0000897077-19-000127.txt : 20190731 0000897077-19-000127.hdr.sgml : 20190731 20190731170018 ACCESSION NUMBER: 0000897077-19-000127 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 78 CONFORMED PERIOD OF REPORT: 20190630 FILED AS OF DATE: 20190731 DATE AS OF CHANGE: 20190731 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALAMO GROUP INC CENTRAL INDEX KEY: 0000897077 STANDARD INDUSTRIAL CLASSIFICATION: FARM MACHINERY & EQUIPMENT [3523] IRS NUMBER: 741621248 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-13854 FILM NUMBER: 19989539 BUSINESS ADDRESS: STREET 1: 1627 E WALNUT CITY: SEGUIN STATE: TX ZIP: 78155 BUSINESS PHONE: 8303791480 MAIL ADDRESS: STREET 1: P.O. BOX 549 STREET 2: 1627 EAST WALNUT CITY: SEGUIN STATE: TX ZIP: 78155 10-Q 1 alg-20190630.htm 10-Q Document
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2019
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE TRANSITION PERIOD FROM ____ TO ____

Commission file number 0-21220

ALAMO GROUP INC.
(Exact name of registrant as specified in its charter)
Delaware
74-1621248
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification Number)

 1627 East Walnut, Seguin, Texas  78155
(Address of principal executive offices, including zip code)
 
830-379-1480
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common Stock, par value
$.10 per share
ALGNew York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No ☒

At July 26, 2019, 11,818,179 shares of common stock, $.10 par value, of the registrant were outstanding.


1






































Alamo Group Inc. and Subsidiaries
 
INDEX
 
                                                                                                                                                                              
PART I.
FINANCIAL INFORMATION
PAGE
Item 1.
Interim Condensed Consolidated Financial Statements  (Unaudited)
June 30, 2019 and December 31, 2018
Three and Six Months Ended June 30, 2019 and June 30, 2018
Three and Six Months Ended June 30, 2019 and June 30, 2018
Three and Six Months Ended June 30, 2019 and June 30, 2018
Six Months Ended June 30, 2019 and June 30, 2018
Item 2.
Item 3.
Item 4.
PART II.
Item 1.
Legal Proceedings
Item 1A.
Risk Factors
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
Item 3.
Defaults Upon Senior Securities
Item 4.
Mine Safety Disclosures
Item 5.
Other Information
Item 6.
Exhibits

2






































Alamo Group Inc. and Subsidiaries
Interim Condensed Consolidated Balance Sheets
(Unaudited) 
 
(in thousands, except share amounts)
June 30, 2019December 31, 2018
ASSETS
Current assets:
Cash and cash equivalents
$48,190 $34,043 
Accounts receivable, net
267,064 228,098 
Inventories, net
205,910 176,630 
Prepaid expenses and other current assets
6,690 5,327 
Income tax receivable
8,250 8,745 
Total current assets
536,104 452,843 
Rental equipment, net
51,517 43,978 
Property, plant and equipment
243,489 219,135 
Less:  Accumulated depreciation
(138,022)(131,905)
Total property, plant and equipment, net
105,467 87,230 
Goodwill
93,134 83,243 
Intangible assets, net
62,725 48,857 
Deferred income taxes
961 1,783 
Other non-current assets
16,671 3,699 
Total assets
$866,579 $721,633 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Trade accounts payable
$67,391 $54,083 
Income taxes payable
1,926 2,865 
Accrued liabilities
47,707 43,785 
Current maturities of long-term debt and finance lease obligations
131 119 
Total current liabilities
117,155 100,852 
Long-term debt and finance lease obligations, net of current maturities
166,232 85,179 
Long-term tax liability
6,378 6,120 
Deferred pension liability
1,719 1,944 
Other long-term liabilities
14,340 8,436 
Deferred income taxes
17,923 11,731 
Stockholders’ equity:
Common stock, $0.10 par value, 20,000,000 shares authorized; 11,737,993 and 11,662,688 outstanding at June 30, 2019 and December 31, 2018, respectively
1,174 1,166 
Additional paid-in-capital
111,476 108,422 
Treasury stock, at cost; 72,600 and 42,600 shares at June 30, 2019 and December 31, 2018, respectively
(3,381)(426)
Retained earnings
476,152 443,040 
Accumulated other comprehensive loss
(42,589)(44,831)
Total stockholders’ equity
542,832 507,371 
Total liabilities and stockholders’ equity
$866,579 $721,633 

See accompanying notes.
3






































Alamo Group Inc. and Subsidiaries
Interim Condensed Consolidated Statements of Income
(Unaudited)
 
Three Months Ended
June 30,
Six Months Ended
June 30,
(in thousands, except per share amounts)2019201820192018
Net sales:
Industrial
$168,000 $150,031 $326,425 $282,198 
Agricultural
55,159 59,071 108,332 117,718 
European
62,027 48,023 112,363 95,296 
Total net sales285,186 257,125 547,120 495,212 
Cost of sales212,053 190,671 410,679 368,501 
Gross profit73,133 66,454 136,441 126,711 
Selling, general and administrative expenses43,784 39,668 84,486 78,564 
Income from operations
29,349 26,786 51,955 48,147 
Interest expense(1,935)(1,497)(3,385)(2,834)
Interest income330 109 503 209 
Other expense, net(295)(92)(684)(226)
Income before income taxes
27,449 25,306 48,389 45,296 
Provision for income taxes6,782 6,535 12,469 11,942 
Net Income
$20,667 $18,771 $35,920 $33,354 
Net income per common share:
Basic
$1.76 $1.61 $3.07 $2.87 
Diluted
$1.75 $1.60 $3.05 $2.84 
Average common shares:
Basic
11,726 11,652 11,712 11,629 
Diluted
11,798 11,759 11,787 11,749 
Dividends declared$0.12 $0.11 $0.24 $0.22 
 
 See accompanying notes.
 
4






































Alamo Group Inc. and Subsidiaries
Interim Condensed Consolidated Statements of Comprehensive Income
(Unaudited)

Three Months Ended
June 30,
Six Months Ended
June 30,
(in thousands)2019201820192018
Net income$20,667 $18,771 $35,920 $33,354 
Other comprehensive income:
Foreign currency translation adjustments
1,194 (11,850)1,914 (8,733)
Net gain on pension and other post-retirement benefits
215 228 430 423 
Unrealized loss during the period related to derivatives
(12) (12) 
Other comprehensive income (loss) before income tax expense
1,397 (11,622)2,332 (8,310)
Income tax expense related to items of other comprehensive income(45)(20)(90)(89)
Other comprehensive income (loss)
1,352 (11,642)2,242 (8,399)
Comprehensive income$22,019 $7,129 $38,162 $24,955 

See accompanying notes.



5






































Alamo Group Inc. and Subsidiaries
Interim Condensed Consolidated Statements of Stockholders’ Equity
 (Unaudited)


For six months ended June 30, 2019
Common Stock
Additional
Paid-in Capital
Treasury StockRetained Earnings
Accumulated
Other
Comprehensive Loss
Total Stock-
holders’ Equity
(in thousands)
SharesAmount
Balance at December 31, 201811,620 $1,166 $108,422 $(426)$443,040 $(44,831)$507,371 
Net income
— — — — 15,253 — 15,253 
Translation adjustment
— — — — — 720 720 
Net actuarial gain arising during period, net of taxes— — — — — 170 170 
Stock-based compensation
— — 627 — — — 627 
Common stock repurchase(15)— — (1,490)— — (1,490)
Exercise of stock options
11 1 236 — — — 237 
Dividends paid ($0.12 per share)
— — — — (1,404)— (1,404)
Balance at March 31, 201911,616 $1,167 $109,285 $(1,916)$456,889 $(43,941)$521,484 
Net income
— — — — 20,667 — 20,667 
Translation adjustment
— — — — — 1,194 1,194 
Unrealized derivative loss, net of taxes
— — — — — (12)(12)
Net actuarial gain arising during period, net of taxes— — — — — 170 170 
Stock-based compensation
— — 948 — — — 948 
Common stock repurchase(15)— (590)(1,465)— — (2,055)
Exercise of stock options
64 7 1,833 — — — 1,840 
Dividends paid ($0.12 per share)
— — — — (1,404)— (1,404)
Balance at June 30, 201911,665 $1,174 $111,476 $(3,381)$476,152 $(42,589)$542,832 


6






































For six months ended June 30, 2018
Common Stock
Additional Paid-in Capital
Treasury StockRetained Earnings
Accumulated
Other
Comprehensive Loss
Total Stock-
holders’ Equity
(in thousands)SharesAmount
Balance at December 31, 201711,534 $1,158 $103,864 $(426)$374,678 $(30,166)$449,108 
Net income
— — — — 14,583 — 14,583 
Translation adjustment
— — — — — 3,117 3,117 
Net actuarial gain arising during period, net of taxes— — — — — 126 126 
Stock-based compensation
— — 458 — — — 458 
Exercise of stock options
9 — 266 — — — 266 
Dividends paid ($0.11 per share)
— — — — (1,276)— (1,276)
Balance at March 31, 201811,543 $1,158 $104,588 $(426)$387,985 $(26,923)$466,382 
Net income
— — — — 18,771 — 18,771 
Translation adjustment
— — — — — (11,850)(11,850)
Net actuarial gain arising during period, net of taxes— — — — — 208 208 
Stock-based compensation
— — 730 — — — 730 
Common stock repurchase— — (437)— — — (437)
Exercise of stock options
67 7 1,913 — — — 1,920 
Dividends paid ($0.11 per share)
— — — — (1,277)— (1,277)
Balance at June 30, 201811,610 $1,165 $106,794 $(426)$405,479 $(38,565)$474,447 


See accompanying notes.

7






































Alamo Group Inc. and Subsidiaries
Interim Condensed Consolidated Statements of Cash Flows
(Unaudited)
Six Months Ended
June 30,
(in thousands)20192018
Operating Activities
Net income$35,920 $33,354 
Adjustment to reconcile net income to net cash provided by (used in) operating activities:
Provision for doubtful accounts
157 (158)
Depreciation - Property, plant and equipment
6,868 6,242 
Depreciation - Rental equipment
4,323 2,983 
Amortization of intangibles
1,969 1,756 
Amortization of debt issuance costs
110 110 
Stock-based compensation expense
1,575 1,188 
Provision for deferred income tax expense2,306 967 
Gain on sale of property, plant and equipment
(284)(149)
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable
(32,377)(35,260)
Inventories
(11,023)(22,116)
Rental equipment
(11,862)(11,547)
Prepaid expenses and other assets
(3,393)(1,452)
Trade accounts payable and accrued liabilities
5,555 5,959 
Income taxes payable
(477)(9,806)
Long-term tax payable258  
Other assets and long-term liabilities
1,274 215 
Net cash provided by (used in) operating activities
899 (27,714)
Investing Activities
Acquisitions, net of cash acquired(52,499) 
Purchase of property, plant and equipment(12,423)(10,829)
Proceeds from sale of property, plant and equipment661 628 
Net cash used in investing activities(64,261)(10,201)
Financing Activities
Borrowings on bank revolving credit facility122,000 104,000 
Repayments on bank revolving credit facility(41,000)(45,000)
Principal payments on finance leases(76)(66)
Proceeds from issuance of long-term debt and finance leases38  
Dividends paid(2,808)(2,553)
Proceeds from exercise of stock options2,077 2,186 
Treasury stock(2,955) 
Cost of common stock repurchased(590)(437)
Net cash provided by financing activities76,686 58,130 
Effect of exchange rate changes on cash and cash equivalents823 (1,986)
Net change in cash and cash equivalents14,147 18,229 
Cash and cash equivalents at beginning of the year34,043 25,373 
Cash and cash equivalents at end of the period$48,190 $43,602 
Cash paid during the period for:
Interest
$3,285 $2,526 
Income taxes
10,035 19,637 
See accompanying notes.
8






































Alamo Group Inc. and Subsidiaries
Notes to Interim Condensed Consolidated Financial Statements - (Unaudited)
June 30, 2019
 
1.  Basis of Financial Statement Presentation

General

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, 2019.  The balance sheet at December 31, 2018 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, 2018 (the "2018 10-K").

Accounting Pronouncements Adopted on January 1, 2019

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)." 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. The guidance became effective for us on January 1, 2019. As a lessee, this standard primarily impacted our accounting for long-term real estate and equipment leases, for which we recognized right-of-use assets of $7,747,000 and a corresponding lease liability of $7,868,000 on our consolidated balance sheet.

We adopted these provisions on January 1, 2019 using the optional transition method that permits us to apply the new disclosure requirements in 2019 and continue to present comparative period information as required under FASB ASC Topic 840, "Leases." We did not have a cumulative-effect adjustment to the opening balance of retained earnings at the date of adoption. We elected the package of practical expedients permitted under the transition guidance within the new standard, which, among other things, allowed us to not account for lease and non-lease components separately for most of our asset classes and to exclude leases with an initial term of 12 months or less from the right-of-use assets and liabilities. Adoption of the standards had no impact on results of operations or liquidity.

In February 2018, the FASB issued ASU 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” to allow reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act ("TCJA"). Upon adoption of the ASU, entities will be required to disclose a description of the accounting policy for releasing income tax effects from accumulated other comprehensive income. The standard is required to be adopted for periods beginning after December 15, 2018, with early adoption available for any set of financial statements that have yet to be issued or made available for issuance including retrospectively for any period in which the effect of the change is the U.S. corporate income tax rate in the TCJA is recognized. The adoption of this ASU did not have a material impact on the Company's consolidated financial statements.

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Accounting Pronouncements Not Yet Adopted

In August 2018, the FASB issued Accounting Statement Update (ASU) No. 2018-13 “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement”, which modifies the disclosures requirements on fair value measurements. Among other things, the amendments add disclosures for changes in unrealized gains and losses on Level 3 fair value measurements and requires additional disclosures on unobservable inputs associated with Level 3 assets. The guidance will become effective for us on January 1, 2020. The impacts that adoption of the ASU is expected to have on our financial disclosures is being evaluated.

In August 2018, the FASB issued Accounting Statement Update (ASU) No. 2018-14, “Compensation, Defined Benefit Plans,” which modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The update removes certain disclosures that are no longer considered cost beneficial and adds disclosure requirements identified as relevant. The guidance will become effective for us on January 1, 2021 with early adoption permitted for any financial statements that have not been issued. The impacts that adoption of the ASU is expected to have on our financial disclosures is being evaluated.

2. Accounting Policies

Leases

The following policy resulted from our adoption of the provisions of ASC Topic 842, “Leases,” effective January 1, 2019, as described above in “Accounting Pronouncements Adopted on January 1, 2019.”

If we determine that an arrangement is or contains a lease, we recognize a right-of-use (ROU) asset and lease liability at the commencement date of the lease. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

We have elected to not account for the lease and non-lease components separately for most of our asset classes with the exception of real-estate. We have also elected to exclude all lease agreements with an initial term of 12 months or less from the lease recognition requirements.

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3.  Business Combinations

On March 4, 2019, the Company acquired 100 percent of the issued and outstanding equity interests of Dutch Power Company B.V. ("Dutch Power"). Dutch Power designs, manufactures and sells a variety of landscape and vegetation management machines primarily in Europe. The primary reason for the Dutch Power acquisition was to enhance the Company's platform for growth by increasing both the Company's product portfolio and capabilities in the European market. The acquisition price was approximately $53 million and has been finalized.

The Company has included the operating results of Dutch Power in its consolidated financial statements since the acquisition. The total purchase price has been allocated to assets acquired and liabilities assumed, including deferred taxes, based on their fair values as of the completion of the acquisitions. Certain estimated values are not yet finalized and are subject to change. The Company will finalize the amounts once the necessary information is obtained and the analysis is complete. The following are the estimated fair value of the assets acquired and liabilities assumed as of the acquisition date (in thousands):

Cash$87 
Accounts receivable6,278 
Inventory17,498 
Prepaid and other assets3,564 
Property, plant and equipment12,828 
Intangible assets15,787 
Other liabilities assumed(13,132)
Net assets assumed$42,910 
Goodwill9,701 
Acquisition Price$52,611 

4.  Accounts Receivable
 
Accounts receivable is shown net of sales discounts and the allowance for doubtful accounts.

At June 30, 2019 the Company had $19,220,000 in reserves for sales discounts compared to $18,123,000 at December 31, 2018 related to products shipped to our customers under various promotional programs. The increase was primarily due to additional discounts reserved related to increased sales of the Company's agricultural products sold during the first six months of 2019.
 
5.  Inventories
 
Inventories valued at LIFO cost represented 54% and 60% of total inventory at June 30, 2019 and December 31, 2018, respectively. The excess of current cost over LIFO valued inventories was approximately $10,646,000 at June 30, 2019 and December 31, 2018. 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 be based, to some extent, on management's estimates at each quarter end. Net inventories consist of the following:
(in thousands)
June 30, 2019December 31, 2018
Finished goods
$172,577 $149,298 
Work in process
18,192 12,732 
Raw materials
15,141 14,600 
Inventories, net$205,910 $176,630 
 
Inventory obsolescence reserves were $7,014,000 at June 30, 2019 and $7,194,000 at December 31, 2018.

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6. Rental Equipment

Rental equipment is shown net of accumulated depreciation of $12,417,000 and $11,145,000 at June 30, 2019 and December 31, 2018, respectively. The Company recognized depreciation expense of $2,234,000 and $1,577,000 for the three months ended June 30, 2019 and June 30, 2018, respectively and $4,323,000 and $2,983,000 for the six months ended June 30, 2019 and June 30, 2018, respectively

7.  Fair Value Measurements
 
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, 2019 and December 31, 2018, as the floating rates on our outstanding balances approximate current market rates. This conclusion was made based on Level 2 inputs.

8. Goodwill and Definite and Indefinite-lived Intangible Assets

The following is the summary of changes to the Company's Goodwill for the six months ended June 30, 2019:
IndustrialAgriculturalEuropeanConsolidated
(in thousands)
Balance at December 31, 2018$61,107 $6,230 $15,906 $83,243 
Translation adjustment326 46 (182)190 
Goodwill acquired  9,701 9,701 
Balance at June 30, 2019$61,433 $6,276 $25,425 $93,134 

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, 2019December 31, 2018
Definite:
Trade names and trademarks25 years$33,083 $23,938 
Customer and dealer relationships
10-14 years
34,466 32,260 
Patents and drawings
3-12 years
6,621 2,061 
Total at cost74,170 58,259 
Less accumulated amortization(16,945)(14,902)
Total net57,225 43,357 
Indefinite:
Trade names and trademarks5,500 5,500 
Total Intangible Assets
$62,725 $48,857 

The Company recognized amortization expense of $1,114,000 and $875,000 for the three months ending June 30, 2019 and 2018, respectively, and $1,969,000 and $1,756,000 for the six months ended June 30, 2019 and 2018, respectively.

As of June 30, 2019, the Company had $62,725,000 of intangible assets, which represents 7% of total assets. 

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9. Debt

The components of long-term debt are as follows:
 
(in thousands)
June 30, 2019December 31, 2018
Current Maturities:
    Finance lease obligations$131 $119 
Long-term debt:
Bank revolving credit facility166,000 85,000 
     Finance lease obligations
232 179 
         Total Long-term debt166,232 85,179 
Total debt$166,363 $85,298 

As of June 30, 2019, $3,152,000 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 $80,848,000 in available borrowings.

10.  Common Stock and Dividends
 
Dividends declared and paid on a per share basis were as follows:
Three Months Ended
June 30,
Six Months Ended
June 30,
2019201820192018
Dividends declared
$0.12 $0.11 $0.24 $0.22 
Dividends paid
$0.12 $0.11 $0.24 $0.22 

On July 2, 2019, the Company announced that its Board of Directors had declared a quarterly cash dividend of $0.12 per share, which was paid on July 29, 2019, to shareholders of record at the close of business on July 16, 2019.
 
11.  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
June 30,
Six Months Ended
June 30,
(In thousands, except per share)
2019201820192018
Net Income
$20,667 $18,771 $35,920 $33,354 
Average Common Shares:
Basic (weighted-average outstanding shares)
11,726 11,652 11,712 11,629 
Dilutive potential common shares from stock options
72 107 75 120 
Diluted (weighted-average outstanding shares)
11,798 11,759 11,787 11,749 
Basic earnings per share
$1.76 $1.61 $3.07 $2.87 
Diluted earnings per share
$1.75 $1.60 $3.05 $2.84 

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12.  Revenue and Segment Information
 
Revenues from Contracts with Customers

Disaggregation of revenue is presented in the tables below by product type and by geographical location. Management has determined that this level of disaggregation would be beneficial to users of the financial statements.
Revenue by Product Type
Three Months Ended
June 30,
Six Months Ended June 30,
(in thousands)2019201820192018
Net Sales
Wholegoods
$229,069 $209,359 $437,103 $399,724 
Parts
49,617 43,247 97,871 87,242 
Other
6,500 4,519 12,146 8,246 
Consolidated$285,186 $257,125 $547,120 $495,212 
Other includes rental sales, extended warranty sales and service sales as it is considered immaterial.

Revenue by Geographical Location
Three Months Ended
June 30,
Six Months Ended June 30,
(in thousands)2019201820192018
Net Sales
United States
$188,652 $183,291 $373,965 $348,468 
France
27,619 24,346 53,554 49,273 
Canada
17,361 15,418 31,305 29,652 
United Kingdom
14,082 12,419 27,880 25,862 
Brazil
5,702 4,858 9,975 10,318 
Netherlands10,132 1,877 12,806 3,166 
China6,999 129 8,211 383 
Germany2,452 493 3,341 896 
Australia
1,827 3,145 4,323 5,527 
Other
10,360 11,149 21,760 21,667 
Consolidated$285,186 $257,125 $547,120 $495,212 

Net sales are attributed to countries based on the location of the customer.

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Segment Information

The following includes a summary of the unaudited financial information by reporting segment at June 30, 2019:  
Three Months Ended
June 30,
Six Months Ended
June 30,
(in thousands)
2019201820192018
Net Sales
Industrial
$168,000 $150,031 $326,425 $282,198 
Agricultural
55,159 59,071 108,332 117,718 
European
62,027 48,023 112,363 95,296