SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 2, 1998
Alamo Group Inc.
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(Exact name of Registrant as specified in its charter)
Delaware 0-21220 74-1621248
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(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
1502 E. Walnut, Seguin, Texas 78155
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (830) 379-1480
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(Former address, if changed since last report.)
<PAGE>
ITEM 5. OTHER EVENTS
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Filed herewith is the Preliminary Unaudited Earnings Summary, as
contained in a press release dated November 2, 1998, for Alamo Group Inc.
("Alamo" or the "Company")) for the three and nine-month periods ended
September 30, 1998. The results of operations set forth therein for such
periods are unaudited.
<PAGE>
ITEM 7(C). EXHIBITS
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Exhibit
Number Description
- -------- ------------
99.1 Preliminary Unaudited Earnings Summary for the
three and nine month periods ended September 30,1998.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.
ALAMO GROUP INC.
(Registrant)
By: /s/ Jim A. Smith
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Name: Jim A. Smith
Title: Executive Vice President
and Chief Financial Officer
Dated: November 3, 1998
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
ALAMO GROUP INC.
EXHIBITS
TO CURRENT REPORT ON
FORM 8-K DATED November 2, 1998
Commission File Number 0-21220
<PAGE>
Exhibit Index
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Exhibit
Number Description
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99.1 (i) Preliminary Unaudited Earnings Summary for
the three and nine month periods ended September
30, 1998.
<PAGE>
For: Alamo Group Inc.
Contact: Donald J. Douglass
Chairman and Chief Executive Officer
210-738-1339 or 203-966-0621
Jim A. Smith
Executive Vice President,
Chief Financial Officer
830-372-9618
Morgan-Walke Associates:
June Filingeri/Jennifer Angell
Media Contact: Merridith Ingram/Eileen King
212-850-5600
ALAMO GROUP INC. ANNOUNCES 1998 THIRD QUARTER RESULTS
SEGUIN, Texas, November 2, 1998 -- Alamo Group Inc. (NYSE:ALG) today
reported results for the third quarter ended September 30, 1998.
Net sales for the third quarter were $51.0 million compared with $52.2
million for the same quarter last year. Net income for the third quarter was
$2.1 million, or $0.21 per diluted share, compared with $4.9 million, or $0.51
per diluted share, in the prior-year period.
For the first nine months of 1998, net sales were $160.1 million compared
with $162.3 million for the nine-month period last year. Net income for the
nine-month period of 1998 was $8.5 million, or $0.87 per diluted share,
compared with $13.4 million, or $1.38 per diluted share, for the same period
last year.
The Company noted that operational losses and the cost of litigation
settlement associated with its Rhino International operations reduced diluted
earnings per share by $0.18 in the third quarter and $0.30 for the first nine
months of 1998. Rhino International, an importer and marketer of Chinese
manufactured tractors, was acquired in 1995 and is not related to the
Company's core business. With the litigation now completed, the Company is
analyzing various strategic options for this operation that could result in a
special charge in the fourth quarter. The operation's net assets are
approximately $6 million.
European sales, while lower than last year, showed firming in the quarter
with profits about even with the year-ago period. Industrial sales for the
quarter increased by 7% from last year. Agricultural sales were down 8% from
last year as a result of a decline in the parts business that was due to the
effect of the severe drought in the Company's principal market areas. Overall
profitability declines for the third quarter and year-to-date were
substantially attributable to drought conditions, the beginning of a cyclical
decline in the agricultural industry, and the losses at Rhino International,
which contributed to decreased margins and increased operating expenses.
Donald J. Douglass, Chairman and Chief Executive Officer, commented:
"While our third quarter results were down, our earnings would have
substantially matched last year if it were not for the losses at Rhino
International and the negative impact of the drought on our parts business. As
a result of the cyclical decline of the agricultural market which began in the
third quarter, we are assessing work force levels, reducing costs and
reviewing marketing strategies to maintain our strong leadership position."
Mr. Douglas continued: "In regard to the transaction with Woods
Equipment, a proxy statement for a Special Meeting to be held on November 18,
1998 for consideration of the merger has been mailed to shareholders. We
continue to believe in the merits of the transaction, and are working hard
towards the goal of closing."
Alamo Group is a leader in the design, manufacture and distribution of
heavy duty, tractor-mounted mowing and vegetation maintenance equipment in
America and Europe. The Company has 1,088 employees in the U.S. and 352 in
Europe, and operates twelve manufacturing facilities. The corporate offices of
Alamo Group Inc. are located in Seguin, Texas, near San Antonio, and the
headquarters for its European operations is located in Salford Priors,
England, near Birmingham.
THIS RELEASE CONTAINS FORWARD LOOKING STATEMENTS THAT ARE MADE PURSUANT
TO THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995. FORWARD LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS AND
UNCERTAINTIES WHICH MAY CAUSE THE COMPANY'S ACTUAL RESULTS IN FUTURE PERIODS
TO DIFFER MATERIALLY FROM FORECASTED RESULTS. AMONG THOSE FACTORS WHICH COULD
CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY ARE THE FOLLOWING: MARKET DEMAND,
MARKET SOFTNESS, COMPETITION, WEATHER, SEASONALITY, CURRENCY-RELATED ISSUES,
AND OTHER RISK FACTORS LISTED FROM TIME TO TIME IN THE COMPANY'S SEC REPORTS.
THE COMPANY DOES NOT UNDERTAKE ANY OBLIGATION TO UPDATE THE INFORMATION
CONTAINED HEREIN, WHICH SPEAKS ONLY AS OF THIS DATE.
<PAGE>
ALAMO GROUP INC. AND SUBSIDIARIES (NYSE:ALG)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THIRD QUARTER ENDED NINE MONTHS ENDED
09/30/98 09/30/97 09/30/98 09/30/97
--------------- ------------ ------------- -------------
<S> <C> <C> <C> <C>
American
Agricultural $23,486 $25,494 $ 78,930 $ 79,722
Industrial 16,502 15,406 48,698 44,790
European 11,036 11,320 32,515 37,784
-------- -------- ------- ---------
Total sales 51,024 52,220 160,143 162,296
Cost of sales 37,393 36,596 118,964 117,367
-------- -------- ------- ---------
Gross Margin 13,631 15,624 41,179 44,929
Operating expenses 10,266 7,900 26,087 22,966
-------- -------- ------- ---------
Income from operations 3,365 7,724 15,092 21,963
Interest expense (636) (571) (2,090) (1,756)
Interest income 180 152 496 374
Other income (Expense) 80 331 (139) 276
-------- -------- -------- ----------
Income before income taxes 2,989 7,636 13,359 20,857
Provision for income taxes 928 2,726 4,900 7,479
-------- -------- -------- ----------
Net income $ 2,061 $ 4,910 $8,459 $13,378
======== ======== ========= ==========
Net income per common share:
Basic $ 0.21 $ 0.52 $ 0.87 $ 1.39
======== ======== ========= ==========
Diluted $ 0.21 $ 0.51 $ 0.87 $ 1.38
======== ======== ========= ==========
Average common shares:
Basic 9,736 9,590 9,707 9,591
======== ======== ========= ==========
Diluted 9,738 9,687 9,747 9,663
======== ======== ========= ==========
</TABLE>
SUMMARY BALANCE SHEET DATA
09/30/98 12/31/97 09/30/97
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Receivables $ 52,143 $ 42,165 $ 46,724
Inventories $ 72,046 $ 65,752 $ 61,802
Current Liabilities $ 23,946 $ 19,876 $ 22,259
Long Term Debt $ 30,654 $ 28,617 $ 26,993
Equity $ 112,844 $ 106,265 $ 105,327
