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Second quarter 2022 net sales were $396.2 million compared to $347.6 million in the second quarter of 2021, an increase of 14.0%. Gross margin improved in the quarter versus the second quarter of 2021 by $11.6 million or 13.1%. Second quarter net income improved 9.4% to $28.5 million, or $2.39 per diluted share, compared to net income of $26.0 million, or $2.19 per diluted share in the second quarter of 2021. The Company’s backlog at the end of the second quarter of 2022 was $894.0 million, an increase of $390.5 million, or 77.5%, from the backlog at the end of the second quarter of 2021, and up 11.6% from the end of calendar year 2021.

The positive results reported for the quarter were achieved through a combination of effective price management, improved manufacturing efficiencies and disciplined control of operating expenses. These results were achieved despite persistent headwinds including material cost inflation, elevated transportation costs, supply chain disruptions and skilled labor shortages. They were also achieved net of the negative impact of currency exchange rates on our consolidated financial results.

The Vegetation Management Division had a strong second quarter of 2022 as markets remained solid compared to the second quarter of 2021. The Division’s second quarter net sales were $255.0 million, up 18.8% compared to $214.7 million for the same period in 2021. For the first six months of 2022, net sales in this Division were $476.0 million, compared to $398.5 million for the first six months of 2021, up 19.4%. The increase in net sales was driven by strong retail demand for agricultural, forestry, tree care, and governmental mowing products in both North America and Europe.

The Division's income from operations for the second quarter 2022 was $32.8 million, up 44.7% compared to $22.7 million for the second quarter of 2021. For the first six months of 2022, income from operations was $51.1 million versus $39.4 million for the first six months of 2021, an increase of 29.7%. Strong results in the United Kingdom, France, Brazil and Australia also contributed to this division's outstanding performance during the quarter. The Division benefited from strong sales, better pricing, a favorable product mix and was able to effectively manage costs and expenses in spite of the impact of ongoing supply chain issues, higher material and inbound freight costs and related surcharges.

The Industrial Equipment Division’s second quarter 2022 net sales were $141.2 million, up 6.3% compared to $132.9 million during the same period in 2021. The increase was primarily attributable to pricing actions that drove higher sales of its excavator and vacuum truck products and, to a lesser extent, other product lines within the Division. Delays in deliveries of medium duty truck chassis and other industrial components, negatively impacted the Division during the second quarter of 2022.

For the first six months of 2022 net sales were $282.2 million compared to $260.2 million for the first six months of 2021, an 8.5% increase. Strong net sales of excavators, vacuum trucks, street sweepers and, to a lesser, extent snow removal equipment were the primary reasons for the increase.

The Division’s income from operations for the second quarter of 2022 was $8.1 million, down 25.7%, compared to $10.9 million, for the second quarter of 2021. For the first six months of 2022 income from operations was $18.9 million compared to $19.6 million for the first six months of 2021, a decrease of 3.6%. The Division was negatively impacted during the second quarter and first six months of 2022 by supply chain disruptions, constrained chassis deliveries and higher material and inbound freight costs.

Jeff Leonard, Alamo Group’s President and Chief Executive Officer, commented, “We are pleased to report that, in the second quarter, Alamo Group achieved the highest quarterly sales and earnings in the Company's history. While the second quarter is normally seasonally strong for the Company, both sales and earnings for the quarter comfortably exceeded previous records. It is especially satisfying that our teams were able to produce robust results in a business environment that certainly remains turbulent and challenging.

“Modest improvements in supply chain performance helped our teams increase customer shipments and improve production efficiencies during the quarter. The improvement in efficiency, combined with better pricing, supported gross margin performance despite persistent cost inflation pressures. Good cost discipline was evident across the Company during the quarter and helped us drive double-digit Income from Operations growth for the first time since the third quarter of 2020.

"Orders received during the quarter declined modestly compared to the second quarter of 2021, however overall, our markets continued to show significant strength. The decline in order bookings during the quarter was primarily the result of gradually softening demand in the North American agriculture market. This was partially offset by a nice increase in Industrial Equipment orders led by strong pre-season demand for turn-key, municipal snowplows. Consolidated backlog declined slightly compared to the end of the first quarter but remained significantly higher than it was at the end of the second quarter of 2021.

“Looking ahead to the second half of the year, we remain encouraged regarding the Company’s sales and earnings prospects. Truck chassis delivery reliability improved in the second quarter, and we are optimistic that gradual improvement in chassis supply will support improved sales and profitability in our Industrial Equipment Division during the third and fourth quarters of this year. We anticipate that the modest improvement in overall supply chain performance evident in the second quarter will continue for the next few months, although shortages of certain components are expected to extend into next year. With an improving supply chain situation, our inventory levels should also naturally decline. Most importantly, our backlog remains close to the historic high set at the end of the first quarter of 2022

Individuals wishing to participate in the conference call should dial 888-394-8218 (domestic) or 323-794-2588 (international). For interested individuals unable to join the call, a replay will be available until Thursday, August 11, 2022, by dialing 888-203-1112 (domestic) or 719-457-0820 (internationally), passcode 4806226.

The live broadcast of Alamo Group Inc.’s quarterly conference call will be available online at the Company's website, www.alamo-group.com (under “Investor Relations/Events & and Presentations”) on Thursday, August 4, 2022, beginning at 1:30 p.m. ET. The online replay will follow shortly after the call ends and will be archived on the Company’s website for 60 days.

Alamo Group is a leader in the design, manufacture, distribution and service of high quality equipment for vegetation management, infrastructure maintenance and other applications. Our products include truck and tractor mounted mowing and other vegetation maintenance equipment, street sweepers, snow removal equipment, excavators, vacuum trucks, other industrial equipment, agricultural implements, forestry equipment and related after-market parts and services. The Company, founded in 1969, has approximately 4,275 employees and operates 29 plants in North America, Europe, Australia and Brazil as of June 30, 2022. The corporate offices of Alamo Group Inc. are located in Seguin, Texas.

This release contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause the Company’s actual results in future periods to differ materially from forecasted results. Among those factors which could cause actual results to differ materially are the following: overall market demand, continuing impacts from the COVID-19 pandemic including more significant supply chain disruptions, reductions in customer demand, sales and profitability declines, operational disruptions, full or partial facility closures, and other similar impacts, geopolitical risks, including effects of the war in Ukraine, inflation, competition, weather, seasonality, currency-related issues, and other risk factors listed from time to time in the Company’s SEC reports. The Company does not undertake any obligation to update the information contained herein, which speaks only as of this date.

(1) This is a non-GAAP financial measure or other information relating to our GAAP financial measures that we have provided to investors in order to allow greater transparency and a deeper understanding of our financial condition and operating results. For a reconciliation of the non-GAAP financial measure or for a more detailed explanation of financial results, refer to “Non-GAAP Financial Measure Reconciliation” below and the Attachments thereto.

(Unaudited)


	June 30, 2022			June 30, 2021
ASSETS
Current assets:
Cash and cash equivalents		$	75,894		$	85,630
Accounts receivable, net		306,967			253,179
Inventories		352,915			277,070
Other current assets		12,527			19,171
Total current assets		748,303			635,050

Rental equipment, net		31,168			38,619

Property, plant and equipment		153,907			149,380

Goodwill		196,068			194,936
Intangible assets		178,781			185,581
Other non-current assets		24,149			17,790

Total assets		$	1,332,376		$	1,221,356

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Trade accounts payable		$	107,003		$	104,715
Income taxes payable		1,498			2,724
Accrued liabilities		66,100			62,107
Current maturities of long-term debt and finance lease obligations		15,015			15,069

Total current liabilities		189,616			184,615

Long-term debt, net of current maturities		356,149			299,910
Long-term tax liability		2,444			4,408

Other long-term liabilities		24,642			28,140
Deferred income taxes		23,083			23,042

Total stockholders’ equity		736,442			681,241

Total liabilities and stockholders’ equity		$	1,332,376		$	1,221,356


	Three Months Ended						Six Months Ended
	6/30/2022			6/30/2021			6/30/2022			6/30/2021
Net sales:
Vegetation Management	$	255,003		$	214,665		$	476,009		$	398,549
Industrial Equipment	141,211			132,885			282,210			260,190

Total net sales	396,214			347,550			758,219			658,739

Cost of sales	296,497			259,410			571,861			494,173
Gross margin	99,717			88,140			186,358			164,566
	25.2		%	25.4		%	24.6		%	25.0		%

Selling, general and administration expense	55,009			50,887			108,644			98,217
Amortization expense	3,792			3,663			7,679			7,321
Income from operations	40,916			33,590			70,035			59,028
	10.3		%	9.7		%	9.2		%	9.0		%

Interest expense	(3,189)			(2,854)			(5,836)			(5,467)
Interest income	57			293			129			581
Other income (expense)	(134)			3,253			(1,886)			2,623

Income before income taxes	37,650			34,282			62,442			56,765
Provision for income taxes	9,178			8,245			15,500			13,266

Net Income	$	28,472		$	26,037		$	46,942		$	43,499

Net income per common share:

Basic	$	2.39		$	2.20		$	3.95		$	3.68

Diluted	$	2.39		$	2.19		$	3.94		$	3.66

Average common shares:
Basic	11,880			11,842			11,870			11,831

Diluted	11,938			11,902			11,927			11,892

From time to time, Alamo Group Inc. may disclose certain “non-GAAP financial measures” in the course of its earnings releases, earnings conference calls, financial presentations and otherwise. For these purposes, “GAAP” refers to generally accepted accounting principles in the United States. The Securities and Exchange Commission (SEC) defines a “non-GAAP financial measure” as a numerical measure of historical or future financial performance, financial position, or cash flows that is subject to adjustments that effectively exclude or include amounts from the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP financial measures disclosed by Alamo Group are provided as additional information to investors in order to provide them with greater transparency about, or an alternative method for assessing, our financial condition and operating results. These measures are not in accordance with, or a substitute for, GAAP and may be different from, or inconsistent with, non-GAAP financial measures used by other companies. Whenever we refer to a non-GAAP financial measure, we will also generally present the most directly comparable financial measure calculated and presented in accordance with GAAP, along with a reconciliation of the differences between the non-GAAP financial measure we reference and such comparable GAAP financial measure.

Attachment 1 discloses Operating Income, Adjusted Net Income and Adjusted Diluted EPS, related to the impact of non-recurring items, of which are non-GAAP financial measures. Attachment 2 discloses a non-GAAP financial presentation related to the impact of currency translation on net sales by division. Attachment 3 shows the net change in our total debt net of cash and earnings before interest, taxes, depreciation and amortization ("EBITDA") which is a non-GAAP financial measure. The Company considers this information useful to investors to allow better comparability of period-to-period operating performance.


Impact of Non-recurring Items

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021

Operating Income - GAAP	$	40,916	$	33,590	$	70,035	$	59,028







Net Income - GAAP	$	28,472	$	26,037	$	46,942	$	43,499






(less: gain on sales of property)	—		(2,635)		—		(2,635)
(add: excise tax)	—		—		983		—
Adjusted Net Income - non-GAAP	$	28,472	$	23,402	$	47,925	$	40,864

Diluted EPS - GAAP	$	2.39	$	2.19	$	3.94	$	3.66





(less: gain on sales of property)	—		(0.22)		—		(0.22)
(add: excise tax)	—		—		0.08		—
Adjusted Diluted EPS - non-GAAP	$	2.39	$	1.97	$	4.02	$	3.44


Impact of Currency Translation on Net Sales by Division

	Three Months Ended June 30,						Change due to currency translation
	2022		2021		% change from 2021		$		%

Vegetation Management	$	255,003	$	214,665	18.8	%	$	(5,774)	(2.7)	%
Industrial Equipment	141,211		132,885		6.3	%	(2,519)		(1.9)	%

Total net sales	$	396,214	$	347,550	14.0	%	$	(8,293)	(2.4)	%



	Six Months Ended June 30,						Change due to currency translation
	2022		2021		% change from 2021		$		%

Vegetation Management	$	476,009	$	398,549	19.4	%	$	(7,383)	(1.9)	%
Industrial Equipment	282,210		260,190		8.5	%	(3,530)		(1.4)	%

Total net sales	$	758,219	$	658,739	15.1	%	$	(10,913)	(1.7)	%


Consolidated Net Change of Total Debt, Net of Cash
	June 30, 2022		June 30, 2021		Net Change

Current maturities	$	15,015	$	15,069
Long-term debt,net of current	356,149		299,910
Total debt	$	371,164	$	314,979

Total cash	75,894		85,630
Total Debt Net of Cash	$	295,270	$	229,349	$	65,921


EBITDA
	Six Months Ended				Trailing Twelve Months Ended
	June 30, 2022		June 30, 2021		June 30, 2022		December 31, 2021

Income from operations	$	70,035	$	59,028	$	127,945	$	116,938
Depreciation	14,413		14,964		29,291		29,842
Amortization	8,013		7,655		15,662		15,304
EBITDA	$	92,461	$	81,647	$	172,898	$	162,084


			For:			Alamo Group Inc.

			Contact:			Dan E. Malone
						Executive Vice President & CSO
						830-372-9581

						Financial Relations Board
						Joe Calabrese
						212-827-3772