[10-Q] Alamo Group, Inc. Quarterly Earnings Report

Q: How did HCKT's Q2 2025 revenue compare to last year?

Q2 revenue was $78.9 million , up 1.6 % from $77.7 million in Q2 2024.

Q: Why did Hackett Group's net income fall in Q2 2025?

Higher stock-based compensation ($9.7 m vs $2.9 m) and integration costs drove margins lower, cutting net income to $1.7 m.

Q: What is Hackett Group's current debt level?

Long-term debt rose to $22.8 million after a $10 million revolver draw; facility capacity is $100 million.

Q: How much stock did HCKT repurchase in 1H 2025?

The company bought back 382,000 shares for $10.5 million and now has $30 million authorized for future buybacks.

Q: What acquisitions affected the quarter?

Hackett closed a $0.8 million asset purchase of Spend Matters and continued integrating the 2024 LeewayHertz AI deal.

Q: Are additional charges expected in 2025?

Management plans $1.5–2.0 million in Q3 restructuring costs linked to its Gen AI transition.

Filing Impact

(Neutral)

Filing Sentiment

(Neutral)

Form Type

10-Q

Rhea-AI Filing Summary

Q2 FY25 snapshot (ended 27-Jun-25):

Total revenue $78.9 m (+1.6 % YoY); revenue-before-reimb. $77.6 m (+2.3 %).
Operating income fell 63 % to $4.6 m; net income collapsed 81 % to $1.7 m, diluted EPS $0.06 vs $0.31.
Gross margin compressed to 35 % as non-cash stock-based comp soared to $9.7 m (prior-year $2.9 m) due to new market-price awards and LeewayHertz earn-outs.
Segment mix: Global S&BT $44.2 m (+4.6 %), SAP Solutions $13.9 m (+12.5 %), Oracle Solutions $20.8 m (-9.7 %).
H1 operating cash flow $9.8 m (-40 %); cash balance $10.1 m (-38 % YTD) after $10 m revolver draw, pushing debt to $22.8 m.
Capital deployment: $10.5 m share buybacks (382 k shs), $6.6 m dividends; repurchase authorization lifted to $30 m.
Acquisitions: Spend Matters assets ($0.8 m) added $2.0 m intangibles; leverage of FY24 LeewayHertz AI deal takes goodwill to $91.1 m.
Future: Q3 restructuring charge $1.5-2.0 m aligned with Gen-AI strategy.

Company remains covenant-compliant on $100 m revolver; liquidity tightens but platform and AI moves aim at long-term growth.

Positive

Revenue resilience: total revenue up 1.6 % YoY despite mixed IT-services market.
SAP & Global S&BT growth: double-digit SAP and mid-single-digit consulting gains indicate traction in AI-led and transformation offerings.
Expanded buyback capacity: board boosted repurchase authorization to $30 m, signalling confidence.
Covenant headroom: company remains compliant on $100 m revolver with net debt still moderate.

Negative

Profit collapse: net income down 81 %; diluted EPS fell to $0.06.
Margin pressure: surge in stock-based compensation and SG&A slashed operating margin from 16 % to 6 %.
Liquidity decline: cash dropped 38 % YTD while debt almost doubled to $22.8 m.
Oracle Solutions weakness: segment revenue fell 9.7 %, signalling client decision delays.
Upcoming restructuring: expected $1.5-2.0 m charge will further dent H2 earnings.

Insights

TL;DR – Earnings down sharply; cash squeezed; AI bets increase risk-reward.

The 2 % revenue uptick masks severe margin erosion driven by unusually high $19 m YTD stock-comp and integration costs. Net leverage is still modest, yet cash coverage has thinned to 0.4× quarterly SG&A, limiting flexibility while buybacks and dividends continue. Segment data show solid demand for S&BT and SAP work, but Oracle slowdown and forthcoming restructuring create uncertainty. Unless AI-led wins materialise, FY25 EPS guidance (not supplied here) is likely to reset lower. Overall tone: negative.

TL;DR – Strategic pivot to Gen AI intact; near-term profitability sacrificed.

Hackett is doubling down on Gen AI by integrating LeewayHertz’s ZBrain and purchasing Spend Matters data assets. These moves strengthen IP and could raise price-per-engagement, but they also inflate compensation and integration overheads, compressing margin to 5.8 %. Client mix still U.S.-centric (79 % revenue). Upcoming $1.5-2 m severance should streamline delivery once AI platforms scale. Investors must weigh short-term earnings pain against differentiated AI value proposition.

08/06/2025 - 05:01 PM

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025

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

ACT OF 1934

FOR THE TRANSITION PERIOD FROM ____ TO ____

Commission file number 0-21220


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

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

1627 East Walnut, Seguin, Texas 78155

(Address of principal executive offices, including zip code)

830-379-1480

(Registrant’s telephone number, including area code)


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

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

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

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

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


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

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

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

At August 1, 2025, 12,110,910 shares of common stock, $.10 par value, of the registrant were outstanding.

Alamo Group Inc. and Subsidiaries

INDEX


PART I.	FINANCIAL INFORMATION		PAGE

Item 1.	Interim Condensed Consolidated Financial Statements (Unaudited)

	Interim Condensed Consolidated Statements of Income		3
		Three and Six Months Ended June 30, 2025 and June 30, 2024

	Interim Condensed Consolidated Statements of Comprehensive Income		4
		Three and Six Months Ended June 30, 2025 and June 30, 2024

	Interim Condensed Consolidated Balance Sheets		5
		June 30, 2025 and December 31, 2024

	Interim Condensed Consolidated Statements of Stockholders' Equity		6
		Three and Six Months Ended June 30, 2025 and June 30, 2024

	Interim Condensed Consolidated Statements of Cash Flows		7
		Six Months Ended June 30, 2025 and June 30, 2024

	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		23

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

	SIGNATURES		25

Alamo Group Inc. and Subsidiaries

Interim Condensed Consolidated Statements of Income

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands, except per share amounts)	2025		2024		2025		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 profit	108,292		108,181		211,133		219,813

Selling, general and administrative expenses	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

Interest expense	(3,684)		(6,098)		(6,878)		(12,189)
Interest income	1,195		514		2,433		1,315
Other income (expense), net	(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

Dividends declared	$	0.30	$	0.26	$	0.60	$	0.52

See accompanying notes.

Alamo Group Inc. and Subsidiaries

Interim Condensed Consolidated Statements of Comprehensive Income

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2025		2024		2025		2024
Net income	$	31,106	$	28,324	$	62,906	$	60,444
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, net of tax (expense) and benefit of $(1,296) and $8, and $(1,837) and $387, respectively	28,062		(5,509)		38,883		(12,781)
Recognition of deferred pension and other post-retirement benefits, net of tax expense of $(58) and $(68), and $(117) and $(137), respectively	201		235		401		470
Unrealized (loss) income on derivative instruments, net of tax benefit and (expense) of $190 and $(28), and $618 and $(197), respectively	(647)		95		(2,110)		673


Other comprehensive income (loss), net of tax	27,616		(5,179)		37,174		(11,638)
Comprehensive income	$	58,722	$	23,145	$	100,080	$	48,806

See accompanying notes.

Alamo Group Inc. and Subsidiaries

Interim Condensed Consolidated Balance Sheets

(Unaudited)


(in thousands, except share amounts)	June 30, 2025			December 31, 2024
ASSETS
Current assets:
Cash and cash equivalents		$	201,823		$	197,274
Accounts receivable, net		356,236			305,561
Inventories, net		372,074			343,363

Prepaid expenses and other current assets		12,461			11,206
Income tax receivable		—			91
Total current assets		942,594			857,495

Rental equipment, net		59,606			52,942

Property, plant and equipment		371,621			365,608
Less: Accumulated depreciation		(210,905)			(207,276)
Total property, plant and equipment, net		160,716			158,332

Goodwill		221,607			203,027
Intangible assets, net		145,040			151,360
Deferred income taxes		1,118			1,118
Other non-current assets		26,968			26,005

Total assets		$	1,557,649		$	1,450,279

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Trade accounts payable		$	111,820		$	84,505
Income taxes payable		3,973			13,259
Accrued liabilities		76,113			77,537
Current maturities of long-term debt and finance lease obligations		15,000			15,008

Total current liabilities		206,906			190,309

Long-term debt and finance lease obligations, net of current maturities		198,115			205,473
Long-term tax liability		626			626

Other long-term liabilities		25,975			24,619
Deferred income taxes		10,631			10,998
Total liabilities		442,253			432,025

Stockholders’ equity:
Common stock, $0.10 par value, 20,000,000 shares authorized; 12,063,098 and 12,017,308 outstanding at June 30, 2025 and December 31, 2024, respectively		1,206			1,202
Additional paid-in-capital		151,120			146,866
Treasury stock, at cost; 82,600 shares at June 30, 2025 and December 31, 2024, respectively		(4,566)			(4,566)
Retained earnings		1,012,057			956,347
Accumulated other comprehensive loss		(44,421)			(81,595)
Total stockholders’ equity		1,115,396			1,018,254

Total liabilities and stockholders’ equity		$	1,557,649		$	1,450,279

See accompanying notes.

Alamo Group Inc. and Subsidiaries

Interim Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)


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	11,935	$	1,202	$	146,866	$	(4,566)	$	956,347	$	(81,595)	$	1,018,254





Other comprehensive income	—	—		—		—		31,800		9,558		41,358
Stock-based compensation expense	—	—		2,303		—		—		—		2,303

Stock-based compensation transactions	29	3		(1,262)		—		—		—		(1,259)


Dividends paid ($0.30 per share)	—	—		—		—		(3,595)		—		(3,595)
Balance at March 31, 2025	11,964	$	1,205	$	147,907	$	(4,566)	$	984,552	$	(72,037)	$	1,057,061





Other comprehensive income	—	—		—		—		31,106		27,616		58,722
Stock-based compensation expense	—	—		2,367		—		—		—		2,367

Stock-based compensation transactions	16	1		846		—		—		—		847


Dividends paid ($0.30 per share)	—	—		—		—		(3,601)		—		(3,601)
Balance at June 30, 2025	11,980	$	1,206	$	151,120	$	(4,566)	$	1,012,057	$	(44,421)	$	1,115,396

See accompanying notes.


For six months ended June 30, 2024

	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, 2023	11,882	$	1,196	$	137,791	$	(4,566)	$	852,859	$	(54,517)	$	932,763





Other comprehensive income (loss)	—	—		—		—		32,120		(6,459)		25,661
Stock-based compensation expense	—	—		2,125		—		—		—		2,125

Stock-based compensation transactions	31	4		(894)		—		—		—		(890)


Dividends paid ($0.26 per share)	—	—		—		—		(3,103)		—		(3,103)
Balance at March 31, 2024	11,913	$	1,200	$	139,022	$	(4,566)	$	881,876	$	(60,976)	$	956,556





Other comprehensive income (loss)	—	—		—		—		28,324		(5,179)		23,145
Stock-based compensation expense	—	—		2,633		—		—		—		2,633

Stock-based compensation transactions	14	1		492		—		—		—		493


Dividends paid ($0.26 per share)	—	—		—		—		(3,111)		—		(3,111)
Balance at June 30, 2024	11,927	$	1,201	$	142,147	$	(4,566)	$	907,089	$	(66,155)	$	979,716

See accompanying notes.

Alamo Group Inc. and Subsidiaries

Interim Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Six Months Ended June 30,
(in thousands)	2025		2024
Operating Activities
Net income	$	62,906	$	60,444
Adjustment to reconcile net income to net cash provided by operating activities:
Provision for doubtful accounts	(11)		508
Depreciation - Property, plant and equipment	13,398		13,279
Depreciation - Rental equipment	5,819		4,814
Amortization of intangibles	8,127		8,114
Amortization of debt issuance	351		351
Stock-based compensation expense	4,670		4,758
Provision for deferred income tax	(2,179)		(21)
(Gain) Loss on sale of property, plant and equipment	(358)		126
Changes in operating assets and liabilities:
Accounts receivable	(37,267)		(30,657)
Inventories	(16,593)		(11,160)
Rental equipment	(12,263)		(12,198)
Prepaid expenses and other assets	1,923		(3,348)
Trade accounts payable and accrued liabilities	18,494		(34)
Income taxes payable	(9,439)		9
Long-term tax payable	—		(2,143)
Other long-term liabilities, net	(667)		1,474
Net cash provided by operating activities	36,911		34,316

Investing Activities
Acquisitions, net of cash acquired	(17,571)		—
Purchase of property, plant and equipment	(12,971)		(11,061)
Proceeds from sale of property, plant and equipment	812		796

Net cash used in investing activities	(29,730)		(10,265)

Financing Activities
Borrowings on bank revolving credit facility	50,000		176,000
Repayments on bank revolving credit facility	(50,000)		(110,250)
Principal payments on long-term debt and finance leases	(7,504)		(7,564)


Contingent consideration payment from acquisition	—		(4,402)
Dividends paid	(7,196)		(6,214)
Proceeds from exercise of stock options	1,227		1,422

Common stock repurchased	(1,639)		(1,819)
Net cash (used in) provided by financing activities	(15,112)		47,173

Effect of exchange rate changes on cash and cash equivalents	12,480		(4,608)
Net change in cash and cash equivalents	4,549		66,616
Cash and cash equivalents at beginning of the year	197,274		51,919
Cash and cash equivalents at end of the period	$	201,823	$	118,535

Cash paid during the period for:
Interest	$	6,861	$	12,144
Income taxes	32,074		21,852

See accompanying notes.

Alamo Group Inc. and Subsidiaries

Notes to Interim Condensed Consolidated Financial Statements - (Unaudited)

June 30, 2025

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, 2025. The balance sheet at December 31, 2024 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, 2024 (the "2024 10-K").

Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance. This ASU will result in the required additional disclosures being included in our consolidated financial statements, once 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 June 30, 2025, the Company acquired 100% of the outstanding membership interests in Ring-O-Matic, LLC (“Ring-O-Matic”) for approximately $17.6 million. Ring-O-Matic is a leading provider of trailer-mounted industrial vacuum excavation equipment. The purpose of the acquisition was to expand our current product offerings and to achieve cost and revenue synergies within our Industrial Equipment division. The Company has included the opening balance sheet for Ring-O-Matic in its consolidated financial statements; however, the impact to the consolidated balance sheet was immaterial.

3. Accounts Receivable

Accounts receivable is shown net of sales discounts and the allowance for credit losses.

At June 30, 2025 the Company had $12.1 million in reserves for sales discounts compared to $14.2 million at December 31, 2024 related to products shipped to our customers under various promotional programs.

4. Inventories

Inventories are stated at the lower of cost or net realizable value. Net inventories consist of the following:


(in thousands)	June 30, 2025			December 31, 2024


Finished goods		$	344,217		$	317,169
Work in process		21,996			21,310
Raw materials		5,861			4,884
Inventories, net		$	372,074		$	343,363

Inventory obsolescence reserves were $9.9 million at June 30, 2025 and $8.3 million at December 31, 2024.

5. Rental Equipment

Rental equipment is shown net of accumulated depreciation of $22.3 million and $25.0 million at June 30, 2025 and December 31, 2024, respectively. The Company recognized depreciation expense of $2.9 million and $2.5 million for the three months ended June 30, 2025 and 2024, respectively, and $5.8 million and $4.8 million for the six months ended June 30, 2025 and 2024, respectively.

6. Fair Value Measurements

The carrying values of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses, approximate their fair value because of the short-term nature of these items. The carrying value of our debt approximates the fair value as of June 30, 2025 and December 31, 2024. This conclusion was made based on Level 2 inputs. Fair values determined by Level 2 utilize inputs that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

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.

The Company has two interest rate swap agreements outstanding as of June 30, 2025. The notional amount of the Company’s outstanding swap agreements is $263.8 million. The fair value of the Company’s derivative liabilities is $1.9 million as of June 30, 2025 compared to a derivative asset of $0.8 million as of December 31, 2024. In the condensed consolidated balance sheet, the fair value of the interest rate swaps is included in other long-term liabilities. The gains and losses are not material to the Company’s condensed consolidated financial statements for the periods presented.

7. Goodwill and Intangible Assets

The following is the summary of changes to the Company's Goodwill for the six months ended June 30, 2025:


(in thousands)	Vegetation Management			Industrial Equipment			Consolidated
Balance at December 31, 2024		$	126,729		$	76,298		$	203,027
Translation adjustment		3,260			1,689			4,949
Goodwill acquired		—			13,631			13,631
Balance at June 30, 2025		$	129,989		$	91,618		$	221,607

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, 2025		December 31, 2024
Definite:
Trade names and trademarks	15-25 years	$	73,431		$	72,040
Customer and dealer relationships	8-15 years	138,192			137,086
Patents and drawings	3-12 years	29,030			28,529
Favorable leasehold interests	7 years	4,200			4,200
Noncompetition agreements	5 years	200			200
Total at cost		245,053			242,055
Less accumulated amortization		(105,513)			(96,195)
Total net		139,540			145,860
Indefinite:
Trade names and trademarks		5,500			5,500
Total Intangible Assets		$	145,040		$	151,360

The Company recognized amortization expense of $4.1 million and $4.1 million for the three months ended June 30, 2025 and 2024, respectively, and $8.1 million and $8.1 million for the six months ended June 30, 2025 and 2024, respectively.

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)	2025		2024		2025		2024
Finance lease cost:
Amortization of right-of-use assets	$	2	$	2	$	4	$	4

Operating lease cost	1,948		1,802		3,827		3,464
Short-term lease cost	295		395		976		870
Variable lease cost	54		78		108		151

Total lease cost	$	2,299	$	2,277	$	4,915	$	4,489

Maturities of operating lease liabilities were as follows:


Future Minimum Lease Payments
(in thousands)	June 30, 2025			December 31, 2024
2025	$	3,564	*		$	6,998
2026	6,351				5,719
2027	4,172				3,595
2028	2,135				1,556
2029	1,538				927
Thereafter	1,188				914
Total minimum lease payments	$	18,948			$	19,709
Less imputed interest	(1,411)				(1,432)
Total operating lease liabilities	$	17,537			$	18,277
*Period ended June 30, 2025 represents the remaining six months of 2025.

Future Lease Commencements

As of June 30, 2025, there are additional operating leases, primarily for buildings, that have not yet commenced in the amount of $1.7 million. These operating leases will commence in fiscal year 2025 with lease terms of 1 to 5 years.

Supplemental balance sheet information related to leases was as follows:


Operating Leases
(in thousands)	June 30, 2025			December 31, 2024
Other non-current assets	$	17,202			$	18,099

Accrued liabilities	6,413				6,449
Other long-term liabilities	11,124				11,828
Total operating lease liabilities	$	17,537			$	18,277











Weighted Average Remaining Lease Term	3.41 years				3.49 years

Weighted Average Discount Rate	4.63		%		4.57		%

Supplemental cash flow information related to leases was as follows:


	Six Months Ended June 30,
(in thousands)	2025		2024

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases	$	3,454	$	3,175

9. Debt

The components of long-term debt are as follows:


(in thousands)	June 30, 2025		December 31, 2024
Bank revolving credit facility	$	—		$	—
Term debt	213,112			220,475
Finance lease obligations	3			6
Total debt	213,115			220,481
Less current maturities	15,000			15,008
Total long-term debt	$	198,115		$	205,473

As of June 30, 2025, $2.7 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 $397.3 million in available borrowings.

10. Common Stock and Dividends

Dividends declared and paid on a per share basis were as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024

Dividends declared	$	0.30	$	0.26	$	0.60	$	0.52
Dividends paid	$	0.30	$	0.26	$	0.60	$	0.52

On July 1, 2025, the Company announced that its Board of Directors had declared a quarterly cash dividend of $0.30 per share, which was paid on July 29, 2025, to shareholders of record at the close of business on July 16, 2025.

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)	2025		2024		2025		2024
Net Income	$	31,106	$	28,324	$	62,906	$	60,444
Average Common Shares:
Basic (weighted-average outstanding shares)	12,020		11,974		12,005		11,959
Dilutive potential common shares from stock options	63		70		61		73
Diluted (weighted-average outstanding shares)	12,083		12,044		12,066		12,032

Basic earnings per share	$	2.59	$	2.36	$	5.24	$	5.05
Diluted earnings per share	$	2.57	$	2.35	$	5.21	$	5.02

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)	2025		2024		2025		2024
Net Sales
Wholegoods	$	339,095	$	328,120	$	652,235	$	671,698
Parts	63,044		71,579		124,420		141,080
Other	16,934		16,604		33,368		29,111
Consolidated	$	419,073	$	416,303	$	810,023	$	841,889

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)	2025		2024		2025		2024

Net Sales
United States	$	307,347	$	295,187	$	582,820	$	588,989
Canada	32,823		30,792		71,922		69,678
France	22,214		23,193		43,962		49,365
United Kingdom	21,226		20,167		42,701		44,378
Brazil	10,512		11,320		19,892		23,524
Netherlands	5,278		10,852		10,962		21,196
Australia	3,276		7,055		8,951		11,559
Germany	2,070		2,357		3,502		5,176



Other	14,327		15,380		25,311		28,024
Consolidated	$	419,073	$	416,303	$	810,023	$	841,889

Net sales are attributed to countries based on the location of the customer.

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, 2025:


	Three Months Ended June 30, 2025
	Vegetation		Industrial
(in thousands)	Management		Equipment		Consolidated
Net Sales	$	178,358	$	240,715	$	419,073
Less:
Cost of Sales	(134,193)		(176,588)		(310,781)
Operating Expenses	(31,414)		(29,800)		(61,214)
Income from Operations	12,751		34,327		47,078
Interest Income					1,195
Other Income (Expense)					(3,183)
Interest Expense					(3,684)
Income Before Taxes					41,406
Taxes					10,300
Net Income					$	31,106


	Three Months Ended June 30, 2024
	Vegetation		Industrial
(in thousands)	Management		Equipment		Consolidated
Net Sales	$	211,535	$	204,768	$	416,303
Less:
Cost of Sales	(157,921)		(150,201)		(308,122)
Operating Expenses	(37,608)		(27,264)		(64,872)
Income from Operations	16,006		27,303		43,309
Interest Income					514
Other Income (Expense)					(65)
Interest Expense					(6,098)
Income Before Taxes					37,660
Taxes					9,336
Net Income					$	28,324


	Six Months Ended June 30, 2025
	Vegetation		Industrial
(in thousands)	Management		Equipment		Consolidated
Net Sales	$	342,248	$	467,775	$	810,023
Less:
Cost of Sales	(255,706)		(343,184)		(598,890)
Operating Expenses	(60,479)		(59,114)		(119,593)
Income from Operations	26,063		65,477		91,540
Interest Income					2,433
Other Income (Expense)					(3,846)
Interest Expense					(6,878)
Income Before Taxes					83,249
Taxes					20,343
Net Income					$	62,906


	Six Months Ended June 30, 2024
	Vegetation		Industrial
(in thousands)	Management		Equipment		Consolidated
Net Sales	$	435,282	$	406,607	$	841,889
Less:
Cost of Sales	(322,466)		(299,610)		(622,076)
Operating Expenses	(75,131)		(54,394)		(129,525)
Income from Operations	37,685		52,603		90,288
Interest Income					1,315
Other Income (Expense)					33
Interest Expense					(12,189)
Income Before Taxes					79,447
Taxes					19,003
Net Income					$	60,444


(in thousands)	June 30, 2025		December 31, 2024
Goodwill
Vegetation Management	$	129,989	$	126,729
Industrial Equipment	91,618		76,298

Consolidated	$	221,607	$	203,027

Total Identifiable Assets
Vegetation Management	$	916,153	$	852,007
Industrial Equipment	641,496		598,272

Consolidated	$	1,557,649	$	1,450,279

13. Accumulated Other Comprehensive Loss

Changes in accumulated other comprehensive loss by component, net of tax, were as follows:


	Three Months Ended June 30,
	2025								2024
(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	$	(70,011)	$	(1,190)	$	(836)	$	(72,037)	$	(59,057)	$	(1,737)	$	(182)	$	(60,976)
Other comprehensive income (loss) before reclassifications	28,062		—		(910)		27,152		(5,509)		—		3		(5,506)
Amounts reclassified from accumulated other comprehensive loss	—		201		263		464		—		235		92		327
Other comprehensive income (loss)	28,062		201		(647)		27,616		(5,509)		235		95		(5,179)
Balance as of end of period	$	(41,949)	$	(989)	$	(1,483)	$	(44,421)	$	(64,566)	$	(1,502)	$	(87)	$	(66,155)


	Six Months Ended June 30,
	2025								2024
(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	$	(80,832)	$	(1,390)	$	627	$	(81,595)	$	(51,785)	$	(1,972)	$	(760)	$	(54,517)
Other comprehensive income (loss) before reclassifications	38,883		—		(2,643)		36,240		(12,781)		—		486		(12,295)
Amounts reclassified from accumulated other comprehensive loss	—		401		533		934		—		470		187		657
Other comprehensive income (loss)	38,883		401		(2,110)		37,174		(12,781)		470		673		(11,638)
Balance as of end of period	$	(41,949)	$	(989)	$	(1,483)	$	(44,421)	$	(64,566)	$	(1,502)	$	(87)	$	(66,155)

14. Subsequent Events

On July 4, 2025, President Trump signed into law Public Law 119-21, commonly known as the One Big Beautiful Bill Act (the “Act”). The Act contained several tax reform proposals that could impact the Company’s current deferred tax liabilities and assets. A company is required to adjust current and deferred tax liabilities and assets for the effects of changes in tax laws or rates in the interim period that includes the enactment date. As the Act was signed into law subsequent to the current interim period, the impact of the Act on the Company’s current and deferred tax liabilities and assets are not included in this quarterly filing. The Company is evaluating the expected impact to the financial statements.

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,
	2025		2024		2025		2024
Vegetation Management	42.6	%	50.8	%	42.3	%	51.7	%
Industrial Equipment	57.4	%	49.2	%	57.7	%	48.3	%

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,
	2025		2024		2025		2024
Gross profit	25.8	%	26.0	%	26.1	%	26.1	%
Income from operations	11.2	%	10.4	%	11.3	%	10.7	%
Income before income taxes	9.9	%	9.0	%	10.3	%	9.4	%
Net income	7.4	%	6.8	%	7.8	%	7.2	%

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.

We continue to experience strong demand for our products in the Industrial Equipment Division during the first six months of 2025, resulting in 15% organic growth compared to the first six months in 2024. Forestry, tree care, and agricultural industries remained weaker, leading to 21% sales decline in the Vegetation Management Division. Gross profit margins remained flat in spite of sales decline, driven by the cost reduction actions completed in 2024, as well as continuous operational improvements.

For the six months of 2025, the Company's net sales decreased by 4%, but income from operations improved 1% and net income improved 4% compared to the same period in 2024. The decrease in net sales was driven by weakness in the markets served by our Vegetation Management Division. Additionally, the sale of Herschel Parts on August 16, 2024 had a negative impact to year-on-year sales, albeit immaterial on a total Company basis. These challenges were offset by strong sales growth in the Industrial Equipment Division.

Net Sales in the Vegetation Management Division decreased 21% for the first six months of 2025 compared to the same period in 2024. The Division's backlog declined 19%, but new orders increased 14% for the first six months of 2025 compared to the first six months of 2024. The Division's income from operations for the first six months of 2025 declined 31% versus the same period in 2024. The cost savings initiatives the Company completed in the second half of 2024 did not fully offset the sales decline and operational inefficiencies related to the factory consolidations.

Net Sales in the Industrial Equipment Division increased in the first six months of 2025 by 15% compared to the first six months of 2024, driven by growth in excavators, vacuum trucks, and snow removal. The Division’s backlog has declined by 7% compared to the same period in 2024 but improved by 6% compared to the fourth quarter of 2024. The Division's income from operations for the first six months of 2025 was up 24% versus the same period in 2024, due to increased demand combined with operational improvements across all operating companies in this Division.

Consolidated income from operations was $91.5 million in the first six months of 2025 compared to $90.3 million in the first six months of 2024, an increase of 1%. The Company's backlog of $687.2 million at the end of the first six months of 2025 is down 11% versus a backlog of $768.9 million at the end of the first six months of 2024.

As part of the ongoing consolidation within the Vegetation Management Division, the Gibson City, Illinois facility has been designated for disposition and is reported on the balance sheet under Other Non-Current Assets as held-for-sale.

Results of Operations

Three Months Ended June 30, 2025 vs. Three Months Ended June 30, 2024

Net sales for the second quarter of 2025 were $419.1 million, an increase of $2.8 million or 1% compared to $416.3 million for the second quarter of 2024. Net sales during the second quarter of 2025 increased due to strong demand for Industrial Equipment, but was offset by the weaker market demand in forestry, tree care, and agricultural mowing.

Net Vegetation Management sales decreased by $33.1 million or 16% to $178.4 million for the second quarter of 2025 compared to $211.5 million during the same period in 2024. The decrease was due to sustained weakness in forestry, tree care, and agricultural mowing markets. The sale of Herschel Parts on August 16, 2024, contributed slightly to the year-over-year decrease, but was immaterial to the overall results.

Net Industrial Equipment sales were $240.7 million in the second quarter of 2025 compared to $204.8 million for the same period in 2024, an increase of $35.9 million or 18%. The increase was due to solid demand in most product lines, particularly vacuum trucks and snow removal contributing the most to year-over-year growth.

Gross profit for the second quarter of 2025 was $108.3 million (26% of net sales) compared to $108.2 million (26% of net sales) during the same period in 2024, an increase of $0.1 million. Strong demand and performance in the Industrial Equipment Division supported the increase in gross profit during the second quarter of 2025 compared to the second quarter of 2024 and offset by the weaker demand in the Vegetation Management Division.

Selling, general and administrative expenses (“SG&A”) were $57.1 million (14% of net sales) during the second quarter of 2025 compared to $60.8 million (15% of net sales) during the same period of 2024, a decrease of $3.7 million attributable to labor cost savings actions taken in the Vegetation Management Division. Amortization expense in the second quarter of 2025 was $4.1 million compared to $4.1 million in the same period in 2024.

Interest expense was $3.7 million for the second quarter of 2025 compared to $6.1 million during the same period in 2024. The decrease in interest expense in the second quarter of 2025 was due to debt reduction.

Other income (expense), net was $3.2 million of expense for the second quarter of 2025 compared to $0.1 million of expense during the same period in 2024. The increase was primarily a result of unfavorable currency exchange rates.

Provision for income taxes was $10.3 million (25% of income before income tax) in the second quarter of 2025 compared to $9.3 million (25% of income before income tax) during the same period in 2024.

The Company’s net income after tax was $31.1 million or $2.57 per share on a diluted basis for the second quarter of 2025 compared to $28.3 million or $2.35 per share on a diluted basis for the second quarter of 2024.

Six Months Ended June 30, 2025 vs. Six Months Ended June 30, 2024

Net sales for the first six months of 2025 were $810.0 million, a decrease of $31.9 million or 4% compared to $841.9 million for the first six months of 2024. The decrease in net sales during the first six months of 2025 is a result of a steep decline in market demand in forestry, tree care, and agricultural mowing partially offset by continued strong demand for Industrial Equipment.

Net Vegetation Management sales decreased during the first six months by $93.1 million or 21% to $342.2 million for 2025 compared to $435.3 million during the same period in 2024. The decrease was due to weaker demand for forestry, tree care, and agricultural mowing markets. The sale of Herschel Parts on August 16, 2024, was immaterial to the year over year sales decrease.

Net Industrial Equipment sales were $467.8 million during the first six months of 2025 compared to $406.6 million for the same period in 2024, an increase of $61.2 million or 15%. The increase in sales for the first six months of 2025 compared to the first six months of 2024 was mainly due to the continued strong demand across the division in excavators, vacuum trucks, and snow removal.

Gross profit for the first six months of 2025 was $211.1 million (26% of net sales) compared to $219.8 million (26% of net sales) during the same period in 2024, a decrease of $8.7 million. The decrease in gross profit was mainly attributable to lower sales volume and production inefficiencies in Vegetation Management. Profitability in the first six months of 2025 remained flat compared to the same period in 2024.

SG&A expenses were $111.5 million (14% of net sales) during the first six months of 2025 compared to $121.4 million (14% of net sales) during the same period of 2024, a decrease of $9.9 million attributable to labor cost savings actions taken in Vegetation Management. Amortization expense in the first six months of 2025 was $8.1 million compared to $8.1 million in the same period in 2024. a decrease of $0.0 million.

Interest expense was $6.9 million for the first six months of 2025 compared to $12.2 million during the same period in 2024, a decrease of $5.3 million. The decrease in interest expense in the first six months of 2025 was mainly due to debt reduction.

Other income (expense), net was $3.8 million of expense during the first six months of 2025 compared to less than $0.1 million of income in the first six months of 2024. The increase was a result of unfavorable currency exchange rates.

Provision for income taxes was $20.3 million (24% of income before income taxes) in the first six months of 2025 compared to $19.0 million (24% of income before income taxes) during the same period in 2024.

The Company's net income after tax was $62.9 million or $5.21 per share on a diluted basis for the first six months of 2025 compared to $60.4 million or $5.02 per share on a diluted basis for the first six months of 2024. The increase of $2.5 million resulted from the factors described above.

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, 2025, the Company had working capital of $735.7 million which represents an increase of $68.5 million from working capital of $667.2 million at December 31, 2024. The increase in working capital was due to higher cash and cash equivalents as well as an increase in accounts receivable and inventory, partially offset by increase in accounts payable.

Capital expenditures were $13.0 million for the first six months of 2025, compared to $11.1 million during the first six months of 2024. The Company expects a capital expenditure level of approximately $30.0 million to $35.0 million for the full year of 2025. 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 $29.7 million during the first six months of 2025 compared to $10.3 million during the first six months of 2024.

Net cash used in financing activities was $15.1 million and net cash provided by financing activities was $47.2 million during the six month periods ended June 30, 2025 and June 30, 2024, respectively. Lower net cash provided by financing activities for the first six months of 2025 relates to no net borrowings from the revolver during the six months ended June 30, 2025, while paying down long-term debt and a quarterly dividend.

The Company had $146.7 million in cash and cash equivalents held by its foreign subsidiaries as of June 30, 2025. 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 October 28, 2022, the Company, as Borrower, and each of its domestic subsidiaries as guarantors, entered into a Third Amended and Restated Credit Agreement (the “2022 Credit Agreement”) with Bank of America, N.A., as Administrative Agent. The 2022 Credit Agreement provides Borrower with the ability to request loans and other financial obligations in an aggregate amount of up to $655.0 million. Under the 2022 Credit Agreement, the Company has borrowed $255.0 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 2027. The Term Facility requires the Company to make equal quarterly principal payments of $3.75 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 2022 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 2022 Credit Agreement), plus, in each case, an applicable margin. The applicable margin ranges from 1.25% to 2.50% for Term SOFR borrowings and from .25% to 1.50% 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 0.15% to 0.30% on any unused portion of the $400.0 million Revolver Facility. The 2022 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 2022 Credit Agreement, including the Term Facility and the Revolver Facility, is October 28, 2027. As of June 30, 2025, $213.8 million was outstanding under the 2022 Credit Agreement, $213.8 million on the Term Facility and zero on the Revolver Facility. On June 30, 2025, $2.7 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 $397.3 million in available borrowings. The Company is in compliance with the covenants under the Agreement as of June 30, 2025.

Management believes the 2022 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, 2025, 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.

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 2024 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 2024 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;

•current and changing tax laws in the U.S. and internationally;

•our ability to hire and retain quality skilled employees; and

•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.

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 increased stockholders’ equity by $28.1 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 $6.4 million for the six month period ended June 30, 2025. 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 2025 average interest rate under these borrowings, the Company’s interest expense would have changed by approximately $1.1 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.

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, 2024 (the "2024 10-K").

Item 1A. Risk Factors

There have not been any material changes from the risk factors previously disclosed in the 2024 Form 10-K for the year ended December 31, 2024.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

During the quarter ended June 30, 2025, there were no repurchases of our common stock under our share repurchase program.

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 or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5–1 trading arrangement (each as defined in Item 408 of Regulation S-K under the Securities Exchange Act of 1934, as amended).

Item 6. Exhibits

(a) Exhibits

Exhibits

Exhibit Title

Incorporated by Reference From the Following Documents

—

2025 Incentive Stock Option Plan

Filed as Appendix II to Form DEF 14A, March 13, 2025

31.1

—

Certification by Jeffery A. Leonard 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 Jeffery A. Leonard 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

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 6, 2025			Alamo Group Inc.
			(Registrant)

			/s/ Jeffery A. Leonard
			Jeffery A. Leonard
			President & Chief Executive Officer
			(Principal Executive Officer)


			/s/ Agnieszka K. Kamps
			Agnieszka K. Kamps
			Executive Vice President & Chief Financial Officer
			(Principal Financial Officer)

Source: View Original Filing on SEC EDGAR

FAQ

How did HCKT's Q2 2025 revenue compare to last year?

Q2 revenue was $78.9 million, up 1.6 % from $77.7 million in Q2 2024.

Why did Hackett Group's net income fall in Q2 2025?

Higher stock-based compensation ($9.7 m vs $2.9 m) and integration costs drove margins lower, cutting net income to $1.7 m.

What is Hackett Group's current debt level?

Long-term debt rose to $22.8 million after a $10 million revolver draw; facility capacity is $100 million.

How much stock did HCKT repurchase in 1H 2025?

The company bought back 382,000 shares for $10.5 million and now has $30 million authorized for future buybacks.

What acquisitions affected the quarter?

Hackett closed a $0.8 million asset purchase of Spend Matters and continued integrating the 2024 LeewayHertz AI deal.

Are additional charges expected in 2025?

Management plans $1.5–2.0 million in Q3 restructuring costs linked to its Gen AI transition.

[10-Q] Alamo Group, Inc. Quarterly Earnings Report

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Why did Hackett Group's net income fall in Q2 2025?

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What acquisitions affected the quarter?

Are additional charges expected in 2025?

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[10-Q] Alamo Group, Inc. Quarterly Earnings Report

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Financial Analyst negative

Industry Specialist – IT Consulting neutral

FAQ

How did HCKT's Q2 2025 revenue compare to last year?

Why did Hackett Group's net income fall in Q2 2025?

What is Hackett Group's current debt level?

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What acquisitions affected the quarter?

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