Alamo Reports Strong Net Income

By Staff Writer May 05, 2022

Alamo Group showed a rise in net income in the first quarter ended March 31.

First quarter 2022 net sales were $362.0 million compared to $311.2 million in the first quarter of 2021, an increase of 16.3%. Gross margin improved in the quarter compared to the first quarter of 2021 but was negatively impacted by continued higher material and transportation costs and supply chain disruptions which resulted in material shortages throughout the quarter. 

First quarter net income improved 5.8% to $18.5 million, or $1.55 per diluted share, compared to net income of $17.5 million, or $1.47 per diluted share in the first quarter of 2021. The company completed an excise tax audit covering a 5-year period which resulted in a one-time $1.3 million expense in the first quarter of 2022. Excluding this charge, adjusted net income was $19.4 million or $1.63 per diluted share. The company’s backlog at the end of the first quarter of 2022 was $917.8 million, an increase of $465.3 million, or 102.8%, from the backlog at the end of the first quarter of 2021, and up 14.6% from the end of calendar year 2021.

The company’s results for the first quarter continued to be materially impacted by persistent pandemic-related headwinds including supply chain disruptions, cost inflation and, to a lesser extent, skilled labor shortages.

“Accelerating cost inflation also adversely impacted the company and caused a 70-basis-point compression of our first quarter operating margin compared to the first quarter of last year,” Jeff Leonard, Alamo Group’s president and chief executive officer.

  “The impact of inflation we experienced across a wide spectrum of purchased materials and components was partially offset by reductions in steel prices during the quarter. Rapidly rising freight costs and associated surcharges are a growing concern that also impacted our margin during the quarter. The price increases we implemented at the end of 2021 helped to minimize the overall effect of supply chain cost inflation on our operating margin during the quarter but obviously, the situation is dynamic. We continue to monitor our costs closely and will take further price actions, without hesitation, to protect margin.”

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Last modified on Thursday, 05 May 2022 23:55