ALG · Alamo Group Inc.

Alamo Group reported solid top-line growth for the first quarter of 2026, with net sales rising 6.7% to $417.1 million. This growth was broad-based, with the Industrial Equipment Division increasing sales by 6.5% and the Vegetation Management Division growing 7.0%. However, profitability metrics faced pressure. GAAP net income declined to $29.2 million from $31.8 million in the prior year, resulting in a decrease in GAAP diluted EPS to $2.41 from $2.64. Adjusted net income also saw a slight decline to $31.1 million. Gross margin contracted by 120 basis points to 25.1%, attributed to mix and cost dynamics, though Adjusted EBITDA improved slightly in absolute terms to $59.3 million.

A significant strategic development was the successful closure of the Petersen acquisition during the quarter. This transaction materially impacted the balance sheet, with goodwill increasing to $266.6 million and intangible assets rising to $225.7 million. The acquisition was funded through the revolving credit facility, contributing to an increase in long-term debt to $275.5 million. Despite the debt increase, the company maintains a strong liquidity position with $195.2 million in cash and $308.4 million of availability under its revolving facility. Net debt stood at $95.2 million.

Operating cash flow was negative $23.5 million for the quarter, primarily driven by working capital needs associated with strong sequential sales growth, particularly in the Vegetation Management Division, which saw a 26.4% sales increase compared to the fourth quarter of 2025. Management expressed optimism regarding momentum and synergy realization from the Petersen acquisition, noting that the integration work has commenced.