Alamo Group Announces 2005 Fourth Quarter and Year End Results.SEGUIN, Texas Seguin (pronounced IPA: /səˈgiːn/) is a city in Guadalupe County, Texas, in the United States. As of the 2000 census, the city population was 22,011. -- Alamo Alamo Eighteenth-century mission in San Antonio, Texas, site of a historic siege of a small group of Texans by a Mexican army (1836) during the Texas war for independence from Mexico. Group Inc. (NYSE NYSE See: New York Stock Exchange : ALG ALG antilymphocyte globulin. ALG antilymphocyte globulin. ALG Antilymphocyte globulin, see there ) today reported results for the fourth quarter and year ended December 31, 2005. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight in the fourth quarter were $82.6 million, a decrease of 2% from the $84.6 million reported for the same period of 2004. The decrease in sales was the result of weaker out of season selling programs, particularly in our North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. Agricultural Division, compared to the very strong levels achieved in the fourth quarter of the previous year. Net income for the quarter was $0.1 million, or $0.01 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared with $2.1 million, or $0.21 per diluted share. The decrease was mainly a result of the $1.4 million pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern , or $0.09 per diluted share after tax charge for restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and other costs taken in the fourth quarter related to the planned closure of the Company's Holton, Kansas Holton is a city in Jackson County, Kansas, United States. The population was 3,353 at the 2000 census. It is the county seat of Jackson CountyGR6. Geography Holton is located at (39. manufacturing plant, which was announced on December 5, 2005. This move is expected to be completed in the second quarter of 2006 and projected savings are estimated to be nearly $3.0 million annually beginning in 2007. The decrease in sales in the fourth quarter also contributed to the lower earnings. For the full year of 2005, net sales grew nearly 8% from $342.2 million in 2004 to $368.1 million in 2005. Net income for the year was $11.3 million, or $1.14 per diluted share, which was 16% below the prior year's net income of $13.4 million or $1.36 per diluted share. The decrease was related to the factors described above as well as a $0.04 per diluted share after tax adjustment taken in the third quarter related to systems software problems at one of the Company's North American Agricultural Division units. The 2005 sales and earnings included those of Spearhead Machinery Limited ("Spearhead"), which the Company acquired in February, 2005. Excluding Spearhead, net sales for the year were up 5% and earnings were down 19%. North American Agricultural Division sales were $27.7 million in the fourth quarter, a decrease of 17% compared to the previous year's level of $33.3 million. Sales for the year were down nearly 3% at $125.9 million versus the $129.3 million achieved in 2004. The decrease for both the quarter and the full year were the result of weaker sales from our preseason selling programs in the fourth quarter compared to the strong results experienced in 2004. This also reflects a generally softer agricultural market in 2005, a situation that is expected to continue into 2006. North American Industrial Division sales increased by over 10% in the fourth quarter of 2005 with sales of $30.3 million compared to $27.5 million in the prior year. For the year, sales were also up 10% at $128.1 million versus $116.3 million in 2004. This reflects steady improvement in our sales of both mowing mow 1 n. 1. The place in a barn where hay, grain, or other feed is stored. 2. A stack of hay or other feed stored in a barn. equipment and street sweepers, despite fairly flat market conditions. Alamo Group's European Division sales were up nearly 3% at $24.5 million in the fourth quarter of 2005 compared to sales of $23.9 million in 2004; however, excluding our Spearhead acquisition, sales were down 6% due to weaker results from out of season selling programs and increased competition. For the year sales were $114.2 million, an increase of 18% compared to 2004, when sales were $96.6 million. Without the contribution of Spearhead sales for the full year were up 8%. This internal growth was achieved despite a weaker market due to changing government regulations concerning farm programs throughout the European Union European Union (EU), name given since the ratification (Nov., 1993) of the Treaty of European Union, or Maastricht Treaty, to the European Community , including delayed subsidy subsidy, financial assistance granted by a government or philanthropic foundation to a person or association for the purpose of promoting an enterprise considered beneficial to the public welfare. payments to farmers which impacted both their income and confidence levels. Ron Robinson Ron Robinson (born March 24, 1962 in Exeter, California) was a Major League Baseball right-handed pitcher for the Cincinnati Reds (1984-1990) and the Milwaukee Brewers (1990-1992). He was the first-round pick (19th overall) of the Reds in the 1980 amateur draft. , President and Chief Executive Officer of Alamo Group, commented, "Our 2005 results reflected generally weaker market conditions that impacted most of the manufacturing companies in the agricultural sector. The sales growth we managed to achieve was mainly in our Industrial Division and the increase from the acquisition of Spearhead in our European Division. The weaker market conditions also affected our margins as a result of more competitive pressure on pricing and terms. Alamo was further impacted by our decision in the fourth quarter to consolidate some of our manufacturing and engineering functions which resulted in a charge to our earnings." "Looking ahead we anticipate the soft market conditions will extend into 2006 and this could limit internal sales growth. But, we are more optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about improved margins and earnings potential as the consolidation efforts we are undertaking should start to have a positive impact on our bottom line in the second half of 2006 and more so in 2007. The addition of the recently acquired Gradall excavator ex·ca·va·tor n. An instrument, such as a sharp spoon or curette, used in scraping out pathological tissue. excavator (eks´k line should also be a strong contributor to both our sales and earnings going forward. This will be further enhanced by the marketing synergies we expect to gain from the combined efforts of Alamo and Gradall, though those will take longer to develop." "Although we remain cautious regarding overall market conditions, we are excited and optimistic about the outlook for Alamo Group in 2006 given the opportunities to leverage our current business with our strategic acquisitions." Alamo Group is a leader in the design, manufacture, distribution and service of high quality equipment for right-of-way maintenance and agriculture. Our products include tractor-mounted mowing and other vegetation maintenance equipment, street sweepers, snowblowers, pothole pothole, in geology, cylindrical pit formed in the rocky channel of a turbulent stream. It is formed and enlarged by the abrading action of pebbles and cobbles that are carried by eddies, or circular water currents that move against the main current of a stream. patchers, excavators, agricultural implements and related after market parts and services. The Company, founded in 1969, has over 2,250 employees and operates fifteen plants in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and Europe as of February 2006. The corporate offices of Alamo Group Inc. are located in Seguin, Texas and the headquarters for the Company's European operations are located in Salford Priors Salford Priors is a rural, agricultural village and civil parish about six miles south west of Alcester, Warwickshire, UK. It is found on the Warwickshire border with Worcestershire. , England. This release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that are made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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: market demand, 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. (Tables Follow)
ALAMO GROUP REPORTS 2005 FOURTH QUARTER RESULTS
Alamo Group Inc. and Subsidiaries (NYSE:ALG)
Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
(Unaudited)
Fourth Quarter Ended Year Ended
12/31/05 12/31/04 12/31/05 12/31/04
--------- --------- --------- ---------
North American
Agricultural $27,745 $33,273 $125,880 $129,254
Industrial 30,335 27,481 128,057 116,305
European 24,549 23,895 114,173 96,612
--------- --------- --------- ---------
Total Sales 82,629 84,649 368,110 342,171
Cost of sales 66,229 67,946 289,353 266,995
--------- --------- --------- ---------
Gross margin 16,400 16,703 78,757 75,176
19.8% 19.7% 21.4% 22.0%
Operating Expenses 15,741 13,308 59,868 52,478
Restructuring Cost 489 - 489 -
--------- --------- --------- ---------
Income from Operations 170 3,395 18,400 22,698
0.2% 4.0% 5.0% 6.6%
Interest Expense (709) (500) (3,041) (2,049)
Interest Income 225 288 825 724
Other Income (Expense) 419 (32) 555 (791)
--------- --------- --------- ---------
Income before income taxes 105 3,151 16,739 20,582
Provision for income taxes (20) 1,089 5,448 7,186
--------- --------- --------- ---------
Net Income $125 $2,062 $11,291 $13,396
========= ========= ========= =========
Net income per common share:
Basic $0.01 $0.21 $1.16 $1.38
========= ========= ========= =========
Diluted $0.01 $0.21 $1.14 $1.36
========= ========= ========= =========
Average common shares:
Basic 9,748 9,738 9,746 9,731
========= ========= ========= =========
Diluted 9,904 9,903 9,908 9,864
========= ========= ========= =========
Summary Balance Sheet Data
12/31/05 12/31/04
--------- ---------
Receivables 85,368 82,337
Inventories 77,013 72,757
Current Liabilities 48,400 49,052
Long Term Debt 30,912 18,428
Equity 163,476 160,832
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