alg-20210630

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, 2021

☐ 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 July 30, 2021, 11,927,798 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 Balance Sheets		3
		June 30, 2021 and December 31, 2020

	Interim Condensed Consolidated Statements of Income		4
		Three and Six Months Ended June 30, 2021 and June 30, 2020

	Interim Condensed Consolidated Statements of Comprehensive Income		5
		Three and Six Months Ended June 30, 2021 and June 30, 2020

	Interim Condensed Consolidated Statements of Stockholders' Equity		6
		Three and Six Months Ended June 30, 2021 and June 30, 2020

	Interim Condensed Consolidated Statements of Cash Flows		7
		Six Months Ended June 30, 2021 and June 30, 2020

	Notes to Interim Condensed Consolidated Financial Statements		8

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations		16

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		26

Alamo Group Inc. and Subsidiaries

Interim Condensed Consolidated Balance Sheets

(Unaudited)


(in thousands, except share amounts)	June 30, 2021			December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents		$	85,630		$	50,195
Accounts receivable, net		253,179			209,276
Inventories, net		264,540			229,971

Prepaid expenses and other current assets		9,164			7,382
Income tax receivable		10,007			6,186
Total current assets		622,520			503,010

Rental equipment, net		38,619			42,266

Property, plant and equipment		314,580			312,362
Less: Accumulated depreciation		(165,200)			(156,928)
Total property, plant and equipment, net		149,380			155,434

Goodwill		194,936			195,132
Intangible assets, net		185,581			193,172
Deferred income taxes		674			1,203
Other non-current assets		17,116			19,112

Total assets		$	1,208,826		$	1,109,329

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Trade accounts payable		$	104,715		$	75,317
Income taxes payable		2,724			2,278
Accrued liabilities		62,107			64,634
Current maturities of long-term debt and finance lease obligations		15,069			15,066

Total current liabilities		184,615			157,295

Long-term debt and finance lease obligations, net of current maturities		299,910			270,320
Long-term tax liability		4,408			3,954
Deferred pension liability		1,219			1,731
Other long-term liabilities		26,921			30,744
Deferred income taxes		19,872			19,642

Stockholders’ equity:
Common stock, $0.10 par value, 20,000,000 shares authorized; 11,861,999 and 11,809,926 outstanding at June 30, 2021 and December 31, 2020, respectively		1,186			1,181
Additional paid-in-capital		121,253			118,528
Treasury stock, at cost; 82,600 shares at June 30, 2021 and December 31, 2020, respectively		(4,566)			(4,566)
Retained earnings		591,014			550,826
Accumulated other comprehensive loss		(37,006)			(40,326)
Total stockholders’ equity		671,881			625,643

Total liabilities and stockholders’ equity		$	1,208,826		$	1,109,329

See accompanying notes.

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)	2021		2020		2021		2020

Net sales:
Industrial	$	231,207	$	182,257	$	443,118	$	412,232
Agricultural	116,343		86,378		215,621		170,851

Total net sales	347,550		268,635		658,739		583,083
Cost of sales	259,410		200,810		494,173		436,318
Gross profit	88,140		67,825		164,566		146,765

Selling, general and administrative expenses	50,887		41,551		98,217		92,799
Amortization expense	3,663		3,613		7,321		7,449
Income from operations	33,590		22,661		59,028		46,517

Interest expense	(2,854)		(3,941)		(5,467)		(9,460)
Interest income	293		306		581		662
Other income (expense), net	3,253		(1,288)		2,623		1,053
Income before income taxes	34,282		17,738		56,765		38,772
Provision for income taxes	8,245		4,749		13,266		10,255
Net Income	$	26,037	$	12,989	$	43,499	$	28,517

Net income per common share:
Basic	$	2.20	$	1.10	$	3.68	$	2.42
Diluted	$	2.19	$	1.10	$	3.66	$	2.41
Average common shares:
Basic	11,842		11,778		11,831		11,769
Diluted	11,902		11,842		11,892		11,835

Dividends declared	$	0.14	$	0.13	$	0.28	$	0.26

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)	2021		2020		2021		2020
Net income	$	26,037	$	12,989	$	43,499	$	28,517
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, net of tax expense of zero and zero, and $(115) and zero, respectively	4,566		5,604		556		(14,850)
Recognition of deferred pension and other post-retirement benefits, net of tax expense of $(67) and $(52), and $(134) and $(104), respectively	252		194		503		388
Unrealized income (loss) on derivative instruments, net of tax (expense) benefit of $(23) and $73, and $(601) and $1,381, respectively	88		(1,144)		2,261		(5,534)


Other comprehensive income (loss), net of tax	4,906		4,654		3,320		(19,996)
Comprehensive income	$	30,943	$	17,643	$	46,819	$	8,521

See accompanying notes.

Alamo Group Inc. and Subsidiaries

Interim Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

For six months ended June 30, 2021

Common Stock

Additional

Paid-in Capital

Treasury Stock

Retained Earnings

Accumulated

Other

Comprehensive Loss

Total Stock-

holders’ Equity

(in thousands)

Amount

Balance at December 31, 2020

11,727

1,181

SEC Form 10-Q filed by Alamo Group, Inc.