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Alamo Group Inc. (NYSE: ALG) today reported results for the first quarter ended March 31, 2011.
Net sales for the quarter were $140.7 million compared to net sales of $131.2 million for the first quarter of 2010, an increase of 7%. Net income for the quarter was $5.7 million, or $0.47 per diluted share, compared to net income of $4.0 million, or $0.34 per diluted share, for the first quarter of 2010, a 42% increase. The 2011 net sales, net income and earnings per share were all records for Alamo’s first quarter results. The Company benefited from improvements in the worldwide agricultural markets, despite continued weakness in governmental markets in both North America and Europe.
Included in the results is the effect of a reclassification of freight revenue. Freight billed to customers had been previously recorded as a reduction of cost of sales and has since been reclassified to sales. This change resulted in an increase in net sales of $3.4 million in first quarter of 2011 and $2.8 million in the first quarter of 2010, with no impact on reported earnings.
The Company’s North American Industrial Division net sales for the first quarter of 2011 were $49.0 million, an increase of 4% compared to net sales of $47.1 million in the prior year’s first quarter. This increase shows evidence of some pent up demand for the Company’s products despite the continued budget pressures at governmental entities who are the main end users for this Division. This indication of improved demand began in late 2010 and shows signs of continuing in 2011 even as governmental budgets are anticipated to remain tight throughout the current year.
Net sales for Alamo’s North American Agricultural Division were $49.7 million in the first quarter compared to $41.7 million in the first quarter of 2010, an increase of 19%. This growth reflects the general strengthening in the agricultural sector driven by increases in commodity prices and farm incomes, which should benefit the Company throughout 2011.