Alamo Group (NYSE:ALG) reported second-quarter 2026 net sales of $415.7 million, up 7.6% from a year earlier, as acquisitions and modest organic growth supported results. Organic net sales rose 1.3%, while adjusted diluted earnings per share increased 7.2% to $2.82.
President and Chief Executive Officer Robert Hureau said the company was pleased with the quarter’s performance, citing strong sales, improved adjusted earnings and solid adjusted EBITDA. He said customer activity remained encouraging in terms of volume, pace and quality, while management continued to focus on operational improvements and strategic execution.
Margins and Earnings
Selling, general and administrative expense increased 5.1% to $60.1 million, including costs associated with acquisitions, integration activities, restructuring, and the additions of Petersen and Ring-O-Matic. However, SG&A declined as a percentage of sales to 13.3% from 13.6%. Excluding acquisition, integration and restructuring expenses, SG&A was approximately 12.5% of sales, compared with approximately 13.5% a year earlier.
Chief Financial Officer Agnes Kamps said the company is pursuing productivity initiatives, including early applications of artificial intelligence, with the aim of managing SG&A as a percentage of revenue over time.
Adjusted EBITDA rose to $63.9 million, or 14.2% of net sales, from $58.8 million, or 14.0% of sales, in the second quarter of 2025. The company recorded $4.3 million of acquisition, integration and restructuring expenses during the quarter, including expenses related to manufacturing and supply-chain transformation, leadership changes, and facility consolidation and streamlining.
Industrial Equipment Gains, Vegetation Stabilizes
The Industrial Equipment Division reported second-quarter net sales of $271.6 million, up 12.8% year over year. Organic sales increased 2.6%, with the remainder of the growth reflecting contributions from Petersen, acquired earlier in 2026, and Ring-O-Matic, acquired in 2025. Adjusted EBITDA was $45.3 million, or 16.7% of divisional sales, nearly level with the 16.8% margin reported a year earlier.
Hureau said excavator and vacuum truck sales increased despite relatively flat end markets, driven by brand strength, dealer and customer relationships, and market-share gains. The rental business was on pace for a record year in both sales and adjusted EBITDA, while Ring-O-Matic also delivered record results, he said.
Industrial Equipment orders declined 2% from a year earlier, producing a book-to-bill ratio of 0.85x. Orders were strongest in snow equipment and increased in sweepers and safety products, including on an organic basis for the latter category. Excavator and vacuum truck orders declined, which management attributed in part to order timing and a difficult comparison with a record order quarter in 2025.
The Vegetation Management Division posted net sales of $179.1 million, up 0.4% from the prior year. It was the division’s second consecutive quarter of year-over-year growth following eight quarters of declines. Adjusted EBITDA was $18.6 million, or 10.4% of sales, compared with $18.5 million and the same margin a year ago.
Growth in North American agriculture, tree care and recycling, and European businesses offset lower sales in municipal mowing and South America. Hureau said improved manufacturing execution supported U.S. agriculture, tree care and recycling sales, while Europe benefited from strength in the Netherlands and France.
Vegetation Management’s book-to-bill ratio was 0.9x, with net orders down 1% year over year. Municipal mowing orders increased at a double-digit rate as state and local customers moved into new budget years, management said. Tree care and recycling orders also grew, aided by dealer-network expansion, while North American agriculture orders were roughly flat and backlog remained healthy.
Outlook, Operational Initiatives and Portfolio Review
Management characterized industrial end markets as stable but selective, with growth moderating after several years of infrastructure-related expansion. Hureau said Alamo expects industrial end markets to be “flattish” in the second half of 2026, though the company remains positive about longer-term demand tied to infrastructure maintenance, public works, utilities and specialized vocational equipment.
For vegetation markets, management remains cautious. Hureau said the company sees end markets as ranging from flat to down mid-single digits for the balance of 2026, citing lower farm income, elevated borrowing costs, tariff-related uncertainty and continued weakness in some tractor-sales data. He said the company does not expect a rapid recovery across the entire vegetation portfolio.
Alamo said its aggregate backlog represented roughly four to five months of revenue, a level management described as consistent with historical patterns outside the elevated demand period of 2023 and 2024. Lead times were considered competitive, according to Hureau.
The company reiterated long-term targets of 15% adjusted operating income margins and 18% adjusted EBITDA margins. Hureau said management sees roughly 300 basis points of improvement that it believes is within its control, supported by procurement savings, aftermarket parts and service initiatives, manufacturing efficiency efforts, and portfolio actions. Procurement savings are expected to begin contributing toward the end of 2026, with a larger impact expected in 2027 as projects advance and inventory turns over.
As part of a portfolio review, Alamo plans to exit a small Netherlands business serving the waterway vegetation-management market through either a sale or closure before year-end. Management said it expects to make additional portfolio decisions in the second half, although the businesses and product lines involved are not large in the context of the company.
Cash Flow and Capital Allocation
For the first six months of 2026, Alamo generated $22.7 million of operating cash flow and reported investing cash outflows of $171.6 million, primarily related to the Petersen acquisition and capital expenditures. Over the trailing 12 months ended June 30, free cash flow totaled $135.3 million, equal to 134% of net income.
In May, the company renewed its credit facility, extending maturity to 2031. The facility provides $602.5 million of committed capacity, including a $400 million revolver and a $202.5 million term loan facility. At quarter-end, Alamo had $195 million in cash, total debt of $262.7 million and net leverage below one times.
During the quarter, the company paid $4.1 million in dividends, repurchased $9.4 million in shares under its $50 million authorization, and repaid $25.9 million on the revolver used to finance the Petersen acquisition. The board again approved a quarterly dividend of $0.34 per share.
Hureau said acquisitions remain a top priority, with a focus largely on tuck-in opportunities close to the company’s core markets, channels and geographies. Management said transactions in the range of roughly $15 million to $30 million of EBITDA are the principal target, although larger deals could be considered if they offer a strong strategic fit and meaningful synergies.
About Alamo Group (NYSE:ALG)
Alamo Group, Inc engages in the design, manufacture and marketing of equipment for vegetation management, roadside maintenance, agricultural harvesting and industrial applications. The company offers a broad portfolio of products, including boom mowers, flail mowers, rotary cutters, snow removal equipment, slurry seal machines, railcar movers and tow tractors. These offerings are distributed under a variety of brand names and through a network of independent dealerships and distributors, meeting the needs of municipalities, highway departments, agricultural producers and industrial operators.
The company operates through two primary segments: Agricultural and Industrial.
