Alamo Group Inc. (NYSE: ALG) today reported results for the second quarter ended June 30, 2011.
Net sales for the quarter were $160.8 million compared to net sales of $138.1 million in the second quarter of 2010, an increase of 16%. Net income for the quarter was $8.9 million, or $0.74 per diluted share, versus $4.9 million, or $0.41 per diluted share, for the same period of 2010. This is an increase of 83% in net income and 80% in net income per diluted share. The 2011 sales, net income and earnings per diluted share were all records for Alamo’s second quarter results as the Company experienced growth in all three segments of its business.
For the first six months of 2011, net sales were $301.5 million, a 12% increase compared to 2010 six month net sales of $269.2 million. Net income in the first half of 2011 was $14.6 million, or $1.22 per diluted share, versus $8.9 million, or $0.75 per diluted share, for the first half of 2010. This is an increase of 64% in net income and 63% in net income per diluted share. The 2011 six month results were also a record for Alamo Group.
Included in the results is the effect of reclassification of freight revenue. Freight billed to customers had previously been recorded as reduction in cost of sales and has since been reclassified to sales. This change resulted in an increase in second quarter net sales of $4.4 million in 2011 and $3.7 million in 2010. For the six month period this change resulted in an increase in net sales of $7.8 million in 2011 and $6.5 million in 2010. There was no impact on reported earnings in any period.
The Company’s North American Industrial Division net sales for the second quarter were $59.3 million, an increase of 20% compared to the $49.6 million achieved in the prior year’s second quarter. For the six month period, net sales were $108.4 million in 2011 versus $96.7 million in 2010, an increase of 12%. Despite continued constraints on spending by governmental entities, which are the main end users for this Division’s products, Alamo Group experienced solid growth in this sector, particularly in its mower and excavator product lines. The Company believes this is evidence of some pent up demand for its products following the last several years of lower sales and an increasingly aging user fleet.