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| Best of NAMA 2025 |
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FULL YEAR: ALAMO GROUP'S SALES DOWN 4%, NET INCOME DOWN 15%: $116 MILLION
Feb. 28, 2025
Source: Alamo Group news release
Seguin, TX -- Net sales of $1.6 billion were 3.6% below the previous year. Gross margin of $412.5 million was 25.3% of net sales compared to 2023 gross margin of $453.6 million or 26.8% of net sales. Industrial Equipment Division net sales of $843.3 million grew 18.7%, offsetting lower Vegetation Management Division net sales of $785.2 million, which declined by 19.8% year-on-year.
Net income for the year was $115.9 million or $9.63 per diluted share, compared to $136.2 million or $11.36 per diluted share in 2023. Operating cash flow was $209.8 million, resulting from disciplined inventory and focused accounts receivable management. Inventory declined year-over-year by $34 million or 9% with improved turns. Accounts receivable declined by $56 million or 16% with annualized days sales outstanding improving by approximately 10 days.
The Company's cost reduction initiatives are progressing as expected. As a result of these initiatives, the Company incurred approximately $4.2 million in separation costs and an additional $1.8 million in consolidation expenses. These actions are expected to deliver annualized cost savings in the range of $25 to $30 million.
A portion of these savings materialized in 2024, with further benefits projected for 2025. Reflecting the resilience of our business and our continued confidence in the Company's future, we have increased our quarterly dividend from $0.26 to $0.30 per share. This 15% increase highlights our strong financial position and commitment to delivering shareholder value.
Our ability to raise the dividend again demonstrates the strength of our cash generation and our disciplined approach to capital allocation, ensuring we balance rewarding shareholders with reinvesting in long-term growth opportunities.
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