Alamo Group Reports Slight Increase in Q2 2025 Net Sales and Income Amid Mixed Division Performance

Alamo Group Inc. reported its financial results for the second quarter and first half of 2025, revealing a slight increase in net sales and net income compared to the previous year. For the three months ended June 30, 2025, the company achieved net sales of $419.1 million, a 1% increase from $416.3 million in the same period of 2024. Net income for the quarter rose to $31.1 million, or $2.57 per diluted share, compared to $28.3 million, or $2.35 per diluted share, in the prior year. For the first six months of 2025, net sales totaled $810.0 million, down 4% from $841.9 million in the first half of 2024, while net income increased to $62.9 million from $60.4 million.

The company's performance was driven by contrasting trends in its two divisions. The Industrial Equipment Division saw a 15% increase in sales, reaching $467.8 million for the first half of 2025, bolstered by strong demand for excavators, vacuum trucks, and snow removal equipment. Conversely, the Vegetation Management Division experienced a 21% decline in sales, totaling $342.2 million, primarily due to weakened demand in forestry, tree care, and agricultural mowing markets. The overall decrease in net sales was also influenced by the sale of Herschel Parts in August 2024, which had a minor impact on year-over-year comparisons.

Operationally, Alamo Group's gross profit for the first half of 2025 was $211.1 million, representing 26% of net sales, consistent with the previous year. Selling, general, and administrative expenses decreased to $111.5 million from $121.4 million, attributed to labor cost savings in the Vegetation Management Division. The company also reported a reduction in interest expenses, down to $6.9 million from $12.2 million, reflecting debt reduction efforts. The total backlog at the end of June 2025 was $687.2 million, an 11% decrease from $768.9 million a year earlier.

In terms of strategic developments, Alamo Group completed the acquisition of Ring-O-Matic, LLC for approximately $17.6 million on June 30, 2025. This acquisition aims to enhance the company's product offerings within the Industrial Equipment Division. The company also reported an increase in cash and cash equivalents to $201.8 million, up from $197.3 million at the end of 2024, and a rise in working capital to $735.7 million, reflecting higher accounts receivable and inventory levels.

Looking ahead, Alamo Group anticipates continued strong demand for its Industrial Equipment products, while acknowledging challenges in the Vegetation Management Division. The company expects to maintain its focus on operational improvements and cost reduction initiatives to mitigate the impact of market fluctuations. Management remains optimistic about leveraging its financial position and liquidity to explore further strategic opportunities, including potential share repurchases, as market conditions permit.