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As we look ahead to the remainder of the year, we expect continued strong demand within our Industrial Equipment Division coupled with a return to modest growth within our Vegetation Management Division, following the substantial channel inventory de-stocking that occurred during 2024.  In addition, we anticipate improved profitability driven by the cost reduction actions that were implemented in 2024.

Comments on Results

Jeff Leonard, Alamo Group's President and Chief Executive Officer commented, "The Company's first quarter results reflected another strong performance from our Industrial Equipment Division and notable performance improvement in our Vegetation Management Division.

First quarter sales were in line with our expectations with Industrial Equipment Division sales up nearly 13% and Vegetation Management sales almost 27% lower than the first quarter of 2024. We were pleased that while consolidated net sales were down 8.1% compared to the first quarter of 2024, they were modestly higher sequentially.

We were also pleased to see that the benefits from our second-half 2024 cost reduction efforts were reflected in our first quarter 2025 results.  Compared to the first quarter of 2024, gross margin improved almost 10 basis points, SG&A expenses declined more than 10%, and interest expense fell by almost 50% as our debt continued to decline.  First quarter operating margin of 11.4% improved 40 basis points and 250 basis points as compared to the first quarter of 2024 and the fourth quarter of 2024, respectively.  Notably, these results represent the best the Company has achieved since the third quarter of 2023.

The governmental and industrial contractor markets continued to display robust strength despite potential risk in the form of tariffs and trade disruptions. Industrial Equipment orders exceeded the strong pace set in the first quarter of 2024, the strongest quarter of that year, and were up nearly 59% versus the fourth quarter of 2024. All Industrial product lines reported solid orders, and activity in our sweeper and safety group was exceptionally strong.  Backlog in the Industrial Equipment Division was $513 million, up $31.7 million or 6.6% from the backlog at the end of 2024.

First quarter orders in the Vegetation Management Division were up nearly 18% compared to the first quarter of 2024 and were also higher than the fourth quarter of 2024.  We were pleased to note this positive development in what is traditionally a slower quarter in this division. Vegetation Management backlog of $189.5 million was down 30.3% compared to the first quarter of 2024 but increased for the third consecutive quarter.  Compared to the first quarter of 2024, order activity was higher across all product lines in North America but declined modestly in South America and Europe.  Governmental orders for mowers in North America were notably stronger.

Looking ahead, the outlook for the next several quarters remains cautiously optimistic.  Trends in our markets during the first quarter were positive overall, and we expect profitability should continue to improve as we enter the seasonally stronger second and third quarters.  In the second quarter, we expect to complete capital investments in our North American agricultural equipment facilities following the plant consolidations that were carried out last year.  Consequently, in the third quarter of this year we expect to see the full benefit of the actions we took at the end of 2024. With rising backlog, stable to rising markets, and a meaningfully improved cost structure, the near-term prospects for the Company appear encouraging.

We also remain mindful of uncertainty tied to evolving global trade negotiations, and particularly how these developments may impact our markets.  We are closely evaluating the effects of both existing and potential tariffs on our markets and operations, and are actively taking steps to mitigate our exposure. Despite the near-term volatility, we believe the Company is well positioned to further expand its operating margin and leverage our strong balance sheet to accelerate both organic and inorganic growth."

Earnings Conference Call

The Company will host a conference call to discuss the first quarter results on Friday, May 9, 2025, at 10:00 a.m. ET. Hosting the call will be members of senior management. Individuals wishing to participate in the conference call should dial (866) 524-3159 (domestic) or (412) 317-6759 (international). For interested individuals unable to join the call, a replay will be available until Friday, May 16, 2025, by dialing (877) 344-7529 (domestic) or (412) 317-0088 (internationally), passcode 3570057.

The live broadcast of Alamo Group Inc.'s quarterly conference call will be available online at the Company's website, www.alamo-group.com (under "Investor Relations/Events and Presentations") on Friday, May 9, 2025, beginning at 10:00 a.m. ET. The online replay will follow shortly after the call ends and will be archived on the Company's website for 60 days.

About Alamo Group

Alamo Group is a leader in the design, manufacture, distribution, and service of high-quality equipment for vegetation management, infrastructure maintenance and other applications. Our products include truck and tractor mounted mowing and other vegetation maintenance equipment, street sweepers, snow removal equipment, excavators, vacuum trucks, other industrial equipment, agricultural implements, forestry equipment and related after-market parts and services. The Company, founded in 1969, has approximately 3,750 employees and operates 27 plants in North America, Europe, Australia, and Brazil as of March 31, 2025. The corporate offices of Alamo Group Inc. are located in Seguin, Texas.

Forward Looking Statements

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

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Alamo Group Inc.
Non-GAAP Financial Measures Reconciliation

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

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

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SOURCE Alamo Group Inc.