of $2.8 million reflected restructuring, acquisition and integration expenses, lower municipal mowing volumes and higher interest expense associated with the financing of the Petersen Industries acquisition.
Liquidity and Capital Resources
In addition to normal operating expenses, the Company has ongoing cash requirements which are necessary to operate the business, including inventory purchases and capital expenditures. The Company’s accounts receivable, inventory and accounts payable levels, particularly in its Vegetation Management Division, historically build in the first quarter and early spring and, to a lesser extent, in the fourth quarter in anticipation of the spring and fall selling seasons. Accounts receivable historically build in the first and fourth quarters of each year as a result of pre-season sales and year-round sales programs. These sales, primarily in the Vegetation Management Division, help balance the Company’s production during the first and fourth quarters.
As of June 30, 2026, the Company had working capital of $766.6 million, a decrease of $13.1 million from working capital of $779.7 million at December 31, 2025. The decrease was primarily due to the use of cash and cash equivalents to partially fund the Petersen Industries acquisition, partly offset by increases in accounts receivable and inventory.
19
Capital expenditures were $10.3 million for the first six months of 2026, compared to $13.0 million during the first six months of 2025. The Company expects a capital expenditure level of approximately $28.0 million to $33.0 million for the full year of 2026. The Company will fund any future expenditures from operating cash flows or through our revolving credit facility, described below.
Net cash used for investing activities was $171.6 million during the first six months of 2026 compared to $29.7 million during the first six months of 2025.
Net cash provided by financing activities was $37.3 million during the first six months of 2026, compared to net cash used in financing activities of $15.1 million during the six month period ended June 30, 2025. Higher net cash provided by financing activities for the first six months of 2026 relates to additional borrowings on bank revolving credit facilities to partially fund the Petersen Industries acquisition.
The Company had $133.8 million in cash and cash equivalents held by its foreign subsidiaries as of June 30, 2026. The majority of these funds are at our European and Canadian facilities. The Company will repatriate European and Canadian cash and cash equivalents as needed to fund operating and investing activities, and will monitor exchange rates to determine the appropriate timing of such repatriation given the current relative value of the U.S. dollar. Repatriated funds will be used to reduce debt levels, and to fund working capital, capital investments, and acquisitions company-wide.
On May 27, 2026, the Company, as Borrower, and each of its domestic subsidiaries as guarantors, entered into a Fourth Amended and Restated Credit Agreement (the “2026 Credit Agreement”) with Bank of America, N.A., as Administrative Agent. The 2026 Credit Agreement provides Borrower with the ability to request loans and other financial obligations in an aggregate amount of up to $602.5 million. Under the 2026 Credit Agreement, the Company has borrowed $202.5 million pursuant to a Term Facility, while up to $400.0 million is available to the Company pursuant to a Revolver Facility which terminates in 2031. The Term Facility requires the Company to make equal quarterly principal payments of $1.27 million over the term of the loan, with the final payment of any outstanding principal amount, plus interest, due at the end of the five-year term. Borrowings under the 2026 Credit Agreement bear interest, at the Company’s option, at a Term Secured Overnight Financing Rate (“SOFR”) or a Base Rate (each as defined in the 2026 Credit Agreement), plus, in each case, an applicable margin. The applicable margin ranges from 1.25% to 2.25% for Term SOFR borrowings and from 0.25% to 1.25% for Base Rate borrowings with the margin percentage based upon the Company's consolidated leverage ratio. The Company must also pay a commitment fee to the lenders ranging between 0.125% to 0.30% on any unused portion of the $400.0 million Revolver Facility. The 2026 Credit Agreement requires the Company to maintain two financial covenants, namely, a maximum consolidated leverage ratio and a minimum consolidated fixed charge coverage ratio. The Agreement also contains various covenants relating to limitations on indebtedness, limitations on investments and acquisitions, limitations on the sale of properties and limitations on liens and capital expenditures. The Agreement also contains other customary covenants, representations and events of defaults. The expiration date of the 2026 Credit Agreement, including the Term Facility and the Revolver Facility, is May 27, 2031. As of June 30, 2026, $263.7 million was outstanding under the 2026 Credit Agreement, $201.2 million on the Term Facility and $62.5 million on the Revolver Facility. On June 30, 2026, $3.2 million of the revolver capacity was committed to irrevocable standby letters of credit issued in the ordinary course of business as required by vendors' contracts resulting in $334.3 million in available borrowings. The Company is in compliance with the covenants under the Agreement as of June 30, 2026.
Management believes the 2026 Credit Agreement along with the Company’s ability to internally generate funds from operations should be sufficient to allow the Company to meet its cash requirements for the foreseeable future. However, future challenges affecting the banking industry and credit markets in general could potentially cause changes to credit availability, which creates a level of uncertainty.
As of June 30, 2026, we believe our financial position remains robust, supported by a strong balance sheet and healthy cash flow from operations. Our available liquidity, comprised of cash and cash equivalents, along with access to undrawn credit facilities, ensures that we are well equipped to meet our operating needs and explore strategic initiatives that could enhance shareholder value. We continuously evaluate our capital allocation strategy, including potentially repurchasing shares under the share repurchase program adopted by the Company and approved by the Board of Directors as announced on October 31, 2024 if it aligns with our strategic priorities and is deemed to be in the best interest of our shareholders. We believe that repurchasing our shares would be a prudent use of capital, provided appropriate market conditions exist.
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Critical Accounting Estimates
Management’s Discussion and Analysis of Financial Condition and Results of Operations are based upon our Consolidated Financial Statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Critical Accounting Policies
An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the financial statements. Management believes that of the Company's significant accounting policies, which are set forth in Note 1 of the Notes to Consolidated Financial Statements in the 2025 Form 10-K, the policies relating to the business combinations involve a higher degree of judgment and complexity. There have been no material changes to the nature of estimates, assumptions and levels of subjectivity and judgment related to critical accounting estimates disclosed in Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" of the 2025 Form 10-K.
Off-Balance Sheet Arrangements
There are no off-balance sheet arrangements that have or are likely to have a current or future material effect on our financial condition.
Forward-Looking Information
Part I of this Quarterly Report on Form 10-Q and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Item 2 of this Quarterly Report contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. In addition, forward-looking statements may be made orally or in press releases, conferences, reports or otherwise, in the future by or on behalf of the Company. Generally, forward-looking statements are not based on historical facts but instead represent the Company's and its management's belief regarding future events.
Statements that are not historical are forward-looking. When used by us or on our behalf, the words "expect,"
“will,” “estimate,” “believe,” “intend,” "would," “could,” "predict," “should,” “anticipate,” "continue," “project,” “forecast,”
“plan,” “may” and similar expressions generally identify forward-looking statements made by us or on our behalf.
Forward-looking statements involve risks and uncertainties. These uncertainties include factors that affect all
businesses operating in a global market, as well as matters specific to the Company and the markets we serve.
Certain particular risks and uncertainties that continually face us include the following:
•budget constraints and revenue shortfalls which could affect the purchases of our type of equipment by governmental customers and related contractors in both domestic and international markets;
•market acceptance of new and existing products;
•our ability to hire suitable employees for our business and maintain good relations with employees;
•our ability to develop and manufacture new and existing products profitably;
•the inability of our suppliers, creditors, public utility providers and financial and other service organizations to deliver or provide their products or services to us;
•legal actions and litigation;
•impairment in the carrying value of goodwill;
•our ability to successfully integrate acquisitions and operate acquired businesses or assets;
•our ability to achieve anticipated cost savings and synergies associated with restructuring some of our business operations;
•current and changing tax laws in the U.S. and internationally;
•our ability to hire and retain quality skilled employees; and
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•changes in the prices of agricultural commodities, which could affect our customers’ income levels.
In addition, we are subject to risks and uncertainties facing the industry in general, including the following:
•changes in business and political conditions and the economy in general in both domestic and international markets;
•uncertainty due to future direction of federal fiscal policy following national elections may slow the growth in governmental market revenue;
•the price and availability of energy and critical raw materials, particularly steel and steel products;
•increased competition;
•increases in input costs on items we use in the manufacturing of our products;
•adverse weather conditions such as droughts, floods, snowstorms, etc., which can affect the buying patterns of our customers and end-users;
•increased costs of complying with governmental regulations which affect corporations including related fines and penalties (such as the European General Data Protection Regulation (GDPR) and the California Consumer Privacy Act);
•an increase in unfunded pension plan liability due to financial market deterioration;
•the potential effects on the buying habits of our customers due to animal disease outbreaks and other epidemics;
•adverse market conditions and credit constraints which could affect our customers and end-users, such as cutbacks on dealer stocking levels;
•changes in market demand;
•climate related incidents and other sustainability risks, global pandemics, acts of war or aggression and terrorist activities or military actions;
•cyber security risks including the potential loss of proprietary data or data security breaches and related fines, penalties and other liabilities;
•financial market changes including changes in interest rates and fluctuations in foreign exchange rates;
•abnormal seasonal factors in our industry;
•changes in domestic and foreign governmental policies and laws, including increased levels of government regulation and changes in agricultural policies, including the amount of farm subsidies and farm payments as well as changes in trade policy that may have an adverse impact on our business;
•changes to global trade policies, tariffs, trade sanctions, and investment restrictions;
•government actions, including but not limited to budget levels, and changes in laws, regulations and legislation, relating to tax, environment, commerce, infrastructure spending, health and safety; and
•risk of governmental defaults and resulting impact on the global economy and particularly financial institutions.
The Company wishes to caution readers not to place undue reliance on any forward-looking statements and to recognize that the statements are not predictions of actual future results. Actual results could differ materially from those anticipated in the forward-looking statements and from historical results, due to the risks and uncertainties
described above, as well as others not now anticipated. The foregoing statements are not exclusive and further information concerning us and our businesses, including factors that could potentially materially affect our financial results, may emerge from time to time. It is not possible for management to predict all risk factors or to assess the impact of such risk factors on the Company’s businesses. Any forward-looking statements made by or on behalf of the Company speak only to the date they are made and we do not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the forward-looking statements were made.
Item 3. Quantitative and Qualitative Disclosures About Market Risks
The Company is exposed to various market risks. Market risks are the potential losses arising from adverse changes in market prices and rates. The Company does not enter into derivative or other financial instruments for trading or speculative purposes.
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Foreign Currency Risk
International Sales
A portion of the Company’s operations consists of manufacturing and sales activities in international jurisdictions. The Company primarily manufactures its products in the U.S., U.K., France, Canada, Brazil, and the Netherlands. The Company sells its products primarily in the functional currency within the markets where the products are produced, but certain sales from the Company's U.K. and Canadian operations are denominated in other foreign currencies. As a result, the Company’s financials, specifically the value of its foreign assets, could be affected by factors such as changes in foreign currency exchange rates or weak economic conditions in the other markets in which the subsidiaries of the Company distribute their products.
Exposure to Exchange Rates
The Company translates the assets and liabilities of foreign-owned subsidiaries at rates in effect at the balance sheet date. Revenues and expenses are translated at average rates in effect during the reporting period. Translation adjustments are included in accumulated other comprehensive income within the statement of stockholders’ equity. The total foreign currency translation adjustment for the current quarter decreased stockholders’ equity by $4.4 million.
The Company’s earnings are affected by fluctuations in the value of the U.S. dollar as compared to foreign currencies, predominately in Europe and Canada, as a result of the sales of its products in international markets. Forward currency contracts are used to hedge against the earnings effects of such fluctuations. The result of a uniform 10% strengthening or 10% decrease in the value of the dollar relative to the currencies in which the Company’s sales are denominated would result in a change in gross profit of $6.2 million for the six month period ended June 30, 2026. A stronger U.S. dollar would unfavorably impact gross profit while a weaker U.S. dollar would provide a favorable impact to gross profit. This calculation assumes that each exchange rate would change in the same direction relative to the U.S. dollar. In addition to the direct effects of changes in exchange rates, which include a changed dollar value of the resulting sales, changes in exchange rates may also affect the volume of sales or the foreign currency sales price as competitors’ products become more or less attractive. The Company’s sensitivity analysis of the effects of changes in foreign currency exchange rates does not factor in a potential change in sales levels or local currency prices.
Interest Rate Risk
The Company’s long-term debt bears interest at variable rates. Accordingly, the Company’s net income is affected by changes in interest rates. Assuming the current level of borrowings at variable rates and a two percentage point change for the second quarter 2026 average interest rate under these borrowings, the Company’s interest expense would have changed by approximately $1.3 million. To protect the Company's long-term debt from fluctuations in interest rates, the Company may enter into interest rate swaps to mitigate exposure. However, this analysis assumes no such actions. Further this analysis does not consider the effects of the change in the level of overall economic activity that could exist in such an environment.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
An evaluation was carried out under the supervision and with the participation of Alamo’s management, including our President and Chief Executive Officer and Executive Vice President and Chief Financial Officer (Principal Financial Officer) of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934). Based upon the evaluation, the President and Chief Executive Officer and Executive Vice President and Chief Financial Officer (Principal Financial Officer) concluded that the Company’s design and operation of these disclosure controls and procedures were effective at the end of the period covered by this report.
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Changes in internal control over financial reporting
There has been no change in our internal control over financial reporting that occurred during our last fiscal year that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
For a description of legal proceedings, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2025 (the "2025 10-K").
Item 1A. Risk Factors
There have not been any material changes from the risk factors previously disclosed in the 2025 Form 10-K for the year ended December 31, 2025.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The following table provides a summary of the Company's repurchase activity for its common stock during the three months ended June 30, 2026.
| Issuer Purchases of Equity Securities | ||||||||||||||
| Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly announced Plans or Programs | Maximum Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (a) | ||||||||||
| April 1-30, 2026 | — | — | — | $50,000,000 | ||||||||||
| May 1-31, 2026 | 26,589 | $151.47 | 26,589 | $45,967,028 | ||||||||||
| June 1-30, 2026 | 35,343 | $150.61 | 35,343 | $40,641,621 | ||||||||||
| (a) On October 31, 2024, the Board authorized a stock repurchase program of up to $50.0 million of the Company's common stock. The program has a term of five (5) years, terminating on October 30, 2029. | ||||||||||||||
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not Applicable
Item 5. Other Information
(a) Reports on Form 8-K
None.
(b) Other Information
None.
(c) During the period covered by this report, none of the Company’s directors or executive officers has adopted terminated
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Item 6. Exhibits
(a) Exhibits
| Exhibits | Exhibit Title | Incorporated by Reference From the Following Documents | ||||||||||||
| 10.1 | — | Separation agreement | Filed as Exhibit 10.1 to Form 8-K, May 19, 2026 | |||||||||||
| 10.2 | — | Fourth amended and restated credit agreement | Filed as Exhibit 10.1 to Form 8-K, May 28, 2026 | |||||||||||
| 31.1 | — | Certification by Robert P. Hureau under Section 302 of the Sarbanes-Oxley Act of 2002 | Filed Herewith | |||||||||||
| 31.2 | — | Certification by Agnieszka K. Kamps under Section 302 of the Sarbanes-Oxley Act of 2002 | Filed Herewith | |||||||||||
| 32.1 | — | Certification by Robert P. Hureau under Section 906 of the Sarbanes-Oxley Act of 2002 | Filed Herewith | |||||||||||
| 32.2 | — | Certification by Agnieszka K. Kamps under Section 906 of the Sarbanes-Oxley Act of 2002 | Filed Herewith | |||||||||||
| 101.INS | — | XBRL Instance Document - the instance document does not appear in the Interactive Data Files because its XBRL tags are embedded within the Inline XBRL document | Filed Herewith | |||||||||||
| 101.SCH | — | XBRL Taxonomy Extension Schema Document | Filed Herewith | |||||||||||
| 101.CAL | — | XBRL Taxonomy Extension Calculation Linkbase Document | Filed Herewith | |||||||||||
| 101.DEF | — | XBRL Taxonomy Extension Definition Linkbase Document | Filed Herewith | |||||||||||
| 101.LAB | — | XBRL Taxonomy Extension Label Linkbase Document | Filed Herewith | |||||||||||
| 101.PRE | — | XBRL Taxonomy Extension Presentation Linkbase Document | Filed Herewith | |||||||||||
| 104 | — | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | Filed Herewith | |||||||||||
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Alamo Group Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| August 3, 2026 | Alamo Group Inc. | ||||
| (Registrant) | |||||
| /s/ Robert P. Hureau | |||||
| Robert P. Hureau | |||||
| President & Chief Executive Officer | |||||
| (Principal Executive Officer) | |||||
| /s/ Agnieszka K. Kamps | |||||
| Agnieszka K. Kamps | |||||
| Executive Vice President & Chief Financial Officer | |||||
| (Principal Financial Officer) | |||||
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