Alamo Group reported lower third-quarter sales and sharply reduced GAAP profit, with results weighed down by $33.3 million in charges tied to exiting or winding down selected businesses and product lines. Adjusted earnings were also lower than a year earlier, though adjusted gross margin improved slightly.
The company also completed its acquisition of U.K. vocational-truck maker Econ Engineering Group for £120 million, or about $158.7 million, plus customary closing adjustments. The purchase followed the end of the quarter and is part of Alamo’s effort to strengthen its industrial portfolio while narrowing its focus elsewhere.
Key details
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Third-quarter sales fell 4%. Net sales were $403.1 million, compared with $420.0 million in the same quarter of 2025.
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Reported profit dropped sharply. Net income was $2.0 million, or $0.17 per diluted share, versus $25.4 million, or $2.10 per share, a year earlier.
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Adjusted earnings were lower, too. Adjusted net income was $24.9 million, or $2.06 per diluted share, compared with $28.2 million, or $2.34 per share, in the prior-year quarter. Adjusted EBITDA was $52.4 million, equal to 13.0% of sales, versus $55.0 million, or 13.1% of sales.
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Portfolio-exit charges totaled $33.3 million before tax. Alamo said it substantially completed planned portfolio-optimization work during the quarter, particularly in its Vegetation Management Division. The actions included sales and wind-downs of businesses and product lines, including Dixie Chopper and Boxer. The charges included inventory valuation adjustments, asset impairments and other wind-down costs.
- Of the charges, $7.3 million reduced sales, $15.5 million was recorded in cost of sales, $9.0 million in selling, general and administrative expenses, and $1.5 million in other income and expense.
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Related discrete tax effects temporarily raised the reported effective tax rate; Alamo said its underlying tax rate remained generally consistent with historical levels.
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Adjusted gross margin improved modestly. Adjusted gross profit was $99.8 million, or 24.7% of sales, compared with $102.2 million, or 24.3%, a year earlier. Reported gross profit was $76.1 million, down from $101.7 million.
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Econ adds a U.K. road-maintenance truck business. Alamo acquired Econ on October 27 for £120.0 million, approximately $158.7 million, plus customary closing adjustments. Econ manufactures vocational trucks used in roadway maintenance. Because the acquisition closed after September 30, it was not part of the reported third-quarter results.
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Quarter-end cash and debt were nearly even. At September 30, Alamo had $230.7 million of cash and $232.3 million of total debt. Over the 12 months through that date, operating cash flow was $158.3 million, equal to 204% of net income for that period.
Plain-English implications
The quarter’s reported earnings were heavily affected by the portfolio-exit charges, but adjusted net income and adjusted EBITDA were also below year-earlier levels. Alamo is pairing the exit of selected businesses and product lines with an acquisition intended to deepen its industrial and infrastructure-maintenance offerings. The cash and debt figures are measured at quarter-end and do not show the financing or cash impact of the Econ purchase.