Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Jul. 31, 2015 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | ALAMO GROUP INC | |
Entity Central Index Key | 897,077 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 11,422,368 |
Interim Condensed Consolidated
Interim Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 34,522 | $ 39,533 |
Accounts receivable, net | 194,942 | 175,008 |
Inventories | 175,440 | 166,088 |
Deferred income taxes | 7,304 | 4,712 |
Prepaid expenses | 4,688 | 4,415 |
Income tax receivable | 556 | 3,546 |
Total current assets | 417,452 | 393,302 |
Rental equipment, net | 44,437 | 33,631 |
Property, plant and equipment | 173,592 | 171,667 |
Less: Accumulated depreciation | (104,201) | (100,497) |
Property, plant and equipment, net | 69,391 | 71,170 |
Goodwill | 77,389 | 75,691 |
Intangible assets, net | 55,010 | 56,984 |
Deferred income taxes | 117 | 642 |
Other assets | 1,441 | 1,466 |
Total assets | 665,237 | 632,886 |
Current liabilities: | ||
Trade accounts payable | 60,806 | 47,741 |
Income taxes payable | 338 | 52 |
Accrued liabilities | 36,060 | 41,002 |
Current maturities of long-term debt and capital lease obligations | 528 | 551 |
Deferred income tax | 322 | 21 |
Total current liabilities | 98,054 | 89,367 |
Long-term debt and capital lease obligations, net of current maturities | 203,014 | 190,024 |
Deferred pension liability | 4,788 | 5,714 |
Other long-term liabilities | 5,940 | 5,656 |
Deferred income taxes | 5,544 | 4,455 |
Stockholders’ equity: | ||
Common stock, $.10 par value, 20,000,000 shares authorized; 11,388,881 and 11,306,650 outstanding at June 30, 2015 and December 31, 2014, respectively | 1,139 | 1,130 |
Additional paid-in-capital | 96,245 | 93,849 |
Treasury stock, at cost; 42,600 shares at June 30, 2015 and December 31, 2014 | (426) | (426) |
Retained earnings | 274,737 | 259,476 |
Accumulated other comprehensive loss, net | (23,798) | (16,359) |
Total stockholders’ equity | 347,897 | 337,670 |
Total liabilities and stockholders’ equity | $ 665,237 | $ 632,886 |
Interim Condensed Consolidated3
Interim Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2015 | Dec. 31, 2014 |
Stockholders' Equity: | ||
Common stock, par value | $ 0.10 | $ 0.10 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 11,388,881 | 11,306,650 |
Common stock, shares outstanding | 11,388,881 | 11,306,650 |
Treasury stock, shares | 42,600 | 42,600 |
Interim Condensed Consolidated4
Interim Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Net sales: | ||||
Net sales | $ 215,734 | $ 207,751 | $ 423,532 | $ 380,361 |
Cost of sales | 165,069 | 160,465 | 327,330 | 294,945 |
Gross profit | 50,665 | 47,286 | 96,202 | 85,416 |
Selling, general and administrative expenses | 34,230 | 32,490 | 67,639 | 59,989 |
Income from operations | 16,435 | 14,796 | 28,563 | 25,427 |
Interest expense | (1,848) | (1,044) | (3,471) | (1,283) |
Interest income | 41 | 35 | 93 | 96 |
Other income, net | 488 | 153 | 1,348 | 627 |
Income before income taxes | 15,116 | 13,940 | 26,533 | 24,867 |
Provision for income taxes | 5,406 | 4,745 | 9,464 | 8,434 |
Net Income | $ 9,710 | $ 9,195 | $ 17,069 | $ 16,433 |
Net income per common share: | ||||
Basic (in dollars per share) | $ 0.86 | $ 0.76 | $ 1.51 | $ 1.36 |
Diluted (in dollars per share) | $ 0.84 | $ 0.75 | $ 1.49 | $ 1.34 |
Average common shares: | ||||
Basic (in shares) | 11,352 | 12,097 | 11,316 | 12,090 |
Diluted (in shares) | 11,498 | 12,276 | 11,467 | 12,273 |
Dividends declared (in dollars per share) | $ 0.08000 | $ 0.07000 | $ 0.16000 | $ 0.14000 |
North American Industrial | ||||
Net sales: | ||||
Net sales | $ 118,521 | $ 105,476 | $ 235,433 | $ 183,187 |
Income from operations | 10,100 | 10,128 | 19,437 | 16,428 |
North American Agricultural | ||||
Net sales: | ||||
Net sales | 52,981 | 53,635 | 101,438 | 104,443 |
Income from operations | 3,722 | 2,375 | 4,514 | 4,790 |
European | ||||
Net sales: | ||||
Net sales | 44,232 | 48,640 | 86,661 | 92,731 |
Income from operations | $ 2,613 | $ 2,293 | $ 4,612 | $ 4,209 |
Interim Condensed Consolidated5
Interim Condensed Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Income | $ 9,710 | $ 9,195 | $ 17,069 | $ 16,433 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustment | 5,830 | 3,531 | (7,822) | 2,605 |
Post Retirement adjustments: | ||||
Net gains arising during the period | 178 | 85 | 383 | 169 |
Other comprehensive income (loss) | 6,008 | 3,616 | (7,439) | 2,774 |
Comprehensive Income | $ 15,718 | $ 12,811 | $ 9,630 | $ 19,207 |
Interim Condensed Consolidated6
Interim Condensed Consolidated Statements of Stockholders' Equity - 6 months ended Jun. 30, 2015 - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Loss |
Balance at Dec. 31, 2014 | $ 337,670 | $ 1,130 | $ 93,849 | $ (426) | $ 259,476 | $ (16,359) |
Balance (shares) at Dec. 31, 2014 | 11,264 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 17,069 | $ 0 | 0 | 0 | 17,069 | 0 |
Translation adjustment | (7,822) | 0 | 0 | 0 | 0 | (7,822) |
Net actuarial gain arising during period, net of taxes | 383 | 0 | 0 | 0 | 0 | 383 |
Stock-based compensation | 466 | 0 | 466 | 0 | 0 | 0 |
Exercise of stock options | 1,939 | $ 9 | 1,930 | 0 | 0 | 0 |
Exercise of stock options (shares) | 82 | |||||
Dividends paid ($.16 per share) | (1,808) | $ 0 | 0 | 0 | (1,808) | 0 |
Balance at Jun. 30, 2015 | $ 347,897 | $ 1,139 | $ 96,245 | $ (426) | $ 274,737 | $ (23,798) |
Balance (shares) at Jun. 30, 2015 | 11,346 |
Interim Condensed Consolidated7
Interim Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Statement of Stockholders' Equity [Abstract] | ||||
Dividends paid (in dollars per share) | $ 0.08000 | $ 0.07000 | $ 0.16000 | $ 0.14000 |
Interim Condensed Consolidated8
Interim Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Operating Activities | ||
Net income | $ 17,069 | $ 16,433 |
Adjustment to reconcile net income to net cash used in operating activities: | ||
Provision for doubtful accounts | 500 | 106 |
Depreciation | 9,361 | 4,913 |
Amortization of intangibles | 1,563 | 55 |
Amortization of debt issuance costs | 106 | 77 |
Stock-based compensation expense | 466 | 1,660 |
Excess tax benefits from stock-based payment arrangements | (39) | (426) |
Provision for deferred income tax benefit | (858) | (1,332) |
Gain on sale of property, plant and equipment | (83) | (895) |
Changes in operating assets and liabilities, net of amounts acquired: | ||
Accounts receivable | (22,152) | (32,856) |
Inventories | (11,713) | (22,876) |
Rental equipment | (14,496) | 0 |
Prepaid expenses and other assets | (1,353) | 2,946 |
Trade accounts payable and accrued liabilities | 9,617 | 16,292 |
Income taxes payable | 3,647 | 874 |
Other long-term liabilities | (394) | (96) |
Net cash used in operating activities | (8,759) | (15,125) |
Investing Activities | ||
Acquisitions, net of cash acquired | (3,465) | (195,612) |
Purchase of property, plant and equipment | (5,101) | (4,319) |
Proceeds from sale of property, plant and equipment | 99 | 1,004 |
Net cash used in investing activities | (8,467) | (198,927) |
Financing Activities | ||
Borrowings on bank revolving credit facility | 52,000 | 200,000 |
Repayments on bank revolving credit facility | (39,000) | (12,000) |
Principal payments on long-term debt and capital leases | (19) | (118) |
Proceeds from issuance of debt | 0 | 778 |
Debt issuance cost | 0 | (818) |
Dividends paid | (1,808) | (1,692) |
Proceeds from sale of common stock | 1,939 | 334 |
Excess tax benefits from stock-based payment arrangements | 39 | 426 |
Net cash provided by financing activities | 13,151 | 186,910 |
Effect of exchange rate changes on cash and cash equivalents | (936) | 541 |
Net change in cash and cash equivalents | (5,011) | (26,601) |
Cash and cash equivalents at beginning of the period | 39,533 | 63,960 |
Cash and cash equivalents at end of the period | 34,522 | 37,359 |
Cash paid during the period for: | ||
Interest | 3,157 | 500 |
Income taxes | $ 8,138 | $ 9,201 |
Basis of Financial Statement Pr
Basis of Financial Statement Presentation | 6 Months Ended |
Jun. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Financial Statement Presentation | Basis of Financial Statement Presentation The accompanying unaudited interim condensed consolidated financial statements of Alamo Group Inc. and its subsidiaries (the “Company”) have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulations S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2015 . The balance sheet at December 31, 2014 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2014 . Certain reclassifications have been made to previously reported financial statements to conform to the current presentation. The accompanying statement of income reflects the correction of a misclassification of freight revenue for the periods. Freight allowance given to customers was previously recorded as a reduction of cost of sales and has been reclassified to increase net sales and cost of sales in accordance with ASC 605-45-45-20. The reclassification of net sales and cost of sales for the three and six months ended June 30, 2014 resulted in an increase of approximately $1,398,000 and $2,757,000 , respectively, with no impact on reported net income. The SEC adopted the conflict mineral rules under Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act on August 22, 2012. The rules require public companies to disclose information about their use of specific minerals originating from and financing armed groups in the Democratic Republic of the Congo or adjoining countries. The conflict mineral rules cover minerals frequently used to manufacture a wide array of electronic and industrial products including semiconductor devices. The rules do not ban the use of minerals from conflict sources, but require SEC filings and public disclosure covering each calendar year, though the public disclosure provision is being challenged in court. We have determined that we are subject to the rules and are evaluating our supply chain. We have previously filed all required reporting for calendar years 2013 and 2014, and are currently in the process of updating our supplier inquiries in order to meet the 2015 reporting requirement, which is due by May 31, 2016. In April 2014, the FASB issued Accounting Standards Update ("ASU") 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposal of Components of an Entity,” which raises the threshold for disposals to qualify as discontinued operations by focusing on whether a disposal represents a strategic shift that has or will have a major effect on an company’s operations and financial results. The guidance allows companies to have significant continuing involvement and continuing cash flows with the disposed component. The guidance was effective on January 1, 2015 and has been adopted. The Company does not believe that this guidance will have a material impact on its consolidated financial statements. In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers” (Topic 606), which supersedes the revenue recognition requirements in ASC Topic 605, “Revenue Recognition,” and most industry-specific guidance. This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. The amendments in the ASU must be applied using either the retrospective or cumulative effect transition method and are effective for annual and interim periods beginning after December 15, 2016. Early adoption is not permitted. In April 2015, the FASB voted to propose a delay in the effective date of this ASU for reporting periods beginning after December 15, 2017, with early adoption permitted as of the original effective date. As a result, the proposed new effective date for the Company will be January 1, 2018. This update could impact the timing and amounts of revenue recognized. We are evaluating the effects, if any, that adoption of this guidance will have on our consolidated financial statements and have not yet selected a transition approach to implement the standard. In January 2015, the FASB issued Accounting Standards Update No. 2015-01, “Income Statement - Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items” (“ASU 2015-01”). ASU 2015-01 eliminates the concept of extraordinary items from GAAP but retains the presentation and disclosure guidance for items that are unusual in nature or occur infrequently and expands the guidance to include items that are both unusual in nature and infrequently occurring. ASU 2015-01 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. A reporting entity may apply ASU 2015-01 prospectively. A reporting entity may also apply ASU 2015-01 retrospectively to all periods presented in the financial statements. The adoption of ASU 2015-01 will not have a material effect on our consolidated financial statements. In April 2015, the FASB issued Accounting Standards Update (ASU) No. 2015-03, “Simplifying the Presentation of Debt Issuance Costs,” as part of its simplification initiative. The ASU changes the presentation of debt issuance costs in financial statements. Under the ASU, an entity presents such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the costs is reported as interest expense. These provisions are to be applied retrospectively and are effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. The adoption of ASU 2015-03 will not materially affect our financial position or results of our operations; however our debt issuance costs will be reported in the balance sheet as a direct deduction of longterm debt and capital lease obligations, net of current maturities. In July 2015, the FASB has issued Accounting Standards Update (ASU) No. 2015-11, “Simplifying the Measurement of Inventory,” as part of its simplification initiative. The ASU amends existing guidance for measuring inventories. This amendment will require the Company to measure inventories recorded using the first-in, first-out method at the lower of cost and net realizable value. This amendment does not change the methodology for measuring inventories recorded using the last-in, first-out method. This amendment will be effective prospectively for the Company on January 1, 2017, with early adoption permitted. We are evaluating the effect this guidance will have on our consolidated financial statements and have not yet selected a transition approach to implement the standard. |
Accounting Policies
Accounting Policies | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Accounting Policies | Accounting Policies There have been no changes or additions to our significant accounting policies described in Note 1 to the Consolidated Financial Statements in the Company’s annual report on Form 10-K for the year ended December 31, 2014 . |
Acquisitions and Investments
Acquisitions and Investments | 6 Months Ended |
Jun. 30, 2015 | |
Business Combinations [Abstract] | |
Acquisitions and Investments | Acquisitions and Investments On March 9, 2015, the Company acquired Herder Implementos e Maquinas Agricolas Ltda. ("Herder") on a debt free basis and subject to certain post-closing adjustments with total consideration of approximately $4.0 million subject to adjustments. This acquisition is being accounted for in accordance with ASC Topic 805. Accordingly, the total purchase price has been allocated on a preliminary basis to assets acquired and liabilities assumed based on their estimated fair values as of the completion of the acquisition. These allocations reflect various provisional estimates that were available at the time and are subject to change during the purchase price allocation period as valuations are finalized. The primary reason for the Herder acquisition was to establish a presence in South America which is a major global agricultural market, therefore Herder will be reported as part of the Company's Agricultural Division. The revenue and earnings of Herder from the date of acquisition to June 30, 2015 were not material to the Company’s consolidated results of operations. In addition, assuming the acquisition had occurred as of January 1, 2014, the results of operations of Herder would not have had a material pro forma effect on the Company’s revenues, earnings or earnings per share for the periods ended June 30, 2015 and 2014. Other Acquisitions On May 13, 2014, the Company acquired all of the operating units of Specialized Industries LP, a portfolio company of ELB Capital Management, LLC. The purchase included the businesses of Super Products LLC, Wausau-Everest LP and Howard P. Fairfield LLC as well as several related entities ("Specialized"), including all brand names and related product names and trademarks (the "Acquisition") pursuant to the terms of the Membership Interests and Partnership Interests Purchase Agreement dated February 24, 2014 (the “Agreement”). The purchase price consideration was approximately $193 million , on a debt-free basis which included certain post-closing adjustments that were made within 90 days from the Acquisition date per the agreement. As disclosed in Note 10 of this 10-Q, the Company amended its revolving credit facility on May 12, 2014, to finance the acquisition. During Q2 2015, the Company completed its valuation of the acquired assets and liabilities. In connection with preparing information needed for the associated tax returns, the Company identified an error in the pre-acquisition financial statements of Specialized Industries. In particular, a previously unrecognized deferred tax liability approximating $3.3 million related to intangible assets was identified. This resulted in an adjustment to the preliminary purchase price allocation disclosed in Note 2 of the Notes to Consolidated Financial Statements included in our annual report on Form 10-K for the year ended December 31, 2014. The Company adjusted the purchase price allocation associated with the Specialized acquisition to record the $3.3 million deferred tax liability with an associated increase in goodwill. Pursuant to ASC 805-10-25-17, this adjustment has been reflected as of the acquisition date, and accordingly, the recorded amounts for deferred income tax liabilities and goodwill in the December 31, 2014 financial statements included herein have been adjusted to reflect the revised amounts. The final amounts assigned to the assets acquired and liabilities assumed in the Specialized acquisition were recognized at their acquisition-date fair values and are as follows (in thousands): Cash 2,025 Accounts receivable 16,290 Inventory 47,500 Prepaid expenses 3,223 Rental equipment 28,446 Property, plant & equipment 13,214 Intangible assets 53,900 Other assets 675 Deferred income tax (6,023 ) Other liabilities assumed (10,962 ) Net assets assumed 148,288 Goodwill 44,611 Acquisition Price 192,899 |
Accounts Receivable
Accounts Receivable | 6 Months Ended |
Jun. 30, 2015 | |
Receivables [Abstract] | |
Accounts Receivable | Accounts Receivable Accounts receivable is shown net of the allowance for doubtful accounts of $3,321,000 and $2,853,000 at June 30, 2015 and December 31, 2014 , respectively. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories valued at LIFO cost represented 41% and 37% of total inventory at June 30, 2015 and December 31, 2014 , respectively. The excess of current cost over LIFO valued inventories was approximately $10,230,000 at June 30, 2015 and December 31, 2014 . An actual valuation of inventory under the LIFO method can be made only at the end of each year based on the inventory levels and costs at that time. Accordingly, interim LIFO must necessarily be based, to some extent, on management's estimates at each quarter end. Net inventories consist of the following: (in thousands) June 30, December 31, Finished goods $ 128,047 $ 112,197 Work in process 19,729 18,635 Raw materials 27,664 35,256 $ 175,440 $ 166,088 Inventory obsolescence reserves were $7,404,000 at June 30, 2015 and $7,601,000 at December 31, 2014 . The decrease in reserve for obsolescence resulted from the Company's quarterly review in the normal course of business. |
Rental Equipment
Rental Equipment | 6 Months Ended |
Jun. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Rental Equipment | Rental Equipment Rental equipment is shown net of accumulated depreciation of $6,435,000 and $3,435,000 at June 30, 2015 and December 31, 2014 , respectively. The Company recognized depreciation expense of $1,918,000 and $644,000 for the three month ending June 30, 2015 and June 30, 2014 , respectively and $3,664,000 and $644,000 for the six months ending June 30, 2015 and June 30, 2014 , respectively. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements ASC Subtopic 820-10 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. There is a three-tier fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. Fair value measurements are classified under the following hierarchy: Level 1 – Quoted prices for identical instruments in active markets. Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs or significant value-drivers are observable in active markets. Level 3 – Model-derived valuations in which one or more significant inputs or significant value-drivers are unobservable Additional details on fair value measurements are included in Note 11 to the consolidated financial statements included in the Company’s annual report on Form 10-K for the year ended December 31, 2014 . The carrying values of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses, approximate their fair value because of the short-term nature of these items. The carrying value of our debt approximates the fair value as of June 30, 2015 and December 31, 2014 , as the floating rates on our outstanding balances approximate current market rates. This conclusion was made based on Level 2 inputs. |
Goodwill
Goodwill | 6 Months Ended |
Jun. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The following is the summary of changes to the Company's Goodwill for the six months ended June 30, 2015 : (in thousands) Balance at December 31, 2014 $ 75,691 Goodwill acquired 2,999 Translation adjustments (1,301 ) Balance at June 30, 2015 $ 77,389 |
Definite and Indefinite Lived I
Definite and Indefinite Lived Intangible Assets | 6 Months Ended |
Jun. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Definite and Indefinite Lived Intangible Assets | Definite and Indefinite Lived Intangible Assets The following is a summary of the Company's definite and indefinite lived intangible assets net of the accumulated amortization: (in thousands) Estimated Useful Lives June 30, December 31, 2014 Definite: Trade names and trademarks 25 years $ 22,006 22,104 Customer and dealer relationships 14 years 29,104 29,404 Patents and drawings 12 years 1,935 1,968 Total at cost 53,045 53,476 Less accumulated amortization 3,535 1,992 Total net 49,510 51,484 Indefinite: Trade names and trademarks 5,500 5,500 Total Intangible Assets $ 55,010 $ 56,984 The Company recognized amortization expense of $782,000 and $55,000 for the three months ending June 30, 2015 and 2014 , respectively and $1,563,000 and $55,000 for the six months ended June 30, 2015 and 2014 , respectively. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Debt | Debt Effective May 12, 2014, the Company amended its revolving credit facility and increased its line of credit from $100 million to $250 million to accommodate the acquisition of Specialized and meet the ongoing needs of the combined entities. The Company maintains a revolving credit facility with certain lenders under its Amended and Restated Revolving Credit Agreement. The aggregate commitments from lenders under such revolving credit facility is $250.0 million and, subject to certain conditions, the Company has the option to request an increase in aggregate commitments of up to an additional $50.0 million . The revolving credit agreement requires the Company to maintain various financial covenants including a minimum earnings before interest and tax to interest expense ratio, a maximum leverage ratio and a minimum asset coverage ratio. The agreement also contains various covenants relating to limitations on indebtedness, limitations on investments and acquisitions, limitations on sale of properties and limitations on liens and capital expenditures. The revolving credit agreement also contains other customary covenants, representations and events of defaults. As of June 30, 2015 , the Company was in compliance with the covenants under the revolving credit facility. The termination date of the revolving credit facility is May 12, 2019. As of June 30, 2015 , $203.0 million was outstanding under the revolving credit facility. As of June 30, 2015 , $1.8 million of the revolver capacity was committed to irrevocable standby letters of credit issued in the ordinary course of business as required by vendors' contracts, resulting in $45.2 million in available borrowings. June 30, December 31, Current Maturities: Capital lease obligations $ 27 $ 35 Other notes payable 501 516 528 551 Long-term debt: Bank revolving credit facility 203,000 190,000 Capital lease obligations 14 24 203,014 190,024 Total debt $ 203,542 $ 190,575 |
Common Stock and Dividends
Common Stock and Dividends | 6 Months Ended |
Jun. 30, 2015 | |
Stockholders' Equity Note [Abstract] | |
Common Stock and Dividends | Common Stock and Dividends Dividends declared and paid on a per share basis were as follows: Three Months Ended Six Months Ended 2015 2014 2015 2014 Dividends declared $ 0.08 $ 0.07 $ 0.16 $ 0.14 Dividends paid $ 0.08 $ 0.07 $ 0.16 $ 0.14 On July 2, 2015, the Company announced that its Board of Directors had declared a quarterly cash dividend of $0.08 per share, which was paid on July 30, 2015, to shareholders of record at the close of business on July 16, 2015. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The Company has granted options to purchase its common stock and or stock grants to certain employees and directors of the Company and its affiliates under various stock option plans at no less than the fair market value of the underlying stock on the date of grant. These options are granted for a term not exceeding ten years and are forfeited in the event the employee or director terminates his or her employment or relationship with the Company or one of its affiliates other than by retirement or death. These options generally vest over five years. All option plans contain anti-dilutive provisions that permit an adjustment of the number of shares of the Company’s common stock represented by each option for any change in capitalization. The Company’s stock-based compensation expense was $290,000 and $1,359,000 for the three months ended June 30, 2015 and 2014 , respectively and $466,000 and $1,660,000 for the six months ended June 30, 2015 and 2014 , respectively. The decrease of stock-based compensation expense in 2015 as compared to 2014 is primarily related to the accelerated vesting of awards to retirement eligible recipients that occurred in 2014. Qualified Options Following is a summary of activity in the Incentive Stock Option Plans for the period indicated: For six months ended June 30, 2015 Shares Outstanding at beginning of year 301,800 Granted 24,500 Exercised (72,375 ) Canceled (1,500 ) Outstanding at June 30, 2015 252,425 Exercisable at June 30, 2015 144,325 Available for grant at June 30, 2015 375,500 Non-qualified Options Following is a summary of activity in the Non-Qualified Stock Option Plans for the period indicated: For six months ended June 30, 2015 Shares Outstanding at beginning of year 132,100 Granted — Exercised (4,800 ) Canceled — Outstanding at June 30, 2015 127,300 Exercisable at June 30, 2015 83,100 Available for grant at June 30, 2015 234,026 Restricted Stock Following is a summary of activity in the Restricted Stock for the periods indicated: For six months ended June 30, 2015 Shares Outstanding at beginning of year 12,043 Granted 24,500 Vested (5,056 ) Forfeited or Canceled — Outstanding at June 30, 2015 31,487 |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following table sets forth the reconciliation from basic to diluted average common shares and the calculations of net income per common share. Net income for basic and diluted calculations do not differ. Three Months Ended Six Months Ended (In thousands, except per share) 2015 2014 2015 2014 Net Income $ 9,710 $ 9,195 $ 17,069 $ 16,433 Average Common Shares: Basic (weighted-average outstanding shares) 11,352 12,097 11,316 12,090 Dilutive potential common shares from stock options 146 179 151 183 Diluted (weighted-average outstanding shares) 11,498 12,276 11,467 12,273 Basic earnings per share $ 0.86 $ 0.76 $ 1.51 $ 1.36 Diluted earnings per share $ 0.84 $ 0.75 $ 1.49 $ 1.34 Stock options totaling 33,325 shares for the six months ended June 30, 2015 were not included in the diluted earnings per share calculation because the effect would have been anti-dilutive. The main difference between diluted common shares for the periods ending June 30, 2015 and June 30, 2014 are the shares the Company retired in September 2014 relating to the stock repurchase from Capital Southwest Corporation. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting At June 30, 2015 the following includes a summary of the unaudited financial information by reporting segment: Three Months Ended Six Months Ended (in thousands) 2015 2014 2015 2014 Net Sales Industrial $ 118,521 $ 105,476 $ 235,433 $ 183,187 Agricultural 52,981 53,635 101,438 104,443 European 44,232 48,640 86,661 92,731 Consolidated $ 215,734 $ 207,751 $ 423,532 $ 380,361 Income from Operations Industrial $ 10,100 $ 10,128 $ 19,437 $ 16,428 Agricultural 3,722 2,375 4,514 4,790 European 2,613 2,293 4,612 4,209 Consolidated $ 16,435 $ 14,796 $ 28,563 $ 25,427 (in thousands) June 30, 2015 December 31, 2014 Goodwill Industrial $ 56,852 $ 57,320 Agricultural 3,673 695 European 16,864 17,676 Consolidated $ 77,389 $ 75,691 Total Identifiable Assets Industrial $ 378,159 $ 367,096 Agricultural 131,118 113,286 European 155,960 152,504 Consolidated $ 665,237 $ 632,886 The 2014 and 2015 acquisitions are reflected in the above segment reporting. Business units of Specialized are in the Industrial segment, Fieldquip and Herder are in the Agricultural segment and Kellands is in the European segment. |
Off-Balance Sheet Arrangements
Off-Balance Sheet Arrangements | 6 Months Ended |
Jun. 30, 2015 | |
Off Balance Sheet Arrangements [Abstract] | |
Off Balance Sheet Arrangements | Off-Balance Sheet Arrangements The Company does not have any obligation under any transaction, agreement or other contractual arrangement to which an entity unconsolidated with the Company is party, that has or is reasonably likely to have a material effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors. |
Contingent Matters
Contingent Matters | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingent Matters | Contingent Matters Like other manufacturers, the Company is subject to a broad range of federal, state, local and foreign laws and requirements, including those concerning air emissions, discharges into waterways, and the generation, handling, storage, transportation, treatment and disposal of hazardous substances and waste materials, as well as the remediation of contamination associated with releases of hazardous substances at the Company’s facilities and off-site disposal locations, workplace safety and equal employment opportunities. These laws and regulations are constantly changing, and it is impossible to predict with accuracy the effect that changes to such laws and regulations may have on the Company in the future. Like other industrial concerns, the Company’s manufacturing operations entail the risk of noncompliance, and there can be no assurance that the Company will not incur material costs or other liabilities as a result thereof. The Company knows that its Indianola, Iowa property is contaminated with chromium which most likely resulted from chrome plating operations which were discontinued before the Company purchased the property. Chlorinated volatile organic compounds have also been detected in water samples on the property, though the source is unknown at this time. The Company voluntarily worked with an environmental consultant and the state of Iowa with respect to these issues and believes it completed its remediation program in June 2006. The work was accomplished within the Company’s environmental liability reserve balance. We requested a “no further action” classification from the state. We received a conditional “no further action” letter in January of 2009. When we demonstrate stable or improving conditions below residential standards for a certain period of time by monitoring existing wells, we will request an unconditional “no further action” letter. The Company knows that Bush Hog’s main manufacturing property in Selma, Alabama was contaminated with chlorinated volatile organic compounds which most likely resulted from painting and cleaning operations during the 1960s and 1970s. The contaminated areas were primarily in the location of underground storage tanks and underneath the former waste storage area. Under the Asset Purchase Agreement, Bush Hog’s prior owner agreed to and has removed the underground storage tanks at its cost and has remediated the identified contamination in accordance with the regulations of the Alabama Department of Environmental Management. An environmental consulting firm was retained by the prior owner to administer the cleanup and monitor the site on an ongoing basis until the remediation program is complete and approved by the applicable authorities. This process is technically complete and awaiting acceptance from applicable authorities, including the issuance of a Letter of Concurrence releasing the site from further assessment or corrective action. Alamo Group Inc. and Bush Hog, Inc. were added as defendants in 2013 to ongoing litigation by Deere & Company as plaintiff against Bush Hog, LLC (now Duroc, LLC) and Great Plains Manufacturing Incorporated, in which Deere alleged infringement of a mower-related patent. The jury concluded that not only did the defendants not infringe the patent, but that the patent was invalid as well. The Company expensed $2,100,000 in legal fees related to this lawsuit in 2013. Deere & Company has appealed and requested a new trial. The Company is waiting for the appellate court to set the matter for a hearing. Certain assets of the Company contain asbestos that may have to be remediated over time. The Company believes that any subsequent change in the liability associated with the asbestos removal will not have a material adverse effect on the Company’s consolidated financial position or results of operations. The Company is subject to various other federal, state, and local laws affecting its business, as well as a variety of regulations relating to such matters as working conditions, equal employment opportunities, and product safety. A variety of state laws regulate the Company’s contractual relationships with its dealers, some of which impose restrictive standards on the relationship between the Company and its dealers, including events of default, grounds for termination, non-renewal of dealer contracts, and equipment repurchase requirements. The Company believes it is currently in material compliance with all such applicable laws and regulations. |
Retirement Benefit Plans
Retirement Benefit Plans | 6 Months Ended |
Jun. 30, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Retirement Benefit Plans | Retirement Benefit Plans Defined Benefit Plan In connection with the February 3, 2006 purchase of all the net assets of the Gradall excavator business, Alamo Group Inc. assumed sponsorship of two Gradall non-contributory defined benefit pension plans, both of which were frozen with respect to both future benefit accruals and future new entrants. The Gradall Company Hourly Employees’ Pension Plan covers approximately 331 former employees and 120 current employees who (i) were formerly employed by the former parent of Gradall, (ii) were covered by a collective bargaining agreement and (iii) first participated in the plan before April 6, 1997. An amendment ceasing all future benefit accruals was effective April 6, 1997. The Gradall Company Employees’ Retirement Plan covers approximately 239 former employees and 82 current employees who (i) were formerly employed by the former parent of Gradall, (ii) were not covered by a collective bargaining agreement and (iii) first participated in the plan before December 31, 2004. An amendment ceasing future benefit accruals for certain participants was effective December 31, 2004. A second amendment discontinued all future benefit accruals for all participants effective April 24, 2006. The following tables present the components of net periodic benefit cost (gains are denoted with parentheses and losses are not): Six Months Ended June 30, 2015 (in thousands) Hourly Employees’ Pension Plan Employees’ Retirement Plan Total Service cost $ 4 $ 2 $ 6 Interest cost 202 434 636 Expected return on plan assets (330 ) (614 ) (944 ) Amortization of prior service cost — — — Amortization of net (gain)/loss 124 200 324 Net periodic benefit cost $ — $ 22 $ 22 Six Months Ended June 30, 2014 (in thousands) Hourly Employees’ Pension Plan Employees’ Retirement Plan Total Service cost $ 4 $ 2 $ 6 Interest cost 210 426 636 Expected return on plan assets (318 ) (590 ) (908 ) Amortization of prior service cost — — — Amortization of net (gain)/loss 36 30 66 Net periodic benefit income $ (68 ) $ (132 ) $ (200 ) The Company amortizes annual pension expense evenly over four quarters. Pension expense was $11,000 for the three months ended June 30, 2015 and net pension income for the three months ended June 30, 2014 was $100,000 . Pension expense for the six months ended June 30, 2015 was $22,000 and pension income for the six month ending June 30, 2014 was $200,000 . The Company is not required to contribute to the pension plans for the 2015 plan year but may do so. Supplemental Retirement Plan The Board of Directors ("Board") of the Company adopted the Alamo Group Inc. Supplemental Executive Retirement Plan (the “SERP”), effective as of January 3, 2011. The SERP will benefit certain key management or other highly compensated employees of the Company and/or certain subsidiaries who are selected by the Compensation Committee and approved by the Board of Directors to participate. The SERP is intended to provide a benefit from the Company upon retirement, death or disability, or a change in control of the Company. Accordingly, the SERP obligates the Company to pay to a participant a Retirement Benefit (as defined in the SERP) upon the occurrence of certain payment events to the extent a participant has a vested right thereto. A participant’s right to his or her Retirement Benefit becomes vested in the Company’s contributions upon ten years of Credited Service (as defined in the SERP) or a change in control of the Company. The Retirement Benefit is based on 20% of the final three year average salary of each participant on or after his or her normal retirement age ( 65 years of age). In the event of the participant’s death or a change in control, the participant’s vested retirement benefit will be paid in a lump sum to the participant or his or her estate, as applicable, within 90 days after the participant’s death or a change in control, as applicable. In the event the participant is entitled to a benefit from the SERP due to disability, retirement or other termination of employment, the benefit will be paid in monthly installments over a period of fifteen years. In May of 2015, the Board amended the SERP to allow the Board to modify the retirement benefit percentage either higher or lower than 20% . As of June 30, 2015, the current retirement benefit for the participants is 20% . The Company records amounts relating to the SERP based on calculations that incorporate various actuarial and other assumptions, including discount rates, rate of compensation increases, retirement dates and life expectancies. The net periodic costs are recognized as employees render the services necessary to earn the SERP benefits. The net period expense for the three months ended June 30, 2015 and 2014 was $150,000 and $140,000 , respectively and $300,000 and $280,000 for the six months ended June 30, 2015 and 2014 , respectively. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company is subject to U.S. federal income tax and various state, local, and international income taxes in numerous jurisdictions. Our domestic and international tax liabilities are subject to the allocation of revenue and expenses in different jurisdictions and the timing of recognizing revenue and expenses. Additionally, the amount of income taxes paid is subject to our interpretation of applicable tax laws in the jurisdictions in which we file. The Company currently files income tax returns in the U.S., Canada, UK, France, Brazil and Australia in which we have entities, and are periodically audited by federal, state, and international tax authorities. These audits can involve complex matters that may require an extended period of time for resolution. There are no income tax examinations currently in process. Although the outcome of future tax audits is uncertain, in management’s opinion, adequate provisions for income taxes have been made. If actual outcomes differ materially from these estimates, they could have a material impact on our financial condition and results of operations. Differences between actual results and assumptions, or changes in assumptions in future periods are recorded in the period they become known. To the extent additional information becomes available prior to resolution; such accruals are adjusted to reflect probable outcomes. Our effective tax rate is impacted by earnings being realized in countries which have lower statutory rates. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The Company was authorized by its Board of Directors in 1997 to repurchase up to 1,000,000 shares of the Company’s common stock to be funded through working capital and credit facility borrowings. This authorization to repurchase up to 1,000,000 shares was revoked by the Board of Directors on August 6, 2015 . |
Acquisitions and Investments (T
Acquisitions and Investments (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The final amounts assigned to the assets acquired and liabilities assumed in the Specialized acquisition were recognized at their acquisition-date fair values and are as follows (in thousands): Cash 2,025 Accounts receivable 16,290 Inventory 47,500 Prepaid expenses 3,223 Rental equipment 28,446 Property, plant & equipment 13,214 Intangible assets 53,900 Other assets 675 Deferred income tax (6,023 ) Other liabilities assumed (10,962 ) Net assets assumed 148,288 Goodwill 44,611 Acquisition Price 192,899 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | Net inventories consist of the following: (in thousands) June 30, December 31, Finished goods $ 128,047 $ 112,197 Work in process 19,729 18,635 Raw materials 27,664 35,256 $ 175,440 $ 166,088 |
Goodwill (Tables)
Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following is the summary of changes to the Company's Goodwill for the six months ended June 30, 2015 : (in thousands) Balance at December 31, 2014 $ 75,691 Goodwill acquired 2,999 Translation adjustments (1,301 ) Balance at June 30, 2015 $ 77,389 |
Definite and Indefinite Lived31
Definite and Indefinite Lived Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination | The following is a summary of the Company's definite and indefinite lived intangible assets net of the accumulated amortization: (in thousands) Estimated Useful Lives June 30, December 31, 2014 Definite: Trade names and trademarks 25 years $ 22,006 22,104 Customer and dealer relationships 14 years 29,104 29,404 Patents and drawings 12 years 1,935 1,968 Total at cost 53,045 53,476 Less accumulated amortization 3,535 1,992 Total net 49,510 51,484 Indefinite: Trade names and trademarks 5,500 5,500 Total Intangible Assets $ 55,010 $ 56,984 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | June 30, December 31, Current Maturities: Capital lease obligations $ 27 $ 35 Other notes payable 501 516 528 551 Long-term debt: Bank revolving credit facility 203,000 190,000 Capital lease obligations 14 24 203,014 190,024 Total debt $ 203,542 $ 190,575 |
Common Stock and Dividends (Tab
Common Stock and Dividends (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Dividends Declared And Paid | Dividends declared and paid on a per share basis were as follows: Three Months Ended Six Months Ended 2015 2014 2015 2014 Dividends declared $ 0.08 $ 0.07 $ 0.16 $ 0.14 Dividends paid $ 0.08 $ 0.07 $ 0.16 $ 0.14 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity | Following is a summary of activity in the Restricted Stock for the periods indicated: For six months ended June 30, 2015 Shares Outstanding at beginning of year 12,043 Granted 24,500 Vested (5,056 ) Forfeited or Canceled — Outstanding at June 30, 2015 31,487 |
Qualified Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Share-based Compensation, Stock Options, Activity | Following is a summary of activity in the Incentive Stock Option Plans for the period indicated: For six months ended June 30, 2015 Shares Outstanding at beginning of year 301,800 Granted 24,500 Exercised (72,375 ) Canceled (1,500 ) Outstanding at June 30, 2015 252,425 Exercisable at June 30, 2015 144,325 Available for grant at June 30, 2015 375,500 |
Non Qualified Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Share-based Compensation, Stock Options, Activity | Following is a summary of activity in the Non-Qualified Stock Option Plans for the period indicated: For six months ended June 30, 2015 Shares Outstanding at beginning of year 132,100 Granted — Exercised (4,800 ) Canceled — Outstanding at June 30, 2015 127,300 Exercisable at June 30, 2015 83,100 Available for grant at June 30, 2015 234,026 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the reconciliation from basic to diluted average common shares and the calculations of net income per common share. Net income for basic and diluted calculations do not differ. Three Months Ended Six Months Ended (In thousands, except per share) 2015 2014 2015 2014 Net Income $ 9,710 $ 9,195 $ 17,069 $ 16,433 Average Common Shares: Basic (weighted-average outstanding shares) 11,352 12,097 11,316 12,090 Dilutive potential common shares from stock options 146 179 151 183 Diluted (weighted-average outstanding shares) 11,498 12,276 11,467 12,273 Basic earnings per share $ 0.86 $ 0.76 $ 1.51 $ 1.36 Diluted earnings per share $ 0.84 $ 0.75 $ 1.49 $ 1.34 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | At June 30, 2015 the following includes a summary of the unaudited financial information by reporting segment: Three Months Ended Six Months Ended (in thousands) 2015 2014 2015 2014 Net Sales Industrial $ 118,521 $ 105,476 $ 235,433 $ 183,187 Agricultural 52,981 53,635 101,438 104,443 European 44,232 48,640 86,661 92,731 Consolidated $ 215,734 $ 207,751 $ 423,532 $ 380,361 Income from Operations Industrial $ 10,100 $ 10,128 $ 19,437 $ 16,428 Agricultural 3,722 2,375 4,514 4,790 European 2,613 2,293 4,612 4,209 Consolidated $ 16,435 $ 14,796 $ 28,563 $ 25,427 (in thousands) June 30, 2015 December 31, 2014 Goodwill Industrial $ 56,852 $ 57,320 Agricultural 3,673 695 European 16,864 17,676 Consolidated $ 77,389 $ 75,691 Total Identifiable Assets Industrial $ 378,159 $ 367,096 Agricultural 131,118 113,286 European 155,960 152,504 Consolidated $ 665,237 $ 632,886 |
Retirement Benefit Plans (Table
Retirement Benefit Plans (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of Net Benefit Cost | The following tables present the components of net periodic benefit cost (gains are denoted with parentheses and losses are not): Six Months Ended June 30, 2015 (in thousands) Hourly Employees’ Pension Plan Employees’ Retirement Plan Total Service cost $ 4 $ 2 $ 6 Interest cost 202 434 636 Expected return on plan assets (330 ) (614 ) (944 ) Amortization of prior service cost — — — Amortization of net (gain)/loss 124 200 324 Net periodic benefit cost $ — $ 22 $ 22 Six Months Ended June 30, 2014 (in thousands) Hourly Employees’ Pension Plan Employees’ Retirement Plan Total Service cost $ 4 $ 2 $ 6 Interest cost 210 426 636 Expected return on plan assets (318 ) (590 ) (908 ) Amortization of prior service cost — — — Amortization of net (gain)/loss 36 30 66 Net periodic benefit income $ (68 ) $ (132 ) $ (200 ) |
Basis of Financial Statement 38
Basis of Financial Statement Presentation (Narrative) (Details) - Jun. 30, 2014 - USD ($) $ in Thousands | Total | Total |
Correction of Misclassification of Freight Revenue | ||
Accounting Policies [Line Items] | ||
Reclassification of net sales and cost of sales | $ 1,398 | $ 2,757 |
Acquisitions and Investments (N
Acquisitions and Investments (Narrative) (Details) - USD ($) $ in Millions | Mar. 09, 2015 | May. 13, 2014 | Jun. 30, 2015 |
Herder | |||
Business Acquisition [Line Items] | |||
Total consideration for the purchase | $ 4 | ||
Specialized Industries LP | |||
Business Acquisition [Line Items] | |||
Total consideration for the purchase | $ 193 | ||
Period for post closing adjustments from acquisition date | 90 days | ||
Purchase price allocation adjustment for unrecognized deferred tax liability related to intangible assets | $ 3.3 |
Acquisitions and Investments Ac
Acquisitions and Investments Acquisitions and Investments (Schedule of Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | May. 13, 2014 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 77,389 | $ 75,691 | $ 75,691 | |
Specialized Industries LP | ||||
Business Acquisition [Line Items] | ||||
Cash | $ 2,025 | |||
Accounts receivable | 16,290 | |||
Inventory | 47,500 | |||
Prepaid expenses | 3,223 | |||
Rental equipment | 28,446 | |||
Property, plant & equipment | 13,214 | |||
Intangible assets | 53,900 | |||
Other assets | 675 | |||
Deferred income tax | (6,023) | |||
Other liabilities assumed | (10,962) | |||
Net assets assumed | 148,288 | |||
Goodwill | 44,611 | |||
Acquisition Price | $ 192,899 |
Accounts Receivable (Narrative)
Accounts Receivable (Narrative) (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Receivables [Abstract] | ||
Allowance for doubtful accounts | $ 3,321 | $ 2,853 |
Inventories (Narrative) (Detail
Inventories (Narrative) (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Inventory Disclosure [Abstract] | ||
Percentage of LIFO inventory | 41.00% | 37.00% |
Excess of current costs over stated LIFO value | $ 10,230 | $ 10,230 |
Inventory obsolescence reserves | $ 7,404 | $ 7,601 |
Inventories (Schedule of Invent
Inventories (Schedule of Inventory, Current) (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 128,047 | $ 112,197 |
Work in process | 19,729 | 18,635 |
Raw materials | 27,664 | 35,256 |
Inventory, Net | $ 175,440 | $ 166,088 |
Rental Equipment (Details)
Rental Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | |||||
Accumulated depreciation | $ (104,201) | $ (104,201) | $ (100,497) | ||
Depreciation | 9,361 | $ 4,913 | |||
Rental Equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Accumulated depreciation | (6,435) | (6,435) | $ (3,435) | ||
Depreciation | $ 1,918 | $ 644 | $ 3,664 | $ 644 |
Goodwill (Details)
Goodwill (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2015USD ($) | |
Goodwill [Roll Forward] | |
Balance at December 31, 2014 | $ 75,691 |
Goodwill acquired | 2,999 |
Translation adjustments | (1,301) |
Balance at June 30, 2015 | $ 77,389 |
Definite and Indefinite Lived46
Definite and Indefinite Lived Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Schedule of Acquired Indefinite-lived and Finite Intangible Assets by Major Class [Line Items] | |||||
Definite: | $ 53,045 | $ 53,045 | $ 53,476 | ||
Less accumulated amortization | 3,535 | 3,535 | 1,992 | ||
Total net | 49,510 | 49,510 | 51,484 | ||
Total Intangible Assets | 55,010 | 55,010 | 56,984 | ||
Amortization of intangibles | 782 | $ 55 | 1,563 | $ 55 | |
Trade names and trademarks | |||||
Schedule of Acquired Indefinite-lived and Finite Intangible Assets by Major Class [Line Items] | |||||
Indefinite: | 5,500 | $ 5,500 | 5,500 | ||
Trade names and trademarks | |||||
Schedule of Acquired Indefinite-lived and Finite Intangible Assets by Major Class [Line Items] | |||||
Estimated Useful Lives | 25 years | ||||
Definite: | 22,006 | $ 22,006 | 22,104 | ||
Customer and dealer relationships | |||||
Schedule of Acquired Indefinite-lived and Finite Intangible Assets by Major Class [Line Items] | |||||
Estimated Useful Lives | 14 years | ||||
Definite: | 29,104 | $ 29,104 | 29,404 | ||
Patents and drawings | |||||
Schedule of Acquired Indefinite-lived and Finite Intangible Assets by Major Class [Line Items] | |||||
Estimated Useful Lives | 12 years | ||||
Definite: | $ 1,935 | $ 1,935 | $ 1,968 |
Debt (Narrative) (Details)
Debt (Narrative) (Details) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 | May. 13, 2014 | May. 12, 2014 |
Debt Instrument [Line Items] | ||||
Total debt | $ 203,542,000 | $ 190,575,000 | ||
Amended and Restated Revolving Credit Agreement | Bank revolving credit facility | ||||
Debt Instrument [Line Items] | ||||
Aggregate commitments | 250,000,000 | |||
Maximum amount of additional aggregate commitments (Up to $50,000,000) | 50,000,000 | |||
Total debt | 203,000,000 | |||
Available borrowings | 45,200,000 | |||
Amended and Restated Revolving Credit Agreement | Standby Letters of Credit | Bank revolving credit facility | ||||
Debt Instrument [Line Items] | ||||
Amount of capacity | $ 1,800,000 | |||
Amended and Restated Revolving Credit Agreement | Specialized Industries LP | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Amount of line of credit | $ 250,000,000 | $ 100,000,000 |
Debt (Schedule of Long Term Deb
Debt (Schedule of Long Term Debt) (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||
Current Maturities: | $ 528 | $ 551 |
Long-term debt: | 203,014 | 190,024 |
Total debt | 203,542 | 190,575 |
Capital lease obligations | ||
Debt Instrument [Line Items] | ||
Current Maturities: | 27 | 35 |
Long-term debt: | 14 | 24 |
Other notes payable | ||
Debt Instrument [Line Items] | ||
Current Maturities: | 501 | 516 |
Bank revolving credit facility | Amended and Restated Revolving Credit Agreement | ||
Debt Instrument [Line Items] | ||
Long-term debt: | 203,000 | $ 190,000 |
Total debt | $ 203,000 |
Common Stock and Dividends (Det
Common Stock and Dividends (Details) - $ / shares | Jul. 02, 2015 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 |
Class of Stock [Line Items] | |||||
Dividends declared (in dollars per share) | $ 0.08000 | $ 0.07000 | $ 0.16000 | $ 0.14000 | |
Dividends paid (in dollars per share) | $ 0.08000 | $ 0.07000 | $ 0.16000 | $ 0.14000 | |
Subsequent Event | |||||
Class of Stock [Line Items] | |||||
Dividends declared (in dollars per share) | $ 0.08 |
Stock-Based Compensation (Narra
Stock-Based Compensation (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Option term | 10 years | |||
Award vesting period | 5 years | |||
Stock-based compensation expense | $ 290 | $ 1,359 | $ 466 | $ 1,660 |
Stock-Based Compensation (Sched
Stock-Based Compensation (Schedule of Qualified Stock Option Activity) (Details) - Jun. 30, 2015 - Qualified Stock Options - shares | Total |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Outstanding at beginning of year | 301,800 |
Granted | 24,500 |
Exercised | (72,375) |
Canceled | (1,500) |
Outstanding at June 30, 2015 | 252,425 |
Exercisable at June 30, 2015 | 144,325 |
Available for grant at June 30, 2015 | 375,500 |
Stock-Based Compensation (Sch52
Stock-Based Compensation (Schedule of Non-Qualified Stock Options Activity) (Details) - Jun. 30, 2015 - Non Qualified Options - shares | Total |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Outstanding at beginning of year | 132,100 |
Granted | 0 |
Exercised | (4,800) |
Canceled | 0 |
Outstanding at June 30, 2015 | 127,300 |
Exercisable at June 30, 2015 | 83,100 |
Available for grant at June 30, 2015 | 234,026 |
Stock-Based Compensation (Sch53
Stock-Based Compensation (Schedule of Restricted Stock Award Activity) (Details) - Restricted Stock | 6 Months Ended |
Jun. 30, 2015shares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Outstanding at beginning of year | 12,043 |
Granted | 24,500 |
Vested | (5,056) |
Forfeited or Canceled | 0 |
Outstanding at June 30, 2015 | 31,487 |
Earnings Per Share (Calculation
Earnings Per Share (Calculation of Basic and Diluted EPS) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Earnings Per Share [Abstract] | ||||
Net income | $ 9,710 | $ 9,195 | $ 17,069 | $ 16,433 |
Average Common Shares: | ||||
Basic (weighted-average outstanding shares) | 11,352,000 | 12,097,000 | 11,316,000 | 12,090,000 |
Dilutive potential common shares from stock options, shares | 146,000 | 179,000 | 151,000 | 183,000 |
Diluted (weighted-average outstanding shares) | 11,498,000 | 12,276,000 | 11,467,000 | 12,273,000 |
Basic earnings per share (in dollars per share) | $ 0.86 | $ 0.76 | $ 1.51 | $ 1.36 |
Diluted earnings per share (in dollars per share) | $ 0.84 | $ 0.75 | $ 1.49 | $ 1.34 |
Stock options excluded from diluted earnings per share calculation because the effect would be anti-dilutive | 33,325 |
Segment Reporting (Details)
Segment Reporting (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Segment Reporting Information [Line Items] | |||||
Net Sales | $ 215,734 | $ 207,751 | $ 423,532 | $ 380,361 | |
Income from Operations | 16,435 | 14,796 | 28,563 | 25,427 | |
Goodwill | 77,389 | 75,691 | 77,389 | 75,691 | $ 75,691 |
Total Identifiable Assets | 665,237 | 632,886 | 665,237 | 632,886 | $ 632,886 |
Industrial | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | 118,521 | 105,476 | 235,433 | 183,187 | |
Income from Operations | 10,100 | 10,128 | 19,437 | 16,428 | |
Goodwill | 56,852 | 57,320 | 56,852 | 57,320 | |
Total Identifiable Assets | 378,159 | 367,096 | 378,159 | 367,096 | |
Agricultural | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | 52,981 | 53,635 | 101,438 | 104,443 | |
Income from Operations | 3,722 | 2,375 | 4,514 | 4,790 | |
Goodwill | 3,673 | 695 | 3,673 | 695 | |
Total Identifiable Assets | 131,118 | 113,286 | 131,118 | 113,286 | |
European | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | 44,232 | 48,640 | 86,661 | 92,731 | |
Income from Operations | 2,613 | 2,293 | 4,612 | 4,209 | |
Goodwill | 16,864 | 17,676 | 16,864 | 17,676 | |
Total Identifiable Assets | $ 155,960 | $ 152,504 | $ 155,960 | $ 152,504 |
Contingent Matters (Narrative)
Contingent Matters (Narrative) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2013USD ($) | |
Deere and Company v Bush Hog LLC and Great Plains Manufacturing Inc | |
Loss Contingencies [Line Items] | |
Legal fees expensed | $ 2,100 |
Retirement Benefit Plans (Narra
Retirement Benefit Plans (Narrative) (Details) $ in Thousands | Jun. 30, 2015 | May. 31, 2015 | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)Employee | Jun. 30, 2014USD ($) |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||
Pension expense | $ | $ 11 | $ (100) | $ 22 | $ (200) | ||
Supplemental Employee Retirement Plans, Defined Benefit | ||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||
Pension expense | $ | $ 150 | $ 140 | $ 300 | 280 | ||
Requisite service period | 10 years | |||||
Percentage of final 3 year average salary in which retirement benefit is based (percentage) | 20.00% | |||||
Term of final average salary used to determine retirement benefit | 3 years | |||||
Retirement age | 65 years | |||||
Period after death or change in control benefit will be paid | 90 days | |||||
Maximum contractual term | 15 years | |||||
Retirement benefit percentage | 20.00% | 20.00% | ||||
Gradall Company Hourly Employees Pension Plan | ||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||
Former employees covered by pension plan | 331 | |||||
Current employees covered in the Gradall Company Hourly Employees' Pension Plan who were formerly employed by former parent (Employees) | 120 | |||||
Pension expense | $ | $ 0 | (68) | ||||
Gradall Company Hourly Employees Retirement Plan | ||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||
Former employees covered by pension plan | 239 | |||||
Current employees covered in the Gradall Company Hourly Employees' Pension Plan who were formerly employed by former parent (Employees) | 82 | |||||
Pension expense | $ | $ 22 | $ (132) |
Retirement Benefit Plans (Perio
Retirement Benefit Plans (Periodic Benefit Cost) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 6 | $ 6 | ||
Interest cost | 636 | 636 | ||
Expected return on plan assets | (944) | (908) | ||
Amortization of prior service cost | 0 | 0 | ||
Amortization of net (gain)/loss | 324 | 66 | ||
Net periodic benefit cost | $ 11 | $ (100) | 22 | (200) |
Hourly Employees’ Pension Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 4 | 4 | ||
Interest cost | 202 | 210 | ||
Expected return on plan assets | (330) | (318) | ||
Amortization of prior service cost | 0 | 0 | ||
Amortization of net (gain)/loss | 124 | 36 | ||
Net periodic benefit cost | 0 | (68) | ||
Employees’ Retirement Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 2 | 2 | ||
Interest cost | 434 | 426 | ||
Expected return on plan assets | (614) | (590) | ||
Amortization of prior service cost | 0 | 0 | ||
Amortization of net (gain)/loss | 200 | 30 | ||
Net periodic benefit cost | $ 22 | $ (132) |
Subsequent Events (Narrative) (
Subsequent Events (Narrative) (Details) - shares | Aug. 06, 2015 | Dec. 31, 1997 |
Subsequent Event [Line Items] | ||
Number of shares authorized to repurchase (up to 1,000,000) | 1,000,000 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Date authorization to repurchase shares was revoked by the Board of Directors | Aug. 6, 2015 |