Government Sales and Regulatory Environment - The company reported a significant dependence on governmental sales, with a substantial portion of revenues derived from federal, state, provincial, and local governmental entities[119] - Changes in the regulatory environment regarding privacy and data protection could increase compliance costs and expose the company to significant penalties[126] - The company is subject to increasingly stringent engine emission regulations, which may impact product sales and competitive position[144] Financial Performance and Metrics - In 2024, the Company's net sales decreased by 4% to $1,628.5 million compared to $1,689.7 million in 2023, primarily due to weak demand in the Vegetation Management Division[183][190] - Net income for 2024 was $115.9 million, a decrease of 15% from $136.2 million in 2023, influenced by lower product demand and associated costs[197] - Gross profit for 2024 was $412.5 million, representing 25.3% of net sales, down from $453.6 million or 26.8% in 2023, attributed to production inefficiencies and costs related to capacity reduction[193] - Total net sales for 2024 were $1,628.5 million, a decrease of 3.6% compared to $1,689.7 million in 2023[289] - Comprehensive income for 2024 was $88.9 million, down from $149.9 million in 2023[292] Acquisitions and Growth Strategy - The company completed acquisitions of Timberwolf in 2021 and Royal Truck in 2023 as part of its growth strategy[134] - The company’s acquisition strategy is crucial for growth, but there are uncertainties regarding the identification of targets and financing for acquisitions[132] - Integration of acquired businesses may distract management and could lead to operational inefficiencies if not managed properly[135] Operational Challenges and Risks - The company faces risks from skilled labor shortages, which could negatively impact production capabilities and increase operating costs[118] - The company has experienced increased costs and supply chain disruptions for raw materials and components, which may adversely affect profitability and market share[117] - Economic downturns and adverse industry conditions could negatively impact demand for the company's products and overall financial performance[115] - Seasonal fluctuations in the agricultural and infrastructure maintenance industries may impact quarterly results and working capital[138] - Extreme weather conditions and climate change risks could adversely affect sales of agricultural and snow removal equipment[140][141] Cash Flow and Capital Management - Net cash provided by operating activities increased to $209.8 million in 2024, compared to $131.2 million in 2023, driven by improved receivables and inventory management[208] - The Company had $147.2 million in cash and cash equivalents held by foreign subsidiaries as of December 31, 2024, with plans to repatriate excess funds to reduce debt and fund working capital[210] - The Company entered into a 2022 Credit Agreement providing up to $655.0 million in loans, with $255.0 million borrowed under a Term Facility and $400.0 million available under a Revolver Facility[211] Shareholder and Equity Information - The company has issued 12,062,868 shares of common stock as of December 31, 2024, with potential dilution of ownership interests for existing shareholders[152] - As of December 31, 2024, four major investors own approximately 38% of the company's outstanding common stock, potentially influencing corporate decisions[156] - The Board of Directors increased the quarterly dividend from $0.26 to $0.30 per share, but future dividend payments are not guaranteed[153] Internal Controls and Governance - The company maintained effective internal control over financial reporting as of December 31, 2024[278] - KPMG LLP issued an unqualified opinion on the effectiveness of the Company's internal control over financial reporting as of December 31, 2024[268] - The company’s management assessed the effectiveness of internal control over financial reporting as of December 31, 2024, concluding that controls were effective[263] Market and Competitive Landscape - The company operates in a highly competitive industry, facing competition from larger firms with greater resources, which could impact its market position[127] - The introduction of new products and technological developments is critical for the company's success, and failure to keep pace could have a material adverse impact on operations[128] - The company is exposed to risks associated with international operations, including compliance with foreign laws and potential trade policy changes that could affect costs and sales[130] Currency and Economic Factors - Fluctuations in currency exchange rates may adversely affect financial results, particularly in international markets[150] - A uniform 10% strengthening of the U.S. dollar relative to foreign currencies would have resulted in a decrease in gross profit of $13.1 million as of December 31, 2024[226] - Inflation moderated in 2024, but costs for commodities and components remained elevated, leading to strategic pricing actions to offset cost pressures[214]

Financial Performance - Fourth quarter net sales were $385.3 million, a decrease of 7.7% compared to $417.5 million in Q4 2023[5]. - Full year net sales totaled $1.629 billion, down 3.6% from the previous year, with Industrial Equipment Division sales increasing by 18.7% to $843.3 million[3][7]. - Net income for Q4 was $28.1 million, or $2.33 per diluted share, compared to $31.5 million, or $2.63 per diluted share in Q4 2023[6]. - Full year net income was $115.9 million, or $9.63 per diluted share, down from $136.2 million, or $11.36 per diluted share in 2023[9]. - Adjusted net income for Q4 2024 was $28.9 million, compared to $31.5 million in Q4 2023, reflecting a decline of 8.4%[33]. - EBITDA for the year ended December 31, 2024, was $220.6 million, down from $247.7 million in 2023, a decrease of 10.9%[38]. - The company reported a diluted EPS of $2.33 for Q4 2024, down from $2.63 in Q4 2023[33]. Backlog and Division Performance - The backlog at the end of Q4 was $668.6 million, with the Industrial Equipment Division backlog remaining elevated despite normalization in the Vegetation Management Division[6]. - The backlog for the Vegetation Management Division decreased to $187.1 million from $352.1 million year-over-year[40]. - The Industrial Equipment Division reported net sales of $225.5 million in Q4 2024, an increase of 11.0% from $203.2 million in Q4 2023[42]. - The Industrial Equipment Division's income from operations for Q4 2024 was $28.0 million, up from $25.0 million in Q4 2023, reflecting a growth of 7.8%[42]. Cash Flow and Debt Management - Operating cash flow for the year was $209.8 million, driven by disciplined inventory management and efficient receivables control[8]. - Total debt net of cash decreased to $23.2 million as of December 31, 2024, from $183.4 million in 2023, a reduction of $160.2 million[38]. Future Outlook and Strategic Initiatives - The company expects annualized cost savings of approximately $25 to $30 million from ongoing cost reduction initiatives launched in Q3 2024[10]. - The outlook for 2025 is cautiously optimistic, with expectations for elevated activity in governmental and industrial contractor markets, and a modest recovery in Vegetation Management markets anticipated in the second half of the year[15]. - The company is closely monitoring potential impacts from tariffs and inflation, with plans to adjust manufacturing strategies and pricing as necessary[16]. Shareholder Value - A quarterly dividend increase of 15% from $0.26 to $0.30 per share reflects the company's strong financial position and commitment to shareholder value[11]. Gross Margin - Gross margin for Q4 2024 was 23.8%, compared to 26.1% in Q4 2023, indicating a decrease of 2.3 percentage points[27].

Group 1 - Alamo Group Inc. (ALG) has been added to the Zacks Rank 5 (Strong Sell) List due to a 6.8% downward revision in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - Ashtead Group plc (ASHTY) is also on the Zacks Rank 5 (Strong Sell) List, with a 6.9% downward revision in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - Clear Secure, Inc. (YOU) has seen a 7% downward revision in the Zacks Consensus Estimate for its current year earnings over the last 60 days, leading to its inclusion in the Zacks Rank 5 List [2]

Company Leadership Transition - Jeff Leonard, President and CEO of Alamo Group Inc., intends to retire by mid-year 2025, pending the appointment of his successor [1][2] - The Board of Directors is actively preparing for this transition and expects to name a new President and CEO within the next several months [1][3] Company Overview - Alamo Group is a leader in the design, manufacture, distribution, and service of high-quality equipment for vegetation management, infrastructure maintenance, and other applications [3] - The company offers a range of products including truck and tractor mounted mowing equipment, street sweepers, snow removal equipment, excavators, vacuum trucks, and agricultural implements [3] - Founded in 1969, Alamo Group has approximately 4,000 employees and operates 28 plants across North America, Europe, Australia, and Brazil as of September 30, 2024 [3]

Core Insights - Stellantis celebrates multiple awards in the J.D. Power 2025 U.S. ALG Residual Value Awards, highlighting the strong performance of its vehicles in retaining value [2][3][4] Group 1: Awards and Recognition - The all-new Dodge Charger Daytona achieves the highest residual value in the new electric car segment [1][2] - Jeep Gladiator ranks No. 1 for residual value among midsize pickups, marking its third award [1][2] - Jeep Wagoneer earns the best residual value among large SUVs for the third consecutive year [1][2] Group 2: Vehicle Performance and Features - The Dodge Charger Daytona showcases a blend of electric performance and muscle car heritage, with outputs of 670 horsepower and 627 lb.-ft. of torque for the Scat Pack model [5] - The Jeep Gladiator is designed for off-road capability, featuring a standard 3.6-liter V6 engine with 285 horsepower and a towing capacity of up to 7,700 pounds [6] - The Jeep Wagoneer combines luxury and performance with a Hurricane Twin Turbo I-6 engine delivering 420 horsepower and best-in-class towing capability of up to 10,000 pounds [7] Group 3: Company Strategy and Vision - Stellantis aims to become a carbon net zero mobility tech company by 2038 as part of its Dare Forward 2030 strategic plan [8]

Group 1 - A-Mark Precious Metals, Inc. (AMRK) is a precious metals trading company with a Zacks Consensus Estimate for its current year earnings revised 17.5% downward over the last 60 days [1] - Anika Therapeutics, Inc. (ANIK) is a joint preservation company with a Zacks Consensus Estimate for its current year earnings revised 82.8% downward over the last 60 days [1] - Alamo Group Inc. (ALG) is a vegetation management and maintenance equipment company with a Zacks Consensus Estimate for its current year earnings revised 6.8% downward over the last 60 days [2]

Financial Data and Key Metrics Changes - Total revenue for Q3 2024 was $401.3 million, reflecting a 4.4% decline compared to the same period last year [10] - Gross profit for the quarter was $100.9 million with a margin of 25.1%, down 206 basis points from Q3 2023 [10] - Operating income for Q3 2024 was $40.1 million, sustaining a double-digit operating margin of 10% of net sales, a decline of 190 basis points year-over-year [11] - Net income for Q3 2024 was $27.4 million or $2.28 per diluted share, compared to $34.9 million or $2.91 per diluted share in the same period last year [12] - Year-to-date net sales through September 2024 were $1.2 billion, reflecting a 2.3% decrease compared to the first nine months of 2023 [15] Business Line Data and Key Metrics Changes - Vegetation Management division reported net sales of $190.1 million, a 23% reduction compared to Q3 2023, with operating income of $12.4 million or 6.5% of net sales [13] - Industrial Equipment division net sales were $211.2 million, representing 22% growth compared to Q3 2023, with operating income of $27.7 million or 13.1% of net sales [14] Market Data and Key Metrics Changes - Governmental demand remained strong across major product lines in North America, with municipal finances stable due to solid economic growth [23] - The backlog in the Industrial Equipment division exceeded $540 million, up nearly 9% compared to Q3 2023 [25] - Sales of the Vegetation Management division's agricultural products declined in Q3 relative to the corresponding period of 2023 in North America, South America, and Europe [29] Company Strategy and Development Direction - The company is executing cost reduction initiatives targeting annual savings of $25 million to $30 million, with approximately $1.6 million in separation expenses incurred in Q3 [17][18] - Facility consolidations are expected to reduce global manufacturing capacity by approximately 8% within the Vegetation Management division [32] - A share repurchase program has been authorized for up to $50 million, affirming confidence in the business's future [38] Management Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for the remainder of 2024, anticipating some near-term uncertainty due to national elections in the U.S. [35] - Recovery in the Vegetation Management markets is expected to depend significantly on interest rate direction in 2025 [37] - The company expects to benefit from an improved M&A environment in 2025, with a strong pipeline of opportunities [78] Other Important Information - Operating cash flow for the first nine months of 2024 was $130.6 million, increasing by 70% compared to the same period in 2023 [20] - Total debt net of cash improved by $126.2 million or 16% compared to Q3 2023 [20] Q&A Session Summary Question: About the permanence of cost reductions - Management indicated that the consolidation in Michigan has ample capacity to meet future needs and that most actions to generate savings are essentially completed [41][42] Question: Margin outlook for 2025 - Management expects to drive margins higher, with room for expansion by a couple of points next year, despite potential challenges in the Vegetation Management division [43][44] Question: Vegetation Management segment performance - Management acknowledged that Q3 might not be the absolute bottom for margins, but significant restructuring actions have been taken [46][47] Question: Industrial Equipment margin expectations - Management is confident that Industrial Equipment margins will continue to expand modestly through 2025, supported by strong demand and backlog [72][74] Question: M&A opportunities - The M&A pipeline for 2025 looks promising, with several opportunities in the company's sweet spot, and management is holding cash for potential acquisitions [77][78]

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, 2024 OR ☐ 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 ...

Financial Performance - Net sales for Q3 2024 were $401.3 million, a decrease of 4.4% compared to $419.6 million in Q3 2023[2] - Net income for Q3 2024 was $27.4 million, down from $34.9 million in Q3 2023, resulting in a fully diluted EPS of $2.28[4] - Year-to-date net sales for the first nine months of 2024 were $1.2 billion, a decrease of 2.3% compared to the same period in 2023[5] - Gross margin for Q3 2024 was 25.1%, down from 27.2% in Q3 2023[22] - Adjusted net income for Q3 2024, including workforce reduction impact, was $28,631[25] - EBITDA for the nine months ended September 30, 2024, was $170,353, down from $188,835 in the same period of 2023[29] - EBITDA for the three months ended September 30, 2024, was $33,614 thousand, up from $24,696 thousand, indicating a growth of 36.0%[31] - EBITDA margin improved to 15.9% from 14.3% year-over-year, maintaining a consistent margin of 15.9% for the nine months ended September 30, 2024[31] - Income from Operations rose to $27,675 thousand, compared to $19,502 thousand in the prior year, marking an increase of 41.8%[31] - Income from Operations for the nine months ended September 30, 2024, was $80,278 thousand, up from $50,849 thousand, representing a significant increase of 57.9%[31] Sales Performance by Division - Industrial Equipment Division net sales increased by 22.3% to $211.2 million, while Vegetation Management Division net sales decreased by 23.0% to $190.1 million[2] - Vegetation Management segment sales decreased by 23.0% to $190,115 in Q3 2024 from $246,902 in Q3 2023[26] - Industrial Equipment segment sales increased by 22.3% to $211,186 in Q3 2024 from $172,742 in Q3 2023[26] - Net Sales for the three months ended September 30, 2024, reached $211,186 thousand, up from $172,742 thousand in the same period last year, reflecting a growth of 22.1%[31] - For the nine months ended September 30, 2024, Net Sales totaled $617,793 thousand, compared to $507,426 thousand in the same period last year, reflecting a growth of 21.7%[31] Backlog and Capacity - The company's backlog at the end of Q3 2024 was $728.8 million, with a 52% decline in the Vegetation Management Division backlog, while the Industrial Equipment Division backlog grew by 8.5% year-over-year[4] - Backlog for the Vegetation Management division was $185,353 as of September 30, 2024, compared to $390,206 in 2023[30] - Backlog increased to $543,425 thousand from $500,661 thousand year-over-year, representing a growth of approximately 8.5%[31] Cost Management and Workforce - The company is targeting annualized cost savings of $25 to $30 million through ongoing cost-saving initiatives, including workforce reductions and plant consolidations[7] - The company incurred approximately $1.6 million in workforce reduction expenses in Q3 2024 and expects total costs to be between $4.0 million to $4.5 million[7] - The company has reduced its worldwide total production capacity by approximately 8% due to facility consolidations and personnel reductions[12] Debt and Cash Position - Total debt net of cash improved by $126.2 million or 60.0% compared to Q3 2023, totaling $84.1 million[2] - Total debt decreased to $224,166 in Q3 2024 from $323,900 in Q3 2023, with total cash increasing to $140,038[28] Market Outlook - The company anticipates no significant improvement in the agricultural equipment market until late 2025, while expecting strong governmental demand for products into the first half of 2025[13][14] - The company continues to focus on market expansion and new product development as part of its growth strategy[31] - The financial performance indicates a strong operational efficiency and positive outlook for future quarters[31]

ALG-055009 dose groups met the primary endpoint with statistically significant reductions in liver fat at Week 12 as measured by MRI-PDFFPlacebo-adjusted median relative reductions in liver fat were up to 46.2% with a clear dose responseALG-055009 was well-tolerated with no serious adverse events or dose reductions. Importantly, ALG-055009 dose groups had a similar incidence of gastrointestinal-related adverse events with less diarrhea compared to placeboSignificant reductions in atherogenic lipids, includi ...