Core Viewpoint - Alamo Group (ALG) is positioned well to potentially beat earnings estimates in its upcoming quarterly report, continuing a strong trend of surpassing expectations in recent quarters [1][6]. Earnings Performance - Alamo Group has consistently exceeded earnings estimates, with an average surprise of 10.45% over the last two quarters [2]. - In the last reported quarter, the company achieved earnings of $2.65 per share, surpassing the Zacks Consensus Estimate of $2.33 per share by 13.73% [3]. - For the previous quarter, Alamo Group's earnings were $2.39 per share against an expected $2.23 per share, resulting in a surprise of 7.17% [3]. Earnings Estimates and Predictions - The company's earnings estimates have been trending higher, supported by its history of earnings surprises [6]. - Alamo Group currently has a positive Earnings ESP of +2.05%, indicating increased analyst optimism regarding its near-term earnings potential [9]. - The combination of a positive Earnings ESP and a Zacks Rank of 3 (Hold) suggests a strong likelihood of another earnings beat in the upcoming report [9]. Earnings ESP Insights - Stocks with a positive Earnings ESP and a Zacks Rank of 3 or better have a nearly 70% chance of producing a positive surprise [7]. - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, reflecting the latest analyst revisions prior to earnings releases [8].

Core Viewpoint - Alamo Group Inc. will release its financial results for Q2 2025 on August 6, 2025, and will host a conference call on August 7, 2025, to discuss these results [1][2][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 [4] - The company offers a range of products including truck and tractor mounted mowing equipment, street sweepers, snow removal equipment, excavators, vacuum trucks, agricultural implements, and forestry equipment [4] - Founded in 1969, Alamo Group has approximately 3,750 employees and operates 28 plants across North America, Europe, Australia, and Brazil as of March 31, 2025 [4]

Core Insights - Hybrid Power Solutions Inc. has received a new purchase order for four Batt Pack Pro units from Alamo Auto Supply, which will be delivered to a utility client in Texas, enhancing the utility's fleet with clean, portable power solutions [1][2] - This order marks the third from Alamo Auto Supply, indicating a strengthening partnership and growing demand for Hybrid's products in the fleet market [2] - The Batt Pack Pro units are designed to provide silent, zero-emission power for various applications, making them a superior alternative to traditional energy sources [3][4] Company Overview - Hybrid Power Solutions Inc. is a Canadian clean energy innovator focused on developing portable power systems that eliminate the need for fossil fuels in off-grid and remote applications [5] - The company emphasizes environmental responsibility and technological innovation, positioning itself as a leader in the clean energy transition [5] Product Features - The Batt Pack Pro offers 5,000W continuous and 10,000W peak power, suitable for job site tools and equipment [6] - It operates silently and emission-free, eliminating noise, fuel dependency, and idling engines [6] - The product is truck-ready, durable, portable, and maintenance-free, allowing for easy integration and recharging through wall power or solar panels [6]

Core Insights - Hybrid Power Solutions Inc. has entered into a new distributor agreement with Alamo Auto Supply, enhancing its distribution network and access to portable power solutions for fleet operators and utility companies [1][4] - Alamo Auto Supply has placed an initial order for two Batt Pack Energy units for a major utility client, indicating a promising start to the collaboration [2] - The partnership allows Alamo Auto Supply to offer Hybrid's emission-free energy solutions, promoting the adoption of clean technology in critical sectors [4] Company Overview - Hybrid Power Solutions Inc. is a Canadian clean energy innovator focused on developing portable power systems that eliminate the need for fossil fuels in off-grid applications [7] - Alamo Auto Supply, established in 1955, is a leading distributor of automotive accessories and fleet solutions, recognized for its quality and service [3][7] Partnership Details - The agreement with Alamo Auto Supply is expected to introduce Hybrid's products to a diverse customer base, including municipalities and commercial fleets [2][4] - The partnership was facilitated by a dedicated manufacturer's representative, who has been instrumental in generating sales opportunities for Hybrid [5] Stock Options - In recognition of the manufacturer's representative's efforts, Hybrid Power Solutions is granting 500,000 stock options priced at 0.065 per share, pending CSE approval [6]

Market Overview - Wall Street ended the first day of July 2025 on a mixed note, with the S&P 500 and Nasdaq falling while the Dow Jones Industrial Average gained slightly [1] - The contrasting movements in the major stock indices were influenced by opposing forces, including a feud between President Trump and Tesla CEO Elon Musk, and the U.S. Senate's passage of Trump's tax bill aimed at stimulating economic growth [2] Investment Opportunities - Amid market uncertainty, there is a potential opportunity to invest in low-leverage stocks that are not expensive and can provide a protective shield during turbulent times [3] - Suggested low-leverage stocks include Novartis (NVS), Alamo Group (ALG), ArcelorMittal (MT), Bilibili (BILI), and Sterling Infrastructure, Inc. (STRL) [3][10] Low-Leverage Stocks - Low-leverage stocks are characterized by a lower debt-to-equity ratio, indicating reduced financial risk and improved solvency [7][8] - Investing in low-leverage stocks is recommended to avoid significant losses during economic downturns [6][7] Company Highlights - **Novartis (NVS)**: Recently completed the acquisition of Regulus Therapeutics, enhancing its drug portfolio. The Zacks Consensus Estimate for NVS's 2025 sales suggests a 7.3% improvement from 2024, with a long-term earnings growth rate of 7.9% [15][16] - **Alamo Group (ALG)**: Completed the acquisition of Ring-O-Matic, expanding its product offerings. The Zacks Consensus Estimate for ALG's 2025 earnings indicates a 7.2% year-over-year improvement [17][18] - **ArcelorMittal (MT)**: Signed an agreement to sell operations in Bosnia and Herzegovina, allowing a focus on higher-growth areas. The company has a long-term earnings growth rate of 49.8% [19] - **Bilibili (BILI)**: Reported a 24% year-over-year revenue increase and a 58% improvement in gross profit for Q1 2025. The Zacks Consensus Estimate for its 2025 sales indicates a 12.1% improvement from 2024 [20][21] - **Sterling Infrastructure (STRL)**: Announced the acquisition of CEC Facilities Group, enhancing its service portfolio in high-growth markets. The company has a long-term earnings growth rate of 15% [22][23]

Company Overview - Alamo Group (ALG) currently has a Momentum Style Score of B, indicating a positive momentum outlook [3] - The company is rated 2 (Buy) by the Zacks Rank, which has a strong track record of outperforming the market [4] Performance Metrics - Over the past week, ALG shares increased by 0.96%, while the Zacks Manufacturing - Farm Equipment industry rose by 1.4% [6] - In a longer time frame, ALG's monthly price change is 7.57%, significantly outperforming the industry's 0.35% [6] - Over the past quarter, ALG shares have increased by 20.74%, and by 26.7% over the last year, compared to the S&P 500's gains of 6.01% and 13.18%, respectively [7] Trading Volume - ALG's average 20-day trading volume is 136,793 shares, which serves as a useful baseline for price-to-volume analysis [8] Earnings Outlook - In the past two months, one earnings estimate for ALG has moved higher, while none have moved lower, raising the consensus estimate from $10.42 to $10.85 [10] - For the next fiscal year, one estimate has also increased, with no downward revisions during the same period [10] Conclusion - Given the positive performance metrics and earnings outlook, ALG is positioned as a promising momentum pick for investors [12]

Financial Data and Key Metrics Changes - First quarter revenue was $391 million, down from $425.6 million in the prior year, reflecting an 8% decrease [10][25] - Gross profit for the quarter was $102.8 million, with a margin of 26.3%, a slight increase of 10 basis points compared to the same period in 2024 [11] - Operating income was $44.5 million, with an operating margin of 11.4%, improving by 40 basis points year-over-year [11][25] - Net income for the first quarter was $31.8 million, or $2.64 per diluted share, compared to $32.1 million, or $2.57 per diluted share in the previous year [11][26] - Total debt was $216.8 million, with net debt of $16.5 million, a significant improvement of $83.2 million or 91.7% compared to the first quarter of 2024 [16] Business Line Data and Key Metrics Changes - The Industrial Equipment division reported record net sales of $227.1 million, representing 12.5% organic growth compared to the first quarter of 2024 [13][20] - The Vegetation Management division's net sales were $163.9 million, a 26.8% reduction year-over-year, but showed a 2.6% sequential improvement [12][21] - Operating income for the Industrial Equipment division was $31.2 million, or 13.7% of net sales, reflecting a 20 basis point improvement from the previous year [13][20] - The Vegetation Management division's operating income was $13.3 million, or 8.1% of net sales, down from $21.7 million and 9.7% in the prior year [21] Market Data and Key Metrics Changes - The backlog for the Industrial Equipment division was $513 million, down 8.3% year-over-year but up 6.6% sequentially [20] - Order bookings in the Vegetation Management division improved nearly 18% year-over-year and 3% sequentially [22] - Agricultural equipment orders in North America were up 26% year-over-year, indicating a recovery in demand [22][23] Company Strategy and Development Direction - The company is focused on driving growth and optimizing operations while maintaining a strong balance sheet [16][27] - There is an active pursuit of acquisition opportunities, with a notable increase in the number of meaningful scale opportunities available [27][28] - The company aims to achieve a 15% margin target in the Vegetation Management division as markets recover [67] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the company's position and outlook for the remainder of 2025, despite ongoing risks from tariffs and global market uncertainties [26][27] - The governmental and industrial contractor markets are expected to continue strong, with no significant changes in spending patterns [38] - The company anticipates sequential improvements in both sales and margins for the Industrial Equipment and Vegetation Management divisions in Q2 [80] Other Important Information - The company approved a quarterly dividend of $0.30 per share, reflecting its commitment to delivering long-term value to shareholders [16] - Interest expense decreased by $2.9 million compared to the same period in 2024, driven by lower debt levels [11] Q&A Session Summary Question: What are the pain points from tariffs? - Management indicated that about 70% of consolidated revenue comes from the U.S., with minimal impact from tariffs on production shifts from Canada to the U.S. [30][31] Question: What is the impact of tariffs on customer demand? - Management noted that demand might change primarily in non-governmental markets, with governmental spending remaining strong [37][38] Question: What drove the 40 basis point increase in operating margin despite lower sales? - Cost reduction initiatives and facility consolidations were key drivers of the improved operating margin [44][49] Question: What is the outlook for M&A activity? - M&A remains the first priority, with several large transactions and smaller tuck-in opportunities actively pursued [50][51] Question: What is the expectation for vegetation revenues in the back half of 2025? - Management expressed optimism for a gradual increase in vegetation revenues, supported by improving order bookings and dealer restocking [55][56] Question: Are there further cost reduction initiatives planned? - While major cost reduction initiatives are complete, there are ongoing efforts to gain efficiencies from recent facility consolidations [63][65] Question: How will steel prices impact costs? - Management has largely passed on steel price increases to the market and closely monitors steel costs across facilities [76][77] Question: What is the outlook for Q2 relative to Q1? - Expectations for Q2 include sequential improvements in both sales and margins for the Industrial Equipment and Vegetation Management divisions [80]

Financial Data and Key Metrics Changes - First quarter revenue was $391 million, down from $425.6 million in the prior year, reflecting an 8% decrease [8][25] - Gross profit was $102.8 million with a margin of 26.3%, a slight increase of 10 basis points year-over-year [9][25] - Operating income was $44.5 million, down 5.4% from the previous year, but operating margin improved by 40 basis points [10][25] - Net income for the quarter was $31.8 million or $2.64 per diluted share, compared to $32.1 million or $2.57 per diluted share in the same period last year [10][25] - Total debt was $216.8 million, with net debt of $16.5 million, a significant improvement of 91.7% year-over-year [15][25] Business Line Data and Key Metrics Changes - The Industrial Equipment division reported record net sales of $227.1 million, representing 12.5% organic growth year-over-year [12][20] - The Vegetation Management division's net sales were $163.9 million, a decline of 26.8% compared to the previous year, but a sequential improvement of 2.6% [11][21] - Operating income for the Industrial Equipment division was $31.2 million, or 13.7% of net sales, reflecting a 20 basis point improvement [12][20] - The Vegetation Management division's operating income was $13.3 million, or 8.1% of net sales, down from $21.7 million in the prior year [21][25] Market Data and Key Metrics Changes - The backlog for the Industrial Equipment division was $513 million, down 8.3% year-over-year but up 6.6% sequentially [20] - Order bookings in the Vegetation Management division improved by nearly 18% year-over-year, marking the fifth consecutive quarter of improvement [22][25] - Agricultural equipment orders in North America were up 26% year-over-year, indicating a recovery in demand [22][25] Company Strategy and Development Direction - The company is focused on driving growth and optimizing operations while pursuing acquisition opportunities of meaningful scale [28][29] - Management emphasized the importance of maintaining a strong balance sheet and low net debt to support future investments [15][28] - The company plans to continue cost reduction initiatives and facility consolidations to enhance operational efficiency [61][63] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's prospects for the remainder of 2025, despite ongoing risks from tariffs and global market uncertainties [27][28] - The governmental and industrial contractor markets are expected to remain strong, with increased spending on maintenance-related activities [38][39] - Management anticipates a gradual recovery in the Vegetation Management division, with expectations for improved sales and margins in the second half of 2025 [41][52] Other Important Information - The company approved a quarterly dividend of $0.30 per share, reflecting its commitment to delivering long-term value to shareholders [15][25] - Interest expense decreased by $2.9 million due to lower debt levels, contributing to improved financial performance [10][25] Q&A Session Summary Question: What are the pain points from tariffs? - Management indicated that about 70% of revenue comes from the U.S., with minimal impact from tariffs on production shifts [31][32] Question: What is the inflationary impact on customer demand? - Management noted that demand may change primarily in non-governmental markets, with governmental spending remaining strong [37][38] Question: What drove the 40 basis point increase in operating margin? - Cost reduction initiatives and facility consolidations were key drivers behind the margin improvement [44][48] Question: What is the outlook for M&A and share buybacks? - M&A remains the first priority, with several opportunities being pursued, while share buybacks are considered if M&A does not materialize [50][51] Question: What is the outlook for vegetation revenues? - Management is optimistic about a gradual recovery in vegetation revenues, supported by improving order bookings and dealer restocking [52][56]

PART I. FINANCIAL INFORMATION [Interim Condensed Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Interim%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) The company's total net sales decreased by **8.1%** year-over-year to **$391.0 million** in Q1 2025, primarily due to a significant **26.8% decline** in the Vegetation Management segment, which was partially offset by a **12.5% growth** in the Industrial Equipment segment. Net income remained relatively stable at **$31.8 million**. The balance sheet shows an increase in total assets to **$1.50 billion**, and stockholders' equity grew to **$1.06 billion**. Cash from operating activities saw a substantial improvement, increasing from **$1.1 million** to **$14.2 million** year-over-year Consolidated Statements of Income Highlights (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change | | :--- | :--- | :--- | :--- | | **Net Sales** | | | | | Vegetation Management | $163,890 | $223,747 | -26.8% | | Industrial Equipment | $227,060 | $201,839 | +12.5% | | **Total Net Sales** | **$390,950** | **$425,586** | **-8.1%** | | Gross Profit | $102,841 | $111,632 | -7.9% | | Income from Operations | $44,462 | $46,979 | -5.4% | | **Net Income** | **$31,800** | **$32,120** | **-1.0%** | | Diluted EPS | $2.64 | $2.67 | -1.1% | Consolidated Balance Sheet Highlights (as of March 31, 2025) | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $200,274 | $197,274 | +1.5% | | Inventories, net | $356,406 | $343,363 | +3.8% | | Total Assets | $1,504,694 | $1,450,279 | +3.8% | | Total Liabilities | $447,633 | $431,955 | +3.6% | | Total Stockholders' Equity | $1,057,061 | $1,018,254 | +3.8% | Consolidated Statements of Cash Flows Highlights (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $14,201 | $1,124 | | Net cash used in investing activities | ($5,892) | ($5,904) | | Net cash (used in) provided by financing activities | ($8,606) | $77,792 | | Net change in cash and cash equivalents | $3,000 | $69,883 | - Dividends declared and paid increased to **$0.30 per share** in Q1 2025, up from **$0.26 per share** in Q1 2024[39](index=39&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reports a mixed performance in Q1 2025, with a **12% organic sales growth** in the Industrial Equipment Division offset by a **27% sales decline** in the Vegetation Management Division due to weaker forestry, tree care, and agricultural markets. Overall net sales decreased by **8%** to **$391.0 million**, while net income saw a slight **1% decrease** to **$31.8 million**. Gross profit margins improved slightly due to cost reduction initiatives. The company's backlog decreased by **15%** year-over-year to **$702.7 million**. Liquidity remains strong with **$699.5 million** in working capital and **$397.2 million** available under the revolving credit facility - The Industrial Equipment Division experienced **12% organic growth**, while the Vegetation Management Division saw a **27% sales decline** due to weaker forestry, tree care, and agricultural markets[52](index=52&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk) Q1 2025 vs Q1 2024 Performance Summary | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $391.0M | $425.6M | -8% | | Net Income | $31.8M | $32.1M | -1% | | Diluted EPS | $2.64 | $2.67 | -1.1% | | Backlog | $702.7M | $831.3M | -15% | - Gross margin improved by approximately **10 basis points** compared to Q1 2024, driven by cost reduction initiatives completed in 2024[63](index=63&type=chunk) - The company maintains a robust financial position with working capital of **$699.5 million** and available borrowings of **$397.2 million** under its credit facility as of March 31, 2025[69](index=69&type=chunk)[74](index=74&type=chunk) - Capital expenditures for Q1 2025 were **$6.0 million**, with a full-year 2025 forecast of **$30.0 million to $35.0 million**[70](index=70&type=chunk) [Quantitative and Qualitative Disclosures About Market Risks](index=21&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risks) The company is exposed to market risks, primarily from foreign currency fluctuations and interest rate changes. A uniform **10%** change in the U.S. dollar's value relative to other currencies would impact gross profit by approximately **$3.3 million** for the quarter. For interest rate risk, a **two percentage point** change would alter interest expense by about **$1.1 million** for the quarter. The company uses derivative instruments like forward currency contracts and interest rate swaps to mitigate these risks but does not engage in speculative trading - A uniform **10%** strengthening or weakening of the U.S. dollar would change the company's gross profit by approximately **$3.3 million** for the three-month period ended March 31, 2025[87](index=87&type=chunk) - A **two percentage point** change in the average interest rate on variable-rate debt would have changed the company's interest expense by approximately **$1.1 million** in Q1 2025[90](index=90&type=chunk) - The company's foreign currency translation adjustment for Q1 2025 increased stockholders' equity by **$10.8 million**[86](index=86&type=chunk) [Controls and Procedures](index=22&type=section&id=Item%204.%20Controls%20and%20Procedures) Based on an evaluation conducted by management, including the CEO and CFO, the company's disclosure controls and procedures were deemed effective as of the end of the period covered by this report. Additionally, there were no material changes to the company's internal control over financial reporting during the last fiscal quarter - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective at the end of the reporting period[91](index=91&type=chunk) - There were no changes in internal control over financial reporting during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, internal controls[92](index=92&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=22&type=section&id=Item%201.%20Legal%20Proceedings) The report refers to the company's Annual Report on Form 10-K for the year ended December 31, 2024, for a description of legal proceedings - For information on legal proceedings, the company refers to its 2024 Form 10-K[93](index=93&type=chunk) [Risk Factors](index=22&type=section&id=Item%201A.%20Risk%20Factors) The company states that there have been no material changes from the risk factors previously disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024 - There have been no material changes from the risk factors previously disclosed in the 2024 Form 10-K[94](index=94&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=22&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds during the period - **None reported**[95](index=95&type=chunk) [Defaults Upon Senior Securities](index=22&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - **None reported**[96](index=96&type=chunk) [Mine Safety Disclosures](index=22&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - **Not Applicable**[97](index=97&type=chunk) [Other Information](index=22&type=section&id=Item%205.%20Other%20Information) The company reported no Form 8-K filings during the quarter. Additionally, no directors or executive officers adopted or terminated a Rule 10b5-1 trading arrangement during the period - No Reports on Form 8-K were filed during the period[97](index=97&type=chunk)[98](index=98&type=chunk) - No directors or executive officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5–1 trading arrangement during the period[99](index=99&type=chunk) [Exhibits](index=23&type=section&id=Item%206.%20Exhibits) The report lists several exhibits filed concurrently, including CEO and CFO certifications under Sections 302 and 906 of the Sarbanes-Oxley Act, as well as XBRL data files - Exhibits filed include CEO and CFO certifications (**31.1**, **31.2**, **32.1**, **32.2**) and XBRL data files (**101 series**)[100](index=100&type=chunk)

For: Alamo Group Inc. Contact: Edward Rizzuti EVP Corporate Development & Investor Relations 830-372-9600 First quarter 2025 net sales of $391.0 million declined 8.1% compared to $425.6 million in the first quarter of 2024. Gross profit of $102.8 million or 26.3% of net sales declined by $8.8 million as a result of lower net sales, however, gross margin improved by nearly 10 basis points, compared to the same period of the prior year. The Vegetation Management Division began to recover as first quarter 2025 ...