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What changed in ALAMO GROUP INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of ALAMO GROUP INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+174 added−173 removedSource: 10-K (2025-02-27) vs 10-K (2024-02-22)

Top changes in ALAMO GROUP INC's 2024 10-K

174 paragraphs added · 173 removed · 142 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

70 edited+5 added−7 removed102 unchanged
Biggest changeSecurities and Exchange Commission ("SEC"), which require specific procedures for the determination and disclosure of the use of certain minerals, known as "conflict minerals," which are mined from the Democratic Republic of the Congo and adjoining countries; and (v) supply chain transparency laws and regulations addressing modern slavery and human trafficking.
Biggest changeSecurities and Exchange Commission ("SEC"), which require specific procedures for the determination and disclosure of the use of certain minerals, known as "conflict minerals," which are mined from the Democratic Republic of the Congo and adjoining countries; and (v) supply chain transparency laws and regulations addressing modern slavery and human trafficking. 12 The Company is also subject to various other federal, state, and local laws affecting its business, as well as a variety of regulations relating to such matters as working conditions, equal employment opportunities, and product safety, including National Highway Traffic Safety Administration reporting.
( "Santa Izabel" ). Santa Izabel designs, manufactures and markets a variety of agricultural implements, sugar cane trailers and other vegetation management products sold throughout Brazil. This acquisition, along with Herder , augmented our product portfolio and improved our manufacturing capabilities in one of the world's largest agricultural markets.
Santa Izabel designs, manufactures and markets a variety of agricultural implements, sugar cane trailers and other vegetation management products sold throughout Brazil. This acquisition, along with Herder , augmented our product portfolio and improved our manufacturing capabilities in one of the world's largest agricultural markets.
Certain particular risks and uncertainties that continually face us include the following: • budget constraints and revenue shortfalls which could affect the purchases of our type of equipment by governmental customers and related contractors in both domestic and international markets; • market acceptance of new and existing products; • our ability to hire suitable employees for our business and maintain good relations with employees; • our ability to develop and manufacture new and existing products profitably; • the inability of our suppliers, creditors, public utility providers and financial and other service organizations to deliver or provide their products or services to us; • legal actions and litigation; • impairment in the carrying value of goodwill; • our ability to successfully integrate acquisitions and operate acquired businesses or assets; • current and changing tax laws in the U.S. and internationally; • our ability to hire and retain quality skilled employees; and • changes in the prices of agricultural commodities, which could affect our customers’ income levels.
Certain particular risks and uncertainties that continually face us include the following: • budget constraints and revenue shortfalls which could affect the purchases of our type of equipment by governmental customers and related contractors in both domestic and international markets; 14 • market acceptance of new and existing products; • our ability to hire suitable employees for our business and maintain good relations with employees; • our ability to develop and manufacture new and existing products profitably; • the inability of our suppliers, creditors, public utility providers and financial and other service organizations to deliver or provide their products or services to us; • legal actions and litigation; • impairment in the carrying value of goodwill; • our ability to successfully integrate acquisitions and operate acquired businesses or assets; • current and changing tax laws in the U.S. and internationally; • our ability to hire and retain quality skilled employees; and • changes in the prices of agricultural commodities, which could affect our customers’ income levels.
This acquisition provided new and complementary products to our existing range of infrastructure maintenance equipment and parts. In 2017, the Company acquired R.P.M. Tech Inc. (" RPM "), a manufacturer of heavy duty snow removal equipment and associated parts. RPM primarily sells to governmental agencies, related contractors, airports and other industrial users.
This acquisition provided new and complementary products to our existing range of infrastructure maintenance equipment and parts. In 2017, the Company acquired R.P.M. Tech Inc. (" RPM "), a manufacturer of heavy duty snow removal equipment and associated parts. RPM primarily sells to governmental agencies, related contractors, airports and 6 other industrial users.
We expect pricing to remain elevated in 2024 but anticipate a slowing of the rate of inflation. While the Company manufactures many of the parts for its products, a significant percentage of parts, including most drivelines, gearboxes, industrial engines, and hydraulic components, are purchased from outside suppliers which manufacture to the Company’s specifications.
We expect pricing to remain elevated in 2024 but anticipate a slowing of the rate of inflation. 11 While the Company manufactures many of the parts for its products, a significant percentage of parts, including most drivelines, gearboxes, industrial engines, and hydraulic components, are purchased from outside suppliers which manufacture to the Company’s specifications.
Rizzuti served as Vice President, General Counsel and Secretary for Erickson Incorporated, a publicly traded aircraft manufacturing and operating company based in Portland, Oregon. 15 Dan E. Malone was appointed Executive Vice President, Chief Sustainability Officer in July of 2021. Mr. Malone joined the Company in 2007 and served as Executive Vice President, Chief Financial Officer from 2007 to 2021.
Rizzuti served as Vice President, General Counsel and Secretary for Erickson Incorporated, a publicly traded aircraft manufacturing and operating company based in Portland, Oregon. Dan E. Malone was appointed Executive Vice President, Chief Sustainability Officer in July of 2021. Mr. Malone joined the Company in 2007 and served as Executive Vice President, Chief Financial Officer from 2007 to 2021.
SMA manufactures and sells principally a line of heavy-duty, tractor-mounted grass and hedge mowing-equipment and associated replacement parts primarily to departments of the French government. This acquisition, along with the acquisitions of Forges Gorce (" Forges Gorce "), a flail blade manufacturer in France, in 1996 and Rousseau Holdings S.A.
SMA manufactures and sells principally a line of heavy-duty, tractor-mounted grass and hedge mowing-equipment and associated replacement parts primarily to departments of the French government. This acquisition, along with the acquisitions of Forges Gorce (" Forges Gorce "), a flail blade manufacturer in France, in 1996 and Rousseau 4 Holdings S.A.
Malone was Vice President and Chief Financial Officer of The York Group, Inc. from 2000 to 2002, and held various financial positions from 1987 to 2000 with Cooper Industries, Inc. and its various subsidiaries. Richard H. Raborn was appointed Executive Vice President the Company's Vegetation Management Division in July of 2021. Mr.
Malone was Vice President and Chief Financial Officer of The York Group, Inc. from 2000 to 2002, and held various financial positions from 1987 to 2000 with Cooper Industries, Inc. and its various subsidiaries. 16 Richard H. Raborn was appointed Executive Vice President of the Company's Vegetation Management Division in July of 2021. Mr.
This acquisition complemented our existing range of snow removal products with RPM's 5 range of heavy duty snow removal equipment, including their line of mechanical snow blowers. In 2020, RPM's operations were consolidated into the Company's nearby Tenco facility and the former RPM facility in Drummondville was sold.
This acquisition complemented our existing range of snow removal products with RPM's range of heavy duty snow removal equipment, including their line of mechanical snow blowers. In 2020, RPM's operations were consolidated into the Company's nearby Tenco facility and the former RPM facility in Drummondville was sold.
We 12 actively volunteer and engage in local community projects and contribute donations to charitable organizations to positively impact the communities and markets in which our employees live and work. Compensation and Benefits : We regularly assess our pay and benefit practices to ensure our people are compensated fairly and competitively.
We actively volunteer and engage in local community projects and contribute donations to charitable organizations to positively impact the communities and markets in which our employees live and work. Compensation and Benefits : We regularly assess our pay and benefit practices to ensure our people are compensated fairly and competitively.
VacAll produces catch basin cleaners and roadway debris vacuum systems. These units are powerful and versatile with uses including, but not limited to, removal of wet and dry debris, spill elimination, and cleaning of 8 sludge beds. VacAll also offers a line of sewer cleaners.
VacAll produces catch basin cleaners and roadway debris vacuum systems. These units are powerful and versatile with uses including, but not limited to, removal of wet and dry debris, spill elimination, and cleaning of sludge beds. VacAll also offers a line of sewer cleaners.
(“ Rousseau ”), a leading French manufacturer of hedge and verge mowers, in 2004, when combined 3 with McConnel and Bomford, has made the Company one of the largest manufacturers in the European market for the kind of vegetation management equipment sold by the Company.
(“ Rousseau ”), a leading French manufacturer of hedge and verge mowers, in 2004, when combined with McConnel and Bomford, has made the Company one of the largest manufacturers in the European market for the kind of vegetation management equipment sold by the Company.
Tech™, Morbark®, Rayco®,Denis Cimaf®, Boxer®, Bush Hog®, Rhino®, RhinoAg®, M&W®, Dixie Chopper®, Herschel®, Schulte®, Fieldquip®, Santa Izabel™, McConnel®, Bomford®, Spearhead™, Twose™, SMA®, Forges Gorce™, Rousseau® , Royal Truck & Equipment™, Timberwolf™ , and Wolftrack™ trademarks (some with related designs) as well as other trademarks and trade names. 6 Products and Distribution Channels At the beginning of the fourth quarter of 2021, the Company began reporting operating results on the basis of two new segments, namely, the Vegetation Management Division and the Industrial Equipment Division.
Tech™, Morbark®, Rayco®, Denis Cimaf®, Boxer®, Bush Hog®, Rhino®, RhinoAg®, M&W®, Dixie Chopper®, Herschel®, Schulte®, Fieldquip®, Santa Izabel™, McConnel®, Bomford®, Spearhead™, Twose™, SMA®, Forges Gorce™, Rousseau®, Royal Truck & Equipment™, Timberwolf™, and Wolftrack™ trademarks (some with related designs) as well as other trademarks and trade names. 7 Products and Distribution Channels At the beginning of the fourth quarter of 2021, the Company began reporting operating results on the basis of two new segments, namely, the Vegetation Management Division and the Industrial Equipment Division.
In addition, we are subject to risks and uncertainties facing the industry in general, including the following: • changes in business and political conditions and the economy in general in both domestic and international markets; • the price and availability of energy and critical raw materials, particularly steel and steel products; • increased competition; • increases in input costs on items we use in the manufacturing of our products; • adverse weather conditions such as droughts, floods, snowstorms, etc., which can affect the buying patterns of our customers and end-users; • increased costs of complying with governmental regulations which affect corporations including related fines and penalties (such as the European General Data Protection Regulation (GDPR) and the California Consumer Privacy Act); • an increase in unfunded pension plan liability due to financial market deterioration; • the potential effects on the buying habits of our customers due to animal disease outbreaks and other epidemics; • adverse market conditions and credit constraints which could affect our customers and end-users, such as cutbacks on dealer stocking levels; • changes in market demand; • climate related incidents and other sustainability risks, global pandemics, acts of war or aggression and terrorist activities or military actions; • cyber security risks including the potential loss of proprietary data or data security breaches and related fines, penalties and other liabilities; • financial market changes including changes in interest rates and fluctuations in foreign exchange rates; • abnormal seasonal factors in our industry; • changes in domestic and foreign governmental policies and laws, including increased levels of government regulation and changes in agricultural policies, including the amount of farm subsidies and farm payments as well as changes in trade policy that may have an adverse impact on our business; • government actions, including but not limited to budget levels, and changes in tax laws, regulations and legislation, relating to the environment, commerce, infrastructure spending, health and safety; and 14 • risk of governmental defaults and resulting impact on the global economy and particularly financial institutions.
In addition, we are subject to risks and uncertainties facing the industry in general, including the following: • changes in business and political conditions and the economy in general in both domestic and international markets; • the price and availability of energy and critical raw materials, particularly steel and steel products; • increased competition; • increases in input costs on items we use in the manufacturing of our products; • adverse weather conditions such as droughts, floods, snowstorms, etc., which can affect the buying patterns of our customers and end-users; • increased costs of complying with governmental regulations which affect corporations including related fines and penalties (such as the European General Data Protection Regulation (GDPR) and the California Consumer Privacy Act); • an increase in unfunded pension plan liability due to financial market deterioration; • the potential effects on the buying habits of our customers due to animal disease outbreaks and other epidemics; • adverse market conditions and credit constraints which could affect our customers and end-users, such as cutbacks on dealer stocking levels; • changes in market demand; • climate related incidents and other sustainability risks, global pandemics, acts of war or aggression and terrorist activities or military actions; • cyber security risks including the potential loss of proprietary data or data security breaches and related fines, penalties and other liabilities; • financial market changes including changes in interest rates and fluctuations in foreign exchange rates; • abnormal seasonal factors in our industry; • changes in domestic and foreign governmental policies and laws, including increased levels of government regulation and changes in agricultural policies, including the amount of farm subsidies and farm payments as well as changes in trade policy that may have an adverse impact on our business; • changes to global trade policies, tariffs, trade sanctions, and investment restrictions • government actions, including but not limited to budget levels, and changes in laws, regulations and legislation, relating to tax, the environment, commerce, infrastructure spending, health and safety; and • risk of governmental defaults and resulting impact on the global economy and particularly financial institutions.
Any forward-looking statements made by or on behalf of the Company speak only to the date they are made and we do not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the forward-looking statements were made.
Any forward-looking statements made by or on behalf of the Company speak only to the date they are made and we do not undertake to 15 update forward-looking statements to reflect the impact of circumstances or events that arise after the forward-looking statements were made.
The Company’s orders are subject to cancellation at 10 any time before shipment; therefore, a comparison of unfilled orders from period to period is not necessarily meaningful and may not be indicative of future actual shipments.
The Company’s orders are subject to cancellation at any time before shipment; therefore, a comparison of unfilled orders from period to period is not necessarily meaningful and may not be indicative of future actual shipments.
SMA equipment includes hydraulic boom-mounted hedge and hedgerow cutters and related replacement parts. SMA’s principal customers are French local authorities. SMA’s product offerings include certain quick-attach boom 7 mowers manufactured by the Company in the U.K. to expand its presence in agricultural dealerships. The SMA product line is manufactured at our facility near Lyon, France.
SMA equipment includes hydraulic boom-mounted hedge and hedgerow cutters and related replacement parts. SMA’s principal customers are French local authorities. SMA’s product offerings include certain quick-attach boom 8 mowers manufactured by the Company in the U.K. to expand its presence in agricultural dealerships. The SMA product line is manufactured at our facility near Lyon, France.
Generally, forward-looking statements are 13 not based on historical facts but instead represent the Company's and its management's beliefs regarding future events. Statements that are not historical are forward-looking.
Generally, forward-looking statements are not based on historical facts but instead represent the Company's and its management's beliefs regarding future events. Statements that are not historical are forward-looking.
In 2022, the Henke manufacturing operations were consolidated into our Wausau snow equipment facility in New Berlin, Wisconsin. In 2023, the Henke Leavenworth, Kansas facility was sold. 4 In 2008, the Company acquired Rivard Developpement S.A.S. (“Rivard”) , a leading French manufacturer of vacuum trucks, high pressure cleaning systems and trenchers.
In 2022, the Henke manufacturing operations were consolidated into our Wausau snow equipment facility in New Berlin, Wisconsin. In 2023, the Henke Leavenworth, Kansas facility was sold. 5 In 2008, the Company acquired Rivard Developpement S.A.S. (“Rivard”) , a leading French manufacturer of vacuum trucks, high pressure cleaning systems and trenchers.
During 2023, the raw materials needed by the Company were available from a variety of sources in adequate quantities and at prevailing market prices. While supply chain issues have improved compared to prior years, we remain affected by inflationary impacts for many of the raw materials we purchase.
During 2024, the raw materials needed by the Company were available from a variety of sources in adequate quantities and at prevailing market prices. While supply chain issues have improved compared to prior years, we remain affected by inflationary impacts for many of the raw materials we purchase.
These include, among other laws and regulations: (i) the Registration, Evaluation, Authorization and Restriction of 11 Chemicals ("REACH") directive, U.S.
These include, among other laws and regulations: (i) the Registration, Evaluation, Authorization and Restriction of Chemicals ("REACH") directive, U.S.
Our CEO and VPHR regularly update our Board of Directors regarding the status of our human resources initiatives, which include: Focus on Health and Safety : Maintaining a safe and healthy workplace in each of our locations is a priority, and we focus on continuous improvement by embedding proactive and preventative safety into every level of the organization as one of our core values.
Our CEO and SVP-CHR regularly update our Board of Directors regarding the status of our human resources strategic initiatives, which include: Focus on Health and Safety : Maintaining a safe and healthy workplace in each of our locations is a priority, and we focus on continuous improvement by embedding proactive and preventative safety into every level of the organization as one of our core values.
The Company has a long-standing strategy of supplementing its internal growth through acquisitions of businesses or product lines that currently complement, command, or have the potential to achieve a meaningful share of their niche markets. The Company has approximately 4,350 employees and manages a total of 29 plants with business operations in North America, South America, Europe, and Australia.
The Company has a long-standing strategy of supplementing its internal growth through acquisitions of businesses or product lines that currently complement, command, or have the potential to achieve a meaningful share of their niche markets. The Company has approximately 3,750 employees and manages a total of 27 plants with business operations in North America, South America, Europe, and Australia.
Leonard joined the Company in 2011, and served as Executive Vice President of the Company's former Industrial Division from 2011 to 2021. Mr. Leonard previously was Senior Vice President of Metso Minerals Industries Inc., a supplier of technology and services for mining, construction, power generation, automation, recycling, and pulp and paper industries. Richard J.
Leonard joined the Company in 2011, and served as Executive Vice President of the Company's former Industrial Division from 2011 to 2021. Mr. Leonard previously was Senior Vice President of Metso Minerals Industries Inc., a supplier of technology and services for mining, construction, power generation, automation, recycling, and pulp and paper industries. On December 20, 2024, Mr.
Sales and Marketing Strategy The Company believes that within the U.S. it is a leading supplier to governmental markets, a leading supplier in the U.S. agricultural market, and one of the largest suppliers in the European market for its key niche product offerings.
Royal Truck is based in Shoemakersville, Pennsylvania. Sales and Marketing Strategy The Company believes that within the U.S. it is a leading supplier to governmental markets, a leading supplier in the U.S. agricultural market, and one of the largest suppliers in the European market for its key niche product offerings.
While the Company considers its patents, trademarks and trade names to be advantageous to its business, it is not dependent on any single patent, trademark, trade name or group of patents, trademarks, or trade names. The net book value of patents, trademarks and trade names was $77.1 million and $78.9 million as of December 31, 2023 and 2022, respectively.
While the Company considers its patents, trademarks and trade names to be advantageous to its business, it is not dependent on any single patent, trademark, trade name or group of patents, trademarks, or trade names. The net book value of patents, trademarks and trade names was $70.8 million and $77.1 million as of December 31, 2024 and 2023, respectively.
Our Vice-President of Corporate Human Resources ("VPHR") is responsible for developing and executing our human resources strategy together with our President and Chief Executive Officer ("CEO") and the other members of the Company's management team.
Our Senior Vice-President of Corporate Human Resources ("SVP-CHR") is responsible for developing and executing our human resources strategy together with our President and Chief Executive Officer ("CEO") and the other members of the Company's management team.
In 1995, the Company expanded its business in the agricultural market with the acquisition of Herschel Corporation (“Herschel”) , a manufacturer and distributor of aftermarket farm equipment replacement and wear parts. In 2000, the Company acquired Schwarze Industries, Inc . (“Schwarze”) .
In 1995, the Company expanded its business in the agricultural market with the acquisition of Herschel Corporation (“Herschel”) , a manufacturer and distributor of aftermarket farm equipment replacement and wear parts. In 2024, the Company sold substantially all of the assets of its Herschel business. In 2000, the Company acquired Schwarze Industries, Inc . (“Schwarze”) .
Our compensation programs vary by country and region, and may include annual bonus and incentive plans, profit sharing, stock-based compensation awards, company-sponsored retirement savings plans with employee matching opportunities (or similar local retirement benefits), healthcare and insurance benefits, dependent care and flexible savings accounts, paid time off such as vacation and holidays, sick pay, disability pay and family leave, flexible work schedules, wellness and employee assistance programs for mental health, self-improvement, legal and financial services, service anniversary awards, tuition assistance and dependent college scholarships, and discounts on products and services.
Our compensation programs vary by country and region, and may include annual bonus and incentive plans, profit sharing, stock-based compensation awards, company-sponsored retirement savings plans with employee matching opportunities (or similar local retirement benefits), healthcare and insurance benefits, dependent care and flexible savings accounts, paid time off such as vacation and holidays, sick pay, disability pay and family leave, flexible work schedules, wellness and employee assistance programs for mental health, self-improvement, legal and financial services, service anniversary awards, tuition assistance and dependent college scholarships, and discounts on products and services. 13 Labor Agreements: As of December 31, 2024, we employed approximately 3,750 employees.
Information About our Executive Officers Certain information is set forth below concerning the executive officers of the Company (the "Executives"), each of whom has been appointed to serve until the 2024 annual meeting of directors or until their successor is duly appointed and qualified. Name Age Position Jeffery A. Leonard 64 President and Chief Executive Officer Richard J.
Information About our Executive Officers Certain information is set forth below concerning the executive officers of the Company (the "Executives"), each of whom has been appointed to serve until the 2025 annual meeting of directors or until their successor is duly appointed and qualified. Name Age Position Jeffery A. Leonard 65 President and Chief Executive Officer Agnieszka K.
(" Denis Cimaf "). Morbark is a leading manufacturer of equipment and aftermarket parts for forestry, tree care, biomass, land management and recycling markets. This acquisition expanded the Company's product line and complemented its range of vegetation maintenance equipment in an adjacent market. Morbark is based in Winn, Michigan with subsidiary locations in Wooster, Ohio and Roxton Falls, Quebec.
(" Denis Cimaf "). Morbark is a leading manufacturer of equipment and aftermarket parts for forestry, tree care, biomass, land management and recycling markets. This acquisition expanded the Company's product line and complemented its range of vegetation maintenance equipment in an adjacent market. Morbark is based in Winn, Michigan.
In 2013, the Company acquired substantially all of the assets and assumed certain specified liabilities of Superior Equipment Australia Pty Ltd ( "Superior" ). Superior is a small Australian-based manufacturer of agricultural mowing equipment and other attachments, parts, and services. The equipment is sold through dealers primarily to agricultural end-users with some sold to governmental entities in Australia.
The equipment is sold primarily through dealers to governmental end-users as well as snow removal contractors. In 2013, the Company acquired substantially all of the assets and assumed certain specified liabilities of Superior Equipment Australia Pty Ltd ( "Superior" ). Superior is a small Australian-based manufacturer of agricultural mowing equipment and other attachments, parts, and services.
Commitment to Diversity and Inclusion : We recognize, value, and respect the individual differences of our employees and believe that a diverse set of backgrounds, experiences, and perspectives is crucial to our ability to continue to innovate, collaborate, and meet the needs of our global workforce and customers.
Commitment to Equal Employment Opportunity and Inclusion : We recognize, value, and respect the individual differences of our employees and believe that a varied set of backgrounds, education, experiences, and perspectives is crucial to our ability to continue to innovate, collaborate, and meet the needs of our global workforce and customers.
Rivard’s equipment is sold primarily in France and certain other markets, mainly in Europe, the Middle East and North Africa, and to governmental entities and related contractors. This business also complements our product offerings in North America. The majority of Rivard's customers provide their own truck chassis.
Rivard manufactures vacuum trucks, high pressure cleaning systems and trenchers. Rivard’s equipment is sold primarily in France and certain other markets, mainly in Europe, the Middle East and North Africa, and to governmental entities and related contractors. This business also complements our product offerings in North America. The majority of Rivard's customers provide their own truck chassis.
Unfilled Orders As of December 31, 2023, the Company had unfilled customer orders of $859.8 million compared to $1.0 billion at December 31, 2022. Management expects that substantially all of the Company’s unfilled orders as of December 31, 2023 will be shipped during fiscal year 2024.
Unfilled Orders As of December 31, 2024, the Company had unfilled customer orders of $668.6 million compared to $859.8 million at December 31, 2023. Management expects that substantially all of the Company’s unfilled orders as of December 31, 2024 will be shipped during fiscal year 2025.
A portion of Nite-Hawk’s sales includes truck chassis which are not manufactured by Nite-Hawk . 9 Royal Truck manufactures and sells truck mounted highway crash attenuator trucks, cone safety and traffic control trucks, and a broad range of other equipment focused on highway safety.
Nite-Hawk focuses mainly on and sells direct to parking lot contractors. A portion of Nite-Hawk’s sales includes truck chassis which are not manufactured by Nite-Hawk . Royal Truck manufactures and sells truck mounted highway crash attenuator trucks, cone safety and traffic control trucks, and a broad range of other equipment focused on highway safety.
Super Products also operates a network of rental stores that provides short and long-term rental contracts for its products. Rental customers are primarily contractors serving the petrochemical, petroleum production and refining industries. A portion of the sales of Super Products includes truck chassis which are not manufactured by the Company. Rivard manufactures vacuum trucks, high pressure cleaning systems and trenchers.
Super Products also operates a network of rental stores that provides short and long-term rental contracts for its products. 9 Rental customers are primarily contractors serving the petrochemical, petroleum production and refining industries. A portion of the sales of Super Products includes truck chassis which are not manufactured by the Company.
The Company utilizes an annual twelve-month sales forecast provided by the Company’s marketing departments which is updated quarterly in order to develop a production plan for its manufacturing facilities.
Usage of this equipment is typically lower in harsh weather. The Company utilizes an annual twelve-month sales forecast provided by the Company’s marketing departments which is updated quarterly in order to develop a production plan for its manufacturing facilities.
Safety performance data is reviewed by the executive leadership team and the Company's Board of Directors. Employee Engagement and Talent Development : Alamo Group's culture aims to promote a diverse, inclusive, and respectful workplace.
Safety performance data is reviewed by the executive leadership team and the Company's Board of Directors. Employee Engagement and Talent Development : Alamo Group aims to create a culture of equal employment opportunity and inclusive and respectful workplace.
Fairfield also provides truck up-fitting services as part of its business. Schwarze equipment includes truck-mounted air vacuum, mechanical broom, and regenerative air sweepers, pothole patchers and replacement parts. Schwarze sells its products primarily to governmental agencies and independent contractors, either directly or through its independent dealer network.
Fairfield also provides truck up-fitting services as part of its business. Schwarze equipment includes truck-mounted air vacuum, mechanical broom, and regenerative air sweepers, and replacement parts. Schwarze sells its products primarily to governmental agencies and independent contractors, either directly or through its independent dealer network. A portion of Schwarze’s sales includes truck chassis which are not manufactured by Schwarze .
Eckert 36 Vice President, Corporate Controller and Chief Accounting Officer Janet S. Pollock 65 Vice President, Human Resources Lori L. Sullivan 54 Vice President, Internal Audit Jeffery A. Leonard was appointed President and Chief Executive Officer of the Company in May of 2021. Mr. Leonard was also appointed as a director of the Company in June of 2021. Mr.
Pollock 66 Senior Vice President, Corporate Human Resources Lori L. Sullivan 55 Vice President, Internal Audit Jeffery A. Leonard was appointed President and Chief Executive Officer of the Company in May of 2021. Mr. Leonard was also appointed as a director of the Company in June of 2021. Mr.
We promote an inclusive environment through policies and training, so that employees feel empowered to contribute to the Company's ongoing success. Career opportunities are marketed internally and externally to a wide network of organizations and job boards, such as Women in Manufacturing, so we can source diverse candidate pools.
We promote an inclusive environment through policies and training, so that employees feel empowered to contribute to the Company's ongoing success. Career opportunities are marketed internally as well as externally to a wide network of organizations and job boards so we can encourage a broad pool of candidates.
The SEC maintains a website that contains annual, quarterly and current reports, proxy and information statements, and other information that issuers (including the Company) file electronically with the SEC. The SEC’s website is www.sec.gov. The Company’s website is www.alamo-group.com.
Available Information The Company files annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission (the “SEC”). The SEC maintains a website that contains annual, quarterly and current reports, proxy and information statements, and other information that issuers (including the Company) file electronically with the SEC. The SEC’s website is www.sec.gov.
However, replacement part sales are generally higher in the second and third quarters of the year, because a substantial number of the Company’s products are used for maintenance activities such as vegetation maintenance, highway right-of-way maintenance, construction, and street and parking lot sweeping. Usage of this equipment is typically lower in harsh weather.
Seasonality The Company’s unit sales are fairly constant quarter to quarter. However, replacement part sales are generally higher in the second and third quarters of the year, because a substantial number of the Company’s products are used for maintenance activities such as vegetation maintenance, highway right-of-way maintenance, construction, and street and parking lot sweeping.
This acquisition established a presence for the Company in Brazil, one of the largest agricultural markets in the world. The Herder manufacturing operations have been consolidated into our Santa Izabel facility and the Herder Matao facility was subsequently sold in 2023. In 2017, the Company acquired 100% of the outstanding shares of Santa Izabel Agro Industria Ltda.
The Herder manufacturing operations have been consolidated into our Santa Izabel facility and the Herder Matao facility was subsequently sold in 2023. In 2017, the Company acquired 100% of the outstanding shares of Santa Izabel Agro Industria Ltda. ( "Santa Izabel" ).
Wehrle served in various accounting management capacities within the Company from 1988 to 2001. Edward T. Rizzuti was appointed Vice President, General Counsel of Alamo Group Inc. in July of 2015, assumed the Secretary role in May of 2018 and was promoted to Executive Vice-President in November of 2021. Prior to joining the Company, from 2010 to 2015, Mr.
Kamps served in various accounting management capacities with several Siemens companies and with United Technologies. Edward T. Rizzuti was appointed Vice President, General Counsel of Alamo Group Inc. in July of 2015, assumed the Secretary role in May of 2018, and was promoted to Executive Vice President in November of 2021. Mr.
ITW is one of the world's leading diversified manufacturers of specialized industrial equipment, consumables and related service business. Michael A. Haberman was appointed Executive Vice-President of the Company's Industrial Equipment Division in July of 2021. Prior to his role as Executive Vice-President, Mr. Haberman served as the Company's Excavation/Vacuum Truck group Vice-President from January 2020 to July 2021. Previously, Mr.
ITW is one of the world's leading diversified manufacturers of specialized industrial equipment, consumables and related service business. Kevin J. Thomas was appointed Executive Vice President of the Company's Industrial Equipment Division in August of 2024. Prior to his role as Executive Vice President, Mr. Thomas served as the Company's Excavation/Vacuum Truck group Vice-President since February of 2022.
In the Company’s European locations, all employees are covered by the European Works Council agreements. McConnel, Bomford, Spearhead, AMS-UK, SMA, Faucheux, Forges Gorce, Rousseau, Rivard, and Alamo Group The Netherlands have various collective bargaining agreements covering approximately 1,010 employees. In addition, 219 employees in Brazil are covered by a collective bargaining agreement, which is renegotiated every calendar year.
McConnel, Bomford, Spearhead, AMS-UK, SMA, Faucheux, Forges Gorce, Rousseau, Rivard, and Alamo Group The Netherlands have various collective bargaining agreements covering approximately 852 employees. In addition, 214 employees in Brazil are covered by a collective bargaining agreement, which is renegotiated every calendar year. The Company considers its employee relations to be satisfactory.
At the end of 2020, the Denis Cimaf manufacturing operations based in Roxton Falls were consolidated into the Rayco facility in Wooster, Ohio. In 2023, the Morbark Roxton Falls, Quebec location was sold. In 2021, the Company acquired 100% of the outstanding capital shares of Timberwolf Limited ( "Timberwolf" ) in the U.K.
At the end of 2020, the Denis Cimaf manufacturing operations based in Roxton Falls were consolidated into the Rayco facility in Wooster, Ohio. In 2023, the Morbark Roxton Falls, Quebec location was sold. In 2024, the Rayco manufacturing operations were consolidated into the Morbark facility in Winn, Michigan.
In 2015, the Company acquired Herder Implementos e Maquinas Agricolas Ltda. ( "Herder" ). Herder is a manufacturer of flail mowers which are sold direct and through dealers to a wide variety of agricultural markets as well as the roadside maintenance market.
Herder is a manufacturer of flail mowers which are sold direct and through dealers to a wide variety of agricultural markets as well as the roadside maintenance market. This acquisition established a presence for the Company in Brazil, one of the largest agricultural markets in the world.
The primary reason for the Royal Truck acquisition was to acquire business operations in an adjacent market, highway safety and equipment, where the Company sees compelling future opportunities. Royal Truck is based in Shoemakersville, Pennsylvania.
(" Royal Truck "), a leading manufacturer of truck mounted highway attenuator trucks and other specialty trucks and equipment for the highway infrastructure and traffic control market. The primary reason for the Royal Truck acquisition was to acquire business operations in an adjacent market, highway safety and equipment, where the Company sees compelling future opportunities.
A portion of Schwarze’s sales includes truck chassis which are not manufactured by Schwarze . ODB manufactures and sells leaf and debris collection equipment and replacement brooms for street sweepers, both of which are sold to municipalities, contractors and commercial landscape markets in North America. Nite-Hawk manufactures parking lot sweepers with unique and innovative hydraulic designs.
ODB manufactures and sells leaf and debris collection equipment and replacement brooms for street sweepers, both of which are sold to municipalities, contractors and commercial landscape markets in North America. Nite-Hawk manufactures parking lot sweepers with unique and innovative hydraulic designs. By eliminating the auxiliary engine, Nite-Hawk sweepers have proven to be fuel-efficient, environmentally conscious, and cost-effective to operate.
In 2014, the Company acquired all of the operating units of Specialized Industries LP. The purchase included the businesses of Super Products LLC ( "Super Products" ), Wausau-Everest LP (" Wausau " & " Everest ") and Howard P. Fairfield LLC (" H.P.
This acquisition allowed the Company to broaden its presence in both the manufacturing and distribution of vegetation management machinery in Australia. In 2014, the Company acquired all of the operating units of Specialized Industries LP. The purchase included the businesses of Super Products LLC ( "Super Products" ), Wausau-Everest LP (" Wausau " & " Everest ") and Howard P.
Fairfield ") as well as several related entities ( "Specialized" ), including all brand names and related product names and trademarks. The primary reason for the Specialized acquisition was to broaden the Company's existing equipment lines. This acquisition increased our product offering and enhanced our market position both in vacuum trucks and snow removal equipment primarily in North America.
Fairfield LLC (" H.P. Fairfield ") as well as several related entities ( "Specialized" ), including all brand names and related product names and trademarks. The primary reason for the Specialized acquisition was to broaden the Company's existing equipment lines.
Santa Izabel designs, manufactures and markets a variety of agricultural implements, including sugar cane trailers sold throughout Brazil. Herschel aftermarket replacement parts are sold for many types of farm equipment and tractors and certain types of mowing and construction equipment.
Santa Izabel designs, manufactures and markets a variety of agricultural implements, including sugar cane trailers sold throughout Brazil.
Labor Agreements: As of December 31, 2023, we employed approximately 4,350 employees. In the U.S., the Company has a collective bargaining agreement at its Gradall plant which covers 215 employees and will expire on April 14, 2024.
In the U.S., the Company has a collective bargaining agreement at its Gradall plant which covers 240 employees and will expire on April 22, 2029.
In Canada the Tenco bargaining agreement covers 115 employees and expires on December 31, 2025; RPM has an agreement covering 4 employees which expires on February 1, 2025; and Everest has a collective bargaining agreement covering 67 employees which expired on November 30, 2023 and with respect to which negotiations are ongoing.
In Canada, the Tenco bargaining agreement covers 130 employees and expires on December 31, 2025; RPM has an agreement covering 2 employees which expires on February 1, 2025; and Everest has a collective bargaining agreement covering 83 employees which expires on November 30, 2029. In the Company’s European locations, all employees are covered by the European Works Council agreements.
As a percentage of sales, research & development was approximately 0.8% in 2023, 0.9% in 2022 and 0.9% in 2021, and is expected to continue at similar levels in 2024. Seasonality The Company’s unit sales are fairly constant quarter to quarter.
Amounts expended on research and development activities were approximately $13.5 million in 2024, $13.4 million in 2023 and $14.3 million in 2022. As a percentage of sales, research & development was approximately 0.8% in 2024, 0.8% in 2023 and 0.9% in 2022, and is expected to continue at similar levels in 2025.
Timberwolf is a leading manufacturer of a broad range of commercial wood chippers primarily serving markets in the U.K. and the European Union. This acquisition complemented the Company's existing range of tree care products and strengthened the Company's presence in the U.K. and European forestry and tree care markets.
In 2021, the Company acquired 100% of the outstanding capital shares of Timberwolf Limited ( "Timberwolf" ) in the U.K. Timberwolf is a leading manufacturer of a broad range of commercial wood chippers primarily serving markets in the U.K. and the European Union.
Tenco is a Canadian-based manufacturer of snow removal equipment including snow blades, blowers, dump bodies, spreaders and associated parts and service. Tenco has operations in Quebec and New York. The equipment is sold primarily through dealers to governmental end-users as well as snow removal contractors.
In 2011, the Company acquired substantially all of the assets and assumed certain specified liabilities of Tenco Group, Inc. ( "Tenco" ) and its subsidiaries. Tenco is a Canadian-based manufacturer of snow removal equipment including snow blades, blowers, dump bodies, spreaders and associated parts and service. Tenco has operations in Quebec and New York.
Replacement Parts The Company derives a significant portion of its revenues from sales of replacement parts for each of its wholegoods lines. Replacement parts represented approximately 17%, 19% and 20% of the Company’s total sales for the years ended December 31, 2023, 2022 and 2021, respectively.
Replacement Parts The Company derives a significant portion of its revenues from sales of replacement parts for each of its wholegoods lines.
Wehrle 67 Executive Vice President and Chief Financial Officer Edward T. Rizzuti 54 Executive Vice President, General Counsel and Secretary Dan E. Malone 63 Executive Vice President, Chief Sustainability Officer Richard H. Raborn 58 Executive Vice President, Alamo Vegetation Management Division Michael A. Haberman 65 Executive Vice President, Alamo Industrial Equipment Division Ian M.
Kamps 48 Executive Vice President and Chief Financial Officer Edward T. Rizzuti 55 Executive Vice President, Corporate Development and Investor Relations and Secretary Dan E. Malone 64 Executive Vice President, Chief Sustainability Officer Richard H. Raborn 59 Executive Vice President, Alamo Vegetation Management Division Kevin J. Thomas 60 Executive Vice President, Alamo Industrial Equipment Division Janet S.
The Superior operations have been consolidated with the Company's Fieldquip location. In 2014, the Company acquired Kellands Agricultural Ltd. and its subsidiary Multidrive Tractors Ltd. ( "Kellands" ). Kellands is a U.K.-based manufacturer of self-propelled sprayers and a range of multi-purpose load-carrying tractor vehicles.
The equipment is sold through dealers primarily to agricultural end-users with some sold to governmental entities in Australia. The Superior operations have been consolidated with the Company's Fieldquip location. In 2014, the Company acquired Kellands Agricultural Ltd. and its subsidiary Multidrive Tractors Ltd. ( "Kellands" ).
Product Development The Company’s ability to provide innovative responses to customer needs, to develop and manufacture new products, and to enhance existing product lines is important to its success. The Company continually conducts research and development activities in an effort to improve existing products and develop new products.
Replacement parts represented approximately 17%, 17% and 19% of the Company’s total sales for the years ended December 31, 2024, 2023 and 2022, respectively. 10 Product Development The Company’s ability to provide innovative responses to customer needs, to develop and manufacture new products, and to enhance existing product lines is important to its success.
In 2014, the Company acquired Fieldquip Australia Pty Ltd ( "Fieldquip" ), a manufacturer of rotary cutters as well as a distributor of various lifestyle products. This acquisition allowed the Company to broaden its presence in both the manufacturing and distribution of vegetation management machinery in Australia.
The Kellands operations were consolidated into the Company's Salford Priors facility and its products are sold under the McConnel brand name. In 2014, the Company acquired Fieldquip Australia Pty Ltd ( "Fieldquip" ), a manufacturer of rotary cutters as well as a distributor of various lifestyle products.
As of December 31, 2023, the Company employed 269 people in its various engineering departments, 164 of whom are degreed engineers and the balance of whom are support staff. Amounts expended on research and development activities were approximately $13.4 million in 2023, $14.3 million in 2022 and $11.7 million in 2021.
The Company continually conducts research and development activities in an effort to improve existing products and develop new products. As of December 31, 2024, the Company employed 245 people in its various engineering departments, 152 of whom are degreed engineers and the balance of whom are support staff.
This acquisition enhanced our manufacture and distribution of our agricultural machinery in Europe and allowed the Company to enter into the self-propelled sprayer market. The Kellands operations were consolidated into the Company's Salford Priors facility and its products are sold under the McConnel brand name.
Kellands is a U.K.-based manufacturer of self-propelled sprayers and a range of multi-purpose load-carrying tractor vehicles. This acquisition enhanced our manufacture and distribution of our agricultural machinery in Europe and allowed the Company to enter into the self-propelled sprayer market.
Wehrle was appointed Executive Vice-President and Chief Financial Officer of the Company in July of 2021. Prior to that, Mr. Wehrle served as Vice President, Controller and Treasurer of the Company from May 2001 to July 2021. He assumed Treasury responsibilities in May of 2018. Previously, Mr.
Kamps was appointed Executive Vice President and Chief Financial Officer of the Company in May of 2024 after being appointed Executive Vice President and Treasurer in March of 2024. Prior to joining the Company, Ms. Kamps served as Vice President and Chief Financial Officer of Americas Styrenics, LLC since January 2021. Prior to her role with Americas Styrenics, Ms.
This acquisition, combined with the Company’s existing range of rotary mowers, established the Company as one of the largest manufacturers of rotary mowers in the world. In 2011, the Company acquired substantially all of the assets and assumed certain specified liabilities of Tenco Group, Inc. ( "Tenco" ) and its subsidiaries.
This acquisition, combined with the Company’s existing range of rotary mowers, established the Company as one of the largest manufacturers of rotary mowers in the world. In 2024, the Rhino manufacturing operations were consolidated into our Bush Hog facility in Selma, Alabama.
Eckert served as Vice President, Finance for AMETEK Inc's Electron Microscopy Technologies business based in Pleasanton, California. Prior to 2020, Mr. Eckert held controllership, FP&A, and strategy roles progressing in responsibility at Howmet Aerospace Inc. (formerly Alcoa Inc.). Janet S. Pollock was appointed Vice President, Human Resources of Alamo Group Inc. in May of 2018. Ms.
Thomas held roles with General Dynamics Land Systems Divisioin and General Motors Truck Group prior to joining Navistar. Janet S. Pollock was appointed Senior Vice President, Corporate Human Resources of Alamo Group Inc. in April of 2024, and previously served as Vice President, Human Resources of Alamo Group since May of 2018. Ms.
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In 2023, the Company acquired 100% of the outstanding equity capital of Royal Truck & Equipment, Inc. (" Royal Truck "), a leading manufacturer of truck mounted highway attenuator trucks and other specialty trucks and equipment for the highway infrastructure and traffic control market.
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This acquisition increased our product offering and enhanced our market position both in vacuum trucks and snow removal equipment primarily in North America. In 2015, the Company acquired Herder Implementos e Maquinas Agricolas Ltda. ( "Herder" ).
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Herschel products include a wide range of cutting parts, plain and hard-faced replacement tillage tools, disc blades and fertilizer application components. Herschel replacement tools and parts are sold throughout the United States, Canada and Mexico to five major customer groups: farm equipment dealers; fleet stores; wholesale distributors; OEMs; and construction equipment dealers.
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This acquisition complemented the Company's existing range of tree care products and strengthened the Company's presence in the U.K. and European forestry and tree care markets. In 2023, the Company acquired 100% of the outstanding equity capital of Royal Truck & Equipment, Inc.
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Valu-Bilt complements the Herschel product lines while also expanding the Company’s offering of aftermarket agricultural parts and added catalog and internet sales direct to end-users.
Added
Leonard notified the Board of his intention to retire as President and CEO by mid-year and upon the appointment of his successor. Mr. Leonard's intention to retire as President and CEO is due to personal reasons and is not the result of any disagreement with the Company. Agnieszka K.
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By eliminating the auxiliary engine, Nite-Hawk sweepers have proven to be fuel-efficient, environmentally conscious, and cost-effective to operate. Nite-Hawk focuses mainly on and sells direct to parking lot contractors.
Added
Rizzuti was named Chief Legal Officer in April of 2024 and transitioned to the role of Executive Vice President Corporate Development and Investor Relations in January of 2025. Prior to joining the Company, from 2010 to 2015, Mr.
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The Company is also subject to various other federal, state, and local laws affecting its business, as well as a variety of regulations relating to such matters as working conditions, equal employment opportunities, and product safety, including National Highway Traffic Safety Administration reporting.
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Prior to joining the Company, Mr. Thomas served as President of Navistar Defense LLC since 2015. Mr. Thomas began with Navistar International in 1999, and held various roles including Director of Engineering, Director of Blue Diamond Truck LLC, and Director of Program Management for Navistar Defense, before being appointed President. Mr.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf our information technology systems suffer severe damage, disruption or shutdown, and our business continuity plans do not effectively resolve the issues in a timely manner, we could experience business disruptions, a loss of critical company records, transaction errors, processing inefficiencies, and the loss of customers and sales, causing our product sales, financial condition, and operating results to be adversely affected and the reporting of our financial results to be delayed. 18 In addition, in the ordinary course of our business, we collect and store sensitive data, including our intellectual property, our proprietary business information and that of our customers, suppliers and business partners, and personally identifiable information or other sensitive information of our customers and employees.
Biggest changeIf our information technology systems suffer severe damage, disruption or shutdown, and our business continuity plans do not effectively resolve the issues in a timely manner, we could experience business disruptions, a loss of critical company records, transaction errors, processing inefficiencies, and the loss of customers and sales, causing our product sales, financial condition, and operating results to be adversely affected and the reporting of our financial results to be delayed.
These factors include the following: • weakness in the worldwide economy; • the price and availability of raw materials, purchased components and energy; • budget constraints and revenue shortfalls for our governmental customers; • changes in domestic and foreign governmental policies and laws, including increased levels of governmental regulation and associated liabilities; • the levels of interest rates; • the value of the U.S. dollar relative to the foreign currencies in countries where we sell our products but don’t have a manufacturing presence; • impact of tighter credit markets on the Company, its dealers and end-users; • impairment in the carrying value of goodwill; and • increase in unfunded pension plan liability due to financial market deterioration.
These factors include the following: • weakness in the worldwide economy; • the price and availability of raw materials, purchased components and energy; • budget constraints and revenue shortfalls for our governmental customers; 17 • changes in domestic and foreign governmental policies and laws, including increased levels of governmental regulation and associated liabilities; • the levels of interest rates; • the value of the U.S. dollar relative to the foreign currencies in countries where we sell our products but don’t have a manufacturing presence; • impact of tighter credit markets on the Company, its dealers and end-users; • impairment in the carrying value of goodwill; and • increase in unfunded pension plan liability due to financial market deterioration.
Federal, state, provincial and local government budgets were negatively affected by the COVID-19 pandemic and its resurgence or a similar pandemic or event could have a material negative impact on our business and financial condition. Significant changes in trade policy and related trade wars could have a material adverse impact on our results of operations.
Federal, state, provincial and local government budgets were negatively affected by the COVID-19 pandemic and its resurgence or a similar pandemic or event could have a material negative impact on our business and financial condition. 18 Significant changes in trade policy and related trade wars could have a material adverse impact on our results of operations.
We may not be able to realize the potential or strategic benefits of the acquisitions we complete, and the businesses we have acquired, or may acquire in the future, may not perform as expected. Acquisitions are an important part of our growth strategy and we have completed a number of acquisitions over the past several years.
We may not be able to realize the potential or strategic benefits of the acquisitions we complete, and the businesses we have acquired, or may acquire in the future, may not perform as expected. 21 Acquisitions are an important part of our growth strategy and we have completed a number of acquisitions over the past several years.
Labor shortages or increased labor costs could impair our ability to 17 operate our business, meet customer commitments or grow our revenues, and could materially and adversely impact our business, results of operations and financial results. We depend on governmental sales, and a decrease in such sales could adversely affect our business, results of operations and financial condition.
Labor shortages or increased labor costs could impair our ability to operate our business, meet customer commitments or grow our revenues, and could materially and adversely impact our business, results of operations and financial results. We depend on governmental sales, and a decrease in such sales could adversely affect our business, results of operations and financial condition.
Sensitive information is also stored by our vendors and on the platforms and networks of third-party providers. Cyber-attacks on the Company, our vendors, or our third-party providers could result in inappropriate access to our intellectual property, Company data, or personally identifiable information of our global workforce, suppliers, or customers.
Sensitive information is also stored by our vendors and on the 19 platforms and networks of third-party providers. Cyber-attacks on the Company, our vendors, or our third-party providers could result in inappropriate access to our intellectual property, Company data, or personally identifiable information of our global workforce, suppliers, or customers.
We may not be successful in identifying, developing and marketing new products and applications or we may experience difficulties that could delay or prevent the successful development, introduction and marketing of such new products and applications, which could have a material adverse impact on our business and results of operations.
We may not be successful in 20 identifying, developing and marketing new products and applications or we may experience difficulties that could delay or prevent the successful development, introduction and marketing of such new products and applications, which could have a material adverse impact on our business and results of operations.
Some of our competitors are significantly larger than we are and have substantially greater financial and other resources at their disposal. We believe that we are able to compete 19 successfully in our markets by, to some extent, avoiding direct competition with significantly larger potential competitors.
Some of our competitors are significantly larger than we are and have substantially greater financial and other resources at their disposal. We believe that we are able to compete successfully in our markets by, to some extent, avoiding direct competition with significantly larger potential competitors.
A successful claim brought against us in excess of available insurance coverage or a requirement to participate in a product recall may have a materially adverse effect on our business. 23 If we are unable to comply with the terms of our credit arrangements, especially the financial covenants, our credit arrangements could be terminated.
A successful claim brought against us in excess of available insurance coverage or a requirement to participate in a product recall may have a materially adverse effect on our business. 24 If we are unable to comply with the terms of our credit arrangements, especially the financial covenants, our credit arrangements could be terminated.
The lack of availability or the increased cost of these purchased materials and components due to supply chain disruptions, inflation, increased tariffs, and/or other uncontrollable events have negatively affected our business operations and profitability and may continue to do so in the future.
The lack of availability or the increased cost of these purchased materials and components due to supply chain disruptions, inflation, increased tariffs, including broad-based reciprocal international tariffs, and/or other uncontrollable events have negatively affected our business operations and profitability and may continue to do so in the future.
This would further dilute the interests of our existing stockholders. 24 There is no assurance that we will continue declaring dividends or have the available cash to make dividend payments. On January 2, 2024, the Board of Directors of the Company increased its quarterly dividend from $0.22 per share to $0.26 per share.
This would further dilute the interests of our existing stockholders. 25 There is no assurance that we will continue declaring dividends or have the available cash to make dividend payments. On January 2, 2025, the Board of Directors of the Company increased its quarterly dividend from $0.26 per share to $0.30 per share.
Slow or negative growth rates, inflationary/deflationary pressures, higher commodity costs and energy prices, reduced credit availability or unfavorable credit terms for our dealers and end-user customers, increased unemployment rates, and recessionary economic conditions and outlook could cause consumers to reduce spending, which may cause them to delay or forgo purchases of our products and could have an adverse effect on our net sales and earnings. 16 Deterioration of industry conditions could harm our business, results of operations and financial condition.
Slow or negative growth rates, inflationary/deflationary pressures, higher commodity costs and energy prices, reduced credit availability or unfavorable credit terms for our dealers and end-user customers, increased unemployment rates, and recessionary economic conditions and outlook could cause consumers to reduce spending, which may cause them to delay or forgo purchases of our products and could have an adverse effect on our net sales and earnings.
The Company also utilizes market valuation models and other financial ratios, which require the Company to make certain assumptions and estimates regarding the applicability of those models to its assets and businesses. As of December 31, 2023, goodwill was $206.5 million, which represents approximately 15% of total assets. The Company recognized no goodwill impairment in 2023, 2022 or 2021.
The Company also utilizes market valuation models and other financial ratios, which require the Company to make certain assumptions and estimates regarding the applicability of those models to its assets and businesses. As of December 31, 2024, goodwill was $203.0 million, which represents approximately 14% of total assets. The Company recognized no goodwill impairment in 2024, 2023 or 2022.
Our business depends to a large extent upon the prospects for the infrastructure maintenance, vegetation management and agricultural markets in general. Future prospects of the industry depend largely on factors outside of our control. Any of those factors could adversely impact demand for our products, which could adversely impact our business, results of operations and financial condition.
Deterioration of industry conditions could harm our business, results of operations and financial condition. Our business depends to a large extent upon the prospects for the infrastructure maintenance, vegetation management and agricultural markets in general. Future prospects of the industry depend largely on factors outside of our control.
On December 31, 2023, 12,013,481 shares of our common stock were issued and outstanding, and there were outstanding options and restricted stock awards totaling an additional 169,840 shares of our common stock. We also have additional shares available for grant under our 2015 Incentive Stock Option Plan and our 2019 Equity Incentive Plan.
On December 31, 2024, 12,062,868 shares of our common stock were issued and outstanding, and there were outstanding options and restricted stock awards totaling an additional 162,820 shares of our common stock. We also have additional shares available for grant under our 2015 Incentive Stock Option Plan and our 2019 Equity Incentive Plan.
State agencies, including the California Air Resources Board ("CARB"), are also adopting emission regulations that apply to products we sell. Requirements have expanded to additional horsepower categories and, accordingly, apply to more of the products we sell. Our ability to meet the Tier 4 and CARB requirements is subject to many variables, some of which are beyond our direct control.
Requirements have expanded to additional horsepower categories and, accordingly, apply to more of the products we sell. Our ability to meet the Tier 4 and CARB requirements is subject to many variables, some of which are beyond our direct control.
The closing prices of our common stock on the New York Stock Exchange during 2023 ranged from $140.27 to $213.25 per share, and during 2022 from $109.83 to $159.75 per share.
The closing prices of our common stock on the New York Stock Exchange during 2024 ranged from $164.50 to $228.33 per share, and during 2023 from $140.27 to $213.25 per share.
The products we manufacture or sell, particularly engines, are subject to increasingly stringent environmental emission regulations. For instance, the EPA adopted increasingly stringent engine emission regulations, including Tier 4 emission requirements applicable to diesel engines in specified horsepower ranges that are used in some of our products.
For instance, the EPA adopted increasingly stringent engine emission regulations, including Tier 4 emission requirements applicable to diesel engines in specified horsepower ranges that are used in some of our products. State agencies, including the California Air Resources Board ("CARB"), are also adopting emission regulations that apply to products we sell.
As of December 31, 2023, four investors - Henry Crown and Company, BlackRock, Inc., Dimensional Fund Advisors LP, and The Vanguard Group - beneficially owned approximately 40% of our outstanding common stock.
As of December 31, 2024, four investors - Henry Crown and Company, BlackRock, Inc., The Vanguard Group, and Allspring Global Investments, LLC - beneficially owned approximately 38% of our outstanding common stock.
For example, decreases or delays in farm subsidies to our agricultural customers, or changes in environmental policies aimed at limiting mowing activities, could adversely affect our business, results of operations and financial condition. 20 Our acquisition strategy may not be successful, which may adversely affect our business, results of operations and financial condition.
In addition, political developments and governmental regulations and policies in the countries in which we operate directly affect the demand for our products. For example, decreases or delays in farm subsidies to our agricultural customers, or changes in environmental policies aimed at limiting mowing activities, could adversely affect our business, results of operations and financial condition.
We believe the loss of a key executive officer or other key employee could have an adverse effect on our business, results of operations, and financial condition. 22 Increasingly stringent engine emission regulations could impact our ability to sell certain of our products into the market and appropriately price certain of our products, which could negatively affect our competitive position and financial results.
Increasingly stringent engine emission regulations could impact our ability to sell certain of our products into the market and appropriately price certain of our products, which could negatively affect our competitive position and financial results. The products we manufacture or sell, particularly engines, are subject to increasingly stringent environmental emission regulations.
Competition for acquisition opportunities may also increase our costs of making acquisitions or prevent us from making certain acquisitions. These and other acquisition-related factors may adversely impact our business, results of operations and financial condition.
These and other acquisition-related factors may adversely impact our business, results of operations and financial condition.
We intend to grow internally and through the acquisition of businesses and assets that will complement our current businesses. To date, a material portion of our growth has come through acquisitions. We cannot be certain that we will be able to identify attractive acquisition targets, obtain financing for acquisitions on satisfactory terms or successfully acquire identified targets.
Our acquisition strategy may not be successful, which may adversely affect our business, results of operations and financial condition. We intend to grow internally and through the acquisition of businesses and assets that will complement our current businesses. To date, a material portion of our growth has come through acquisitions.
If we are unable to successfully integrate acquired businesses, our future results may be negatively impacted. 21 The agricultural industry and the infrastructure maintenance industry are seasonal, and seasonal fluctuations may cause our results of operations and working capital to fluctuate from quarter to quarter.
The failure to execute such transactions successfully or to achieve favorable terms may result in a loss of value, reduced liquidity, or the inability to reinvest in more strategic opportunities. 22 The agricultural industry and the infrastructure maintenance industry are seasonal, and seasonal fluctuations may cause our results of operations and working capital to fluctuate from quarter to quarter.
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In addition, political developments and governmental regulations and policies in the countries in which we operate directly affect the demand for our products.
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Any of those factors could adversely impact demand for our products, which could adversely impact our business, results of operations and financial condition.
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In addition, in the ordinary course of our business, we collect and store sensitive data, including our intellectual property, our proprietary business information and that of our customers, suppliers and business partners, and personally identifiable information or other sensitive information of our customers and employees.
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We cannot be certain that we will be able to identify attractive acquisition targets, obtain financing for acquisitions on satisfactory terms or successfully acquire identified targets. Competition for acquisition opportunities may also increase our costs of making acquisitions or prevent us from making certain acquisitions.
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If we are unable to successfully integrate acquired businesses, our future results may be negatively impacted. We may not achieve anticipated cost savings or synergies associated with restructuring some of our business operations. Efforts to restructure some of our business operations may not be successful.
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We may encounter significant challenges in integrating the operations, management, and cultures of the affected entities. These challenges could include difficulties in combining business processes, systems, and employee teams, which may lead to operational inefficiencies, loss of productivity, or failure to achieve anticipated cost savings or synergies.
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Disposal of non-core assets may adversely affect our business, results of operations and financial condition. We may sell or otherwise dispose of certain non-core assets or businesses.
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We believe the loss of a 23 key executive officer or other key employee could have an adverse effect on our business, results of operations, and financial condition.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe ITSC also reviews the Board's and Audit Committee’s feedback and incorporates it into ongoing cybersecurity management efforts. Our IT team, led by the Vice President of IT and the Director of Network and Information Systems, is responsible for day-to-day assessment and management of cybersecurity risks.
Biggest changeOur IT team, led by the Vice President of IT and the Director of Network and Information Systems, is responsible for day-to-day assessment and management of cybersecurity risks, including the monitoring and detecting of cybersecurity incidents and executing our cybersecurity incident response plans.
We perform an annual review of our efforts to manage risk with controls that align with and map to key compliance frameworks, such as NIST and the ISO 27000 series of regulations. We perform quarterly IT risk assessments that include cybersecurity risk assessments focused on action plans developed through annual reviews.
We perform an annual review of our efforts to manage risk with controls that align with and map to key compliance frameworks, such as NIST and the ISO 27000 series of standards. We perform quarterly IT risk assessments that include cybersecurity risk assessments focused on action plans developed through annual reviews.
Members of our IT team have undergraduate and graduate degrees in relevant fields, including information systems, information assurance, and information technology with a concentration in cybersecurity. Members of our IT team have also obtained relevant certifications, including the Director of Network and Information Systems being a Certified Information Systems Security Professional. 27
Members of our IT team have undergraduate and graduate degrees in relevant fields, including information systems, information assurance, and information technology with a concentration in cybersecurity. Members of our IT team have also obtained relevant certifications, including the Director of Network and Information Systems being a Certified Information Systems Security Professional. 28
We have an Information Technology Steering Committee ("ITSC"), comprised of the Company President and Chief Executive Officer, the Executive Vice Presidents of our Vegetation Management and Industrial Equipment Divisions, the Chief 26 Financial Officer, and the Chief Sustainability Officer, that determines the priority of cybersecurity initiatives.
We have an Information Technology Steering Committee ("ITSC"), comprised of the Company President and Chief Executive Officer, the Executive Vice Presidents of our Vegetation Management and Industrial Equipment Divisions, the Chief 27 Financial Officer, and the Chief Sustainability Officer, that assesses and manages material risks from cybersecurity threats and determines the priority of cybersecurity initiatives.
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The ITSC also reviews the Board's and Audit Committee’s feedback and incorporates it into ongoing cybersecurity management efforts.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe facilities are listed below: Facility Square Footage Principal Types of Products Manufactured And Assembled Winn, Michigan* 1,100,000 Owned Tree chippers, Grinders, Brush Cutters, and Debarkers for Morbark Selma, Alabama* 744,000 Owned Mechanical Rotary Mowers, Finishing Mowers, Backhoes, Front-End Loaders for Bush Hog New Philadelphia, Ohio* 430,000 Owned Telescopic Excavators for Gradall and Vacuum Trucks for VacAll Wooster, Ohio* 400,000 Leased Stump Cutters, Aerial Trimmers, Mulchers, Crawler Trucks for Rayco and Denis Cimaf Gibson City, Illinois* 275,000 Owned Mechanical Mowers, Blades, Deep Tillage Equipment, and other implements for Rhino , Bush Hog and OEMs Seguin, Texas* 230,000 Owned Hydraulic and Mechanical Rotary and Flail Mowers, Sickle-Bar Mowers, and Boom-Mounted Equipment for Alamo Industrial Indianola, Iowa* 200,000 Owned Distribution and Manufacturing of Aftermarket Farm Equipment Replacement and Wear Parts for Herschel/Valu-Bilt Neuville, France* 195,000 Owned Hydraulic and Mechanical Boom-Mounted Hedge and Grass Cutters for Rousseau and SMA Mukwonago, Wisconsin* 171,000 Owned Truck-Mounted Vacuum Trucks for Super Products Richmond, Virginia* 160,000 Leased Leaf Collection Equipment and Street Sweeper Replacement Brooms for ODB Ludlow, England* 160,000 Owned Hydraulic Boom-Mounted Hedge and Grass Cutters and other Equipment for McConnel and Twose Salford Priors, England* 157,000 Owned Tractor-Mounted Power Arm Flails and other Equipment for Bomford and Twose and Spearhead Sao Joao da Boa Vista, Brazil* 138,000 Owned Mowing Equipment, Sugar Cane Trailers and other equipment for Santa Izabel Huntsville, Alabama* 135,000 Owned Air and Mechanical Street Sweeping Equipment for Schwarze New Berlin, Wisconsin* 120,000 Owned Municipal Snow Removal and Ice Control Equipment for Wausau Coatesville, Indiana* 120,000 Owned Zero Turn Radius Mowers for Dixie Chopper Middelburg, the Netherlands* 110,000 Owned Boom Mowers, Flail Mowers and Stump Grinders for Dutch Power Englefeld, Saskatchewan, Canada* 105,000 Owned Mechanical Rotary Mowers, Snow Blowers, and Rock Removal Equipment for Schulte St.
Biggest changeThe facilities are listed below: Facility Square Footage Owned Principal Types of Products Manufactured And Assembled Winn, Michigan* 1,110,000 Owned Tree chippers, Grinders, Brush Cutters, and Debarkers for Morbark and Stump Cutters, Aerial Rimmers, Mulchers, Crawler Trucks for Rayco and Denis Cimaf Selma, Alabama* 744,000 Owned Mechanical Rotary Mowers, Finishing Mowers, Backhoes, Front-End Loaders for Bush Hog New Philadelphia, Ohio* 430,000 Owned Telescopic Excavators for Gradall and Vacuum Trucks for VacAll Wooster, Ohio* 400,000 Leased Fabrication and assembly of products for various product lines Gibson City, Illinois 275,000 Owned Mechanical Mowers, Blades, Deep Tillage Equipment, and other implements for Rhino , Bush Hog and OEMs Seguin, Texas* 230,000 Owned Hydraulic and Mechanical Rotary and Flail Mowers, Sickle-Bar Mowers, and Boom-Mounted Equipment for Alamo Industrial Neuville, France* 195,000 Owned Hydraulic and Mechanical Boom-Mounted Hedge and Grass Cutters for Rousseau and SMA Sao Joao da Boa Vista, Brazil* 183,000 Owned Mowing Equipment, Sugar Cane Trailers and other equipment for Santa Izabel Mukwonago, Wisconsin* 171,000 Owned Truck-Mounted Vacuum Trucks for Super Products Salford Priors, England* 168,000 Owned Tractor-Mounted Power Arm Flails and other Equipment for Bomford and Twose and Spearhead Ludlow, England* 167,000 Owned Hydraulic Boom-Mounted Hedge and Grass Cutters and other Equipment for McConnel and Twose Richmond, Virginia* 157,000 Leased Leaf Collection Equipment and Street Sweeper Replacement Brooms for ODB Huntsville, Alabama* 135,000 Owned Air and Mechanical Street Sweeping Equipment for Schwarze Daumeray, France* 125,000 Owned Vacuum Trucks, High Pressure Cleaning Systems and Trenchers for Rivard New Berlin, Wisconsin* 120,000 Owned Municipal Snow Removal and Ice Control Equipment for Wausau Coatesville, Indiana* 115,000 Owned Zero Turn Radius Mowers for Dixie Chopper Middelburg, the Netherlands* 110,000 Owned Boom Mowers, Flail Mowers and Stump Grinders for Dutch Power Englefeld, Saskatchewan, Canada* 105,000 Owned Mechanical Rotary Mowers, Snow Blowers, and Rock Removal Equipment for Schulte St.
Fairfield Kent, Washington* 43,000 Leased Truck-Mounted Sweeping Equipment for the contractor market branded NiteHawk Ayer's Cliff, Quebec, Canada* 41,000 Owned Municipal Snow Removal and Ice Control Equipment for Everest Suffolk, England* 35,000 Leased Commercial wood chippers and other forestry equipment for Timberwolf Peschadoires, France* 22,000 Owned Replacement Parts for Blades, Knives and Shackles for Forges Gorce Oakey, Australia 18,000 Leased Agriculture Mowing Equipment and other Attachments for Fieldquip Installation & Rental Facilities, Warehouses & Sales 503,200 Leased / Owned Services Parts Distribution, Installation Facilities and Sales and After Market Office Offices, Seguin & New Braunfels, Texas 29,000 Leased /Owned Corporate Office Total 6,144,200 82% * Principal manufacturing plants 28 Approximately 82% of the manufacturing, warehouse and office space is owned.
Fairfield Ayer's Cliff, Quebec, Canada* 41,000 Owned Municipal Snow Removal and Ice Control Equipment for Everest Suffolk, England* 35,000 Leased Commercial wood chippers and other forestry equipment for Timberwolf Kent, Washington* 25,000 Leased Truck-Mounted Sweeping Equipment for the contractor market branded NiteHawk Peschadoires, France* 22,000 Owned Replacement Parts for Blades, Knives and Shackles for Forges Gorce Oakey, Australia 18,000 Leased Agriculture Mowing Equipment and other Attachments for Fieldquip Installation & Rental Facilities, Warehouses & Sales 540,000 Leased / Owned Services Parts Distribution, Installation Facilities and Sales and After Market Office Offices, Seguin & New Braunfels, Texas 29,000 Leased /Owned Corporate Office Total 6,059,000 81% * Principal manufacturing plants 29 Approximately 81% of the manufacturing, warehouse and office space is owned.
Valerien, Quebec, Canada* 100,000 Owned Snow and Ice Removal Equipment for Tenco Daumeray, France* 100,000 Owned Vacuum Trucks, High Pressure Cleaning Systems and Trenchers for Rivard Giessen, the Netherlands* 70,000 Owned Aquatic Harvesting Boats and Remote Control Mowing Equipment for Alamo Group The Netherlands Sioux Falls, South Dakota* 66,000 Owned Hydraulic and Mechanical Mowing Equipment for Tiger Shoemakersville, Pennsylvania* 65,000 Leased Truck Mounted Highway Attenuator Trucks and Other Specialty Trucks and Equipment for Royal Truck and Equipment Hopkinton, New Hampshire* 55,000 Owned Distributor of Public Works and Runway Maintenance Products for H.P.
Valerien, Quebec, Canada* 104,000 Owned Snow and Ice Removal Equipment for Tenco Giessen, the Netherlands* 72,000 Owned Aquatic Harvesting Boats and Remote Control Mowing Equipment for Alamo Group The Netherlands Sioux Falls, South Dakota* 66,000 Owned Hydraulic and Mechanical Mowing Equipment for Tiger Shoemakersville, Pennsylvania* 65,000 Leased Truck Mounted Highway Attenuator Trucks and Other Specialty Trucks and Equipment for Royal Truck and Equipment Hopkinton, New Hampshire* 55,000 Owned Distributor of Public Works and Runway Maintenance Products for H.P.
Item 2. Properties As of February 16, 2024, the Company utilized twenty-nine principal manufacturing plants with seventeen located in the United States, eight in Europe, three in Canada, and one in Brazil.
Item 2. Properties As of February 21, 2025, the Company utilized twenty-seven principal manufacturing plants with fifteen located in the United States, eight in Europe, three in Canada, and one in Brazil.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+2 added−1 removed3 unchanged
Biggest changeOn February 16, 2024, there were 12,015,281 shares of common stock outstanding, held by approximately 78 holders of record, but the total number of beneficial owners of the Company’s common stock exceeds this number. On February 16, 2024, the closing price of the common stock on the New York Stock Exchange was $217.33 per share.
Biggest changeOn February 21, 2025, there were 12,063,468 shares of common stock outstanding, held by approximately 68 holders of record, but the total number of beneficial owners of the Company’s common stock exceeds this number. On February 21, 2025, the closing price of the common stock on the New York Stock Exchange was $188.90 per share.
Information relating to compensation plans under which equity securities of the Company are authorized for issuance is set forth in Part III, Item 12 of this Annual Report on Form 10-K. 29 Stock Price Performance Graph The information contained in this Stock Performance Graph section shall not be deemed to be “soliciting material” or “filed” with the SEC or subject to the liabilities of Section 18 of the Exchange Act, except to the extent that Alamo Group Inc. specifically incorporates it by reference into a document filed under the Securities Act or the Exchange Act.
Information relating to compensation plans under which equity securities of the Company are authorized for issuance is set forth in Part III, Item 12 of this Annual Report on Form 10-K. 30 Stock Price Performance Graph The information contained in this Stock Performance Graph section shall not be deemed to be “soliciting material” or “filed” with the SEC or subject to the liabilities of Section 18 of the Exchange Act, except to the extent that Alamo Group Inc. specifically incorporates it by reference into a document filed under the Securities Act or the Exchange Act.
The following graph and table set forth the cumulative total return to the Company's stockholders of our Common Stock during a five-year period ended December 31, 2023, as well as the performance of an overall stock market index (the S&P SmallCap 600 Index) and a published industry or line-of-business index (the S&P 500 Industrials Index) for the same period. *$100 invested on 12/31/18 in stock or index, including reinvestment of dividends.
The following graph and table set forth the cumulative total return to the Company's stockholders of our Common Stock during a five-year period ended December 31, 2024, as well as the performance of an overall stock market index (the S&P SmallCap 600 Index) and a published industry or line-of-business index (the S&P 500 Industrials Index) for the same period. *$100 invested on 12/31/19 in stock or index, including reinvestment of dividends.
Fiscal year ending December 31. Copyright© 2024 Standard & Poor's, a division of S&P Global.
Fiscal year ending December 31. Copyright© 2025 Standard & Poor's, a division of S&P Global.
On January 2, 2024, the Board of Directors of the Company declared a quarterly dividend of $0.26 per share which was paid on January 29, 2024 to holders of record as of January 16, 2024.
On January 2, 2025, the Board of Directors of the Company declared a quarterly dividend of $0.30 per share which was paid on January 29, 2025 to holders of record as of January 16, 2025.
Removed
All rights reserved. 12/18 12/19 12/20 12/21 12/22 12/23 Alamo Group Inc. 100.00 163.18 180.16 192.93 186.60 278.40 S&P SmallCap 600 100.00 122.78 136.64 173.29 145.39 168.73 S&P 500 Industrials 100.00 129.37 143.68 174.02 164.49 194.31 Purchase of Equity Securities The Company has suspended its share repurchase program but the program may be reinstated in the future. Item 6.
Added
All rights reserved. 12/19 12/20 12/21 12/22 12/23 12/24 Alamo Group Inc. 100.00 110.41 118.24 114.36 170.62 151.71 S&P SmallCap 600 100.00 111.29 141.13 118.41 137.42 149.37 S&P 500 Industrials 100.00 111.06 134.52 127.15 150.20 176.44 Purchase of Equity Securities On October 31 2024, the Company announced that its Board of Directors approved a share repurchase program under which the Company is authorized to repurchase in the aggregate up to $50.0 million of its outstanding stock over 5 years, through October 30, 2029.
Added
The extent to which the Company may repurchase 31 shares, and the timing of such purchases, will depend upon market conditions and other corporate considerations as determined by the Company’s Board and management. Item 6. Reserved

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

28 edited+16 added−22 removed29 unchanged
Biggest changeWe experienced strong demand for our products in 2023 together with improving supply chain conditions which facilitated higher throughput and better operating efficiency, leading to record net sales and income for the full year. Market conditions are mixed; governmental and industrial product demand is robust while vegetation product demand has been hampered by higher interest rates and elevated channel inventories.
Biggest changeMarket conditions are mixed; governmental and industrial product demand is robust while vegetation product demand has been hampered mainly by higher interest rates and elevated channel inventories. 2024 Performance In 2024, the Company's net sales decreased by 4% and net income decreased by 15% compared to 2023.
The applicable margin ranges from 1.25% to 2.50% for Term SOFR borrowings and from .25% to 1.50% for Base Rate borrowings with the margin percentage based upon the Company's consolidated leverage ratio. The Company must also pay a commitment fee to the lenders ranging between 0.15% to 0.30% on any unused portion of the $400.0 million Revolver Facility.
The applicable margin ranges from 1.25% to 2.50% for Term SOFR borrowings and from 0.25% to 1.50% for Base Rate borrowings with the margin percentage based upon the Company's consolidated leverage ratio. The Company must also pay a commitment fee to the lenders ranging between 0.15% to 0.30% on any unused portion of the $400.0 million Revolver Facility.
Assigning estimated fair values to the assets acquired and liabilities assumed requires the use of significant estimates, judgments, inputs, and assumptions regarding the fair value of intangible assets that are separately identifiable from goodwill, inventory step-up, and property, plant, and equipment, and are based on available historical information, future expectations, and assumptions determined to be reasonable but are inherently uncertain with respect to future events, including economic conditions, competition, the useful life of the acquired assets and other factors.
Assigning estimated fair values to the assets acquired and liabilities assumed requires the use of significant estimates, judgments, inputs, and assumptions regarding the fair value of intangible assets that are separately identifiable from goodwill, inventory step-up, and property, plant, and equipment, and are based on available 36 historical information, future expectations, and assumptions determined to be reasonable but are inherently uncertain with respect to future events, including economic conditions, competition, the useful life of the acquired assets and other factors.
Net income for 2022 was $101.9 million compared to $80.2 million in 2021, with the increase in 2022 net income resulting from the factors described above. Liquidity and Capital Resources In addition to normal operating expenses, the Company has ongoing cash requirements which are necessary to conduct the Company’s business, including inventory purchases and capital expenditures.
Net income for 2023 was $136.2 million compared to $101.9 million in 2022, with the increase in 2023 net income resulting from the factors described above. 34 Liquidity and Capital Resources In addition to normal operating expenses, the Company has ongoing cash requirements which are necessary to conduct the Company’s business, including inventory purchases and capital expenditures.
The Agreement also contains 34 other customary covenants, representations and events of defaults. The expiration date of the 2022 Credit Agreement, including the Term Facility and the Revolver Facility, is October 28, 2027. As of December 31, 2023, $235.2 million was outstanding under the Credit Agreement, $235.2 million on the Term Facility and zero on the Revolver Facility.
The Agreement also contains other customary covenants, representations and events of defaults. The expiration date of the 2022 Credit Agreement, including the Term Facility and the Revolver Facility, is October 28, 2027. As of December 31, 2024, $220.5 million was outstanding under the Credit Agreement, $220.5 million on the Term Facility and zero on the Revolver Facility.
The following tables set forth, for the periods indicated, certain financial data: Fiscal Year Ended December 31, Net sales (data in thousands): 2023 2022 2021 Vegetation Management $ 979,040 $ 937,065 $ 812,676 Industrial Equipment 710,611 576,551 521,547 Total net sales $ 1,689,651 $ 1,513,616 $ 1,334,223 Cost and profit margins, as percentages of net sales: Cost of sales 73.2 % 75.1 % 74.9 % Gross profit 26.8 % 24.9 % 25.1 % Selling, general, administrative, and amortization expenses 15.1 % 15.1 % 16.3 % Income from operations 11.7 % 9.8 % 8.8 % Income before income taxes 10.4 % 8.9 % 8.2 % Net income 8.1 % 6.7 % 6.0 % Results of Operations Fiscal 2023 compared to Fiscal 2022 The Company’s net sales in the fiscal year ended December 31, 2023 (“2023”) were $1,689.7 million, an increase of $176.1 million or 11.6% compared to $1,513.6 million for the fiscal year ended December 31, 2022 (“2022”).
The following tables set forth, for the periods indicated, certain financial data: Fiscal Year Ended December 31, Net sales (data in thousands): 2024 2023 2022 Vegetation Management $ 785,199 $ 979,040 $ 937,065 Industrial Equipment 843,314 710,611 576,551 Total net sales $ 1,628,513 $ 1,689,651 $ 1,513,616 Cost and profit margins, as percentages of net sales: Cost of sales 74.7 % 73.2 % 75.1 % Gross profit 25.3 % 26.8 % 24.9 % Selling, general, administrative, and amortization expenses 15.2 % 15.1 % 15.1 % Income from operations 10.1 % 11.7 % 9.8 % Income before income taxes 9.2 % 10.4 % 8.9 % Net income 7.1 % 8.1 % 6.7 % Results of Operations Fiscal 2024 compared to Fiscal 2023 The Company’s net sales in the fiscal year ended December 31, 2024 (“2024”) were $1,628.5 million, a decrease of $61.2 million or 3.6% compared to $1,689.7 million for the fiscal year ended December 31, 2023 (“2023”).
The effect on our financial statements upon adoption of these pronouncements is discussed in the above-referenced note. Payment due by period Critical Accounting Estimates Management’s Discussion and Analysis of Financial Condition and Results of Operations are based upon our Consolidated Financial Statements, which have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”).
Payment due by period Critical Accounting Estimates Management’s Discussion and Analysis of Financial Condition and Results of Operations are based upon our Consolidated Financial Statements, which have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”).
For further information on the critical accounting policies, see Note 1 of our Notes to Consolidated Financial Statements. 35 Business Combinations We account for the acquisition of a business in accordance with the accounting standards codification guidance for business combinations, whereby the total consideration transferred is allocated to the assets acquired and liabilities assumed, including amounts attributable to intangible assets based on their respective estimated fair values as of the date of acquisition.
Business Combinations We account for the acquisition of a business in accordance with the accounting standards codification guidance for business combinations, whereby the total consideration transferred is allocated to the assets acquired and liabilities assumed, including amounts attributable to intangible assets based on their respective estimated fair values as of the date of acquisition.
Amortization expense in 2023 was $15.5 million compared to $15.3 million in 2022, an increase of $0.2 million. 32 Interest expense for 2023 was $26.1 million compared to $14.4 million in 2022, an increase of $11.7 million or 81.7%. The increase in interest expense in 2023 primarily came from higher interest rates compared to 2022.
Interest expense for 2023 was $26.1 million compared to $14.4 million in 2022, an increase of $11.7 million or 81.7%. The increase in interest expense in 2023 primarily came from higher interest rates compared to 2022. Other income (expense), net was income of $1.8 million during 2023 compared to expense of $0.7 million in 2022.
The increase in SG&A expenses in 2023 was largely attributable to higher marketing expenses related to trade shows, sales promotions and commissions and to a lesser extent, sales volume-driven administration expense.
The increase in SG&A expenses in 2023 was largely attributable to higher marketing expenses related to trade shows, sales promotions and commissions and to a lesser extent, sales volume-driven administration expense. Amortization expense in 2023 was $15.5 million compared to $15.3 million in 2022, an increase of $0.2 million.
On December 31, 2023, $2.6 million of the revolver capacity was committed to irrevocable standby letters of credit issued in the ordinary course of business as required by vendors' contracts resulting in $397.4 million in available borrowings. The Company is in compliance with the covenants under the Agreement.
On December 31, 2024, $2.7 million of the revolver capacity was committed to irrevocable standby letters of credit issued in the ordinary course of business as required by vendors' contracts resulting in $397.3 million in available borrowings.
The Company will fund any future expenditures from operating cash flows or through our revolving credit facility, described below. Net cash provided by operating activities was $131.2 million for 2023, compared to $14.5 million for 2022.
The Company will fund any future expenditures from operating cash flows or through our revolving credit facility, described below. Net cash provided by operating activities was $209.8 million for 2024, compared to $131.2 million for 2023. The increase of cash from operating activities is primarily the result of improved receivables and inventory compared to 2023.
Management believes the following critical accounting policy reflects its more significant estimates and assumptions used in the preparation of the Consolidated Financial Statements.
Management believes the following critical accounting policy reflects its more significant estimates and assumptions used in the preparation of the Consolidated Financial Statements. For further information on the critical accounting policies, see Note 1 of our Notes to Consolidated Financial Statements.
Fiscal 2022 compared to Fiscal 2021 The Company’s net sales in the fiscal year ended December 31, 2022 (“2022”) were $1,513.6 million, an increase of $179.4 million or 13.4% compared to $1,334.2 million for the fiscal year ended December 31, 2021 (“2021”).
Fiscal 2023 compared to Fiscal 2022 The Company’s net sales in the fiscal year ended December 31, 2023 (“2023”) were $1,689.7 million, an increase of $176.1 million or 11.6% compared to $1,513.6 million for the fiscal year ended December 31, 2022 (“2022”).
Actual results in future periods may differ materially from those expressed or implied because of a number of risks and uncertainties which are discussed below and in the Forward-Looking Information section beginning on page 13.
Actual results in future periods may differ materially from those expressed or implied because of a number of risks and uncertainties which are discussed below and in the Forward-Looking Information section beginning on page 14 . We experienced strong demand for industrial equipment products in 2024 while demand for forestry, tree care, and agricultural mowing products weakened.
The Company had $42.5 million in cash and cash equivalents held by its foreign subsidiaries as of December 31, 2023. The majority of these funds are held at our European and Canadian facilities.
This reduction in cash used by financing activities is due to repayment of revolving credit. The Company had $147.2 million in cash and cash equivalents held by its foreign subsidiaries as of December 31, 2024. The majority of these funds are held at our European and Canadian facilities.
Other income (expense), net was income of $1.8 million during 2023 compared to expense of $0.7 million in 2022. The increase in 2023 was primarily the result of a gain on fixed assets relating to the sale of a manufacturing facility located in Kent, Washington partially offset by loss on currency exchange.
The increase in 2023 was primarily the result of a gain on fixed assets relating to the sale of a manufacturing facility located in Kent, Washington partially offset by loss on currency exchange. The expense in 2022 was primarily the result of an excise tax audit and to a lesser extent, changes in exchange rates.
The expense in 2022 was primarily the result of an excise tax audit and to a lesser extent, changes in exchange rates. Provision for income taxes was $39.0 million (22.2% of income before income taxes) for 2023 compared to $32.4 million (24.1% of income before income taxes) in 2022.
Provision for income taxes was $39.0 million (22.2% of income before income taxes) for 2023 compared to $32.4 million (24.1% of income before income taxes) in 2022.
Net income for 2023 was $136.2 million compared to $101.9 million in 2022, with the increase in 2023 net income resulting from the factors described above.
Provision for income taxes was $33.7 million (22.5% of income before income taxes) for 2024 compared to $39.0 million (22.2% of income before income taxes) in 2023. Net income for 2024 was $115.9 million compared to $136.2 million in 2023, with the decrease in 2024 net income resulting from the factors described above.
The increase in investing activities is driven by the acquisition of Royal Truck. Net cash used by financing activities was $76.9 million for 2023, compared to net cash provided of $24.5 million for 2022. This reduction in cash provided by financing activities is due to repayment of revolving credit.
Net cash used in investing activities was $22.2 million for 2024, compared to $52.6 million for 2023. The decrease in investing activities was in part driven by the acquisition of Royal Truck in 2023. Net cash used by financing activities was $32.0 million for 2024, compared to net cash used of $76.9 million for 2023.
The Company's Industrial Equipment Division net sales were up 23% for the full year of 2023 compared to the full year of 2022. The division's net sales were strong in each of the product lines: excavator and vacuum trucks, street sweepers, debris collectors, and snow removal equipment.
The Company's Industrial Equipment Division reported a 19% increase in net sales for the full year of 2024 compared to 2023. Sales growth was strong in all product lines, with excavators, vacuum trucks, sweepers & safety, and snow removal contributing to year-over-year growth.
Management believes the Agreement and the Company’s ability to internally generate funds from operations should be sufficient to meet the Company’s cash requirements for the foreseeable future. However, future challenges affecting the banking industry and credit markets in general could potentially cause changes to credit availability, which creates a level of uncertainty.
The Company is in compliance with the covenants under the Agreement. 35 Management believes the Agreement and the Company’s ability to internally generate funds from operations should be sufficient to meet the Company’s cash requirements for the foreseeable future.
Inflation moderated in the second half of 2023 and we anticipate that trend will continue in 2024 with the average cost of commodities, components, parts, and accessories increasing slightly when compared to the average costs in 2023. 31 The following discussion should be read in conjunction with the consolidated financial statements of the Company and the notes thereto included elsewhere in this Annual Report on Form 10-K.
The Company's backlog decreased 22% to $669 million at the end of 2024 versus the backlog of $860 million at the end of 2023. 32 The following discussion should be read in conjunction with the consolidated financial statements of the Company and the notes thereto included elsewhere in this Annual Report on Form 10-K.
Inflation The Company is exposed to the risk that the price of energy, steel and other purchased components may increase and the Company may not be able to increase the price of its products correspondingly. If this occurs, the Company’s results of operations would be adversely impacted.
However, future challenges affecting the banking industry and credit markets in general could potentially cause changes to credit availability, which creates a level of uncertainty. Inflation The Company is exposed to the risk that the price of energy, steel and other purchased components may increase and the Company may not be able to increase the price of its products correspondingly.
However, cost inflation is an ongoing challenge that could have a material impact on the Company's business and financial results, particularly if the current inflationary environment materially worsens. New Accounting Pronouncements As discussed in Note 2 of Notes to Consolidated Financial Statements, certain new financial accounting pronouncements became effective January 1, 2023, or will become effective in the future.
New Accounting Pronouncements As discussed in Note 2 of Notes to Consolidated Financial Statements, certain new financial accounting pronouncements became effective January 1, 2024, or will become effective in the future. The effect on our financial statements upon adoption of these pronouncements is discussed in the above-referenced note.
As of December 31, 2023, the Company had working capital of $590.0 million, which represents an increase of $53.3 million from working capital of $536.7 million as of December 31, 2022.
As of December 31, 2024, the Company had working capital of $667.2 million, which represents an increase of $77.2 million from working capital of $590.0 million as of December 31, 2023. The increase in working capital was primarily a result of higher cash and cash equivalents. Capital expenditures were $25.0 million for 2024, compared to $37.7 million for 2023.
Amortization expense in 2022 was $15.3 million compared to $14.6 million in 2021, an increase of $0.7 million. Interest expense for 2022 was $14.4 million compared to $10.5 million in 2021, an increase of $3.9 million or 36.3%. The increase in interest expense in 2022 primarily came from higher interest rates and increased borrowing levels.
Amortization expense in 2024 was $16.2 million compared to $15.5 million in 2023, an increase of $0.7 million due to Royal Truck acquisition in the fourth quarter of 2023. Interest expense for 2024 was $20.5 million compared to $26.1 million in 2023, a decrease of $5.6 million or 21.3%.
Other income (expense), net was expense of $0.7 million during 2022 compared to income of $1.9 million in 2021. The expense in 2022 was primarily the result of an excise tax audit and to a lesser extent, changes in exchange rates.
Other income (expense), net was income of $2.7 million during 2024 compared to income of $1.8 million in 2023. The increase was primarily driven by foreign exchange transaction gains, offset by fixed asset losses.
Removed
While our supply chain has improved, there are lingering supply chain issues and we continue to face labor challenges in some of our locations. 2023 Performance In 2023, the Company's net sales increased by 12% and net income increased by 34% compared to 2022.
Added
Gross profit margins declined slightly due to weaker Vegetation Management Division sales that slowed our production cadence and adversely impacted production efficiency.
Removed
The increase in both net sales and net income was primarily due to a strong demand for our products and improving operating conditions, particularly in the later part of the year. Margins improved due to the increase in demand along with pricing actions which helped mitigate inflation cost pressures.
Added
The decrease in net sales was primarily driven by weak forestry, tree care, and agricultural mowing markets, leading to lower demand in the Vegetation Management Division. Additionally, the sale of Herschel Parts on August 16, 2024, had a negative impact on year-over-year sales, though it was immaterial on a full-year basis.
Removed
However, our full-year results were constrained to some extent by higher input costs, ongoing supply chain disruptions, and skilled labor shortages, all of which had a greater impact on our results earlier in the year. The Company's Vegetation Management Division experienced a 4% increase in net sales for the full year of 2023 compared to the full year of 2022.
Added
These challenges were nearly offset by strong sales growth in the Industrial Equipment Division. The decline in net income was due to lower product demand in the Vegetation Management Division, which affected production efficiency, along with associated separation costs incurred to reduce division capacity.
Removed
The increase in net sales was primarily due to continued strong customer demand for our products and positive pricing actions.
Added
In the Industrial Equipment Division, nonrecurring costs related to the five-week labor strike at Gradall Industries negatively impacted second-quarter results. The Company reached a new five-year collective bargaining agreement at its Gradall plant in May 2024.
Removed
The division's income from operations for 2023 was up 13% versus the full year of 2022, due to improved sales, positive pricing actions,and better productivity, but offset by higher input costs, lingering supply chain disruptions, labor constraints, and higher marketing costs.
Added
The Company's Vegetation Management Division experienced a 20% decrease in net sales for the full year of 2024 compared to 2023 due to a steep decline in forestry, tree care and agricultural mowing markets. The Division’s backlog has declined 47% year-over-year and is now at pre-Covid levels.
Removed
The division's income from operations for 2023 was up 89% versus the full year of 2022, driven by significant sales growth and improved operating efficiencies, but offset by higher input costs and certain key supplier issues, most notably, a shortage of truck chassis earlier in the year.
Added
Income from operations for 2024 decreased by 54% compared to 2023, reflecting market downturn and costs associated with separation and reduction of capacity. The Company continues to implement cost-saving initiatives and enhance operational efficiency, with the goal of improving operating margins.
Removed
Consolidated income from operations was $198.0 million for the full year of 2023 compared to $148.6 million in 2022, an increase of 33%. The Company's backlog decreased 15% to $859.8 million at the end of 2023 versus the backlog of $1.0 billion at the end of 2022.
Added
Income from operations for 2024 rose 43% versus 2023, driven by increased demand, greater operational efficiencies, and an improvement in supply chain performance and truck chassis availability. Consolidated income from operations was $165 million for the full year of 2024 compared to $198 million for the full year of 2023, a decrease of 17%.
Removed
The decrease in the Company's backlog was primarily attributable to a decline in Vegetation Management Division product orders which returned to normal levels from a historical perspective. Inflationary Impacts In 2023, the cost of commodities, components, parts, and accessories was higher compared to the cost of those items purchased in 2022, mainly as a result of inflationary pressure.
Added
The decrease in sales was attributable to weaker market demand in forestry, tree care, and agricultural mowing markets, partially offset by continued strong demand for industrial equipment. Vegetation Management net sales were $785.2 million in 2024 compared to $979.0 million in 2023, a decrease of $193.8 million or 19.8%.
Removed
The increase in sales was attributable to continued strong customer demand for our products in both the Vegetation Management and Industrial Equipment Divisions and improved pricing. Negatively impacting net sales were higher costs for materials and inbound freight, supply chain disruptions and a shortage of skilled labor.
Added
The decline was primarily driven by the sustained weakness in forestry, tree care, and agricultural mowing markets. The sale of Herschel Parts on August 16, 2024 was immaterial to the year-over-year sales decrease. Industrial Equipment net sales were $843.3 million in 2024 compared to $710.6 million in 2023, representing an increase of $132.7 million or 18.7%.
Removed
Also, currency translation negatively affected sales as the U.S. dollar strengthened against the currencies of international countries where we operate.
Added
The increase was a result of strong performance in all product lines including excavator and vacuum trucks, sweepers & safety, and snow removal equipment. Gross profit for 2024 was $412.5 million (25.3% of net sales) compared to $453.6 million (26.8% of net sales) in 2023, a decrease of $41.1 million.
Removed
Net Vegetation Management sales were $937.1 million in 2022 compared to $812.7 million in 2021, an increase of $124.4 million or 15.3%, coming from a strong performance in all product lines, particularly forestry and tree care and agricultural and governmental mowing equipment in both North America and Europe.
Added
The decrease in gross profit was primarily attributable to the decline in Vegetation Management market demand, resulting in production inefficiencies, and the impact of costs to reduce capacity and separation expenses as the Division adjusted to market conditions. In addition, profitability was also impacted by the five-week strike at Gradall in Ohio, which negatively affected the Industrial Equipment Division.
Removed
Supply chain disruptions, labor constraints and unfavorable input cost changes constrained this division during 2022. Currency translation effects also negatively impacted net sales in this division. Net Industrial Equipment sales were $576.6 million in 2022 compared to $521.5 million in 2021, representing an increase of $55.1 million or 10.5%.
Added
Selling, general and administrative expenses (“SG&A”) were $231.5 million (14.2% of net sales) in 2024 compared to $240.2 million (14.2% of net sales) in 2023, a decrease of $8.7 million. The decrease in SG&A expenses in 2024 was attributable to labor cost savings actions taken in Vegetation Management partially offset by additional costs from the acquisition of Royal Truck.
Removed
The increase was mainly due to continued solid results in our excavator and vacuum truck product lines with modest support from other product lines. This division was also negatively impacted by ongoing supply chain disruptions and logistics issues in 2022, including delays in receiving truck chassis and component parts from supply chain partners.
Added
The decrease in interest expense in 2024 was primarily due to debt reduction. 33 Interest income for 2024 was $2.6 million compared to $1.5 million in 2023, an increase of $1.1 million or 77.6%. The increase in 2024 was primarily due to higher cash on hand.
Removed
Gross profit for 2022 was $376.5 million (24.9% of net sales) compared to $334.5 million (25.1% of net sales) in 2021, an increase of $42.0 million. The increase in gross profit was mainly attributable to higher sales volume during 2022 compared to 2021 as well as improved pricing.
Added
If this occurs, the Company’s results of operations would be adversely impacted. In 2024, while inflation moderated compared to prior years, the cost of commodities, components, parts, and accessories remained elevated relative to historical levels. Throughout 2024, we continued to implement strategic pricing actions and operational efficiency measures to help offset these sustained cost pressures.
Removed
Profitability was negatively impacted by supply chain disruptions, shortages of component parts, along with higher costs of materials and inbound freight. These factors led to lower profitability as a percentage of sales in 2022 as compared to the same period in 2021.
Added
While the rate of inflation decreased during 2024, prices for many key inputs remained higher than pre-pandemic levels. Looking ahead to 2025, we expect the cost environment to remain challenging, though with less volatility than in recent years. We anticipate modest increases in the average cost of commodities, components, parts, and accessories compared to 2024 levels.
Removed
Selling, general and administrative expenses (“SG&A”) were $212.6 million (14.0% of net sales) in 2022 compared to $202.9 million (15.2% of net sales) in 2021, an increase of $9.7 million. The increase in SG&A expenses in 2022 was attributable to higher administrative, marketing and engineering expenses as the Company returned to pre-pandemic expense levels.
Added
However, cost inflation continues to be an ongoing challenge that could have a material impact on the Company's business and financial results, particularly if there are unexpected shifts in political policy changes (including the imposition of tariffs), global economic environment or supply chain dynamics.
Removed
Borrowing levels rose in 2022 primarily because of the need for the Company to increase its inventory levels to accommodate stronger market demand and to mitigate supply chain challenges. We anticipate borrowing levels will continue to be pressured by higher inventory requirements unless and until the supply chain situation improves.
Removed
The income in 2021 was primarily due to changes in exchange rates and the sale of a facility in the Netherlands for $3.4 million. 33 Provision for income taxes was $32.4 million (24.1% of income before income taxes) for 2022 compared to $29.3 million (26.7% of income before income taxes) in 2021.
Removed
The increase in working capital was primarily a result of volume-driven and inflation-driven increases in accounts receivable as well as a volume driven increase in inventory to support the Company's backlog. Capital expenditures were $37.7 million for 2023, compared to $31.1 million for 2022.
Removed
The increase of cash from operating activities is primarily the result of stronger net income driven by sales growth and a significantly lower year-on-year change in operating assets compared to 2022. Net cash used in investing activities was $52.6 million for 2023, compared to $31.7 million for 2022.
Removed
In 2023, the cost of commodities, components, parts, and accessories was higher compared to the cost of those items purchased in 2022, mainly as a result of inflationary pressure. In 2023, we worked to mitigate some of the effects of cost increases through pricing actions.
Removed
Inflation moderated in the second half of 2023 and we anticipate that trend will continue in 2024 with the average cost of commodities, components, parts, and accessories increasing slightly when compared to the average costs in 2023.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

7 edited+1 added−0 removed7 unchanged
Biggest changeAccordingly, the Company’s net income is affected by changes in interest rates. Assuming the average level of borrowings at variable rates and a two hundred basis point change in the 2023 average interest rate under these borrowings, the Company’s 2023 interest expense would have changed by approximately $7.0 million.
Biggest changeAccordingly, the Company’s net income was affected by changes in interest rates for part of 2024. Assuming the average level of borrowings at variable rates and a two hundred basis point change in the 2024 average interest rate under these borrowings, the Company’s 2024 interest expense would have changed by approximately $5.6 million.
The Company sells its products primarily within the markets where the products are 36 produced, but some of the Company’s sales from its U.K. and Canadian operations are denominated in other currencies.
The Company sells its products primarily within the markets where the products are produced, but some of the Company’s sales from its U.K. and Canadian operations are denominated in other currencies.
Comparatively, on December 31, 2022, the result of a uniform 10% strengthening in the value of the dollar relative to the currencies in which the Company’s sales are denominated would have been a decrease in gross profit of approximately $10.9 million. This calculation assumes that each exchange rate would change in the same direction relative to the U.S. dollar.
Comparatively, on December 31, 2023, the result of a uniform 10% strengthening in the value of the dollar relative to the currencies in which the Company’s sales are denominated would have been a decrease in gross profit of approximately $12.5 million. This calculation assumes that each exchange rate would change in the same direction relative to the U.S. dollar.
No assurance can be given as to future valuation of the British pound or Euro or how further movements in those or other currencies could affect future earnings or the financial position of the Company. Interest Rate Risk The majority of the Company’s long-term debt bears interest at variable rates.
No assurance can be given as to future valuation of the British pound or Euro or how further movements in those or other currencies could affect future earnings or the financial position of the Company. Interest Rate Risk The majority of the Company’s long-term debt bears interest at variable rates. However, as discussed below in Note 13.
Foreign currency forward exchange contracts in the U.K. are used to offset the earnings effects of such fluctuations. On December 31, 2023, the result of a uniform 10% strengthening in the value of the U.S. dollar relative to the currencies in which the Company’s sales are denominated would have been a decrease in gross profit of $12.5 million.
Foreign currency forward exchange contracts in the U.K. are used to offset the earnings effects of such fluctuations. On December 31, 2024, the result of a uniform 10% 37 strengthening in the value of the U.S. dollar relative to the currencies in which the Company’s sales are denominated would have been a decrease in gross profit of $13.1 million.
The Company’s sensitivity analysis of the effects of changes in foreign currency exchange rates does not factor in a potential change in sales levels or local currency prices. The translation adjustment during 2023 was a gain of $13.6 million.
The Company’s sensitivity analysis of the effects of changes in foreign currency exchange rates does not factor in a potential change in sales levels or local currency prices. The translation adjustment during 2024 was a loss of $29.0 million.
On December 31, 2023, the British pound closed at 0.7854 relative to the U.S. dollar, and the Euro closed at 0.9060 relative to the U.S. dollar. By comparison, on December 31, 2022, the British pound closed at 0.8266 relative to the U.S. dollar, and the Euro closed at 0.9344 relative to the U.S. dollar.
On December 31, 2024, the British pound closed at 0.7991 relative to the U.S. dollar, and the Euro closed at 0.9657 relative to the U.S. dollar. By comparison, on December 31, 2023, the British pound closed at 0.7854 relative to the U.S. dollar, and the Euro closed at 0.9060 relative to the U.S. dollar.
Added
Long-Term Debt, effective August 30, 2024, the Company put in place an interest rate swap that converted the variable interest rate on the Term Facility to a fixed rate of 3.7855% plus an interest margin percentage for the full amount of the outstanding long-term debt for three years.

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