Alamo Group Inc. Q1 FY2026 earnings call

Robert Hureau thanked everyone for joining. Agnes Kamps reviewed financial results. Robert provided details on division performances. Industrial Equipment division had net sales growth driven by acquisitions, adjusted EBITDA margins good. Vegetation Management division saw net sales increase, adjusted EBITDA margins improved sequentially. Long-term strategy has 4 pillars: people and culture, commercial excellence, operational excellence, capital deployment. Product innovation activities highlighted including new non-CDL vacuum truck, next-generation hybrid sweepers, Wide Wing System for snow business

Net sales for Q1 2026 were $417.1 million, an increase of 6.7% compared to Q1 2025. Gross profit was $104.8 million versus $102.8 million in Q1 2025. Gross margin was 25.1%, down 118 basis points year-over-year. SG&A expense was $57.8 million, up 6.3% from Q1 2025. Net interest expense was $3.1 million compared to $2 million in Q1 2025. Adjusted EBITDA for Q1 2026 was $59.3 million or 14.2% of net sales compared to $58.3 million or 14.9% of net sales in Q1 2025. Industrial Equipment division: Net sales were $241.7 million, an increase of 6.5% compared to Q1 2025. Adjusted EBITDA was $39.7 million or 16.4% of net sales. Vegetation Management division: Net sales were $175.4 million, an increase of 7% compared to Q1 2025. Adjusted EBITDA was $19.6 million or 11.2% of net sales

Industrial business likely flattish to up very low single digits year-over-year excluding acquisitions. Vegetation business rate of decline expected to slow in 2026 but end markets not expected to support current year-over-year growth for balance of year. Long-term financial targets of 10%+ sales growth, 15% adjusted operating margins, 18%+ adjusted EBITDA margins, 100% free cash flow to net income intact, with initiatives like procurement savings, manufacturing improvements, and parts/sales mix improvement to drive margins

Adverse economic conditions leading to reduced market demand, supply chain disruptions, labor constraints, competition, weather, seasonality, currency-related issues, geopolitical events. Tariff impacts on margins, with year-over-year tariff differences affecting results

Q: Chris Moore asked about Industrial organic growth decline and 5% organic growth for Industrial in '26.

A: Robert Hureau said Industrial likely flattish to up very low single digits year-over-year excluding acquisitions, transitioning from robust prior years.

Q: Michael Shlisky asked about snow business delayed orders and sales strategy.

A: Robert Hureau said snow business sales decline due to being selective on orders to improve profitability, order pattern strong, lead times good.

Q: Joe Grabowski asked about Petersen integration and tariff impacts.

A: Robert Hureau said Petersen integration smooth, initial impressions positive, tariff impact still around 0.8%-0.9% of sales.

Q: Gregory Burns asked about ag revenue trends and margin targets.

A: Robert Hureau said ag business had positive trends but cautious tone, long-term margin targets with initiatives like procurement, manufacturing, and parts/sales mix to drive margins