- Net income for the fourth quarter of $6.0 million
Record net sales for the fourth quarter of $165.6 million
- North American Industrial Division up 17%
- North American Agricultural Division up 5%
- European Division up 7%
- Record net income for full year of $36.1 million
- Record net sales for full year of $676.8 million
Net sales for the fourth quarter of 2013 were $165.6 million compared to net sales of $149.4 million for the fourth quarter of 2012, an increase of 11%. Net income for the quarter was $6.0 million, or $0.49 per diluted share, vs. net income of $4.2 million, or $0.35 per diluted share in 2012, an increase of 43%. The 2012 results included the effect of a non-cash impairment charge of $0.7 million on a pretax basis, or $0.05 per diluted share on an after tax basis, related to a write-down of goodwill in the company’s European Division.
Full Year Results
For full year 2013, net sales were $676.8 million versus $628.4 million in 2012, an increase of 8%. Net income for the year was $36.1 million, or $2.96 per diluted share, compared to $28.9 million, or $2.40 per diluted share, in 2012, an increase of 25%. Net sales, net income and EPS in 2013 were records for Alamo Group.
Sales by Division
The company’s North American Industrial Division net sales in the fourth quarter of 2013 were $77.8 million compared to $66.5 million in the fourth quarter of 2012, an increase of 17%. For the full year the Division’s net sales were $296.6 million in 2013 compared to $263.4 million in 2012, an increase of 13%. Stronger demand for the company’s products was widespread in this Division for both the fourth quarter and full year.
In Alamo’s North American Agricultural Division, net sales were $47.3 million in the fourth quarter of 2013 compared to $45 million in the prior year, an increase of 5%. The Division's full year net sales were $215.3 million in 2013 versus $200.5 million in 2012, an increase of 7%. The improved results were achieved despite softening demand in the general agricultural market.
Net sales in Alamo Group's European Division in the fourth quarter of 2013 were $40.6 million, an increase of 7% over net sales of $37.9 million achieved in 2012. The Division's full year net sales were $164.9 million in 2013, which was slightly above the $164.6 million achieved in 2012. While the year started off slowly for this Division, results began to improve in the second half of the year reflecting modest improvements in overall European economic conditions.
Ron Robinson, Alamo Group’s president and chief executive officer, commented, "We had a good fourth quarter with record sales, though earnings were a little below our expectations largely due to legal expenses which were unusually high and included work on the recently announced pending acquisition of the units of Specialized Industries as well as work on the acquisition of Bandit Industries which was called off during the fourth quarter.
"In addition, there were significant expenses related to a trial in the fourth quarter in which it was alleged Alamo Group and several other defendants were infringing a mower related patent. The jury ruled in our favor in the case and the company had costs totaling about $1.8 million in the fourth quarter and about $2.1 million for the full year. Despite this, Alamo had record sales and earnings for the full year of 2013. This achievement was led by strong growth in our North American Industrial Division as well as solid gains in our North American Agricultural Division. It was also encouraging to note the modest improvement in our European operations in the second half of the year giving indications of a bottoming out of the difficult economic conditions affecting the overall European market.
"We feel the strong finish to 2013 combined with ending backlog levels that exceeded the previous year's bodes well for Alamo's 2014 outlook, although the first quarter of 2014 is off to a slower start than we anticipated. We believe this is somewhat related to the challenging winter weather conditions that have impacted large areas in the U.S. This has affected our customers and our internal operations, as several of our plants lost work days due to weather closures. We are also concerned about softening conditions in the agricultural market as well as the impact of winter weather on 2014 governmental maintenance budgets.
"In general, we remain optimistic about Alamo’s prospects for 2014 in total. We are particularly excited about the previously announced pending acquisition of the units of Specialized Industries. These businesses are complementary to Alamo’s existing operations and are a major step forward in our company’s development which should benefit us in 2014 and the years to come."