Executive Summary

Mixed quarter: revenue grew 4.7% to $420.0M while GAAP EPS fell to $2.10; adjusted EPS was $2.34 (down $0.04 YoY) as gross margin compressed on tariffs and Vegetation Management production inefficiencies .
Versus S&P Global consensus, ALG beat on revenue ($420.0M vs $407.6M*) but missed on adjusted EPS ($2.34 vs $2.64*) and EBITDA ($51.2M vs $58.8M*) as tariff costs outpaced late-quarter price actions; estimate counts were 4 for both EPS and revenue*.
Industrial Equipment remained the growth engine: sales +17% YoY and adjusted EBITDA margin 15.5%; Vegetation Management declined 9% with adjusted EBITDA margin 9.7%, with consolidation-related inefficiencies delaying expected margin gains .
Management guided Q4 sequential revenue down ~4–5% with ~30% decremental to gross profit; tariffs expected at “a little less than 1% of sales” in 2026 (pre-mitigation) with ongoing pricing and procurement offsets; vegetation margin recovery expected over the next 1–2 quarters .

Values retrieved from S&P Global for consensus figures.*

What Went Well and What Went Wrong

What Went Well

Industrial Equipment delivered its seventh straight quarter of double-digit sales growth (+17% YoY) with broad-based strength and healthy backlog; adjusted EBITDA rose to $38.2M with 15.5% margin .
Product innovation and portfolio expansion: highlighted a new non‑CDL vacuum truck platform designed for modular build and shipping; Ring‑O‑Matic acquisition broadened trailer‑mounted vacuum offering .
Balance sheet and cash generation remained strong: YTD operating cash flow $102.4M; cash $244.8M vs debt $209.4M (net cash of ~$35M) supporting M&A pipeline and dividend .

What Went Wrong

Gross margin fell ~90 bps YoY to 24.2% on Vegetation consolidation inefficiencies and tariffs; SG&A up on CEO transition and acquisition costs ($3.3M in Q3) .
Vegetation Management sales declined 9% with margin pressure (adj. EBITDA margin 9.7% vs 11.5% YoY); management said productivity improvements are “tracking more slowly than anticipated” .
Industrial orders moderated (book‑to‑bill <1) and division margins were pressured by tariffs; management expects industrial end‑markets to “cool a bit” into 2026 from extraordinary levels .

Financial Results

Consolidated results – trend (oldest → newest)

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($M)	$391.0	$419.1	$420.0
Gross Margin %	26.3%	25.8%	24.2%
Operating Income ($M)	$44.5	$47.1	$37.5
Operating Margin %	11.4%	11.2%	8.9%
Diluted EPS (GAAP)	$2.64	$2.57	$2.10
Adjusted Diluted EPS (non‑GAAP)	$2.65	$2.57	$2.34

Q3 2025 vs prior year (YoY)

Metric	Q3 2024	Q3 2025
Revenue ($M)	$401.3	$420.0
Gross Margin %	25.1% (calc from $100.9/$401.3)	24.2%
Operating Income ($M)	$40.1	$37.5
Diluted EPS (GAAP)	$2.28	$2.10
Adjusted Diluted EPS	$2.38	$2.34
EBITDA ($M)	$53.3	$51.2
Adjusted EBITDA ($M)	$54.9	$55.0

Q3 2025 vs S&P Global consensus

Metric	Consensus	Actual
Revenue ($M)	$407.6*	$420.0
Adjusted EPS	$2.64*	$2.34
EBITDA ($M)	$58.8*	$51.2

Values retrieved from S&P Global.*

Segment breakdown – Q3 2025

Segment	Net Sales ($M)	EBITDA ($M)	EBITDA Margin %	Adjusted EBITDA ($M)	Adjusted EBITDA Margin %
Industrial Equipment	$247.0	$36.5	14.8%	$38.2	15.5%
Vegetation Management	$173.1	$14.7	8.5%	$16.8	9.7%

KPIs and balance sheet

KPI	Q2 2025	Q3 2025
Backlog – Industrial ($M)	$509.6	$438.1
Backlog – Vegetation ($M)	$177.6	$180.2
Cash & Equivalents ($M)	$201.8	$244.8
Total Debt ($M)	$213.1	$209.4
Net Debt ($M)	$11.3	$(35.4)
YTD Operating Cash Flow ($M)	$36.9	$102.4

Non‑GAAP items in Q3: CEO transition ($0.11 EPS), acquisition/integration ($0.09), restructuring ($0.04); total +$0.24 to GAAP EPS to reach adjusted EPS of $2.34 .

Guidance Changes

Metric	Period	Previous Guidance	Current Update	Change
Revenue (consolidated)	Q4 2025	—	Down ~4–5% sequentially vs Q3; seasonally lower Q1/Q4	Directional — seasonality
Gross profit flow-through	Q4 2025	—	~30% decremental on the sequential revenue decline	New color
Vegetation Mgmt margins	Q4 2025–Q1 2026	—	Consolidation inefficiencies persist into Q4 and Q1; improvements over next 1–2 quarters	Timing pushed out
Tariffs headwind (gross)	FY 2026	—	“A little less than 1% of sales” (ex-truck chassis tariffs), partially offset by price/procurement	New framework
Capex	LT average	—	~2% of sales on average	Policy reiterated
Dividend	Ongoing	$0.30/quarter	$0.30/quarter declared Oct 1	Maintained
Formal FY guidance	FY 2025	None issued	None issued	—

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
Tariffs/Macro	Q1: flagged tariff risks and mitigation steps ; Q2: “uncertain” tariff environment	Tariffs reduced margins; pricing actions late in Q3; 2026 gross impact <1% of sales; working exemptions/supplier actions	Impact rising; mitigation in progress
Supply chain/Consolidations	Q1: cost actions from 2024 supporting margins ; Q2: plant consolidations nearing completion	Vegetation consolidations slowed productivity; benefits expected in 1–2 quarters	Benefits delayed, still expected
Product innovation	Q2: Ring‑O‑Matic acquisition broadened vac offering	New non‑CDL vacuum truck; modular for shipping/upfit	Increasing innovation focus
Orders/Backlog	Q1: Industrial orders +59% vs Q4; backlog $702.7M ; Q2: backlog $687.2M; robust ordering	Industrial book‑to‑bill <1; early Q4 orders “reasonable”; Vegetation bookings +double‑digits YoY; backlog healthy	Industrial moderating; Vegetation improving
Capital allocation	Q1/Q2: strong balance sheet; Ring‑O‑Matic tuck‑in	Priority on tuck‑ins ($100–150M sales per deal), dividend maintained, buyback authorized but de‑emphasized vs M&A	Higher M&A emphasis

Management Commentary

“The Industrial Equipment Division continued to perform exceptionally well, delivering strong year‑over‑year double digit net sales growth for the seventh consecutive quarter.”
“The degradation in gross margin was primarily due to unforeseen production inefficiencies related to the consolidation of manufacturing facilities in the Vegetation Management Division and due to tariff costs in both divisions.”
“As we sit today, we expect to make progress on these [Vegetation] initiatives going forward, but it will take one or two more quarters before operations…normalize and yield the full operating efficiencies we anticipate.”
“A little less than 1% of sales would be the expectation, the gross expectation for tariffs in 2026…we did pass price along in the quarter, not enough to cover those tariffs completely. We'll continue to work to do so along with managing our supply base.”
Long‑term targets: sales growth 10%+, adjusted operating margin ~15%, adjusted EBITDA margin 18–20%, FCF ≈ 100% of net income .

Q&A Highlights

Vegetation margins recovery: Management “definitely” sees a path back above 10% without meaningful revenue growth as consolidation efficiencies add 200–400 bps near term, plus procurement/parts mix add 200–300 bps; expects 1–2 quarters to normalize .
Industrial orders/margins: Orders were down in Q3 (lumpiness, lead‑time reductions, mild end‑market cooling); Q4 margins in the “12–13% zip code” with pricing offsetting some tariff headwinds .
Tariff magnitude/timing: 2026 gross impact “a little less than 1% of sales” (ex‑truck chassis), with pricing/procurement offsets; YoY effect front‑half‑weighted given no tariffs in Q1’25 .
Demand sustainability: Post‑stimulus moderation expected, but hydro‑excavation called out as a structurally growing niche (6–7% CAGR) with regulatory support; acquisitions to supplement growth and margins .

Estimates Context

Q3 2025 print vs S&P Global consensus: revenue beat ($420.0M vs $407.6M*), adjusted EPS miss ($2.34 vs $2.64*), EBITDA miss ($51.2M vs $58.8M*). Estimate counts: 4 EPS, 4 revenue*.
Implications: Street likely nudges near‑term EPS/EBITDA lower on tariff drag and Vegetation timing, partially offset by revenue resilience and pricing actions; 2026 tariffs “<1% of sales” guide and procurement programs should limit further margin deterioration .