Alamo Group Q3 Profit Falls With Portfolio Charges; Buys Econ

The Tip Desk · November 3, 2026 · 4 min read

Third-quarter net sales were $403.1 million as $33.3 million of pre-tax charges from sales and wind-downs involving Dixie Chopper, Boxer and other lines cut net income to $2.0 million.

Alamo Group Inc. (ALG) reported third-quarter 2026 net sales of $403.1 million, down 4.0%, and net income of $2.0 million, compared with $25.4 million a year earlier. Results included $33.3 million of net pre-tax charges associated with the sale and wind-down of businesses and product lines such as Dixie Chopper® and Boxer®, as the company substantially completed planned portfolio-optimization actions during the quarter.

Net sales were $403.1 million, down 4.0% from $420.0 million a year earlier. Net income was $2.0 million, or $0.17 a share, compared with $25.4 million, or $2.10 a share, in the third quarter of 2025. Adjusted net income was $24.9 million, or $2.06 a share. Adjusted EBITDA was $52.4 million, or 13.0% of net sales.

The charges included inventory valuation adjustments, impairment of intangible and other long-lived assets, and other wind-down costs. Of the $33.3 million, $7.3 million was recorded as a reduction in sales, $15.5 million in cost of sales, $9.0 million in selling, general and administrative expenses, and $1.5 million in other income and expense. Divestiture-related tax items temporarily raised the effective tax rate, the company said, while the underlying rate remained generally consistent with historical levels.

Gross profit was $76.1 million. Adjusted gross profit was $99.8 million, or 24.7% of net sales.

Industrial Equipment Division net sales were $232.8 million, down 5.8% from $247.0 million. The company said softer end-market conditions and the timing of orders earlier in the year were partially offset by Petersen Industries; excluding Petersen, Industrial Equipment sales decreased approximately 12.6%. Adjusted EBITDA in the division was $31.1 million, or 13.4% of net sales, compared with $38.2 million, or 15.5% of net sales, a year earlier. The company attributed the year-over-year decline in adjusted EBITDA margin to material and freight inflation and the impact of lower sales on the division’s fixed costs.

Vegetation Management Division net sales were $170.4 million, down 1.5% from $173.1 million. The quarter included the $7.3 million divestiture-related reduction in sales; excluding that item, the company said the division’s sales increased 2.7%, primarily reflecting improved manufacturing throughput in several businesses. Adjusted EBITDA in Vegetation Management was $21.3 million, or 12.5% of net sales, compared with $16.8 million, or 9.7% of net sales, a year earlier. The company said the year-over-year increase in adjusted EBITDA margin reflected improved performance in several of its businesses.

President and Chief Executive Officer Robert Hureau said the company had taken two steps to advance its strategy: completing planned portfolio-optimization activities, particularly within Vegetation Management, and acquiring Econ, further enhancing the Industrial portfolio. He said the Industrial Equipment Division experienced margin pressure from elevated material and freight costs and that the company had taken pricing actions that lagged inflation during the quarter. He said order intake strengthened during the third quarter, with particularly encouraging activity in vacuum trucks and sweepers.

Backlog at September 30, 2026 was $521.3 million compared with $618.3 million at September 30, 2025. Industrial Equipment backlog was $350.4 million and Vegetation Management backlog was $170.9 million. The company said order activity remained solid during the third quarter and that current backlog levels support appropriate customer lead times.

For the first nine months of 2026, net sales increased 3.3% to $1.3 billion. Adjusted EBITDA increased 2.0% to $175.6 million, or 13.8% of net sales. Industrial Equipment Division net sales increased 4.4% to $746.1 million, and Vegetation Management Division net sales increased 1.9% to $524.9 million. Diluted EPS was $5.14 for the nine months; adjusted diluted EPS was $7.43.

On October 27, 2026, after quarter-end, Alamo Group acquired 100% of Econ Engineering Group Limited, a U.K. manufacturer of roadway maintenance vocational trucks, for £120.0 million ($158.7 million), plus customary closing adjustments, using borrowings under its revolving credit facility. At September 30, 2026, cash was $230.7 million and total debt was $232.3 million, leaving debt net of cash of approximately $1.7 million. Available borrowings under the revolving credit facility were $363.6 million. Management said remaining liquidity, together with cash flows from operations, remains sufficient to meet anticipated operating and capital requirements.