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 class	Trading symbol(s)	Name of each exchange on which registered
	Common Stock, par value $.10 per share	ALG	New 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)
	Interim Condensed Consolidated Balance Sheets		3
		June 30, 2019 and December 31, 2018
	Interim Condensed Consolidated Statements of Income		4
		Three and Six Months Ended June 30, 2019 and June 30, 2018
	Interim Condensed Consolidated Statements of Comprehensive Income		5
		Three and Six Months Ended June 30, 2019 and June 30, 2018
	Interim Condensed Consolidated Statements of Stockholders' Equity		6
		Three and Six Months Ended June 30, 2019 and June 30, 2018
	Interim Condensed Consolidated Statements of Cash Flows		8
		Six Months Ended June 30, 2019 and June 30, 2018
	Notes to Interim Condensed Consolidated Financial Statements		9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations		18
Item 3.	Quantitative and Qualitative Disclosures About Market Risks		23
Item 4.	Controls and Procedures		25
PART II.	OTHER INFORMATION		25
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
	SIGNATURES		27

2

Alamo Group Inc. and Subsidiaries

Interim Condensed Consolidated Balance Sheets

(Unaudited) 

(in thousands, except share amounts)	June 30, 2019			December 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)	2019		2018		2019		2018
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 sales	285,186		257,125		547,120		495,212
Cost of sales	212,053		190,671		410,679		368,501
Gross profit	73,133		66,454		136,441		126,711
Selling, general and administrative expenses	43,784		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 income	330		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 taxes	6,782		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)	2019		2018		2019		2018
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 Stock		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stock- holders’ Equity
(in thousands)	Shares	Amount
Balance at December 31, 2018	11,620	$	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, 2019	11,616	$	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, 2019	11,665	$	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 Stock		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stock- holders’ Equity
(in thousands)	Shares	Amount
Balance at December 31, 2017	11,534	$	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, 2018	11,543	$	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, 2018	11,610	$	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)	2019		2018
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 expense	2,306		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 payable	258		—
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 equipment	661		628
Net cash used in investing activities	(64,261)		(10,201)
Financing Activities
Borrowings on bank revolving credit facility	122,000		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 leases	38		—
Dividends paid	(2,808)		(2,553)
Proceeds from exercise of stock options	2,077		2,186
Treasury stock	(2,955)		—
Cost of common stock repurchased	(590)		(437)
Net cash provided by financing activities	76,686		58,130
Effect of exchange rate changes on cash and cash equivalents	823		(1,986)
Net change in cash and cash equivalents	14,147		18,229
Cash and cash equivalents at beginning of the year	34,043		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.

9

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.

10

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 receivable	6,278
Inventory	17,498
Prepaid and other assets	3,564
Property, plant and equipment	12,828
Intangible assets	15,787
Other liabilities assumed	(13,132)
Net assets assumed	$	42,910
Goodwill	9,701
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, 2019			December 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.

11

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:

	Industrial			Agricultural			European			Consolidated
(in thousands)
Balance at December 31, 2018		$	61,107		$	6,230		$	15,906		$	83,243
Translation adjustment		326			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, 2019			December 31, 2018
Definite:
Trade names and trademarks	25 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 cost			74,170			58,259
Less accumulated amortization			(16,945)			(14,902)
Total net			57,225			43,357
Indefinite:
Trade names and trademarks			5,500			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. 

12

9. Debt

The components of long-term debt are as follows:

(in thousands)	June 30, 2019			December 31, 2018
Current Maturities:
Finance lease obligations		$	131		$	119
Long-term debt:
Bank revolving credit facility		166,000			85,000
Finance lease obligations		232			179
Total Long-term debt		166,232			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,
	2019		2018		2019		2018
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)	2019		2018		2019		2018
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)	2019		2018		2019		2018
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)	2019		2018		2019		2018
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
Netherlands	10,132		1,877		12,806		3,166
China	6,999		129		8,211		383
Germany	2,452		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)	2019		2018		2019		2018
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