Alamo Group, Inc.

The replay can be accessed by dialing -344-7529 with the passcode 788-8480. Additionally, the call is being webcast on the company's website at -group.com and a replay will be available for 60 days. On the line with me today are Jeff Leonard, President and Chief Executive Officer, and Chief Financial Officer. Management will make some opening remarks and then we will 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. Before turning the call over to Jeff, I would like to make a few comments about forward-looking statements. We will be making forward-looking statements today that are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties which may cause the company's actual results in future periods to differ materially from forecasted results. Among those factors which could cause actual results to differ materially are the following. Adverse economic conditions which could lead to a reduction in overall market demand, supply chain disruptions, labor constraints, competition, weather, seasonality, currency-related issues, geopolitical events, and other risk factors listed from time to time in the company's SEC reports. The company does not undertake any obligation to update the information contained herein, which speaks only as of this date. I would now like to introduce Jeff Leonard. Jeff, please go ahead.

Thank you, Ed. We'd like to thank everyone who's joined us on the conference call today and express our appreciation for your continued interest in Alamo Group. Our second quarter results reflected a strong, solid operating performance driven by sustained strength in the governmental and industrial markets supported by further modest improvement in the markets for our vegetation management equipment. Sales increased modestly compared to the second quarter of 2024. However, operating income improved significantly as a result of the efficiency improvement measures we have successfully implemented over the past several quarters. I would now like to turn the call over to Agnes, who will take us through a review of our financial results for the second quarter. I will then provide additional comments on the results and say a few words about the outlook for the balance of 2025. Following our formal remarks, we look forward to your questions. Agnes, please go ahead.

Thank you, Jeff. Good morning, everyone. I am pleased to report that we delivered solid operational performance this quarter, reflecting the strength and resilience of our business model. Our industrial equipment division delivered impressive results. Our vegetation management division continues its recovery, and we are encouraged by the progress made. The second quarter of 2025 revenue was $419.1 million, compared to strong prior year second quarter revenue of $416.3 million. Growth profit for the quarter was $108.3 million, with a margin of .8% of net sales, compared to $108.2 million and margin of 26% for the same period last year. As GNA expenses were $57.1 million, which is a reduction of 6% driven by savings in vegetation management division. Operating income in the second quarter of 2025 was $47.1 million, with an operating margin of .2% of net sales, reflecting an increase of 83 basis points, compared to the second quarter in 2024. Net income for the second quarter was $31.1 million, or $2.57 per diluted share, compared to net income of $28.3 million, or $2.35 per diluted share last year at the same time. Almost 10% increase in the net income was driven by stronger operating results. Interest expense decreased $2.4 million, compared to the same period in 2024, driven by significantly lower debt levels. Lower interest expense helped offset unfavorable impact of the revaluation of US dollar denominated monetary assets held in our Canadian entities. The provision for income tax was $10.3 million, resulting in effective tax rate of approximately 24.9%, compared to .8% in the second quarter of 2024. With that overview, let's take a closer look at the performance of our divisions. Vegetation Management Division reported net sales of $178.4 million, a .7% reduction compared to the second quarter of 2024. While this was a reduction compared to the strong quarter in 2024, it was a .8% sequential improvement as bookings and backlogs have stabilized. Operating income for this division was $12.8 million, representing .1% of net sales. The impact of lower revenue compared to the second quarter of 2024 was partially offset by savings from the cost reductions taken in 2024. Industrial Equipment Division net sales were another record, $240.7 million, representing an impressive .6% organic growth compared to the second quarter of 2024. Growth in the second quarter was driven by strong sales across the division, especially notable were sales of vacuum trucks as well as no removal equipment. Operating income was also a record, $34.3 million or .3% of net sales, which was a 100 basis points improvement compared to the same period last year, a result of growth in our operational excellence initiatives. Moving on to the balance sheet. We maintain a strong financial position and flexibility to support ongoing initiatives and future investments. Our total assets of ,000,000 at the end of second quarter increased by $51.7 million compared to last year at the same time. An increase in cash and cash equivalents were partially offset by decrease in accounts receivable and inventory. We reduced our accounts receivable by $32.3 million to $356.2 million, also representing a reduction in day sales outstanding by about three days compared to the same period in 2024. Inventory of $372.1 million was also reduced by $13.1 million compared to last year. Reductions we achieved in vegetation management division were offset by increase in industrial equipment division. Higher inventory in the industrial equipment division supports double-digit growth in that division. As a result of our discipline cash management, the operating cash flow year to date was $36.9 million. At the end of second quarter 2025, our total debt was $213.1 million and debt net of cash was $11.3 million. This was an improvement of $163.8 million or .5% compared to the second quarter in 2024, driven by strategic debt reduction and strong cash generation. To conclude, I would like to emphasize our commitment to delivering long-term value to our shareholders. We are pleased that our board has approved a quarterly dividend of $0.30 per share as we move forward where we may focus on driving growth and optimization in our operations. Thank you. I'll turn it back over to Jeff.