ALAMO GROUP ANNOUNCES 3Q20 RESULTS
Nov. 9, 2020
Source: Alamo Group
Alamo Group, manufacturer of equipment for agriculture and infrastructure maintenance, reported consolidated net sales in the third quarter 2020 were up 7.3% to $291.8 million. Sales of its ag equipment rose to $95.5 million, up 2%. Industrial equipment net sales grew to $196.2 million, up 10.1% for the quarter. Net income for the third quarter was up 15% to $20 million.
For the first 9 months of 2020, net sales were $874.8 million compared to $818.9 million in the previous year, an increase of 6.8%. Net income for the first 9 months of 2020 was $48.6 million vs. $53.3 million for the same period in 2019, a decrease of 9%.
Results for the third quarter and first 9 months of 2020 include the effects of the acquisition of Dutch Power, which was completed in March 2019, and the acquisition of Morbark, which was completed in October 2019. Together these acquisitions contributed $52.3 million to net sales and $1.9 million to net income in the third quarter of 2020 compared to $10 million in net sales and $0.2 million loss in net income in the third quarter of 2019.
For the first 9 months of 2020, these acquisitions contributed $176.8 million to net sales and $7.9 million to net income compared to $27.7 million in net sales and $0.8 million in net income in the first 9 months of 2019. The acquisition of Dixie Chopper was completed in September 2019, however its contribution to consolidated results was not material during third quarter 2020.
Among the cost reduction actions taken in response to the COVID-19 pandemic were the furlough and temporary layoffs of less than 100 workers of the company's 4,270 employees at the time. In addition. the company made permanent reductions in work force totaling approximately 200 positions. As a result of all the above and including normal employee turnover and related new hires, total xompany employment as of the end of September 2020 was approximately 3,950.
While most of these measures are still in effect, one measure in particular the Company commented on in its April 7, 2020 operational update concerned a temporary halt to all U.S. salaried staff merit pay increases and rolling back any such increases that had already taken place.
As a result of its improved operations and in order for the company to stay competitive and to fairly treat its employees who have contributed so much to our success, effective Oct. 1, 2020, the company has reinstituted merit increases for all affected employees on a go forward basis. In addition, effective Nov. 1, 2020, the company reinstituted the cash portion of the compensation paid to its independent Board members, which has been suspended since May of this year.