10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-K

☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
	OF THE SECURITIES EXCHANGE ACT OF 1934
	FOR THE YEAR ENDED DECEMBER 31, 2022
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
	OF THE SECURITIES EXCHANGE ACT OF 1934

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	(I.R.S. Employer
incorporation or organization)	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
Common Stock, par value $.10 per share	ALG	on which registered
		New York Stock Exchange

 SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:  None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ☒

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 requirement 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 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 registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and an "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 has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The aggregate market value of the voting stock (which consists solely of shares of common stock) held by non-affiliates of the registrant as of June 30, 2022 (based upon the last reported sale price of $116.43 per share) was approximately $1,160,963,116 on such date.

The number of shares of the registrant’s common stock, par value $.10 per share, outstanding as of February 17, 2023 was 11,971,477 shares.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s proxy statement relating to the 2023 Annual Meeting of Stockholders have been incorporated by reference herein in response to Part III. 

ALAMO GROUP INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-K

TABLE OF CONTENTS

                                                                                                                                                 

	PART I	Page
Item 1.	Business	3
Item 1A.	Risk Factors	16
Item 1B.	Unresolved Staff Comments	26
Item 2.	Properties	27
Item 3.	Legal Proceedings	28
Item 4.	Mine Safety Disclosures	28
	PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	28
Item 6.	Reserved	30
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	36
Item 8.	Financial Statements and Supplementary Data	36
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	36
Item 9A.	Controls and Procedures	37
Item 9B.	Other Information	37
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	37
	PART III
Item 10.	Directors, Executive Officers and Corporate Governance	37
Item 11.	Executive Compensation	38
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	38
Item 13.	Certain Relationships, Related Transactions, and Director Independence	38
Item 14.	Principal Accountant Fees and Services	39
	PART IV
Item 15.	Exhibits and Financial Statement Schedules	39
	Index to Consolidated Financial Statements	39
Item 16.	Summary	39

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PART I

Item 1. Business

Unless the context otherwise requires, the terms “the Company,”  “we,” “our” and “us” refer to Alamo Group Inc. and its subsidiaries on a consolidated basis.

General

The Company is a leader in the design, manufacture and servicing of high quality vegetation management and infrastructure maintenance equipment for governmental, industrial and agricultural use. The Company’s products include tractor mounted and self-propelled mowers, zero-turn mowers, agricultural implements, tree and branch chippers, forestry/wood recycling equipment, street and parking lot sweepers, leaf and debris collection equipment, pothole patchers, vacuum trucks, hydro-excavation equipment, telescopic boom excavators, and snow removal equipment. The Company emphasizes high quality, cost-effective products for its customers and strives to develop and market innovative products while constantly monitoring and controlling its manufacturing and overhead costs. The Company has a long-standing strategy of supplementing its internal growth through acquisitions of businesses or product lines that currently complement, command, or have the potential to achieve a meaningful share of their niche markets.

The Company has approximately 4,200 employees and manages a total of 28 plants with business operations in North America, South America, Europe, and Australia. The Company sells its products primarily through a network of independent dealers and distributors to governmental end-users and related independent contractors, as well as to other commercial customers. The primary markets for our products are North America, South America, Europe and Australia.

The predecessor corporation to Alamo Group Inc. was incorporated in the State of Texas in 1969, as a successor to a business that began selling mowing equipment in 1955, and Alamo Group Inc. was reincorporated in the State of Delaware in 1987.

History

Since its founding in 1969, the Company has focused on satisfying customer needs through geographic market expansion, product development and refinement, and selected acquisitions. The Company’s first products were based on rotary cutting technology. Through acquisitions, the Company added flail cutting technology in 1983 and sickle-bar cutting technology in 1984.

The Company entered the agricultural mowing markets in 1986 with the acquisition of Rhino Products Inc. (“Rhino”), a leading manufacturer in this field. With this acquisition, the Company embarked on a strategy to increase the Rhino dealer distribution network during a period of industry contraction. The addition of M&W Gear Company (“M&W”) in early 1995 allowed the Company to enter into the manufacturing and distribution of tillage equipment, which complements the Rhino distribution network. M&W is part of the vegetation management marketing group.

In 1991, the Company began its international expansion with the acquisition of McConnel Ltd. (“McConnel”), a United Kingdom (“U.K.”) manufacturer of vegetation maintenance equipment, principally hydraulic boom-mounted hedge and grass cutters and related parts. Bomford-Turner Ltd. (“Bomford”), also a U.K. company, was acquired in 1993. Bomford is a manufacturer of heavy-duty, tractor-mounted grass and hedge mowing equipment. McConnel and Bomford sell their products to dealers and distributors through their respective sales forces.

The Company added to its presence in the industrial and governmental vegetation markets with the acquisition of Tiger Corporation (“Tiger”) in 1994. Tiger manufactures a wide variety of durable rotary and flail boom mowers, side mowers and rear mowing equipment, along with truck mounted boom mowers and a full line of specialty mowing equipment and attachments.

In 1994, the Company acquired Signalisation Moderne Autoroutiere S.A. (“SMA”) located in Orleans, France. SMA manufactures and sells principally a line of heavy-duty, tractor-mounted grass and hedge mowing-equipment and associated replacement parts primarily to departments of the French government. This acquisition, along with the acquisitions of Forges Gorce ("Forges Gorce"), a flail blade manufacturer in France, in 1996 and Rousseau Holdings S.A. (“Rousseau”), a leading French manufacturer of hedge and verge mowers, in 2004, when combined

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with McConnel and Bomford, has made the Company one of the largest manufacturers in the European market for the kind of vegetation management equipment sold by the Company.

In 1995, the Company expanded its business in the agricultural market with the acquisition of Herschel Corporation (“Herschel”), a manufacturer and distributor of aftermarket farm equipment replacement and wear parts. 

In 2000, the Company acquired Schwarze Industries, Inc. (“Schwarze”). Schwarze is a manufacturer of a broad range of street sweeping equipment which is sold to governmental agencies and contractors. The Company believes the Schwarze sweeper products fit the Company’s strategy of identifying product offerings with brand recognition in the industrial markets the Company serves. In 2004, the Company purchased the pothole patcher product line from Wildcat Manufacturing, Inc. This product line was merged into the Schwarze operation and is complementary to its current product offerings.

In 2000, the Company purchased the product line and associated assets of Twose of Tiverton Ltd. (“Twose”) a small regional manufacturer of power arm flail mowers and parts, as well as harrows and rollers, in the U.K. Twose consolidated its operations into the existing facilities at McConnel and Bomford and its brand name has been merged into the McConnel product line.

In 2000, the Company acquired Schulte Industries Ltd. and its related entities (“Schulte”). Schulte is a Canadian manufacturer of mechanical rotary mowers, snow blowers, and rock removal equipment. Schulte strengthened the Company’s Canadian presence in both marketing and manufacturing. It also expanded the Company’s range of large, heavy-duty rotary mowers.

In 2002, the Company purchased inventory, fixed assets and certain other assets of Valu-Bilt Tractor Parts (“Valu-Bilt”), a subsidiary of Quality Stores, Inc., located in Des Moines, Iowa. Valu-Bilt is a distributor of new, used and rebuilt tractor parts and other agricultural spare and wear parts sold directly to customers through its catalog and the internet and on a wholesale basis to dealers. Subsequent to the purchase, the operations of Valu-Bilt in Des Moines, Iowa, were consolidated into the Company’s Herschel facility in Indianola, Iowa.

In 2005, the Company acquired 100% of the issued and outstanding stock of Spearhead Machinery Limited (“Spearhead”) and subsequently merged its manufacturing operations into Bomford’s facility. Spearhead manufactures a range of tractor-mounted vegetation maintenance equipment, including reach mowers, flail mowers and rotary cutters. This acquisition extended our product lines and market coverage in Europe.

In 2006, the Company purchased substantially all of the assets of the Gradall excavator business (“Gradall”) from JLG Industries, Inc., including their manufacturing plant in New Philadelphia, Ohio. Gradall is a leading manufacturer of both wheeled and crawler telescopic excavators in North America. This acquisition enhanced our Industrial Equipment Division product offering sold to governmental and commercial buyers for digging/grading along roadways, maintenance along right-of-ways, and other applications.

In 2006, the Company purchased the vacuum truck and sweeper lines of Clean Earth Environmental Group, LLC and Clean Earth Kentucky, LLC (collectively referred to as “VacAll”). This included the product lines, inventory and certain other assets that relate to this business. The production of the vacuum truck and sweeper lines was moved to the Gradall facility in New Philadelphia, Ohio.

In 2006, the Company acquired 100% of the ownership interests in Nite-Hawk Sweepers LLC (“Nite-Hawk”), a manufacturer of truck mounted sweeping equipment primarily for the contract sweeping market, which expanded our presence in that market and which complements our Schwarze sweeper line.             

In 2007, the Company purchased Henke Manufacturing Corporation (“Henke”), a manufacturer of specialty snow removal attachments. Henke’s products are mounted on both heavy industrial equipment and medium to heavy-duty trucks. The primary end-users are governmental agencies, related contractors and other industrial users. In 2022, the Henke manufacturing operations were consolidated into our Wausau snow equipment facility in New Berlin, Wisconsin.

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In 2008, the Company acquired Rivard Developpement S.A.S. (“Rivard”), a leading French manufacturer of vacuum trucks, high pressure cleaning systems and trenchers. The acquisition broadened the Company’s product offering to our customers in Europe and other markets we serve.

In 2009, the Company acquired substantially all the assets of Bush Hog, LLC (“Bush Hog”), a leading manufacturer of rotary cutters, finishing mowers, zero turn radius mowers, front-end loaders, backhoes, landscape equipment and a variety of other implements. This acquisition, combined with the Company’s existing range of rotary mowers, established the Company as one of the largest manufacturers of rotary mowers in the world.

In 2011, the Company acquired substantially all of the assets and assumed certain specified liabilities of Tenco Group, Inc. ("Tenco") and its subsidiaries. Tenco is a Canadian-based manufacturer of snow removal equipment including snow blades, blowers, dump bodies, spreaders and associated parts and service. Tenco has operations in Quebec as well as New York and Vermont. The equipment is sold primarily through dealers to governmental end-users as well as snow removal contractors.

In 2013, the Company acquired substantially all of the assets and assumed certain specified liabilities of Superior Equipment Australia Pty Ltd ("Superior"). Superior is a small Australian-based manufacturer of agricultural mowing equipment and other attachments, parts, and services. The equipment is sold through dealers primarily to agricultural end-users with some sold to governmental entities in Australia. The Superior operations have been consolidated with the Company's Fieldquip location.

In 2014, the Company acquired Kellands Agricultural Ltd. and its subsidiary Multidrive Tractors Ltd. ("Kellands"). Kellands is a U.K.-based manufacturer of self-propelled sprayers and a range of multi-purpose load-carrying tractor vehicles. This acquisition enhanced our manufacture and distribution of our agricultural machinery in Europe and allowed the Company to enter into the self-propelled sprayer market. The Kellands operations were consolidated into the Company's Salford Priors facility and its products are sold under the McConnel brand name.

In 2014, the Company acquired Fieldquip Australia Pty Ltd ("Fieldquip"), a manufacturer of rotary cutters as well as a distributor of various lifestyle products. This acquisition allowed the Company to broaden its presence in both the manufacturing and distribution of vegetation management machinery in Australia.

In 2014, the Company acquired all of the operating units of Specialized Industries LP.  The purchase included the businesses of Super Products LLC ("Super Products"), Wausau-Everest LP ("Wausau" & "Everest") and Howard P. Fairfield LLC ("H.P. Fairfield") as well as several related entities ("Specialized"), including all brand names and related product names and trademarks. The primary reason for the Specialized acquisition was to broaden the Company's existing equipment lines. This acquisition increased our product offering and enhanced our market position both in vacuum trucks and snow removal equipment primarily in North America.

In 2015, the Company acquired Herder Implementos e Maquinas Agricolas Ltda. ("Herder"). Herder is a manufacturer of flail mowers which are sold direct and through dealers to a wide variety of agricultural markets as well as the roadside maintenance market. This acquisition established a presence for the Company in Brazil, one of the largest agricultural markets in the world. The Herder manufacturing operations have been consolidated into our Santa Izabel facility.

In 2017, the Company acquired 100% of the outstanding shares of Santa Izabel Agro Industria Ltda. ("Santa Izabel"). Santa Izabel designs, manufactures and markets a variety of agricultural implements, sugar cane trailers and other vegetation management products sold throughout Brazil. This acquisition, along with our existing Herder operation in Brazil, augmented our product portfolio and improved our manufacturing capabilities in one of the world's largest agricultural markets.

In 2017, the Company acquired substantially all of the assets and assumed certain specified liabilities of Old Dominion Brush Company, Inc. ("ODB"). ODB manufactures leaf collection equipment as well as replacement brooms for street sweepers, both of which are sold to municipalities, contractors and commercial landscape markets in North America. ODB is based in Richmond, Virginia. This acquisition provided new and complementary products to our existing range of infrastructure maintenance equipment and parts.

In 2017, the Company acquired R.P.M. Tech Inc. ("RPM"), a manufacturer of heavy duty snow removal equipment and associated parts. RPM primarily sells to governmental agencies, related contractors, airports and

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other industrial users. This acquisition complemented our existing range of snow removal products with RPM's range of heavy duty snow removal equipment, including their line of mechanical snow blowers. In 2020, RPM's operations were consolidated into the Company's nearby Tenco facility and the former RPM facility in Drummondville was sold.

In 2019, the Company acquired 100% of the outstanding capital shares of Dutch Power B.V. ("Dutch Power") in the Netherlands. Dutch Power designs and manufactures a variety of landscape and vegetation management machines and attachments. This acquisition expanded our existing platform and increased our capabilities in the European market. Dutch Power changed its legal name to Alamo Group The Netherlands in 2021.

In 2019, the Company acquired substantially all of the assets of the Dixie Chopper ("Dixie Chopper") business. Dixie Chopper manufactures a wide range of commercial and high end residential Zero Turn ("ZT") mowers. This acquisition provided a new channel and increased the Company's exposure in the outdoor power equipment market. Dixie Chopper was consolidated into our Rhino business operations.

In 2019, the Company acquired 100% of the outstanding capital shares of Morbark, LLC ("Morbark") which included its subsidiaries Rayco Manufacturing LLC ("Rayco") and Denis Cimaf Inc. ("Denis Cimaf"). Morbark is a leading manufacturer of equipment and aftermarket parts for forestry, tree care, biomass, land management and recycling markets. This acquisition expanded the Company's product line and complemented its range of vegetation maintenance equipment in an adjacent market. Morbark is based in Winn, Michigan with subsidiary locations in Wooster, Ohio and Roxton Falls, Quebec. At the end of 2020, the Denis Cimaf manufacturing operations based in Roxton Falls were consolidated into the Rayco facility in Wooster, Ohio.

In 2021, the Company acquired 100% of the outstanding capital shares of Timberwolf Limited ("Timberwolf") in the U.K. Timberwolf is a leading manufacturer of a broad range of commercial wood chippers primarily serving markets in the U.K. and the European Union. This acquisition complemented the Company's existing range of tree care products and strengthened the Company's presence in the U.K. and European forestry and tree care markets.

Sales and Marketing Strategy

The Company believes that within the U.S. it is a leading supplier to governmental markets, a leading supplier in the U.S. agricultural market, and one of the largest suppliers in the European market for its key niche product offerings. The Company’s products are sold through the Company’s various marketing organizations and extensive worldwide dealer and distributor networks under the Gradall®, VacAll®, Super Products®, Rivard®, Alamo Industrial®, Terrain King®, Tiger®, Herder®, Conver®, Roberine®, Votex®, Schwarze®, NiteHawk®, ODB®, Henke®, Tenco®, Wausau®, Everest®, H.P. Fairfield™, R.P.M. Tech™, Morbark®, Rayco®,Denis Cimaf®, Boxer®, Bush Hog®, Rhino®, RhinoAg®, M&W®, Dixie Chopper®, Herschel®, Schulte®, Fieldquip®, Santa Izabel™, McConnel®, Bomford®, Spearhead™, Twose™, SMA®, Forges Gorce™, Rousseau® , Timberwolf™ , and Wolftrack™ trademarks (some with related designs) as well as other trademarks and trade names.

Products and Distribution Channels

At the beginning of the fourth quarter of 2021, the Company began reporting operating results on the basis of two new segments, namely, the Vegetation Management Division and the Industrial Equipment Division. Prior to the fourth quarter of 2021, the Company had been reporting its operating results on the basis of two segments which were the Industrial Division and Agricultural Division. The Vegetation Management Division includes all of the operations of the former Agricultural Division plus the mowing and forestry/tree care operations that were previously part of the former Industrial Division, including the Company's recently acquired Morbark and Dutch Power business units. The Industrial Equipment Division includes the Company’s vocational truck business and other industrial operations such as excavators, vacuum trucks, street sweepers, and snow removal equipment. We believe the realignment of our two divisions provides greater potential to capture synergies in cross-branding, distribution, product development, supply chain management and logistics. The two divisions are also more balanced in scale and scope giving the Company two strong platforms for ongoing development through a mix of organic growth and

acquisitions.

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Vegetation Management Division

Bush Hog and Rhino equipment is generally sold to farmers, ranchers and other end-users to clear brush, mow grass, maintain pastures and unused farmland, shred crops, till fields, and for haymaking and other applications. Bush Hog and Rhino equipment consists principally of a comprehensive line of tractor-powered equipment, including rotary mowers, finishing mowers, flail mowers, disc mowers, front-end loaders, backhoes, rotary tillers, posthole diggers, scraper blades and replacement parts.

Dixie Chopper produces a wide range of commercial and high end residential zero turn ("ZT") mowers. It sells its products through its independent dealers in the outdoor power equipment channel throughout the U.S.

Schulte equipment includes heavy-duty mechanical rotary mowers, snow blowers, rock removal equipment and related replacement parts. Schulte serves both the agricultural and governmental markets primarily in Canada and the U.S. It also sells some of the Company’s other product lines in its markets and some of its products through independent distributors throughout the world.

McConnel equipment principally includes a broad line of hydraulic, boom-mounted hedge and grass cutters, remote control mowers as well as other tractor attachments and implements such as cultivators, subsoilers and other implements and related replacement parts. McConnel equipment is sold primarily in the U.K., Ireland, France and in other parts of Europe through independent dealers and distributors. McConnel also sells a range of self-propelled sprayers and a variety of multi-drive load-carrying vehicles. These products are sold through its existing dealer network as well as various marketing groups within the European region of the Vegetation Management Division.

Bomford equipment includes hydraulic boom-mounted hedge and hedgerow cutters, industrial grass mowers, agricultural seedbed preparation cultivators and related replacement parts. Bomford equipment is sold to governmental agencies, contractors and agricultural end-users in the U.K., Ireland, France and other parts of Europe, North America, Australia and Asia. Bomford’s sales network is similar to that of McConnel in the U.K.

Spearhead manufactures a range of tractor-mounted vegetation maintenance equipment, including reach mowers, flail mowers and rotary cutters. These products are manufactured in the Company's Bomford facility.

Fieldquip broadens the Company's presence in Australia. The company sells a variety of vegetation maintenance equipment, specifically rotary mowers and tractor attachments. Fieldquip sells to customers ranging from large agricultural and commercial operators to small farm hobbyist and residential users, as well as agricultural dealers who serve owners and operators in the turf, golf, park and airport industries and growers with orchards, vineyards and plantations in Australia and the South Pacific.

Rousseau sells hydraulic and mechanical boom mowers, primarily in France, through its own sales force and its dealer distribution network mainly to agricultural and governmental markets. These products have also been introduced into other markets outside of France. These products are manufactured at our facility near Lyon, France.

SMA equipment includes hydraulic boom-mounted hedge and hedgerow cutters and related replacement parts. SMA’s principal customers are French local authorities. SMA’s product offerings include certain quick-attach boom mowers manufactured by the Company in the U.K. to expand its presence in agricultural dealerships. The Company consolidated its SMA operations located in Orleans, France, and production was relocated to its manufacturing facility near Lyon, France.

Forges Gorce manufactures cutting blades which are sold to some of the Company’s subsidiaries as well as to other third party customers and distributors.

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Morbark manufactures a broad range of tree chippers, stump grinders, mulchers, brush cutters, flails and debarkers sold under the Morbark, Rayco, Denis Cimaf and Boxer brand names. Its products are sold to industrial and commercial contractors mainly through a network of independent dealers and distributors and, to a lesser extent, direct sales to end-users.

Timberwolf produces a variety of commercial tree care and forestry equipment and attachments under several brand names including Timberwolf and Wolftrack. Timberwolf sells its products primarily to commercial customers through a comprehensive network of dealers.

Alamo Industrial equipment is principally sold through independent dealers to governmental end-users, related independent contractors and utility and other dealers serving infrastructure maintenance operators and other applications in the U.S. and other countries. Governmental agencies and contractors that perform services for such agencies purchase primarily hydraulically-powered, tractor - and off-road chassis mounted mowers, including boom-mounted mowers, other types of cutters and replacement parts for heavy-duty, intensive use applications, including maintenance around highway, airport, recreational and other public areas. A portion of Alamo Industrial’s sales includes tractors, which are not manufactured by Alamo Industrial.

Tiger equipment includes heavy duty, tractor- and truck-mounted mowing and vegetation maintenance equipment and replacement parts. Tiger sells to state, county and local governmental entities and related contractors, primarily through a network of independent dealers. Tiger’s dealer distribution network is independent of Alamo Industrial’s dealer distribution network. A portion of Tiger’s sales includes tractors, which are not manufactured by Tiger.

Alamo Group The Netherlands produces a variety of landscape and vegetation maintenance equipment and attachments under several brand names including Herder, Conver, Roberine, and Votex. Alamo Group The Netherlands primarily sells to contractors who perform infrastructure maintenance for governmental agencies and private landowners.

Herder and Santa Izabel give the Company a presence in the Brazilian agricultural market. Herder manufactures and distributes flail and rotary mowers and various other agricultural equipment, direct and through dealers. Its products are used in a wide variety of agricultural and governmental markets. Santa Izabel designs, manufactures and markets a variety of agricultural implements, including sugar cane trailers sold throughout Brazil.

Herschel aftermarket replacement parts are sold for many types of farm equipment and tractors and certain types of mowing and construction equipment. Herschel products include a wide range of cutting parts, plain and hard-faced replacement tillage tools, disc blades and fertilizer application components. Herschel replacement tools and parts are sold throughout the United States, Canada and Mexico to five major customer groups: farm equipment dealers; fleet stores; wholesale distributors; OEMs; and construction equipment dealers. Valu-Bilt complements the Herschel product lines while also expanding the Company’s offering of aftermarket agricultural parts and added catalog and internet sales direct to end-users.

Industrial Equipment Division

Gradall produces a range of excavators based on high-pressure hydraulic telescoping booms which are sold through dealers primarily to governmental agencies and, to a lesser extent, the mining industry, steel mills and other specialty applications in the U.S. and other countries. Many of these products are designed for excavation, grading, shaping and similar tasks involved in land clearing, road building, grading or maintenance. These products are available mounted on various types of undercarriages: wheels for full-speed highway travel, wheels for on/off road use, and crawlers. A portion of Gradall’s sales includes truck chassis which are not manufactured by Gradall.

VacAll produces catch basin cleaners and roadway debris vacuum systems. These units are powerful and versatile with uses including, but not limited to, removal of wet and dry debris, spill elimination, and cleaning of sludge beds. VacAll also offers a line of sewer cleaners. Its products are primarily sold through dealers to industrial and commercial contractors as well as governmental agencies. A portion of VacAll’s sales includes truck chassis which are not manufactured by the Company.

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Super Products produces truck-mounted vacuum machines, combination sewer cleaners and hydro excavators. Its products are sold to municipalities, utilities and contractors through a nationwide distributor network. Super Products also operates a network of rental stores that provides short and long-term rental contracts for its products. Rental customers are primarily contractors serving the petrochemical, petroleum production and refining industries. A portion of the sales of Super Products includes truck chassis which are not manufactured by the Company.

Rivard manufactures vacuum trucks, high pressure cleaning systems and trenchers. Rivard’s equipment is sold primarily in France and certain other markets, mainly in Europe, the Middle East and North Africa, and to governmental entities and related contractors. This business also complements our product offerings in North America. The majority of Rivard's customers provide their own truck chassis.

Tenco and RPM both design and manufacture a heavy-duty line of snow removal equipment, including truck-mounted snow plows, snow blowers, dump bodies and spreaders. Their products are primarily sold through independent dealers. End-users are governmental agencies, contractors, airports and other industrial users.

Wausau designs and manufactures a comprehensive range of snow removal and ice control products. Products include snowplows, snow blowers, snow throwers, brooms, deicers, brine sprayers and other related accessories and parts. Wausau sells its products through its established dealer network to both governmental and non-governmental end-users and sells directly to airports and fixed-base operators.

Everest designs and manufactures a range of snow removal and ice control products including snowplows, wing systems, spreader bodies, and other related accessories and parts. Everest also manufactures custom-engineered underground construction forms for tunnels.

Henke designs and manufactures snow plows and heavy duty snow removal equipment, hitches and attachments for trucks, loaders and graders sold primarily through independent truck and industrial equipment dealers. Henke’s primary end-users are governmental agencies, related contractors and other industrial users.

H.P. Fairfield is a full-service distributor of public works and runway maintenance products, parts and service, whose sales and service outlets are located in the northeastern part of the U.S. H.P. Fairfield’s offerings include custom municipal snow and ice removal equipment, a range of salt spreaders and truck bodies, street sweepers, a line of industrial rotary, flail and boom mowers, solid waste and recycling equipment, water and sewer maintenance equipment, municipal tractors and attachments, and asphalt maintenance patchers, some of which are sourced from other Alamo Group companies. H.P. Fairfield also provides truck up-fitting services as part of its business.

Schwarze equipment includes truck-mounted air vacuum, mechanical broom, and regenerative air sweepers, pothole patchers and replacement parts. Schwarze sells its products primarily to governmental agencies and independent contractors, either directly or through its independent dealer network. A portion of Schwarze’s sales includes truck chassis which are not manufactured by Schwarze.

ODB manufactures and sells leaf and debris collection equipment and replacement brooms for street sweepers, both of which are sold to municipalities, contractors and commercial landscape markets in North America.

Nite-Hawk manufactures parking lot sweepers with unique and innovative hydraulic designs. By eliminating the auxiliary engine, Nite-Hawk sweepers have proven to be fuel-efficient, environmentally conscious, and cost-effective to operate. Nite-Hawk focuses mainly on and sells direct to parking lot contractors. A portion of Nite-Hawk’s sales includes truck chassis which are not manufactured by Nite-Hawk.

Replacement Parts

The Company derives a significant portion of its revenues from sales of replacement parts for each of its wholegoods lines. Replacement parts represented approximately 19%, 20% and 21% of the Company’s total sales for the years ended December 31, 2022, 2021 and 2020, respectively. Replacement parts generally are more profitable and less cyclical than wholegoods.

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Product Development

The Company’s ability to provide innovative responses to customer needs, to develop and manufacture new products, and to enhance existing product lines is important to its success. The Company continually conducts research and development activities in an effort to improve existing products and develop new products. As of December 31, 2022, the Company employed 267 people in its various engineering departments, 166 of whom are degreed engineers and the balance of whom are support staff. Amounts expended on research and development activities were approximately $14.3 million in 2022, $11.7 million in 2021 and $12.4 million in 2020. As a percentage of sales, research & development was approximately 0.9% in 2022, 0.9% in 2021 and 1.1% in 2020, and is expected to continue at similar levels in 2023.

Seasonality

The Company’s unit sales are fairly constant quarter to quarter. However, replacement part sales are generally higher in the second and third quarters of the year, because a substantial number of the Company’s products are used for maintenance activities such as vegetation maintenance, highway right-of-way maintenance, construction, and street and parking lot sweeping. Usage of this equipment is typically lower in harsh weather. The Company utilizes an annual twelve-month sales forecast provided by the Company’s marketing departments which is updated quarterly in order to develop a production plan for its manufacturing facilities. In addition, many of the Company’s marketing departments attempt to equalize demand for products throughout the calendar year by offering seasonal sales programs which may provide additional incentives, including discounts and extended payment terms.

Competition

The Company’s products are sold in highly competitive markets throughout the world. The principal competitive factors are price, quality, availability, service and reputation. The Company competes with several large national and international companies that offer a broad range of equipment and replacement parts, as well as with numerous small, privately-held manufacturers and suppliers of a limited number of products, mainly on a regional basis. Some of the Company’s competitors are significantly larger than the Company and have substantially greater financial and other resources at their disposal. The Company believes that it is able to compete successfully in its markets by effectively managing its manufacturing costs, offering high quality products, developing and designing innovative products and, to some extent, avoiding direct competition with significantly larger potential competitors. There can be no assurance that the Company’s competitors will not substantially increase the resources devoted to the development and marketing of products competitive with the Company’s products or that new competitors with greater resources will not enter the Company’s markets.

Unfilled Orders

As of December 31, 2022, the Company had unfilled customer orders of $1.0 billion compared to $800.8 million at December 31, 2021. Management expects that substantially all of the Company’s unfilled orders as of December 31, 2022 will be shipped during fiscal year 2023. The amount of unfilled orders at a particular time is affected by a number of factors, including manufacturing and shipping schedules which, in most instances, are dependent on the Company’s seasonal sales programs and the requirements of its customers. It is possible that the lingering effects of the COVID-19 pandemic, including supply chain disruptions, labor constraints and other new and/or unanticipated effects, could cause delays in delivery or an inability to complete unfilled customer orders. The Company’s orders are subject to cancellation at any time before shipment; therefore, a comparison of unfilled orders from period to period is not necessarily meaningful and may not be indicative of future actual shipments. No single customer or group of customers is responsible for 10% or more of the aggregate revenue of the Company or of a segment of the Company.

Sources of Supply

The principal raw materials used by the Company include steel, other metal components, hydraulic hoses, paint and tires. During 2022, the raw materials needed by the Company were available from a variety of sources in adequate quantities and at prevailing market prices, but in 2022 we experienced significant price inflation for many of the raw materials we purchase. We expect pricing to remain elevated in 2023 but anticipate a slowing of the rate of inflation.

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While the Company manufactures many of the parts for its products, a significant percentage of parts, including most drivelines, gearboxes, industrial engines, and hydraulic components, are purchased from outside suppliers which manufacture to the Company’s specifications. In addition, the Company, through its subsidiaries, purchases tractors and truck chassis as a number of the Company’s products are mounted and shipped with a tractor or truck chassis. Tractors and truck chassis are generally available, but during 2022 we experienced significant delays in receiving truck chassis which caused us to delay shipments of some of our products and created operational inefficiencies in some of our facilities, particularly within our Industrial Equipment Division. The Company sources its purchased goods from international and domestic suppliers. No one supplier is responsible for supplying more than 10% of the principal raw materials or purchased goods used by the Company.

Patents, Trademarks and Trade Names

The Company owns various U.S. and international patents, trademarks and trade names. While the Company considers its patents, trademarks and trade names to be advantageous to its business, it is not dependent on any single patent, trademark, trade name or group of patents, trademarks, or trade names. The net book value of patents, trademarks and trade names was $78.9 million and $84.8 million as of December 31, 2022 and 2021, respectively.

Environmental and Other Governmental Regulations

Like other manufacturers, the Company is subject to a broad range of federal, state, local and foreign laws, rules and regulations including those relating to climate change; emissions to air, including Tier 4 or similar engine emission regulations; discharges to water; restrictions placed on water usage and water availability; product and associated packaging; use of certain chemicals; restricted substances, including "conflict minerals" disclosure rules; import and export compliance, including country of origin certification requirements; worker and product user health and safety; energy efficiency; product life-cycles; outdoor noise laws; and the generation, use, handling, labeling, collection, management, storage, transportation, treatment, and disposal of hazardous substances, wastes, and other regulated materials.

The U.S. Environmental Protection Agency ("EPA"), the California Air Resources Board ("CARB"), and similar regulators in other U.S. states and foreign jurisdictions in which we sell our products have emission requirements setting maximum emission standards for certain equipment. In addition to the the EPA's implementation of Tier 4 emission requirements applicable to diesel engines, China, the European Union ("EU") and the United Kingdom also have adopted similar regulations, and similar emission regulations are also being considered in other markets in which we sell our products. CARB continues to propose and discuss implementation of zero emissions equipment regulations that will likely create increasingly stringent requirements on exhaust and other emissions from some of the products we manufacture.

The U.S. federal government, several U.S. states, and certain international markets where we sell our products, including the EU and some EU member countries have introduced product life-cycle laws, rules, or regulations, which are intended to reduce waste and environmental and human health impact, and require manufacturers to label, collect, dispose, and recycle certain products, including some of our products, at the end of their useful life. These include, among other laws and regulations: (i) the Registration, Evaluation, Authorization and Restriction of Chemicals directive or similar substance level laws, rules, or regulations that require notification of use of certain chemicals, or ban or restrict the use of certain chemicals; (ii) California Proposition 65 and other product substance restriction laws, some of which require certain labeling of products; (iii) energy efficiency laws, rules, or regulations, which are intended to reduce the use and inefficiencies associated with energy and natural resource consumption and require specified efficiency ratings and capabilities for certain products; (iv) conflict minerals laws, such as those contained in the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules promulgated by the U.S. Securities and Exchange Commission ("SEC"), which require specific procedures for the determination and disclosure of the use of certain minerals, known as "conflict minerals," which are mined from the Democratic Republic of the Congo and adjoining countries; and (v) supply chain transparency laws and regulations addressing modern slavery and human trafficking.

The Company is also 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, including National Highway Traffic Safety Administration reporting. In addition, a variety of laws regulate the Company’s contractual relationships with its dealers, some of which impose restrictive standards on the relationship

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between the Company and its dealers, including events of default, grounds for termination, non-renewal of dealer contracts, and equipment repurchase requirements.

We believe we have maintained compliance with existing laws, rules and regulations applicable to our business and will continue to do so. W believe there will be some additional costs to our business as a result of the increasing level of regulation applicable to our business activities, and there can be no assurance that the Company will not incur material costs or other liabilities as a result thereof.

Human Capital Resources and Management

We recognize that the success of our Company is dependent upon the talents and dedication of our people, and we are committed to investing in their success. Our Vice-President of Corporate Human Resources is responsible for developing and executing our human resources strategy together with our President and Chief Executive Officer and the other members of the Company's management team. Our Chief Executive Officer and Vice-President of Human Resources regularly update our Board of Directors regarding the status of our human resources initiatives. Among the key elements of our human resources strategy are the following:

Focus on Health and Safety: Employee health and safety is of paramount importance to us. We believe it is our responsibility to maintain a safe and healthy workplace in each of our locations and to make continuous improvements in this area. We do this by embedding safety into every level of the organization as one of our core values. Our approach is proactive and preventative. Regular safety meetings are held at our plants on an ongoing basis. Every location offers frequent safety training programs to all employees and leverages safety committees who conduct safety audits to identify and remove potential issues. We ensure that safety performance is tracked, aggregated, and reviewed timely and reported to management for appropriate action. Our corporate technical affairs and safety team collects data on recordable injury rates, severe injury rates, and near misses from each Alamo Group operating company, and conducts root cause analysis with corrective action plans to prevent future occurrences. This data is reviewed monthly by the executive leadership team and shared with the Company's Board of Directors on a quarterly basis. With the onset of the COVID-19 pandemic, we implemented, and continue to adhere to, certain rigorous and meaningful safety measures recommended by the U.S. Centers for Disease Control and Prevention, World Health Organization, and federal, state, local, and foreign authorities that we determined were in the best interest of our employees, customers, and suppliers. This led to the adoption of various measures including COVID-19 case tracking and quarantining where and when necessary, mandating face coverings when required by local rules and regulations (except where hazardous), regular sanitization, reconfiguration of workstations to allow for appropriate distancing, expanding the use of internal video meetings and installation of related technology, minimizing travel, and implementing remote work assignments, amongst other actions. These measures continue to be in place where and when necessary.

Employee Engagement and Talent Development: We focus on attracting, developing, and retaining a team of highly talented and motivated employees. Our key talent philosophy is to develop internal candidates from within our Company, so they are “ready now” when career opportunities arise, and when we recruit externally to select candidates with future stretch potential. We provide all employees a wide range of professional development experiences, both formal and informal, at all stages in their careers. Our formal offerings include tuition reimbursement, a diverse curriculum of learning programs, leadership development experiences, vocational and trade skills training, and external partnerships with educational institutions and trade schools across the globe. The Company's focus on supervisor and manager development and a culture of promoting a diverse, inclusive, and respectful workplace supports our ability to attract, engage, retain, and motivate industry-leading talent to meet our customer’s needs and sustain the Company’s growth. Formal welder training, apprenticeships, and local partnerships with vocational training programs, junior colleges, and high schools ensure that our operating companies continue to attract and grow their critical manufacturing skills. The Company’s emphasis on our core competencies, including Leading People and Leading Change, continues to favorably impact our succession planning and employee retention with below industry average annual turnover rates. In January of 2022, we implemented The Alamo Group Learning & Development Academy, a new talent development program which focuses on building and strengthening the leadership capabilities of our management teams and also offers technical skills training for our production floor employees. Many programs are available on-demand to manufacturing supervisors, which offers development opportunities to those with direct oversight of the people building our products. Training is easily accessible both to employees who work on-site as well as those who work in remote and hybrid environments. Virtual, in-person and on-campus programs are offered to encourage cross-location and cross-functional networking and sharing of ideas that foster and support our culture of continuous improvement.

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Commitment to Diversity and Inclusion: We recognize, value, and respect the individual differences of our employees and believe that a diverse set of backgrounds, experiences, and perspectives is crucial to our ability to continue to innovate, collaborate, and meet the needs of our global workforce and customers. Accordingly, we are committed to encouraging and fostering an inclusive culture where diversity and individual differences are accepted, respected, and valued so that employees feel empowered to contribute fully to the Company's ongoing success. To support diversity and inclusion in the workplace, we dedicate people and resources to promote an inclusive environment through policies and training. We also market our career opportunities to a wide network of organizations and job boards that can help us source diverse candidate pools. We actively volunteer and engage in local community projects and contribute donations to charitable organizations. We build strategies and implement tactics that will attract and maintain a diverse workforce, positively impacting the communities and markets in which our employees live and work. Initiatives include but are not limited to increased diversity and inclusion training that increases awareness and reinforces respect in the workplace, as well as building partnerships with organizations like Women in Manufacturing and The National Diversity Council.

Compensation and Benefits: We conduct regular assessments of our pay and benefit practices to help ensure that our people are compensated fairly and competitively. We also devote significant resources to management and employee training and development, including tuition assistance for career-enhancing academic and professional programs. In addition to salaries, our compensation programs, which vary by country and region, can include annual bonus and incentive plans, profit sharing, stock-based compensation awards, company-sponsored retirement savings plans with employee matching opportunities (or similar local retirement benefits), healthcare and insurance benefits, dependent care and flexible savings accounts, paid time off such as vacation and holidays, sick pay, disability pay and family leave, flexible work schedules, wellness and employee assistance programs for mental health, self-improvement, legal and financial services, service anniversary awards, tuition assistance and dependent college scholarships, and discounts on products and services.

Labor Agreements: As of December 31, 2022, we employed approximately 4,200 employees. In the U.S. the Company has a collective bargaining agreement at its Gradall plant which covers 185 employees and will expire on April 14, 2024. In Canada the Tenco bargaining agreement covers 99 employees and expires on December 31, 2025; RPM has an agreement covering 4 employees which expires on February 1, 2025; and Everest has a collective bargaining agreement covering 66 employees which will expire on November 30, 2023. In the Company’s European locations, all employees are covered by the European Works Council agreements. McConnel, Bomford, Spearhead, AMS-UK, SMA, Faucheux, Forges Gorce, Rousseau, Rivard, and Alamo Group The Netherlands have various collective bargaining agreements covering approximately 784 employees. The Company considers its employee relations to be satisfactory.

Available Information

The Company files annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission (the “SEC”). The SEC maintains a website that contains annual, quarterly and current reports, proxy and information statements, and other information that issuers (including the Company) file electronically with the SEC. The SEC’s website is www.sec.gov.

The Company’s website is www.alamo-group.com. The Company makes available free of charge through its website, via a link to the SEC’s website at www.sec.gov, its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. The Company also makes available through its website, via a link to the SEC’s website, statements of beneficial ownership of the Company’s equity securities filed by its directors, officers, 10% or greater shareholders, and others required to file under Section 16 of the Exchange Act.

The Company also makes available free of charge on its website its most recent annual report on Form 10-K, its quarterly reports on Form 10-Q for the current fiscal year, its most recent proxy statement and its most recent annual report to stockholders, although in some cases these documents are not available on our site as soon as they are available on the SEC’s site. You will need to have on your computer the Adobe Acrobat Reader® software to view the documents, which are in PDF format. In addition, the Company posts on its website its Charters for its Audit Committee, Compensation Committee and Nominating/Corporate Governance Committee, as well as its Corporate Governance Policies and its Code of Conduct and Ethics for its directors, officers and employees. You can obtain a written copy of these documents, excluding exhibits, at no cost, by sending your request to the Corporate Secretary, Alamo Group Inc., 1627 E. Walnut Street, Seguin, Texas 78155, which is the principal

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corporate office of the Company. The telephone number is 830-379-1480. The information on the Company’s website is not incorporated by reference into this report.

Forward-Looking Information

Part I of this Annual Report on Form 10-K and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Part II of this Annual Report contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. In addition, forward-looking statements may be made in other documents filed or furnished with the SEC, or by management orally or in press releases, conferences, reports or otherwise to analysts, investors, representatives of the media and others, in the future by or on behalf of the Company. Generally, forward-looking statements are not based on historical facts but instead represent the Company's and its management's beliefs regarding future events.

Statements that are not historical are forward-looking. When used by us or on our behalf, the words "expect," “will,” “estimate,” “believe,” “intend,” "would," “could,” "predict," “should,” “anticipate,” "continue," “project,” “forecast,” “plan,” “may” and similar expressions generally identify forward-looking statements made by us or on our behalf. Forward-looking statements involve risks and uncertainties. These uncertainties include factors that affect all businesses operating in a global market, as well as matters specific to the Company and the markets we serve. Certain particular risks and uncertainties that continually face us include the following:

•budget constraints and revenue shortfalls which could affect the purchases of our type of equipment by governmental customers and related contractors in both domestic and international markets;

•market acceptance of new and existing products;

•our ability to hire suitable employees for our business and maintain good relations with employees;

•our ability to develop and manufacture new and existing products profitably;

•the inability of our suppliers, creditors, public utility providers and financial and other service organizations to deliver or provide their products or services to us;

•legal actions and litigation;

•impairment in the carrying value of goodwill;

•our ability to successfully integrate acquisitions and operate acquired businesses or assets;

•current and changing tax laws in the U.S. and internationally;

•our ability to hire and retain quality skilled employees; and

•changes in the prices of agricultural commodities, which could affect our customers’ income

levels.

In addition, we are subject to risks and uncertainties facing the industry in general, including the following:

•changes in business and political conditions and the economy in general in both domestic and international markets;

•negative impacts on our business and financial results including from operational and supply chain disruptions, input cost inflation, labor shortages, and other negative effects resulting from the COVID-19 pandemic or other causes;

•the price and availability of energy and critical raw materials, particularly steel and steel products;

•increased competition;

•increases in input costs on items we use in the manufacturing of our products;

•adverse weather conditions such as droughts, floods, snowstorms, etc., which can affect the buying patterns of our customers and end-users;

•increased costs of complying with governmental regulations which affect corporations including related fines and penalties (such as the European General Data Protection Regulation (GDPR) and the California Consumer Privacy Act);

•an increase in unfunded pension plan liability due to financial market deterioration;

•the potential effects on the buying habits of our customers due to animal disease outbreaks and other epidemics;

•adverse market conditions and credit constraints which could affect our customers and end-users, such as cutbacks on dealer stocking levels;

•changes in market demand;

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•climate related incidents and other sustainability risks, global pandemics, acts of war or aggression (including the war between Russia and Ukraine) and terrorist activities or military actions;

•cyber security risks including the potential loss of proprietary data or data security breaches and related fines, penalties and other liabilities;

•financial market changes including changes in interest rates and fluctuations in foreign exchange rates;

•abnormal seasonal factors in our industry;

•changes in domestic and foreign governmental policies and laws, including increased levels of government regulation and changes in agricultural policies, including the amount of farm subsidies and farm payments as well as changes in trade policy that may have an adverse impact on our business;

•government actions, including but not limited to budget levels, change in tax laws, regulations and legislation, relating to the environment, commerce, infrastructure spending, health and safety; and

•risk of governmental defaults and resulting impact on the global economy and particularly financial institutions.

We wish to caution readers not to place undue reliance on any forward-looking statement and to recognize that the statements are not predictions of actual future results. Actual results could differ materially from those anticipated in the forward-looking statements and from historical results, due to the risks and uncertainties described above and under “Risk Factors,” as well as others not now anticipated. The foregoing statements are not exclusive and further information concerning us and our businesses, including factors that could potentially materially affect our financial results, may emerge from time to time. It is not possible for management to predict all risk factors or to assess the impact of such risk factors on the Company’s businesses. Any forward-looking statements made by or on behalf of the Company speak only to the date they are made and we do not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the forward-looking statements were made.

Information About our Executive Officers

Certain information is set forth below concerning the executive officers of the Company (the "Executives"), each of whom has been appointed to serve until the 2023 annual meeting of directors or until their successor is duly appointed and qualified.

Name	Age	Position
Jeffery A. Leonard	63	President and Chief Executive Officer
Richard J. Wehrle	66	Executive Vice President and Chief Financial Officer
Edward T. Rizzuti	53	Executive Vice President, General Counsel and Secretary
Dan E. Malone	62	Executive Vice President, Chief Sustainability Officer
Richard H. Raborn	57	Executive Vice President, Alamo Vegetation Management Division
Michael A. Haberman	64	Executive Vice President, Alamo Industrial Equipment Division
Janet S. Pollock	64	Vice President, Human Resources
Lori L. Sullivan	53	Vice President, Internal Audit

Jeffery A. Leonard was appointed President and Chief Executive Officer of the Company in May of 2021. Mr. Leonard was also appointed as a director of the Company in June of 2021. Mr. Leonard joined the Company in 2011, and served as Executive Vice President of the Company's former Industrial Division from 2011 to 2021. Mr. Leonard previously was Senior Vice President of Metso Minerals Industries Inc., a supplier of technology and services for mining, construction, power generation, automation, recycling, and pulp and paper industries.

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Richard J. Wehrle was appointed Executive Vice-President and Chief Financial Officer of the Company in July of 2021. Prior to that, Mr. Wehrle served as Vice President, Controller and Treasurer of the Company from May 2001 to July 2021. He assumed Treasury responsibilities in May of 2018. Previously, Mr. Wehrle served in various accounting management capacities within the Company from 1988 to 2001.

Edward T. Rizzuti was appointed Vice President, General Counsel of Alamo Group Inc. in July of 2015, assumed the Secretary role in May of 2018 and was promoted to Executive Vice-President in November of 2021. Prior to joining the Company, from 2010 to 2015, Mr. Rizzuti served as Vice President, General Counsel and Secretary for Erickson Incorporated, a publicly traded aircraft manufacturing and operating company based in Portland, Oregon.

Dan E. Malone was appointed Executive Vice President, Chief Sustainability Officer in July of 2021. Mr. Malone joined the Company in 2007 and served as Executive Vice President, Chief Financial Officer from 2007 to 2021. Prior to joining the Company, Mr. Malone held the position of Executive Vice President, Chief Financial Officer & Corporate Secretary at Igloo Products Corporation, a manufacturer of insulated consumer goods, from 2002 to January 2007. Mr. Malone was Vice President and Chief Financial Officer of The York Group, Inc. from 2000 to 2002, and held various financial positions from 1987 to 2000 with Cooper Industries, Inc. and its various subsidiaries.

Richard H. Raborn was appointed Executive Vice President the Company's Vegetation Management Division in July of 2021. Mr. Raborn joined the Company in 2015 and served as Executive Vice-President of the Company's former Agricultural Division from 2015 to 2021. Prior to joining the Company, Mr. Raborn was Vice President and General Manager of the Powertrain Metal Division for Illinois Tool Works (ITW) from 2009 to 2015. ITW is one of the world's leading diversified manufacturers of specialized industrial equipment, consumables and related service business.

Michael A. Haberman was appointed Executive Vice-President of the Company's Industrial Equipment Division in July of 2021. Prior to his role as Executive Vice-President, Mr. Haberman served as the Company's Excavation/Vacuum Truck group Vice-President from January 2020 to July 2021. Previously, Mr. Haberman served as President of the Company's Gradall Industries company from February of 2006 until January of 2020.

Janet S. Pollock was appointed Vice President, Human Resources of Alamo Group Inc. in May of 2018. Ms. Pollock joined Alamo Group in June of 2013 as Vice President of Human Resources for U.S. Operations. Prior to joining the Company, Ms. Pollock was Vice President of Human Resources with CPS Energy in San Antonio, Texas and Vice President of Strategic Initiatives for Coca-Cola Enterprises, Inc.

Lori L. Sullivan was appointed Vice President, Internal Audit of Alamo Group Inc. in May of 2019. Prior to this appointment, Ms. Sullivan was Vice President of Internal Audit for U.S. Operations and Director of Internal Audit for Alamo Group Inc. Ms. Sullivan has held audit positions within various industries including research and development, public utilities, and public accounting prior to joining Alamo Group in July of 2011.

Item 1A. Risk Factors

You should carefully consider each of the risks described below, together with all of the other information contained in this Annual Report on Form 10-K, before making an investment decision with respect to the Company’s securities. If any of the following risks develop into actual events, the Company’s business, financial condition or results from operations could be materially and adversely affected and you could lose all or part of your investment.

Risks related to our business

A downturn in general economic conditions and outlook in the United States and around the world could adversely affect our net sales and earnings.

The strength and profitability of our business depends on the overall demand for our products and upon economic conditions and outlook, including but not limited to economic growth rates, consumer spending levels, financing availability, pricing and terms for our dealers and end-users, employment rates, interest rates, inflation, consumer confidence and general economic and political conditions and expectations in the United States and the

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other economies in which we conduct business. Slow or negative growth rates, inflationary/deflationary pressures, higher commodity costs and energy prices, reduced credit availability or unfavorable credit terms for our dealers and end-user customers, increased unemployment rates, and recessionary economic conditions and outlook could cause consumers to reduce spending, which may cause them to delay or forgo purchases of our products and could have an adverse effect on our net sales and earnings.

Deterioration of industry conditions could harm our business, results of operations and financial condition.

Our business depends to a large extent upon the prospects for the infrastructure maintenance, vegetation management and agricultural markets in general. Future prospects of the industry depend largely on factors outside of our control. Any of those factors could adversely impact demand for our products, which could adversely impact our business, results of operations and financial condition. These factors include the following:

•weakness in the worldwide economy;

•the price and availability of raw materials, purchased components and energy;

•budget constraints and revenue shortfalls for our governmental customers;

•changes in domestic and foreign governmental policies and laws, including increased levels of governmental regulation and associated liabilities;

•the levels of interest rates;

•the value of the U.S. dollar relative to the foreign currencies in countries where we sell our products but don’t have a manufacturing presence;

•impact of tighter credit markets on the Company, its dealers and end-users;

•impairment in the carrying value of goodwill; and

•increase in unfunded pension plan liability due to financial market deterioration.

In addition, our business is susceptible to a number of factors that specifically affect agricultural customer spending patterns, including the following:

•animal disease outbreaks, epidemics and crop pests;

•weather conditions, such as droughts, floods and snowstorms;

•changes in farm incomes;

•cattle and agricultural commodity prices;

•changes in governmental agricultural policies worldwide;

•the level of worldwide farm output and demand for farm products; and

•limits on agricultural imports/exports.

Our dependence on, and the price and availability of, raw materials as well as purchased components may adversely affect our business, results of operations and financial condition.

We purchase commodities, components, parts, accessories and other goods, such as steel, truck chassis, engines, transmissions, hydraulics, electrification components, and other items necessary for the manufacture of our end-products. The lack of availability or the increased cost of these purchased materials and components due to supply chain disruptions, inflation, increased tariffs, and/or other uncontrollable events have negatively affected our business operations and profitability and may continue to do so in the future. Historically, we have mitigated commodity, component, parts, and other input cost increases, in part, by increasing prices on our products and executing on our strategic productivity initiatives. However, we may not be able to fully offset increased input costs in the future. If our price increases are not accepted by our customers and the market or we are not able to realize anticipated manufacturing efficiencies, our net sales, profit margins, earnings, and market share could be adversely affected. Further, if we are unavailable to timely source items such as truck chassis, engines, hydraulics and other critical components our business, results of operations and financial condition may be adversely affected.

The COVID-19 pandemic may continue to materially and adversely affect our business, results of operations and financial condition.

The COVID-19 pandemic caused a significant downturn in our markets and subsequently caused significant market volatility and operational challenges, among other things. The extent and duration of ongoing impacts stemming from the pandemic will depend on numerous factors, including:

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•global governmental, business and individual actions taken in response to COVID-19;

•the effect on our suppliers and companies throughout our supply chain to meet supply commitments, requirements, and/or demands and our ability to continue to obtain commodities, components, parts, and accessories on a timely basis and at anticipated costs;

•the effect on our dealers, distributors, and other channel partners and customers, including reduced or constrained budgets and cash preservation efforts;

•our ability to fulfill existing and future sales order backlog;

•potential effects the pandemic may have on our available labor force;

•increasing logistics costs and transportation challenges;

While our markets appear to have recovered from the more direct negative impacts of the pandemic, the longer term effects of the pandemic, including supply chain disruptions, purchased component shortages, and inflationary pressures are unknown and could have a material adverse effect on our business, results of operations and financial results.

Skilled labor shortages or our inability to retain qualified employees could adversely affect our operations.

Our ability to maintain our productivity at competitive levels may be limited by our ability to employ, compensate, train and retain personnel necessary to meet our requirements. We may experience shortages of qualified personnel such as engineers, project managers, supervisors, and select skilled trades. We cannot be certain that we will be able to maintain an adequate skilled or unskilled labor force or key technical personnel necessary to operate efficiently and to support our growth strategy and operations. Shortages of skilled labor, such as welders and machine operators, are ongoing and could negatively affect our production capabilities, lead to production inefficiencies, or increase our cost of operating. Labor shortages or increased labor costs could impair our ability to operate our business, meet customer commitments or grow our revenues, and could materially and adversely impact our business, results of operations and financial results.

We depend on governmental sales, and a decrease in such sales could adversely affect our business, results of operations and financial condition.

A substantial portion of our revenues is derived from sales to federal, state, provincial and local governmental entities and related contractors, both in the U.S. and in other countries in which we sell our products. These sales depend primarily on the levels of budgeted and appropriated expenditures for highway, airport, roadside and parks maintenance by various governmental entities and are affected by changes in local and national economic conditions. Federal, state, provincial and local government budgets have been and will likely continue to be negatively affected by the COVID-19 pandemic and this could have a material negative impact on our business and financial condition.

Significant changes in trade policy and related trade wars could have a material adverse impact on our results of operations.

The U.S. has made significant changes in its trade policy and has taken certain actions that have adversely impacted U.S. trade and relationships with China and other trading partners, including imposing tariffs on certain goods imported into the U.S. Any continued actions or further changes in U.S. trade policy could trigger additional retaliatory actions by affected countries, resulting in "trade wars." Trade wars may lead to reduced economic activity, increased costs, reduced demand and changes in purchasing behaviors for some or all of our products, or other potentially adverse economic outcomes. These or other consequences from any trade wars could have a material adverse impact on our sales volumes, prices and our consolidated financial results.

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Impairment in the carrying value of goodwill could negatively impact our consolidated results of operations and net worth.

The Company has conducted for the last three years an analysis for estimating the fair value of the Company's business enterprise. We have utilized the discounted cash flow income approach and market approach for which we chose to heavily weigh more on the discounted cash flow approach. This analysis requires the Company to make significant assumptions and estimates about the extent and timing of future cash flows, discount rates and growth rates. The cash flows are estimated over a significant future period of time, which makes those estimates and assumptions subject to an even higher degree of uncertainty. The Company also utilizes market valuation models and other financial ratios, which require the Company to make certain assumptions and estimates regarding the applicability of those models to its assets and businesses. As of December 31, 2022, goodwill was $195.9 million, which represents 15% of total assets.

The Company recognized no goodwill impairment in 2022, 2021 or 2020. During the 2022 impairment analysis review, we performed a sensitivity analysis for goodwill impairment with respect to each of our reporting units and determined that a hypothetical 15% decline in the fair value of each reporting unit as of October 1, 2022 would not result in an impairment of goodwill for any of the reporting units. If we were to have a significant goodwill impairment caused by a greater than 15% decline in fair value, it could impact our results of operations as well as our net worth.

We are significantly dependent on information technology and our business may suffer from disruptions associated with information technology, cyber-attacks or other catastrophic losses affecting our IT infrastructure.

We rely on information technology networks and systems, including the Internet, to process, transmit, and store electronic and financial information, to manage a variety of business processes and activities, including our accounting and financial functions, and to comply with regulatory, legal, and tax requirements. We also depend on our information technology infrastructure for digital marketing activities and for electronic communications among our locations, personnel, customers, and suppliers. These information technology systems (some of which are provided and maintained by third parties) may be susceptible to damage, disruptions, or shutdowns due to hardware failures, computer viruses, hacker attacks, telecommunication failures, user errors, catastrophic events or other factors. In addition, a number of our salaried employees are working remotely at various times. This remote working environment may pose a heightened risk for security breaches or other disruptions of our information technology systems. If our information technology systems suffer severe damage, disruption or shutdown, and our business continuity plans do not effectively resolve the issues in a timely manner, we could experience business disruptions, a loss of critical company records, transaction errors, processing inefficiencies, and the loss of customers and sales, causing our product sales, financial condition, and operating results to be adversely affected and the reporting of our financial results to be delayed.

In addition, in the ordinary course of our business, we collect and store sensitive data, including our intellectual property, our proprietary business information and that of our customers, suppliers and business partners, and personally identifiable information or other sensitive information of our customers and employees. The secure use, processing, maintenance and transmission of this information is critical to our operations and business strategy. Despite the information security measures we have taken, our information technology and infrastructure may be subjected to attacks by hackers or breached due to employee malfeasance, employee errors, or other disruptions. Cybersecurity threats and sophisticated computer crime pose a potential risk to the security of the Company’s information technology systems, networks, and services, as well as the confidentiality and integrity of the Company’s data and intellectual property. Cyber-attacks, unauthorized access or security breaches, and other cyber incidents could include, among other things, computer viruses, malicious or destructive code, ransomware, social engineering attacks (including phishing and impersonation), hacking, denial-of-service attacks, and other similar attacks. These threats are constantly evolving, which increases the difficulty of defending against them or implementing adequate preventive measures. Sensitive information is also stored by our vendors and on the platforms and networks of third-party providers. Cyber-attacks on the Company, our vendors, or our third-party providers could result in inappropriate access to our intellectual property, Company data, or personally identifiable information of our global workforce, suppliers, or customers. Potential consequences of a successful cyber-attack or other cybersecurity breach or incident include remediation costs, legal costs, increased cybersecurity protection costs, lost revenues resulting from the unauthorized use of proprietary information or the failure to retain or attract customers following an attack, litigation and legal risks including governmental or regulatory enforcement actions,

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increased insurance premiums, reputational damage that adversely affects customer or investor confidence, and damage to the Company’s competitiveness, stock price, and long-term shareholder value.

While we have taken steps to address these risks by implementing enhanced security technologies, internal controls, and business continuity plans, these measures may not be adequate. We cannot assure that the steps we have taken will be sufficient to protect our systems, information or other property. Our systems and information may be vulnerable to theft, loss, damage and interruption from a number of potential threats and events.

Changes in the regulatory environment regarding privacy and data protection regulations could have a material adverse impact on our results of operations.

Federal, state, provincial and local governments have been moving to adopt privacy rules and regulations that may impact us in the future. In 2018, the EU adopted a comprehensive overhaul of its data protection regime in the form of the General Data Protection Regulation (“GDPR”) which imposes a strict data protection compliance regime with severe penalties of 4% of worldwide turnover or €20.0 million, whichever is greater, and includes new rights such as the right of erasure of personal data. Although the GDPR applies across the EU, as has been the case under the current data protection regime, EU Member States have some national derogations and local data protection authorities (“DPAs”) will still have the ability to interpret the GDPR, which has the potential to create inconsistencies on a country-by-country basis. In addition, certain U.S. states have enacted privacy and data protection laws. For example, the State of California enacted the California Consumer Privacy Act ("CCPA") which became effective in 2020. Implementation of, and compliance with, the GDPR, CCPA and other similar laws could increase our cost of doing business and/or force us to change our business practices in a manner adverse to our business. In addition, violations of the GDPR, CCPA and other laws may result in significant fines, penalties and damage to our brand and business which could, individually or in the aggregate, materially harm our business and reputation. Privacy legislation, enforcement and policy activity in this area continues to rapidly expand. Compliance costs and costs related with implementing privacy-related and data protection measures could be significant. Further, noncompliance could expose us to significant monetary penalties, damage to our reputation, and even possible criminal sanctions. Even our inadvertent failure to comply with privacy-related or data protection laws and regulations could have a material adverse impact on our results of operations.

We operate in a highly competitive industry, and some of our competitors and potential competitors have greater resources than we do.

Our products are sold in highly competitive markets throughout the world. We compete with several large national and international companies that offer a broad range of equipment and replacement parts that compete with our products, as well as with numerous small, privately-held manufacturers and suppliers of a limited number of products mainly on a regional basis. Some of our competitors are significantly larger than we are and have substantially greater financial and other resources at their disposal. We believe that we are able to compete successfully in our markets by, to some extent, avoiding direct competition with significantly larger potential competitors. There can be no assurance that our competitors will not substantially increase the resources devoted to the development and marketing of products competitive with our products or that new competitors with greater resources will not enter our markets. Any failure to effectively compete could have an adverse effect on our business, results of operations and financial condition.

Failure to develop new products or keep pace with technological developments may have a material adverse impact on our results of operations.

Our industry is affected by future technological developments. The introduction of new products or processes with innovative technologies could render our existing products or processes obsolete or unmarketable. Our success depends, to some extent, upon our ability to develop, market and sell cost-effective new products and applications that keep pace with technological developments in the markets we serve. We may not be successful in identifying, developing and marketing new products and applications or we may experience difficulties that could delay or prevent the successful development, introduction and marketing of such new products and applications, which could have a material adverse impact on our business and results of operations.

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We operate and source internationally, which exposes us to the political, economic and other risks of doing business abroad.

We have operations in a number of countries outside of the United States and we source raw materials and components globally. Our international operations are subject to the risks normally associated with conducting business in foreign countries, including but not limited to the following:

•limitations on ownership and on repatriation of earnings;

•import and export restrictions, tariffs and quotas;

•potentially adverse effects including negative economic conditions resulting from war or the threat of war, including the ongoing war between Ukraine and Russia;

•additional expenses relating to the difficulties and costs of staffing and managing international operations;

•labor disputes and uncertain political and economic environments and the impact of foreign business cycles;

•changes in laws or policies;

•changes in any international trade agreements, such as any changes in European Union membership;

•delays in obtaining or the inability to obtain necessary governmental permits;

•potentially adverse consequences resulting from the applicability of foreign tax laws;

•cultural differences;

•increased expenses due to inflation;

•weak economic conditions in foreign markets where our subsidiaries distribute their products;

•changes in currency exchange rates;

•disruptions in transportation and port authorities; and

•regulations involving international freight shipments.

Operating in the international marketplace exposes us to a number of risks, including the need to comply with U.S. and foreign laws and regulations applicable to our foreign operations, including anti-corruption laws such as the Foreign Corrupt Practices Act and the U.K. Bribery Act, United States export control laws, and data privacy laws such as the European GDPR. The costs of compliance with these various laws, regulations and policies can be significant and penalties for noncompliance could significantly and adversely impact our business. Our international operations may also be adversely affected by laws and policies affecting foreign trade, investment, taxation, and our ability to effectively source components and raw materials internationally. For example, any significant changes in U.S. trade policy, including the introduction of any new or expanded tariffs, could increase the cost of critical materials and supplies that we source internationally or negatively impact international sales of our products, which would have an adverse effect on our net sales and earnings.

 In addition, political developments and governmental regulations and policies in the countries in which we operate directly affect the demand for our products. For example, decreases or delays in farm subsidies to our agricultural customers, or changes in environmental policies aimed at limiting mowing activities, could adversely affect our business, results of operations and financial condition.

Our acquisition strategy may not be successful, which may adversely affect our business, results of operations and financial condition.

We intend to grow internally and through the acquisition of businesses and assets that will complement our current businesses. To date, a material portion of our growth has come through acquisitions. We cannot be certain that we will be able to identify attractive acquisition targets, obtain financing for acquisitions on satisfactory terms or successfully acquire identified targets. Competition for acquisition opportunities may also increase our costs of making acquisitions or prevent us from making certain acquisitions. These and other acquisition-related factors may adversely impact our business, results of operations and financial condition.

We may not be able to realize the potential or strategic benefits of the acquisitions we complete, and the businesses we have acquired, or may acquire in the future, may not perform as expected.

Acquisitions are an important part of our growth strategy and we have completed a number of acquisitions over the past several years. In 2019, we completed three acquisitions, namely Dutch Power, Dixie Chopper, and Morbark, and in 2021 we acquired Timberwolf. Acquisitions can be difficult, time-consuming, and pose a number of risks, including:

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•potential negative impact on our earnings per share as a result of acquisition costs and related financing costs, among other things;

•the assumption of liabilities that are unknown to us at the time of closing;

•failure of acquired products to achieve projected sales;

•potential downward pressure on operating margins due to lower operating margins of acquired businesses, increased headcount costs and other expenses associated with adding and supporting new products;

•disruption of ongoing business operations, including diversion of management’s attention and uncertainty for employees and customers, particularly during the post-acquisition integration process; and

•potential negative impact on our relationships with customers, distributors and vendors.

If we do not manage these risks, the acquisitions that we complete may have an adverse effect on our business, our results of operations or financial condition. In addition, we may not be successful in integrating acquired businesses into our existing operations and achieving projected synergies. We could face many risks in integrating acquired businesses, including but not limited to the following:

•we may incur substantial costs, delays or other operational or financial challenges in integrating acquired businesses, including integrating each company's accounting, information technology, human resource and other administrative systems to facilitate effective management;

•we may be unable to achieve expected cost reductions, to take advantage of cross-selling opportunities, or to eliminate redundant operations, facilities and systems;

•We may encounter problems in integrating the acquired products with our existing and/or new products;

•we may need to implement or improve controls, procedures and policies appropriate for a public company which could take a significant amount of time and expense;

•acquisitions may divert our management’s attention from the operation of our existing businesses;

•we may not be able to retain key personnel of acquired businesses;

•there may be cultural challenges associated with integrating management and employees from the acquired businesses into our organization; and

•we may encounter unanticipated events, circumstances and legal risk and associated liabilities.

Our integration of acquired businesses requires significant efforts from the management of each entity, including coordinating existing business plans and research and development efforts. Integrating operations may distract management’s attention from the day-to-day operation of the combined companies. Ultimately, our attempts to integrate the operations, technology and personnel of acquired businesses may not be successful. If we are unable to successfully integrate acquired businesses, our future results may be negatively impacted.

The agricultural industry and the infrastructure maintenance industry are seasonal, and seasonal fluctuations may cause our results of operations and working capital to fluctuate from quarter to quarter.

In general, agricultural and governmental end-users typically purchase new equipment during the first and second calendar quarters. Other products such as street sweepers, excavators, snow removal equipment, front-end loaders and pothole patchers have different seasonal patterns, as do replacement parts in general. In attempting to achieve efficient utilization of manpower and facilities throughout the year, we estimate seasonal demand months in advance and manufacturing capacity is scheduled in anticipation of such demand. We utilize an annual plan with updated quarterly sales forecasts provided by our marketing divisions and order backlog in order to develop a production plan for our manufacturing facilities. In addition, many of our marketing departments attempt to equalize demand for their products throughout the calendar year by offering seasonal sales programs which may provide additional incentives, including discounts and extended payment terms, on equipment that is ordered during off-season periods. Because we spread our production and wholesale shipments throughout the year to take into account the factors described above, sales in any given period may not reflect the timing of dealer orders and retail demand.

Weather conditions and general economic conditions may affect the timing of purchases and actual industry conditions might differ from our forecasts. In addition to seasonal factors, the agricultural industry is cyclical in nature with sales largely dependent on the state of the farm economy and, in particular, agriculture commodity

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prices and farm income. Consequently, sudden or significant declines in industry demand could adversely affect our working capital or results of operations.

Extreme weather conditions may impact demand for some of our products and impact our business, results of operations and financial condition.

Extreme weather conditions such as droughts or flooding may adversely affect sales of some of our products including our mowing equipment and other agricultural equipment and related parts. Milder winter conditions with lower snowfall accumulations can have an adverse impact on sales of our snow removal equipment and related parts business in the key markets we serve. In the event unfavorable weather conditions are worsened as a result of global climate change, our business may be adversely affected to a more significant extent.

Our business and operations are subject to risks related to climate change.

The long-term effects of global climate change present both physical risks (such as weather catastrophes) and transition risks (such as regulatory changes), which are expected to be widespread and unpredictable. Unusual weather conditions, including drought and flood conditions may affect the purchasing decisions of some of our customers, particularly customers of our agriculture products which could lead to lower sales volumes of those products. In addition, changes in climate could affect the availability and cost of products, commodities and energy, which may impact our ability to procure goods or services required for the operation of our business at the quantities and levels we require. Our facilities may also be directly impacted by significant weather events brought on by climate change, and we face the risk of losses incurred as a result of physical damage to our facilities, loss or spoilage of inventory and business interruption caused by such events. New legal and regulatory requirements have been, and may continue to be, implemented to address the concern over climate change in an effort to reduce or mitigate the effects of it, and such regulatory requirements dealing with the environmental aspects of our operations and the products we manufacture could result in significant expenditures in upgrading our facilities and/or designing and manufacturing new forms of equipment that satisfy such requirements. We cannot currently predict the specific terms of any new climate change legislation or regulation, but any such new legislation or regulation may have a material adverse impact on our business, results of operations, or financial condition.

If we do not retain key personnel and attract and retain other highly skilled employees, our business may suffer.

Our continued success will depend on, among other things, the efforts and skills of our executive officers, including our president and chief executive officer, and our ability to attract and retain additional highly qualified managerial, technical, manufacturing, and sales and marketing personnel. We do not maintain “key man” life insurance for any of our employees, and all of our senior management are employed at will. We cannot assure you that we will be able to attract and hire suitable replacements for any of our key employees. We believe the loss of a key executive officer or other key employee could have an adverse effect on our business, results of operations, and financial condition.

Increasingly stringent engine emission regulations could impact our ability to sell certain of our products into the market and appropriately price certain of our products, which could negatively affect our competitive position and financial results.

The products we manufacture or sell, particularly engines, are subject to increasingly stringent environmental emission regulations. For instance, the EPA has adopted increasingly stringent engine emission regulations, including Tier 4 emission requirements applicable to diesel engines in specified horsepower ranges that are used in some of our products. Requirements have expanded to additional horsepower categories and, accordingly, apply to more of the products we sell. Our ability to meet the Tier 4 requirements is subject to many variables, some of which are beyond our direct control. If we fail to meet the Tier 4 requirements and any other EPA emission standards that are currently in place or that may be introduced in the future, our ability to sell our products into the market may be limited, which could have a material adverse effect on our competitive position and financial results.

We are subject to environmental, health and safety and employment laws and regulations and related compliance expenditures and liabilities.

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,

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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 offsite 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.

Changes in environmental laws or new laws relating to the emission of greenhouse gases ("GHG") or the emission of other gases may cause us to make additional investment in new product designs or could increase our environmental compliance expenditures. The regulation of GHG emissions could result in other additional costs to the Company in the form of tax or emissions allowances, facility improvement costs, and higher input costs. Increased input costs and other costs associated with GHG emissions regulation and related compliance may also negatively impact customer demand. Because the timing and extent of GHG emission regulations or climate change regulations are unknown at this time, we are unable to predict the impact this may have on our overall business.

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.

We are subject on an ongoing basis to the risk of product liability claims and other litigation arising in the ordinary course of business.

Like other manufacturers, we are subject to various claims, including product liability claims, arising in the ordinary course of business, and we are a party to various legal proceedings that constitute routine litigation incidental to our business. We may be exposed to product liability claims in the event that the use of our products results, or is alleged to result, in bodily injury, property damage, or both. We cannot assure you that we will not experience any material product liability losses in the future or that we will not incur significant costs to defend the Company against such claims. We cannot assure you that our product liability insurance coverage will be adequate for any liabilities that may ultimately be incurred or that it will continue to be available on terms acceptable to us. A successful claim brought against us in excess of available insurance coverage or a requirement to participate in a product recall may have a materially adverse effect on our business.

If we are unable to comply with the terms of our credit arrangements, especially the financial covenants, our credit arrangements could be terminated.

We cannot assure you that we will be able to comply with all of the terms of our credit arrangements, especially the financial covenants. Our ability to comply with such terms depends on the success of our business and our operating results. Various risks, uncertainties, and events beyond our control could affect our ability to comply with the terms of our credit arrangements. If we were out of compliance with any covenant required by our credit arrangements following any applicable cure periods, the banks could terminate their commitments unless we could negotiate a covenant waiver. The banks could condition such waiver on amendments to the terms of our credit arrangements that may be unfavorable to us, including a potential increase to the interest rate we currently pay on outstanding debt under our credit arrangements, which could adversely affect our operating results.

Fluctuations in currency exchange rates may adversely affect our financial results.

Our earnings are affected by fluctuations in the value of the U.S. dollar as compared to foreign currencies, predominantly in European countries, Canada and Australia, as a result of the sale of our products in international markets. While we do enter into foreign exchange contracts to protect against such fluctuations to an extent (primarily in the U.K. market), we cannot assure you that we will be able to effectively manage these risks.

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Significant long-term fluctuations in relative currency values, such as a devaluation of the Euro against the U.S. dollar, could have an adverse effect on our future results of operations or financial condition.

Risks related to investing in our common stock

Because the price of our common stock may fluctuate significantly, it may be difficult for you to resell our common stock when desired or at attractive prices.

The trading price of our common stock has and may continue to fluctuate. The closing prices of our common stock on the New York Stock Exchange during 2022 ranged from $109.83 to $159.75 per share, and during 2021 from $136.01 to $164.81 per share. Our stock price may fluctuate in response to the risk factors set forth herein and to a number of events and factors, such as quarterly variations in operating and financial results, litigation, changes in financial estimates and recommendations by securities analysts, the operating and stock performance of other companies that investors may deem comparable to us, news reports relating to us or trends in our industry or general economic conditions. The stock price volatility and trading volume may make it difficult for you to resell your shares of our common stock when desired or at attractive prices.

You may experience dilution of your ownership interests due to the future issuance of additional shares of our common stock.

We may issue shares of our previously authorized and unissued securities, which will result in the dilution of the ownership interests of our present stockholders. We are currently authorized to issue 20,000,000 shares of common stock. On December 31, 2022, 11,968,197 shares of our common stock were issued and outstanding, and there were outstanding options and restricted stock awards totaling an additional 183,277 shares of our common stock. We also have additional shares available for grant under our 2015 Incentive Stock Option Plan and our 2019 Equity Incentive Plan. Additional stock option or other compensation plans or amendments to existing plans for employees and directors may be adopted. Issuance of these shares of common stock may dilute the ownership interests of our then existing stockholders. We may also issue additional shares of our common stock in connection with the hiring of personnel, future acquisitions, such as the 1,700,000 shares issued as consideration for the acquisition of Bush Hog in 2009, future private placements of our securities for capital raising purposes, or for other business purposes. This would further dilute the interests of our existing stockholders.

There is no assurance that we will continue declaring dividends or have the available cash to make dividend payments.

On January 3, 2023, the Board of Directors of the Company increased its quarterly dividend from $0.18 per share to $0.22 per share. Although we have paid a cash dividend in each quarter since becoming a public company in 1993, there can be no assurance that we will continue to declare dividends or that funds will continue to be available for this purpose in the future. The declaration and payment of dividends are restricted by the terms of our credit facility, are subject to the discretion of our Board of Directors, are not cumulative, and will depend upon our profitability, financial condition, capital needs, future prospects, and other factors deemed relevant by our Board of Directors.

Provisions of our corporate documents may have anti-takeover effects that could prevent a change in control.

Provisions of our charter, bylaws and Delaware law could make it more difficult for a third party to acquire us, even if doing so would be beneficial to our stockholders. These provisions include prohibiting stockholders from calling stockholder meetings and prohibiting stockholder actions by written consent. Our Certificate of Incorporation and Bylaws state that any amendment to certain provisions, including those provisions regarding limitations on action by written consent discussed above, be approved by the holders of at least two-thirds of our common stock. We are also afforded the protections of Section 203 of the Delaware General Corporation Law, which would prevent us from engaging in a business combination with a person who becomes a 15% or greater stockholder for a period of three years from the date such person acquired such status unless certain board or stockholder approvals were obtained.

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Future sales, or the possibility of future sales, of a substantial amount of our common stock may depress the price of the shares of our common stock.

Future sales, or the availability for sale in the public market, of substantial amounts of our common stock could adversely affect the prevailing market price of our common stock and could impair our ability to raise capital through future sales of equity securities. If we or our existing stockholders sell substantial amounts of our common stock in the public market, or if there is a perception that these sales may occur, the market price of our common stock could decline.

Certain stockholders own a significant amount of our common stock, and their interests may conflict with those of our other stockholders.

As of December 31, 2022, six investors - BlackRock, Inc., Henry Crown and Company, Dimensional Fund Advisors LP, T. Rowe Price Associates, Inc., Victory Capital Management Inc., and The Vanguard Group - beneficially owned approximately 50% of our outstanding common stock. As a result, the major stockholders combined could be able to significantly influence the direction of the Company, the election of our Board of Directors, and the outcome of any other matter requiring stockholder approval, including mergers, consolidations and the sale of all or substantially all of our assets, and together with other beneficially owned investors, to prevent or cause a change in control of the Company. Also, pursuant to contractual obligations, affiliates of Henry Crown and Company were entitled to certain rights with respect to the registration of the common stock owned by them under the Securities Act. Pursuant to such registration rights, on March 12, 2012, we filed a registration statement related to the common stock owned by such entities and such registration statement was declared effective by the SEC. The interests of the major stockholders may conflict with the interests of our other stockholders.

Item 1B. Unresolved Staff Comments 

The Company has no unresolved staff comments to report pursuant to Item 1B.

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Item 2. Properties

      As of December 31, 2022, the Company utilized twenty-eight principal manufacturing plants with sixteen located in the United States, eight in Europe, three in Canada, and one in Brazil. The facilities are listed below:

Facility	Square Footage		Principal Types of Products Manufactured And Assembled
Winn, Michigan*	1,100,000	Owned	Tree chippers, Grinders, Brush Cutters, and Debarkers for Morbark
Selma, Alabama*	769,000	Owned	Mechanical Rotary Mowers, Finishing Mowers, Backhoes, Front-End Loaders for Bush Hog
New Philadelphia, Ohio*	430,000	Owned	Telescopic Excavators for Gradall and Vacuum Trucks for VacAll
Wooster, Ohio*	400,000	Leased	Stump Cutters, Aerial Trimmers, Mulchers, Crawler Trucks for Rayco and Denis Cimaf
Gibson City, Illinois*	275,000	Owned	Mechanical Mowers, Zero Turn Radius Mowers, Blades, Deep Tillage Equipment, and other implements for Rhino, Bush Hog and OEMs
Seguin, Texas*	230,000	Owned	Hydraulic and Mechanical Rotary and Flail Mowers, Sickle-Bar Mowers, and Boom-Mounted Equipment for Alamo Industrial
Indianola, Iowa*	200,000	Owned	Distribution and Manufacturing of Aftermarket Farm Equipment Replacement and Wear Parts for Herschel/Valu-Bilt
Richmond, Virginia*	197,000	Leased	Leaf Collection Equipment and Street Sweeper Replacement Brooms for ODB
Neuville, France*	195,000	Owned	Hydraulic and Mechanical Boom-Mounted Hedge and Grass Cutters for Rousseau and SMA
Mukwonago, Wisconsin*	171,000	Owned	Truck-Mounted Vacuum Trucks for Super Products
Ludlow, England*	160,000	Owned	Hydraulic Boom-Mounted Hedge and Grass Cutters and other Equipment for McConnel and Twose
Salford Priors, England*	157,000	Owned	Tractor-Mounted Power Arm Flails and other Equipment for Bomford and Twose and Spearhead
Sao Joao da Boa Vista, Brazil*	138,000	Owned	Mowing Equipment, Sugar Cane Trailers and other equipment for Santa Izabel
Huntsville, Alabama*	135,000	Owned	Air and Mechanical Street Sweeping Equipment for Schwarze
New Berlin, Wisconsin*	120,000	Owned	Municipal Snow Removal and Ice Control Equipment for Wausau
Middelburg, the Netherlands*	110,000	Owned	Boom Mowers, Flail Mowers and Stump Grinders for Dutch Power
Englefeld, Saskatchewan, Canada*	105,000	Owned	Mechanical Rotary Mowers, Snow Blowers, and Rock Removal Equipment for Schulte
St. Valerien, Quebec, Canada*	100,000	Owned	Snow and Ice Removal Equipment for Tenco
Daumeray, France*	100,000	Owned	Vacuum Trucks, High Pressure Cleaning Systems and Trenchers for Rivard
Leavenworth, Kansas*	72,000	Owned	Snow Plows and Heavy-Duty Snow Removal Equipment for Henke
Giessen, the Netherlands*	70,000	Owned	Aquatic Harvesting Boats and Remote Control Mowing Equipment for Alamo Group The Netherlands
Sioux Falls, South Dakota*	66,000	Owned	Hydraulic and Mechanical Mowing Equipment for Tiger
Hopkinton, New Hampshire*	55,000	Owned	Distributor of Public Works and Runway Maintenance Products for H.P. Fairfield
Skowhegan, Maine*	47,000	Owned	Distributor of Public Works and Runway Maintenance Products for H.P. Fairfield
Kent, Washington*	43,000	Owned	Truck-Mounted Sweeping Equipment for the contractor market branded NiteHawk
Ayer's Cliff, Quebec, Canada*	41,000	Owned	Municipal Snow Removal and Ice Control Equipment for Everest
Suffolk, England*	35,000	Leased	Commercial wood chippers and other forestry equipment for Timberwolf
Peschadoires, France*	22,000	Owned	Replacement Parts for Blades, Knives and Shackles for Forges Gorce
Oakey, Australia	18,000	Leased	Agriculture Mowing Equipment and other Attachments for Fieldquip
Matao, Brazil	12,000	Owned	Agriculture Mowing Equipment and other Attachments for Herder
Installation & Rental Facilities, Warehouses & Sales	585,000	Leased / Owned	Services Parts Distribution, Installation Facilities and Sales and After Market Office
Offices, Seguin, Texas	21,000	Owned	Corporate Office
Total	6,179,000	80%

     * Principal manufacturing plants

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Approximately 80% of the manufacturing, warehouse and office space is owned. The Company considers each of these facilities to be well maintained, in good operating condition and adequate for its present level of operations.

Item 3. Legal Proceedings

The Company is subject to various legal actions which have arisen in the ordinary course of its business. The most prevalent of such actions relate to product liability, which is generally covered by insurance after various self-insured retention amounts. While amounts claimed might be substantial and the ultimate liability with respect to such litigation cannot be determined at this time, the Company believes that the ultimate outcome of these matters will not have a material adverse effect on the Company’s consolidated financial position or results of operations; however, the ultimate resolution cannot be determined at this time.

Item 4. Mine Safety Disclosures

Not applicable.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

The Company’s common stock trades on the New York Stock Exchange under the symbol: ALG. On February 17, 2023, there were 11,971,477 shares of common stock outstanding, held by approximately 78 holders of record, but the total number of beneficial owners of the Company’s common stock exceeds this number. On February 17, 2023, the closing price of the common stock on the New York Stock Exchange was $163.16 per share.

On January 3, 2023, the Board of Directors of the Company declared a quarterly dividend of $0.22 per share which was paid on February 1, 2023 to holders of record as of January 18, 2023. The Company expects to continue its policy of paying regular cash dividends, although there is no assurance as to future dividends as they depend on future earnings, capital requirements and financial condition. In addition, the payment of dividends is subject to restrictions under the Company’s bank revolving credit agreement. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources” in Item 7 of Part II of this Annual Report on Form 10-K for a further description of the bank revolving credit agreement.

Information relating to compensation plans under which equity securities of the Company are authorized for issuance is set forth in Part III, Item 12 of this Annual Report on Form 10-K.

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Stock Price Performance Graph

The information contained in this Stock Performance Graph section shall not be deemed to be “soliciting material” or “filed” with the SEC or subject to the liabilities of Section 18 of the Exchange Act, except to the extent that Alamo Group Inc. specifically incorporates it by reference into a document filed under the Securities Act or the Exchange Act.

The following graph and table set forth the cumulative total return to the Company's stockholders of our Common Stock during a five-year period ended December 31, 2022, as well as the performance of an overall stock market index (the S&P SmallCap 600 Index).

In addition, the Company has changed its peer group index and has selected the S&P Industrials Index as its published industry or line-of-business index, replacing the Russell 2000 Index used in prior years, as the Company believes the S&P industrials Index represents a more appropriate peer group. The cumulative return of the Russell 2000 Index is presented in the graph below as required by Item 201(e)(4) of Regulation S-K.

*$100 invested on 12/31/17 in stock or index, including reinvestment of dividends.

Fiscal year ending December 31.

Copyright© 2023 Standard & Poor's, a division of S&P Global. All rights reserved.

Copyright© 2023 Russell Investment Group. All rights reserved.

	12/17	12/18	12/19	12/20	12/21	12/22
Alamo Group Inc.	100.00	68.81	112.28	123.97	132.76	128.40
S&P SmallCap 600	100.00	91.52	112.37	125.05	158.59	133.06
Russell 2000	100.00	88.99	111.70	134.00	153.85	122.41
S&P Industrials	100.00	86.71	112.17	124.59	150.89	142.63

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Purchase of Equity Securities

The Company has suspended its share repurchase program but the program may be reinstated in the future.

Item 6. Reserved

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Executive Summary and Outlook

This report contains forward-looking statements that are based on Alamo Group’s current expectations. Actual results in future periods may differ materially from those expressed or implied because of a number of risks and uncertainties which are discussed below and in the Forward-Looking Information section beginning on page 14.

We experienced strong demand for our products in 2022 which led to record net sales for the full year. Our markets continue to exhibit strength and we currently see do not anticipate a significant reduction in customer demand, at least in the near term. However, many of the same adverse operating conditions that we experienced in 2022 including, among other things, supply chain disruptions, input cost inflation, and labor shortages continue to present challenges to our business. Supply chain and labor issues have led to disruptions in our manufacturing facilities which constrain our operating efficiencies and negatively impact our overall profitability. These challenges are also partially responsible for our record high backlog levels, as we have struggled to fully complete and ship products in a timely manner. While our supply chain appears to be gradually improving, we expect that some or all of these adverse operating conditions will persist for at least a portion of 2023.

2022 Performance

In 2022, the Company's net sales increased by 13% and net income increased by 27% compared to 2021. The increase in both net sales and net income was primarily due to a strong demand for our products. Margins improved due to the increase in demand along with pricing actions we began in 2021 which helped mitigate inflation cost pressures. However, our results were constrained by higher input costs, ongoing supply chain disruptions, and skilled labor shortages.

The Company's Vegetation Management Division experienced a 15% increase in net sales for the full year of 2022 compared to the full year of 2021. The increase in net sales was primarily due to continued strong customer demand for our products and positive pricing actions. The division's income from operations for 2022 was up 37% versus the full year of 2021, due to improved sales and positive pricing actions but offset by higher input costs and operational inefficiencies due to supply chain disruptions and labor constraints.

The Company's Industrial Equipment Division net sales were up 11% for the full year of 2022 compared to the full year of 2021. The division's net sales were strong in the excavator and vacuum truck product lines and were also supported by moderate sales increases in our street sweeper, debris collector and snow removal equipment lines. Negatively impacting this division were higher input costs and supply chain disruptions including, most significantly, a shortage of truck chassis. These adverse conditions had a negative impact on the division's income from operations, which for the full year of 2022 was up only 5% compared to the full year of 2021.

Consolidated income from operations was $148.6 million for the full year of 2022 compared to $116.9 million in 2021, an increase of 27%. The Company's backlog increased 26% to $1.0 billion at the end of 2022 versus the backlog of $800.8 million at the end of 2021. The increase in the Company's backlog was primarily attributable to continued strong customer demand for our products in both of the Company's divisions as outlined above.

Inflationary Impacts

In 2022, the cost of commodities, components, parts, and accessories was significantly higher compared to the cost of those items purchased in 2021, mainly as a result of ongoing upward inflationary pressure. In 2023, we anticipate that the average cost of commodities, components, parts, and accessories will be slightly higher than the average costs experienced during 2022 but the rate of inflation appears to be moderating. Any material worsening of the current inflationary environment could lead to higher input costs which is likely to have a material adverse effect on our business and financial results.

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Impact of the War in Ukraine

In 2022, we discontinued sales into the Russian and Belarusian markets as a response to the war in Ukraine. Our sales in those markets represented an insignificant share of our overall international business and, accordingly, this decision did not have a material impact on our 2022 results nor do we expect it to have a material impact on our future financial results. The war has disrupted parts of our supply chain and has created additional inflationary pressure on some of the items we purchase for our end-products, but we do not believe these effects are material to our business. However, any significant change in or escalation of the war in Ukraine could result in unanticipated effects which may adversely impact our business.

The following discussion should be read in conjunction with the consolidated financial statements of the Company and the notes thereto included elsewhere in this Annual Report on Form 10-K.

The following tables set forth, for the periods indicated, certain financial data:

	Fiscal Year Ended December 31,
Net sales (data in thousands):	2022			2021			2020
Vegetation Management	$	937,065		$	812,676		$	654,630
Industrial Equipment	576,551			521,547			508,836
Total net sales	$	1,513,616		$	1,334,223		$	1,163,466
Cost and profit margins, as percentages of net sales:
Cost of sales	75.1		%	74.9		%	74.8		%
Gross profit	24.9		%	25.1		%	25.2		%
Selling, general, administrative, and amortization expenses	15.1		%	16.3		%	17.1		%
Income from operations	9.8		%	8.8		%	8.1		%
Income before income taxes	8.9		%	8.2		%	6.9		%
Net income	6.7		%	6.0		%	5.0		%

Results of Operations

Fiscal 2022 compared to Fiscal 2021

The Company’s net sales in the fiscal year ended December 31, 2022 (“2022”) were $1,513.6 million, an increase of $179.4 million or 13.4% compared to $1,334.2 million for the fiscal year ended December 31, 2021 (“2021”). The increase in sales was attributable to continued strong customer demand for our products in both the Vegetation Management and Industrial Equipment Divisions and improved pricing. Negatively impacting net sales were higher costs for materials and inbound freight, supply chain disruptions and a shortage of skilled labor. Also, currency translation negatively affected sales as the U.S. dollar strengthened against the currencies of international countries where we operate.

Net Vegetation Management sales were $937.1 million in 2022 compared to $812.7 million in 2021, an increase of $124.4 million or 15.3%, coming from a strong performance in all product lines, particularly forestry and tree care and agricultural and governmental mowing equipment in both North America and Europe. Supply chain disruptions, labor constraints and unfavorable input cost changes constrained this Division during 2022. Currency translation effects also negatively impacted net sales in this division.

Net Industrial Equipment sales were $576.6 million in 2022 compared to $521.5 million in 2021, representing an increase of $55.1 million or 10.5%. The increase was mainly due to continued solid results in our excavator and vacuum truck product lines with modest support from other product lines. This division was also negatively impacted by ongoing supply chain disruptions and logistics issues in 2022, including delays in receiving truck chassis and component parts from supply chain partners.

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Gross profit for 2022 was $376.5 million (24.9% of net sales) compared to $334.5 million (25.1% of net sales) in 2021, an increase of $42.0 million. The increase in gross profit was mainly attributable to higher sales volume during 2022 compared to 2021 as well as improved pricing. Profitability was negatively impacted by supply chain disruptions, shortages of component parts, along with higher costs of materials and inbound freight. These factors led to lower profitability as a percentage of sales in 2022 as compared to the same period in 2021.

Selling, general and administrative expenses (“SG&A”) were $212.6 million (14.0% of net sales) in 2022 compared to $202.9 million (15.2% of net sales) in 2021, an increase of $9.7 million. The increase in SG&A expenses in 2022 was attributable to higher administrative, marketing and engineering expenses as the Company returned to pre-pandemic expense levels. Amortization expense in 2022 was $15.3 million compared to $14.6 million in 2021, an increase of $0.7 million.

Interest expense for 2022 was $14.4 million compared to $10.5 million in 2021, an increase of $3.9 million or 36.3%. The increase in interest expense in 2022 primarily came from higher interest rates and increased borrowing levels. Borrowing levels rose in 2022 primarily because of the need for the Company to increase its inventory levels to accommodate stronger market demand and to mitigate supply chain challenges. We anticipate borrowing levels will continue to be pressured by higher inventory requirements unless and until the supply chain situation improves.

Other income (expense), net was expense of $0.7 million during 2022 compared to income of $1.9 million in 2021. The expense in 2022 was primarily the result of an excise tax audit and to a lesser extent, changes in exchange rates. The income in 2021 was primarily due to changes in exchange rates and the sale of a facility in the Netherlands for $3.4 million.

Provision for income taxes was $32.4 million (24.1% of income before income taxes) for 2022 compared to $29.3 million (26.7% of income before income taxes) in 2021.

Net income for 2022 was $101.9 million compared to $80.2 million in 2021, with the increase in 2022 net income resulting from the factors described above.

Fiscal 2021 compared to Fiscal 2020

The Company’s net sales in the fiscal year ended 2021 were $1,334.2 million, an increase of $170.7 million or 14.7% compared to $1,163.5 million for the fiscal year ended December 31, 2020 (“2020”). The increase in sales was attributable to the continued strong recovery in customer demand for our products in both the Vegetation Management and the Industrial Equipment Divisions. Negatively affecting sales in 2020 was the onset of the COVID-19 pandemic which materially impacted global demand for the Company's products and overall Company financial performance.

Net Vegetation Management sales were $812.7 million in 2021 compared to $654.6 million in 2020, an increase of $158.1 million or 24.1%, coming from improved sales in the forestry/tree care and agricultural mowing units along with solid contributions from the U.K., Europe, Brazil and Australia operations. Sales in this Division were negatively impacted by operational and supply chain disruptions and logistics issues due to the pandemic.

Net Industrial Equipment sales were $521.5 million in 2021 compared to $508.8 million in 2020, representing an increase of $12.7 million or 2.5%. The increase primarily resulted from higher customer demand for excavation/vacuum truck products and to a lesser extent the sweeper/debris collection products, offset by softer demand for snow removal equipment. Negatively affecting this Division were delays in truck chassis deliveries due to ongoing computer chip shortages as well as other supply chain constraints and operational disruptions due to the pandemic.

Gross profit for 2021 was $334.5 million (25.1% of net sales) compared to $293.7 million (25.2% of net sales) in 2020, an increase of $40.8 million. The increase in gross profit was primarily attributable to higher sales volume in 2021 as well as pricing increases that were implemented over the course of the year. This was offset by inflationary pressures, mainly from steel, along with higher costs relating to delivery of component parts, such as airfreighting charges to meet customer deliveries, which also had a negative effect on gross margin percentage for the full year of 2021. Negatively affecting the gross margin and gross margin percentage during for the full year of 2020 was a $4.8 million charge on sales of inventory that had been previously stepped-up related to the Morbark acquisition.

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Selling, general and administrative expenses (“SG&A”) were $202.9 million (15.2% of net sales) in 2021 compared to $184.2 million (15.8% of net sales) in 2020, an increase of $18.7 million. The full year of 2021 included higher administrative and marketing expenses as the Company returned to pre-pandemic expense levels. Amortization expense in 2021 was $14.6 million compared to $14.7 million in 2020, a decrease of $0.1 million.

Interest expense for 2021 was $10.5 million compared to $15.8 million in 2020, a decrease of $5.3 million or 33.5%. The decrease in interest expense in 2021 primarily came from a decrease in interest rates, and to a lesser extent, reduced borrowing levels.

Other income (expense), net was income of $1.9 million during 2021 compared to expense of $0.6 million in 2020. The income in 2021 was primarily from changes in exchange rates and the sale of a facility in the Netherlands and the expense in 2020 was primarily the result of changes in exchange rates offset by the gain on the sale of two properties, one in the U.S. and one in Canada.

Provision for income taxes was $29.3 million (26.7% of income before income taxes) for 2021 compared to $22.0 million (27.5% of income before income taxes) in 2020.

Net income for 2021 was $80.2 million compared to $57.8 million in 2020, with the increase in 2021 net income resulting from the factors described above.

Liquidity and Capital Resources

In addition to normal operating expenses, the Company has ongoing cash requirements which are necessary to conduct the Company’s business, including inventory purchases and capital expenditures. The Company’s accounts receivable, inventory and accounts payable levels, particularly in its Vegetation Management Division, build in the first quarter and early spring and, to a lesser extent, in the fourth quarter in anticipation of the spring and fall selling seasons. Accounts receivable historically build in the first and fourth quarters of each year as a result of pre-season sales and year-round sales programs. These sales, primarily in the Vegetation Management Division, help balance the Company’s production during the first and fourth quarters.

As of December 31, 2022, the Company had working capital of $536.7 million, which represents a increase of $117.1 million from working capital of $419.6 million as of December 31, 2021. The increase in working capital was primarily a result of volume-driven and inflation-driven increases in accounts receivable as well as an increase in inventory to support the Company's higher backlog levels.

Capital expenditures were $31.1 million for 2022, compared to $25.3 million for 2021. The Company will fund any future expenditures from operating cash flows or through our revolving credit facility, described below.

Net cash provided by operating activities was $14.5 million for 2022, compared to $49.7 million for 2021. The decrease of cash from operating activities is primarily the result of increased borrowings on the Company's revolving credit facility used for increased working capital needs in support of elevated backlog levels.

Net cash used in investing activities was $31.7 million for 2022, compared to $33.4 million for 2021. Net cash provided by financing activities was $24.5 million for 2022, compared to net cash used of $23.0 million for 2021.

The Company had $42.9 million in cash and cash equivalents held by its foreign subsidiaries as of December 31, 2022. The majority of these funds are held at our European and Canadian facilities. The Company will continue to repatriate European and Canadian cash and cash equivalents in excess of amounts needed to fund operating and investing activities, but will need to monitor exchange rates to determine the appropriate timing of such repatriation given the current relative strength of the U.S. dollar. Repatriated funds will initially be used to reduce funded debt levels under the Company's current credit facility and subsequently used to fund working capital, capital investments and acquisitions company-wide.

On October 28, 2022, the Company, as the borrower, and each of its domestic subsidiaries as guarantors, entered into a Third Amended and Restated Credit Agreement (the “2022 Credit Agreement”) with Bank of America, N.A., as Administrative Agent. The 2022 Credit Agreement provides the Company with the ability to request loans and other financial obligations in an aggregate amount of up to $655.0 million. Under the 2022 Credit Agreement, the Company has borrowed $255.0 million pursuant to a Term Facility, while up to $400.0 million is available to the Company pursuant to a Revolver Facility which terminates in five years. The Term Facility requires the Company to

33

make equal quarterly principal payments of $3.75 million over the term of the loan, with the final payment of any outstanding principal amount, plus interest, due at the end of the five year term. Borrowings under the 2022 Credit Agreement bear interest, at the Company’s option, at a Term Secured Overnight Financing Rate (“SOFR”) or a Base Rate (each as defined in the 2022 Credit Agreement), plus, in each case, an applicable margin. The applicable margin ranges from 1.25% to 2.50% for Term SOFR borrowings and from .25% to 1.50% for Base Rate borrowings with the margin percentage based upon the Company's consolidated leverage ratio. The Company must also pay a commitment fee to the lenders ranging between 0.15% to 0.30% on any unused portion of the $400.0 million Revolver Facility. The 2022 Credit Agreement requires the Company to maintain two financial covenants, namely, a maximum consolidated leverage ratio and a minimum consolidated fixed charge coverage ratio. The Agreement also contains various covenants relating to limitations on indebtedness, limitations on investments and acquisitions, limitations on the 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 2022 Credit Agreement, including the Term Facility and the Revolver Facility, is October 28, 2027.

As of December 31, 2022, $301.9 million was outstanding under the Credit Agreement, $249.9 million on the Term Facility and $52.0 million on the Revolver Facility. On December 31, 2022, $2.8 million of the revolver capacity was committed to irrevocable standby letters of credit issued in the ordinary course of business as required by vendors' contracts resulting in $295.2 million in available borrowings. The Company is in compliance with the covenants under the Agreement.

Management believes the Agreement and the Company’s ability to internally generate funds from operations should be sufficient to meet the Company’s cash requirements for the foreseeable future. However, future challenges affecting the banking industry and credit markets in general could potentially cause changes to credit availability, which creates a level of uncertainty.

Inflation

The Company is exposed to the risk that the price of energy, steel and other purchased components may increase and the Company may not be able to increase the price of its products correspondingly. If this occurs, the Company’s results of operations would be adversely impacted. In 2022, the Company was materially impacted by inflationary pressures that significantly increased the price of steel as well as the price of many other purchased components. In 2022, we worked to mitigate some of the effects of cost increases through aggressive pricing actions but cost inflation is an ongoing challenge that could have a material impact on the Company's business and financial results, particularly if the current inflationary environment materially worsens.

New Accounting Pronouncements

As discussed in Note 2 of Notes to Consolidated Financial Statements, certain new financial accounting pronouncements became effective January 1, 2021, or will become effective in the future. The effect on our financial statements upon adoption of these pronouncements is discussed in the above-referenced note.

Payment due by period

Critical Accounting Estimates

Management’s Discussion and Analysis of Financial Condition and Results of Operations are based upon our Consolidated Financial Statements, which have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

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Critical Accounting Policies

An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the financial statements. Management believes the following critical accounting policy reflect its more significant estimates and assumptions used in the preparation of the Consolidated Financial Statements. For further information on the critical accounting policies, see Note 1 of our Notes to Consolidated Financial Statements.

Business Combinations

We account for the acquisition of a business in accordance with the accounting standards codification guidance for business combinations, whereby the total consideration transferred is allocated to the assets acquired and liabilities assumed, including amounts attributable to intangible assets based on their respective estimated fair values as of the date of acquisition. Goodwill represents the excess of consideration transferred over the estimated fair value of the net assets acquired in a business combination.

Assigning estimated fair values to the assets acquired and liabilities assumed requires the use of significant estimates, judgments, inputs, and assumptions regarding the fair value of intangible assets that are separately identifiable from goodwill, inventory step-up, and property, plant, and equipment, and are based on available historical information, future expectations, and assumptions determined to be reasonable but are inherently uncertain with respect to future events, including economic conditions, competition, the useful life of the acquired assets and other factors. Such significant estimates, judgments, inputs, and assumptions include, when applicable, the selection of an appropriate valuation method depending on the nature of the respective asset, such as the income approach, the market or sales comparison approach, or the cost approach; estimating future cash flows based on projected revenues and/or margins that we expect to generate subsequent to an acquisition; applying an appropriate discount rate to estimate the present value of those projected cash flows we expect to generate subsequent to an acquisition; selecting an appropriate royalty rate or estimating a customer attrition or technological obsolescence factor where necessary and appropriate given the nature of the respective asset; assigning the appropriate contributory asset charge where needed; determining an appropriate useful life and the related depreciation or amortization method for the respective asset; and assessing the accuracy and completeness of other historical financial metrics of the acquiree used as standalone inputs or as the basis for determining estimated projected inputs such as margins, customer attrition, and costs to hold and sell product.

In determining the estimated fair value of intangible assets that are separately identifiable from goodwill, we typically utilize the income approach, which discounts the projected future cash flows using an appropriate discount rate that reflects the risks associated with the projected cash flows. However, in certain instances, particularly in relation to developed technology or patents, we may utilize the cost approach depending on the nature of the respective intangible asset and the recency of the development or procurement of such technology. In determining the estimated fair value of acquired inventory, we typically utilize the cost approach for raw materials and the sales comparison approach for finished goods, work in process and component parts. In determining the estimated fair value of acquired property, plant, and equipment, we typically utilize the sales comparison approach or the cost approach depending on the nature of the respective asset and the recency of the construction or procurement of such asset.

We may refine the estimated fair values of assets acquired and liabilities assumed, if necessary, over a period not to exceed one year from the date of acquisition by taking into consideration new information that, if known at the date of acquisition, would have affected the estimated fair values ascribed to the assets acquired and liabilities assumed. The judgments made in determining the estimated fair value assigned to assets acquired and liabilities assumed, as well as the estimated useful life and depreciation or amortization method of each asset, can materially impact the net earnings of the periods subsequent to an acquisition through depreciation and amortization, and in certain instances through impairment charges, if the asset becomes impaired in the future. During the measurement period, any purchase price allocation changes that impact the carrying value of goodwill will affect any measurement of goodwill impairment taken during the measurement period, if applicable.

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Item 7A. Quantitative and Qualitative Disclosures about Market Risk

The Company is exposed to various financial market risks. Market risk is the potential loss arising from adverse changes in market prices and rates. The Company does not enter into derivative or other financial instruments for trading or speculative purposes.

Foreign Currency Risk

International Sales

A portion of the Company’s operations consists of manufacturing and sales activities in international jurisdictions. The Company manufactures its products primarily in the U.S., the U.K., France, the Netherlands, Canada, Brazil and Australia. The Company sells its products primarily within the markets where the products are produced, but certain of the Company’s sales from its U.K. and Canadian operations are denominated in other currencies. As a result, the Company’s financials, specifically the value of its foreign assets, could be affected by factors such as changes in foreign currency exchange rates in the U.K. and Canada or weak economic conditions in the other markets in which the subsidiaries of the Company distribute their products.

Exposure to Exchange Rates

The Company’s earnings are affected by fluctuations in the value of the U.S. dollar as compared to foreign currencies, predominantly in European countries and Canada and, to a lesser extent, Australia and Brazil, as a result of the sale of its products in international markets. Foreign currency forward exchange contracts in the U.K. are used to offset the earnings effects of such fluctuations. On December 31, 2022, the result of a uniform 10% strengthening in the value of the U.S. dollar relative to the currencies in which the Company’s sales are denominated would have been a decrease in gross profit of $10.9 million. Comparatively, on December 31, 2021, the result of a uniform 10% strengthening in the value of the dollar relative to the currencies in which the Company’s sales are denominated would have been a decrease in gross profit of approximately $8.9 million. This calculation assumes that each exchange rate would change in the same direction relative to the U.S. dollar. In addition to the direct effects of changes in exchange rates, which are a changed dollar value of the resulting sales, changes in exchange rates may also affect the volume of sales or the foreign currency sales price as competitors’ products become more or less attractive. The Company’s sensitivity analysis of the effects of changes in foreign currency exchange rates does not factor in a potential change in sales levels or local currency prices. The translation adjustment during 2022 was a loss of $23.0 million. On December 31, 2022, the British pound closed at 0.8266 relative to the U.S. dollar, and the Euro closed at 0.9344 relative to the U.S. dollar. By comparison, on December 31, 2021, the British pound closed at 0.7392 relative to the U.S. dollar, and the Euro closed at 0.8793 relative to the U.S. dollar. No assurance can be given as to future valuation of the British pound or Euro or how further movements in those or other currencies could affect future earnings or the financial position of the Company.

Interest Rate Risk

The majority of the Company’s long-term debt bears interest at variable rates. Accordingly, the Company’s net income is affected by changes in interest rates. Assuming the average level of borrowings at variable rates and a two hundred basis point change in the 2022 average interest rate under these borrowings, the Company’s 2022 interest expense would have changed by approximately $7.3 million. In the event of an adverse change in interest rates, management could take actions to mitigate its exposure. Further, this analysis does not consider the effects of the change in the level of overall economic activity that could exist in such an environment. However, challenges affecting the banking industry and credit markets in general can potentially cause changes to credit availability and cost of borrowing, which creates a level of uncertainty.

Item 8. Financial Statements and Supplementary Data

The financial statements and supplementary data described in Item 15 of this report and included on pages 49 through 79 of this report are incorporated herein by reference.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

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Item 9A. Controls and Procedures

Disclosure Controls and Procedures. An evaluation was carried out, under the supervision and with the participation of the Company's management, including our President & Chief Executive Officer and Executive Vice President & Chief Financial Officer (Principal Financial and Accounting Officer), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934). Based upon the evaluation, the President & Chief Executive Officer and Executive Vice President & Chief Financial Officer (Principal Financial and Accounting Officer) concluded that the Company’s disclosure controls and procedures were effective at the end of the period covered by this report.

Management’s Annual Report on Internal Control over Financial Reporting. Management’s report on the Company’s internal control over financial reporting is included on page 45 of this Annual Report on Form 10-K and incorporated by reference herein. The Company’s independent registered public accounting firm has audited and issued a report on the Company’s internal control over financial reporting which is included on page 48 of this Annual Report on Form 10-K and incorporated by reference herein.

The effectiveness of our internal control over financial reporting as of December 31, 2022 has been audited by KPMG LLP, an independent registered public accounting firm, and the firm’s report on this matter is included in Item 8 of this annual report on Form 10-K.

Changes in Internal Controls over Financial Reporting. There have not been any changes in the Company's internal control over financial reporting (as such term is defined by paragraph (d) of Rule 13a-15 under the Securities Exchange Act) during the fourth fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

Item 9B. Other Information

None.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

There are incorporated in this Item 10, by reference, those portions of the Company’s definitive proxy statement for the 2023 Annual Meeting of Stockholders which appear therein under the captions “Proposal 1 -  Election of Directors,” “Nominees for Election to the Board of Directors,” “Information Concerning Directors,” “Meetings and Committees of the Board,” “The Audit Committee,” and “The Nominating/Corporate Governance Committee."  See also the information under the caption “Information About Our Executive Officers” in Part I of this Report.

The Board of Directors has delegated certain responsibilities to three Committees of the Board. The Committees are the Audit Committee, Compensation Committee and Nominating/Corporate Governance Committee. The Board of Directors has also adopted Corporate Governance guidelines and a Code of Business Conduct and Ethics for all employees, including the Chief Executive Officer, Principal Financial Officer, Principal Accounting Officer and those individuals performing similar functions.

The Committee Charters, Code of Business Conduct and Ethics, and Corporate Governance Guidelines may be found on the Company’s website (www.alamo-group.com) under the “Corporate Governance” tab at https://www.alamo-group.com/our-company/corporate-governance/ and are also available in printed form at no charge by sending a request to the Corporate Secretary, Alamo Group Inc., 1627 E. Walnut Street, Seguin, Texas 78155, which is the principal executive office of the Company. The telephone number is (830) 379-1480. The Company will post any amendments to the Code of Conduct and Ethics, and any waivers that are required to be disclosed by the rules of either the SEC or the New York Stock Exchange, on the Company’s website.

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Item 11. Executive Compensation

There are incorporated in this Item 11, by reference, those portions of the Company’s definitive proxy statement for the 2023 Annual Meeting of Stockholders which appear therein under the captions "Executive Compensation," “The Compensation Committee,” “Compensation Discussion and Analysis,” "Compensation Committee Report” and “Director Compensation during 2022.”

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

There is incorporated in this Item 12, by reference, that portion of the Company’s definitive proxy statement for the 2023 Annual Meeting of Stockholders which appears under the caption “Beneficial Ownership of our Common Stock.”

Information on Alamo Group Inc.’s Equity Compensation Plans

The following table provides information on the shares that are available under the Company’s stock compensation plans and, in the case of plans where stock options may be granted, the number of shares of common stock issuable upon exercise of those stock options. The Company currently does not have an Equity Compensation Plan that is not approved by the Stockholders.

The numbers in the table are as of December 31, 2022, the last day of Alamo Group Inc.’s 2022 fiscal year.

 

	A	B	C
Equity Compensation Plan Category	Number of Securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights	Number of Securities that remain available for future issuance  under equity compensation plans (excluding securities reflected in column A)
Plans approved by stockholders
2005 Incentive Stock Option Plan	10,500	$48.36	—
2009 Equity Incentive Plan	6,300	$97.30	—
2015 Incentive Stock Option Plan	74,147	$114.65	286,033
2019 Equity Incentive Plan	92,330	$135.29	381,531
Plans not approved by stockholders	—	—	—
Total	183,277		667,564

Item 13. Certain Relationships, Related Transactions and Director Independence

Information regarding certain relationships and related transactions is set forth under the caption “Certain Relationships and Related Transactions” in the Company’s definitive proxy statement for the 2023 Annual Meeting of Stockholders, and such information is incorporated by reference herein. There were no such reportable relationships or related party transactions in the fiscal year ended December 31, 2022.

Information regarding director independence is set forth under the caption “Information Concerning Directors” in the Company’s definitive proxy statement for the 2023 Annual Meeting of Stockholders, and such information is incorporated by reference herein.

38

Item 14. Principal Accountant Fees and Services

Our independent registered public accounting firm is KPMG LLP, San Antonio, TX, Auditor Firm ID: 185.

Information regarding principal accountant fees and services is set forth under the caption “Proposal 3 – Ratification of Appointment of Independent Auditors” in the Company’s definitive proxy statement for the 2023 Annual Meeting of Stockholders, and such information is incorporated by reference herein.

PART IV

Item 15. Exhibits and Financial Statement Schedules

Financial Statements

	Page
Report of Management on Internal Control over Financial Reporting	43
Reports of Independent Registered Public Accounting Firm (KPMG LLP)	44
Consolidated Balance Sheets	47
Consolidated Statements of Income	48
Consolidated Statements of Comprehensive Income	49
Consolidated Statements of Stockholders’ Equity	50
Consolidated Statements of Cash Flows	51
Notes to Consolidated Financial Statements	52

Financial Statement Schedules

All schedules for which a provision is made in the applicable accounting regulation of the Securities and Exchange Commission are omitted because they are not required or because the required information is included in the consolidated financial statements or notes thereto.

Item 16. Summary

None.

39

Exhibits

Exhibits – The following exhibits are incorporated by reference to the filing indicated or are included following the index to Exhibits.

INDEX TO EXHIBITS

 

			Incorporated by Reference
			From the Following
Exhibits		Exhibit Title	Documents
3.1	—	Certificate of Incorporation, as amended, of Alamo Group Inc.	Filed as Exhibit 3.1 to Form S-1, February 5, 1993
3.2	—	Certificate of Amendment of Certificate of Incorporation of Alamo Group Inc.	Filed as Exhibit 3.1 to Form 8-K, May 10, 2016
3.3	—	By-Laws of Alamo Group Inc. as amended	Filed as Exhibit 3.1 to Form 8-K, December 12, 2022
4.1	—	Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934	Filed as Exhibit 4.1 to Form 10-K, February 28, 2020
10.1	—	Form of indemnification agreements with Directors of Alamo Group Inc.	Filed as Exhibit 10.1 to Form 10-Q, May 15, 1997
10.2	—	Form of indemnification agreements with certain executive officers of Alamo Group Inc.	Filed as Exhibit 10.2 to Form 10-Q, May 15, 1997
*10.3	—	401(k) Restoration Plan for Highly Compensated Employees, adopted on December 9, 1997	Filed as Exhibit 10.15 to Form 10-K, March 31, 1998
*10.4	—	2005 Incentive Stock Option Plan, adopted by the Board of Directors on May 4, 2005	Filed as Appendix E to Schedule 14A, March 29, 2005
10.5	—	Third Amended and Restated Credit Agreement, dated as of October 28, 2022, by and among Alamo Group Inc., Bank of America, N.A. as administrative agent, Wells Fargo Bank, N.A., and PNC Bank, N.A. as co-syndication agents, TD Bank, N.A. as documentation agent, and the other lenders party thereto.	Filed as Exhibit 10.1 to Form 8-K, October 31, 2022
10.6	—	First Amendment to Securities Purchase Agreement, dated as of October 22, 2019, by and among Alamo Acquisition Corporation, a Delaware corporation, Alamo Group Inc., a Delaware corporation, Stellex Capital Partners, LP, a Delaware limited partnership, and in its capacity as the initial representative of the other Sellers pursuant to Section 10.6 of the Securities Purchase Agreement.	Filed as Exhibit 10.2 to Form 10-Q, October 31, 2019
*10.7	—	Form of Restricted Stock Award Agreement under the 2009 Equity Incentive Plan	Filed as Exhibit 10.2 to Form 8-K, May 13, 2009
*10.8	—	Supplemental Executive Retirement Plan	Filed as Exhibit 10.1 to Form 8-K, January 18, 2011
*10.9	—	Amended and Restated Executive Incentive Plan	Filed as Exhibit 10.26 to Form 10-K, March 1, 2018
*10.10	—	2015 Incentive Stock Option Plan, adopted by the Board of Directors on May 7, 2015	Filed as Appendix A to Schedule 14A, March 19, 2015
*10.11	—	Alamo Group Inc. 2019 Equity Incentive Plan	Filed as Exhibit 10.1 to Form 8-K, May 7, 2019
*10.12	—	Form of Restricted Stock Award Agreement under the Alamo Group Inc. 2019 Equity Incentive Plan	Filed as Exhibit 10.23 to Form 10-K, February 28, 2020
*10.13	—	Form of Restricted Stock Unit Agreement under the Alamo Group Inc. 2019 Equity Incentive Plan	Filed as Exhibit 10.24 to Form 10-K, February 28, 2020

40

*10.14	—	Form of Performance Share Unit Agreement under the Alamo Group Inc. 2019 Equity Incentive Plan	Filed as Exhibit 10.22 to Form 10-K, February 26, 2021
10.15	—	Form of Executive Change in Control Agreement	Filed as Exhibit 10.1 to Form 8-K, March 10, 2020
10.16	—	Amendment to Executive Change in Control Agreement	Filed as Exhibit 10.1 to Form 10-Q, August 4, 2021
10.17	—	Executive Change in Control Agreement by and between Alamo Group Inc. and Michael A. Haberman	Filed as Exhibit 10.24 to Form 10-K, February 24, 2022
21.1	—	Subsidiaries of the Registrant	Filed Herewith
23.1	—	Consent of KPMG LLP	Filed Herewith
31.1	—	Certification by Jeffery A. Leonard under Section 302 of the Sarbanes-Oxley Act of 2002	Filed Herewith
31.2	—	Certification by Richard J. Wehrle under Section 302 of the Sarbanes-Oxley Act of 2002	Filed Herewith
32.1	—	Certification by Jeffery A. Leonard under Section 906 of the Sarbanes-Oxley Act of 2002	Filed Herewith
32.2	—	Certification by Richard J. Wehrle under Section 906 of the  Sarbanes-Oxley Act of 2002	Filed Herewith
101.INS	—	XBRL Instance Document	Filed Herewith
101.SCH	—	XBRL Taxonomy Extension Schema Document	Filed Herewith
101.CAL	—	XBRL Taxonomy Extension Calculation Linkbase Document	Filed Herewith
101.LAB	—	XBRL Taxonomy Extension Label Linkbase Document	Filed Herewith
101.PRE	—	XBRL Taxonomy Extension Presentation Linkbase Document	Filed Herewith
101.DEF	—	XBRL Taxonomy Extension Definition Linkbase Document	Filed Herewith
104	—	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)	Filed Herewith

________________________________________________________________________________________________________________________

*Compensatory Plan

41

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

		ALAMO GROUP INC.
Date:	February 23, 2023
		/s/ Jeffery A. Leonard
		Jeffery A. Leonard
		President & Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in their capacities and on the 23th day of February 2023.

Signature	Title
/s/RODERICK R. BATY Roderick R. Baty	Independent Board Chair & Director
/s/JEFFERY A. LEONARD Jeffery A. Leonard	President & Chief Executive Officer (Principal Executive Officer)
/s/RICHARD J. WEHRLE Richard J. Wehrle	Executive Vice President & Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
/s/ROBERT P. BAUER Robert P. Bauer	Director
/s/ERIC P. ETCHART Eric P. Etchart	Director
/s/NINA C. GROOMS Nina C. Grooms	Director
/s/TRACY C. JOKINEN Tracy C. Jokinen	Director
/s/RICHARD W. PAROD Richard W. Parod	Director
/s/RONALD A. ROBINSON Ronald A. Robinson	Director
/s/LORIE L. TEKORIUS Lorie L. Tekorius	Director

42

Report of Management on Internal Control over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. Generally Accepted Accounting Principles.

Because of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2022 using the criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, the Company’s management concludes that, as of December 31, 2022, the Company’s internal controls over financial reporting were effective based on these criteria.

KPMG LLP, an independent registered public accounting firm, has issued an attestation report on the effectiveness of internal control over financial reporting, which is included herein.

  

Date:	February 23, 2023	/s/Jeffery A. Leonard
		Jeffery A. Leonard
		President, Chief Executive Officer & Director (Principal Executive Officer)
		/s/Richard J. Wehrle
		Richard J. Wehrle
		Executive Vice President & Chief Financial Officer (Principal Financial Officer)

43

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Alamo Group Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Alamo Group Inc. and subsidiaries (the Company) as of December 31, 2022 and 2021, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2022, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2022, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 23, 2023 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Sufficiency of evidence over the existence of inventory

As discussed in Note 6 to the consolidated financial statements, the value of inventory was $353 million as of December 31, 2022. To facilitate the global delivery of goods to customers, the Company operates across North America, South America, Europe and Australia. Within these locations, the Company has 28 principal manufacturing plants located in six countries.

We identified the assessment of the sufficiency of evidence over the existence of inventory as a critical audit matter. The geographical dispersion of inventory required especially subjective auditor judgment in determining the sufficiency of audit evidence obtained over the existence of inventory.

44

The following are the primary procedures we performed to address this critical audit matter. We applied auditor judgment to determine the nature and extent of procedures to be performed over the existence of inventory including determining where we would perform procedures. We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s inventory process at certain manufacturing plants. This included controls related to the physical inspection of inventories at certain plants. We performed independent test counts for a sample of items and compared them to the Company’s records to evaluate the inventory at those specific plants. We selected a sample of inventory transactions that were made by the Company near the Company’s fiscal year-end and evaluated the accounting period in which they were recorded. We evaluated the sufficiency of audit evidence obtained by assessing the results of the procedures performed.

	/s/ KPMG LLP
We have served as the Company’s auditor since 2009.
San Antonio, Texas
February 23, 2023

45

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Alamo Group Inc.:

Opinion on Internal Control Over Financial Reporting

We have audited Alamo Group Inc. and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2022 and 2021, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2022, and the related notes (collectively, the consolidated financial statements), and our report dated February 23, 2023 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Report of Management on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

	/s/ KPMG LLP
San Antonio, Texas
February 23, 2023

46

Alamo Group Inc. and Subsidiaries

Consolidated Balance Sheets

	Year Ended December 31,
(in thousands, except per share amounts)	2022		2021
ASSETS
Current assets:
Cash and cash equivalents	$	47,016	$	42,115
Accounts receivable, net	317,581		237,970
Inventories, net	352,553		320,917
Prepaid expenses and other current assets	9,144		9,500
Income tax receivable	916		1,666
Total current assets	727,210		612,168
Rental equipment, net	33,723		32,514
Property, plant and equipment	335,078		321,863
Less:  Accumulated depreciation	(180,071)		(169,372)
Total property, plant and equipment, net	155,007		152,491
Goodwill	195,858		202,406
Intangible assets, net	171,341		183,466
Deferred income taxes	969		1,110
Other non-current assets	24,400		21,587
Total assets	$	1,308,508	$	1,205,742
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Trade accounts payable	$	97,537	$	101,396
Income taxes payable	6,592		2,613
Accrued liabilities	71,368		73,523
Current maturities of long-term debt and finance lease obligations	15,009		15,032
Total current liabilities	190,506		192,564
Long-term debt and finance lease obligations, net of current maturities	286,943		254,522
Long-term tax liability	3,781		4,416
Other long-term liabilities	23,668		27,119
Deferred income taxes	18,250		21,458
Stockholders’ equity:
Common stock, $.10 par value, 20,000,000 shares authorized; 11,913,890 and 11,874,178 outstanding at December 31, 2022 and December 31, 2021, respectively	1,191		1,187
Additional paid-in capital	129,820		124,228
Treasury stock, at cost; 82,600 shares at December 31, 2022 and December 31, 2021	(4,566)		(4,566)
Retained earnings	727,183		633,804
Accumulated other comprehensive loss	(68,268)		(48,990)
Total stockholders’ equity	785,360		705,663
Total liabilities and stockholders’ equity	$	1,308,508	$	1,205,742

See accompanying notes.

47

Alamo Group Inc. and Subsidiaries

Consolidated Statements of Income

	Year Ended December 31,
(in thousands, except per share amounts)	2022		2021		2020
Net sales:
Vegetation Management	$	937,065	$	812,676	$	654,630
Industrial Equipment	576,551		521,547		508,836
Total net sales	1,513,616		1,334,223		1,163,466
Cost of sales	1,137,098		999,709		869,736
Gross profit	376,518		334,514		293,730
Selling, general and administrative expenses	212,649		202,939		184,199
Amortization expense	15,277		14,637		14,746
Income from operations	148,592		116,938		94,785
Interest expense	(14,361)		(10,533)		(15,837)
Interest income	752		1,149		1,366
Other income	(673)		1,944		(557)
Income before income taxes	134,310		109,498		79,757
Provision for income taxes	32,382		29,253		21,953
Net income	$	101,928	$	80,245	$	57,804
Net income per common share:
Basic	$	8.58	$	6.78	$	4.91
Diluted	$	8.54	$	6.75	$	4.88
Average common shares:
Basic	11,877		11,837		11,782
Diluted	11,934		11,896		11,845

See accompanying notes.

48

Alamo Group Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income

			Year Ended December 31,
(in thousands)			2022		2021		2020
Net income			$	101,928	$	80,245	$	57,804
Other comprehensive income (loss), net of tax:
	Foreign currency translation adjustment, net of tax (expense) benefit of $1,069, $(344), and $810		(23,032)		(15,800)		8,862
	Unrealized income (loss) on derivative instruments, net of tax (expense) benefit of $(497), $(1,405), and $1,842, respectively		2,047		5,298		(7,484)
	Recognition of deferred pension and other post-retirement benefits, net of tax (expense) benefit of $(194), $(356), and $230, respectively		1,707		1,838		(866)
		Other comprehensive (loss) income, net of tax	$	(19,278)	$	(8,664)	$	512
Comprehensive income			$	82,650	$	71,581	$	58,316

See accompanying notes.

49

Alamo Group Inc. and Subsidiaries

Consolidated Statements of Stockholders’ Equity

 

	Common Stock			Additional Paid-in Capital		Treasury Stock		Retained Earnings		Accumulated Other Comprehensive Income			Total Stock- holders’ Equity
(in thousands)	Shares	Amount
Balance at December 31, 2019	11,670	$	1,175	$	113,666	$	(4566)	$	508,506		$	(40,838)	$	577,943
Other comprehensive income	—	—		—		—		57,804			512		58,316
Stock-based compensation expense	—	—		4,119		—		—			—		4,119
Stock-based compensation transactions	57	6		743		—		—			—		749
Dividends paid ($0.52 per share)	—	—		—		—		(6,124)			—		(6,124)
Balance at December 31, 2020	11,727	$	1,181	$	118,528	$	(4,566)	$	560,186		$	(40,326)	$	635,003
Other comprehensive income	—	—		—		—		80,245			(8,664)		71,581
Stock-based compensation expense	—	—		5,987		—		—			—		5,987
Stock-based compensation transactions	64	6		(287)		—		—			—		(281)
Dividends paid ($0.56 per share)	—	—		—		—		(6,627)			—		(6,627)
Balance at December 31, 2021	11,791	$	1,187	$	124,228	$	(4,566)	$	633,804		$	(48,990)	$	705,663
Other comprehensive income	—	—		—		—		101,928			(19,278)		82,650
Stock-based compensation expense	—	—		5,561		—		—			—		5,561
Stock-based compensation transactions	40	4		31		—		—			—		35
Dividends paid ($0.72 per share)	—	—		—		—		(8,549)			—		(8,549)
Balance at December 31, 2022	11,831	$	1,191	$	129,820	$	(4,566)	$	727,183		$	(68,268)	$	785,360

See accompanying notes.

50

Alamo Group Inc. and Subsidiaries

Consolidated Statements of Cash Flows

	Year Ended December 31,
(in thousands)	2022		2021		2020
Operating Activities
Net income	$	101,928	$	80,245	$	57,804
Adjustments to reconcile net income to cash provided by operating activities:
Provision for doubtful accounts	424		506		860
Depreciation - PP&E	23,673		21,229		19,264
Depreciation - Rental	7,739		8,613		9,830
Amortization of intangibles	15,277		14,637		14,746
Amortization of debt issuance	667		667		634
Stock-based compensation expense	5,561		5,987		4,119
Provision for deferred income tax (benefit) expense	(2,337)		(1,182)		(855)
Gain on sale of property, plant and equipment	(161)		(3,779)		(1,094)
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	(85,055)		(27,571)		28,064
Inventories	(37,739)		(78,463)		38,275
Rental equipment	(9,196)		1,138		4,542
Prepaid expenses and other	(6,146)		(6,994)		6,373
Trade accounts payable and accrued liabilities	(2,879)		32,532		(3,783)
Income taxes payable	2,934		4,648		6,601
Long term tax payable	(635)		462		(3,478)
Other assets and liabilities, net	475		(3,008)		2,431
Net cash provided by operating activities	14,530		49,667		184,333
Investing Activities
Acquisitions, net of cash acquired	(2,000)		(17,798)		—
Purchase of property, plant and equipment	(31,141)		(25,263)		(17,874)
Proceeds from sale of property, plant and equipment	1,566		9,667		3,703
Purchase of patents	(163)		(44)		—
Net cash used in investing activities	(31,738)		(33,438)		(14,171)
Financing Activities
Borrowings on bank revolving credit facility	222,000		188,000		115,000
Repayment on bank revolving credit facility	(174,000)		(189,000)		(255,000)
Principal payments on long-term debt and capital leases	(15,031)		(15,093)		(18,867)
Dividends paid	(8,549)		(6,627)		(6,124)
Proceeds from exercise of stock options	803		1,676		1,459
Common stock repurchased	(768)		(1,957)		(710)
Net cash provided (used) in financing activities	24,455		(23,001)		(164,242)
Effect of exchange rate changes on cash	(2,346)		(1,308)		1,964
Net change in cash and cash equivalents	4,901		(8,080)		7,884
Cash and cash equivalents at beginning of the year	42,115		50,195		42,311
Cash and cash equivalents at end of the year	$	47,016	$	42,115	$	50,195
Cash paid during the year for:
Interest	$	14,575	$	10,248	$	17,049
Income taxes	$	35,102	$	32,865	$	17,140

See accompanying notes.

51

Alamo Group Inc. and Subsidiaries

Notes to Consolidated Financial Statements

1. SIGNIFICANT ACCOUNTING POLICIES

Description of the Business and Segments

The Company manufactures, distributes and services high quality tractor-mounted mowing and other vegetation maintenance equipment, street sweepers, excavators, vacuum trucks, forestry and tree maintenance equipment, snow removal equipment, leaf collection equipment, pothole patchers, zero turn radius mowers, agricultural implements and related aftermarket parts and services.

The Company manages its business through two principal reporting segments: Vegetation Management and Industrial Equipment, which are discussed in Note 18.

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Alamo Group Inc. and its subsidiaries (the “Company” or “Alamo Group”), all of which are wholly owned. All intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

 The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles requires management to make estimates and assumptions that affect the amount of assets, liabilities, revenues, and expenses reported in the financial statements and accompanying notes. Judgments related to asset impairment and certain reserves are particularly subject to change. Actual results could differ from those estimates. Such estimates include, but are not limited to, allowance for doubtful accounts, reserve for sales discounts, estimated realizable value on obsolete and slow-moving inventory, warranty reserve, estimates related to pension accounting, estimates related to fair value for purposes of assessing goodwill, long-lived assets and intangible assets for impairment, estimates related to income taxes, and estimates related to contingencies.

Foreign Currency

The Company translates the assets and liabilities of foreign-owned subsidiaries at rates in effect at the end of the year. Revenues and expenses are translated at average rates in effect during the reporting period. Translation adjustments are included in Accumulated other comprehensive income (loss).

Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less from the date of purchase to be cash equivalents. As of December 31, 2022 and December 31, 2021, there was no restricted cash.

Concentrations of Credit Risk

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of accounts receivable. The credit risk is limited because of the large numbers and types of customers and their geographic dispersion.

52

Inventory Valuation

Inventories are stated at the lower of cost or net realizable value.

Property, Plant and Equipment

Property, plant, and equipment are stated on the basis of cost. Major renewals and betterments are charged to the property accounts, while replacements, maintenance and repairs, which do not improve or extend the lives of the respective assets, are expensed to the current period. Depreciation is provided at amounts calculated to amortize the cost of the assets over their estimated useful economic lives using the straight-line method.

Impairment of Long-Lived Assets

Long-lived assets, such as property, plant and equipment, rental equipment, and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group to be tested for possible impairment, the Company first compares non-discounted cash flows expected to be generated by that asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group is not recoverable on a non-discounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.

Goodwill

Goodwill represents the excess of the purchase price over the estimated fair value of the identifiable net assets acquired. Goodwill is not amortized but is instead tested for impairment at least annually, or whenever events or circumstances change between the annual impairment tests that make it likely that an impairment may have occurred, such as a significant adverse change in the business climate or a decision to sell all or a portion of a reporting unit. The Company performs its annual test for goodwill impairment related to its reporting units on October 1 of each fiscal year. Impairment testing for goodwill is done at the reporting unit level. A reporting unit is an operating segment or one level below an operating segment (also known as a component). A component of an operating segment is a reporting unit if the component constitutes a business for which discrete financial information is available, and segment management regularly reviews the operating results of that component.

We perform a qualitative assessment for all of our reporting units to determine whether it is more likely than not that an impairment exists. Factors considered include macroeconomic, industry and competitive conditions, legal and regulatory environment, historical financial performance and significant changes in the reporting unit. If the qualitative assessment indicates that it is more likely than not that an impairment exists, then a quantitative assessment is performed. Alternatively, we may also bypass the qualitative assessment and go ahead and perform step 1 to determine if the carrying amount exceeds the reporting unit’s fair value. If the fair value of the reporting unit is lower than its carrying amount, goodwill is written down for the amount by which the carrying amount exceeds the fair value. However, the loss recognized cannot exceed the carrying amount of goodwill. We typically use discounted cash flow models to determine the fair value of a reporting unit. The assumptions used in these models are consistent with those we believe a hypothetical marketplace participant would use.

See Note 8 to the Consolidated Financial Statements for more information regarding goodwill.

 Intangible Assets    

The Company has intangible assets with both definite and indefinite useful lives. The definite-lived assets are trade names and trademarks, customer and dealer relationships, and patents and drawings that are subject to amortization with useful lives ranging from 3 years to 25 years. Impairment of definite-lived assets is discussed as part of the Impairment of Long-Lived Assets paragraph above.

The indefinite-lived assets not subject to amortization consist of trade names. The Company tests its indefinite-lived intangible assets for impairment on an annual basis at year-end, or more frequently if an event occurs or circumstances change that indicate that the fair value of an indefinite-lived intangible asset could be below its carrying amount. The impairment test consists of comparing the fair value of the indefinite-lived intangible asset,

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determined using the relief from royalty method, with its carrying amount. An impairment loss would be recognized for the carrying amount in excess of its fair value.

See Note 9 to the Consolidated Financial Statements for more information regarding intangible assets.

Leases

We determine if an arrangement is a lease at inception. Operating leases are included in other non-current assets, accrued liabilities, and other long-term liabilities on our consolidated balance sheets. Finance leases are included in property, plant and equipment, accrued liabilities, and other long-term liabilities on our consolidated balance sheets.

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 as allowed by ASC.

See Note 10 to the Consolidated Financial Statements for more information regarding leases.

Pensions

The Company records annual amounts relating to its pension and post-retirement plans based on calculations that incorporate various actuarial and other assumptions, including discount rates, mortality, assumed rates of return, compensation increases, turnover rates and health care cost trend rates. The Company reviews its assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends when it is appropriate to do so. The effect of modifications to those assumptions is recorded in Accumulated other comprehensive income (loss) and amortized to net periodic cost over future periods using the corridor method. The Company believes that the assumptions utilized in recording its obligations under its plans are reasonable based on its experience and market conditions. The net periodic costs are recognized as employees render the services necessary to earn the post-retirement benefits.

Revenue Recognition

The majority of the Company's revenue is recognized from product sales under contracts with customers. The Company presents two reportable operating segments within its financial statements: Vegetation Management and Industrial Equipment. Contract terms and performance obligations within each contractual agreement are generally consistent for both divisions, with small differences that do not have a significant impact on the revenue recognition considerations under Topic 606. Revenues are recognized when we satisfy our performance obligation to transfer product to our customers, which typically occurs at a point in time upon shipment or delivery of the product, and for an amount that reflects the transaction price that is allocated to the performance obligation. Our contracts with customers state the final terms of sale, including the description, quantity and price for goods sold. In the normal course of business, we generally do not accept product returns.

The transaction price is the consideration that we expect to be entitled to in exchange for our products. Some of our contracts contain variable consideration in the form of sales incentives to our customers, such as discounts and rebates. For contracts that include variable consideration, we estimate the factors that determine the variable consideration in order to establish the transaction price.

We have elected that any taxes collected from customers and remitted to government authorities (i.e., sales tax, use tax, etc.) are excluded from the measurement of the transaction price and therefore are excluded from net sales in the consolidated statements of operations.

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There are instances where we provide shipping services in relation to the goods sold to our customers. Shipping and handling costs that occur before the customer obtains control of the goods are deemed to be fulfillment activities and are included in cost of goods sold. We have elected to account for shipping and handling activities that occur after the customer has obtained control of a good as fulfillment activities (i.e., an expense) rather than as a promised service.

Rental Equipment

The Company enters into operating lease agreements with customers related to the rental of certain equipment. In accounting for these leases, the cost of the equipment purchased or manufactured by the Company is recorded as an asset, and is depreciated over its estimated useful life. Accumulated depreciation relating to the rental equipment was $22.3 million and $20.1 million on December 31, 2022 and December 31, 2021, respectively.

Shipping and Handling Costs

The Company’s policy is to include shipping and handling costs in costs of goods sold.

Advertising

We charge advertising costs to expense as incurred. Advertising and marketing expense related to operations for fiscal years 2022, 2021, and 2020 was approximately $10.9 million, $10.2 million and $10.1 million, respectively. Advertising and marketing expenses are included in Selling, General and Administrative expenses (“SG&A”).

Research and Development

Product development and engineering costs charged to SG&A amounted to $14.3 million, $11.7 million, and $12.4 million for the years ended December 31, 2022, 2021, and 2020, respectively.

Commitments and Contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. The Company's policy is to accrue for legal costs expected to be incurred in connection with loss contingencies.

Income Taxes

Deferred tax assets and liabilities are determined based on differences between the financial reporting basis and tax basis of assets and liabilities, and are measured by applying enacted statutory tax rates applicable to the future years in which deferred tax assets or liabilities are expected to be settled or realized. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversals of deferred tax liabilities, projected future taxable income, available tax carrybacks and tax planning strategies in making this assessment other than those which we have reserved. We have elected to treat the global intangible low-taxed income (GILTI) tax as a period expense.

Stock-Based Compensation

The Company has granted options to purchase its common stock, restricted stock awards, restricted stock units, and performance stock units 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 that 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.

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The fair value of each stock option is estimated on the date of grant using the Black-Scholes valuation method with the following assumptions noted:

1.The risk-free rate is based on the U.S. Treasury rate over the expected life of the option at the time of the grant.

2.The dividend yield is calculated as the ratio of dividends paid per share of common stock to the stock price on the date of the grant.

3.The expected volatility factors are based on the historical movement of the Company’s common stock price over the expected life of the option.

4.The expected life is the average length of time in which officers, other employees, and non-employee directors are expected to exercise their options, and which are primarily based on historical experience.

The Company calculated the fair value for options with the following weighted-average assumptions for 2022, 2021, and 2020:

Fair Value Calculation Assumptions for Stock Compensation
	December 31,
	2022		2021		2020
Risk-free interest rate	1.93	%	1.25	%	1.22	%
Dividend yield	0.5	%	0.4	%	0.5	%
Volatility factors	33.2	%	33.9	%	30.0	%
Weighted-average expected life	8.0 years		8.0 years		8.0 years

Earnings per Common Share (“EPS”)

Basic EPS is computed using the weighted-average number of common shares outstanding during the year. The treasury stock method is used to compute diluted EPS which gives effect to the potential dilution of earnings that could have occurred if additional shares were issued for awards granted under the Company’s incentive stock option plans. The treasury stock method assumes that proceeds obtained upon exercise of awards granted under the incentive stock option plans are used to purchase outstanding common stock at the average market price during the period.

2. ACCOUNTING PRONOUNCEMENTS

Accounting Pronouncements Not Yet Adopted

In September 2022, the FASB issues ASU No. 2022-04, “Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations”. The amendments in this Update are effective for are effective for fiscal years beginning after December 15, 202 and require that a buyer in a supplier finance program disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. To achieve this objective, the Company will disclose qualitative and quantitative information about its supplier finance programs.

3. BUSINESS COMBINATIONS

On October 26, 2021, the Company acquired 100% of the issued and outstanding equity interests of Timberwolf Limited (“Timberwolf”). Timberwolf manufactures a broad range of commercial wood chippers, primarily serving markets in the U.K. and the European Union. The primary reason for the Timberwolf acquisition was to enhance the Company's forestry and tree care platform for growth by increasing both the Company's product portfolio and capabilities in the European market. The acquisition price was approximately $25.0 million. The Company has included the operating results of Timberwolf in its consolidated financial statements since the date of acquisition, these results are considered immaterial.

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4. 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 does not differ.

(in thousands, except per share amounts)	2022		2021		2020
Net income	$	101,928	$	80,245	$	57,804
Average common shares:
Basic (weighted-average outstanding shares)	11,877		11,837		11,782
Dilutive potential common shares from stock options	57		59		63
Diluted (weighted-average outstanding shares)	11,934		11,896		11,845
Basic earnings per share	$	8.58	$	6.78	$	4.91
Diluted earnings per share	$	8.54	$	6.75	$	4.88

Stock options totaling 25,610 shares in 2022, 15,586 shares in 2021, and 9,864 shares in 2020 were not included in the diluted earnings per share calculation because the effect would have been anti-dilutive.

5. VALUATION AND QUALIFYING ACCOUNTS

Valuation and qualifying accounts included the following:

(in thousands)	Balance Beginning of Year		Net Charged to Costs and Expenses		Translations, Reclassifications and Acquisitions			Net Write-Offs or Discounts Taken		Balance End of Year
2022
Reserve for sales discounts	$	12,567	$	137,553		$	(21)	$	(130,238)	$	19,861
Reserve for inventory obsolescence	12,908		6,998			(277)		(6,420)		13,209
Reserve for warranty	9,953		11,290			(244)		(11,659)		9,340
2021
Reserve for sales discounts	$	13,549	$	116,114		$	(688)	$	(116,408)	$	12,567
Reserve for inventory obsolescence	12,027		6,531			(146)		(5,504)		12,908
Reserve for warranty	9,096		10,727			(132)		(9,738)		9,953
2020
Reserve for sales discounts	$	16,883	$	93,398		$	15	$	(96,747)	$	13,549
Reserve for inventory obsolescence	8,233		4,609			1,471		(2,286)		12,027
Reserve for warranty	10,249		8,466			247		(9,866)		9,096

Sales Discounts

On December 31, 2022, the Company had $19.9 million in reserves for sales discounts compared to $12.6 million on December 31, 2021 on product shipped to our customers under various promotional programs. The most common programs provide a discount when the customer pays within a specified period of time.

The Company reviews the reserve quarterly based on analysis made on each program outstanding at the time. The cost of these discounts is estimated based on historical experience and known changes in promotional programs and is reported as a reduction to sales when the product sale is recognized. The reserve is adjusted if discounts paid differ from those estimated. Historically, those adjustments have not been material.

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Reserve for Inventory Obsolescence

We value inventories at the lower of the cost of inventory or net realizable value. As needed, we record an inventory valuation adjustment for excess, slow moving, and obsolete inventory that is equal to the excess of the cost of the inventory over the estimated net realizable value. The inventory valuation adjustment to net realizable value establishes a new cost basis of the inventory that cannot be subsequently reversed. Such inventory valuation adjustments for excess, obsolete, and slow moving inventory are not reduced or removed until the product is sold or disposed of.

The Company had a reserve of $13.2 million on December 31, 2022 and $12.9 million on December 31, 2021 to cover obsolete and slow moving inventory. The increase in the reserve was primarily attributable to the Company's Industrial Equipment Division. The reserve for inventory obsolescence is calculated as follows: 1) no inventory usage over a three-year period is deemed obsolete and reserved at 100%; and 2) slow moving inventory with little usage requires a 100% reserve on items that have a quantity greater than a three-year supply. There are exceptions to the obsolete and slow moving classifications if approved by an officer of the Company, based on specific identification of an item or items that are deemed to be either included or excluded from this classification. In cases where there is no historical data, management makes a judgment based on a specific review of the inventory in question to determine what reserves, if any, are appropriate. New products or parts are generally excluded from the reserve until a three-year history has been established.

Warranty

The Company’s warranty policy is generally to provide its customers warranty for up to one year on all wholegood units and 90 days on parts, though some components can have warranty for longer terms.

Warranty reserve, as a percentage of sales, is generally calculated by looking at the current twelve months’ expenses and prorating that amount based on twelve months’ sales with a three to six month lag period. The Company’s historical experience is that an end-user takes approximately three to six months from the receipt of the unit to file a warranty claim.

The current liability warranty reserve balance was $9.3 million on December 31, 2022 and $10.0 million on December 31, 2021 and is included in Note 11.

6. INVENTORIES

Inventories consisted of the following:

	December 31,
(in thousands)	2022		2021
Finished goods and parts	$	312,726	$	277,760
Work in process	22,273		24,895
Raw materials	17,554		18,262
Inventory, net	$	352,553	$	320,917

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7. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consist of the following:

	December 31,
(in thousands)	2022		2021		Useful Lives
Land	$	12,792	$	12,838
Buildings and improvements	145,616		145,086		5-20 yrs.
Machinery and equipment	140,252		129,901		3-10 yrs.
Office furniture and equipment	13,270		13,291		3-7 yrs.
Computer software	13,551		12,384		3-7 yrs.
Transportation equipment	9,597		8,363		3 yrs.
Property, plant and equipment, at cost	335,078		321,863
Accumulated depreciation	(180,071)		(169,372)
Property, plant and equipment, net	$	155,007	$	152,491

8. GOODWILL

The changes in the carrying amount of goodwill for the year ended December 31, 2020, 2021, and 2022 are as follows:

	Vegetation Management			Industrial Equipment			Consolidated
(in thousands)
Balance at December 31, 2019		$	126,894		$	71,128		$	198,022
Translation adjustment		132			1,036			1,168
Goodwill adjustment		(2,045)			(2,013)			(4,058)
Balance at December 31, 2020		$	124,981		$	70,151		$	195,132
Translation adjustment		(1,510)			(708)			(2,218)
Goodwill acquired		9,492			—			9,492
Balance at December 31, 2021		$	132,963		$	69,443		$	202,406
Translation adjustment		(1,882)			(1,147)			(3,029)
Goodwill adjustment		(3,519)			—			(3,519)
Balance at December 31, 2022		$	127,562		$	68,296		$	195,858

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9. INTANGIBLE ASSETS

The following is a summary of the Company's intangible assets net of the accumulated amortization:

(in thousands)	Estimated Useful Lives	December 31, 2022			December 31, 2021
Definite:
Trade names and trademarks	15-25 years		$	68,797		$	68,321
Customer and dealer relationships	8-15 years		129,338			126,104
Patents and developed technologies	3-12 years		28,437			29,338
Favorable leasehold interests	7 years		4,200			4,200
Total at cost			230,772			227,963
Less accumulated amortization			(64,931)			(49,997)
Total net			165,841			177,966
Indefinite:
Trade names and trademarks			5,500			5,500
Total Intangible Assets			$	171,341		$	183,466

The Company's net carrying value at December 31, 2022 of intangible assets with definite useful lives consists of trade names and trademarks at $54.9 million, customer and dealer relationships at $90.2 million, patents and drawings at $18.5 million, and favorable leasehold interests at $2.3 million. As of December 31, 2022, the related accumulated amortization balance for the definite-lived assets were $13.9 million for trade names and trademarks, $39.2 million for customer and dealer relationships, $9.9 million for patents and drawings, and $1.9 million for favorable leasehold interests. The Company estimates amortization expense to be $15.3 million for each of the next five years.

Indefinite-lived trade names and trademarks consisted of the Gradall trade name with a carrying value of $3.6 million and the Bush Hog trade name with a carrying value of $1.9 million.

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10. LEASES

Leases

The Company leases office space and equipment under various operating and capital leases, which generally are expected to be renewed or replaced by other leases. As of December 31, 2022, the components of lease cost were as follows:

Components of Lease Cost
	Twelve Months Ended December 31,
(in thousands)	2022		2021
Finance lease cost:
Amortization of right-of-use assets	$	30	$	67
Interest on lease liabilities	1		3
Operating lease cost	5,783		5,571
	1,397		1,033
Variable lease cost	348		410
Total lease cost	$	7,559	$	7,084

As of December 31, 2022, future minimum lease payments under these non-cancelable leases are:

Future Minimum Lease Payments
(in thousands)	Operating Leases
2023	$	5,177
2024	4,099
2025	3,294
2026	2,728
2027	1,780
Thereafter	1,743
Total minimum lease payments	$	18,821
Less imputed interest	(1,287)
Total lease liabilities	$	17,534

Rental expense for operating leases was $7.5 million for 2022, $7.0 million for 2021, and $6.1 million for 2020.

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Future Lease Commencements

As of December 31, 2022, we have additional operating leases that have not yet commenced in the amount of $3.1 million. These operating leases will commence in fiscal year 2023.

Supplemental balance sheet information related to leases was as follows:

Operating Leases
	December 31,
(in thousands)	2022			2021
Other non-current assets	$	17,249		$	16,744
Accrued liabilities	4,685			4,655
Other long-term liabilities	12,849			12,237
Total operating lease liabilities	$	17,534		$	16,892
Weighted average remaining lease term	4.66 years			5.14 years
Weighted average discount rate	3.30		%	2.83		%

Supplemental cash flow information related to leases was as follows:

	Twelve Months Ended December 31,
(in thousands)	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	5,246	$	5,013

11. ACCRUED LIABILITIES

Accrued liabilities consist of the following balances:

	December 31,
(in thousands)	2022		2021
Salaries, wages and bonuses	$	37,590	$	37,462
Lease liability	4,685		4,655
Taxes	2,426		1,902
Warranty	9,340		9,953
Retirement provision	2,588		2,967
Customer deposits	5,197		6,383
Other	9,542		10,201
Accrued liabilities	$	71,368	$	73,523

12. FAIR VALUE OF FINANCIAL INSTRUMENTS

U.S. GAAP requires or permits certain assets or liabilities to be measured at fair value on a recurring or non- recurring basis in our balance sheets. U.S. GAAP also requires the disclosure of the fair values of financial instruments when an option to elect fair value accounting has been provided but such election has not been made. A debt obligation is an example of such a financial instrument.

Fair value is defined 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

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unobservable inputs (lowest level) reflect internally developed market assumptions. In fair value, measurements are classified under the following hierarchy:

Level 1 – Quoted prices for identical assets or liabilities 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.

When measuring fair value, the Company maximizes use of observable inputs and minimizes the use of unobservable inputs.

Fair value measurements are classified to the lowest level input or value-driver that is significant to the valuation. A measurement may therefore be classified within Level 3 even though there may be significant inputs that are readily observable.

The carrying values of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses, approximate fair value because of the short-term nature of these items. The carrying value of our debt approximates the fair value as of December 31, 2022 and 2021, as the floating rates on our outstanding balances approximate current market rates. This conclusion was made based on Level 2 inputs. Fair values determined by Level 2 utilize inputs that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Other than the investments held by the retirement benefit plans, as described in Note 17 to the Consolidated Financial Statements, the Company does not have any other significant financial assets or liabilities measured at fair value on a recurring basis.

The Company has no recurring or nonrecurring valuations that fall under Level 3 of the fair value hierarchy as of December 31, 2022 and 2021.

13. LONG-TERM DEBT

The components of long-term debt are as follows:

	December 31,
(in thousands)	2022		2021
Bank revolving credit facility	$	52,000	$	4,000
Term debt	249,928		265,498
Capital lease obligations	24		56
Total debt	301,952		269,554
Less current maturities	15,009		15,032
Total long-term debt	$	286,943	$	254,522

On October 28, 2022, the Company, as Borrower, and each of its domestic subsidiaries as guarantors, entered into a Third Amended and Restated Credit Agreement (the “2022 Credit Agreement”) with Bank of America, N.A., as Administrative Agent. The 2022 Credit Agreement provides Borrower with the ability to request loans and other financial obligations in an aggregate amount of up to $655.0 million. Under the 2022 Credit Agreement, the Company has borrowed $255.0 million pursuant to a Term Facility, while up to $400.0 million is available to the Company pursuant to a Revolver Facility which terminates in 5 years. The Term Facility requires the Company to make equal quarterly principal payments of $3,750,000 over the term of the loan, with the final payment of any outstanding principal amount, plus interest, due at the end of the five year term. Borrowings under the 2022 Credit Agreement bear interest, at the Company’s option, at a Term Secured Overnight Financing Rate (“SOFR”) or a Base Rate (each as defined in the 2022 Credit Agreement), plus, in each case, an applicable margin. The applicable margin ranges from 1.25% to 2.50% for Term SOFR borrowings and from .25% to 1.50% for Base Rate borrowings with the margin percentage based upon the Company's consolidated leverage ratio. The Company must also pay a commitment fee to the lenders ranging between 0.15% to 0.30% on any unused portion of the $400,000,000 Revolver Facility.

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The 2022 Credit Agreement requires the Company to maintain two financial covenants, namely, a maximum consolidated leverage ratio and a minimum consolidated fixed charge coverage ratio. The Agreement also contains various covenants relating to limitations on indebtedness, limitations on investments and acquisitions, limitations on the 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 2022 Credit Agreement, including the Term Facility and the Revolver Facility, is October 28, 2027.

As of December 31, 2022, $301.9 million was outstanding under the Credit Agreement. Of the total outstanding, $249.9 million was on the Term Facility at a rate of 6.17% and $52.0 million was on the Revolver Facility at a rate of 6.25%. On December 31, 2022, $2.8 million of the revolver capacity was committed to irrevocable standby letters of credit issued in the ordinary course of business as required by vendors' contracts resulting in $295.2 million in available borrowings. The Company is in compliance with the covenants under the Credit Agreement.

The aggregate maturities of long-term debt, as of December 31, 2022, are as follows: $15.0 million in 2023; $15.0 million in 2024; $15.0 million in 2025; $15.0 million in 2026; $241.9 in 2027; and zero thereafter. 

14. INCOME TAXES

Income Statement Components

Earnings before income taxes were as follows:

	December 31,
(in thousands)	2022		2021		2020
Income before income taxes:
Domestic	$	86,680	$	74,070	$	50,977
Foreign	47,630		35,428		28,780
	$	134,310	$	109,498	$	79,757

The components of income tax expense (benefit) were as follows:

	December 31,
(in thousands)	2022		2021		2020
Current:
Domestic	$	19,197	$	16,846	$	10,823
Foreign	11,848		8,646		8,759
State	3,674		4,943		3,226
	34,719		30,435		22,808
Deferred:
Domestic	(2,246)		(679)		1,238
Foreign	(51)		(274)		(1199)
State	(40)		(229)		(894)
	(2,337)		(1,182)		(855)
Total income taxes	$	32,382	$	29,253	$	21,953

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A reconciliation of the income tax at the Company’s U.S. statutory federal income tax rate to the provision for income tax follows:  

	December 31,
(in thousands)	2022			2021			2020
Income tax expense at statutory rates	$	28,205		$	22,995		$	16,749
Increase (reduction) from:
Jurisdictional rate differences	1,989			1,599			1,034
Executive compensation limitation	481			1,314			170
Stock based compensation	122			(322)			(366)
U.S. state taxes	2,632			3,724			2,556
Foreign tax expense	267			—			704
R&D credit	(1,645)			(670)			(415)
GILTI	500			—			50
Previously unrecognized tax (benefit)/expense	51			8			2,219
Other, net	(220)			605			(748)
Provision for income taxes	$	32,382		$	29,253		$	21,953
Effective tax rate	24		%	27		%	28		%

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Deferred Income Tax Assets and Liabilities

The components of the Company’s deferred income tax assets and liabilities were as follows. Certain prior year deferred tax component amounts have been reclassified to conform to the current year presentation.

	December 31,
(in thousands)	2022		2021
Deferred income tax assets:
Inventory basis difference	$	3,459	$	1,136
Accounts receivable reserve	334		270
Rental equipment and Property, plant and equipment	347		201
Stock based compensation	826		754
Pension liability	2,900		3,351
Employee benefit accrual	2,451		3,070
Product liability and warranty reserves	2,177		2,464
Foreign net operating loss	3,078		3,764
Lease liability	4,738		4,221
Capitalized R&D costs	4,230		—
Other	1,635		1,415
Total deferred income tax assets	$	26,175	$	20,646
Less: Valuation allowance	(3,637)		(4,129)
Net deferred income tax assets	$	22,538	$	16,517
Deferred income tax liabilities:
Inventory basis differences	$	(264)	$	(283)
Rental equipment and Property, plant and equipment	(14,373)		(13,253)
Lease asset	(4,637)		(4,149)
Intangible assets	(19,301)		(18,041)
Expenses not currently deductible for book purposes	(1,244)		(1,139)
Total deferred income tax liabilities	$	(39,819)	$	(36,865)
Net deferred income taxes	$	(17,281)	$	(20,348)

As of December 31, 2022, the Company had foreign deferred tax assets consisting of foreign net operating losses and other tax benefits available to reduce future taxable income in a foreign jurisdiction. These foreign jurisdictions’ net operating loss carry-forwards are approximately $10.1 million with an unlimited carry-forward period. The Company also has U.S. state net operating loss carry-forwards in the amount of $0.2 million which will expire between 2036 and 2042.

The Company's valuation allowances as of December 31, 2022 and 2021 related primarily to foreign net operating losses and foreign tax credits.

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Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows. The Company does not expect the unrecognized tax benefits to change significantly over the next 12 months.

 

Unrecognized Tax Benefits
	December 31,
(in thousands)	2022		2021
Balance as of beginning of year	$	270	$	262
Increases for tax positions related to the current year	156		82
Decreases due to lapse of statute of limitations	(105)		(74)
Balance as of end of year	$	321	$	270

The Company has adopted the policy to include interest and penalty expense related to income taxes as interest and other expense, respectively. As of December 31, 2022, no interest or penalties have accrued. With few exceptions, the Company’s open tax years for its federal and state income tax returns are for the tax years ended 2017 through 2022, and for tax years ended 2016 through 2022 for its foreign income tax returns.

The Company currently intends to permanently reinvest its earnings in certain foreign subsidiaries. No U.S. corporate income taxes or foreign withholding taxes should be imposed on future distributions of the earnings not permanently reinvested. If the amounts asserted as permanent reinvestment were distributed, the Company would be subject to approximately $4.8 million in withholding taxes.

15. COMMON STOCK

On January 3, 2023, the Board of Directors of the Company declared a quarterly dividend of $0.22 per share which was paid on February 1, 2023 to holders of record as of January 18, 2023. The Company also has a share repurchase program under which the Company is authorized to repurchase, in the aggregate, up to $30.0 million of its outstanding common stock. During 2022, the Company purchased zero shares.

16. STOCK OPTIONS

Incentive Stock Option Plan

On May 7, 2015, the stockholders of the Company approved the 2015 Incentive Stock Option Plan (“2015 ISO Plan”) and the Company reserved 400,000 shares of common stock for options to be issued under the 2015 ISO Plan. Each option becomes vested and exercisable for up to 20% of the total optioned shares one year following the grant of the option and for an additional 20% of the total optioned shares after each succeeding year until the option is fully exercisable at the end of the fifth year.

We also maintain other incentive option plans that have expired, under which previously granted awards remain outstanding. No additional grants may be awarded under these plans.

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Following is a summary of activity in the Incentive Stock Option Plans for the periods indicated:

 

	2022			2021			2020
	Shares	Exercise    Price*		Shares	Exercise    Price*		Shares	Exercise    Price*
Options outstanding at beginning of year	87,610	$	91.24	100,920	$	68.58	119,720	$	57.65
Granted	17,625	137.93		18,900	156.38		13,950	114.53
Exercised	(14,780)	50.79		(30,210)	53.68		(31,300)	45.94
Canceled	(5,808)	114.48		(2,000)	130.92		(1,450)	96.97
Options outstanding at end of year	84,647	106.43		87,610	91.24		100,920	68.58
Options exercisable at end of year	43,412	$	78.50	49,360	$	61.21	67,700	$	52.60
Options available for grant at end of year	286,033			297,850			314,750

*Weighted Averages

 Options outstanding and exercisable at December 31, 2022 were as follows:

 

Qualified Stock Options	Options Outstanding					Options Exercisable
	Shares	Remaining Contractual Life (yrs)*		Exercise Price*		Shares	Exercise     Price*
Range of Exercise Price
$42.70 - $83.99	27,725		2.32	$	57.89	27,725	$	57.89
$92.50 - $138.75	40,422		7.57	$	119.34	12,387	$	103.89
$156.38 - $234.57	16,500		8.16	$	156.38	3,300	$	156.38
Total	84,647					43,412

*Weighted Averages

The weighted-average grant-date fair values of options granted during 2022, 2021, and 2020 were $52.70, $59.01 and $38.33, respectively. Stock option expense was $0.6 million, $0.6 million and $0.5 million for years ending 2022, 2021, and 2020, respectively. As of December 31, 2022, there was $1.3 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the plans. That cost is expected to be recognized over a period of five years.

Equity Incentive Plan

On May 2, 2019, the stockholders of the Company approved the 2019 Equity Incentive Plan and the Company reserved 500,000 shares of common stock for issuance of equity awards including the issuance of non-qualified options for the purchase of shares of our common stock which may be granted to Company officers and non-employee directors. Options become vested and exercisable for up to 20% of the total optioned shares one year following the grant of the option and for an additional 20% of the total optioned shares after each succeeding year until the option is fully exercisable at the end of the fifth year.

	2022	2021	2020
Options available for grant at end of year	381,531	423,969	455,549

We also maintain other incentive option plans that have expired, under which previously granted awards remain outstanding. No additional grants may be awarded under these plans.

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Non-Qualified Options

Following is a summary of activity in the Non-Qualified Stock Option Plans for the periods indicated:

 

	2022			2021			2020
	Shares	Exercise Price*		Shares	Exercise Price*		Shares	Exercise Price*
Options outstanding at beginning of year	2,000	$	53.51	3,000	$	53.51	5,300	$	46.87
Granted	—	—		—	—		—	—
Exercised	(1,000)	53.51		(1,000)	53.51		(2,300)	38.22
Canceled	—	—		—	—		—	—
Options outstanding at end of year	1,000	53.51		2,000	53.51		3,000	53.51
Options exercisable at end of year	1,000	$	53.51	2,000	$	53.51	3,000	$	53.51

*Weighted Averages

Options outstanding and exercisable as of December 31, 2022 were as follows:

Non-Qualified Stock Options	Options Outstanding					Options Exercisable
	Shares	Remaining Contractual Life (yrs)*		Exercise Price*		Shares	Exercise Price*
Range of Exercise Price
$42.70 - $83.99	1,000		1.36	$	53.51	1,000	$	53.51
Total	1,000					1,000

*Weighted Averages

There were no options granted in 2020, 2021 or 2022. Stock option expense was zero for years ending 2022, 2021, and 2020, respectively. As of December 31, 2022, there was zero unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the plans.

During 2022, 2021, and 2020, 1,000, 1,000, and 2,300 non-qualified options were exercised, respectively, $0.1 million, $0.1 million, and $0.1 million of cash receipts were received, respectively.

Restricted Stock Awards/Units

Following is a summary of activity in the Restricted Stock Awards ("RSA")/Units for the periods indicated:

  

	2022			2021			2020
	Shares	Grant-Date Fair Value*		Shares	Grant-Date Fair Value*		Shares	Grant-Date Fair Value*
Awards outstanding at beginning of year	80,616	$	129.53	91,043	$	104.77	78,705	$	94.34
Granted	48,396	133.70		35,224	157.00		44,307	111.95
Exercised	(29,922)	122.19		(45,651)	101.36		(31,594)	88.90
Canceled	(1,460)	143.82		—	—		(375)	100.34
Awards outstanding at end of year	97,630	133.67		80,616	129.53		91,043	104.77

*Weighted Averages

Restricted stock awards vest over a three year period. The weighted-average remaining contractual life in years for 2022, 2021 and 2020 was 1.41, 1.61 and 1.95, respectively. Compensation expense was $4.9 million, $5.4 million and $3.7 million for years ending 2022, 2021, and 2020, respectively. As of December 31, 2022, there was $7.0 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the plans. That cost is expected to be recognized over a period of three years.

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Performance Stock Units

In 2020, the Company's Board of Directors approved a change to our long-term incentive compensation plan to implement new performance-based equity grants in the form of a Performance Stock Unit ("PSU") award. PSU award vesting and payout amounts are tied to the Company's achievement of certain targeted financial metrics relating to a three-year performance period with the goal of more closely aligning executive compensation with long-term Company performance.

The 2020 target long-term incentive compensation mix established for the Company's Section 16 filers consists of RSAs and PSUs each representing fifty percent (50%) of the total long-term incentive compensation target value. PSU awards represent a right to receive a certain number of shares of the Company’s common stock at the end of the three-year performance period if certain financial or other performance targets/metrics have been met. 

17. RETIREMENT BENEFIT PLANS

Defined Benefit Plans

In connection with the February 3, 2006 purchase of all the net assets of the Gradall excavator business, the Company assumed sponsorship of two Gradall non-contributory defined benefit pension plans, both of which are frozen with respect to both future benefit accruals and future new entrants.

The Gradall Company Employees’ Retirement Plan covers approximately 245 former employees and 51 current employees who (i) were formerly employed by JLG Industries, Inc., (ii) were not covered by a collective bargaining agreement and (iii) first participated in the plan before December 31, 2004. An amendment ceasing future benefit accruals for certain participants was effective December 31, 2004. A second amendment discontinued all future benefit accruals for all participants effective April 24, 2006.

The Gradall Company Hourly Employees’ Pension Plan covered former employees and current employees who (i) were formerly employed by JLG Industries, Inc., (ii) were covered by a collective bargaining agreement and (iii) first participated in the plan before April 6, 1997. An amendment ceasing all future benefit accruals was effective April 6, 1997.

 The following table sets forth the change in plan assets, change in projected benefit obligation, rate assumptions and components of net periodic benefit cost as of December 31 with respect to the plan. The measurement dates of the assets and liabilities of the plan were December 31 of the respective years presented.

 

Reconciliation of Funded Status
	Year Ended December 31,
(in thousands)	2022		2021
Change in projected benefit obligation
Benefit obligation at beginning of year	$	22,564	$	24,100
Service cost	4		5
Interest cost	604		553
Liability actuarial (gain) loss	(4,761)		(994)
Benefits paid	(1,140)		(1,100)
Benefit obligation at end of year	$	17,271	$	22,564
Change in fair value of plan assets
Fair value of plan assets at beginning of year	$	23,671	$	22,370
Return on plan assets	(4,262)		2,401
Employer contributions	—		—
Benefits paid	(1,140)		(1,100)
Fair value of plan assets at end of year	18,269		23,671
Funded status	$	998	$	1,107

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The Company recognizes the overfunded or underfunded status (i.e., the difference between the fair value of plan assets and the projected benefit obligations) of defined benefit postretirement plans as an asset or liability in its consolidated balance sheet and recognizes changes in the funded status in the year in which the changes occur. The Company measures the funded status of a plan as of the date of the year-end consolidated balance sheet.

The accumulated benefit obligation for our pension plan represents the actuarial present value of benefits based on employee service and compensation as of a certain date and does not include an assumption about future compensation levels.

In determining the projected benefit obligation and the net pension cost, we used the following significant weighted-average assumptions:

 

Rates to Determine Benefit Obligation
	Year Ended December 31,
	2022	2021
Discount rate	5.10%	2.75%
Composite rate of compensation increase	N/A	N/A

Rates to Determine Net Periodic Benefit Cost
	Year Ended December 31,
	2022	2021
Discount rate	2.75%	2.35%
Long-term rate of return on plan assets	6.00%	7.25%
Composite rate of compensation increase	N/A	N/A

The Company employs a building block approach in determining the expected long-term rate of return on plan assets. Historical markets are studied and long-term historical relationships between equities and fixed income are preserved consistent with the widely accepted capital market principle that assets with higher volatility generate a greater return over the long run. Current market factors such as inflation and interest rates are evaluated before long-term market assumptions are determined. The long-term portfolio return is established via a building block approach with proper consideration of diversification and rebalancing. Peer data and historical returns are reviewed to check for reasonability and appropriateness.

The following table presents the components of net periodic benefit cost (gains are denoted with parentheses and losses are not):

Components of Net Periodic Benefit Cost
	Year Ended December 31,
(in thousands)	2022		2021
Service cost	$	4	$	5
Interest cost	604		553
Expected return on plan assets	(1,384)		(1,581)
Amortization of net loss	182		542
Net periodic benefit cost	$	(594)	$	(481)

 The Company estimates that $1.0 million of unrecognized actuarial expense will be amortized from Accumulated other comprehensive income (loss) into net periodic benefit costs during 2023.

The Company employs a total return investment approach whereby a mix of equities and fixed income investments are used to maximize the long-term return of plan assets for a prudent level of risk. Risk tolerance is established through careful consideration of plan liabilities, plan funded status, and corporate financial condition. The investment portfolio contains a diversified blend of equity and fixed income investments. Furthermore, equity investments are diversified across U.S. and non-U.S. stocks, as well as growth, value, and small and large

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capitalization. Other assets such as real estate, private equity, and hedge funds are used judiciously to enhance long-term returns while improving portfolio diversification. Derivatives may be used to gain market exposure in an efficient and timely manner; however, derivatives may not be used to leverage the portfolio beyond the market value of the underlying investments. Investment risk is measured and monitored on an ongoing basis through quarterly investment portfolio reviews, annual liability measurements, and periodic asset/liability studies. Our current asset allocations are consistent with our targeted allocations.

The pension plans' weighted-average asset allocation as a percentage of plan assets at December 31 is as follows:

 

Asset Allocation as a Percentage of the Plan
	Year Ended December 31,
	2022	2021
Equity securities	36%	36%
Debt securities	62%	62%
Short-term investments	2%	2%
Other	—%	—%
Total	100%	100%

The following table presents the hierarchy levels for our postretirement benefit plan investments as of December 31 as described in Note 1 to the Consolidated Financial Statements:

 

(in thousands)		December 31, 2022			Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Mutual Funds:
	Mid Cap		$	512		$	512		$	—		$	—
	International		743			743			—			—
Common/Collective Trusts:
	Wells Fargo Liability Driven Solution CIT I		7,815			—			7,815			—
	Wells Fargo Liability Driven Solution CIT II		3,550			—			3,550			—
	Wells Fargo BlackRock International Equity		488			—			488			—
	Wells Fargo/Causeway International Value		464			—			464			—
	Wells Fargo BlackRock Large Cap Growth Index Fund		724			—			724			—
	Wells Fargo BlackRock Large Cap Value Index Fund		744			—			744			—
	Wells Fargo Multi-Manager Small Cap		785			—			785			—
	Wells Fargo BlackRock Russell 2000 Index Fund		261			—			261			—
	Wells Fargo BlackRock S&P Mid Cap Index Fund		320			—			320			—
	Wells Fargo/MFS Value CIT F		359			—			359			—
	Wells Fargo/T. Rowe Price Large-Cap Growth Managed CIT		359			—			359			—
	Wells Fargo/T. Rowe Price Equity Income Managed CIT		356			—			356			—
	Wells Fargo Voya Large Cap Growth CIT F		357			—			357			—
Cash & Short-term Investments			432			432			—			—
	Total		$	18,269		$	1,687		$	16,582		$	—

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(in thousands)		December 31, 2021			Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Mutual Funds:
	Mid Cap		$	637		$	637		$	—		$	—
	International		940			940			—			—
Common/Collective Trusts:
	Wells Fargo Liability Driven Solution CIT I		7,782			—			7,782			—
	Wells Fargo Liability Driven Solution CIT II		7,026						7,026
	Wells Fargo BlackRock International Equity		616			—			616			—
	Wells Fargo/Causeway International Value		586			—			586			—
	Wells Fargo BlackRock Large Cap Growth Index Fund		950			—			950			—
	Wells Fargo BlackRock Large Cap Value Index Fund		968			—			968			—
	Wells Fargo Multi-Manager Small Cap		1,015			—			1,015			—
	Wells Fargo BlackRock Russell 2000 Index Fund		332			—			332			—
	Wells Fargo BlackRock S&P Mid Cap Index Fund		419			—			419			—
	Wells Fargo/MFS Value CIT F		469			—			469			—
	Wells Fargo/T. Rowe Price Large-Cap Growth Managed CIT		465			—			465			—
	Wells Fargo/T. Rowe Price Equity Income Managed CIT		487			—			487			—
	Wells Fargo Voya Large Cap Growth CIT F		482			—			482			—
Cash & Short-term Investments			497			497			—			—
	Total		$	23,671		$	2,074		$	21,597		$	—

Our interests in the common collective trust investments are managed by one custodian. Consistent with our investment policy, the custodian has invested the assets across a widely diversified portfolio of U.S. and international equity and fixed income securities. Fair values of each security within the collective trust as of December 31, 2022 were obtained from the custodian and are based on quoted market prices of individual investments; however, since the fund itself does not have a quoted market price, these assets are considered Level 2.

The common collective funds noted in the above table have estimated fair value using the net asset value per share of investments. Investments can be redeemed immediately at the current net asset value per share based on the fair value of the underlying assets. Redemption frequency is daily. The categories contain investments in equity securities of smaller growing companies, medium-sized U.S. companies, large value-oriented and growth-oriented companies, and foreign companies traded on international markets.

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Expected benefit payments are estimated using the same assumptions used in determining our benefit obligation as of December 31, 2022. The following table illustrates the estimated pension benefit payments that are projected to be paid:

 

Projected Future Benefit Payments
(in thousands)	Employees’ Retirement Plan
2023		$	1,275
2024		1,304
2025		1,315
2026		1,312
2027		1,306
Years 2028 through 2032		6,209

Supplemental Retirement Plan

The Board of Directors of the Company adopted the Alamo Group Inc. Supplemental Executive Retirement Plan (the “SERP”), effective as of January 3, 2011. The SERP will benefit certain key management or other highly compensated employees of the Company and/or certain subsidiaries who are selected by the Compensation Committee and approved by the Board to participate.

The SERP is intended to provide a benefit from the Company upon retirement, death or disability, or a change in control of the Company. Accordingly, the SERP obligates the Company to pay to a participant a Retirement Benefit (as defined in the SERP) upon the occurrence of certain payment events to the extent a participant has a vested right thereto. A participant’s right to his or her Retirement Benefit becomes vested in the Company’s contributions upon 10 years of Credited Service (as defined in the SERP) or a change in control of the Company.  The Retirement Benefit is based on 20% of the final three-year average salary of each participant on or after his or her normal retirement age (65 years of age).  In the event of the participant’s death or a change in control, the participant’s vested retirement benefit will be paid in a lump sum to the participant or his or her estate, as applicable, within 90 days after the participant’s death or a change in control, as applicable. In the event that the participant is entitled to a benefit from the SERP due to disability, retirement or other termination of employment, the benefit will be paid in monthly installments over a period of fifteen years.

The Company records amounts relating to the SERP based on calculations that incorporate various actuarial and other assumptions, including discount rates, rate of compensation increases, retirement dates and life expectancy. The net periodic costs are recognized as employees render the services necessary to earn the SERP benefits.

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%. In May of 2016, the Board added additional highly compensated employees to the plan. As of December 31, 2022, the current retirement benefit (as defined in the plan) for the participants ranges from 10% to 20%.

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The change in the Projected Benefit Obligation (PBO) as of December 31, 2022 and 2021, is shown below:

 

Reconciliation of Benefit Obligation
	Year Ended December 31,
(in thousands)	2022		2021
Benefit obligation at January 1,	$	11,326	$	10,160
Service cost	284		369
Interest cost	278		205
Liability actuarial loss (gain)	(2,023)		759
Benefits paid	(313)		(167)
Benefit obligation at December 31,	$	9,552	$	11,326

The components of net periodic pension expense were as follows:

 

Components of Net Periodic Benefit Cost
	Year Ended December 31,
(in thousands)	2022		2021
Service cost	$	284	$	369
Interest cost	278		205
Amortization of prior service cost	420		413
Amortization of net (gain)/loss	440		318
Net periodic benefit cost	$	1,422	$	1,305

The Company estimates that $0.4 million of unrecognized actuarial expense will be amortized from Accumulated other comprehensive income into net periodic benefit costs during 2023.

In determining the projected benefit obligation and the net pension cost, we used the following significant weighted-average assumptions:

Assumptions used to determine benefit obligations at December 31:

 

Rates to Determine Benefit Obligation
	2022	2021
Discount rate	5.05%	2.50%
Composite rate of compensation increase	3.00%	3.00%

Assumptions used to determine net periodic benefit cost for the years ended December 31:

 

Rates to Determine Net Periodic Benefit Cost
	2022	2021
Discount rate	2.50%	2.05%
Composite rate of compensation increase	3.00%	3.00%
Long-term rate of return on plan assets	N/A	N/A

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Future estimated benefits expected to be paid from the plan over the next ten years as follows:

Projected Future Benefit Payments
(in thousands)	SERP
2023	$	490
2024	546
2025	639
2026	866
2027	868
Years 2028 through 2032	4,321

Defined Contribution Plans

The Company has two defined contribution plans, The Gradall Salaried Employees’ Savings and Investment Plan (“Salary Plan”) and The International Association of Machinist and Aerospace Workers Retirement Plan (“IAM Plan”). The Company contributed $0.5 million, $0.5 million, and $0.4 million to the IAM Plan for the plan years ended December 31, 2022, 2021 and 2020, respectively. The Company converted the Salary Plan into its 401(k) retirement and savings plan and put the Hourly Plan into a separate 401(k) retirement and savings plan.

The Company provides a defined contribution 401(k) retirement and savings plan for eligible U.S. employees. Company matching contributions are based on a percentage of employee contributions. Company contributions to the plan during 2022, 2021 and 2020 were $4.2 million, $3.9 million, and $3.5 million, respectively.

Three of the Company’s international subsidiaries also participate in a defined contribution and savings plan covering eligible employees. The Company’s international subsidiaries contribute between 0% and 10% of the participant’s salary up to a specific limit. Total contributions made to the above plans were $0.9 million, $0.9 million, and $0.9 million for the years ended December 31, 2022, 2021 and 2020, respectively.

18. REVENUE AND SEGMENT REPORTING

Disaggregation of revenue is presented in the tables below by product type. Management has determined that this level of disaggregation would be beneficial to users of the financial statements.

Revenue by Product Type
	December 31,
(in thousands)	2022		2021		2020
Net Sales
Wholegoods	$	1,185,885	$	1,024,158	$	885,254
Parts	280,261		262,432		247,126
Other *	47,470		47,633		31,086
Consolidated	$	1,513,616	$	1,334,223	$	1,163,466

    *Other includes rental sales, extended warranty sales and service sales as it is considered immaterial.

The Company’s sales are principally within the United States, United Kingdom, France, Canada and Australia. The Company sells its products primarily through a network of independent dealers and distributors to governmental end-users, related independent contractors, as well as to the agricultural and commercial turf markets. Effective for the fourth quarter of 2021, the Company began reporting its operating results on the basis of the following segments, Vegetation Management Division and Industrial Equipment Division. Prior to the fourth quarter of 2021, the Company had been reporting its operating results on the basis of two segments which were the Industrial Division and Agricultural Division. The Vegetation Management Division includes all of the operations of the former Agricultural Division plus the mowing and forestry/tree care operations that were previously part of the former Industrial Division. The Industrial Equipment Division includes the Company’s vocational truck business and other industrial operations such as excavators, vacuum trucks, street sweepers, and snow removal equipment.

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The Company has included a summary of the financial information by reporting segment. The following table presents the revenue and income from operations by reporting segment for the years ended December 31, 2022, 2021, and 2020:

 

	December 31,
(in thousands)	2022		2021		2020
Net Revenue
Vegetation Management	$	937,065	$	812,676	$	654,630
Industrial Equipment	576,551		521,547		508,836
Consolidated	$	1,513,616	$	1,334,223	$	1,163,466
Income from Operations
Vegetation Management	$	108,508	$	78,917	$	46,651
Industrial Equipment	40,084		38,021		48,134
Consolidated	$	148,592	$	116,938	$	94,785

The following table presents the goodwill and total identifiable assets by reporting segment for the years ended December 31, 2022 and 2021:

 

	December 31,
(in thousands)	2022		2021
Goodwill
Vegetation Management	$	127,562	$	132,963
Industrial Equipment	68,296		69,443
Consolidated	$	195,858	$	202,406
Identifiable Assets
Vegetation Management	$	866,974	$	789,838
Industrial Equipment	441,534		415,904
Consolidated	$	1,308,508	$	1,205,742

77

19.  ACCUMULATED OTHER COMPREHENSIVE LOSS

Changes in accumulated other comprehensive loss by component, net of tax, were as follows:

	Twelve Months Ended December 31,
	2022								2021
(in thousands)	Foreign Currency Translation Adjustment		Defined Benefit Plans Items		Gains (Losses) on Cash Flow Hedges		Total		Foreign Currency Translation Adjustment		Defined Benefit Plans Items		Gains (Losses) on Cash Flow Hedges		Total
Balance as of beginning of period	$	(42,397)	$	(5,017)	$	(1,576)	$	(48,990)	$	(26,597)	$	(6,855)	$	(6,874)	$	(40,326)
Other comprehensive income (loss) before reclassifications	(23,032)		—		1,512		(21,520)		(15,800)		—		7,984		(7,816)
Amounts reclassified from accumulated other comprehensive loss	—		1,707		535		2,242		—		1,838		(2,686)		(848)
Other comprehensive income (loss)	(23,032)		1,707		2,047		(19,278)		(15,800)		1,838		5,298		(8,664)
Balance as of end of period	$	(65,429)	$	(3,310)	$	471	$	(68,268)	$	(42,397)	$	(5,017)	$	(1,576)	$	(48,990)

20. INTERNATIONAL OPERATIONS AND GEOGRAPHIC INFORMATION

Following is selected financial information on the Company’s international operations, which include the United Kingdom, France, Netherlands, Canada, Brazil, and Australia:

International Operations Financial Information
	December 31,
(in thousands)	2022		2021		2020
Net sales	$	420,678	$	363,339	$	312,462
Income from operations	48,893		34,561		31,166
Income before income taxes	51,206		37,051		30,674
Identifiable assets	364,752		352,187		304,536

78

 Following is other selected geographic financial information on the Company’s operations:

Geographic Financial Information
	December 31,
(in thousands)	2022		2021		2020
Geographic net sales:
United States	$	1,080,893	$	953,024	$	862,430
France	89,629		92,052		81,259
Canada	95,799		83,392		65,313
United Kingdom	69,454		57,386		47,757
Brazil	46,841		31,365		16,592
Netherlands	23,304		27,964		23,946
Germany	9,115		8,977		9,328
Australia	26,117		20,980		10,999
Other	72,464		59,083		45,842
Total net sales	$	1,513,616	$	1,334,223	$	1,163,466
Geographic location of long-lived assets:
United States	$	457,075	$	461,341	$	480,940
Netherlands	28,428		32,262		39,063
Canada	32,165		32,132		33,573
United Kingdom	31,767		36,569		18,843
France	18,728		19,781		21,033
Brazil	12,175		10,408		11,123
Australia	670		790		964
Total long-lived assets	$	581,008	$	593,283	$	605,539

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

21. COMMITMENTS AND CONTINGENCIES

The Company is subject to various unresolved legal actions that arise in the ordinary course of its business. The most significant of such actions relates to product liability, which is generally covered by insurance after various self-insured retention amounts. While amounts claimed might be substantial and the liability with respect to such litigation cannot be determined at this time, the Company believes that the outcome of these matters will not have a material adverse effect on the Company’s consolidated financial position or results of operations; however, the ultimate resolution cannot be determined at this time.

Also, 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.

79

EX-21.1

Exhibit 21.1

SUBSIDIARIES OF ALAMO GROUP INC.

Name	Jurisdiction of Incorporation
Alamo Group (USA) Inc. (1)	Delaware
Alamo Group Europe Limited (1)	United Kingdom
Alamo Group (Canada) Inc. (1)	New Brunswick
Alamo Group Brazil I, Inc. (1)	Delaware
Alamo Group Brazil II, Inc. (1)	Delaware
Alamo Group Texas LLC (2)	Texas
Alamo Group Management Inc. (2)	Texas
Bush Hog LLC (2)	Delaware
Gradall Industries LLC (2)	Delaware
Henke Manufacturing LLC (2)	Kansas
Herschel Parts, Inc. (2)	Nevada
Howard P. Fairfield LLC (2)	Delaware
Morbark, LLC (15)	Michigan
Nite-Hawk Sweepers, LLC (2)	Washington
Old Dominion Brush Company LLC (2)	Delaware
RhinoAg LLC (2)	Delaware
Schulte (USA) LLC (2)	Florida
Schwarze Industries Australia PTY Ltd. (3)	Australia
Schwarze Industries LLC (2)	Alabama
Super Products LLC (2)	Delaware
Tenco Industries Inc. (2)	Delaware
Tiger Mowers LLC (2)	Nevada
Wausau Equipment Company LLC (2)	Delaware
ALG (HK) Limited (2)	Hong Kong
ALG (Beijing) Trading Co. Ltd. (9)	China
Bomford Turner Limited (4)	United Kingdom
Bomford & Evershed Ltd. (5)	United Kingdom
Bomford Turner (1954) Limited. (5)	United Kingdom
Kellands Agricultural Ltd. (4)	United Kingdom
McConnel Ltd. (4)	United Kingdom
Spearhead Machinery Ltd. (4)	United Kingdom
Timberwolf Limited (4)	United Kingdom
Turner International (ENG) Ltd. (5)	United Kingdom
Twose of Tiverton Ltd. (5)	United Kingdom
Alamo Group (FR) SAS (4)	France
SMA Faucheux SAS (6)	France
Forges Gorce SAS (6)	France
Rivard SAS (6)	France
Alamo Group Agriculture France (6)	France
ALSA Alamo Legal Services and Advice (6)	France
Schulte Industries Ltd. (7)	New Brunswick
Tenco Inc. (7)	New Brunswick
Everest Equipment Co. (7)	Nova Scotia
Fieldquip PTY Ltd. (10)	Australia
Herder Implementos e Maquinas Agricolas Ltda. (12)	Brazil
Santa Izabel Agro Industria Ltda. (11)	Brazil

Alamo Group The Netherlands Holding B.V. (4)	The Netherlands
Alamo Group The Netherlands Giessen B.V. (13)	The Netherlands
Alamo Group The Netherlands Middelburg B.V.. (13)	The Netherlands
Roberine B.V. (13)	The Netherlands

_____________________

(1)	100% owned by Alamo Group Inc.
(2)	100% owned by Alamo Group (USA) Inc.
(3)	100% owned by Schwarze Industries, Inc.
(4)	100% owned by Alamo Group (Europe) Limited
(5)	100% owned by Bomford Turner Limited
(6)	100% owned by Alamo Group (FR) SAS
(7)	100% owned by Alamo Group (Canada) Inc.
(8)	100% owned by SMA SAS
(9)	100% owned by ALG (HK) Limited
(10)	100% owned by Schwarze Industries Australia PTY Ltd.
(11)	90% owned by Alamo Group Brazil I, Inc.   10% owned by Alamo Group Brazil II, Inc.
(12)	99.99% owned by Santa Izabel Agro Industria Ltda. 00.01% owned by Brazil 1, Inc.
(13)	100% owned by Alamo Group The Netherlands Holding B.V.

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the registration statement (No. 333-180049) on Form S-3 and registration statements (Nos. 333-231205, 333-204169, 333-174755, 333-143216, and 333-88454) on Form S-8 of our reports dated February 23, 2023, with respect to the consolidated financial statements of Alamo Group Inc. and the effectiveness of internal control over financial reporting.

	/s/ KPMG LLP
San Antonio, Texas
February 23, 2023

EX-31.1

Exhibit 31.1

I, Jeffery A. Leonard, certify that:

1.I have reviewed this annual report on Form 10-K of Alamo Group Inc;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

February 23, 2023	/s/Jeffery A. Leonard
	Jeffery A. Leonard President & Chief Executive Officer

EX-31.2

Exhibit 31.2

I, Richard J. Wehrle, certify that:

1.I have reviewed this annual report on Form 10-K of Alamo Group Inc;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

February 23, 2023	/s/Richard J. Wehrle
	Richard J. Wehrle Executive Vice President & Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Alamo Group Inc. (the “Company”) on Form 10-K for the period ended December 31, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jeffery A. Leonard, President & Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

February 23, 2023	/s/Jeffery A. Leonard
	Jeffery A. Leonard President & Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Alamo Group Inc. (the “Company”) on Form 10-K for the period ended December 31, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Richard J. Wehrle, Executive Vice President & Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

February 23, 2023	/s/Richard J. Wehrle
	Richard J. Wehrle Executive Vice President & Chief Financial Officer
	(Principal Financial Officer)

XML

Cover - USD ($)	12 Months Ended
	Dec. 31, 2022	Feb. 17, 2023	Jun. 30, 2022
Cover [Abstract]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2022
Current Fiscal Year End Date	--12-31
Document Transition Report	false
Entity File Number	0-21220
Entity Registrant Name	ALAMO GROUP INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	74-1621248
Entity Address, Address Line One	1627 East Walnut
Entity Address, City or Town	Seguin
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	78155
City Area Code	830
Local Phone Number	379-1480
Title of 12(b) Security	Common Stock, par value$.10 per share
Trading Symbol	ALG
Security Exchange Name	NYSE
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Entity Shell Company	false
Entity Public Float			$ 1,160,963,116
Entity Common Stock, Shares Outstanding		11,971,477
Documents Incorporated by Reference	Portions of the registrant’s proxy statement relating to the 2023 Annual Meeting of Stockholders have been incorporated by reference herein in response to Part III.
Entity Central Index Key	0000897077
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	FY
Amendment Flag	false

XML

Audit Information	12 Months Ended
	Dec. 31, 2022
Audit Information [Abstract]
Auditor Firm ID	185
Auditor Name	KPMG LLP
Auditor Location	San Antonio, TX

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 47,016	$ 42,115
Accounts receivable, net	317,581	237,970
Inventories, net	352,553	320,917
Prepaid expenses and other current assets	9,144	9,500
Income tax receivable	916	1,666
Total current assets	727,210	612,168
Rental equipment, net	33,723	32,514
Property, plant and equipment	335,078	321,863
Less:  Accumulated depreciation	(180,071)	(169,372)
Total property, plant and equipment, net	155,007	152,491
Goodwill	195,858	202,406
Intangible assets, net	171,341	183,466
Deferred income taxes	969	1,110
Other non-current assets	24,400	21,587
Total assets	1,308,508	1,205,742
Current liabilities:
Trade accounts payable	97,537	101,396
Income taxes payable	6,592	2,613
Accrued liabilities	71,368	73,523
Current maturities of long-term debt and finance lease obligations	15,009	15,032
Total current liabilities	190,506	192,564
Long-term debt and finance lease obligations, net of current maturities	286,943	254,522
Long-term tax liability	3,781	4,416
Other long-term liabilities	23,668	27,119
Deferred income taxes	18,250	21,458
Stockholders’ equity:
Common stock, $.10 par value, 20,000,000 shares authorized; 11,913,890 and 11,874,178 outstanding at December 31, 2022 and December 31, 2021, respectively	1,191	1,187
Additional paid-in capital	129,820	124,228
Treasury stock, at cost; 82,600 shares at December 31, 2022 and December 31, 2021	(4,566)	(4,566)
Retained earnings	727,183	633,804
Accumulated other comprehensive loss	(68,268)	(48,990)
Total stockholders’ equity	785,360	705,663
Total liabilities and stockholders’ equity	$ 1,308,508	$ 1,205,742

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.10	$ 0.10
Common stock, shares authorized (in shares)	20,000,000	20,000,000
Common stock, shares outstanding (in shares)	11,913,890	11,874,178
Treasury stock (in shares)	82,600	82,600

XML

Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Net sales:
Total net sales	$ 1,513,616	$ 1,334,223	$ 1,163,466
Cost of sales	1,137,098	999,709	869,736
Gross profit	376,518	334,514	293,730
Selling, general and administrative expenses	212,649	202,939	184,199
Amortization expense	15,277	14,637	14,746
Income from operations	148,592	116,938	94,785
Interest expense	(14,361)	(10,533)	(15,837)
Interest income	752	1,149	1,366
Other income	(673)	1,944	(557)
Income before income taxes	134,310	109,498	79,757
Provision for income taxes	32,382	29,253	21,953
Net income	$ 101,928	$ 80,245	$ 57,804
Net income per common share:
Basic (in dollars per share)	$ 8.58	$ 6.78	$ 4.91
Diluted (in dollars per share)	$ 8.54	$ 6.75	$ 4.88
Average common shares:
Basic (in shares)	11,877	11,837	11,782
Diluted (in shares)	11,934	11,896	11,845
Vegetation Management
Net sales:
Total net sales	$ 937,065	$ 812,676	$ 654,630
Income from operations	108,508	78,917	46,651
Industrial Equipment
Net sales:
Total net sales	576,551	521,547	508,836
Income from operations	$ 40,084	$ 38,021	$ 48,134

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Statement of Comprehensive Income [Abstract]
Net income	$ 101,928	$ 80,245	$ 57,804
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment, net of tax (expense) benefit of $1,069, $(344), and $810	(23,032)	(15,800)	8,862
Unrealized income (loss) on derivative instruments, net of tax (expense) benefit of $(497), $(1,405), and $1,842, respectively	2,047	5,298	(7,484)
Recognition of deferred pension and other post-retirement benefits, net of tax (expense) benefit of $(194), $(356), and $230, respectively	1,707	1,838
Other comprehensive (loss) income, net of tax	(19,278)	(8,664)	512
Comprehensive income	$ 82,650	$ 71,581	$ 58,316

XML

Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Statement of Comprehensive Income [Abstract]
Foreign currency translation adjustment, tax expense	$ 1,069	$ (344)	$ 810
Unrealized gain (loss) on derivative instruments	(497)	(1,405)	1,842
Net gain on pension and other post-retirement benefits	$ (194)	$ (356)	$ 230

XML

Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Treasury Stock	Retained Earnings	Accumulated Other Comprehensive Income
Beginning balance (in shares) at Dec. 31, 2019		11,670
Beginning balance at Dec. 31, 2019	$ 577,943	$ 1,175	$ 113,666	$ (4,566)	$ 508,506	$ (40,838)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Other comprehensive income	58,316				57,804	512
Stock-based compensation expense	4,119		4,119
Stock-based compensation transactions (in shares)		57
Stock-based compensation transactions	749	$ 6	743
Dividends paid	(6,124)				(6,124)
Ending balance (in shares) at Dec. 31, 2020		11,727
Ending balance at Dec. 31, 2020	635,003	$ 1,181	118,528	(4,566)	560,186	(40,326)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Other comprehensive income	71,581				80,245	(8,664)
Stock-based compensation expense	5,987		5,987
Stock-based compensation transactions (in shares)		64
Stock-based compensation transactions	(281)	$ 6	(287)
Dividends paid	(6,627)				(6,627)
Ending balance (in shares) at Dec. 31, 2021		11,791
Ending balance at Dec. 31, 2021	705,663	$ 1,187	124,228	(4,566)	633,804	(48,990)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Other comprehensive income	82,650				101,928	(19,278)
Stock-based compensation expense	5,561		5,561
Stock-based compensation transactions (in shares)		40
Stock-based compensation transactions	35	$ 4	31
Dividends paid	(8,549)				(8,549)
Ending balance (in shares) at Dec. 31, 2022		11,831
Ending balance at Dec. 31, 2022	$ 785,360	$ 1,191	$ 129,820	$ (4,566)	$ 727,183	$ (68,268)

XML

Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Statement of Stockholders' Equity [Abstract]
Dividends paid (in dollars per share)	$ 0.72	$ 0.56	$ 0.52

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Operating Activities
Net income	$ 101,928	$ 80,245	$ 57,804
Adjustments to reconcile net income to cash provided by operating activities:
Provision for doubtful accounts	424	506	860
Depreciation - PP&E	23,673	21,229	19,264
Depreciation - Rental	7,739	8,613	9,830
Amortization of intangibles	15,277	14,637	14,746
Amortization of debt issuance	667	667	634
Stock-based compensation expense	5,561	5,987	4,119
Provision for deferred income tax (benefit) expense	(2,337)	(1,182)	(855)
Gain on sale of property, plant and equipment	(161)	(3,779)	(1,094)
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	(85,055)	(27,571)	28,064
Inventories	(37,739)	(78,463)	38,275
Rental equipment	(9,196)	1,138	4,542
Prepaid expenses and other	(6,146)	(6,994)	6,373
Trade accounts payable and accrued liabilities	(2,879)	32,532	(3,783)
Income taxes payable	2,934	4,648	6,601
Long term tax payable	(635)	462	(3,478)
Other assets and liabilities, net	475	(3,008)	2,431
Net cash provided by operating activities	14,530	49,667	184,333
Investing Activities
Acquisitions, net of cash acquired	(2,000)	(17,798)	0
Purchase of property, plant and equipment	(31,141)	(25,263)	(17,874)
Proceeds from sale of property, plant and equipment	1,566	9,667	3,703
Purchase of patents	(163)	(44)	0
Net cash used in investing activities	(31,738)	(33,438)	(14,171)
Financing Activities
Borrowings on bank revolving credit facility	222,000	188,000	115,000
Repayment on bank revolving credit facility	(174,000)	(189,000)	(255,000)
Principal payments on long-term debt and capital leases	(15,031)	(15,093)	(18,867)
Dividends paid	(8,549)	(6,627)	(6,124)
Proceeds from exercise of stock options	803	1,676	1,459
Common stock repurchased	(768)	(1,957)	(710)
Net cash provided (used) in financing activities	24,455	(23,001)	(164,242)
Effect of exchange rate changes on cash	(2,346)	(1,308)	1,964
Net change in cash and cash equivalents	4,901	(8,080)	7,884
Cash and cash equivalents at beginning of the year	42,115	50,195	42,311
Cash and cash equivalents at end of the year	47,016	42,115	50,195
Cash paid during the year for:
Interest	14,575	10,248	17,049
Income taxes	$ 35,102	$ 32,865	$ 17,140

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Significant Accounting Policies

12 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES

Description of the Business and Segments

The Company manufactures, distributes and services high quality tractor-mounted mowing and other vegetation maintenance equipment, street sweepers, excavators, vacuum trucks, forestry and tree maintenance equipment, snow removal equipment, leaf collection equipment, pothole patchers, zero turn radius mowers, agricultural implements and related aftermarket parts and services.

The Company manages its business through two principal reporting segments: Vegetation Management and Industrial Equipment, which are discussed in Note 18.

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Alamo Group Inc. and its subsidiaries (the “Company” or “Alamo Group”), all of which are wholly owned. All intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

 The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles requires management to make estimates and assumptions that affect the amount of assets, liabilities, revenues, and expenses reported in the financial statements and accompanying notes. Judgments related to asset impairment and certain reserves are particularly subject to change. Actual results could differ from those estimates. Such estimates include, but are not limited to, allowance for doubtful accounts, reserve for sales discounts, estimated realizable value on obsolete and slow-moving inventory, warranty reserve, estimates related to pension accounting, estimates related to fair value for purposes of assessing goodwill, long-lived assets and intangible assets for impairment, estimates related to income taxes, and estimates related to contingencies.

Foreign Currency

The Company translates the assets and liabilities of foreign-owned subsidiaries at rates in effect at the end of the year. Revenues and expenses are translated at average rates in effect during the reporting period. Translation adjustments are included in Accumulated other comprehensive income (loss).

Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less from the date of purchase to be cash equivalents. As of December 31, 2022 and December 31, 2021, there was no restricted cash.

Concentrations of Credit Risk

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of accounts receivable. The credit risk is limited because of the large numbers and types of customers and their geographic dispersion.

Inventory Valuation

Inventories are stated at the lower of cost or net realizable value.

Property, Plant and Equipment

Property, plant, and equipment are stated on the basis of cost. Major renewals and betterments are charged to the property accounts, while replacements, maintenance and repairs, which do not improve or extend the lives of the respective assets, are expensed to the current period. Depreciation is provided at amounts calculated to amortize the cost of the assets over their estimated useful economic lives using the straight-line method.

Impairment of Long-Lived Assets

Long-lived assets, such as property, plant and equipment, rental equipment, and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group to be tested for possible impairment, the Company first compares non-discounted cash flows expected to be generated by that asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group is not recoverable on a non-discounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.

Goodwill

Goodwill represents the excess of the purchase price over the estimated fair value of the identifiable net assets acquired. Goodwill is not amortized but is instead tested for impairment at least annually, or whenever events or circumstances change between the annual impairment tests that make it likely that an impairment may have occurred, such as a significant adverse change in the business climate or a decision to sell all or a portion of a reporting unit. The Company performs its annual test for goodwill impairment related to its reporting units on October 1 of each fiscal year. Impairment testing for goodwill is done at the reporting unit level. A reporting unit is an operating segment or one level below an operating segment (also known as a component). A component of an operating segment is a reporting unit if the component constitutes a business for which discrete financial information is available, and segment management regularly reviews the operating results of that component.

We perform a qualitative assessment for all of our reporting units to determine whether it is more likely than not that an impairment exists. Factors considered include macroeconomic, industry and competitive conditions, legal and regulatory environment, historical financial performance and significant changes in the reporting unit. If the qualitative assessment indicates that it is more likely than not that an impairment exists, then a quantitative assessment is performed. Alternatively, we may also bypass the qualitative assessment and go ahead and perform step 1 to determine if the carrying amount exceeds the reporting unit’s fair value. If the fair value of the reporting unit is lower than its carrying amount, goodwill is written down for the amount by which the carrying amount exceeds the fair value. However, the loss recognized cannot exceed the carrying amount of goodwill. We typically use discounted cash flow models to determine the fair value of a reporting unit. The assumptions used in these models are consistent with those we believe a hypothetical marketplace participant would use.

See Note 8 to the Consolidated Financial Statements for more information regarding goodwill.

 Intangible Assets    

The Company has intangible assets with both definite and indefinite useful lives. The definite-lived assets are trade names and trademarks, customer and dealer relationships, and patents and drawings that are subject to amortization with useful lives ranging from 3 years to 25 years. Impairment of definite-lived assets is discussed as part of the Impairment of Long-Lived Assets paragraph above.

The indefinite-lived assets not subject to amortization consist of trade names. The Company tests its indefinite-lived intangible assets for impairment on an annual basis at year-end, or more frequently if an event occurs or circumstances change that indicate that the fair value of an indefinite-lived intangible asset could be below its carrying amount. The impairment test consists of comparing the fair value of the indefinite-lived intangible asset,

determined using the relief from royalty method, with its carrying amount. An impairment loss would be recognized for the carrying amount in excess of its fair value.

See Note 9 to the Consolidated Financial Statements for more information regarding intangible assets.

Leases

We determine if an arrangement is a lease at inception. Operating leases are included in other non-current assets, accrued liabilities, and other long-term liabilities on our consolidated balance sheets. Finance leases are included in property, plant and equipment, accrued liabilities, and other long-term liabilities on our consolidated balance sheets.

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 as allowed by ASC.

See Note 10 to the Consolidated Financial Statements for more information regarding leases.

Pensions

The Company records annual amounts relating to its pension and post-retirement plans based on calculations that incorporate various actuarial and other assumptions, including discount rates, mortality, assumed rates of return, compensation increases, turnover rates and health care cost trend rates. The Company reviews its assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends when it is appropriate to do so. The effect of modifications to those assumptions is recorded in Accumulated other comprehensive income (loss) and amortized to net periodic cost over future periods using the corridor method. The Company believes that the assumptions utilized in recording its obligations under its plans are reasonable based on its experience and market conditions. The net periodic costs are recognized as employees render the services necessary to earn the post-retirement benefits.

Revenue Recognition

The majority of the Company's revenue is recognized from product sales under contracts with customers. The Company presents two reportable operating segments within its financial statements: Vegetation Management and Industrial Equipment. Contract terms and performance obligations within each contractual agreement are generally consistent for both divisions, with small differences that do not have a significant impact on the revenue recognition considerations under Topic 606. Revenues are recognized when we satisfy our performance obligation to transfer product to our customers, which typically occurs at a point in time upon shipment or delivery of the product, and for an amount that reflects the transaction price that is allocated to the performance obligation. Our contracts with customers state the final terms of sale, including the description, quantity and price for goods sold. In the normal course of business, we generally do not accept product returns.

The transaction price is the consideration that we expect to be entitled to in exchange for our products. Some of our contracts contain variable consideration in the form of sales incentives to our customers, such as discounts and rebates. For contracts that include variable consideration, we estimate the factors that determine the variable consideration in order to establish the transaction price.

We have elected that any taxes collected from customers and remitted to government authorities (i.e., sales tax, use tax, etc.) are excluded from the measurement of the transaction price and therefore are excluded from net sales in the consolidated statements of operations.

There are instances where we provide shipping services in relation to the goods sold to our customers. Shipping and handling costs that occur before the customer obtains control of the goods are deemed to be fulfillment activities and are included in cost of goods sold. We have elected to account for shipping and handling activities that occur after the customer has obtained control of a good as fulfillment activities (i.e., an expense) rather than as a promised service.

Rental Equipment

The Company enters into operating lease agreements with customers related to the rental of certain equipment. In accounting for these leases, the cost of the equipment purchased or manufactured by the Company is recorded as an asset, and is depreciated over its estimated useful life. Accumulated depreciation relating to the rental equipment was $22.3 million and $20.1 million on December 31, 2022 and December 31, 2021, respectively.

Shipping and Handling Costs

The Company’s policy is to include shipping and handling costs in costs of goods sold.

Advertising

We charge advertising costs to expense as incurred. Advertising and marketing expense related to operations for fiscal years 2022, 2021, and 2020 was approximately $10.9 million, $10.2 million and $10.1 million, respectively. Advertising and marketing expenses are included in Selling, General and Administrative expenses (“SG&A”).

Research and Development

Product development and engineering costs charged to SG&A amounted to $14.3 million, $11.7 million, and $12.4 million for the years ended December 31, 2022, 2021, and 2020, respectively.

Commitments and Contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. The Company's policy is to accrue for legal costs expected to be incurred in connection with loss contingencies.

Income Taxes

Deferred tax assets and liabilities are determined based on differences between the financial reporting basis and tax basis of assets and liabilities, and are measured by applying enacted statutory tax rates applicable to the future years in which deferred tax assets or liabilities are expected to be settled or realized. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversals of deferred tax liabilities, projected future taxable income, available tax carrybacks and tax planning strategies in making this assessment other than those which we have reserved. We have elected to treat the global intangible low-taxed income (GILTI) tax as a period expense.

Stock-Based Compensation

The Company has granted options to purchase its common stock, restricted stock awards, restricted stock units, and performance stock units 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 that 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 fair value of each stock option is estimated on the date of grant using the Black-Scholes valuation method with the following assumptions noted:

1.The risk-free rate is based on the U.S. Treasury rate over the expected life of the option at the time of the grant.

2.The dividend yield is calculated as the ratio of dividends paid per share of common stock to the stock price on the date of the grant.

3.The expected volatility factors are based on the historical movement of the Company’s common stock price over the expected life of the option.

4.The expected life is the average length of time in which officers, other employees, and non-employee directors are expected to exercise their options, and which are primarily based on historical experience.

The Company calculated the fair value for options with the following weighted-average assumptions for 2022, 2021, and 2020:

Fair Value Calculation Assumptions for Stock Compensation
	December 31,
	2022		2021		2020
Risk-free interest rate	1.93	%	1.25	%	1.22	%
Dividend yield	0.5	%	0.4	%	0.5	%
Volatility factors	33.2	%	33.9	%	30.0	%
Weighted-average expected life	8.0 years		8.0 years		8.0 years

Earnings per Common Share (“EPS”)

Basic EPS is computed using the weighted-average number of common shares outstanding during the year. The treasury stock method is used to compute diluted EPS which gives effect to the potential dilution of earnings that could have occurred if additional shares were issued for awards granted under the Company’s incentive stock option plans. The treasury stock method assumes that proceeds obtained upon exercise of awards granted under the incentive stock option plans are used to purchase outstanding common stock at the average market price during the period.

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Accounting Pronouncements

12 Months Ended

Dec. 31, 2022

Accounting Changes and Error Corrections [Abstract]

ACCOUNTING PRONOUNCEMENTS

ACCOUNTING PRONOUNCEMENTS

Accounting Pronouncements Not Yet Adopted

In September 2022, the FASB issues ASU No. 2022-04, “Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations”. The amendments in this Update are effective for are effective for fiscal years beginning after December 15, 202 and require that a buyer in a supplier finance program disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. To achieve this objective, the Company will disclose qualitative and quantitative information about its supplier finance programs.

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Business Combinations	12 Months Ended
	Dec. 31, 2022
Business Combination and Asset Acquisition [Abstract]
BUSINESS COMBINATIONS	BUSINESS COMBINATIONSOn October 26, 2021, the Company acquired 100% of the issued and outstanding equity interests of Timberwolf Limited (“Timberwolf”). Timberwolf manufactures a broad range of commercial wood chippers, primarily serving markets in the U.K. and the European Union. The primary reason for the Timberwolf acquisition was to enhance the Company's forestry and tree care platform for growth by increasing both the Company's product portfolio and capabilities in the European market. The acquisition price was approximately $25.0 million. The Company has included the operating results of Timberwolf in its consolidated financial statements since the date of acquisition, these results are considered immaterial.

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Earnings Per Share

12 Months Ended

Dec. 31, 2022

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 does not differ.

(in thousands, except per share amounts)	2022		2021		2020
Net income	$	101,928	$	80,245	$	57,804
Average common shares:
Basic (weighted-average outstanding shares)	11,877		11,837		11,782
Dilutive potential common shares from stock options	57		59		63
Diluted (weighted-average outstanding shares)	11,934		11,896		11,845
Basic earnings per share	$	8.58	$	6.78	$	4.91
Diluted earnings per share	$	8.54	$	6.75	$	4.88

Stock options totaling 25,610 shares in 2022, 15,586 shares in 2021, and 9,864 shares in 2020 were not included in the diluted earnings per share calculation because the effect would have been anti-dilutive.

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Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2022

Receivables [Abstract]

VALUATION AND QUALIFYING ACCOUNTS

VALUATION AND QUALIFYING ACCOUNTS

Valuation and qualifying accounts included the following:

(in thousands)	Balance Beginning of Year		Net Charged to Costs and Expenses		Translations, Reclassifications and Acquisitions			Net Write-Offs or Discounts Taken		Balance End of Year
2022
Reserve for sales discounts	$	12,567	$	137,553		$	(21)	$	(130,238)	$	19,861
Reserve for inventory obsolescence	12,908		6,998			(277)		(6,420)		13,209
Reserve for warranty	9,953		11,290			(244)		(11,659)		9,340
2021
Reserve for sales discounts	$	13,549	$	116,114		$	(688)	$	(116,408)	$	12,567
Reserve for inventory obsolescence	12,027		6,531			(146)		(5,504)		12,908
Reserve for warranty	9,096		10,727			(132)		(9,738)		9,953
2020
Reserve for sales discounts	$	16,883	$	93,398		$	15	$	(96,747)	$	13,549
Reserve for inventory obsolescence	8,233		4,609			1,471		(2,286)		12,027
Reserve for warranty	10,249		8,466			247		(9,866)		9,096

Sales Discounts

On December 31, 2022, the Company had $19.9 million in reserves for sales discounts compared to $12.6 million on December 31, 2021 on product shipped to our customers under various promotional programs. The most common programs provide a discount when the customer pays within a specified period of time.

The Company reviews the reserve quarterly based on analysis made on each program outstanding at the time. The cost of these discounts is estimated based on historical experience and known changes in promotional programs and is reported as a reduction to sales when the product sale is recognized. The reserve is adjusted if discounts paid differ from those estimated. Historically, those adjustments have not been material.

Reserve for Inventory Obsolescence

We value inventories at the lower of the cost of inventory or net realizable value. As needed, we record an inventory valuation adjustment for excess, slow moving, and obsolete inventory that is equal to the excess of the cost of the inventory over the estimated net realizable value. The inventory valuation adjustment to net realizable value establishes a new cost basis of the inventory that cannot be subsequently reversed. Such inventory valuation adjustments for excess, obsolete, and slow moving inventory are not reduced or removed until the product is sold or disposed of.

The Company had a reserve of $13.2 million on December 31, 2022 and $12.9 million on December 31, 2021 to cover obsolete and slow moving inventory. The increase in the reserve was primarily attributable to the Company's Industrial Equipment Division. The reserve for inventory obsolescence is calculated as follows: 1) no inventory usage over a three-year period is deemed obsolete and reserved at 100%; and 2) slow moving inventory with little usage requires a 100% reserve on items that have a quantity greater than a three-year supply. There are exceptions to the obsolete and slow moving classifications if approved by an officer of the Company, based on specific identification of an item or items that are deemed to be either included or excluded from this classification. In cases where there is no historical data, management makes a judgment based on a specific review of the inventory in question to determine what reserves, if any, are appropriate. New products or parts are generally excluded from the reserve until a three-year history has been established.

Warranty

The Company’s warranty policy is generally to provide its customers warranty for up to one year on all wholegood units and 90 days on parts, though some components can have warranty for longer terms.

Warranty reserve, as a percentage of sales, is generally calculated by looking at the current twelve months’ expenses and prorating that amount based on twelve months’ sales with a three to six month lag period. The Company’s historical experience is that an end-user takes approximately three to six months from the receipt of the unit to file a warranty claim.

The current liability warranty reserve balance was $9.3 million on December 31, 2022 and $10.0 million on December 31, 2021 and is included in Note 11.

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Inventories

12 Months Ended

Dec. 31, 2022

Inventory Disclosure [Abstract]

INVENTORIES

INVENTORIES

Inventories consisted of the following:

	December 31,
(in thousands)	2022		2021
Finished goods and parts	$	312,726	$	277,760
Work in process	22,273		24,895
Raw materials	17,554		18,262
Inventory, net	$	352,553	$	320,917

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Property, Plant and Equipment

12 Months Ended

Dec. 31, 2022

Property, Plant and Equipment [Abstract]

PROPERTY, PLANT AND EQUIPMENT

PROPERTY, PLANT AND EQUIPMENTProperty, plant and equipment consist of the following:

	December 31,
(in thousands)	2022		2021		Useful Lives
Land	$	12,792	$	12,838
Buildings and improvements	145,616		145,086		5-20 yrs.
Machinery and equipment	140,252		129,901		3-10 yrs.
Office furniture and equipment	13,270		13,291		3-7 yrs.
Computer software	13,551		12,384		3-7 yrs.
Transportation equipment	9,597		8,363		3 yrs.
Property, plant and equipment, at cost	335,078		321,863
Accumulated depreciation	(180,071)		(169,372)
Property, plant and equipment, net	$	155,007	$	152,491

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Goodwill

12 Months Ended

Dec. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL

GOODWILL

The changes in the carrying amount of goodwill for the year ended December 31, 2020, 2021, and 2022 are as follows:

	Vegetation Management			Industrial Equipment			Consolidated
(in thousands)
Balance at December 31, 2019		$	126,894		$	71,128		$	198,022
Translation adjustment		132			1,036			1,168
Goodwill adjustment		(2,045)			(2,013)			(4,058)
Balance at December 31, 2020		$	124,981		$	70,151		$	195,132
Translation adjustment		(1,510)			(708)			(2,218)
Goodwill acquired		9,492			—			9,492
Balance at December 31, 2021		$	132,963		$	69,443		$	202,406
Translation adjustment		(1,882)			(1,147)			(3,029)
Goodwill adjustment		(3,519)			—			(3,519)
Balance at December 31, 2022		$	127,562		$	68,296		$	195,858

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Intangible Assets

12 Months Ended

Dec. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS

INTANGIBLE ASSETS

The following is a summary of the Company's intangible assets net of the accumulated amortization:

(in thousands)	Estimated Useful Lives	December 31, 2022			December 31, 2021
Definite:
Trade names and trademarks	15-25 years		$	68,797		$	68,321
Customer and dealer relationships	8-15 years		129,338			126,104
Patents and developed technologies	3-12 years		28,437			29,338
Favorable leasehold interests	7 years		4,200			4,200
Total at cost			230,772			227,963
Less accumulated amortization			(64,931)			(49,997)
Total net			165,841			177,966
Indefinite:
Trade names and trademarks			5,500			5,500
Total Intangible Assets			$	171,341		$	183,466

The Company's net carrying value at December 31, 2022 of intangible assets with definite useful lives consists of trade names and trademarks at $54.9 million, customer and dealer relationships at $90.2 million, patents and drawings at $18.5 million, and favorable leasehold interests at $2.3 million. As of December 31, 2022, the related accumulated amortization balance for the definite-lived assets were $13.9 million for trade names and trademarks, $39.2 million for customer and dealer relationships, $9.9 million for patents and drawings, and $1.9 million for favorable leasehold interests. The Company estimates amortization expense to be $15.3 million for each of the next five years.

Indefinite-lived trade names and trademarks consisted of the Gradall trade name with a carrying value of $3.6 million and the Bush Hog trade name with a carrying value of $1.9 million.

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Leases

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

LEASES

LEASES

Leases

The Company leases office space and equipment under various operating and capital leases, which generally are expected to be renewed or replaced by other leases. As of December 31, 2022, the components of lease cost were as follows:

Components of Lease Cost
	Twelve Months Ended December 31,
(in thousands)	2022		2021
Finance lease cost:
Amortization of right-of-use assets	$	30	$	67
Interest on lease liabilities	1		3
Operating lease cost	5,783		5,571
	1,397		1,033
Variable lease cost	348		410
Total lease cost	$	7,559	$	7,084

As of December 31, 2022, future minimum lease payments under these non-cancelable leases are:

Future Minimum Lease Payments
(in thousands)	Operating Leases
2023	$	5,177
2024	4,099
2025	3,294
2026	2,728
2027	1,780
Thereafter	1,743
Total minimum lease payments	$	18,821
Less imputed interest	(1,287)
Total lease liabilities	$	17,534

Rental expense for operating leases was $7.5 million for 2022, $7.0 million for 2021, and $6.1 million for 2020.

Future Lease Commencements

As of December 31, 2022, we have additional operating leases that have not yet commenced in the amount of $3.1 million. These operating leases will commence in fiscal year 2023.

Supplemental balance sheet information related to leases was as follows:

Operating Leases
	December 31,
(in thousands)	2022			2021
Other non-current assets	$	17,249		$	16,744
Accrued liabilities	4,685			4,655
Other long-term liabilities	12,849			12,237
Total operating lease liabilities	$	17,534		$	16,892
Weighted average remaining lease term	4.66 years			5.14 years
Weighted average discount rate	3.30		%	2.83		%

Supplemental cash flow information related to leases was as follows:

	Twelve Months Ended December 31,
(in thousands)	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	5,246	$	5,013

LEASES

LEASES

Leases

The Company leases office space and equipment under various operating and capital leases, which generally are expected to be renewed or replaced by other leases. As of December 31, 2022, the components of lease cost were as follows:

Components of Lease Cost
	Twelve Months Ended December 31,
(in thousands)	2022		2021
Finance lease cost:
Amortization of right-of-use assets	$	30	$	67
Interest on lease liabilities	1		3
Operating lease cost	5,783		5,571
	1,397		1,033
Variable lease cost	348		410
Total lease cost	$	7,559	$	7,084

As of December 31, 2022, future minimum lease payments under these non-cancelable leases are:

Future Minimum Lease Payments
(in thousands)	Operating Leases
2023	$	5,177
2024	4,099
2025	3,294
2026	2,728
2027	1,780
Thereafter	1,743
Total minimum lease payments	$	18,821
Less imputed interest	(1,287)
Total lease liabilities	$	17,534

Rental expense for operating leases was $7.5 million for 2022, $7.0 million for 2021, and $6.1 million for 2020.

Future Lease Commencements

As of December 31, 2022, we have additional operating leases that have not yet commenced in the amount of $3.1 million. These operating leases will commence in fiscal year 2023.

Supplemental balance sheet information related to leases was as follows:

Operating Leases
	December 31,
(in thousands)	2022			2021
Other non-current assets	$	17,249		$	16,744
Accrued liabilities	4,685			4,655
Other long-term liabilities	12,849			12,237
Total operating lease liabilities	$	17,534		$	16,892
Weighted average remaining lease term	4.66 years			5.14 years
Weighted average discount rate	3.30		%	2.83		%

Supplemental cash flow information related to leases was as follows:

	Twelve Months Ended December 31,
(in thousands)	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	5,246	$	5,013

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Accrued Liabilities

12 Months Ended

Dec. 31, 2022

Payables and Accruals [Abstract]

ACCRUED LIABILITIES

ACCRUED LIABILITIESAccrued liabilities consist of the following balances:

	December 31,
(in thousands)	2022		2021
Salaries, wages and bonuses	$	37,590	$	37,462
Lease liability	4,685		4,655
Taxes	2,426		1,902
Warranty	9,340		9,953
Retirement provision	2,588		2,967
Customer deposits	5,197		6,383
Other	9,542		10,201
Accrued liabilities	$	71,368	$	73,523

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Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2022

Fair Value Disclosures [Abstract]

FAIR VALUE OF FINANCIAL INSTRUMENTS

FAIR VALUE OF FINANCIAL INSTRUMENTS

U.S. GAAP requires or permits certain assets or liabilities to be measured at fair value on a recurring or non- recurring basis in our balance sheets. U.S. GAAP also requires the disclosure of the fair values of financial instruments when an option to elect fair value accounting has been provided but such election has not been made. A debt obligation is an example of such a financial instrument.

Fair value is defined 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. In fair value, measurements are classified under the following hierarchy:

Level 1 – Quoted prices for identical assets or liabilities 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.

When measuring fair value, the Company maximizes use of observable inputs and minimizes the use of unobservable inputs.

Fair value measurements are classified to the lowest level input or value-driver that is significant to the valuation. A measurement may therefore be classified within Level 3 even though there may be significant inputs that are readily observable.

The carrying values of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses, approximate fair value because of the short-term nature of these items. The carrying value of our debt approximates the fair value as of December 31, 2022 and 2021, as the floating rates on our outstanding balances approximate current market rates. This conclusion was made based on Level 2 inputs. Fair values determined by Level 2 utilize inputs that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Other than the investments held by the retirement benefit plans, as described in Note 17 to the Consolidated Financial Statements, the Company does not have any other significant financial assets or liabilities measured at fair value on a recurring basis.

The Company has no recurring or nonrecurring valuations that fall under Level 3 of the fair value hierarchy as of December 31, 2022 and 2021.

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Long-Term Debt

12 Months Ended

Dec. 31, 2022

Debt Disclosure [Abstract]

LONG-TERM DEBT

LONG-TERM DEBT

The components of long-term debt are as follows:

	December 31,
(in thousands)	2022		2021
Bank revolving credit facility	$	52,000	$	4,000
Term debt	249,928		265,498
Capital lease obligations	24		56
Total debt	301,952		269,554
Less current maturities	15,009		15,032
Total long-term debt	$	286,943	$	254,522

On October 28, 2022, the Company, as Borrower, and each of its domestic subsidiaries as guarantors, entered into a Third Amended and Restated Credit Agreement (the “2022 Credit Agreement”) with Bank of America, N.A., as Administrative Agent. The 2022 Credit Agreement provides Borrower with the ability to request loans and other financial obligations in an aggregate amount of up to $655.0 million. Under the 2022 Credit Agreement, the Company has borrowed $255.0 million pursuant to a Term Facility, while up to $400.0 million is available to the Company pursuant to a Revolver Facility which terminates in 5 years. The Term Facility requires the Company to make equal quarterly principal payments of $3,750,000 over the term of the loan, with the final payment of any outstanding principal amount, plus interest, due at the end of the five year term. Borrowings under the 2022 Credit Agreement bear interest, at the Company’s option, at a Term Secured Overnight Financing Rate (“SOFR”) or a Base Rate (each as defined in the 2022 Credit Agreement), plus, in each case, an applicable margin. The applicable margin ranges from 1.25% to 2.50% for Term SOFR borrowings and from .25% to 1.50% for Base Rate borrowings with the margin percentage based upon the Company's consolidated leverage ratio. The Company must also pay a commitment fee to the lenders ranging between 0.15% to 0.30% on any unused portion of the $400,000,000 Revolver Facility.

The 2022 Credit Agreement requires the Company to maintain two financial covenants, namely, a maximum consolidated leverage ratio and a minimum consolidated fixed charge coverage ratio. The Agreement also contains various covenants relating to limitations on indebtedness, limitations on investments and acquisitions, limitations on the 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 2022 Credit Agreement, including the Term Facility and the Revolver Facility, is October 28, 2027.

As of December 31, 2022, $301.9 million was outstanding under the Credit Agreement. Of the total outstanding, $249.9 million was on the Term Facility at a rate of 6.17% and $52.0 million was on the Revolver Facility at a rate of 6.25%. On December 31, 2022, $2.8 million of the revolver capacity was committed to irrevocable standby letters of credit issued in the ordinary course of business as required by vendors' contracts resulting in $295.2 million in available borrowings. The Company is in compliance with the covenants under the Credit Agreement.

The aggregate maturities of long-term debt, as of December 31, 2022, are as follows: $15.0 million in 2023; $15.0 million in 2024; $15.0 million in 2025; $15.0 million in 2026; $241.9 in 2027; and zero thereafter.

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Income Taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

Income Statement Components

Earnings before income taxes were as follows:

	December 31,
(in thousands)	2022		2021		2020
Income before income taxes:
Domestic	$	86,680	$	74,070	$	50,977
Foreign	47,630		35,428		28,780
	$	134,310	$	109,498	$	79,757

The components of income tax expense (benefit) were as follows:

	December 31,
(in thousands)	2022		2021		2020
Current:
Domestic	$	19,197	$	16,846	$	10,823
Foreign	11,848		8,646		8,759
State	3,674		4,943		3,226
	34,719		30,435		22,808
Deferred:
Domestic	(2,246)		(679)		1,238
Foreign	(51)		(274)		(1199)
State	(40)		(229)		(894)
	(2,337)		(1,182)		(855)
Total income taxes	$	32,382	$	29,253	$	21,953

A reconciliation of the income tax at the Company’s U.S. statutory federal income tax rate to the provision for income tax follows:  

	December 31,
(in thousands)	2022			2021			2020
Income tax expense at statutory rates	$	28,205		$	22,995		$	16,749
Increase (reduction) from:
Jurisdictional rate differences	1,989			1,599			1,034
Executive compensation limitation	481			1,314			170
Stock based compensation	122			(322)			(366)
U.S. state taxes	2,632			3,724			2,556
Foreign tax expense	267			—			704
R&D credit	(1,645)			(670)			(415)
GILTI	500			—			50
Previously unrecognized tax (benefit)/expense	51			8			2,219
Other, net	(220)			605			(748)
Provision for income taxes	$	32,382		$	29,253		$	21,953
Effective tax rate	24		%	27		%	28		%

Deferred Income Tax Assets and Liabilities

The components of the Company’s deferred income tax assets and liabilities were as follows. Certain prior year deferred tax component amounts have been reclassified to conform to the current year presentation.

	December 31,
(in thousands)	2022		2021
Deferred income tax assets:
Inventory basis difference	$	3,459	$	1,136
Accounts receivable reserve	334		270
Rental equipment and Property, plant and equipment	347		201
Stock based compensation	826		754
Pension liability	2,900		3,351
Employee benefit accrual	2,451		3,070
Product liability and warranty reserves	2,177		2,464
Foreign net operating loss	3,078		3,764
Lease liability	4,738		4,221
Capitalized R&D costs	4,230		—
Other	1,635		1,415
Total deferred income tax assets	$	26,175	$	20,646
Less: Valuation allowance	(3,637)		(4,129)
Net deferred income tax assets	$	22,538	$	16,517
Deferred income tax liabilities:
Inventory basis differences	$	(264)	$	(283)
Rental equipment and Property, plant and equipment	(14,373)		(13,253)
Lease asset	(4,637)		(4,149)
Intangible assets	(19,301)		(18,041)
Expenses not currently deductible for book purposes	(1,244)		(1,139)
Total deferred income tax liabilities	$	(39,819)	$	(36,865)
Net deferred income taxes	$	(17,281)	$	(20,348)

As of December 31, 2022, the Company had foreign deferred tax assets consisting of foreign net operating losses and other tax benefits available to reduce future taxable income in a foreign jurisdiction. These foreign jurisdictions’ net operating loss carry-forwards are approximately $10.1 million with an unlimited carry-forward period. The Company also has U.S. state net operating loss carry-forwards in the amount of $0.2 million which will expire between 2036 and 2042.

The Company's valuation allowances as of December 31, 2022 and 2021 related primarily to foreign net operating losses and foreign tax credits.

Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows. The Company does not expect the unrecognized tax benefits to change significantly over the next 12 months.

 

Unrecognized Tax Benefits
	December 31,
(in thousands)	2022		2021
Balance as of beginning of year	$	270	$	262
Increases for tax positions related to the current year	156		82
Decreases due to lapse of statute of limitations	(105)		(74)
Balance as of end of year	$	321	$	270

The Company has adopted the policy to include interest and penalty expense related to income taxes as interest and other expense, respectively. As of December 31, 2022, no interest or penalties have accrued. With few exceptions, the Company’s open tax years for its federal and state income tax returns are for the tax years ended 2017 through 2022, and for tax years ended 2016 through 2022 for its foreign income tax returns.

The Company currently intends to permanently reinvest its earnings in certain foreign subsidiaries. No U.S. corporate income taxes or foreign withholding taxes should be imposed on future distributions of the earnings not permanently reinvested. If the amounts asserted as permanent reinvestment were distributed, the Company would be subject to approximately $4.8 million in withholding taxes.

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Common Stock	12 Months Ended
	Dec. 31, 2022
Equity [Abstract]
COMMON STOCK	COMMON STOCKOn January 3, 2023, the Board of Directors of the Company declared a quarterly dividend of $0.22 per share which was paid on February 1, 2023 to holders of record as of January 18, 2023. The Company also has a share repurchase program under which the Company is authorized to repurchase, in the aggregate, up to $30.0 million of its outstanding common stock. During 2022, the Company purchased zero shares.

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Stock Options

12 Months Ended

Dec. 31, 2022

Share-Based Payment Arrangement [Abstract]

STOCK OPTIONS

STOCK OPTIONS

Incentive Stock Option Plan

On May 7, 2015, the stockholders of the Company approved the 2015 Incentive Stock Option Plan (“2015 ISO Plan”) and the Company reserved 400,000 shares of common stock for options to be issued under the 2015 ISO Plan. Each option becomes vested and exercisable for up to 20% of the total optioned shares one year following the grant of the option and for an additional 20% of the total optioned shares after each succeeding year until the option is fully exercisable at the end of the fifth year.

We also maintain other incentive option plans that have expired, under which previously granted awards remain outstanding. No additional grants may be awarded under these plans.

Following is a summary of activity in the Incentive Stock Option Plans for the periods indicated:

 

	2022			2021			2020
	Shares	Exercise    Price*		Shares	Exercise    Price*		Shares	Exercise    Price*
Options outstanding at beginning of year	87,610	$	91.24	100,920	$	68.58	119,720	$	57.65
Granted	17,625	137.93		18,900	156.38		13,950	114.53
Exercised	(14,780)	50.79		(30,210)	53.68		(31,300)	45.94
Canceled	(5,808)	114.48		(2,000)	130.92		(1,450)	96.97
Options outstanding at end of year	84,647	106.43		87,610	91.24		100,920	68.58
Options exercisable at end of year	43,412	$	78.50	49,360	$	61.21	67,700	$	52.60
Options available for grant at end of year	286,033			297,850			314,750

*Weighted Averages

 Options outstanding and exercisable at December 31, 2022 were as follows:

 

Qualified Stock Options	Options Outstanding					Options Exercisable
	Shares	Remaining Contractual Life (yrs)*		Exercise Price*		Shares	Exercise     Price*
Range of Exercise Price
$42.70 - $83.99	27,725		2.32	$	57.89	27,725	$	57.89
$92.50 - $138.75	40,422		7.57	$	119.34	12,387	$	103.89
$156.38 - $234.57	16,500		8.16	$	156.38	3,300	$	156.38
Total	84,647					43,412

*Weighted Averages

The weighted-average grant-date fair values of options granted during 2022, 2021, and 2020 were $52.70, $59.01 and $38.33, respectively. Stock option expense was $0.6 million, $0.6 million and $0.5 million for years ending 2022, 2021, and 2020, respectively. As of December 31, 2022, there was $1.3 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the plans. That cost is expected to be recognized over a period of five years.

Equity Incentive Plan

On May 2, 2019, the stockholders of the Company approved the 2019 Equity Incentive Plan and the Company reserved 500,000 shares of common stock for issuance of equity awards including the issuance of non-qualified options for the purchase of shares of our common stock which may be granted to Company officers and non-employee directors. Options become vested and exercisable for up to 20% of the total optioned shares one year following the grant of the option and for an additional 20% of the total optioned shares after each succeeding year until the option is fully exercisable at the end of the fifth year.

	2022	2021	2020
Options available for grant at end of year	381,531	423,969	455,549

We also maintain other incentive option plans that have expired, under which previously granted awards remain outstanding. No additional grants may be awarded under these plans.

Non-Qualified Options

Following is a summary of activity in the Non-Qualified Stock Option Plans for the periods indicated:

 

	2022			2021			2020
	Shares	Exercise Price*		Shares	Exercise Price*		Shares	Exercise Price*
Options outstanding at beginning of year	2,000	$	53.51	3,000	$	53.51	5,300	$	46.87
Granted	—	—		—	—		—	—
Exercised	(1,000)	53.51		(1,000)	53.51		(2,300)	38.22
Canceled	—	—		—	—		—	—
Options outstanding at end of year	1,000	53.51		2,000	53.51		3,000	53.51
Options exercisable at end of year	1,000	$	53.51	2,000	$	53.51	3,000	$	53.51

*Weighted Averages

Options outstanding and exercisable as of December 31, 2022 were as follows:

Non-Qualified Stock Options	Options Outstanding					Options Exercisable
	Shares	Remaining Contractual Life (yrs)*		Exercise Price*		Shares	Exercise Price*
Range of Exercise Price
$42.70 - $83.99	1,000		1.36	$	53.51	1,000	$	53.51
Total	1,000					1,000

*Weighted Averages

There were no options granted in 2020, 2021 or 2022. Stock option expense was zero for years ending 2022, 2021, and 2020, respectively. As of December 31, 2022, there was zero unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the plans.

During 2022, 2021, and 2020, 1,000, 1,000, and 2,300 non-qualified options were exercised, respectively, $0.1 million, $0.1 million, and $0.1 million of cash receipts were received, respectively.

Restricted Stock Awards/Units

Following is a summary of activity in the Restricted Stock Awards ("RSA")/Units for the periods indicated:

  

	2022			2021			2020
	Shares	Grant-Date Fair Value*		Shares	Grant-Date Fair Value*		Shares	Grant-Date Fair Value*
Awards outstanding at beginning of year	80,616	$	129.53	91,043	$	104.77	78,705	$	94.34
Granted	48,396	133.70		35,224	157.00		44,307	111.95
Exercised	(29,922)	122.19		(45,651)	101.36		(31,594)	88.90
Canceled	(1,460)	143.82		—	—		(375)	100.34
Awards outstanding at end of year	97,630	133.67		80,616	129.53		91,043	104.77

*Weighted Averages

Restricted stock awards vest over a three year period. The weighted-average remaining contractual life in years for 2022, 2021 and 2020 was 1.41, 1.61 and 1.95, respectively. Compensation expense was $4.9 million, $5.4 million and $3.7 million for years ending 2022, 2021, and 2020, respectively. As of December 31, 2022, there was $7.0 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the plans. That cost is expected to be recognized over a period of three years.

Performance Stock Units

In 2020, the Company's Board of Directors approved a change to our long-term incentive compensation plan to implement new performance-based equity grants in the form of a Performance Stock Unit ("PSU") award. PSU award vesting and payout amounts are tied to the Company's achievement of certain targeted financial metrics relating to a three-year performance period with the goal of more closely aligning executive compensation with long-term Company performance.

The 2020 target long-term incentive compensation mix established for the Company's Section 16 filers consists of RSAs and PSUs each representing fifty percent (50%) of the total long-term incentive compensation target value. PSU awards represent a right to receive a certain number of shares of the Company’s common stock at the end of the three-year performance period if certain financial or other performance targets/metrics have been met.

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Retirement Benefit Plans

12 Months Ended

Dec. 31, 2022

Retirement Benefits [Abstract]

RETIREMENT BENEFIT PLANS

RETIREMENT BENEFIT PLANS

Defined Benefit Plans

In connection with the February 3, 2006 purchase of all the net assets of the Gradall excavator business, the Company assumed sponsorship of two Gradall non-contributory defined benefit pension plans, both of which are frozen with respect to both future benefit accruals and future new entrants.

The Gradall Company Employees’ Retirement Plan covers approximately 245 former employees and 51 current employees who (i) were formerly employed by JLG Industries, Inc., (ii) were not covered by a collective bargaining agreement and (iii) first participated in the plan before December 31, 2004. An amendment ceasing future benefit accruals for certain participants was effective December 31, 2004. A second amendment discontinued all future benefit accruals for all participants effective April 24, 2006.

The Gradall Company Hourly Employees’ Pension Plan covered former employees and current employees who (i) were formerly employed by JLG Industries, Inc., (ii) were covered by a collective bargaining agreement and (iii) first participated in the plan before April 6, 1997. An amendment ceasing all future benefit accruals was effective April 6, 1997.

 The following table sets forth the change in plan assets, change in projected benefit obligation, rate assumptions and components of net periodic benefit cost as of December 31 with respect to the plan. The measurement dates of the assets and liabilities of the plan were December 31 of the respective years presented.

 

Reconciliation of Funded Status
	Year Ended December 31,
(in thousands)	2022		2021
Change in projected benefit obligation
Benefit obligation at beginning of year	$	22,564	$	24,100
Service cost	4		5
Interest cost	604		553
Liability actuarial (gain) loss	(4,761)		(994)
Benefits paid	(1,140)		(1,100)
Benefit obligation at end of year	$	17,271	$	22,564
Change in fair value of plan assets
Fair value of plan assets at beginning of year	$	23,671	$	22,370
Return on plan assets	(4,262)		2,401
Employer contributions	—		—
Benefits paid	(1,140)		(1,100)
Fair value of plan assets at end of year	18,269		23,671
Funded status	$	998	$	1,107

The Company recognizes the overfunded or underfunded status (i.e., the difference between the fair value of plan assets and the projected benefit obligations) of defined benefit postretirement plans as an asset or liability in its consolidated balance sheet and recognizes changes in the funded status in the year in which the changes occur. The Company measures the funded status of a plan as of the date of the year-end consolidated balance sheet.

The accumulated benefit obligation for our pension plan represents the actuarial present value of benefits based on employee service and compensation as of a certain date and does not include an assumption about future compensation levels.

In determining the projected benefit obligation and the net pension cost, we used the following significant weighted-average assumptions:

 

Rates to Determine Benefit Obligation
	Year Ended December 31,
	2022	2021
Discount rate	5.10%	2.75%
Composite rate of compensation increase	N/A	N/A

Rates to Determine Net Periodic Benefit Cost
	Year Ended December 31,
	2022	2021
Discount rate	2.75%	2.35%
Long-term rate of return on plan assets	6.00%	7.25%
Composite rate of compensation increase	N/A	N/A

The Company employs a building block approach in determining the expected long-term rate of return on plan assets. Historical markets are studied and long-term historical relationships between equities and fixed income are preserved consistent with the widely accepted capital market principle that assets with higher volatility generate a greater return over the long run. Current market factors such as inflation and interest rates are evaluated before long-term market assumptions are determined. The long-term portfolio return is established via a building block approach with proper consideration of diversification and rebalancing. Peer data and historical returns are reviewed to check for reasonability and appropriateness.

The following table presents the components of net periodic benefit cost (gains are denoted with parentheses and losses are not):

Components of Net Periodic Benefit Cost
	Year Ended December 31,
(in thousands)	2022		2021
Service cost	$	4	$	5
Interest cost	604		553
Expected return on plan assets	(1,384)		(1,581)
Amortization of net loss	182		542
Net periodic benefit cost	$	(594)	$	(481)

 The Company estimates that $1.0 million of unrecognized actuarial expense will be amortized from Accumulated other comprehensive income (loss) into net periodic benefit costs during 2023.

The Company employs a total return investment approach whereby a mix of equities and fixed income investments are used to maximize the long-term return of plan assets for a prudent level of risk. Risk tolerance is established through careful consideration of plan liabilities, plan funded status, and corporate financial condition. The investment portfolio contains a diversified blend of equity and fixed income investments. Furthermore, equity investments are diversified across U.S. and non-U.S. stocks, as well as growth, value, and small and large

capitalization. Other assets such as real estate, private equity, and hedge funds are used judiciously to enhance long-term returns while improving portfolio diversification. Derivatives may be used to gain market exposure in an efficient and timely manner; however, derivatives may not be used to leverage the portfolio beyond the market value of the underlying investments. Investment risk is measured and monitored on an ongoing basis through quarterly investment portfolio reviews, annual liability measurements, and periodic asset/liability studies. Our current asset allocations are consistent with our targeted allocations.

The pension plans' weighted-average asset allocation as a percentage of plan assets at December 31 is as follows:

 

Asset Allocation as a Percentage of the Plan
	Year Ended December 31,
	2022	2021
Equity securities	36%	36%
Debt securities	62%	62%
Short-term investments	2%	2%
Other	—%	—%
Total	100%	100%

The following table presents the hierarchy levels for our postretirement benefit plan investments as of December 31 as described in Note 1 to the Consolidated Financial Statements:

 

(in thousands)		December 31, 2022			Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Mutual Funds:
	Mid Cap		$	512		$	512		$	—		$	—
	International		743			743			—			—
Common/Collective Trusts:
	Wells Fargo Liability Driven Solution CIT I		7,815			—			7,815			—
	Wells Fargo Liability Driven Solution CIT II		3,550			—			3,550			—
	Wells Fargo BlackRock International Equity		488			—			488			—
	Wells Fargo/Causeway International Value		464			—			464			—
	Wells Fargo BlackRock Large Cap Growth Index Fund		724			—			724			—
	Wells Fargo BlackRock Large Cap Value Index Fund		744			—			744			—
	Wells Fargo Multi-Manager Small Cap		785			—			785			—
	Wells Fargo BlackRock Russell 2000 Index Fund		261			—			261			—
	Wells Fargo BlackRock S&P Mid Cap Index Fund		320			—			320			—
	Wells Fargo/MFS Value CIT F		359			—			359			—
	Wells Fargo/T. Rowe Price Large-Cap Growth Managed CIT		359			—			359			—
	Wells Fargo/T. Rowe Price Equity Income Managed CIT		356			—			356			—
	Wells Fargo Voya Large Cap Growth CIT F		357			—			357			—
Cash & Short-term Investments			432			432			—			—
	Total		$	18,269		$	1,687		$	16,582		$	—

            

(in thousands)		December 31, 2021			Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Mutual Funds:
	Mid Cap		$	637		$	637		$	—		$	—
	International		940			940			—			—
Common/Collective Trusts:
	Wells Fargo Liability Driven Solution CIT I		7,782			—			7,782			—
	Wells Fargo Liability Driven Solution CIT II		7,026						7,026
	Wells Fargo BlackRock International Equity		616			—			616			—
	Wells Fargo/Causeway International Value		586			—			586			—
	Wells Fargo BlackRock Large Cap Growth Index Fund		950			—			950			—
	Wells Fargo BlackRock Large Cap Value Index Fund		968			—			968			—
	Wells Fargo Multi-Manager Small Cap		1,015			—			1,015			—
	Wells Fargo BlackRock Russell 2000 Index Fund		332			—			332			—
	Wells Fargo BlackRock S&P Mid Cap Index Fund		419			—			419			—
	Wells Fargo/MFS Value CIT F		469			—			469			—
	Wells Fargo/T. Rowe Price Large-Cap Growth Managed CIT		465			—			465			—
	Wells Fargo/T. Rowe Price Equity Income Managed CIT		487			—			487			—
	Wells Fargo Voya Large Cap Growth CIT F		482			—			482			—
Cash & Short-term Investments			497			497			—			—
	Total		$	23,671		$	2,074		$	21,597		$	—

Our interests in the common collective trust investments are managed by one custodian. Consistent with our investment policy, the custodian has invested the assets across a widely diversified portfolio of U.S. and international equity and fixed income securities. Fair values of each security within the collective trust as of December 31, 2022 were obtained from the custodian and are based on quoted market prices of individual investments; however, since the fund itself does not have a quoted market price, these assets are considered Level 2.

The common collective funds noted in the above table have estimated fair value using the net asset value per share of investments. Investments can be redeemed immediately at the current net asset value per share based on the fair value of the underlying assets. Redemption frequency is daily. The categories contain investments in equity securities of smaller growing companies, medium-sized U.S. companies, large value-oriented and growth-oriented companies, and foreign companies traded on international markets.

Expected benefit payments are estimated using the same assumptions used in determining our benefit obligation as of December 31, 2022. The following table illustrates the estimated pension benefit payments that are projected to be paid:

 

Projected Future Benefit Payments
(in thousands)	Employees’ Retirement Plan
2023		$	1,275
2024		1,304
2025		1,315
2026		1,312
2027		1,306
Years 2028 through 2032		6,209

Supplemental Retirement Plan

The Board of Directors of the Company adopted the Alamo Group Inc. Supplemental Executive Retirement Plan (the “SERP”), effective as of January 3, 2011. The SERP will benefit certain key management or other highly compensated employees of the Company and/or certain subsidiaries who are selected by the Compensation Committee and approved by the Board to participate.

The SERP is intended to provide a benefit from the Company upon retirement, death or disability, or a change in control of the Company. Accordingly, the SERP obligates the Company to pay to a participant a Retirement Benefit (as defined in the SERP) upon the occurrence of certain payment events to the extent a participant has a vested right thereto. A participant’s right to his or her Retirement Benefit becomes vested in the Company’s contributions upon 10 years of Credited Service (as defined in the SERP) or a change in control of the Company.  The Retirement Benefit is based on 20% of the final three-year average salary of each participant on or after his or her normal retirement age (65 years of age).  In the event of the participant’s death or a change in control, the participant’s vested retirement benefit will be paid in a lump sum to the participant or his or her estate, as applicable, within 90 days after the participant’s death or a change in control, as applicable. In the event that the participant is entitled to a benefit from the SERP due to disability, retirement or other termination of employment, the benefit will be paid in monthly installments over a period of fifteen years.

The Company records amounts relating to the SERP based on calculations that incorporate various actuarial and other assumptions, including discount rates, rate of compensation increases, retirement dates and life expectancy. The net periodic costs are recognized as employees render the services necessary to earn the SERP benefits.

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%. In May of 2016, the Board added additional highly compensated employees to the plan. As of December 31, 2022, the current retirement benefit (as defined in the plan) for the participants ranges from 10% to 20%.

The change in the Projected Benefit Obligation (PBO) as of December 31, 2022 and 2021, is shown below:

 

Reconciliation of Benefit Obligation
	Year Ended December 31,
(in thousands)	2022		2021
Benefit obligation at January 1,	$	11,326	$	10,160
Service cost	284		369
Interest cost	278		205
Liability actuarial loss (gain)	(2,023)		759
Benefits paid	(313)		(167)
Benefit obligation at December 31,	$	9,552	$	11,326

The components of net periodic pension expense were as follows:

 

Components of Net Periodic Benefit Cost
	Year Ended December 31,
(in thousands)	2022		2021
Service cost	$	284	$	369
Interest cost	278		205
Amortization of prior service cost	420		413
Amortization of net (gain)/loss	440		318
Net periodic benefit cost	$	1,422	$	1,305

The Company estimates that $0.4 million of unrecognized actuarial expense will be amortized from Accumulated other comprehensive income into net periodic benefit costs during 2023.

In determining the projected benefit obligation and the net pension cost, we used the following significant weighted-average assumptions:

Assumptions used to determine benefit obligations at December 31:

 

Rates to Determine Benefit Obligation
	2022	2021
Discount rate	5.05%	2.50%
Composite rate of compensation increase	3.00%	3.00%

Assumptions used to determine net periodic benefit cost for the years ended December 31:

 

Rates to Determine Net Periodic Benefit Cost
	2022	2021
Discount rate	2.50%	2.05%
Composite rate of compensation increase	3.00%	3.00%
Long-term rate of return on plan assets	N/A	N/A

Future estimated benefits expected to be paid from the plan over the next ten years as follows:

Projected Future Benefit Payments
(in thousands)	SERP
2023	$	490
2024	546
2025	639
2026	866
2027	868
Years 2028 through 2032	4,321

Defined Contribution Plans

The Company has two defined contribution plans, The Gradall Salaried Employees’ Savings and Investment Plan (“Salary Plan”) and The International Association of Machinist and Aerospace Workers Retirement Plan (“IAM Plan”). The Company contributed $0.5 million, $0.5 million, and $0.4 million to the IAM Plan for the plan years ended December 31, 2022, 2021 and 2020, respectively. The Company converted the Salary Plan into its 401(k) retirement and savings plan and put the Hourly Plan into a separate 401(k) retirement and savings plan.

The Company provides a defined contribution 401(k) retirement and savings plan for eligible U.S. employees. Company matching contributions are based on a percentage of employee contributions. Company contributions to the plan during 2022, 2021 and 2020 were $4.2 million, $3.9 million, and $3.5 million, respectively.

Three of the Company’s international subsidiaries also participate in a defined contribution and savings plan covering eligible employees. The Company’s international subsidiaries contribute between 0% and 10% of the participant’s salary up to a specific limit. Total contributions made to the above plans were $0.9 million, $0.9 million, and $0.9 million for the years ended December 31, 2022, 2021 and 2020, respectively.

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Revenue and Segment Reporting

12 Months Ended

Dec. 31, 2022

Segment Reporting [Abstract]

REVENUE AND SEGMENT REPORTING

REVENUE AND SEGMENT REPORTING

Disaggregation of revenue is presented in the tables below by product type. Management has determined that this level of disaggregation would be beneficial to users of the financial statements.

Revenue by Product Type
	December 31,
(in thousands)	2022		2021		2020
Net Sales
Wholegoods	$	1,185,885	$	1,024,158	$	885,254
Parts	280,261		262,432		247,126
Other *	47,470		47,633		31,086
Consolidated	$	1,513,616	$	1,334,223	$	1,163,466

    *Other includes rental sales, extended warranty sales and service sales as it is considered immaterial.

The Company’s sales are principally within the United States, United Kingdom, France, Canada and Australia. The Company sells its products primarily through a network of independent dealers and distributors to governmental end-users, related independent contractors, as well as to the agricultural and commercial turf markets. Effective for the fourth quarter of 2021, the Company began reporting its operating results on the basis of the following segments, Vegetation Management Division and Industrial Equipment Division. Prior to the fourth quarter of 2021, the Company had been reporting its operating results on the basis of two segments which were the Industrial Division and Agricultural Division. The Vegetation Management Division includes all of the operations of the former Agricultural Division plus the mowing and forestry/tree care operations that were previously part of the former Industrial Division. The Industrial Equipment Division includes the Company’s vocational truck business and other industrial operations such as excavators, vacuum trucks, street sweepers, and snow removal equipment.

The Company has included a summary of the financial information by reporting segment. The following table presents the revenue and income from operations by reporting segment for the years ended December 31, 2022, 2021, and 2020:

 

	December 31,
(in thousands)	2022		2021		2020
Net Revenue
Vegetation Management	$	937,065	$	812,676	$	654,630
Industrial Equipment	576,551		521,547		508,836
Consolidated	$	1,513,616	$	1,334,223	$	1,163,466
Income from Operations
Vegetation Management	$	108,508	$	78,917	$	46,651
Industrial Equipment	40,084		38,021		48,134
Consolidated	$	148,592	$	116,938	$	94,785

The following table presents the goodwill and total identifiable assets by reporting segment for the years ended December 31, 2022 and 2021:

 

	December 31,
(in thousands)	2022		2021
Goodwill
Vegetation Management	$	127,562	$	132,963
Industrial Equipment	68,296		69,443
Consolidated	$	195,858	$	202,406
Identifiable Assets
Vegetation Management	$	866,974	$	789,838
Industrial Equipment	441,534		415,904
Consolidated	$	1,308,508	$	1,205,742

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Accumulated Other Comprehensive Loss

12 Months Ended

Dec. 31, 2022

Equity [Abstract]

ACCUMULATED OTHER COMPREHENSIVE LOSS

ACCUMULATED OTHER COMPREHENSIVE LOSS

Changes in accumulated other comprehensive loss by component, net of tax, were as follows:

	Twelve Months Ended December 31,
	2022								2021
(in thousands)	Foreign Currency Translation Adjustment		Defined Benefit Plans Items		Gains (Losses) on Cash Flow Hedges		Total		Foreign Currency Translation Adjustment		Defined Benefit Plans Items		Gains (Losses) on Cash Flow Hedges		Total
Balance as of beginning of period	$	(42,397)	$	(5,017)	$	(1,576)	$	(48,990)	$	(26,597)	$	(6,855)	$	(6,874)	$	(40,326)
Other comprehensive income (loss) before reclassifications	(23,032)		—		1,512		(21,520)		(15,800)		—		7,984		(7,816)
Amounts reclassified from accumulated other comprehensive loss	—		1,707		535		2,242		—		1,838		(2,686)		(848)
Other comprehensive income (loss)	(23,032)		1,707		2,047		(19,278)		(15,800)		1,838		5,298		(8,664)
Balance as of end of period	$	(65,429)	$	(3,310)	$	471	$	(68,268)	$	(42,397)	$	(5,017)	$	(1,576)	$	(48,990)

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International Operations and Geographic Information

12 Months Ended

Dec. 31, 2022

Segment Reporting [Abstract]

INTERNATIONAL OPERATIONS AND GEOGRAPHIC INFORMATION

INTERNATIONAL OPERATIONS AND GEOGRAPHIC INFORMATION

Following is selected financial information on the Company’s international operations, which include the United Kingdom, France, Netherlands, Canada, Brazil, and Australia:

International Operations Financial Information
	December 31,
(in thousands)	2022		2021		2020
Net sales	$	420,678	$	363,339	$	312,462
Income from operations	48,893		34,561		31,166
Income before income taxes	51,206		37,051		30,674
Identifiable assets	364,752		352,187		304,536

 Following is other selected geographic financial information on the Company’s operations:

Geographic Financial Information
	December 31,
(in thousands)	2022		2021		2020
Geographic net sales:
United States	$	1,080,893	$	953,024	$	862,430
France	89,629		92,052		81,259
Canada	95,799		83,392		65,313
United Kingdom	69,454		57,386		47,757
Brazil	46,841		31,365		16,592
Netherlands	23,304		27,964		23,946
Germany	9,115		8,977		9,328
Australia	26,117		20,980		10,999
Other	72,464		59,083		45,842
Total net sales	$	1,513,616	$	1,334,223	$	1,163,466
Geographic location of long-lived assets:
United States	$	457,075	$	461,341	$	480,940
Netherlands	28,428		32,262		39,063
Canada	32,165		32,132		33,573
United Kingdom	31,767		36,569		18,843
France	18,728		19,781		21,033
Brazil	12,175		10,408		11,123
Australia	670		790		964
Total long-lived assets	$	581,008	$	593,283	$	605,539

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

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

The Company is subject to various unresolved legal actions that arise in the ordinary course of its business. The most significant of such actions relates to product liability, which is generally covered by insurance after various self-insured retention amounts. While amounts claimed might be substantial and the liability with respect to such litigation cannot be determined at this time, the Company believes that the outcome of these matters will not have a material adverse effect on the Company’s consolidated financial position or results of operations; however, the ultimate resolution cannot be determined at this time.

Also, 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.

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Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

Basis of Presentation and Principles of Consolidation

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Alamo Group Inc. and its subsidiaries (the “Company” or “Alamo Group”), all of which are wholly owned. All intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

Use of Estimates

 The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles requires management to make estimates and assumptions that affect the amount of assets, liabilities, revenues, and expenses reported in the financial statements and accompanying notes. Judgments related to asset impairment and certain reserves are particularly subject to change. Actual results could differ from those estimates. Such estimates include, but are not limited to, allowance for doubtful accounts, reserve for sales discounts, estimated realizable value on obsolete and slow-moving inventory, warranty reserve, estimates related to pension accounting, estimates related to fair value for purposes of assessing goodwill, long-lived assets and intangible assets for impairment, estimates related to income taxes, and estimates related to contingencies.

Foreign Currency

Foreign Currency

The Company translates the assets and liabilities of foreign-owned subsidiaries at rates in effect at the end of the year. Revenues and expenses are translated at average rates in effect during the reporting period. Translation adjustments are included in Accumulated other comprehensive income (loss).

Cash Equivalents

Cash EquivalentsThe Company considers all highly liquid investments with original maturities of three months or less from the date of purchase to be cash equivalents.

Concentrations of Credit Risk

Concentrations of Credit Risk

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of accounts receivable. The credit risk is limited because of the large numbers and types of customers and their geographic dispersion.

Inventory Valuation

Inventory ValuationInventories are stated at the lower of cost or net realizable value.

Property, Plant and Equipment

Property, Plant and Equipment

Property, plant, and equipment are stated on the basis of cost. Major renewals and betterments are charged to the property accounts, while replacements, maintenance and repairs, which do not improve or extend the lives of the respective assets, are expensed to the current period. Depreciation is provided at amounts calculated to amortize the cost of the assets over their estimated useful economic lives using the straight-line method.

Impairment of Long-lived assets

Impairment of Long-Lived AssetsLong-lived assets, such as property, plant and equipment, rental equipment, and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group to be tested for possible impairment, the Company first compares non-discounted cash flows expected to be generated by that asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group is not recoverable on a non-discounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.

Goodwill

Goodwill

Goodwill represents the excess of the purchase price over the estimated fair value of the identifiable net assets acquired. Goodwill is not amortized but is instead tested for impairment at least annually, or whenever events or circumstances change between the annual impairment tests that make it likely that an impairment may have occurred, such as a significant adverse change in the business climate or a decision to sell all or a portion of a reporting unit. The Company performs its annual test for goodwill impairment related to its reporting units on October 1 of each fiscal year. Impairment testing for goodwill is done at the reporting unit level. A reporting unit is an operating segment or one level below an operating segment (also known as a component). A component of an operating segment is a reporting unit if the component constitutes a business for which discrete financial information is available, and segment management regularly reviews the operating results of that component.

We perform a qualitative assessment for all of our reporting units to determine whether it is more likely than not that an impairment exists. Factors considered include macroeconomic, industry and competitive conditions, legal and regulatory environment, historical financial performance and significant changes in the reporting unit. If the qualitative assessment indicates that it is more likely than not that an impairment exists, then a quantitative assessment is performed. Alternatively, we may also bypass the qualitative assessment and go ahead and perform step 1 to determine if the carrying amount exceeds the reporting unit’s fair value. If the fair value of the reporting unit is lower than its carrying amount, goodwill is written down for the amount by which the carrying amount exceeds the fair value. However, the loss recognized cannot exceed the carrying amount of goodwill. We typically use discounted cash flow models to determine the fair value of a reporting unit. The assumptions used in these models are consistent with those we believe a hypothetical marketplace participant would use.

Intangible Assets

Intangible Assets    

The Company has intangible assets with both definite and indefinite useful lives. The definite-lived assets are trade names and trademarks, customer and dealer relationships, and patents and drawings that are subject to amortization with useful lives ranging from 3 years to 25 years. Impairment of definite-lived assets is discussed as part of the Impairment of Long-Lived Assets paragraph above.

The indefinite-lived assets not subject to amortization consist of trade names. The Company tests its indefinite-lived intangible assets for impairment on an annual basis at year-end, or more frequently if an event occurs or circumstances change that indicate that the fair value of an indefinite-lived intangible asset could be below its carrying amount. The impairment test consists of comparing the fair value of the indefinite-lived intangible asset,

determined using the relief from royalty method, with its carrying amount. An impairment loss would be recognized for the carrying amount in excess of its fair value.

Leases

Leases

We determine if an arrangement is a lease at inception. Operating leases are included in other non-current assets, accrued liabilities, and other long-term liabilities on our consolidated balance sheets. Finance leases are included in property, plant and equipment, accrued liabilities, and other long-term liabilities on our consolidated balance sheets.

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 as allowed by ASC.

Rental EquipmentThe Company enters into operating lease agreements with customers related to the rental of certain equipment. In accounting for these leases, the cost of the equipment purchased or manufactured by the Company is recorded as an asset, and is depreciated over its estimated useful life.

Pensions

Pensions

The Company records annual amounts relating to its pension and post-retirement plans based on calculations that incorporate various actuarial and other assumptions, including discount rates, mortality, assumed rates of return, compensation increases, turnover rates and health care cost trend rates. The Company reviews its assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends when it is appropriate to do so. The effect of modifications to those assumptions is recorded in Accumulated other comprehensive income (loss) and amortized to net periodic cost over future periods using the corridor method. The Company believes that the assumptions utilized in recording its obligations under its plans are reasonable based on its experience and market conditions. The net periodic costs are recognized as employees render the services necessary to earn the post-retirement benefits.

Revenue Recognition

Revenue Recognition

The majority of the Company's revenue is recognized from product sales under contracts with customers. The Company presents two reportable operating segments within its financial statements: Vegetation Management and Industrial Equipment. Contract terms and performance obligations within each contractual agreement are generally consistent for both divisions, with small differences that do not have a significant impact on the revenue recognition considerations under Topic 606. Revenues are recognized when we satisfy our performance obligation to transfer product to our customers, which typically occurs at a point in time upon shipment or delivery of the product, and for an amount that reflects the transaction price that is allocated to the performance obligation. Our contracts with customers state the final terms of sale, including the description, quantity and price for goods sold. In the normal course of business, we generally do not accept product returns.

The transaction price is the consideration that we expect to be entitled to in exchange for our products. Some of our contracts contain variable consideration in the form of sales incentives to our customers, such as discounts and rebates. For contracts that include variable consideration, we estimate the factors that determine the variable consideration in order to establish the transaction price.

We have elected that any taxes collected from customers and remitted to government authorities (i.e., sales tax, use tax, etc.) are excluded from the measurement of the transaction price and therefore are excluded from net sales in the consolidated statements of operations.

There are instances where we provide shipping services in relation to the goods sold to our customers. Shipping and handling costs that occur before the customer obtains control of the goods are deemed to be fulfillment activities and are included in cost of goods sold. We have elected to account for shipping and handling activities that occur after the customer has obtained control of a good as fulfillment activities (i.e., an expense) rather than as a promised service.

Rental Equipment

Leases

We determine if an arrangement is a lease at inception. Operating leases are included in other non-current assets, accrued liabilities, and other long-term liabilities on our consolidated balance sheets. Finance leases are included in property, plant and equipment, accrued liabilities, and other long-term liabilities on our consolidated balance sheets.

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 as allowed by ASC.

Rental EquipmentThe Company enters into operating lease agreements with customers related to the rental of certain equipment. In accounting for these leases, the cost of the equipment purchased or manufactured by the Company is recorded as an asset, and is depreciated over its estimated useful life.

Shipping and Handling Costs

Shipping and Handling Costs

The Company’s policy is to include shipping and handling costs in costs of goods sold.

Advertising

Advertising

We charge advertising costs to expense as incurred. Advertising and marketing expense related to operations for fiscal years 2022, 2021, and 2020 was approximately $10.9 million, $10.2 million and $10.1 million, respectively. Advertising and marketing expenses are included in Selling, General and Administrative expenses (“SG&A”).

Research and Development

Research and Development

Product development and engineering costs charged to SG&A amounted to $14.3 million, $11.7 million, and $12.4 million for the years ended December 31, 2022, 2021, and 2020, respectively.

Commitments and Contingencies

Commitments and Contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. The Company's policy is to accrue for legal costs expected to be incurred in connection with loss contingencies.

Income Taxes

Income Taxes

Deferred tax assets and liabilities are determined based on differences between the financial reporting basis and tax basis of assets and liabilities, and are measured by applying enacted statutory tax rates applicable to the future years in which deferred tax assets or liabilities are expected to be settled or realized. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversals of deferred tax liabilities, projected future taxable income, available tax carrybacks and tax planning strategies in making this assessment other than those which we have reserved. We have elected to treat the global intangible low-taxed income (GILTI) tax as a period expense.

Stock-Based Compensation

Stock-Based Compensation

The Company has granted options to purchase its common stock, restricted stock awards, restricted stock units, and performance stock units 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 that 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 fair value of each stock option is estimated on the date of grant using the Black-Scholes valuation method with the following assumptions noted:

1.The risk-free rate is based on the U.S. Treasury rate over the expected life of the option at the time of the grant.

2.The dividend yield is calculated as the ratio of dividends paid per share of common stock to the stock price on the date of the grant.

3.The expected volatility factors are based on the historical movement of the Company’s common stock price over the expected life of the option.

4.The expected life is the average length of time in which officers, other employees, and non-employee directors are expected to exercise their options, and which are primarily based on historical experience.

Earnings per Common Share ("EPS")

Earnings per Common Share (“EPS”)

Basic EPS is computed using the weighted-average number of common shares outstanding during the year. The treasury stock method is used to compute diluted EPS which gives effect to the potential dilution of earnings that could have occurred if additional shares were issued for awards granted under the Company’s incentive stock option plans. The treasury stock method assumes that proceeds obtained upon exercise of awards granted under the incentive stock option plans are used to purchase outstanding common stock at the average market price during the period.

Accounting Pronouncements

Accounting Pronouncements Not Yet Adopted

In September 2022, the FASB issues ASU No. 2022-04, “Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations”. The amendments in this Update are effective for are effective for fiscal years beginning after December 15, 202 and require that a buyer in a supplier finance program disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. To achieve this objective, the Company will disclose qualitative and quantitative information about its supplier finance programs.

Reserve for Inventory Obsolescence

Reserve for Inventory Obsolescence

We value inventories at the lower of the cost of inventory or net realizable value. As needed, we record an inventory valuation adjustment for excess, slow moving, and obsolete inventory that is equal to the excess of the cost of the inventory over the estimated net realizable value. The inventory valuation adjustment to net realizable value establishes a new cost basis of the inventory that cannot be subsequently reversed. Such inventory valuation adjustments for excess, obsolete, and slow moving inventory are not reduced or removed until the product is sold or disposed of.

The Company had a reserve of $13.2 million on December 31, 2022 and $12.9 million on December 31, 2021 to cover obsolete and slow moving inventory. The increase in the reserve was primarily attributable to the Company's Industrial Equipment Division. The reserve for inventory obsolescence is calculated as follows: 1) no inventory usage over a three-year period is deemed obsolete and reserved at 100%; and 2) slow moving inventory with little usage requires a 100% reserve on items that have a quantity greater than a three-year supply. There are exceptions to the obsolete and slow moving classifications if approved by an officer of the Company, based on specific identification of an item or items that are deemed to be either included or excluded from this classification. In cases where there is no historical data, management makes a judgment based on a specific review of the inventory in question to determine what reserves, if any, are appropriate. New products or parts are generally excluded from the reserve until a three-year history has been established.

Warranty

Warranty

The Company’s warranty policy is generally to provide its customers warranty for up to one year on all wholegood units and 90 days on parts, though some components can have warranty for longer terms.

Warranty reserve, as a percentage of sales, is generally calculated by looking at the current twelve months’ expenses and prorating that amount based on twelve months’ sales with a three to six month lag period. The Company’s historical experience is that an end-user takes approximately three to six months from the receipt of the unit to file a warranty claim.

Fair Value of Financial Instruments

U.S. GAAP requires or permits certain assets or liabilities to be measured at fair value on a recurring or non- recurring basis in our balance sheets. U.S. GAAP also requires the disclosure of the fair values of financial instruments when an option to elect fair value accounting has been provided but such election has not been made. A debt obligation is an example of such a financial instrument.

Fair value is defined 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. In fair value, measurements are classified under the following hierarchy:

Level 1 – Quoted prices for identical assets or liabilities 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.

When measuring fair value, the Company maximizes use of observable inputs and minimizes the use of unobservable inputs.

Fair value measurements are classified to the lowest level input or value-driver that is significant to the valuation. A measurement may therefore be classified within Level 3 even though there may be significant inputs that are readily observable.

The carrying values of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses, approximate fair value because of the short-term nature of these items. The carrying value of our debt approximates the fair value as of December 31, 2022 and 2021, as the floating rates on our outstanding balances approximate current market rates. This conclusion was made based on Level 2 inputs. Fair values determined by Level 2 utilize inputs that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Other than the investments held by the retirement benefit plans, as described in Note 17 to the Consolidated Financial Statements, the Company does not have any other significant financial assets or liabilities measured at fair value on a recurring basis.

The Company has no recurring or nonrecurring valuations that fall under Level 3 of the fair value hierarchy as of December 31, 2022 and 2021.

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Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

The Company calculated the fair value for options with the following weighted-average assumptions for 2022, 2021, and 2020:

Fair Value Calculation Assumptions for Stock Compensation
	December 31,
	2022		2021		2020
Risk-free interest rate	1.93	%	1.25	%	1.22	%
Dividend yield	0.5	%	0.4	%	0.5	%
Volatility factors	33.2	%	33.9	%	30.0	%
Weighted-average expected life	8.0 years		8.0 years		8.0 years

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Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2022

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 does not differ.

(in thousands, except per share amounts)	2022		2021		2020
Net income	$	101,928	$	80,245	$	57,804
Average common shares:
Basic (weighted-average outstanding shares)	11,877		11,837		11,782
Dilutive potential common shares from stock options	57		59		63
Diluted (weighted-average outstanding shares)	11,934		11,896		11,845
Basic earnings per share	$	8.58	$	6.78	$	4.91
Diluted earnings per share	$	8.54	$	6.75	$	4.88

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Valuation and Qualifying Accounts (Tables)

12 Months Ended

Dec. 31, 2022

Receivables [Abstract]

Schedule of Valuation and Qualifying Accounts

Valuation and qualifying accounts included the following:

(in thousands)	Balance Beginning of Year		Net Charged to Costs and Expenses		Translations, Reclassifications and Acquisitions			Net Write-Offs or Discounts Taken		Balance End of Year
2022
Reserve for sales discounts	$	12,567	$	137,553		$	(21)	$	(130,238)	$	19,861
Reserve for inventory obsolescence	12,908		6,998			(277)		(6,420)		13,209
Reserve for warranty	9,953		11,290			(244)		(11,659)		9,340
2021
Reserve for sales discounts	$	13,549	$	116,114		$	(688)	$	(116,408)	$	12,567
Reserve for inventory obsolescence	12,027		6,531			(146)		(5,504)		12,908
Reserve for warranty	9,096		10,727			(132)		(9,738)		9,953
2020
Reserve for sales discounts	$	16,883	$	93,398		$	15	$	(96,747)	$	13,549
Reserve for inventory obsolescence	8,233		4,609			1,471		(2,286)		12,027
Reserve for warranty	10,249		8,466			247		(9,866)		9,096

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Inventories (Tables)

12 Months Ended

Dec. 31, 2022

Inventory Disclosure [Abstract]

Schedule of Inventories

Inventories consisted of the following:

	December 31,
(in thousands)	2022		2021
Finished goods and parts	$	312,726	$	277,760
Work in process	22,273		24,895
Raw materials	17,554		18,262
Inventory, net	$	352,553	$	320,917

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Property, Plant and Equipment (Tables)

12 Months Ended

Dec. 31, 2022

Property, Plant and Equipment [Abstract]

Schedule of Property, Plant and Equipment

Property, plant and equipment consist of the following:

	December 31,
(in thousands)	2022		2021		Useful Lives
Land	$	12,792	$	12,838
Buildings and improvements	145,616		145,086		5-20 yrs.
Machinery and equipment	140,252		129,901		3-10 yrs.
Office furniture and equipment	13,270		13,291		3-7 yrs.
Computer software	13,551		12,384		3-7 yrs.
Transportation equipment	9,597		8,363		3 yrs.
Property, plant and equipment, at cost	335,078		321,863
Accumulated depreciation	(180,071)		(169,372)
Property, plant and equipment, net	$	155,007	$	152,491

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Goodwill (Tables)

12 Months Ended

Dec. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The changes in the carrying amount of goodwill for the year ended December 31, 2020, 2021, and 2022 are as follows:

	Vegetation Management			Industrial Equipment			Consolidated
(in thousands)
Balance at December 31, 2019		$	126,894		$	71,128		$	198,022
Translation adjustment		132			1,036			1,168
Goodwill adjustment		(2,045)			(2,013)			(4,058)
Balance at December 31, 2020		$	124,981		$	70,151		$	195,132
Translation adjustment		(1,510)			(708)			(2,218)
Goodwill acquired		9,492			—			9,492
Balance at December 31, 2021		$	132,963		$	69,443		$	202,406
Translation adjustment		(1,882)			(1,147)			(3,029)
Goodwill adjustment		(3,519)			—			(3,519)
Balance at December 31, 2022		$	127,562		$	68,296		$	195,858

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Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite Lived Intangible Assets

The following is a summary of the Company's intangible assets net of the accumulated amortization:

(in thousands)	Estimated Useful Lives	December 31, 2022			December 31, 2021
Definite:
Trade names and trademarks	15-25 years		$	68,797		$	68,321
Customer and dealer relationships	8-15 years		129,338			126,104
Patents and developed technologies	3-12 years		28,437			29,338
Favorable leasehold interests	7 years		4,200			4,200
Total at cost			230,772			227,963
Less accumulated amortization			(64,931)			(49,997)
Total net			165,841			177,966
Indefinite:
Trade names and trademarks			5,500			5,500
Total Intangible Assets			$	171,341		$	183,466

Schedule of Indefinite-Lived Intangible Assets

The following is a summary of the Company's intangible assets net of the accumulated amortization:

(in thousands)	Estimated Useful Lives	December 31, 2022			December 31, 2021
Definite:
Trade names and trademarks	15-25 years		$	68,797		$	68,321
Customer and dealer relationships	8-15 years		129,338			126,104
Patents and developed technologies	3-12 years		28,437			29,338
Favorable leasehold interests	7 years		4,200			4,200
Total at cost			230,772			227,963
Less accumulated amortization			(64,931)			(49,997)
Total net			165,841			177,966
Indefinite:
Trade names and trademarks			5,500			5,500
Total Intangible Assets			$	171,341		$	183,466

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Leases (Tables)

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Components of Lease Expense

As of December 31, 2022, the components of lease cost were as follows:

Components of Lease Cost
	Twelve Months Ended December 31,
(in thousands)	2022		2021
Finance lease cost:
Amortization of right-of-use assets	$	30	$	67
Interest on lease liabilities	1		3
Operating lease cost	5,783		5,571
	1,397		1,033
Variable lease cost	348		410
Total lease cost	$	7,559	$	7,084

Operating Lease Maturity

As of December 31, 2022, future minimum lease payments under these non-cancelable leases are:

Future Minimum Lease Payments
(in thousands)	Operating Leases
2023	$	5,177
2024	4,099
2025	3,294
2026	2,728
2027	1,780
Thereafter	1,743
Total minimum lease payments	$	18,821
Less imputed interest	(1,287)
Total lease liabilities	$	17,534

Supplemental Balance Sheet Information Related to Leases

Supplemental balance sheet information related to leases was as follows:

Operating Leases
	December 31,
(in thousands)	2022			2021
Other non-current assets	$	17,249		$	16,744
Accrued liabilities	4,685			4,655
Other long-term liabilities	12,849			12,237
Total operating lease liabilities	$	17,534		$	16,892
Weighted average remaining lease term	4.66 years			5.14 years
Weighted average discount rate	3.30		%	2.83		%

Supplemental Cash Flow Information Related to Leases

Supplemental cash flow information related to leases was as follows:

	Twelve Months Ended December 31,
(in thousands)	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	5,246	$	5,013

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Accrued Liabilities (Tables)

12 Months Ended

Dec. 31, 2022

Payables and Accruals [Abstract]

Schedule of Accrued Liabilities

Accrued liabilities consist of the following balances:

	December 31,
(in thousands)	2022		2021
Salaries, wages and bonuses	$	37,590	$	37,462
Lease liability	4,685		4,655
Taxes	2,426		1,902
Warranty	9,340		9,953
Retirement provision	2,588		2,967
Customer deposits	5,197		6,383
Other	9,542		10,201
Accrued liabilities	$	71,368	$	73,523

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Long-Term Debt (Tables)

12 Months Ended

Dec. 31, 2022

Debt Disclosure [Abstract]

Schedule of Components of Long-Term Debt

The components of long-term debt are as follows:

	December 31,
(in thousands)	2022		2021
Bank revolving credit facility	$	52,000	$	4,000
Term debt	249,928		265,498
Capital lease obligations	24		56
Total debt	301,952		269,554
Less current maturities	15,009		15,032
Total long-term debt	$	286,943	$	254,522

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Schedule of Income before Income Tax, Domestic and Foreign

Earnings before income taxes were as follows:

	December 31,
(in thousands)	2022		2021		2020
Income before income taxes:
Domestic	$	86,680	$	74,070	$	50,977
Foreign	47,630		35,428		28,780
	$	134,310	$	109,498	$	79,757

Schedule of Components of Income Tax Expense (Benefit)

The components of income tax expense (benefit) were as follows:

	December 31,
(in thousands)	2022		2021		2020
Current:
Domestic	$	19,197	$	16,846	$	10,823
Foreign	11,848		8,646		8,759
State	3,674		4,943		3,226
	34,719		30,435		22,808
Deferred:
Domestic	(2,246)		(679)		1,238
Foreign	(51)		(274)		(1199)
State	(40)		(229)		(894)
	(2,337)		(1,182)		(855)
Total income taxes	$	32,382	$	29,253	$	21,953

Schedule of Effective Income Tax Rate Reconciliation

A reconciliation of the income tax at the Company’s U.S. statutory federal income tax rate to the provision for income tax follows:  

	December 31,
(in thousands)	2022			2021			2020
Income tax expense at statutory rates	$	28,205		$	22,995		$	16,749
Increase (reduction) from:
Jurisdictional rate differences	1,989			1,599			1,034
Executive compensation limitation	481			1,314			170
Stock based compensation	122			(322)			(366)
U.S. state taxes	2,632			3,724			2,556
Foreign tax expense	267			—			704
R&D credit	(1,645)			(670)			(415)
GILTI	500			—			50
Previously unrecognized tax (benefit)/expense	51			8			2,219
Other, net	(220)			605			(748)
Provision for income taxes	$	32,382		$	29,253		$	21,953
Effective tax rate	24		%	27		%	28		%

Schedule of Deferred Tax Assets and Liabilities

The components of the Company’s deferred income tax assets and liabilities were as follows. Certain prior year deferred tax component amounts have been reclassified to conform to the current year presentation.

	December 31,
(in thousands)	2022		2021
Deferred income tax assets:
Inventory basis difference	$	3,459	$	1,136
Accounts receivable reserve	334		270
Rental equipment and Property, plant and equipment	347		201
Stock based compensation	826		754
Pension liability	2,900		3,351
Employee benefit accrual	2,451		3,070
Product liability and warranty reserves	2,177		2,464
Foreign net operating loss	3,078		3,764
Lease liability	4,738		4,221
Capitalized R&D costs	4,230		—
Other	1,635		1,415
Total deferred income tax assets	$	26,175	$	20,646
Less: Valuation allowance	(3,637)		(4,129)
Net deferred income tax assets	$	22,538	$	16,517
Deferred income tax liabilities:
Inventory basis differences	$	(264)	$	(283)
Rental equipment and Property, plant and equipment	(14,373)		(13,253)
Lease asset	(4,637)		(4,149)
Intangible assets	(19,301)		(18,041)
Expenses not currently deductible for book purposes	(1,244)		(1,139)
Total deferred income tax liabilities	$	(39,819)	$	(36,865)
Net deferred income taxes	$	(17,281)	$	(20,348)

Schedule of Unrecognized Tax Benefits Roll Forward

The Company does not expect the unrecognized tax benefits to change significantly over the next 12 months. 

Unrecognized Tax Benefits
	December 31,
(in thousands)	2022		2021
Balance as of beginning of year	$	270	$	262
Increases for tax positions related to the current year	156		82
Decreases due to lapse of statute of limitations	(105)		(74)
Balance as of end of year	$	321	$	270

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Stock Options (Tables)

12 Months Ended

Dec. 31, 2022

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule of Share-based Compensation, Stock Options, Activity

	2022	2021	2020
Options available for grant at end of year	381,531	423,969	455,549

Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity

Following is a summary of activity in the Restricted Stock Awards ("RSA")/Units for the periods indicated:

  

	2022			2021			2020
	Shares	Grant-Date Fair Value*		Shares	Grant-Date Fair Value*		Shares	Grant-Date Fair Value*
Awards outstanding at beginning of year	80,616	$	129.53	91,043	$	104.77	78,705	$	94.34
Granted	48,396	133.70		35,224	157.00		44,307	111.95
Exercised	(29,922)	122.19		(45,651)	101.36		(31,594)	88.90
Canceled	(1,460)	143.82		—	—		(375)	100.34
Awards outstanding at end of year	97,630	133.67		80,616	129.53		91,043	104.77

*Weighted Averages

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 periods indicated:

 

	2022			2021			2020
	Shares	Exercise    Price*		Shares	Exercise    Price*		Shares	Exercise    Price*
Options outstanding at beginning of year	87,610	$	91.24	100,920	$	68.58	119,720	$	57.65
Granted	17,625	137.93		18,900	156.38		13,950	114.53
Exercised	(14,780)	50.79		(30,210)	53.68		(31,300)	45.94
Canceled	(5,808)	114.48		(2,000)	130.92		(1,450)	96.97
Options outstanding at end of year	84,647	106.43		87,610	91.24		100,920	68.58
Options exercisable at end of year	43,412	$	78.50	49,360	$	61.21	67,700	$	52.60
Options available for grant at end of year	286,033			297,850			314,750

*Weighted Averages

Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range

Options outstanding and exercisable at December 31, 2022 were as follows:

 

Qualified Stock Options	Options Outstanding					Options Exercisable
	Shares	Remaining Contractual Life (yrs)*		Exercise Price*		Shares	Exercise     Price*
Range of Exercise Price
$42.70 - $83.99	27,725		2.32	$	57.89	27,725	$	57.89
$92.50 - $138.75	40,422		7.57	$	119.34	12,387	$	103.89
$156.38 - $234.57	16,500		8.16	$	156.38	3,300	$	156.38
Total	84,647					43,412

*Weighted Averages

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 periods indicated:

 

	2022			2021			2020
	Shares	Exercise Price*		Shares	Exercise Price*		Shares	Exercise Price*
Options outstanding at beginning of year	2,000	$	53.51	3,000	$	53.51	5,300	$	46.87
Granted	—	—		—	—		—	—
Exercised	(1,000)	53.51		(1,000)	53.51		(2,300)	38.22
Canceled	—	—		—	—		—	—
Options outstanding at end of year	1,000	53.51		2,000	53.51		3,000	53.51
Options exercisable at end of year	1,000	$	53.51	2,000	$	53.51	3,000	$	53.51

*Weighted Averages

Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range

Options outstanding and exercisable as of December 31, 2022 were as follows:

Non-Qualified Stock Options	Options Outstanding					Options Exercisable
	Shares	Remaining Contractual Life (yrs)*		Exercise Price*		Shares	Exercise Price*
Range of Exercise Price
$42.70 - $83.99	1,000		1.36	$	53.51	1,000	$	53.51
Total	1,000					1,000

*Weighted Averages

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Retirement Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2022

Defined Benefit Plan Disclosure [Line Items]

Schedule of Defined Benefit Plans Disclosures

The following table sets forth the change in plan assets, change in projected benefit obligation, rate assumptions and components of net periodic benefit cost as of December 31 with respect to the plan. The measurement dates of the assets and liabilities of the plan were December 31 of the respective years presented. 

Reconciliation of Funded Status
	Year Ended December 31,
(in thousands)	2022		2021
Change in projected benefit obligation
Benefit obligation at beginning of year	$	22,564	$	24,100
Service cost	4		5
Interest cost	604		553
Liability actuarial (gain) loss	(4,761)		(994)
Benefits paid	(1,140)		(1,100)
Benefit obligation at end of year	$	17,271	$	22,564
Change in fair value of plan assets
Fair value of plan assets at beginning of year	$	23,671	$	22,370
Return on plan assets	(4,262)		2,401
Employer contributions	—		—
Benefits paid	(1,140)		(1,100)
Fair value of plan assets at end of year	18,269		23,671
Funded status	$	998	$	1,107

Schedule of Allocation of Plan Assets

The pension plans' weighted-average asset allocation as a percentage of plan assets at December 31 is as follows: 

Asset Allocation as a Percentage of the Plan
	Year Ended December 31,
	2022	2021
Equity securities	36%	36%
Debt securities	62%	62%
Short-term investments	2%	2%
Other	—%	—%
Total	100%	100%

Fair Value, Assets Measured on Recurring Basis

The following table presents the hierarchy levels for our postretirement benefit plan investments as of December 31 as described in Note 1 to the Consolidated Financial Statements:

 

(in thousands)		December 31, 2022			Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Mutual Funds:
	Mid Cap		$	512		$	512		$	—		$	—
	International		743			743			—			—
Common/Collective Trusts:
	Wells Fargo Liability Driven Solution CIT I		7,815			—			7,815			—
	Wells Fargo Liability Driven Solution CIT II		3,550			—			3,550			—
	Wells Fargo BlackRock International Equity		488			—			488			—
	Wells Fargo/Causeway International Value		464			—			464			—
	Wells Fargo BlackRock Large Cap Growth Index Fund		724			—			724			—
	Wells Fargo BlackRock Large Cap Value Index Fund		744			—			744			—
	Wells Fargo Multi-Manager Small Cap		785			—			785			—
	Wells Fargo BlackRock Russell 2000 Index Fund		261			—			261			—
	Wells Fargo BlackRock S&P Mid Cap Index Fund		320			—			320			—
	Wells Fargo/MFS Value CIT F		359			—			359			—
	Wells Fargo/T. Rowe Price Large-Cap Growth Managed CIT		359			—			359			—
	Wells Fargo/T. Rowe Price Equity Income Managed CIT		356			—			356			—
	Wells Fargo Voya Large Cap Growth CIT F		357			—			357			—
Cash & Short-term Investments			432			432			—			—
	Total		$	18,269		$	1,687		$	16,582		$	—

            

(in thousands)		December 31, 2021			Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Mutual Funds:
	Mid Cap		$	637		$	637		$	—		$	—
	International		940			940			—			—
Common/Collective Trusts:
	Wells Fargo Liability Driven Solution CIT I		7,782			—			7,782			—
	Wells Fargo Liability Driven Solution CIT II		7,026						7,026
	Wells Fargo BlackRock International Equity		616			—			616			—
	Wells Fargo/Causeway International Value		586			—			586			—
	Wells Fargo BlackRock Large Cap Growth Index Fund		950			—			950			—
	Wells Fargo BlackRock Large Cap Value Index Fund		968			—			968			—
	Wells Fargo Multi-Manager Small Cap		1,015			—			1,015			—
	Wells Fargo BlackRock Russell 2000 Index Fund		332			—			332			—
	Wells Fargo BlackRock S&P Mid Cap Index Fund		419			—			419			—
	Wells Fargo/MFS Value CIT F		469			—			469			—
	Wells Fargo/T. Rowe Price Large-Cap Growth Managed CIT		465			—			465			—
	Wells Fargo/T. Rowe Price Equity Income Managed CIT		487			—			487			—
	Wells Fargo Voya Large Cap Growth CIT F		482			—			482			—
Cash & Short-term Investments			497			497			—			—
	Total		$	23,671		$	2,074		$	21,597		$	—

Schedule of Changes in Projected Benefit Obligations

The change in the Projected Benefit Obligation (PBO) as of December 31, 2022 and 2021, is shown below:

 

Reconciliation of Benefit Obligation
	Year Ended December 31,
(in thousands)	2022		2021
Benefit obligation at January 1,	$	11,326	$	10,160
Service cost	284		369
Interest cost	278		205
Liability actuarial loss (gain)	(2,023)		759
Benefits paid	(313)		(167)
Benefit obligation at December 31,	$	9,552	$	11,326

Pension Plan

Defined Benefit Plan Disclosure [Line Items]

Schedule of Assumptions Used

In determining the projected benefit obligation and the net pension cost, we used the following significant weighted-average assumptions:

 

Rates to Determine Benefit Obligation
	Year Ended December 31,
	2022	2021
Discount rate	5.10%	2.75%
Composite rate of compensation increase	N/A	N/A

Rates to Determine Net Periodic Benefit Cost
	Year Ended December 31,
	2022	2021
Discount rate	2.75%	2.35%
Long-term rate of return on plan assets	6.00%	7.25%
Composite rate of compensation increase	N/A	N/A

Schedule of Net Periodic Benefit Cost

The following table presents the components of net periodic benefit cost (gains are denoted with parentheses and losses are not):

Components of Net Periodic Benefit Cost
	Year Ended December 31,
(in thousands)	2022		2021
Service cost	$	4	$	5
Interest cost	604		553
Expected return on plan assets	(1,384)		(1,581)
Amortization of net loss	182		542
Net periodic benefit cost	$	(594)	$	(481)

Schedule of Expected Benefit Payments

The following table illustrates the estimated pension benefit payments that are projected to be paid: 

Projected Future Benefit Payments
(in thousands)	Employees’ Retirement Plan
2023		$	1,275
2024		1,304
2025		1,315
2026		1,312
2027		1,306
Years 2028 through 2032		6,209

Supplemental Employee Retirement Plan

Defined Benefit Plan Disclosure [Line Items]

Schedule of Assumptions Used

In determining the projected benefit obligation and the net pension cost, we used the following significant weighted-average assumptions:

Assumptions used to determine benefit obligations at December 31:

 

Rates to Determine Benefit Obligation
	2022	2021
Discount rate	5.05%	2.50%
Composite rate of compensation increase	3.00%	3.00%

Assumptions used to determine net periodic benefit cost for the years ended December 31:

 

Rates to Determine Net Periodic Benefit Cost
	2022	2021
Discount rate	2.50%	2.05%
Composite rate of compensation increase	3.00%	3.00%
Long-term rate of return on plan assets	N/A	N/A

Schedule of Net Periodic Benefit Cost

The components of net periodic pension expense were as follows:

 

Components of Net Periodic Benefit Cost
	Year Ended December 31,
(in thousands)	2022		2021
Service cost	$	284	$	369
Interest cost	278		205
Amortization of prior service cost	420		413
Amortization of net (gain)/loss	440		318
Net periodic benefit cost	$	1,422	$	1,305

Schedule of Expected Benefit Payments

Future estimated benefits expected to be paid from the plan over the next ten years as follows:

Projected Future Benefit Payments
(in thousands)	SERP
2023	$	490
2024	546
2025	639
2026	866
2027	868
Years 2028 through 2032	4,321

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Revenue and Segment Reporting (Tables)

12 Months Ended

Dec. 31, 2022

Segment Reporting [Abstract]

Disaggregation of Revenue

Management has determined that this level of disaggregation would be beneficial to users of the financial statements.

Revenue by Product Type
	December 31,
(in thousands)	2022		2021		2020
Net Sales
Wholegoods	$	1,185,885	$	1,024,158	$	885,254
Parts	280,261		262,432		247,126
Other *	47,470		47,633		31,086
Consolidated	$	1,513,616	$	1,334,223	$	1,163,466

    *Other includes rental sales, extended warranty sales and service sales as it is considered immaterial.

Schedule of Segment Reporting Information, by Segment

The following table presents the revenue and income from operations by reporting segment for the years ended December 31, 2022, 2021, and 2020:

 

	December 31,
(in thousands)	2022		2021		2020
Net Revenue
Vegetation Management	$	937,065	$	812,676	$	654,630
Industrial Equipment	576,551		521,547		508,836
Consolidated	$	1,513,616	$	1,334,223	$	1,163,466
Income from Operations
Vegetation Management	$	108,508	$	78,917	$	46,651
Industrial Equipment	40,084		38,021		48,134
Consolidated	$	148,592	$	116,938	$	94,785

The following table presents the goodwill and total identifiable assets by reporting segment for the years ended December 31, 2022 and 2021:

 

	December 31,
(in thousands)	2022		2021
Goodwill
Vegetation Management	$	127,562	$	132,963
Industrial Equipment	68,296		69,443
Consolidated	$	195,858	$	202,406
Identifiable Assets
Vegetation Management	$	866,974	$	789,838
Industrial Equipment	441,534		415,904
Consolidated	$	1,308,508	$	1,205,742

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Accumulated Other Comprehensive Loss (Tables)

12 Months Ended

Dec. 31, 2022

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Loss

Changes in accumulated other comprehensive loss by component, net of tax, were as follows:

	Twelve Months Ended December 31,
	2022								2021
(in thousands)	Foreign Currency Translation Adjustment		Defined Benefit Plans Items		Gains (Losses) on Cash Flow Hedges		Total		Foreign Currency Translation Adjustment		Defined Benefit Plans Items		Gains (Losses) on Cash Flow Hedges		Total
Balance as of beginning of period	$	(42,397)	$	(5,017)	$	(1,576)	$	(48,990)	$	(26,597)	$	(6,855)	$	(6,874)	$	(40,326)
Other comprehensive income (loss) before reclassifications	(23,032)		—		1,512		(21,520)		(15,800)		—		7,984		(7,816)
Amounts reclassified from accumulated other comprehensive loss	—		1,707		535		2,242		—		1,838		(2,686)		(848)
Other comprehensive income (loss)	(23,032)		1,707		2,047		(19,278)		(15,800)		1,838		5,298		(8,664)
Balance as of end of period	$	(65,429)	$	(3,310)	$	471	$	(68,268)	$	(42,397)	$	(5,017)	$	(1,576)	$	(48,990)

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International Operations and Geographic Information (Tables)

12 Months Ended

Dec. 31, 2022

Segment Reporting [Abstract]

Schedule of International Operations

Following is selected financial information on the Company’s international operations, which include the United Kingdom, France, Netherlands, Canada, Brazil, and Australia:

International Operations Financial Information
	December 31,
(in thousands)	2022		2021		2020
Net sales	$	420,678	$	363,339	$	312,462
Income from operations	48,893		34,561		31,166
Income before income taxes	51,206		37,051		30,674
Identifiable assets	364,752		352,187		304,536

Schedule of Selected Geographic Financial Information

Following is other selected geographic financial information on the Company’s operations:

Geographic Financial Information
	December 31,
(in thousands)	2022		2021		2020
Geographic net sales:
United States	$	1,080,893	$	953,024	$	862,430
France	89,629		92,052		81,259
Canada	95,799		83,392		65,313
United Kingdom	69,454		57,386		47,757
Brazil	46,841		31,365		16,592
Netherlands	23,304		27,964		23,946
Germany	9,115		8,977		9,328
Australia	26,117		20,980		10,999
Other	72,464		59,083		45,842
Total net sales	$	1,513,616	$	1,334,223	$	1,163,466
Geographic location of long-lived assets:
United States	$	457,075	$	461,341	$	480,940
Netherlands	28,428		32,262		39,063
Canada	32,165		32,132		33,573
United Kingdom	31,767		36,569		18,843
France	18,728		19,781		21,033
Brazil	12,175		10,408		11,123
Australia	670		790		964
Total long-lived assets	$	581,008	$	593,283	$	605,539

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Significant Accounting Policies - Additional Information (Details)	3 Months Ended	12 Months Ended
	Dec. 31, 2022 USD ($) segment	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
Accounting Policies [Line Items]
Number of principal reporting segments | segment	2
Restricted cash	$ 0	$ 0	$ 0
Options
Accounting Policies [Line Items]
Award vesting period (years)		5 years
Rental Equipment
Accounting Policies [Line Items]
Accumulated depreciation relating to rental equipment	$ 22,300,000	$ 22,300,000	20,100,000
Selling, General and Administrative expenses
Accounting Policies [Line Items]
Advertising expense		10,900,000	10,200,000	$ 10,100,000
Product development and engineering costs		$ 14,300,000	$ 11,700,000	$ 12,400,000
Minimum
Accounting Policies [Line Items]
Estimated useful lives		3 years
Maximum
Accounting Policies [Line Items]
Estimated useful lives		25 years
Option term (years)		10 years

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Significant Accounting Policies - Schedule of Fair Value Assumptions and Methodology (Details)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Accounting Policies [Abstract]
Risk-free interest rate	1.93%	1.25%	1.22%
Dividend yield	0.50%	0.40%	0.50%
Volatility factors	33.20%	33.90%	30.00%
Weighted-average expected life	8 years	8 years	8 years

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Business Combinations (Details) - Dutch Power $ in Millions	Oct. 26, 2021 USD ($)
Business Acquisition [Line Items]
Percentage of outstanding capital shares acquired	100.00%
Acquisition price	$ 25.0

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Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Earnings Per Share [Abstract]
Net income	$ 101,928	$ 80,245	$ 57,804
Average common shares:
Basic (weighted-average outstanding shares) (in shares)	11,877,000	11,837,000	11,782,000
Dilutive potential common shares from stock options (in shares)	57,000	59,000	63,000
Diluted (weighted-average outstanding shares) (in shares)	11,934,000	11,896,000	11,845,000
Basic earnings per share (in dollars per share)	$ 8.58	$ 6.78	$ 4.91
Diluted earnings per share (in dollars per share)	$ 8.54	$ 6.75	$ 4.88
Stock options excluded from diluted earnings per share calculation (in shares)	25,610	15,586	9,864

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Valuation and Qualifying Accounts - Schedule of Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Reserve for sales discounts
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance Beginning of Year	$ 12,567	$ 13,549	$ 16,883
Net Charged to Costs and Expenses	137,553	116,114	93,398
Translations, Reclassifications and Acquisitions	(21)	(688)	15
Net Write-Offs or Discounts Taken	(130,238)	(116,408)	(96,747)
Balance End of Year	19,861	12,567	13,549
Reserve for inventory obsolescence
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance Beginning of Year	12,908	12,027	8,233
Net Charged to Costs and Expenses	6,998	6,531	4,609
Translations, Reclassifications and Acquisitions	(277)	(146)	1,471
Net Write-Offs or Discounts Taken	(6,420)	(5,504)	(2,286)
Balance End of Year	13,209	12,908	12,027
Reserve for warranty
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance Beginning of Year	9,953	9,096	10,249
Net Charged to Costs and Expenses	11,290	10,727	8,466
Translations, Reclassifications and Acquisitions	(244)	(132)	247
Net Write-Offs or Discounts Taken	(11,659)	(9,738)	(9,866)
Balance End of Year	$ 9,340	$ 9,953	$ 9,096

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Valuation and Qualifying Accounts - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Accounts, Notes, Loans and Financing Receivable [Line Items]
Inventory obsolescence reserves	$ 13,200	$ 12,900
Inventory usage period	3 years
Inventory reserve percentage	100.00%
Product warranty accrual period of expenses used in calculation	12 months
Product warranty accrual period for sales used in calculation	12 months
Warranty	$ 9,340	9,953
Minimum
Accounts, Notes, Loans and Financing Receivable [Line Items]
Product warranty accrual lag period	3 months
Maximum
Accounts, Notes, Loans and Financing Receivable [Line Items]
Product warranty accrual lag period	6 months
Wholegoods | Maximum
Accounts, Notes, Loans and Financing Receivable [Line Items]
Product warranty period	1 year
Parts
Accounts, Notes, Loans and Financing Receivable [Line Items]
Product warranty period	90 days
Reserve for sales discounts
Accounts, Notes, Loans and Financing Receivable [Line Items]
Reserves for sales discounts on products shipped under promotional programs	$ 19,861	$ 12,567	$ 13,549	$ 16,883

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Inventories - Schedule of Inventory, Current (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Inventory Disclosure [Abstract]
Finished goods and parts	$ 312,726	$ 277,760
Work in process	22,273	24,895
Raw materials	17,554	18,262
Inventory, net	$ 352,553	$ 320,917

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Property, Plant and Equipment (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Property, Plant and Equipment [Line Items]
Property, plant and equipment	$ 335,078	$ 321,863
Less:  Accumulated depreciation	(180,071)	(169,372)
Total property, plant and equipment, net	155,007	152,491
Land
Property, Plant and Equipment [Line Items]
Property, plant and equipment	12,792	12,838
Buildings and improvements
Property, Plant and Equipment [Line Items]
Property, plant and equipment	$ 145,616	145,086
Buildings and improvements | Minimum
Property, Plant and Equipment [Line Items]
Useful Lives	5 years
Buildings and improvements | Maximum
Property, Plant and Equipment [Line Items]
Useful Lives	20 years
Machinery and equipment
Property, Plant and Equipment [Line Items]
Property, plant and equipment	$ 140,252	129,901
Machinery and equipment | Minimum
Property, Plant and Equipment [Line Items]
Useful Lives	3 years
Machinery and equipment | Maximum
Property, Plant and Equipment [Line Items]
Useful Lives	10 years
Office furniture and equipment
Property, Plant and Equipment [Line Items]
Property, plant and equipment	$ 13,270	13,291
Office furniture and equipment | Minimum
Property, Plant and Equipment [Line Items]
Useful Lives	3 years
Office furniture and equipment | Maximum
Property, Plant and Equipment [Line Items]
Useful Lives	7 years
Computer software
Property, Plant and Equipment [Line Items]
Property, plant and equipment	$ 13,551	12,384
Computer software | Minimum
Property, Plant and Equipment [Line Items]
Useful Lives	3 years
Computer software | Maximum
Property, Plant and Equipment [Line Items]
Useful Lives	7 years
Transportation equipment
Property, Plant and Equipment [Line Items]
Property, plant and equipment	$ 9,597	$ 8,363
Useful Lives	3 years

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Goodwill (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Goodwill [Roll Forward]
Goodwill, balance at the beginning of the period	$ 202,406	$ 195,132	$ 198,022
Translation adjustment	(3,029)	(2,218)	1,168
Goodwill acquired		9,492
Goodwill adjustment	(3,519)		(4,058)
Goodwill, balance at the end of the period	195,858	202,406	195,132
Vegetation Management
Goodwill [Roll Forward]
Goodwill, balance at the beginning of the period	132,963	124,981	126,894
Translation adjustment	(1,882)	(1,510)	132
Goodwill acquired		9,492
Goodwill adjustment	(3,519)		(2,045)
Goodwill, balance at the end of the period	127,562	132,963	124,981
Industrial Equipment
Goodwill [Roll Forward]
Goodwill, balance at the beginning of the period	69,443	70,151	71,128
Translation adjustment	(1,147)	(708)	1,036
Goodwill acquired		0
Goodwill adjustment	0		(2,013)
Goodwill, balance at the end of the period	$ 68,296	$ 69,443	$ 70,151

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Intangible Assets - Schedule of Definite and Indefinite Lived Intangible Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Schedule of Acquired Indefinite-lived and Finite Intangible Assets by Major Class [Line Items]
Definite	$ 230,772	$ 227,963
Less accumulated amortization	(64,931)	(49,997)
Total net	165,841	177,966
Total Intangible Assets	171,341	183,466
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]
Definite	68,797	68,321
Less accumulated amortization	(13,900)
Total net	54,900
Customer and dealer relationships
Schedule of Acquired Indefinite-lived and Finite Intangible Assets by Major Class [Line Items]
Definite	129,338	126,104
Less accumulated amortization	(39,200)
Total net	90,200
Patents and developed technologies
Schedule of Acquired Indefinite-lived and Finite Intangible Assets by Major Class [Line Items]
Definite	28,437	29,338
Less accumulated amortization	(9,900)
Total net	$ 18,500
Favorable leasehold interests
Schedule of Acquired Indefinite-lived and Finite Intangible Assets by Major Class [Line Items]
Estimated Useful Lives	7 years
Definite	$ 4,200	$ 4,200
Less accumulated amortization	(1,900)
Total net	$ 2,300
Minimum
Schedule of Acquired Indefinite-lived and Finite Intangible Assets by Major Class [Line Items]
Estimated Useful Lives	3 years
Minimum | Trade names and trademarks
Schedule of Acquired Indefinite-lived and Finite Intangible Assets by Major Class [Line Items]
Estimated Useful Lives	15 years
Minimum | Customer and dealer relationships
Schedule of Acquired Indefinite-lived and Finite Intangible Assets by Major Class [Line Items]
Estimated Useful Lives	8 years
Minimum | Patents and developed technologies
Schedule of Acquired Indefinite-lived and Finite Intangible Assets by Major Class [Line Items]
Estimated Useful Lives	3 years
Maximum
Schedule of Acquired Indefinite-lived and Finite Intangible Assets by Major Class [Line Items]
Estimated Useful Lives	25 years
Maximum | Trade names and trademarks
Schedule of Acquired Indefinite-lived and Finite Intangible Assets by Major Class [Line Items]
Estimated Useful Lives	25 years
Maximum | Customer and dealer relationships
Schedule of Acquired Indefinite-lived and Finite Intangible Assets by Major Class [Line Items]
Estimated Useful Lives	15 years
Maximum | Patents and developed technologies
Schedule of Acquired Indefinite-lived and Finite Intangible Assets by Major Class [Line Items]
Estimated Useful Lives	12 years

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Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Schedule of Acquired Indefinite-lived and Finite Intangible Assets by Major Class [Line Items]
Net carrying value of intangibles with definite useful lives	$ 165,841	$ 177,966
Accumulated amortization	64,931	$ 49,997
2022	15,300
2023	15,300
2024	15,300
2025	15,300
2026	15,300
Trade Names | Gradall
Schedule of Acquired Indefinite-lived and Finite Intangible Assets by Major Class [Line Items]
Carrying values of indefinite lived trade names	3,600
Trade Names | Bush Hog
Schedule of Acquired Indefinite-lived and Finite Intangible Assets by Major Class [Line Items]
Carrying values of indefinite lived trade names	1,900
Trade names and trademarks
Schedule of Acquired Indefinite-lived and Finite Intangible Assets by Major Class [Line Items]
Net carrying value of intangibles with definite useful lives	54,900
Accumulated amortization	13,900
Customer and dealer relationships
Schedule of Acquired Indefinite-lived and Finite Intangible Assets by Major Class [Line Items]
Net carrying value of intangibles with definite useful lives	90,200
Accumulated amortization	39,200
Patents and developed technologies
Schedule of Acquired Indefinite-lived and Finite Intangible Assets by Major Class [Line Items]
Net carrying value of intangibles with definite useful lives	18,500
Accumulated amortization	9,900
Favorable leasehold interests
Schedule of Acquired Indefinite-lived and Finite Intangible Assets by Major Class [Line Items]
Net carrying value of intangibles with definite useful lives	2,300
Accumulated amortization	$ 1,900

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Leases - Lease Cost (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Leases [Abstract]
Amortization of right-of-use assets	$ 30	$ 67
Interest on lease liabilities	1	3
Operating lease cost	5,783	5,571
Short-Term Lease, Cost	1,397	1,033
Variable lease cost	348	410
Total lease cost	$ 7,559	$ 7,084

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Leases - Maturity Schedule (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Operating Leases
2023	$ 5,177
2024	4,099
2025	3,294
2026	2,728
2027	1,780
Thereafter	1,743
Total minimum lease payments	18,821
Less imputed interest	(1,287)
Total lease liabilities	$ 17,534	$ 16,892

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Leases - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Leases [Abstract]
Operating lease expense	$ 7.5	$ 7.0	$ 6.1
Additional operating lease not yet commenced	$ 3.1

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Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Operating Leases
Other non-current assets	$ 17,249	$ 16,744
Accrued liabilities	4,685	4,655
Other long-term liabilities	12,849	12,237
Total operating lease liabilities	$ 17,534	$ 16,892
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]	Other non-current assets	Other non-current assets
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Accrued liabilities	Accrued liabilities
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration]	Other long-term liabilities	Other long-term liabilities
Operating leases, weighted average remaining lease term	4 years 7 months 28 days	5 years 1 month 20 days
Operating leases, weighted average remaining discount rate	3.30%	2.83%

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Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Leases [Abstract]
Operating cash flows from operating leases	$ 5,246	$ 5,013

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Accrued Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Payables and Accruals [Abstract]
Salaries, wages and bonuses	$ 37,590	$ 37,462
Lease liability	4,685	4,655
Taxes	2,426	1,902
Warranty	9,340	9,953
Retirement provision	2,588	2,967
Customer deposits	5,197	6,383
Other	9,542	10,201
Accrued liabilities	$ 71,368	$ 73,523

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Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Debt Instrument [Line Items]
Capital lease obligations	$ 24	$ 56
Total debt	301,952	269,554
Less current maturities	15,009	15,032
Total long-term debt	$ 286,943	$ 254,522
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Less current maturities	Less current maturities
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration]	Total long-term debt	Total long-term debt
Term debt
Debt Instrument [Line Items]
Long-term debt	$ 249,928	$ 265,498
Line of Credit | Bank revolving credit facility
Debt Instrument [Line Items]
Long-term debt	$ 52,000	$ 4,000

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Long-Term Debt - Additional Information (Details) $ in Thousands	Oct. 28, 2022 USD ($)	Dec. 31, 2022 USD ($)	Oct. 24, 2019 covenant
Debt Instrument [Line Items]
2023		$ 15,000
2024		15,000
2025		15,000
2026		15,000
2027		241,900
Thereafter		0
the Credit Agreement | Bank revolving credit facility
Debt Instrument [Line Items]
Number of covenants | covenant			2
the Credit Agreement | Bank revolving credit facility | Line of Credit
Debt Instrument [Line Items]
Aggregate commitments	$ 655,000
Debt instrument, unused borrowing capacity, amount	$ 400,000
Fair value of amount outstanding		301,900
the Credit Agreement | Bank revolving credit facility | Line of Credit | Low
Debt Instrument [Line Items]
Commitment fee (percent)	0.15%
the Credit Agreement | Bank revolving credit facility | Line of Credit | High
Debt Instrument [Line Items]
Commitment fee (percent)	0.30%
the Credit Agreement | Bank revolving credit facility | Line of Credit | Secured Overnight Financing Rate (SOFR) | Low
Debt Instrument [Line Items]
Debt instrument, interest rate, stated percentage	1.25%
the Credit Agreement | Bank revolving credit facility | Line of Credit | Secured Overnight Financing Rate (SOFR) | High
Debt Instrument [Line Items]
Debt instrument, interest rate, stated percentage	2.50%
the Credit Agreement | Bank revolving credit facility | Line of Credit | Base Rate | Low
Debt Instrument [Line Items]
Debt instrument, interest rate, stated percentage	0.25%
the Credit Agreement | Bank revolving credit facility | Line of Credit | Base Rate | High
Debt Instrument [Line Items]
Debt instrument, interest rate, stated percentage	1.50%
the Credit Agreement | Bank revolving credit facility | Term Facility
Debt Instrument [Line Items]
Aggregate commitments	$ 255,000
Debt instrument, periodic payment	3,750
Fair value of amount outstanding		$ 249,900
Long-Term debt outstanding, rate (percent)		6.17%
the Credit Agreement | Bank revolving credit facility | Standby Letters of Credit
Debt Instrument [Line Items]
Aggregate commitments	$ 400,000
Expiration period	5 years
Fair value of amount outstanding		$ 52,000
Long-Term debt outstanding, rate (percent)		6.25%
Amount of capacity		$ 2,800
Available borrowings		$ 295,200

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Income Taxes - Schedule of Income (Loss) before Provision for Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Income Tax Disclosure [Abstract]
Domestic	$ 86,680	$ 74,070	$ 50,977
Foreign	47,630	35,428	28,780
Income before income taxes	$ 134,310	$ 109,498	$ 79,757

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Income Taxes - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Current:
Domestic	$ 19,197	$ 16,846	$ 10,823
Foreign	11,848	8,646	8,759
State	3,674	4,943	3,226
Provision for current income tax expense (benefit)	34,719	30,435	22,808
Deferred:
Domestic	(2,246)	(679)	1,238
Foreign	(51)	(274)	(1,199)
State	(40)	(229)	(894)
Provision for deferred income tax expense (benefit)	(2,337)	(1,182)	(855)
Provision for income tax	$ 32,382	$ 29,253	$ 21,953

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Income Taxes - Income Tax Reconciliation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Income Tax Disclosure [Abstract]
Income tax expense at statutory rates	$ 28,205	$ 22,995	$ 16,749
Increase (reduction) from:
Jurisdictional rate differences	1,989	1,599	1,034
Executive compensation limitation	481	1,314	170
Stock based compensation	122	(322)	(366)
U.S. state taxes	2,632	3,724	2,556
Foreign tax expense	267	0	704
R&D credit	(1,645)	(670)	(415)
GILTI	500	0	50
Previously unrecognized tax (benefit)/expense	51	8	2,219
Other, net	(220)	605	(748)
Provision for income taxes	$ 32,382	$ 29,253	$ 21,953
Effective tax rate	24.00%	27.00%	28.00%

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Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Deferred income tax assets:
Inventory basis difference	$ 3,459	$ 1,136
Accounts receivable reserve	334	270
Rental equipment and Property, plant and equipment	347	201
Stock based compensation	826	754
Pension liability	2,900	3,351
Employee benefit accrual	2,451	3,070
Product liability and warranty reserves	2,177	2,464
Foreign net operating loss	3,078	3,764
Lease liability	4,738	4,221
Capitalized R&D costs	4,230	0
Other	1,635	1,415
Total deferred income tax assets	26,175	20,646
Less: Valuation allowance	(3,637)	(4,129)
Net deferred income tax assets	22,538	16,517
Deferred income tax liabilities:
Inventory basis differences	(264)	(283)
Rental equipment and Property, plant and equipment	(14,373)	(13,253)
Lease asset	(4,637)	(4,149)
Intangible assets	(19,301)	(18,041)
Expenses not currently deductible for book purposes	(1,244)	(1,139)
Total deferred income tax liabilities	(39,819)	(36,865)
Net deferred income taxes	$ (17,281)	$ (20,348)

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Income Taxes - Additional Information (Details)	Dec. 31, 2022 USD ($)
Operating Loss Carryforwards [Line Items]
Income tax penalties and interest cacrued	$ 0
Withholding taxes	4,800,000
Foreign
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards with unlimited carryforward period	10,100,000
State
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards	$ 200,000

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Income Taxes - Schedule of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Balance as of beginning of year	$ 270	$ 262
Increases for tax positions related to the current year	156	82
Decreases due to lapse of statute of limitations	(105)	(74)
Balance as of end of year	$ 321	$ 270

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Common Stock (Details) - USD ($)			12 Months Ended
	Feb. 01, 2023	Jan. 03, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Class of Stock [Line Items]
Dividends paid (in dollars per share)			$ 0.72	$ 0.56	$ 0.52
Stock repurchase program, authorized amount			$ 30,000,000
Common stock repurchased (in shares)			0
Subsequent Event
Class of Stock [Line Items]
Dividends per share (in dollars per share)		$ 0.22
Dividends paid (in dollars per share)	$ 0.22

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Stock Options - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions			12 Months Ended
	May 02, 2019	May 07, 2015	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Option term (years)			10 years
Qualified Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average grant date fair value of options granted (in dollars per share)			$ 52.7	$ 59.01	$ 38.33
Stock option expense			$ 0.6	$ 0.6	$ 0.5
Total unrecognized compensation cost related to non-vested share-based compensation arrangements			$ 1.3
Period cost is expected to be recognized (years)			5 years
Granted (in shares)			17,625	18,900	13,950
Exercise of stock options (in shares)			14,780	30,210	31,300
Non Qualified Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option expense			$ 0.0	$ 0.0	$ 0.0
Total unrecognized compensation cost related to non-vested share-based compensation arrangements			$ 0.0
Granted (in shares)			0	0	0
Exercise of stock options (in shares)			1,000	1,000	2,300
Proceeds from stock options exercised			$ 0.1	$ 0.1	$ 0.1
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option expense			4.9	$ 5.4	$ 3.7
Total unrecognized compensation cost related to non-vested share-based compensation arrangements			$ 7.0
Weighted average remaining contractual life (years)			1 year 4 months 28 days	1 year 7 months 9 days	1 year 11 months 12 days
Restricted Stock Units (RSUs) | Granted after 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period (years)					3 years
Restricted Stock Units (RSUs) | Year One after Grant Date
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period (years)			3 years
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Annual vesting percentage of award			50.00%
Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Annual vesting percentage of award			50.00%
Performance period			3 years
Option term (years)			3 years
2015 ISO Plan | Qualified Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares of common stock reserved for options to be issued (in shares)		400,000
2015 ISO Plan | Qualified Stock Options | Year One after Grant Date
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period (years)		1 year
2015 ISO Plan | Qualified Stock Options | Year One after Grant Date | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Annual vesting percentage of award		20.00%
2015 ISO Plan | Qualified Stock Options | Year Two after Grant Date
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Annual vesting percentage of award		20.00%
2015 ISO Plan | Qualified Stock Options | Year Three after Grant Date
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Annual vesting percentage of award		20.00%
2015 ISO Plan | Qualified Stock Options | Year Four after Grant Date
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Annual vesting percentage of award		20.00%
2015 ISO Plan | Qualified Stock Options | Year Five after Grant Date
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Annual vesting percentage of award		20.00%
2009 Equity Incentive Plan | Non Qualified Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares of common stock reserved for options to be issued (in shares)	500,000
2009 Equity Incentive Plan | Non Qualified Options | Year One after Grant Date
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period (years)	1 year
2009 Equity Incentive Plan | Non Qualified Options | Year One after Grant Date | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Annual vesting percentage of award	20.00%
2009 Equity Incentive Plan | Non Qualified Options | Year Two after Grant Date
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Annual vesting percentage of award	20.00%
2009 Equity Incentive Plan | Non Qualified Options | Year Three after Grant Date
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Annual vesting percentage of award	20.00%
2009 Equity Incentive Plan | Non Qualified Options | Year Four after Grant Date
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Annual vesting percentage of award	20.00%
2009 Equity Incentive Plan | Non Qualified Options | Year Five after Grant Date
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Annual vesting percentage of award	20.00%

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Stock Options - Schedule of Qualified Stock Option Activity (Details) - Qualified Stock Options - $ / shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Shares
Options outstanding at beginning of year (in shares)	87,610	100,920	119,720
Granted (in shares)	17,625	18,900	13,950
Exercised (in shares)	(14,780)	(30,210)	(31,300)
Canceled (in shares)	(5,808)	(2,000)	(1,450)
Options outstanding at end of year (in shares)	84,647	87,610	100,920
Exercise Price
Outstanding at beginning of year, exercise price (in dollars per share)	$ 91.24	$ 68.58	$ 57.65
Granted, exercise price (in dollars per share)	137.93	156.38	114.53
Exercised, exercise price (in dollars per share)	50.79	53.68	45.94
Canceled, exercise price (in dollars per share)	114.48	130.92	96.97
Outstanding at end of year, exercise price (in dollars per share)	$ 106.43	$ 91.24	$ 68.58
Options exercisable at end of year (in shares)	43,412	49,360	67,700
Exercisable at end of year, exercise price (in dollars per share)	$ 78.50	$ 61.21	$ 52.60
Options available for grant at end of year (in shares)	286,033	297,850	314,750

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Stock Options - Schedule of Qualified Stock Options Outstanding and Exercisable (Details) - Qualified Stock Options - $ / shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options outstanding (in shares)	84,647	87,610	100,920	119,720
Options exercisable (in shares)	43,412	49,360	67,700
$42.70 - $83.99
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of exercise price, lower range limit (in dollars per share)	$ 42.7
Range of exercise price, upper range limit (in dollars per share)	$ 83.99
Options outstanding, exercise price range (in shares)	27,725
Options outstanding, remaining contractual life	2 years 3 months 25 days
Options outstanding, exercise price (in dollars per share)	$ 57.89
Options exercisable, exercise price range (in shares)	27,725
Options exercisable, exercise price (in dollars per share)	$ 57.89
$92.50 - $138.75
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of exercise price, lower range limit (in dollars per share)	92.5
Range of exercise price, upper range limit (in dollars per share)	$ 138.75
Options outstanding, exercise price range (in shares)	40,422
Options outstanding, remaining contractual life	7 years 6 months 25 days
Options outstanding, exercise price (in dollars per share)	$ 119.34
Options exercisable, exercise price range (in shares)	12,387
Options exercisable, exercise price (in dollars per share)	$ 103.89
$156.38 - $234.57
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of exercise price, lower range limit (in dollars per share)	156.38
Range of exercise price, upper range limit (in dollars per share)	$ 234.57
Options outstanding, exercise price range (in shares)	16,500
Options outstanding, remaining contractual life	8 years 1 month 28 days
Options outstanding, exercise price (in dollars per share)	$ 156.38
Options exercisable, exercise price range (in shares)	3,300
Options exercisable, exercise price (in dollars per share)	$ 156.38

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Stock Options - Equity Incentive Plan (Details) - shares	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Non Qualified Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options available for grant at end of year (in shares)	381,531	423,969	455,549

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Stock Options - Schedule of Non-Qualified Stock Options Activity (Details) - Non Qualified Options - $ / shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Shares
Options outstanding at beginning of year (in shares)	2,000	3,000	5,300
Granted (in shares)	0	0	0
Exercised (in shares)	(1,000)	(1,000)	(2,300)
Canceled (in shares)	0	0	0
Options outstanding at end of year (in shares)	1,000	2,000	3,000
Exercise Price
Outstanding at beginning of year, exercise price (in dollars per share)	$ 53.51	$ 53.51	$ 46.87
Granted, exercise price (in dollars per share)	0	0	0
Exercised, exercise price (in dollars per share)	53.51	53.51	38.22
Canceled, exercise price (in dollars per share)	0	0	0
Outstanding at end of year, exercise price (in dollars per share)	$ 53.51	$ 53.51	$ 53.51
Options exercisable at end of year (in shares)	1,000	2,000	3,000
Exercisable at end of year, exercise price (in dollars per share)	$ 53.51	$ 53.51	$ 53.51

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Stock Options - Schedule of Non-Qualified Stock Options Outstanding and Exercisable (Details) - Non Qualified Options - $ / shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options outstanding (in shares)	1,000	2,000	3,000	5,300
Options exercisable (in shares)	1,000	2,000	3,000
$42.70 - $83.99
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of exercise price, lower range limit (in dollars per share)	$ 42.7
Range of exercise price, upper range limit (in dollars per share)	$ 83.99
Options outstanding, exercise price range (in shares)	1,000
Options outstanding, remaining contractual life	1 year 4 months 9 days
Options outstanding, exercise price (in dollars per share)	$ 53.51
Options exercisable, exercise price range (in shares)	1,000
Options exercisable, exercise price (in dollars per share)	$ 53.51

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Stock Options - Schedule of Restricted Stock Award Activity (Details) - Restricted Stock - $ / shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Shares
Outstanding at beginning of year (in shares)	80,616	91,043	78,705
Granted (in shares)	48,396	35,224	44,307
Exercised (in shares)	(29,922)	(45,651)	(31,594)
Canceled (in shares)	(1,460)	0	(375)
Outstanding at end of year (in shares)	97,630	80,616	91,043
Grant-Date Fair Value
Outstanding at beginning of year (in dollars per share)	$ 129.53	$ 104.77	$ 94.34
Granted (in dollars per share)	133.70	157.00	111.95
Exercised (in dollars per share)	122.19	101.36	88.90
Canceled (in dollars per share)	143.82	0	100.34
Outstanding at end of year (in dollars per share)	$ 133.67	$ 129.53	$ 104.77

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Retirement Benefit Plans - Additional Information (Details) $ in Millions	12 Months Ended
	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($) employee plan subsidiary	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Feb. 03, 2006 plan
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Number of non-contributory defined benefit pension plans | plan					2
Number of defined contribution plans | plan		2
Estimated
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Estimate of amount of unrecognized actuarial expense	$ 1.0
Supplemental Employee Retirement Plan
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
SERP credited service period		10 years
Percentage of final 3 year average salary in which retirement benefit is based (percentage)		20.00%
Number of final years in which the Retirement Benefit is based		3 years
Retirement age		65 years
Period of time that vested retirement benefit will be paid after death or change in control		90 days
Years of monthly installments associated with SERP disability		15 years
Supplemental Employee Retirement Plan | Estimated
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Estimate of amount of unrecognized actuarial expense	$ 0.4
Supplemental Employee Retirement Plan | Minimum
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Current retirement benefit percentage		10.00%
Supplemental Employee Retirement Plan | Maximum
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Current retirement benefit percentage		20.00%
Employees’ Retirement Plan
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Former employees | employee		245
Current employees | employee		51
IAM Plan
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Annual contribution amount		$ 0.5	$ 0.5	$ 0.4
United States
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Annual contribution amount		4.2	3.9	3.5
Foreign Plan
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Annual contribution amount		$ 0.9	$ 0.9	$ 0.9
Number of international subsidiaries that participate in defined contribution and savings plan | subsidiary		3
Foreign Plan | Minimum
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Employer contribution percentage		0.00%
Foreign Plan | Maximum
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Employer contribution percentage		10.00%

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Retirement Benefit Plans - Schedule of Defined Benefit Plans Disclosures (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Change in fair value of plan assets
Fair value of plan assets at beginning of year	$ 23,671
Fair value of plan assets at end of year	18,269	$ 23,671
Pension Plan
Change in projected benefit obligation
Benefit obligation at beginning of year	22,564	24,100
Service cost	4	5
Interest cost	604	553
Liability actuarial (gain) loss	(4,761)	(994)
Benefits paid	(1,140)	(1,100)
Benefit obligation at end of year	17,271	22,564
Change in fair value of plan assets
Fair value of plan assets at beginning of year	23,671	22,370
Return on plan assets	(4,262)	2,401
Employer contributions	0	0
Benefits paid	(1,140)	(1,100)
Fair value of plan assets at end of year	18,269	23,671
Funded status	998	1,107
Supplemental Employee Retirement Plan
Change in projected benefit obligation
Benefit obligation at beginning of year	11,326	10,160
Service cost	284	369
Interest cost	278	205
Liability actuarial (gain) loss	(2,023)	759
Benefits paid	(313)	(167)
Benefit obligation at end of year	$ 9,552	$ 11,326

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Retirement Benefit Plans - Schedule of Assumptions Used (Details)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Pension Plan
Defined Benefit Plan Disclosure [Line Items]
Discount rate	5.10%	2.75%
Discount rate	2.75%	2.35%
Long-term rate of return on plan assets	6.00%	7.25%
Supplemental Employee Retirement Plan
Defined Benefit Plan Disclosure [Line Items]
Discount rate	5.05%	2.50%
Composite rate of compensation increase	3.00%	3.00%
Discount rate	2.50%	2.05%
Composite rate of compensation increase	3.00%	3.00%

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Retirement Benefit Plans - Schedule of Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Pension Plan
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 4	$ 5
Interest cost	604	553
Expected return on plan assets	(1,384)	(1,581)
Amortization of net (gain)/loss	182	542
Net periodic benefit cost	(594)	(481)
Supplemental Employee Retirement Plan
Defined Benefit Plan Disclosure [Line Items]
Service cost	284	369
Interest cost	278	205
Amortization of prior service cost	420	413
Amortization of net (gain)/loss	440	318
Net periodic benefit cost	$ 1,422	$ 1,305

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Retirement Benefit Plans - Weighted Average Asset Allocations (Details) - Pension Plan	Dec. 31, 2022	Dec. 31, 2021
Defined Benefit Plan Disclosure [Line Items]
Asset allocations as a percentage of plan assets	100.00%	100.00%
Equity securities
Defined Benefit Plan Disclosure [Line Items]
Asset allocations as a percentage of plan assets	36.00%	36.00%
Debt securities
Defined Benefit Plan Disclosure [Line Items]
Asset allocations as a percentage of plan assets	62.00%	62.00%
Short-term investments
Defined Benefit Plan Disclosure [Line Items]
Asset allocations as a percentage of plan assets	2.00%	2.00%
Other
Defined Benefit Plan Disclosure [Line Items]
Asset allocations as a percentage of plan assets	0.00%	0.00%

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Retirement Benefit Plans - Schedule of Fair Value of Plan Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	$ 18,269	$ 23,671
Quoted Prices in Active Markets for Identical Assets (Level 1)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	1,687	2,074
Significant Other Observable Inputs (Level 2)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	16,582	21,597
Significant Unobservable Inputs (Level 3)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Mid Cap
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	512	637
Mid Cap | Quoted Prices in Active Markets for Identical Assets (Level 1)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	512	637
Mid Cap |   Significant Other Observable Inputs (Level 2)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Mid Cap |   Significant Unobservable Inputs (Level 3)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
International
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	743	940
International | Quoted Prices in Active Markets for Identical Assets (Level 1)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	743	940
International |   Significant Other Observable Inputs (Level 2)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
International |   Significant Unobservable Inputs (Level 3)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Wells Fargo Liability Driven Solution CIT I
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	7,815	7,782
Wells Fargo Liability Driven Solution CIT I | Quoted Prices in Active Markets for Identical Assets (Level 1)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Wells Fargo Liability Driven Solution CIT I |   Significant Other Observable Inputs (Level 2)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	7,815	7,782
Wells Fargo Liability Driven Solution CIT I |   Significant Unobservable Inputs (Level 3)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Wells Fargo Liability Driven Solution CIT II
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	3,550	7,026
Wells Fargo Liability Driven Solution CIT II | Quoted Prices in Active Markets for Identical Assets (Level 1)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0
Wells Fargo Liability Driven Solution CIT II |   Significant Other Observable Inputs (Level 2)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	3,550	7,026
Wells Fargo Liability Driven Solution CIT II |   Significant Unobservable Inputs (Level 3)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0
Wells Fargo BlackRock International Equity
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	488	616
Wells Fargo BlackRock International Equity | Quoted Prices in Active Markets for Identical Assets (Level 1)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Wells Fargo BlackRock International Equity |   Significant Other Observable Inputs (Level 2)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	488	616
Wells Fargo BlackRock International Equity |   Significant Unobservable Inputs (Level 3)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Wells Fargo/Causeway International Value
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	464	586
Wells Fargo/Causeway International Value | Quoted Prices in Active Markets for Identical Assets (Level 1)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Wells Fargo/Causeway International Value |   Significant Other Observable Inputs (Level 2)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	464	586
Wells Fargo/Causeway International Value |   Significant Unobservable Inputs (Level 3)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Wells Fargo BlackRock Large Cap Growth Index Fund
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	724	950
Wells Fargo BlackRock Large Cap Growth Index Fund | Quoted Prices in Active Markets for Identical Assets (Level 1)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Wells Fargo BlackRock Large Cap Growth Index Fund |   Significant Other Observable Inputs (Level 2)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	724	950
Wells Fargo BlackRock Large Cap Growth Index Fund |   Significant Unobservable Inputs (Level 3)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Wells Fargo BlackRock Large Cap Value Index Fund
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	744	968
Wells Fargo BlackRock Large Cap Value Index Fund | Quoted Prices in Active Markets for Identical Assets (Level 1)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Wells Fargo BlackRock Large Cap Value Index Fund |   Significant Other Observable Inputs (Level 2)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	744	968
Wells Fargo BlackRock Large Cap Value Index Fund |   Significant Unobservable Inputs (Level 3)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Wells Fargo Multi-Manager Small Cap
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	785	1,015
Wells Fargo Multi-Manager Small Cap | Quoted Prices in Active Markets for Identical Assets (Level 1)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Wells Fargo Multi-Manager Small Cap |   Significant Other Observable Inputs (Level 2)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	785	1,015
Wells Fargo Multi-Manager Small Cap |   Significant Unobservable Inputs (Level 3)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Wells Fargo BlackRock Russell 2000 Index Fund
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	261	332
Wells Fargo BlackRock Russell 2000 Index Fund | Quoted Prices in Active Markets for Identical Assets (Level 1)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Wells Fargo BlackRock Russell 2000 Index Fund |   Significant Other Observable Inputs (Level 2)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	261	332
Wells Fargo BlackRock Russell 2000 Index Fund |   Significant Unobservable Inputs (Level 3)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Wells Fargo BlackRock S&P Mid Cap Index Fund
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	320	419
Wells Fargo BlackRock S&P Mid Cap Index Fund | Quoted Prices in Active Markets for Identical Assets (Level 1)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Wells Fargo BlackRock S&P Mid Cap Index Fund |   Significant Other Observable Inputs (Level 2)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	320	419
Wells Fargo BlackRock S&P Mid Cap Index Fund |   Significant Unobservable Inputs (Level 3)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Wells Fargo/MFS Value CIT F
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	359	469
Wells Fargo/MFS Value CIT F | Quoted Prices in Active Markets for Identical Assets (Level 1)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Wells Fargo/MFS Value CIT F |   Significant Other Observable Inputs (Level 2)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	359	469
Wells Fargo/MFS Value CIT F |   Significant Unobservable Inputs (Level 3)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Wells Fargo/T. Rowe Price Large-Cap Growth Managed CIT
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	359	465
Wells Fargo/T. Rowe Price Large-Cap Growth Managed CIT | Quoted Prices in Active Markets for Identical Assets (Level 1)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Wells Fargo/T. Rowe Price Large-Cap Growth Managed CIT |   Significant Other Observable Inputs (Level 2)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	359	465
Wells Fargo/T. Rowe Price Large-Cap Growth Managed CIT |   Significant Unobservable Inputs (Level 3)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Wells Fargo/T. Rowe Price Equity Income Managed CIT
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	356	487
Wells Fargo/T. Rowe Price Equity Income Managed CIT | Quoted Prices in Active Markets for Identical Assets (Level 1)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Wells Fargo/T. Rowe Price Equity Income Managed CIT |   Significant Other Observable Inputs (Level 2)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	356	487
Wells Fargo/T. Rowe Price Equity Income Managed CIT |   Significant Unobservable Inputs (Level 3)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Wells Fargo Voya Large Cap Growth CIT F
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	357	482
Wells Fargo Voya Large Cap Growth CIT F | Quoted Prices in Active Markets for Identical Assets (Level 1)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Wells Fargo Voya Large Cap Growth CIT F |   Significant Other Observable Inputs (Level 2)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	357	482
Wells Fargo Voya Large Cap Growth CIT F |   Significant Unobservable Inputs (Level 3)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Cash & Short-term Investments
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	432	497
Cash & Short-term Investments | Quoted Prices in Active Markets for Identical Assets (Level 1)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	432	497
Cash & Short-term Investments |   Significant Other Observable Inputs (Level 2)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Cash & Short-term Investments |   Significant Unobservable Inputs (Level 3)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	$ 0	$ 0

XML

Retirement Benefit Plans - Schedule of Expected Benefit Payments (Details) $ in Thousands	Dec. 31, 2022 USD ($)
Pension Plan
Defined Benefit Plan Disclosure [Line Items]
2023	$ 1,275
2024	1,304
2025	1,315
2026	1,312
2027	1,306
Years 2028 through 2032	6,209
Supplemental Employee Retirement Plan
Defined Benefit Plan Disclosure [Line Items]
2023	490
2024	546
2025	639
2026	866
2027	868
Years 2028 through 2032	$ 4,321

XML

Revenue and Segment Reporting - Schedule of Segment Reporting (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Segment Reporting Information [Line Items]
Net Revenue	$ 1,513,616	$ 1,334,223	$ 1,163,466
Income from Operations	148,592	116,938	94,785
Goodwill	195,858	202,406	195,132	$ 198,022
Identifiable Assets	1,308,508	1,205,742
Vegetation Management
Segment Reporting Information [Line Items]
Net Revenue	937,065	812,676	654,630
Income from Operations	108,508	78,917	46,651
Goodwill	127,562	132,963	124,981	126,894
Identifiable Assets	866,974	789,838
Industrial Equipment
Segment Reporting Information [Line Items]
Net Revenue	576,551	521,547	508,836
Income from Operations	40,084	38,021	48,134
Goodwill	68,296	69,443	70,151	$ 71,128
Identifiable Assets	441,534	415,904
Wholegoods
Segment Reporting Information [Line Items]
Net Revenue	1,185,885	1,024,158	885,254
Parts
Segment Reporting Information [Line Items]
Net Revenue	280,261	262,432	247,126
Other *
Segment Reporting Information [Line Items]
Net Revenue	$ 47,470	$ 47,633	$ 31,086

XML

Revenue and Segment Reporting - Additional Information (Details)	3 Months Ended
	Dec. 31, 2022 segment
Segment Reporting [Abstract]
Number of principal reporting segments	2

XML

Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	$ 705,663	$ 635,003	$ 577,943
Other comprehensive income (loss) before reclassifications	(23,032)	(15,800)	8,862
Amounts reclassified from accumulated other comprehensive loss	1,707	1,838
Other comprehensive income (loss)	(19,278)	(8,664)	512
Ending balance	785,360	705,663	635,003
Foreign Currency Translation Adjustment
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(42,397)	(26,597)
Other comprehensive income (loss) before reclassifications	(23,032)	(15,800)
Amounts reclassified from accumulated other comprehensive loss	0	0
Other comprehensive income (loss)	(23,032)	(15,800)
Ending balance	(65,429)	(42,397)	(26,597)
Defined Benefit Plans Items
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(5,017)	(6,855)
Other comprehensive income (loss) before reclassifications	0	0
Amounts reclassified from accumulated other comprehensive loss	1,707	1,838
Other comprehensive income (loss)	1,707	1,838
Ending balance	(3,310)	(5,017)	(6,855)
Gains (Losses) on Cash Flow Hedges
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(1,576)	(6,874)
Other comprehensive income (loss) before reclassifications	1,512	7,984
Amounts reclassified from accumulated other comprehensive loss	535	(2,686)
Other comprehensive income (loss)	2,047	5,298
Ending balance	471	(1,576)	(6,874)
Accumulated Other Comprehensive Income
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(48,990)	(40,326)	(40,838)
Other comprehensive income (loss) before reclassifications	(21,520)	(7,816)
Amounts reclassified from accumulated other comprehensive loss	2,242	(848)
Other comprehensive income (loss)	(19,278)	(8,664)
Ending balance	$ (68,268)	$ (48,990)	$ (40,326)

XML

International Operations and Geographic Information - Schedule of International Operations (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Segment Reporting Information [Line Items]
Net sales	$ 1,513,616	$ 1,334,223	$ 1,163,466
Income from operations	148,592	116,938	94,785
Income before income taxes	134,310	109,498	79,757
Identifiable assets	1,308,508	1,205,742
Non-US
Segment Reporting Information [Line Items]
Net sales	420,678	363,339	312,462
Income from operations	48,893	34,561	31,166
Income before income taxes	51,206	37,051	30,674
Identifiable assets	$ 364,752	$ 352,187	$ 304,536

XML

International Operations and Geographic Information - Schedule of Selected Geographic Financial Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	$ 1,513,616	$ 1,334,223	$ 1,163,466
Total long-lived assets	581,008	593,283	605,539
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	1,080,893	953,024	862,430
Total long-lived assets	457,075	461,341	480,940
France
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	89,629	92,052	81,259
Total long-lived assets	18,728	19,781	21,033
Canada
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	95,799	83,392	65,313
Total long-lived assets	32,165	32,132	33,573
United Kingdom
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	69,454	57,386	47,757
Total long-lived assets	31,767	36,569	18,843
Brazil
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	46,841	31,365	16,592
Total long-lived assets	12,175	10,408	11,123
Netherlands
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	23,304	27,964	23,946
Total long-lived assets	28,428	32,262	39,063
Germany
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	9,115	8,977	9,328
Australia
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	26,117	20,980	10,999
Total long-lived assets	670	790	964
Other
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	$ 72,464	$ 59,083	$ 45,842