Alamo Group (ALG) investor relations material

Company overview and business segments

• Manufactures industrial and vegetation management equipment for infrastructure, land management, and agriculture, serving public and private sectors globally.

• Operates two main divisions: Industrial Equipment (60% of sales) and Vegetation Management (40% of sales).

• Products include excavators, vacuum trucks, mowers, mulchers, sweepers, and snow removal equipment.

• Key end markets: public works, industrial, agriculture, and other sectors like utilities and construction.

• Sells through dealers, retailers, direct sales, and to government/municipal customers.

Financial performance and metrics

• Q2'26 LTM net sales reached $1.66B, with an adjusted EBITDA margin of 13.4% and operating income margin of 10.1%.

• Free cash flow for Q2'26 LTM was $135M, representing 134% of net income.

• Net leverage remains low at 0.3x, with a strong balance sheet and current ratio of 4.4x.

• Industrial Equipment division YTD Q2'26 net sales were $513.4M, with a 16.6% adjusted EBITDA margin.

• Vegetation Management division YTD Q2'26 net sales were $354.5M, with a 10.8% adjusted EBITDA margin.

Growth, strategy, and capital allocation

• Targets 8–10% annual sales growth (including acquisitions), ~15% adjusted operating income margin, and ~18% adjusted EBITDA margin.

• Capital allocation prioritizes M&A, organic capex (~2% of net sales), share buybacks, and dividends.

• Maintains a $50M share repurchase authorization and a $0.34/share dividend, with a payout ratio near 15%.

• Pursues 1–2 tuck-in acquisitions per year, focusing on core product categories and geographies.

• Strong cash flow supports value-added capital deployment and growth initiatives.