Alamo Group Inc (ALG) has reported a 33.35 percent plunge in profit for the quarter ended Dec. 31, 2016. The company has earned $7.59 million, or $0.65 a share in the quarter, compared with $11.38 million, or $0.99 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $9.45 million, or $0.81 a share compared with $10.83 million or $0.95 a share, a year ago.
Revenue during the quarter dropped 8.43 percent to $205.52 million from $224.43 million in the previous year period. Gross margin for the quarter expanded 161 basis points over the previous year period to 23.32 percent. Total expenses were 94.03 percent of quarterly revenues, up from 93.59 percent for the same period last year. That has resulted in a contraction of 44 basis points in operating margin to 5.97 percent.
Operating income for the quarter was $12.28 million, compared with $14.40 million in the previous year period.
However, the adjusted operating income for the quarter stood at $15.17 million compared to $17.34 million in the prior year period. At the same time, adjusted operating margin contracted 34 basis points in the quarter to 7.38 percent from 7.72 percent in the last year period.
Ron Robinson, Alamo Group’s president and chief executive officer commented, “Our fourth quarter was somewhat weaker than our expectations as we continue to be impacted by persistent headwinds that have been constraining our sales throughout the year. However, there were many positive developments during 2016. Despite lower sales, we were able to grow gross margins as a result of our ongoing cost control initiatives and manufacturing efficiencies. And, cash flow for both the quarter and full year remained at a strong level allowing us to reduce total debt during the year by $74 million and by over $120 million in the last two years. This was achieved through both strong earnings from operations as well as better asset management as we reduced inventory and increased inventory turns.
Working capital declines
Alamo Group Inc has witnessed a decline in the working capital over the last year. It stood at $248.92 million as at Dec. 31, 2016, down 10.42 percent or $28.94 million from $277.86 million on Dec. 31, 2015. Current ratio was at 4.16 as on Dec. 31, 2016, down from 4.27 on Dec. 31, 2015.
Debt comes down significantly
Alamo Group Inc has recorded a decline in total debt over the last one year. It stood at $70.09 million as on Dec. 31, 2016, down 51.35 percent or $73.99 million from $144.08 million on Dec. 31, 2015. Total debt was 12.68 percent of total assets as on Dec. 31, 2016, compared with 23.87 percent on Dec. 31, 2015. Debt to equity ratio was at 0.18 as on Dec. 31, 2016, down from 0.40 as on Dec. 31, 2015. Interest coverage ratio deteriorated to 7.77 for the quarter from 9.10 for the same period last year.
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