Earnings call transcript: Alamo Group Q2 2025 sees revenue beat, EPS miss

Alamo Group Inc. (ALG) reported its Q2 2025 financial results, revealing a mixed performance with strong revenue figures but a slight miss on earnings per share (EPS). The company posted revenue of $419.1 million, surpassing forecasts, while EPS came in at $2.57, slightly below the expected $2.59. Despite the revenue beat, the stock declined by 1.74% in after-hours trading, closing at $224.77. According to InvestingPro data, the company’s current market capitalization stands at $2.68 billion, with a P/E ratio of 22.62. InvestingPro analysis suggests the stock is currently trading near its Fair Value.

Key Takeaways

• Revenue exceeded expectations, reaching $419.1 million.
• EPS slightly missed forecasts, coming in at $2.57 against a $2.59 forecast.
• Stock price dropped 1.74% post-earnings announcement.
• Strong performance in Industrial Equipment with a 17.6% organic growth.
• Ongoing focus on mergers and acquisitions (M&A).

Company Performance

Alamo Group demonstrated robust revenue growth in Q2 2025, driven by strong demand in its Industrial Equipment division, which achieved a 17.6% organic growth. The company’s strategic consolidation of manufacturing facilities and improved utilization rates contributed to enhanced operational efficiency. Alamo’s net income rose nearly 10% from the previous year, reflecting the company’s ability to manage costs effectively despite a challenging market environment. InvestingPro data reveals the company maintains strong financial health with a "GOOD" overall score, operating with moderate debt levels and maintaining healthy profit margins of 25.29%.

Financial Highlights

• Revenue: $419.1 million, up from $416.3 million in Q2 2024.
• Earnings per share: $2.57, up from $2.34 in Q2 2024.
• Gross profit: $108.3 million, with a margin of 25.8%.
• Operating margin improved by 83 basis points to 11.2%.
• Net income: $31.1 million, an increase from the previous year.

Earnings vs. Forecast

Alamo Group’s revenue of $419.1 million exceeded the forecast of $406.75 million, marking a positive surprise of 3.04%. However, EPS fell short of expectations by 0.77%, with an actual EPS of $2.57 versus the forecasted $2.59. This slight miss may have contributed to the negative market reaction, as investors had anticipated a stronger earnings performance.

Market Reaction

Following the earnings announcement, Alamo Group’s stock declined by 1.74%, closing at $224.77 in after-hours trading. This movement contrasts with the company’s 52-week high of $230.16, indicating a cautious investor sentiment despite the revenue beat. The stock’s decline suggests concerns over the EPS miss and its potential implications for future profitability. However, InvestingPro analysts maintain a positive outlook with price targets ranging from $210 to $260, and the stock has delivered an impressive 33.61% return over the past year. For deeper insights into ALG’s valuation and growth potential, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

Outlook & Guidance

Looking ahead, Alamo Group remains optimistic about its growth prospects. The company expects continued improvement in its Vegetation Management segment and is actively exploring M&A opportunities to enhance its market position. With net debt approaching zero, Alamo is well-positioned to capitalize on strategic investments and navigate the evolving market landscape.

Executive Commentary

"We’re in a strong position to exploit our increasingly active M&A pipeline," stated Jeff Leonard, CEO of Alamo Group, highlighting the company’s focus on strategic growth. CFO Agnes Kamps added, "We’re feeling a little more confident on the Ag side," indicating a positive outlook for the agricultural equipment sector.

Risks and Challenges

• Tariff impacts: Ongoing trade tensions may affect production costs and pricing strategies.
• Market changes: Reduced focus on electrification could impact future competitiveness.
• Emission standards: Upcoming regulatory changes require strategic adjustments.
• Succession planning: Potential CEO transition could affect leadership stability.
• Supply chain issues: Global disruptions pose risks to manufacturing and delivery schedules.

Q&A

During the earnings call, analysts raised questions about Alamo’s strategies to mitigate tariff impacts and improve margins in Vegetation Management. The company also addressed its CEO succession planning and confirmed a strong outlook for its snow removal business, indicating confidence in its strategic direction.

Full transcript - Alamo Group Inc (ALG) Q2 2025:

Conference Operator: Good day, and welcome to the Alamo Group Incorporated Second Quarter twenty twenty five Conference Call. All participants will be in a listen only mode. After today’s presentation, there will be an opportunity to ask questions. I would now like to turn the conference over to Mr. Edward Rizzuti, EVP, Corporate Development and Investor Relations.

Please go ahead, sir.

Edward Rizzuti, EVP, Corporate Development and Investor Relations, Alamo Group: Thank you. By now, you should have all received a copy of the press release. However, if anyone is missing a copy and would like to receive one, please contact us at (212) 827-3746, and we will send you a release and make sure you are on the company’s distribution list. There will be a replay of the call, which will begin one hour after the call and run for one week. The replay can be accessed by dialing 704-4529 with the passcode seven million eight hundred eighty eight thousand four hundred eighty.

Additionally, the call is being webcast on the company’s website at www.alamogroup.com, and a replay will be available for sixty days. On the line with me today are Jeff Leonard, President and Chief Executive Officer and Agnes Kamps, Executive Vice President and Chief Financial Officer. Management will make some opening remarks and then we will open up the line for your questions. During the call today, management may reference certain non GAAP numbers in their remarks. Reconciliations of these non GAAP results to applicable GAAP numbers are included in the attachments to our earnings release.

Before turning the call over to Jeff, I would like to make a few comments about forward looking statements. We will be making forward looking statements today that are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward looking statements involve known and unknown risks and uncertainties, which may cause the company’s actual results in future periods to differ materially from forecasted results. Among those factors which could cause actual results to differ materially are the following: adverse economic conditions which could lead to a reduction in overall market demand supply chain disruptions labor constraints competition weather, seasonality, currency related issues, geopolitical events and other risk factors listed from time to time in the company’s SEC reports. The company does not undertake any obligation to update the information contained herein, which speaks only as of this date.

I would now like to introduce Jeff Leonard. Jeff, please go ahead.

Jeff Leonard, President and Chief Executive Officer, Alamo Group: Thank you, Ed. We’d like to thank everyone who has joined us on the conference call today and express our appreciation for your continued interest in Alamo Group. Our second quarter results reflected a strong solid operating performance driven by sustained strength in the governmental and industrial markets supported by further modest improvement in the markets for vegetation management equipment. Sales increased modestly compared to the 2024. However, operating income improved significantly as a result of the efficiency improvement measures we have successfully implemented over the past several quarters.

I would now like to turn the call over to Agnes, who will take us through a review of our financial results for the second quarter. I will then provide additional comments on the results and say a few words about the outlook for the balance of 2025. Following our formal remarks, we look forward to your questions. Agnes, please go ahead.

Agnes Kamps, Executive Vice President and Chief Financial Officer, Alamo Group: Thank you, Jeff. Good morning, everyone. I am pleased to report that we delivered solid operational performance this quarter, reflecting the strength and resilience of our business model. Our Industrial Equipment division delivered impressive results. Our Vegetation Management division continued its recovery, and we are encouraged by the progress made.

2025 revenue was $419,100,000 compared to strong prior year second quarter revenue of $416,300,000 Gross profit for the quarter was $108,300,000 with a margin of 25.8% of net sales compared to January and margin of 26% for the same period last year. SG and A expenses were $57,100,000 which is a reduction of 6% driven by savings Management division. Operating income in the 2025 was $47,100,000 with an operating margin of 11.2% of net sales, reflecting an increase of 83 basis points compared to the second quarter in 2024. Net income for the second quarter was $31,100,000 or 2.57 per diluted share compared to net income of $28,300,000 or $2.35 per diluted share last year at the same time. Almost 10% increase in the net income was driven by stronger operating results.

Interest expense decreased $2,400,000 compared to the same period in 2024, driven by significantly lower debt levels. Lower interest expense helped offset unfavorable impact of the revaluation of U. S. Dollar denominated monetary assets held in our Canadian entities. The provision for income tax was 10,300,000 resulting in effective tax rate of approximately 24.9% compared to 24.8% in the 2024.

With that overview, let’s take a closer look at the performance of our divisions. Vegetation Management division reported net sales of $178,400,000 a 15.7% reduction compared to the 2024. While this was a reduction compared to the strong quarter in 2024, it was a 8.8% sequential improvement as bookings and backlog have stabilized. Operating income for this division was $12,800,000 representing 7.1% of net sales. The impact of lower revenue compared to the 2024 was partially offset by savings from the cost reductions taken in 2024.

Industrial Equipment division net sales were another record $240,700,000 representing an impressive 17.6% organic growth compared to the 2024. Growth in the second quarter was driven by strong sales across the division, especially notable were sales of vacuum trucks as well as snow removal equipment. Operating income was also a record $34,300,000 or 14.3% of net sales, which was a 100 basis point improvement compared to the same period last year, a result of growth and our operational excellence initiatives. Moving on to the balance sheet. We maintain a strong financial position and flexibility to support ongoing initiatives and future investments.

Our total assets of $1,558,000,000 at the end of second quarter increased by $51,700,000 compared to last year at the same time. An increase in cash and cash equivalents were partially offset by decrease in accounts receivable and inventory. We reduced our accounts receivable by $32,300,000 to $356,200,000 also representing a reduction in days sales outstanding by about three days compared to the same period in 2024. Inventory of $372,100,000 was also reduced by $13,100,000 compared to last year. Reductions we achieved in Vegetation Management divisions were offset by increase in Industrial Equipment division.

Higher inventory in the Industrial Equipment division supports double digit growth in that division. As a result of our disciplined cash management, the operating cash flow year to date was $36,900,000 At the end of second quarter twenty twenty five, our total debt was $213,100,000 and debt net of cash was $11,300,000 This was an improvement of $163,800,000 or 93.5% compared to the second quarter in twenty twenty four, driven by strategic debt reduction and strong cash generation. To conclude, I would like to emphasize our commitment to delivering long term value to our shareholders. We are pleased that our Board has approved a quarterly dividend of $0.30 per share. As we move forward, we remain focused on driving growth and optimization in our operations.

Thank you. I’ll turn it back over to Jeff.

Jeff Leonard, President and Chief Executive Officer, Alamo Group: Thank you, Agnes. I’d like to add a personal welcome to everyone who’s on the call with us this morning. In the second quarter, our markets continued to develop in accordance with our expectations and improvements in operating efficiencies combined with lower costs contributed to the improved earnings per share. Demand remained robust in the Government and Industrial Contractor segments and our Industrial Equipment division had another excellent quarter. Sales in the division were up nearly 18 compared to the 2024 with all of this growth being organic.

Sales of excavators, vacuum trucks, street sweepers, highway safety vehicles and snow removal equipment all improved nicely. Manufacturing facility utilization remained quite strong and resulted in higher efficiencies that supported the expansion of operating margin in this division. The combination of strong sales growth and improved efficiencies contributed to a 100 basis point expansion of the division’s operating income. Industrial Equipment division EBITDA of 16.7% improved 60 basis points compared to the 2024. The order backlog in the Industrial Equipment division remained quite good at nearly $510,000,000 providing us very good visibility and confidence through the second half of the year and into the early months of twenty twenty six.

Second quarter order bookings in this division were up nearly 21 compared to the 2024, primarily driven by exceptionally strong orders for vacuum trucks. On a year to date basis, Industrial Division orders were up over 10% compared to the 2024. Markets for the company’s vegetation management equipment continued to improve at a modest but steady pace, and there were several positive indicators pointing to improved market conditions that were evident during this quarter. Notably, this was the division’s fifth sequential quarter of improvement in order bookings. Second quarter order bookings were nearly 10% higher than the 2024, and year to date orders are up nearly 14% compared to the first six months of last year.

Agricultural equipment sales were down compared to the 2024, but improved solidly on a sequential basis. Ag equipment orders in the second quarter were up firmly compared to the prior year’s second quarter and were sharply higher sequentially. Sales of governmental mowers further improved in North And South America, but declined somewhat in Europe compared to the 2024. We saw a partly similar pattern in Forestry and Tree Care. Sales in the Forestry and Tree Care group declined relative to the 2024, but improved nicely on a sequential basis.

Orders in these product lines also increased compared to the 2024. We were encouraged to see that U. S. Residential housing starts were somewhat higher this quarter, but we continue to believe that an interest rate relief is needed to restore and sustain momentum in this part of the division. Overall, despite the positive improvement in trends and markets for this division’s products remained under pressure, dealers remain cautious regarding new inventory commitments on their balance sheets because of the higher floorplan interest rates.

Although Vegetation Management division sales declined 16% compared to the 2024, it was encouraging to note the solid 9% improvement sequentially. Sequential improvement was mostly attributable to better performance from its North American ag equipment business and to a lesser extent from forestry and tree care. This division’s results also benefited from better efficiencies resulting from plant consolidations completed last year as well as from significant reduction in sales, general and administrative costs. The division’s operating margin declined 50 basis points to 7.1% of net sales, while EBITDA declined 120 basis points compared to the 2024. On a consolidated basis, the company’s solid second quarter results aligned with our expectations.

Sales increased modestly on a consolidated basis compared to the 2024, but rose more than 7% compared to the first quarter of this year, driven by strong organic growth in the Industrial Equipment division. Consolidated operating margin improved 83 basis points to 11.2% and net income improved by nearly 10% compared to the 2024. Second quarter earnings per share of $1.57 improved 9% net of a $0.21 per share impact of foreign exchange headwinds from the U. S. Dollar revaluation in our Canadian operations.

Turning now to our outlook for the balance of 2025. We remain optimistic about the company’s prospects for the next several quarters and beyond. While risks and uncertainty associated with tariffs remain, the combination of sustained strength of our industrial equipment markets, further recovery in vegetation management markets, improving internal efficiencies and a lower administrative cost structure continue to point to positive development of company performance for the next several quarters. We were very pleased to complete the tuck in acquisition of Ring O Matic in the second quarter as their vacuum excavation equipment nicely complements our vacuum truck and excavator product line and offers potential to accelerate growth in our equipment rental business. Ringomatic employs a group of exceptional employees and we’re thrilled to have them join the Alamo Group team.

With the company’s net debt approaching zero, we’re in a strong position to exploit our increasingly active M and A pipeline. We’re encouraged by the quantity and quality of the actionable corporate development opportunities we’ve identified and are pursuing to accelerate corporate growth. This concludes our prepared remarks. We’re now ready to take your questions. Operator, please go ahead.

Conference Operator: Thank you. We will now begin the question and answer session. And our first question will come from Chris Moore with CJS Securities. Please go ahead.

Chris Moore, Analyst, CJS Securities: Hey, good morning, guys. Congrats on a great quarter.

Jeff Leonard, President and Chief Executive Officer, Alamo Group: Hi, Chris. Good morning.

Chris Moore, Analyst, CJS Securities: Good morning. Maybe we’ll just follow-up on some of the stuff you’re talking about, Jeff. So from a visibility standpoint, sounds like industrial is looking good at least into early twenty twenty six. Can you maybe just talk a little bit more about vegetation for Q4 and your thoughts in terms of this improving orders, continuing that trend?

Jeff Leonard, President and Chief Executive Officer, Alamo Group: Yes, I think we’re likely to see that trend continue for the next several quarters at least, Chris. Mean, we’re coming from a very low point as you know. So the climb out has to be consistent and I think it will be. I was very encouraged to see how much the ag market recovered during this quarter. It was actually a little better than I thought.

And forestry was maybe not as quite as good as I thought it was going to be. But forestry is the bigger ticket, more expensive items and there we definitely could benefit from some interest rate relief, which I am hoping one of these days we are going to see. But all in all, the activity level is improving and I think the dealer sentiment is slowly improving as well despite ongoing headwinds in ag. Commodity pricing still isn’t brilliant at the moment. But overall, are encouraged.

And I think that’s partly just because there is so much inelasticity in our pipeline at the moment. I have shared with you in previous quarters that our pipeline is exceptionally low of inventory in the field. So it doesn’t take much to drive the orders higher at this So we feel very good about where we are going. The reduction in the cost structure is significant in that division and we are maintaining it. And the plant consolidations are finally starting to see the efficiency improvements we were counting on, particularly in ag.

The consolidation of our two big ag plants late last year is finally starting to show real benefits we expected to see. So overall, I am encouraged. The markets were a little bit better in that space than I thought and I think the climb out is clear and I think it will continue for at least several quarters from what I can see.

Chris Moore, Analyst, CJS Securities: Terrific. So far direct pain points from tariffs, including shifting production from Canada to The U. S. Have been manageable. The issue you’ve talked about in the past is the potential inflationary impact, impact on demand.

Just curious what you’re seeing at this point. Are there kind of specific product lines that would be more at risk?

Jeff Leonard, President and Chief Executive Officer, Alamo Group: The biggest risk overall is to our snow removal group and it’s really a U. S./Canada issue as I’ve told you before. But we’ve largely mitigated that Chris by shifting a good deal of that production from Canada into The U. S. Into our plant here in Ohio where we’re at the grade off facility today for what that’s worth.

So I don’t see that being as too bad and the inflation side has been actually pretty decent. In other words, pressure on our purchase prices has been far less significant than I think Agnes and I anticipated. So, so far we are navigating the tariffs pretty effectively and I am very happy with that.

Chris Moore, Analyst, CJS Securities: Got it. Perfect. And maybe just last one. We’re at better than 1.6 this year, nine twenty five plus industrial. Just wondering from an industrial standpoint, how much existing infrastructure can handle from a revenue standpoint before you’d have to add a little capacity?

Jeff Leonard, President and Chief Executive Officer, Alamo Group: I think we’re okay yet because our plant in Wisconsin is not overwhelmed yet. We still have some capacity there. Our Ohio plant where we are today is busy for sure. The backhaul product line has been doing very well and so sales have been up across that product line pretty sharply. But we have still got plenty of capacity in Wisconsin that we can go after and we have other facilities as you know.

Our Huntsville facility still has some capacity. So we are not feeling too much pressure yet, Chris, with that. I think labor is the bigger constraint again. We’re starting to see labor tighten again as sort of like we did during the pandemic and that’s something we’re watching very closely.

Chris Moore, Analyst, CJS Securities: Got it. Very helpful. I’ll jump back in line. Thanks guys.

Jeff Leonard, President and Chief Executive Officer, Alamo Group: Thanks Chris.

Conference Operator: Our next question will come from Mig Dobre with Baird.

Mig Dobre, Analyst, Baird: Yes, hello. Just Back to vegetation management. What’s the right way to think about revenue here in the back half of the year? And I’m wondering in terms of both kind of how you see demand play out, but also in theory, there should be some seasonality here that we have to kind of take into account?

Jeff Leonard, President and Chief Executive Officer, Alamo Group: Yes. I think the seasonality will start to show up again in the fourth quarter, Mig. But I think as long as we can keep building the backlog, that capital will be in a better position to book and bills, over one again, which is nice to see. So the business is reinflating, not as fast as we’d like obviously. But I think you’re going to see a slow build of inventory.

I don’t think it’s going be dramatic for the remainder of this year, but I think it will start to build again. As we’ve seen, we’ve seen that for the past several quarters. We keep talking about the sequential improvements and I think those will continue. So I’m sorry, just to

Mig Dobre, Analyst, Baird: be clear here, your $178,000,000 of revenue in Q2, you are saying that we continue to build sequentially here in Q3 and into Q4 as the year progresses?

Jeff Leonard, President and Chief Executive Officer, Alamo Group: I think so. I mean, there is still some uncertainty out there on the forestry side, not so much in the ag side, but in the forestry side, there is still some uncertainty there. We’ve still seen some order cancellations in forestry mix, so that’s we’re not completely out of the woods there. But my assessment is I think revenue will continue to build, but very slow in that division.

Agnes Kamps, Executive Vice President and Chief Financial Officer, Alamo Group: Maybe if I could add something. I would agree with that. We are feeling a little more confident in on the Ag side. Orders have been growing pretty nicely over there and productivity in the plant after consolidation has been improving. So on the ag side, we’re feeling a little bit better, but I would agree with what Jeff had mentioned about forestry.

And

Mig Dobre, Analyst, Baird: then my follow-up, you mentioned in the press release that the margin in vegetation still reflected some of the effects of the recent facility consolidation costs. Maybe it would be helpful to call out what these costs are, maybe magnitude the nature of the cost? I mean, you’re obviously not adjusting them out. And at what point in time should we expect this drag to be done with? And implicitly, what would that mean for margins going forward as you kind

Jeff Leonard, President and Chief Executive Officer, Alamo Group: of lap all of this?

Agnes Kamps, Executive Vice President and Chief Financial Officer, Alamo Group: Yes. I will take this one. What we’re referring to in terms of gross margin is productivity. As these plants have consolidated, there was a couple of capital projects needed to complete and simple learning curve, and that has been improving. So in our plant in the U.

S. Ag in Selma, that certainly has been improving and productivity will improve in the second half. And we’re still working. We still have a little more lift in our plant in the forestry in Wind, Michigan. So that’s related to productivity.

Jeff Leonard, President and Chief Executive Officer, Alamo Group: You quantify this?

Mig Dobre, Analyst, Baird: Let me ask the question differently. If per Jeff’s comments, we’re thinking that revenue maybe gets a little bit better in Q3 and in Q4, is it reasonable to expect margins to improve sequentially relative to Q2 as well?

Jeff Leonard, President and Chief Executive Officer, Alamo Group: Yes, I would not say that, Nate, for what it’s worth because we still have a fairly unfavorable mix in forestry at the moment. And I did comment, I think, the call that though or at least I did on the previous call that it’s the large forestry equipment that still remains down. The Tree Care side is coming back nicely, but the margins in the Tree Care side, the smaller products are not what they are in the big industrial machine. So the mix is still relatively unfavorable in forestry and we’re still working through some demons on the inventory side, mentioned with dealer cancellations and so on. So I wouldn’t factor in too much of a margin improvement for the next quarter at least.

I think if we see it, it will be more like a Q4 event in that side of the business in forestry and tree care. And I think we could probably give you a shot at quantifying it, but I don’t think we want to do that on this call today and maybe on the after call.

Mig Dobre, Analyst, Baird: Okay. Then final question for me. Jeff, we talked in the past about your intent to retire and looking for a replacement for you. We’re sitting here in August. We haven’t released I haven’t heard anything new on the matter.

So I’m wondering kind of how your thinking has evolved and what’s going on in terms of internal, external candidates, how is the Board

Jeff Leonard, President and Chief Executive Officer, Alamo Group: looking at this? Okay. I can give you a very satisfying answer to that, think, what it’s worth. We’re with our Board of Directors here in Ohio this week. The process is going exactly according to the plan and I think you’re going to see it reach a conclusion in the third quarter.

So yes, it’s getting more close for sure. So and that’s both a happy and a sad thing for me personally. We’ve got a very active M and A pipeline as I commented on the call and I certainly want to see the company pilot its way through that with success. So I’ve offered to stay involved as much or as little as needed going forward. And that’s about all I can say about it.

But the actual succession process is well advanced.

Mig Dobre, Analyst, Baird: All right. Appreciate that. Thank you.

Conference Operator: Our next question will come from Mike Shisky with D. A. Davidson. Please go ahead.

Mike Shisky, Analyst, D.A. Davidson: Hello. Good morning. Pardon me, the background noise Hi, Mike. Morning. Yes.

Hi. I just had a couple of quick ones here or maybe one. Maybe the first one is not that quick. It’s about capital allocation. I know you’re pursuing some M and A deals.

It sounds like despite the strong orders in industrial and the backlog, you’re not pursuing any large capacity additions there. I was wondering if you had any thoughts about trying to enter any new product categories with up with the amped up R and D budgets or other ways to put capital to work in an organically positive way? Well, we’re always pursuing them, Mike. We obviously don’t talk about publicly what we’ve got in R and

Jeff Leonard, President and Chief Executive Officer, Alamo Group: D pipeline. But yes, we look for that growth to come partly from acquisition but also from organic developments inside. We really like this little Ring O Matic acquisition. I know that’s inorganic, but that is a new platform for us that really drive our rental So we are very happy to get that one and the response from our customers has been very positive to that.

We are very encouraged by the way that should unfold under our leadership. In terms of the R and D pipeline, we have had to change gears a little bit. We were investing very, very heavily electrification and now the need or let’s say the drive and demand for that has taken a time out for the moment. And of course, we also have the change in emission standards coming up here in another year or two. We have to be paying attention to that and getting prepared for that and that causes you to spend more on R and D just in the preparation phase because you have to advance all those products forward.

In terms of new verticals that we would develop organically with inside the company, no, I don’t think we’ve got anything major in the pipeline there that I want to talk about today. We don’t need to. We’ve got more than adequate growth coming out of our existing initiatives. So capital allocation remains very heavily toward M and A at the moment. And I think that’s going to be the case for the remainder of this year.

Mike Shisky, Analyst, D.A. Davidson: Great. And then I also wanted to touch on your snow business, you’ve done quite well for several years in a row here. It sounds like you’ve got pretty decent orders last the rest of this year and the next. Curious as to the legs of that, how much of your business has become chassis plus blade and how much it feels just like the blade? That’s been a large part of the growth.

So I kind of want to get a feel for whether there’s more than one year of like legs left in your snow business.

Jeff Leonard, President and Chief Executive Officer, Alamo Group: In the snow business, I’m sorry. Yes, we do have a lot of noise on the line, Mike, but we were both agonists. I’m struggling to hear your question. The snow business remains very, very active for us and it’s like the vacuum truck business. It’s is a little bit spiky.

You get a large order and then the market takes the time out and so on. But the activity is very strong right now, especially in Canada. There is still some significant orders to be placed there, which is encouraging and The U. S. Market has been stable.

I followed the Douglas earnings call closely and they were reporting an uptick in snow, which we’re seeing as well. So there seems to be plenty of legs left in that market from my point of view. Mike, I don’t see any kind of a slowdown coming there.

Mike Shisky, Analyst, D.A. Davidson: Outstanding. Thanks so much. I’ll pass it along.

Jeff Leonard, President and Chief Executive Officer, Alamo Group: Thank you.

Conference Operator: This concludes our question and answer session. I would like to turn the conference back over to management for any closing remarks. Please go ahead.

Jeff Leonard, President and Chief Executive Officer, Alamo Group: Thank you. This concludes our preparation for today’s meeting. We look forward to speaking with you again on our third quarter conference call in November.

Conference Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.

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