alg-20210930

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 SEPTEMBER 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 October 29, 2021, 11,923,746 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
		September 30, 2021 and December 31, 2020

	Interim Condensed Consolidated Statements of Income		4
		Three and Nine Months Ended September 30, 2021 and September 30, 2020

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

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

	Interim Condensed Consolidated Statements of Cash Flows		8
		Nine Months Ended September 30, 2021 and September 30, 2020

	Notes to Interim Condensed Consolidated Financial Statements		9

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations		17

Item 3.	Quantitative and Qualitative Disclosures About Market Risks		23

Item 4.	Controls and Procedures		24

PART II.	OTHER INFORMATION		24

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		27

Alamo Group Inc. and Subsidiaries

Interim Condensed Consolidated Balance Sheets

(Unaudited)


(in thousands, except share amounts)	September 30, 2021			December 31, 2020
					As Adjusted
ASSETS
Current assets:
Cash and cash equivalents		$	89,189		$	50,195
Accounts receivable, net		245,517			209,276
Inventories, net		294,270			242,501

Prepaid expenses and other current assets		6,741			7,382
Income tax receivable		66			6,186
Total current assets		635,783			515,540

Rental equipment, net		36,244			42,266

Property, plant and equipment		316,347			312,362
Less: Accumulated depreciation		(168,557)			(156,928)
Total property, plant and equipment, net		147,790			155,434

Goodwill		193,572			195,132
Intangible assets, net		181,516			193,172
Deferred income taxes		2,004			1,203
Other non-current assets		20,869			19,112

Total assets		$	1,217,778		$	1,121,859

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Trade accounts payable		$	107,059		$	75,317
Income taxes payable		6,425			2,278
Accrued liabilities		67,183			64,634
Current maturities of long-term debt and finance lease obligations		15,059			15,066

Total current liabilities		195,726			157,295

Long-term debt and finance lease obligations, net of current maturities		279,215			270,320
Long-term tax liability		4,408			3,954
Deferred pension liability		963			1,731
Other long-term liabilities		28,095			30,744
Deferred income taxes		17,709			22,812

Stockholders’ equity:
Common stock, $0.10 par value, 20,000,000 shares authorized; 11,870,513 and 11,809,926 outstanding at September 30, 2021 and December 31, 2020, respectively		1,187			1,181
Additional paid-in-capital		123,446			118,528
Treasury stock, at cost; 82,600 shares at September 30, 2021 and December 31, 2020, respectively		(4,566)			(4,566)
Retained earnings		616,235			560,186
Accumulated other comprehensive loss		(44,640)			(40,326)
Total stockholders’ equity		691,662			635,003

Total liabilities and stockholders’ equity		$	1,217,778		$	1,121,859

See accompanying notes.

Alamo Group Inc. and Subsidiaries

Interim Condensed Consolidated Statements of Income

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share amounts)	2021		2020		2021		2020

Net sales:
Industrial	$	218,988	$	196,241	$	662,106	$	608,473
Agricultural	119,323		95,518		334,944		266,369

Total net sales	338,311		291,759		997,050		874,842
Cost of sales	252,015		213,123		746,188		649,441
Gross profit	86,296		78,636		250,862		225,401

Selling, general and administrative expenses	52,586		44,069		150,803		136,868
Amortization expense	3,667		3,644		10,988		11,093
Income from operations	30,043		30,923		89,071		77,440

Interest expense	(2,660)		(3,461)		(8,127)		(12,921)
Interest income	296

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