Alamo (ALG) 10-Q 6 May 16 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	Apr. 29, 2016
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	Mar. 31, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding		11,439,177

Interim Condensed Consolidated

Interim Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 49,654	$ 26,922
Accounts receivable, net	195,692	178,305
Inventories, net	156,572	150,758
Prepaid expenses	5,134	5,410
Income tax receivable	1,360	1,491
Total current assets	408,412	362,886
Rental equipment, net	33,994	37,564
Property, plant and equipment	180,158	178,044
Less: Accumulated depreciation	(109,854)	(107,094)
Property, plant and equipment, net	70,304	70,950
Goodwill	76,397	75,509
Intangible assets, net	52,472	52,950
Deferred income taxes	1,897	1,475
Other assets	2,876	2,169
Total assets	646,352	603,503
Current liabilities:
Trade accounts payable	54,903	45,486
Income taxes payable	1,076	1,320
Accrued liabilities	30,360	38,141
Current maturities of long-term debt and capital lease obligations	75	77
Total current liabilities	86,414	85,024
Long-term debt and capital lease obligations, net of current maturities	173,004	144,006
Deferred pension liability	4,063	4,499
Other long-term liabilities	5,879	5,782
Deferred income taxes	4,562	3,723
Stockholders’ equity:
Common stock, $.10 par value, 20,000,000 shares authorized; 11,410,765 and 11,392,236 outstanding at March 31, 2016 and December 31, 2015, respectively	1,141	1,139
Additional paid-in-capital	97,378	96,778
Treasury stock, at cost; 42,600 shares at March 31, 2016 and December 31, 2015	(426)	(426)
Retained earnings	306,691	299,057
Accumulated other comprehensive loss, net	(32,354)	(36,079)
Total stockholders’ equity	372,430	360,469
Total liabilities and stockholders’ equity	$ 646,352	$ 603,503

Interim Condensed Consolidated3

Interim Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2016	Dec. 31, 2015
Stockholders' Equity:
Common stock, par value	$ 0.10	$ 0.10
Common stock, shares authorized	20,000,000	20,000,000
Common stock, shares outstanding	11,410,765	11,392,236
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
	Mar. 31, 2016	Mar. 31, 2015
Net sales:
Net sales	$ 210,971	$ 207,798
Cost of sales	160,694	162,261
Gross profit	50,277	45,537
Selling, general and administrative expenses	33,988	33,409
Income from operations	16,289	12,128
Interest expense	(1,406)	(1,623)
Interest income	62	52
Other (expense) income, net	(622)	860
Income before income taxes	14,323	11,417
Provision for income taxes	5,664	4,058
Net Income	$ 8,659	$ 7,359
Net income per common share:
Basic (in dollars per share)	$ 0.76	$ 0.65
Diluted (in dollars per share)	$ 0.75	$ 0.64
Average common shares:
Basic (in shares)	11,389	11,280
Diluted (in shares)	11,507	11,436
Dividends declared (in dollars per share)	$ 0.09000	$ 0.08000
Industrial
Net sales:
Net sales	$ 123,278	$ 116,912
Income from operations	11,527	9,337
Agricultural
Net sales:
Net sales	48,662	48,457
Income from operations	2,759	792
European
Net sales:
Net sales	39,031	42,429
Income from operations	$ 2,003	$ 1,999

Interim Condensed Consolidated5

Interim Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Statement of Comprehensive Income [Abstract]
Net Income	$ 8,659	$ 7,359
Other comprehensive income (loss) (before tax effect):
Foreign currency translation adjustment	3,559	(13,652)
Post Retirement adjustments:
Net gains arising during the period	166	205
Other comprehensive income (loss)	3,725	(13,447)
Comprehensive Income (Loss)	$ 12,384	$ (6,088)

Interim Condensed Consolidated6

Interim Condensed Consolidated Statements of Stockholders' Equity - 3 months ended Mar. 31, 2016 - 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, 2015	$ 360,469	$ 1,139	$ 96,778	$ (426)	$ 299,057	$ (36,079)
Balance (shares) at Dec. 31, 2015		11,350
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	8,659				8,659
Translation adjustment	3,559					3,559
Net actuarial gain arising during period	166					166
Stock-based compensation	285		285
Exercise of stock options	317	$ 2	315
Exercise of stock options (shares)		18
Dividends paid ($.09 per share)	(1,025)				(1,025)
Balance at Mar. 31, 2016	$ 372,430	$ 1,141	$ 97,378	$ (426)	$ 306,691	$ (32,354)
Balance (shares) at Mar. 31, 2016		11,368

Interim Condensed Consolidated7

Interim Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Statement of Stockholders' Equity [Abstract]
Dividends paid (in dollars per share)	$ 0.09000	$ 0.08000

Interim Condensed Consolidated8

Interim Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Operating Activities
Net income	$ 8,659	$ 7,359
Adjustment to reconcile net income to net cash used in operating activities:
Provision for doubtful accounts	69	126
Depreciation	4,579	2,815
Amortization of intangibles	772	781
Amortization of debt issuance costs	53	53
Stock-based compensation expense	285	176
Excess tax benefits from stock-based payment arrangements	(38)	(10)
Provision for deferred income tax benefit	292	(1,166)
Gain on sale of property, plant and equipment	(165)	(14)
Changes in operating assets and liabilities, net of amounts acquired:
Accounts receivable	(16,383)	(22,550)
Inventories	(4,337)	(8,531)
Rental equipment	1,916	(3,148)
Prepaid expenses and other assets	(1,241)	(1,895)
Trade accounts payable and accrued liabilities	655	9,911
Income taxes payable	(47)	3,414
Other long-term liabilities	(154)	(229)
Net cash used in operating activities	(5,085)	(12,908)
Investing Activities
Acquisitions, net of cash acquired	(188)	(3,465)
Purchase of property, plant and equipment	(1,761)	(1,886)
Proceeds from sale of property, plant and equipment	354	21
Net cash used in investing activities	(1,595)	(5,330)
Financing Activities
Borrowings on bank revolving credit facility	44,000	33,000
Repayments on bank revolving credit facility	(15,000)	(15,000)
Principal payments on long-term debt and capital leases	(6)	274
Dividends paid	(1,025)	(903)
Proceeds from sale of common stock	317	275
Excess tax benefits from stock-based payment arrangements	38	10
Net cash provided by financing activities	28,324	17,656
Effect of exchange rate changes on cash and cash equivalents	1,088	(2,290)
Net change in cash and cash equivalents	22,732	(2,872)
Cash and cash equivalents at beginning of the period	26,922	39,533
Cash and cash equivalents at end of the period	49,654	36,661
Cash paid during the period for:
Interest	1,419	1,554
Income taxes	$ 5,735	$ 2,897

Basis of Financial Statement Pr

Basis of Financial Statement Presentation	3 Months Ended
	Mar. 31, 2016
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, 2016 . The balance sheet at December 31, 2015 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, 2015 . In May 2014, the Financial Accounting Standards Board ("FASB") 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 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. ASU 2015-03 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. In August 2015, the FASB issued ASU No. 2015-15, "Interest - Imputation of Interest," which clarifies ASU 2015-03 based on comments made by the SEC stating that debt issuance costs related to line-of-credit arrangements may continue to be presented as an asset and amortized ratably over the term of the line-of-credit regardless of whether there are any outstanding borrowings under such arrangement. 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 Company adopted this amendment in the first quarter of 2016 which did not materially affect our financial position or results of our operations, as our debt issuance costs primarily relate to our line-of-credit. In July 2015, the FASB issued Accounting Standards Update (ASU) No. 2015-11, “Simplifying the Measurement of Inventory,” as part of its simplification initiative. ASU 2015-11 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. In February 2016, the FASB issued ASU No. 2016-02, “Leases.” This update requires that a lessee recognize in the statement of financial position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. Similar to current guidance, the update continues to differentiate between finance leases and operating leases, however this distinction now primarily relates to differences in the manner of expense recognition over time and in the classification of lease payments in the statement of cash flows. The updated guidance leaves the accounting for leases by lessors largely unchanged from existing GAAP. Early application is permitted. Entities are required to use a modified retrospective adoption, with certain relief provisions, for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements when adopted. The guidance will become effective for us on January 1, 2019. The impacts that adoption of the ASU is expected to have on our consolidated financial statements and related disclosures are being evaluated. Additionally, we have not determined the effect of the ASU on our internal control over financial reporting or other changes in business practices and processes.

Accounting Policies

Accounting Policies	3 Months Ended
	Mar. 31, 2016
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 2015 10-K.

Acquisitions and Investments

Acquisitions and Investments	3 Months Ended
	Mar. 31, 2016
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 for a total consideration of $3.7 million subject to certain post-closing adjustments. This acquisition was accounted for in accordance with ASC Topic 805. The primary reason for the Herder acquisition was to establish a presence in South America which is a major global agricultural market; therefore, Herder is being reported as part of the Company's Agricultural Division. The revenue and earnings of Herder from the date of acquisition were not material to the Company’s consolidated results of operations. In addition, assuming the acquisition had occurred as of January 1, 2015, 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 March 31, 2016 and 2015.

Accounts Receivable

Accounts Receivable	3 Months Ended
	Mar. 31, 2016
Receivables [Abstract]
Accounts Receivable	Accounts Receivable Accounts receivable is shown net of the allowance for doubtful accounts of $3,581,000 and $3,484,000 at March 31, 2016 and December 31, 2015 , respectively.

Inventories

Inventories	3 Months Ended
	Mar. 31, 2016
Inventory Disclosure [Abstract]
Inventories	Inventories Inventories valued at LIFO cost represented 45% of total inventory at March 31, 2016 and December 31, 2015 , respectively. The excess of current cost over LIFO valued inventories was approximately $8,712,000 at March 31, 2016 and December 31, 2015 . An actual valuation of inventory under the LIFO method is 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) March 31, December 31, Finished goods $ 133,700 $ 129,995 Work in process 11,149 9,561 Raw materials 11,723 11,202 Total inventory $ 156,572 $ 150,758 Inventory obsolescence reserves were $7,996,000 at March 31, 2016 and $9,675,000 at December 31, 2015 . The decrease in reserve for obsolescence resulted from the Company's quarterly review in the normal course of business.

Rental Equipment

Rental Equipment	3 Months Ended
	Mar. 31, 2016
Property, Plant and Equipment [Abstract]
Rental Equipment	Rental Equipment Rental equipment is shown net of accumulated depreciation of $8,940,000 and $8,322,000 at March 31, 2016 and December 31, 2015 , respectively. The Company recognized depreciation expense of $1,744,000 and $1,747,000 for the three months ending March 31, 2016 and March 31, 2015 , respectively.

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	Mar. 31, 2016
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, 2015 . 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 March 31, 2016 and December 31, 2015 , as the floating rates on our outstanding balances approximate current market rates. This conclusion was made based on Level 2 inputs.

Goodwill

Goodwill	3 Months Ended
	Mar. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	Goodwill The following is the summary of changes to the Company's Goodwill for the three months ended March 31, 2016 : (in thousands) Balance at December 31, 2015 $ 75,509 Goodwill acquired — Translation adjustments 888 Balance at March 31, 2016 $ 76,397

Definite and Indefinite Lived I

Definite and Indefinite Lived Intangible Assets	3 Months Ended
	Mar. 31, 2016
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 March 31, December 31, 2015 Definite: Trade names and trademarks 25 years $ 21,955 $ 21,878 Customer and dealer relationships 14 years 28,947 28,715 Patents and drawings 12 years 1,918 1,893 Total at cost 52,820 52,486 Less accumulated amortization (5,848 ) (5,036 ) Total net 46,972 47,450 Indefinite: Trade names and trademarks 5,500 5,500 Total Intangible Assets $ 52,472 $ 52,950 The Company recognized amortization expense of $772,000 and $781,000 for the three months ending March 31, 2016 and 2015 , respectively.

Debt

Debt	3 Months Ended
	Mar. 31, 2016
Debt Disclosure [Abstract]
Debt	Debt The Company maintains an unsecured revolving credit facility with certain lenders under its Amended and Restated Revolving Credit Agreement ("the Agreement"). The aggregate commitments from lenders under this Agreement are $250,000,000 and, subject to certain conditions, the Company has the option to request an increase in aggregate commitments of up to an additional $50,000,000 . The 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 Agreement also contains other customary covenants, representations and events of defaults. The expiration date of the Agreement is May 12, 2019. As of March 31, 2016 , $173,000,000 was outstanding under the Agreement. As of March 31, 2016 , $1,582,000 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 $75,418,000 in available borrowings. As of March 31, 2016 , the Company was in compliance with the covenants under the Agreement. March 31, December 31, Current Maturities: Capital lease obligations $ 12 $ 17 Other notes payable 63 60 75 77 Long-term debt: Bank revolving credit facility 173,000 144,000 Capital lease obligations 4 6 173,004 144,006 Total debt $ 173,079 $ 144,083

Common Stock and Dividends

Common Stock and Dividends	3 Months Ended
	Mar. 31, 2016
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 2016 2015 Dividends declared $ 0.09 $ 0.08 Dividends paid $ 0.09 $ 0.08 On April 4, 2016, the Company announced that its Board of Directors had declared a quarterly cash dividend of $0.09 per share, which was paid on April 29, 2016, to shareholders of record at the close of business on April 15, 2016.

Stock-Based Compensation

Stock-Based Compensation	3 Months Ended
	Mar. 31, 2016
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 $285,000 and $176,000 for the three months ended March 31, 2016 and 2015 , respectively. Qualified Options Following is a summary of activity in the Incentive Stock Option Plans for the period indicated: For three months ended March 31, 2016 Shares Outstanding at beginning of year 254,195 Granted — Exercised (14,325 ) Canceled — Outstanding at March 31, 2016 239,870 Exercisable at March 31, 2016 129,020 Available for grant at March 31, 2016 370,750 Non-qualified Options Following is a summary of activity in the Non-Qualified Stock Option Plans for the period indicated: For three months ended March 31, 2016 Shares Outstanding at beginning of year 127,300 Granted — Exercised — Canceled — Outstanding at March 31, 2016 127,300 Exercisable at March 31, 2016 83,100 Available for grant at March 31, 2016 232,522 Restricted Stock Following is a summary of activity in the Restricted Stock for the periods indicated: For three months ended March 31, 2016 Shares Outstanding at beginning of year 32,616 Granted — Vested (4,204 ) Forfeited or Canceled — Outstanding at March 31, 2016 28,412

Earnings Per Share

Earnings Per Share	3 Months Ended
	Mar. 31, 2016
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 (In thousands, except per share) 2016 2015 Net Income $ 8,659 $ 7,359 Average Common Shares: Basic (weighted-average outstanding shares) 11,389 11,280 Dilutive potential common shares from stock options 118 156 Diluted (weighted-average outstanding shares) 11,507 11,436 Basic earnings per share $ 0.76 $ 0.65 Diluted earnings per share $ 0.75 $ 0.64 Stock options totaling 85,962 shares for the three months ended March 31, 2016 were not included in the diluted earnings per share calculation because the effect would have been anti-dilutive.

Segment Reporting

Segment Reporting	3 Months Ended
	Mar. 31, 2016
Segment Reporting [Abstract]
Segment Reporting	Segment Reporting At March 31, 2016 the following includes a summary of the unaudited financial information by reporting segment: Three Months Ended (in thousands) 2016 2015 Net Sales Industrial $ 123,278 $ 116,912 Agricultural 48,662 48,457 European 39,031 42,429 Consolidated $ 210,971 $ 207,798 Income from Operations Industrial $ 11,527 $ 9,337 Agricultural 2,759 792 European 2,003 1,999 Consolidated $ 16,289 $ 12,128 (in thousands) March 31, 2016 December 31, 2015 Goodwill Industrial $ 56,626 $ 56,293 Agricultural 3,258 2,984 European 16,513 16,232 Consolidated $ 76,397 $ 75,509 Total Identifiable Assets Industrial $ 358,574 $ 370,642 Agricultural 132,114 110,489 European 155,664 122,372 Consolidated $ 646,352 $ 603,503

Off-Balance Sheet Arrangements

Off-Balance Sheet Arrangements	3 Months Ended
	Mar. 31, 2016
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	3 Months Ended
	Mar. 31, 2016
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. The remediation process has been completed. On August 6, 2015, Bush Hog received a letter of concurrence from the Alabama Department of Environmental Management concluding that Bush Hog had successfully remediated the property and that the site was eligible for liability protection under the Land Recycling and Economic Redevelopment Act for contamination discovered and addressed under Bush Hog’s voluntary cleanup plan. 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. A hearing on the appeal was held on October 8, 2015. A final ruling on the appeal is expected in 2016. 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	3 Months Ended
	Mar. 31, 2016
Compensation and Retirement Disclosure [Abstract]
Retirement Benefit Plans	Retirement Benefit Plans Defined Benefit Plan The following tables present the components of net periodic benefit cost (gains are denoted with parentheses and losses are not): Three Months Ended March 31, 2016 (in thousands) Hourly Employees’ Pension Plan Employees’ Retirement Plan Total Service cost $ 2 $ 1 $ 3 Interest cost 100 222 322 Expected return on plan assets (162 ) (299 ) (461 ) Amortization of net loss 71 110 181 Net periodic benefit cost $ 11 $ 34 $ 45 Three Months Ended March 31, 2015 (in thousands) Hourly Employees’ Pension Plan Employees’ Retirement Plan Total Service cost $ 2 $ 1 $ 3 Interest cost 101 217 318 Expected return on plan assets (165 ) (307 ) (472 ) Amortization of net loss 62 100 162 Net periodic benefit cost $ — $ 11 $ 11 The Company amortizes annual pension expense evenly over four quarters. Pension expense was $45,000 and $11,000 the three months ended March 31, 2016 and March 31, 2015 , respectively. The Company is not required to contribute to the pension plans for the 2016 plan year but may do so. Supplemental Retirement Plan 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 March 31, 2016 , the current retirement benefit for the participants is 20% . The net period expense for the three months ended March 31, 2016 and 2015 was $148,000 and $150,000 , respectively.

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2016
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, U.K., France, Brazil and Australia in which we have entities and other jurisdictions we conduct business in from time to time. Periodically our filings are 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	3 Months Ended
	Mar. 31, 2016
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events On April 6, 2016 we notified all participants in the Gradall Company Hourly Employees’ Pension Plan of our decision to terminate the plan. Participants in the plan will not lose any benefits but will be given a choice between obtaining certain continued annuity benefits that match the benefits offered under the plan or receiving an immediate one-time lump sum payment in total settlement of benefits. We must meet various legal requirements in connection with the proper termination of the plan, and as a result we do not expect termination of the plan to be completed until 2017.

Inventories (Tables)

Inventories (Tables)	3 Months Ended
	Mar. 31, 2016
Inventory Disclosure [Abstract]
Schedule of Inventory, Current	Net inventories consist of the following: (in thousands) March 31, December 31, Finished goods $ 133,700 $ 129,995 Work in process 11,149 9,561 Raw materials 11,723 11,202 Total inventory $ 156,572 $ 150,758

Goodwill (Tables)

Goodwill (Tables)	3 Months Ended
	Mar. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Goodwill	The following is the summary of changes to the Company's Goodwill for the three months ended March 31, 2016 : (in thousands) Balance at December 31, 2015 $ 75,509 Goodwill acquired — Translation adjustments 888 Balance at March 31, 2016 $ 76,397

Definite and Indefinite Lived30

Definite and Indefinite Lived Intangible Assets (Tables)	3 Months Ended
	Mar. 31, 2016
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 March 31, December 31, 2015 Definite: Trade names and trademarks 25 years $ 21,955 $ 21,878 Customer and dealer relationships 14 years 28,947 28,715 Patents and drawings 12 years 1,918 1,893 Total at cost 52,820 52,486 Less accumulated amortization (5,848 ) (5,036 ) Total net 46,972 47,450 Indefinite: Trade names and trademarks 5,500 5,500 Total Intangible Assets $ 52,472 $ 52,950

Debt (Tables)

Debt (Tables)	3 Months Ended
	Mar. 31, 2016
Debt Disclosure [Abstract]
Schedule of Long-term Debt Instruments	March 31, December 31, Current Maturities: Capital lease obligations $ 12 $ 17 Other notes payable 63 60 75 77 Long-term debt: Bank revolving credit facility 173,000 144,000 Capital lease obligations 4 6 173,004 144,006 Total debt $ 173,079 $ 144,083

Common Stock and Dividends (Tab

Common Stock and Dividends (Tables)	3 Months Ended
	Mar. 31, 2016
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 2016 2015 Dividends declared $ 0.09 $ 0.08 Dividends paid $ 0.09 $ 0.08

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	3 Months Ended
	Mar. 31, 2016
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 three months ended March 31, 2016 Shares Outstanding at beginning of year 32,616 Granted — Vested (4,204 ) Forfeited or Canceled — Outstanding at March 31, 2016 28,412
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 three months ended March 31, 2016 Shares Outstanding at beginning of year 254,195 Granted — Exercised (14,325 ) Canceled — Outstanding at March 31, 2016 239,870 Exercisable at March 31, 2016 129,020 Available for grant at March 31, 2016 370,750
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 three months ended March 31, 2016 Shares Outstanding at beginning of year 127,300 Granted — Exercised — Canceled — Outstanding at March 31, 2016 127,300 Exercisable at March 31, 2016 83,100 Available for grant at March 31, 2016 232,522

Earnings Per Share (Tables)

Earnings Per Share (Tables)	3 Months Ended
	Mar. 31, 2016
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 (In thousands, except per share) 2016 2015 Net Income $ 8,659 $ 7,359 Average Common Shares: Basic (weighted-average outstanding shares) 11,389 11,280 Dilutive potential common shares from stock options 118 156 Diluted (weighted-average outstanding shares) 11,507 11,436 Basic earnings per share $ 0.76 $ 0.65 Diluted earnings per share $ 0.75 $ 0.64

Segment Reporting (Tables)

Segment Reporting (Tables)	3 Months Ended
	Mar. 31, 2016
Segment Reporting [Abstract]
Schedule of Segment Reporting Information, by Segment	At March 31, 2016 the following includes a summary of the unaudited financial information by reporting segment: Three Months Ended (in thousands) 2016 2015 Net Sales Industrial $ 123,278 $ 116,912 Agricultural 48,662 48,457 European 39,031 42,429 Consolidated $ 210,971 $ 207,798 Income from Operations Industrial $ 11,527 $ 9,337 Agricultural 2,759 792 European 2,003 1,999 Consolidated $ 16,289 $ 12,128 (in thousands) March 31, 2016 December 31, 2015 Goodwill Industrial $ 56,626 $ 56,293 Agricultural 3,258 2,984 European 16,513 16,232 Consolidated $ 76,397 $ 75,509 Total Identifiable Assets Industrial $ 358,574 $ 370,642 Agricultural 132,114 110,489 European 155,664 122,372 Consolidated $ 646,352 $ 603,503

Retirement Benefit Plans (Table

Retirement Benefit Plans (Tables)	3 Months Ended
	Mar. 31, 2016
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): Three Months Ended March 31, 2016 (in thousands) Hourly Employees’ Pension Plan Employees’ Retirement Plan Total Service cost $ 2 $ 1 $ 3 Interest cost 100 222 322 Expected return on plan assets (162 ) (299 ) (461 ) Amortization of net loss 71 110 181 Net periodic benefit cost $ 11 $ 34 $ 45 Three Months Ended March 31, 2015 (in thousands) Hourly Employees’ Pension Plan Employees’ Retirement Plan Total Service cost $ 2 $ 1 $ 3 Interest cost 101 217 318 Expected return on plan assets (165 ) (307 ) (472 ) Amortization of net loss 62 100 162 Net periodic benefit cost $ — $ 11 $ 11

Acquisition and Investments (Na

Acquisition and Investments (Narrative) (Details) $ in Millions	Mar. 09, 2015USD ($)
Herder
Business Acquisition [Line Items]
Total consideration	$ 3.7

Accounts Receivable (Narrative)

Accounts Receivable (Narrative) (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Receivables [Abstract]
Allowance for doubtful accounts	$ 3,581	$ 3,484

Inventories (Narrative) (Detail

Inventories (Narrative) (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Inventory Disclosure [Abstract]
Percentage of LIFO inventory	45.00%	45.00%
Excess of current costs over stated LIFO value	$ 8,712	$ 8,712
Inventory obsolescence reserves	$ 7,996	$ 9,675

Inventories (Schedule of Invent

Inventories (Schedule of Inventory, Current) (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Inventory Disclosure [Abstract]
Finished goods	$ 133,700	$ 129,995
Work in process	11,149	9,561
Raw materials	11,723	11,202
Total inventory	$ 156,572	$ 150,758

Rental Equipment (Details)

Rental Equipment (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Property, Plant and Equipment [Line Items]
Accumulated depreciation	$ (109,854)		$ (107,094)
Depreciation	4,579	$ 2,815
Rental Equipment
Property, Plant and Equipment [Line Items]
Accumulated depreciation	(8,940)		$ (8,322)
Depreciation	$ 1,744	$ 1,747

Goodwill (Details)

Goodwill (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2016USD ($)
Goodwill [Roll Forward]
Balance at December 31, 2015	$ 75,509
Goodwill acquired	0
Translation adjustments	888
Balance at March 31, 2016	$ 76,397

Definite and Indefinite Lived43

Definite and Indefinite Lived Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Schedule of Acquired Indefinite-lived and Finite Intangible Assets by Major Class [Line Items]
Definite:	$ 52,820		$ 52,486
Less accumulated amortization	(5,848)		(5,036)
Total net	46,972		47,450
Total Intangible Assets	52,472		52,950
Amortization of intangibles	772	$ 781
Trade names and trademarks
Schedule of Acquired Indefinite-lived and Finite Intangible Assets by Major Class [Line Items]
Indefinite:	$ 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:	$ 21,955		21,878
Customer and dealer relationships
Schedule of Acquired Indefinite-lived and Finite Intangible Assets by Major Class [Line Items]
Estimated Useful Lives	14 years
Definite:	$ 28,947		28,715
Patents and drawings
Schedule of Acquired Indefinite-lived and Finite Intangible Assets by Major Class [Line Items]
Estimated Useful Lives	12 years
Definite:	$ 1,918		$ 1,893

Debt (Narrative) (Details)

Debt (Narrative) (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Total debt	$ 173,079,000	$ 144,083,000
Unsecured Debt | 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	173,000,000
Available borrowings	75,418,000
Unsecured Debt | Amended and Restated Revolving Credit Agreement | Standby Letters of Credit
Debt Instrument [Line Items]
Amount of capacity	$ 1,582,000

Debt (Schedule of Long Term Deb

Debt (Schedule of Long Term Debt) (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Current Maturities:	$ 75	$ 77
Long-term debt:	173,004	144,006
Total debt	173,079	144,083
Capital lease obligations
Debt Instrument [Line Items]
Current Maturities:	12	17
Long-term debt:	4	6
Other notes payable
Debt Instrument [Line Items]
Current Maturities:	63	60
Bank revolving credit facility | Amended and Restated Revolving Credit Agreement
Debt Instrument [Line Items]
Long-term debt:	$ 173,000	$ 144,000

Common Stock and Dividends (Det

Common Stock and Dividends (Details) - $ / shares	Apr. 04, 2016	Mar. 31, 2016	Mar. 31, 2015
Class of Stock [Line Items]
Dividends declared (in dollars per share)		$ 0.09000	$ 0.08000
Dividends paid (in dollars per share)		$ 0.09000	$ 0.08000
Subsequent Event
Class of Stock [Line Items]
Dividends declared (in dollars per share)	$ 0.09

Stock-Based Compensation (Narra

Stock-Based Compensation (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Option term	10 years
Award vesting period	5 years
Stock-based compensation expense	$ 285	$ 176

Stock-Based Compensation (Sched

Stock-Based Compensation (Schedule of Qualified Stock Option Activity) (Details) - Qualified Stock Options	3 Months Ended
	Mar. 31, 2016shares
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Outstanding at beginning of year	254,195
Granted	0
Exercised	(14,325)
Canceled	0
Outstanding at March 31, 2016	239,870
Exercisable at March 31, 2016	129,020
Available for grant at March 31, 2016	370,750

Stock-Based Compensation (Sch49

Stock-Based Compensation (Schedule of Non-Qualified Stock Options Activity) (Details) - Non Qualified Options	3 Months Ended
	Mar. 31, 2016shares
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Outstanding at beginning of year	127,300
Granted	0
Exercised	0
Canceled	0
Outstanding at March 31, 2016	127,300
Exercisable at March 31, 2016	83,100
Available for grant at March 31, 2016	232,522

Stock-Based Compensation (Sch50

Stock-Based Compensation (Schedule of Restricted Stock Award Activity) (Details) - Restricted Stock	3 Months Ended
	Mar. 31, 2016shares
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	32,616
Granted	0
Vested	(4,204)
Forfeited or Canceled	0
Outstanding at March 31, 2016	28,412

Earnings Per Share (Calculation

Earnings Per Share (Calculation of Basic and Diluted EPS) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Earnings Per Share [Abstract]
Net income	$ 8,659	$ 7,359
Average Common Shares:
Basic (weighted-average outstanding shares)	11,389,000	11,280,000
Dilutive potential common shares from stock options, shares	118,000	156,000
Diluted (weighted-average outstanding shares)	11,507,000	11,436,000
Basic earnings per share (in dollars per share)	$ 0.76	$ 0.65
Diluted earnings per share (in dollars per share)	$ 0.75	$ 0.64
Stock options excluded from diluted earnings per share calculation because the effect would be anti-dilutive	85,962

Segment Reporting (Details)

Segment Reporting (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Segment Reporting Information [Line Items]
Net Sales	$ 210,971	$ 207,798
Income from Operations	16,289	12,128
Goodwill	76,397		$ 75,509
Total Identifiable Assets	646,352		603,503
Industrial
Segment Reporting Information [Line Items]
Net Sales	123,278	116,912
Income from Operations	11,527	9,337
Goodwill	56,626		56,293
Total Identifiable Assets	358,574		370,642
Agricultural
Segment Reporting Information [Line Items]
Net Sales	48,662	48,457
Income from Operations	2,759	792
Goodwill	3,258		2,984
Total Identifiable Assets	132,114		110,489
European
Segment Reporting Information [Line Items]
Net Sales	39,031	42,429
Income from Operations	2,003	$ 1,999
Goodwill	16,513		16,232
Total Identifiable Assets	$ 155,664		$ 122,372

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 (Perio

Retirement Benefit Plans (Periodic Benefit Cost) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 3	$ 3
Interest cost	322	318
Expected return on plan assets	(461)	(472)
Amortization of net loss	181	162
Net periodic benefit cost	45	11
Hourly Employees’ Pension Plan
Defined Benefit Plan Disclosure [Line Items]
Service cost	2	2
Interest cost	100	101
Expected return on plan assets	(162)	(165)
Amortization of net loss	71	62
Net periodic benefit cost	11	0
Employees’ Retirement Plan
Defined Benefit Plan Disclosure [Line Items]
Service cost	1	1
Interest cost	222	217
Expected return on plan assets	(299)	(307)
Amortization of net loss	110	100
Net periodic benefit cost	$ 34	$ 11

Retirement Benefit Plans (Narra

Retirement Benefit Plans (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Pension expense	$ 45	$ 11
Supplemental Employee Retirement Plans, Defined Benefit
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Pension expense	$ 148	$ 150
Retirement benefit percentage	20.00%