Alamo Group Inc. Announces 2003 Second Quarter Results.Business Editors SEGUIN, Texas--(BUSINESS WIRE)--Aug. 5, 2003 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 second quarter ended June 30, 2003. 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 for the second quarter increased 6% to $73.5 million from $69.5 million for the same period last year. Net income for the quarter was $3.3 million, or $0.33 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 $2.7 million, or $0.28 per diluted share, in the prior-year period. Sales in the second quarter include those of Faucheux Industries SA, acquired in November 2002. Excluding Faucheux, net sales for the quarter were flat compared with the second quarter of 2002. Net income in the 2003 second quarter increased $543,000 or $0.05 per diluted share over the second quarter of 2002, which includes a gain on the sale of undeveloped real estate and the results of Faucheux, which totaled $310,000, or $0.03 per diluted share. For the first six months of 2003, net sales were $140.9 million compared with $134.3 million for the six-month period last year, an increase of 5%. Net income for the six-month period of 2003 was $3.9 million, or $0.40 per diluted share, compared with $5.2 million, or $0.54 per diluted share, for the same period last year. The increase in sales is attributable to the acquisition of Valu-Bilt in April 2002 and Faucheux in November 2002. The decline in net income was a result of a change in the mix of sales, principally a reduction in higher margin sales in the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. Industrial division in the first half of this year compared to the same period last year. Also contributing to the decline was a higher level of incentives and discounts in the North American Agricultural division, particularly in the first quarter of 2003, versus the prior year. Sales for Alamo's North American Agricultural business declined by 9% in the quarter compared to the prior year, primarily due to continued softness in the agricultural industry. In general, dealer inventory levels are higher than normal, which reduced re-stocking orders during the quarter. North American Industrial sales for the quarter were up 4% over the second quarter of 2002. Despite this modest increase, the Company continues to experience weak market conditions particularly as it relates to governmental business. There was a significant increase in European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. sales in the quarter to $17.3 million from $11.8 million in the prior year period. Of this increase, approximately 70% is due to the acquisition of Faucheux Industries SA in November 2002, with the remainder coming from internal growth. 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, commented, "Our second quarter results were in line with our expectations. The increase in earnings for the quarter compared to the prior year reflects more internal improvements than market conditions, which remain weak in most of our business segments. This resulted in improved gross and operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: in the second quarter, versus a year ago. Our North American Agricultural division continued to be affected by an overhang Overhang Calculated as stock options granted, plus the remaining options to still be granted, and then divided by the total shares outstanding. Notes: A high percentage for the overhang is usually a bad thing. of inventory on dealer lots and lower manufacturing utilization rates. We have begun to see the early signs of improvement in market conditions in the past few months, though it is still too early to know if this trend will continue. Likewise, our North American Industrial division has been impacted by the reduction in spending by governmental agencies for our type of products due to budget constraints A Budget Constraint represents the combinations of goods and services that a consumer can purchase given current prices and his income. Consumer theory uses the concepts of a budget constraint and a preference ordering to analyze consumer choices. . Early signs also point to a slight improvement in this area as well. Our European operations continued to do well thanks to aggressive marketing initiatives, even in the face of relatively soft market conditions. In addition, while the Company as a whole has benefited from the weaker U.S. dollar, our European subsidiaries have experienced some negative effects due to the strong Euro." Mr. Robinson concluded, "We hope the hints of market improvement we are seeing continue. However, we are relying more on our cost control efforts to drive bottom line improvements in the short-term, regardless of the market conditions, leaving Alamo Group well positioned to take advantage of any upturn in our business segments." 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 tractor, in agriculture, vehicle used to pull such equipment as plows, cultivators, and mowers; to power stationary devices such as saws and winches; and to push snowplows and earth-moving implements. and truck mounted 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. and other vegetation vegetation /veg·e·ta·tion/ (vej?e-ta´shun) any plantlike fungoid neoplasm or growth; a luxuriant fungus-like growth of pathologic tissue. maintenance equipment, street sweepers, agricultural implements front-end loaders front-end loader n. An earthmoving machine with a hydraulic scoop in front for lifting and loading earth or rubble. , backhoe and related after market parts and services. The Company, founded in 1969, has over 1,600 employees and operates thirteen 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 June 2003. The corporate offices of Alamo Group Inc. are located in 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. 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.
Alamo Group Inc. and Subsidiaries
(NYSE:ALG)
Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
06/30/03 06/30/02 06/30/03 06/30/02
--------- --------- --------- ---------
North American
Agricultural $26,750 $29,363 $53,188 $58,479
Industrial 29,460 28,331 55,241 53,835
European 17,326 11,826 32,478 21,983
--------- --------- --------- ---------
Total Sales 73,536 69,520 140,907 134,297
Cost of sales 56,692 54,105 111,675 104,521
--------- --------- --------- ---------
Gross margin 16,844 15,415 29,232 29,776
22.9% 22.2% 20.7% 22.2%
Operating Expenses 11,635 10,808 22,641 20,767
--------- --------- --------- ---------
Income from Operations 5,209 4,607 6,591 9,009
7.1% 6.6% 4.7% 6.7%
Interest Expense (631) (745) (1,102) (1,433)
Interest Income 155 128 257 253
Other Income (Expense) 396 55 491 64
--------- --------- --------- ---------
Income before income taxes 5,129 4,045 6,237 7,893
Provision for income taxes 1,861 1,320 2,304 2,659
--------- --------- --------- ---------
Net Income $3,268 $2,725 $3,933 $5,234
========= ========= ========= =========
Net income per common share:
Basic $0.34 $0.28 $0.40 $0.54
========= ========= ========= =========
Diluted $0.33 $0.28 $0.40 $0.54
========= ========= ========= =========
Average common shares:
Basic 9,718 9,711 9,718 9,711
========= ========= ========= =========
Diluted 9,767 9,809 9,766 9,801
========= ========= ========= =========
Summary Balance Sheet Data
06/30/03 12/31/02 06/30/02
--------- --------- ---------
Receivables 77,696 59,720 68,673
Inventories 66,064 63,512 68,643
Current Liabilities 36,968 30,558 31,789
Long Term Debt 32,616 27,833 39,946
Equity 137,121 130,478 128,767
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