Alamo Group Inc. has reported results for the first quarter ended March 31, 2013.
Net sales for the first quarter were $158.4 million compared to net sales of $155.9 million for the first quarter of 2012, an increase of 2%. Net income for the quarter was $6.9 million, or $0.57 per diluted share, compared to net income of $6.8 million, or $0.56 per diluted share, for the first quarter of 2012, an increase of 2%. The first quarter 2013 net sales and net income levels were both records for Alamo during a first quarter as the Company experienced steady demand for its products.
Net sales in the North American Industrial Division for the first quarter of 2013 were $69.3 million, an increase of 7% compared to net sales of $64.7 million for the first quarter of 2012. The Division benefited from stable demand from governmental end users and was led by increases in sales for mowers, street sweepers and vacuum trucks.
Alamo’s North American Agricultural Division recorded net sales of $49.6 million in the first quarter of 2013, a 3% increase compared to net sales of $48.3 million in the prior year’s first quarter. The results reflected modest increases in demand for its agricultural products in the U.S., though the growth rates in this market are moderating.
The Company’s European Division net sales in the first quarter of 2013 were $39.5 million, versus $42.9 million in the first quarter of 2012, a decrease of 8%. The Division’s sales continued to be affected by general weakness in the European economy and were further impacted by adverse weather conditions.
Alamo Group’s President and Chief Executive Officer, Ron Robinson, commented, “We are pleased to start 2013 on a positive note, particularly given the slower growth we are seeing in some of our U.S. markets and the continued weakness in the overall European economy. During the quarter, our margins were impacted by lower sales of higher margin spare parts due to the prolonged winter conditions that affected large areas of the U.S. and resulted in a later start of spring cleanup along roadways and a slower start to the agricultural season. However, much of this effect was mitigated as we continued to benefit from our operational initiatives, which have led to further improvements in our asset utilization and manufacturing efficiencies.”
“Once again, our Industrial Division drove our performance with solid year-over-year growth. While our snow removal products had a slow start to the year, the majority of this Division’s products exhibited steady-to-improving results. The increases in street sweeper and vacuum truck product lines were particularly gratifying, as well as the continued strong performance in our mower lines. The Division also saw backlogs improve during the quarter, which should bode well as we progress through the rest of the year.”
“Our Agricultural Division experienced steady performance as well, though the modest increase in sales reflects the slowing growth of the agricultural market in North America as commodity prices in general have retreated somewhat from the strong levels of the past few years. Similar to our Industrial Division, improving backlogs during the quarter should benefit this Division throughout 2013.”
“In Europe, our operations performed well considering weak economic conditions that continued to impact all of our markets. These difficult conditions are expected to linger in the near-term as governmental budgets remain tight, agricultural markets feel the effects of lower commodity prices, and the general economy is constrained due to the region’s overall economic uncertainty.”
Mr. Robinson concluded, “While we continue to operate in a challenging economic environment, we remain positive about the prospects for Alamo Group. The record results in the first quarter, a stronger backlog and relatively steady demand for our type of equipment, gives us confidence as we move forward in 2013.”