Alamo Group Inc. (NYSE: ALG) reported results for the second quarter ended June 30, 2013.
Net sales for the quarter were $178.1 million compared to net sales of $167.0 million for the second quarter of 2012, an increase of 7%. Net income for the quarter was $11.8 million, or $0.97 per diluted share, compared to net income of $9.3 million, or $0.77 per diluted share, for the same period of 2012, an increase of 26%.
For the first six months of 2013, net sales were $336.5 million, a 4% increase compared to net sales of $322.9 million during the same period in 2012. Net income for the first half of 2013 was $18.7 million, or $1.54 per diluted share, vs. $16.1 million, or $1.34 per diluted share, for the first half of 2012, an increase of 16%.
Net sales and net income for both the second quarter and first six months of 2013 were records for Alamo Group.
The company’s North American Industrial Division net sales in the second quarter of 2013 were $77.6 million, an increase of 11% compared to the $70.1 million achieved in the second quarter of the prior year. For the six month period, net sales were $147.0 in 2013 vs. $134.9 million in 2012, an increase of 9%. Nearly all units within the division contributed to second quarter growth as demand for the company’s infrastructure maintenance products, primarily from governmental end users showed steady improvement.
Alamo’s North American Agricultural Division net sales were $57.3 million in the second quarter of 2013, vs. $53.1 million in the comparable period of 2012, an increase of 8%. For the first six months of 2013 net sales in the division were $106.9 million compared to $101.4 million in 2012, an increase of 5%. Despite lower overall growth rates in the agricultural sector, the company benefited from increased activity in the second quarter compared to the first quarter of this year which was impacted by late winter conditions.
Alamo Group’s European Division net sales in the second quarter of 2013 were $43.2 million, a decrease of 1% compared to net sales of $43.8 for the same period in 2012. For the first half of 2013, net sales in the division were $82.6 million, a decrease of 5% compared to net sales of $86.7 million in the first six months of 2012. These results reflect continued weakness and uncertainty in the general European economy.
Ron Robinson, Alamo Group’s president and chief executive officer, commented, "We were pleased with our record second quarter results which exceeded our expectations, particularly in light of the weakness in Europe. We are particularly gratified with the improvement in our gross margins which reflects our ongoing focus on operational efficiencies and cost control. This steadfast approach helped us to turn a 7% increase in sales into a 26% increase in income.
"Our Industrial Division once again led the way with solid growth reflecting continued need for our infrastructure maintenance equipment even in light of the budget constraints affecting many of our customers. This was also achieved despite a slightly unfavorable product mix as sales of higher margin spare and wear parts were below prior year levels."
"Our Agricultural Division products performed well even though overall industry growth rates continue to be moderating. However, we feel activity was strong in the second quarter as farmers were planting crops that were delayed due to late winter weather. Spare part sales in this Division, also lagged expectations.
"While our European operation’s sales were marginally lower in the second quarter, this was encouraging as we anticipated even weaker conditions since there is little evidence of any improvement in the overall economy there, a situation which we feel will persist throughout 2013.”
Robinson concluded, “We continue to feel positive about the outlook for Alamo Group. We believe market demand for our type of equipment will provide a stable foundation for our Company and that determined focus on asset utilization and operational improvement will continue to enhance our results for the remainder of 2013.”