Alamo Group, Inc. (NYSE:ALG) Q3 2018 Earnings Conference Call - Final Transcript

Nov 01, 2018 • 11:00 am ET

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Alamo Group, Inc. (NYSE:ALG) Q3 2018 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen. Welcome to the Alamo Group Third Quarter 2018 Earnings Conference Call. During today's presentation all parties will be in a listen only mode. Following the presentation, the conference will be open for questions. (Operator Instructions) This conference is being recorded today, Thursday, November 1, 2018.

I would now like to turn today's conference call over to Mr. Edward Rizzuti. Please go ahead, sir.

Executive
Edward Rizzuti

Thank you. By now, you should have all received a copy of the press release. However, if anyone is missing a copy and would like to receive one, please contact us at 212-827-3773, and we will send you a release and make sure you are on the company's distribution list. There will be a replay of the call, which will begin one hour after the call and run for one week. The replay can be accessed by dialing 1-888-203-1112, with the passcode 1940994. Additionally, the call is being webcast on the company's website at www.alamo-group.com, and a replay will be available for 60 days.

On the line with me today are Ron Robinson, President and Chief Executive Officer; Dan Malone, Executive Vice President, Chief Financial Officer; and Richard Wehrle, Vice President, Treasurer and Corporate Controller. Management will make some opening remarks, and then we'll open up the line for your questions.

During the call today, management may reference certain non-GAAP numbers in their remarks. Reconciliations of these non-GAAP results to applicable GAAP numbers are included in the attachments to our earnings release (Forward-Looking Cautionary Statements).

I would now like to introduce Ron. Ron, please go ahead.

Executive
Ron Robinson

Thank you, Ed. And we want to thank all of you for joining us today. Dan Malone, our CFO will begin our call with a review of our financial results for the third quarter of 2018. I will then provide a few more comments on the results. And then following our formal remarks, we look forward to taking your questions. So Dan, please go ahead.

Executive
Dan Malone

Thank you, Ron. Our third quarter 2018 results again set company records for sales and earnings. In the quarter, our results were significantly helped by a $3 million adjustment to the 2017 year-end tax provision, which covered the retroactive effects of the 2017 Corporate Tax Reform Act. That said, our record sales and earnings were achieved both with and without the benefit of the tax adjustment.

Very strong industrial division results were again the main driver of our third quarter performance, while agricultural division results were negatively affected by weak market dynamics and higher input costs. In Europe, delays in shipments from our French vacuum truck plant more than offset the otherwise good results of our UK businesses. Overall, third quarter 2018 sales of $257.6 million beat the prior year third quarter by 7.1%, and by about 3.7% without the effect of acquisitions.

Year-to-date, sales are up 12.5% with organic sales growth of 7% without acquisitions. Industrial division third quarter 2018 sales of $156.7 million, represented 18.4% increase over the prior year