ALAMO GROUP INC 10-K

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 Officer and Principal 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 Officer and Principal 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, 2025 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. 38 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 During the period covered by this report, none of the Company's directors or executive officers has adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (each as defined in Item 408 of Regulation S-K under the Securities Exchange Act of 1934, as amended). 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 2026 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,” and “Corporate Governance," including the section titled "Delinquent Section 16(a) Reports." 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 Company has adopted an insider trading policy that governs the purchase, sale, and/or other transactions of our securities by our directors, officers, and employees and the Company itself. A copy of our insider trading policy was filed as Exhibit 19 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. 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/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. Item 11. Executive Compensation There are incorporated in this Item 11, by reference, those portions of the Company’s definitive proxy statement for the 2026 Annual Meeting of Stockholders which appear therein under the captions “Compensation Committee Interlocks and Insider Participation,” "Executive Compensation," “Compensation Discussion and Analysis,” "Compensation Committee Report” and “Director Compensation during 2025.” 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 2026 Annual Meeting of Stockholders which appears under the caption “Beneficial Ownership of our Common Stock.” 39 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, 2025, the last day of Alamo Group Inc.’s 2025 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 2015 Incentive Stock Option Plan 64,632 $159.41 — 2019 Equity Incentive Plan 84,047 $190.44 287,398 2025 Incentive Stock Option Plan — — 300,000 Plans not approved by stockholders — — — Total 148,679 587,398 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 2026 Annual Meeting of Stockholders, and such information is incorporated by reference herein. There were no other such reportable relationships or related party transactions in the fiscal year ended December 31, 2025. Information regarding director independence is set forth under the caption “Information Concerning Directors” in the Company’s definitive proxy statement for the 2026 Annual Meeting of Stockholders, and such information is incorporated by reference herein. 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 2026 Annual Meeting of Stockholders, and such information is incorporated by reference herein. 40 PART IV Item 15. Exhibits and Financial Statement Schedules Financial Statements Page Report of Management on Internal Control over Financial Reporting 45 Reports of Independent Registered Public Accounting Firm (KPMG LLP) 46 Consolidated Balance Sheets 49 Consolidated Statements of Income 50 Consolidated Statements of Comprehensive Income 51 Consolidated Statements of Stockholders’ Equity 52 Consolidated Statements of Cash Flows 53 Notes to Consolidated Financial Statements 54 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. 41 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, October 31, 2024 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 — Form of Restricted Stock Award Agreement under the 2009 Equity Incentive Plan Filed as Exhibit 10.2 to Form 8-K, May 13, 2009 *10.7 — Supplemental Executive Retirement Plan Filed as Exhibit 10.1 to Form 8-K, January 18, 2011 *10.8 — Amended and Restated Executive Incentive Plan Filed as Exhibit 10.26 to Form 10-K, March 1, 2018 *10.9 — 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 *10.10 — Alamo Group Inc. 2019 Equity Incentive Plan Filed as Exhibit 10.1 to Form 8-K, May 7, 2019 *10.11 — 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 *10.12 — 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 *10.13 — 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 *10.14 — Form of Executive Change in Control Agreement Filed as Exhibit 10.1 to Form 8-K, March 10, 2020 *10.15 — Amendment to Executive Change in Control Agreement by and between Alamo Group Inc. and Dan Malone Filed as Exhibit 10.1 to Form 10-Q, August 2, 2023 42 *10.16 — Amendment to Executive Change in Control Agreement by and between Alamo Group Inc. and Edward Rizzuti Filed as Exhibit 10.2 to Form 10-Q, August 2, 2023 *10.17 — Amendment to Executive Change in Control Agreement by and between Alamo Group Inc. and Richard Wehrle Filed as Exhibit 10.3 to Form 10-Q, August 2, 2023 *10.18 — Offer letter to Robert Hureau Filed as Exhibit 10.1 to Form 8-K, August 18, 2025 *10.19 — Change in Control and Severance Agreement between Alamo Group Inc. and Robert Hureau Filed as Exhibit 10.2 to Form 8-K, August 18, 2025 *10.20 — Alamo Group Inc. 2025 Incentive Stock Option Plan Filed as Appendix II to Form DEF 14A, March 13, 2025 *10.21 — Membership Interest Purchase Agreement Filed as Exhibit 10.1 to Form 8-K, December 10, 2025 19.0 — Insider Information and Trading Policy Filed as Exhibit 19 to Form 10-K, February 27, 2025 21.1 — Subsidiaries of the Registrant Filed Herewith 23.1 — Consent of KPMG LLP Filed Herewith 31.1 — Certification by Robert P. Hureau under Section 302 of the Sarbanes-Oxley Act of 2002 Filed Herewith 31.2 — Certification by Agnieszka K. Kamps under Section 302 of the Sarbanes-Oxley Act of 2002 Filed Herewith 32.1 — Certification by Robert P. Hureau under Section 906 of the Sarbanes-Oxley Act of 2002 Filed Herewith 32.2 — Certification by Agnieszka K. Kamps under Section 906 of the Sarbanes-Oxley Act of 2002 Filed Herewith 97.0 — Recoupment Policy Filed as Exhibit 97.0 to Form 10-K, February 22, 2024 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 ________________________________________________________________________________________________________________________ *Management Contract or Compensatory Plan or Arrangement 43 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: March 2, 2026 /s/ Robert P. Hureau Robert P. Hureau 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 2nd day of March 2026. Signature Title /s/ RICHARD W. PAROD Richard W. Parod Independent Board Chair & Director /s/ ROBERT P. HUREAU Robert P. Hureau President & Chief Executive Officer (Principal Executive Officer) /s/ AGNIESZKA K. KAMPS Agnieszka K. Kamps 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/COLLEEN C. HALEY Colleen C. Haley Director /s/PAUL D. HOUSEHOLDER Paul D. Householder Director /s/TRACY C. JOKINEN Tracy C. Jokinen Director /s/LORIE L. TEKORIUS Lorie L. Tekorius Director 44 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, 2025 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, 2025, 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: March 2, 2026 /s/ Robert P. Hureau Robert P. Hureau President, Chief Executive Officer & Director (Principal Executive Officer) /s/Agnieszka K. Kamps Agnieszka K. Kamps Executive Vice President & Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) 45 Report of Independent Registered Public Accounting Firm To the Stockholders and the 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, 2025 and 2024, 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, 2025, 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, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, 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, 2025, 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 March 2, 2026 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 $383 million as of December 31, 2025. 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 27 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. 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 46 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 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 March 2, 2026 47 Report of Independent Registered Public Accounting Firm To the Stockholders and the 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, 2025, 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, 2025, 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, 2025 and 2024, 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, 2025, and the related notes (collectively, the consolidated financial statements), and our report dated March 2, 2026 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 March 2, 2026 48 Alamo Group Inc. and Subsidiaries Consolidated Balance Sheets Year Ended December 31, (in thousands, except per share amounts) 2025 2024 ASSETS Current assets: Cash and cash equivalents $ 309,659 $ 197,274 Accounts receivable, net 276,866 305,561 Inventories, net 383,252 343,363 Prepaid expenses and other current assets 11,629 11,206 Income tax receivable 16,687 91 Total current assets 998,093 857,495 Rental equipment, net 61,102 52,942 Property, plant and equipment 392,029 365,608 Less: Accumulated depreciation ( 226,052 ) ( 207,276 ) Total property, plant and equipment, net 165,977 158,332 Goodwill 214,611 203,027 Intangible assets, net 144,932 151,360 Deferred income taxes 1,264 1,118 Other non-current assets 20,637 26,005 Total assets $ 1,606,616 $ 1,450,279 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Trade accounts payable $ 125,130 $ 84,505 Income taxes payable 2,332 13,259 Accrued liabilities 75,905 77,537 Current maturities of long-term debt and finance lease obligations 15,000 15,008 Total current liabilities 218,367 190,309 Long-term debt and finance lease obligations, net of current maturities 190,748 205,473 Long-term tax liability 470 626 Other long-term liabilities 24,113 24,619 Deferred income taxes 24,215 10,998 Total liabilities 457,913 432,025 Stockholders’ equity: Common stock, $ .10 par value, 20,000,000 shares authorized; 12,073,713 and 12,017,308 outstanding at December 31, 2025 and December 31, 2024, respectively 1,207 1,202 Additional paid-in capital 155,427 146,866 Treasury stock, at cost; 82,600 shares at December 31, 2025 and December 31, 2024 ( 4,566 ) ( 4,566 ) Retained earnings 1,045,733 956,347 Accumulated other comprehensive loss ( 49,098 ) ( 81,595 ) Total stockholders’ equity 1,148,703 1,018,254 Total liabilities and stockholders’ equity $ 1,606,616 $ 1,450,279 See accompanying notes. 49 Alamo Group Inc. and Subsidiaries Consolidated Statements of Income Year Ended December 31, (in thousands, except per share amounts) 2025 2024 2023 Net sales: Vegetation Management $ 654,053 $ 785,199 $ 979,040 Industrial Equipment 949,662 843,314 710,611 Total net sales 1,603,715 1,628,513 1,689,651 Cost of sales 1,205,898 1,216,025 1,236,007 Gross profit 397,817 412,488 453,644 Selling, general and administrative expenses 229,657 231,453 240,158 Amortization expense 16,547 16,227 15,519 Income from operations 151,613 164,808 197,967 Interest expense ( 14,877 ) ( 20,548 ) ( 26,093 ) Interest income 5,569 2,637 1,485 Other income (expense) ( 2,793 ) 2,731 1,761 Income before income taxes 139,512 149,628 175,120 Provision for income taxes 35,711 33,698 38,959 Net income $ 103,801 $ 115,930 $ 136,161 Net income per common share: Basic $ 8.64 $ 9.69 $ 11.42 Diluted $ 8.59 $ 9.63 $ 11.36 Average common shares: Basic 12,018 11,968 11,920 Diluted 12,077 12,037 11,987 See accompanying notes. 50 Alamo Group Inc. and Subsidiaries Consolidated Statements of Comprehensive Income Year Ended December 31, (in thousands) 2025 2024 2023 Net income $ 103,801 $ 115,930 $ 136,161 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment, net of tax (expense) benefit of $( 2,556 ), $ 1,496 , and $( 949 ) 34,396 ( 29,047 ) 13,644 Unrealized (loss) income on derivative instruments, net of tax benefit (expense) of $ 625 , $( 406 ), and $ 282 , respectively ( 2,106 ) 1,387 ( 1,231 ) Recognition of deferred pension and other post-retirement benefits, net of tax expense of $( 61 ), $( 170 ), and $( 391 ), respectively 207 582 1,338 Other comprehensive income (loss), net of tax $ 32,497 $ ( 27,078 ) $ 13,751 Comprehensive income $ 136,298 $ 88,852 $ 149,912 See accompanying notes. 51 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, 2022 11,831 $ 1,191 $ 129,820 $ ( 4,566 ) $ 727,183 $ ( 68,268 ) $ 785,360 Other comprehensive income — — — — 136,161 13,751 149,912 Stock-based compensation expense — — 7,424 — — — 7,424 Stock-based compensation transactions 51 5 547 — — — 552 Dividends paid ($ 0.88 per share) — — — — ( 10,485 ) — ( 10,485 ) Balance at December 31, 2023 11,882 $ 1,196 $ 137,791 $ ( 4,566 ) $ 852,859 $ ( 54,517 ) $ 932,763 Other comprehensive income — — — — 115,930 ( 27,078 ) 88,852 Stock-based compensation expense — — 9,141 — — — 9,141 Stock-based compensation transactions 53 6 ( 66 ) — — — ( 60 ) Dividends paid ($ 1.04 per share) — — — — ( 12,442 ) — ( 12,442 ) Balance at December 31, 2024 11,935 $ 1,202 $ 146,866 $ ( 4,566 ) $ 956,347 $ ( 81,595 ) $ 1,018,254 Other comprehensive income — — — — 103,801 32,497 136,298 Stock-based compensation expense — — 9,938 — — — 9,938 Stock-based compensation transactions 56 5 ( 1,377 ) — — — ( 1,372 ) Dividends paid ($ 1.20 per share) — — — — ( 14,415 ) — ( 14,415 ) Balance at December 31, 2025 11,991 $ 1,207 $ 155,427 $ ( 4,566 ) $ 1,045,733 $ ( 49,098 ) $ 1,148,703 See accompanying notes. 52 Alamo Group Inc. and Subsidiaries Consolidated Statements of Cash Flows Year Ended December 31, (in thousands) 2025 2024 2023 Operating Activities Net income $ 103,801 $ 115,930 $ 136,161 Adjustments to reconcile net income to cash provided by operating activities: Provision for doubtful accounts 129 1,718 253 Depreciation - Property, plant and equipment 27,084 26,865 23,665 Depreciation - Rental Equipment 11,740 9,992 8,789 Amortization of intangibles 16,547 16,227 15,519 Amortization of debt issuance 703 703 703 Stock-based compensation expense 9,938 9,141 7,424 Provision for deferred income tax expense (benefit) 10,583 ( 3,607 ) ( 4,253 ) Gain on sale of property, plant and equipment ( 2,564 ) ( 639 ) ( 6,621 ) Changes in operating assets and liabilities, net of acquisitions: Accounts receivable 40,618 47,012 ( 35,293 ) Inventories ( 28,135 ) 26,494 ( 10,844 ) Rental equipment ( 19,741 ) ( 23,830 ) ( 13,930 ) Prepaid expenses and other assets 6,823 ( 2,608 ) ( 835 ) Trade accounts payable and accrued liabilities 30,243 ( 15,673 ) 4,813 Income taxes payable ( 27,375 ) 1,000 6,705 Long term tax payable ( 156 ) ( 2,007 ) ( 1,147 ) Other long-term liabilities ( 2,695 ) 3,060 45 Net cash provided by operating activities 177,543 209,778 131,154 Investing Activities Acquisitions, net of cash acquired ( 18,283 ) — ( 27,560 ) Purchase of property, plant and equipment ( 30,627 ) ( 24,993 ) ( 37,745 ) Proceeds from sale of property, plant and equipment 4,480 3,045 12,682 Purchase of patents ( 1,763 ) ( 233 ) — Net cash used in investing activities ( 46,193 ) ( 22,181 ) ( 52,623 ) Financing Activities Borrowings on bank revolving credit facility 50,000 195,000 183,000 Repayment on bank revolving credit facility ( 50,000 ) ( 195,000 ) ( 235,000 ) Principal payments on long-term debt and finance leases ( 15,007 ) ( 15,069 ) ( 14,948 ) Contingent consideration payment after acquisition — ( 4,402 ) — Dividends paid ( 14,415 ) ( 12,442 ) ( 10,485 ) Proceeds from exercise of stock options 1,650 1,912 1,586 Common stock repurchased ( 3,022 ) ( 1,972 ) ( 1,034 ) Net cash used in financing activities ( 30,794 ) ( 31,973 ) ( 76,881 ) Effect of exchange rate changes on cash 11,829 ( 10,269 ) 3,253 Net change in cash and cash equivalents 112,385 145,355 4,903 Cash and cash equivalents at beginning of the year 197,274 51,919 47,016 Cash and cash equivalents at end of the year $ 309,659 $ 197,274 $ 51,919 Cash paid during the year for: Interest $ 14,735 $ 20,787 $ 25,358 Income taxes $ 52,932 $ 40,426 $ 37,330 See accompanying notes. 53 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, truck mounted highway attenuator trucks, forestry and tree maintenance equipment, snow removal equipment, leaf collection equipment, 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 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, 2025 and December 31, 2024, 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. Cost is determined by the first-in, first-out (“FIFO”) method. At all locations, the Company reserves for obsolete, slow moving, and excess inventory by estimating the net realizable value based on the potential future use of such inventory. 54 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. 55 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 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 income. 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 sales. We have elected to account for shipping and handling 56 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 $ 24.5 million and $ 25.0 million on December 31, 2025 and December 31, 2024, respectively. Shipping and Handling Costs The Company’s policy is to include shipping and handling costs in cost of sales. Advertising We charge advertising costs to expense as incurred. Advertising and marketing expense related to operations for fiscal years 2025, 2024, and 2023 was approximately $ 14.0 million, $ 14.8 million and $ 23.2 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 $ 11.2 million, $ 13.5 million, and $ 13.4 million for the years ended December 31, 2025, 2024, and 2023, 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 carry-backs 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: 57 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 2025, 2024, and 2023: Fair Value Calculation Assumptions for Stock Compensation December 31, 2025 2024 2023 Risk-free interest rate 4.14 % 4.27 % 4.05 % Dividend yield 0.7 % 0.5 % 0.5 % Volatility factors 31.7 % 31.4 % 32.1 % 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 November 2024, the FASB issued ASU No. 2024-03, Expense Disaggregation Disclosures (Subtopic 220-40). The ASU requires disaggregated Income Statement Expenses. The ASU is effective for annual periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is also permitted. This ASU will result in the required additional disclosures being included in our consolidated financial statements, once adopted. Accounting Pronouncements Adopted for Year End 2025 In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance. This ASU resulted in additional required disclosures being included in our consolidated financial statements, once adopted. We have adopted the provision of this ASU prospectively for the year ending December, 31, 2025. Accounting Pronouncements Adopted for Year End 2024 In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures (Topic 280). This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment's profit or loss. This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. The ASU is effective for annual periods beginning after 58 December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements. Early adoption is also permitted. Upon adoption this ASU will result in incremental disclosures as required. We have adopted the provision of this ASU for the year ending December 31, 2024. 3. BUSINESS COMBINATIONS On June 30, 2025, the Company acquired 100 % of the issued and outstanding equity capital of Ring-O-Matic, LLC. (“Ring-O-Matic”). Ring-O-Matic is a leading manufacturer of trailer-mounted and truck-mounted vacuum excavators and excavation systems. The primary reason for the Ring-O-Matic acquisition was to acquire business operations in an adjacent market, trailer-mounted vacuum excavators, where the Company sees compelling future opportunities. The acquisition price was approximately $ 17.5 million. The Company completed its review of the valuation of the purchase price allocation for Ring-O-Matic during the fourth quarter of 2025. The Company has included the operating results of Ring-O-Matic in its consolidated financial statements since the date of acquisition; these results are considered immaterial. On October 31, 2025, the Company acquired certain UK assets of GreenMech Ltd. (GreenMech), and 100 % of the issued and outstanding equity capital of GreenMech subsidiaries in France and Germany. GreenMech is a manufacturer of woodchippers and tree care equipment. The acquisition price was approximately £ 2.6 million (about USD $ 3.6 million). The Company completed its review of the valuation of the purchase price allocation for GreenMech during the fourth quarter of 2025. The Company has included the operating results of GreenMech in its consolidated financial statements since the date of acquisition; these results are considered immaterial. On October 10, 2023, the Company acquired 100 % of the issued and outstanding equity capital of Royal Truck & Equipment, Inc. (“Royal Truck”). Royal Truck is a leading manufacturer of truck mounted highway attenuator trucks and other specialty trucks and equipment for the highway infrastructure and traffic control market. The primary reason for the Royal Truck acquisition was to acquire business operations in an adjacent market, highway safety and equipment, where the Company sees compelling future opportunities. The acquisition price was approximately $ 32 million. The Company completed its review of the valuation of the purchase price allocation for Royal Truck during the first quarter of 2024. The Company has included the operating results of Royal Truck in its consolidated financial statements since the date of acquisition; these results are considered immaterial. 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) 2025 2024 2023 Net income $ 103,801 $ 115,930 $ 136,161 Average common shares: Basic (weighted-average outstanding shares) 12,018 11,968 11,920 Dilutive potential common shares from stock options 59 69 67 Diluted (weighted-average outstanding shares) 12,077 12,037 11,987 Basic earnings per share $ 8.64 $ 9.69 $ 11.42 Diluted earnings per share $ 8.59 $ 9.63 $ 11.36 Stock options totaling 16,420 shares in 2025, 15,797 shares in 2024, and 4,991 shares in 2023 were not included in the diluted earnings per share calculation because the effect would have been anti-dilutive. 59 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 2025 Reserve for sales discounts $ 14,245 $ 128,788 $ 14 $ ( 132,365 ) $ 10,682 Reserve for inventory obsolescence 8,283 14,661 219 ( 3,329 ) 19,834 Reserve for warranty 9,808 15,936 388 ( 16,280 ) 9,852 2024 Reserve for sales discounts $ 24,031 $ 134,695 $ ( 18 ) $ ( 144,463 ) $ 14,245 Reserve for inventory obsolescence 8,985 6,067 ( 249 ) ( 6,520 ) 8,283 Reserve for warranty 11,138 14,907 ( 265 ) ( 15,972 ) 9,808 2023 Reserve for sales discounts $ 19,861 $ 159,235 $ 5 $ ( 155,070 ) $ 24,031 Reserve for inventory obsolescence 13,209 5,527 410 ( 10,161 ) 8,985 Reserve for warranty 9,340 13,809 313 ( 12,324 ) 11,138 Sales Discounts On December 31, 2025, the Company had $ 10.7 million in reserves for sales discounts compared to $ 14.2 million on December 31, 2024 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 $ 19.8 million on December 31, 2025 and $ 8.3 million on December 31, 2024 to cover obsolete and slow moving inventory. The increase in the reserve was primarily attributable to the Company's Vegetation Management 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. 60 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 $ 9.9 million on December 31, 2025 and $ 9.8 million on December 31, 2024 and is included in Note 11 . 6. INVENTORIES Inventories consisted of the following: December 31, (in thousands) 2025 2024 Finished goods and parts $ 353,939 $ 317,169 Work in process 24,007 21,310 Raw materials 5,306 4,884 Inventory, net $ 383,252 $ 343,363 7. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consist of the following: December 31, (in thousands) 2025 2024 Useful Lives Land $ 12,619 $ 11,704 Buildings and improvements 154,948 149,893 1 - 50 yrs. Machinery and equipment 180,269 162,017 1 - 40 yrs. Office furniture and equipment 14,653 14,587 1 - 15 yrs. Computer software 17,925 16,202 1 - 7 yrs. Transportation equipment 11,615 11,205 2 - 10 yrs. Property, plant and equipment, at cost 392,029 365,608 Accumulated depreciation ( 226,052 ) ( 207,276 ) Property, plant and equipment, net $ 165,977 $ 158,332 61 8. GOODWILL The changes in the carrying amount of goodwill for the year ended December 31, 2023, 2024, and 2025 are as follows: Vegetation Management Industrial Equipment Consolidated (in thousands) Balance at December 31, 2022 $ 127,562 $ 68,296 $ 195,858 Translation adjustment 1,337 476 1,813 Goodwill acquired — 8,865 8,865 Balance at December 31, 2023 $ 128,899 $ 77,637 $ 206,536 Translation adjustment ( 2,170 ) ( 1,221 ) ( 3,391 ) Goodwill adjustment — ( 118 ) ( 118 ) Balance at December 31, 2024 $ 126,729 $ 76,298 $ 203,027 Translation adjustment 2,923 1,591 4,514 Goodwill acquired 121 6,949 7,070 Balance at December 31, 2025 $ 129,773 $ 84,838 $ 214,611 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, 2025 December 31, 2024 Definite: Trade names and trademarks 15 - 25 years $ 79,224 $ 72,040 Customer and dealer relationships 8 - 15 years 140,566 137,086 Patents and developed technologies 4 - 25 years 29,078 28,529 Favorable leasehold interests 7 years 4,200 4,200 Noncompetition agreements 5 years 200 200 Total at cost 253,268 242,055 Less accumulated amortization ( 113,836 ) ( 96,195 ) Total net 139,432 145,860 Indefinite: Trade names and trademarks 5,500 5,500 Total Intangible Assets $ 144,932 $ 151,360 The Company's net carrying value at December 31, 2025 of intangible assets with definite useful lives consists of trade names and trademarks at $ 55.8 million, customer and dealer relationships at $ 72.6 million, patents and drawings at $ 10.5 million, and favorable leasehold interests at $ 0.5 million. As of December 31, 2025, the related accumulated amortization balance for the definite-lived assets were $ 23.4 million for trade names and trademarks, $ 68.0 million for customer and dealer relationships, $ 18.6 million for patents and drawings, and $ 3.7 million for favorable leasehold interests. The Company estimates amortization expense to be $ 16.2 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. 62 10. LEASES Leases The Company leases office space and equipment under various operating and finance leases, which generally are expected to be renewed or replaced by other leases. As of December 31, 2025, the components of lease cost were as follows: Components of Lease Cost Twelve Months Ended December 31, (in thousands) 2025 2024 Finance lease cost: Amortization of right-of-use assets $ 7 $ 8 Interest on lease liabilities — — Operating lease cost 7,631 7,248 Short-term lease cost 3,550 2,088 Variable lease cost 214 265 Total lease cost $ 11,402 $ 9,609 As of December 31, 2025, future minimum lease payments under these non-cancelable leases are: Future Minimum Lease Payments (in thousands) Operating Leases 2026 $ 6,630 2027 4,302 2028 2,068 2029 1,418 2030 837 Thereafter 310 Total minimum lease payments $ 15,565 Less imputed interest ( 1,023 ) Total lease liabilities $ 14,542 Rental expense for operating leases was $ 11.4 million for 2025, $ 9.6 million for 2024, and $ 7.7 million for 2023. 63 Future Lease Commencements As of December 31, 2025, we have additional operating leases that have not yet commenced in the amount of $ 5.1 million. These operating leases will commence in fiscal year 2026. Supplemental balance sheet information related to leases was as follows: Operating Leases December 31, (in thousands) 2025 2024 Other non-current assets $ 14,234 $ 18,099 Accrued liabilities 6,146 6,449 Other long-term liabilities 8,396 11,828 Total operating lease liabilities $ 14,542 $ 18,277 Weighted average remaining lease term 3.11 years 3.49 years Weighted average discount rate 4.61 % 4.57 % Supplemental cash flow information related to leases was as follows: Twelve Months Ended December 31, (in thousands) 2025 2024 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 6,931 $ 6,503 11. ACCRUED LIABILITIES Accrued liabilities consist of the following balances: December 31, (in thousands) 2025 2024 Salaries, wages and bonuses $ 39,993 $ 38,063 Lease liability 6,146 6,449 Taxes 582 1,392 Warranty 9,852 9,808 Retirement provision 3,321 2,575 Customer deposits 3,187 8,564 Other 12,824 10,686 Accrued liabilities $ 75,905 $ 77,537 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 64 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, 2025 and 2024. 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, 2025 and 2024. Derivative Instruments and Hedging Activities The Company records all derivatives in accordance with ASC 815, Derivatives and Hedging, which requires derivative instruments to be reported on the consolidated balance sheets at fair value and establishes criteria for designation and effectiveness of hedging relationships. The Company is exposed to market risk such as changes in foreign currencies and interest rates. The Company does not hold or issue derivative financial instruments for trading purposes. The Company may periodically utilize derivative instruments such as foreign currency or interest rate swaps in the normal course of business to partially offset exposure. The related gains and losses are reported as a component of accumulated other comprehensive loss ("AOCL") in the consolidated balance sheets. The Company has two interest rate swap agreements outstanding as of December 31, 2025. The notional amount of the Company’s outstanding swap agreements is $ 256.3 million. The fair value of the Company’s derivative liability is $ 2.1 million as of December 31, 2025 compared to $ 0.8 million assets as of December 31, 2024. In the consolidated balance sheet, the fair value of the interest rate swaps is included in other long-term liabilities. The gains and losses are not material to the Company’s consolidated financial statements for the periods presented. 65 13. LONG-TERM DEBT The components of long-term debt are as follows: December 31, (in thousands) 2025 2024 Bank revolving credit facility $ — $ — Term debt 205,748 220,475 Finance lease obligations — 6 Total debt 205,748 220,481 Less current maturities 15,000 15,008 Total long-term debt $ 190,748 $ 205,473 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 $ 3.75 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, 2025, $ 205.7 million was outstanding under the Credit Agreement. Of the total outstanding, $ 205.7 million was on the Term Facility at the end of 2025. Effective August 30, 2024, the Company entered into an interest rate swap with Bank of America, N.A., converting the variable SOFR rate on the Term Facility to a fixed rate of 3.7855 % plus the margin percentage discussed above. The notional principal is scheduled to adjust each quarter to match the amortization of the Term Facility up to the swap termination date of August 31, 2027. On December 31, 2025, $ 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 $ 397.2 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, 2025, are as follows: $ 15.0 million in 2026; $ 190.7 million in 2027; and zero thereafter. 66 14. INCOME TAXES The Company adopted ASU 2023-09 prospectively for the year ended December 31, 2025. Comparative information for 2024 and 2023 remain under the previous ASC 740 disclosure requirements. Income Tax Expense and Rate Reconciliation: December 31, (in thousands) 2025 % Income before income taxes $ 139,512 U.S. Federal Statutory Tax Rate 29,298 21.0 % State and Local Income Taxes, net of federal benefit (a) 3,675 2.6 % Foreign Tax Effects Canada Statutory tax rate difference between Canada and the United States ( 1,958 ) ( 1.4 ) % State and Local Income Taxes (b) 3,423 2.5 % Other Adjustments, Net ( 236 ) ( 0.2 ) % UK 495 0.4 % Other foreign jurisdictions 377 0.3 % Other Adjustments, Net 637 0.4 % Effective Tax Rate $ 35,711 25.6 % (a) The following are the list of states that made up the majority (greater than 50%) of the tax effect in this category: California, Illinois, Maine, Maryland, Massachusetts, New York, Pennsylvania, and Virginia (b) The following are the list of provinces that made up the majority (greater than 50%) of the tax effect in this category: Quebec and Saskatchewan The following table disaggregates the income taxes paid: December 31, Jurisdiction (in thousands) 2025 U.S. Federal $ 25,313 U.S. State & Local 6,167 Foreign Total 21,452 Countries>5%: Canada 12,455 UK 3,380 France 2,740 Income Statement Components Earnings before income taxes were as follows: December 31, (in thousands) 2025 2024 2023 Income before income taxes: Domestic $ 82,735 $ 66,449 $ 121,065 Foreign 56,777 83,179 54,055 $ 139,512 $ 149,628 $ 175,120 67 The components of income tax expense (benefit) were as follows: December 31, (in thousands) 2025 2024 2023 Current: Domestic $ 7,385 $ 13,080 $ 24,168 Foreign 14,528 19,968 11,356 State 3,215 4,257 7,688 25,128 37,305 43,212 Deferred: Domestic 9,953 ( 1,895 ) ( 4,451 ) Foreign ( 505 ) ( 1,225 ) 353 State 1,135 ( 487 ) ( 155 ) 10,583 ( 3,607 ) ( 4,253 ) Total income taxes $ 35,711 $ 33,698 $ 38,959 A reconciliation of the income tax at the Company’s U.S. statutory federal income tax rate to the provision for income tax follows. Some prior year components have been reclassified to conform to the current year presentation. December 31, (in thousands) 2024 2023 Income tax expense at statutory rates $ 31,422 $ 36,775 Increase (reduction) from: Jurisdictional rate differences 4,832 2,766 Executive compensation limitations 1,122 183 Valuation allowance ( 2,432 ) ( 789 ) Stock based compensation 209 ( 24 ) U.S. state taxes 2,876 6,076 Foreign tax (credit) / expense ( 1,498 ) ( 371 ) R&D credit (net) ( 3,529 ) ( 3,618 ) Other credits ( 490 ) ( 628 ) GILTI 871 109 FDII ( 187 ) ( 731 ) Previously unrecognized tax (benefit) / expense 136 170 Other (net) 366 ( 959 ) Provision for income taxes $ 33,698 $ 38,959 Effective tax rate 22.5 % 22.2 % 68 Deferred Income Tax Assets and Liabilities The components of the Company’s deferred income tax assets and liabilities were as follows: December 31, (in thousands) 2025 2024 Deferred income tax assets: Inventory basis difference $ 6,205 $ 4,579 Accounts receivable reserve 987 620 Rental equipment and Property, plant and equipment 13 — Stock based compensation — 679 Pension liability 3,322 3,010 Employee benefit accrual 3,384 2,384 Product liability and warranty reserves 2,803 2,598 Foreign net operating loss 611 — Lease liability 4,390 3,662 Intangible assets 146 — Capitalized R&D costs 5,854 13,676 Other 801 808 Total deferred income tax assets $ 28,516 $ 32,016 Less: Valuation allowance — — Net deferred income tax assets $ 28,516 $ 32,016 Deferred income tax liabilities: Inventory basis differences $ — $ ( 78 ) Rental equipment and Property, plant and equipment ( 19,017 ) ( 14,960 ) Stock based compensation ( 270 ) — Lease asset ( 4,293 ) ( 3,545 ) Intangible assets ( 23,769 ) ( 21,962 ) Expenses not currently deductible for book purposes ( 1,689 ) ( 1,351 ) Other ( 2,429 ) — Total deferred income tax liabilities $ ( 51,467 ) $ ( 41,896 ) Net deferred income taxes $ ( 22,951 ) $ ( 9,880 ) As of December 31, 2025, the Company had no foreign or domestic net operating loss carry-forwards. The Company had no valuation allowances on deferred tax assets as of December 31, 2025. 69 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) 2025 2024 Balance as of beginning of year $ 626 $ 490 Increases for tax positions related to the current year — 218 Decreases due to lapse of statute of limitations ( 156 ) ( 82 ) Balance as of end of year $ 470 $ 626 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, 2025, no interest or penalties have been accrued. With few exceptions, the Company’s open tax years for its federal and state income tax returns are for the tax years ended 2020 through 2025, and for tax years ended 2019 through 2025 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 $ 6.8 million in withholding taxes. 15. COMMON STOCK On January 2, 2026, the Board of Directors of the Company declared a quarterly dividend of $ 0.34 per share which was paid on January 29, 2026 to holders of record as of January 16, 2026. The Company also had a share repurchase program under which the Company had authorized to repurchase, in the aggregate, up to $ 50.0 million of its outstanding common stock . During 2025, the Company repurchased zero shares. 16. STOCK OPTIONS Incentive Stock Option Plan On May 8, 2025, the stockholders of the Company approved the 2025 Incentive Stock Option Plan (“2025 ISO Plan”) and the Company reserved 300,000 shares of common stock for options to be issued under the 2025 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. 70 Following is a summary of activity in the Incentive Stock Option Plans for the periods indicated: 2025 2024 2023 Shares Exercise Price* Shares Exercise Price* Shares Exercise Price* Options outstanding at beginning of year 69,052 $ 150.74 75,862 $ 128.64 84,647 $ 106.43 Granted 15,060 174.81 17,519 203.55 14,425 178.25 Exercised ( 12,970 ) 119.64 ( 18,430 ) 103.81 ( 21,260 ) 72.09 Canceled ( 6,510 ) 182.30 ( 5,899 ) 169.97 ( 1,950 ) 148.08 Options outstanding at end of year 64,632 159.41 69,052 150.74 75,862 128.64 Options exercisable at end of year 30,615 $ 138.84 29,757 $ 118.60 34,027 $ 100.00 Options available for grant at end of year 300,000 261,888 273,558 *Weighted Averages Options outstanding and exercisable at December 31, 2025 were as follows: Qualified Stock Options Options Outstanding Options Exercisable Shares Remaining Contractual Life (yrs)* Exercise Price* Shares Exercise Price* Range of Exercise Price $ 54.87 - $ 83.99 2,100 0.91 $ 75.67 2,100 $ 75.67 $ 92.50 - $ 137.93 19,351 4.53 $ 122.77 15,241 $ 118.68 $ 156.38 - $ 203.55 43,181 7.29 $ 179.91 13,274 $ 171.98 Total 64,632 30,615 *Weighted Averages The weighted-average grant-date fair values of options granted during 2025, 2024, and 2023 were $ 72.36 , $ 86.89 and $ 76.10 , respectively. Stock option expense was $ 0.9 million, $ 0.9 million and $ 0.8 million for years ending 2025, 2024, and 2023, respectively. As of December 31, 2025, there was $ 1.6 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. 2025 2024 2023 Options available for grant at end of year 287,398 321,669 356,156 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. 71 Non-Qualified Options Following is a summary of activity in the Non-Qualified Stock Option Plans for the periods indicated: 2025 2024 2023 Shares Exercise Price* Shares Exercise Price* Shares Exercise Price* Options outstanding at beginning of year — $ — — $ — 1,000 $ 53.51 Granted — — — — — — Exercised — — — — ( 1,000 ) 53.51 Canceled — — — — — — Options outstanding at end of year — — — — — — Options exercisable at end of year — $ — — $ — — $ — *Weighted Averages Restricted Stock Awards/Units Following is a summary of activity in the Restricted Stock Awards (" RSA ")/Units for the periods indicated: 2025 2024 2023 Shares Grant-Date Fair Value* Shares Grant-Date Fair Value* Shares Grant-Date Fair Value* Awards outstanding at beginning of year 93,768 $ 180.18 93,978 $ 158.99 97,630 $ 133.67 Granted 65,948 185.50 49,270 181.78 45,267 178.66 Exercised ( 58,373 ) 170.53 ( 44,535 ) 127.51 ( 33,847 ) 129.51 Canceled ( 17,296 ) 183.08 ( 4,945 ) 121.34 ( 15,072 ) 118.97 Awards outstanding at end of year 84,047 $ 190.31 93,768 $ 180.18 93,978 $ 158.99 *Weighted Averages Restricted stock awards vest over a three year period. The weighted-average remaining contractual life in years for 2025, 2024 and 2023 was 1.56 , 1.33 and 1.51 , respectively. Compensation expense was $ 9.0 million, $ 8.2 million and $ 6.6 million for years ending 2025, 2024, and 2023, respectively. As of December 31, 2025, there was $ 8.8 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. 72 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 39 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) 2025 2024 Change in projected benefit obligation Benefit obligation at beginning of year $ 15,664 $ 16,947 Service cost 1 2 Interest cost 841 800 Liability actuarial (gain) loss 331 ( 923 ) Benefits paid ( 1,204 ) ( 1,162 ) Benefit obligation at end of year $ 15,633 $ 15,664 Change in fair value of plan assets Fair value of plan assets at beginning of year $ 17,746 $ 18,775 Return on plan assets 997 133 Employer contributions — — Benefits paid ( 1,204 ) ( 1,162 ) Fair value of plan assets at end of year 17,539 17,746 Funded status $ 1,906 $ 2,082 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: 73 Rates to Determine Benefit Obligation Year Ended December 31, 2025 2024 Discount rate 5.30 % 5.60 % Composite rate of compensation increase N/A N/A Rates to Determine Net Periodic Benefit Cost Year Ended December 31, 2025 2024 Discount rate 5.60 % 4.90 % Long-term rate of return on plan assets 4.70 % 5.00 % 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) 2025 2024 Service cost $ 1 $ 2 Interest cost 841 800 Expected return on plan assets ( 804 ) ( 908 ) Amortization of net loss 749 823 Net periodic benefit cost $ 787 $ 717 The Company estimates that $ 0.9 million of unrecognized actuarial expense will be amortized from Accumulated other comprehensive income (loss) into net periodic benefit costs during 2026. 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. 74 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, 2025 2024 Equity securities — % — % Debt securities 98 % 98 % 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, 2025 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 $ — $ — $ — $ — Large Cap — — — — International — — — — Common/Collective Trusts: Principal Liability Driven Solution CIT I 11,034 — 11,034 — Principal Liability Driven Solution CIT II 6,153 — 6,153 — Cash & Short-term Investments 352 352 — — Total $ 17,539 $ 352 $ 17,187 $ — (in thousands) December 31, 2024 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 $ — $ — $ — $ — Large Cap — — — — International — — — — Common/Collective Trusts: Principal Liability Driven Solution CIT I 10,796 — 10,796 — Principal Liability Driven Solution CIT II 6,589 6,589 Cash & Short-term Investments 361 361 — — Total $ 17,746 $ 361 $ 17,385 $ — 75 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, 2025 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, 2025. The following table illustrates the estimated pension benefit payments that are projected to be paid: Projected Future Benefit Payments (in thousands) Employees’ Retirement Plan 2026 $ 1,282 2027 1,287 2028 1,272 2029 1,256 2030 1,240 Years 2031 through 2035 5,885 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 were selected by the Compensation Committee and approved by the Board to participate. The SERP was intended to provide a benefit from the Company upon retirement, death or disability, or a change in control of the Company. Accordingly, the SERP obligated 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, 2025, the current retirement benefit (as defined in the plan) for the participants ranges from 10 % to 20 %. As of December 31, 2025, the SERP was closed to new participants. 76 The change in the Projected Benefit Obligation (PBO) as of December 31, 2025 and 2024, is shown below: Reconciliation of Benefit Obligation Year Ended December 31, (in thousands) 2025 2024 Benefit obligation at January 1, $ 11,059 $ 10,263 Service cost 199 172 Interest cost 584 479 Liability actuarial loss (gain) 282 ( 323 ) Benefits paid ( 643 ) ( 427 ) Plan amendments 332 895 Benefit obligation at December 31, $ 11,813 $ 11,059 The components of net periodic pension expense were as follows: Components of Net Periodic Benefit Cost Year Ended December 31, (in thousands) 2025 2024 Service cost $ 199 $ 172 Interest cost 584 479 Amortization of prior service cost 268 357 Amortization of net (gain)/loss ( 3 ) 9 Net periodic benefit cost $ 1,048 $ 1,017 The Company estimates that no unrecognized actuarial expense will be amortized from Accumulated other comprehensive income into net periodic benefit costs during 2026. 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 2025 2024 Discount rate 5.10 % 5.45 % 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 2025 2024 Discount rate 5.45 % 4.80 % Composite rate of compensation increase 3.00 % 3.00 % Long-term rate of return on plan assets N/A N/A 77 Future estimated benefits expected to be paid from the plan over the next ten years as follows: Projected Future Benefit Payments (in thousands) SERP 2026 $ 915 2027 963 2028 966 2029 968 2030 967 Years 2031 through 2035 5,241 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 $ 0.7 million, $ 0.6 million, and $ 0.5 million to the IAM Plan for the plan years ended December 31, 2025, 2024 and 2023, 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 2025, 2024 and 2023 were $ 4.2 million, $ 4.3 million, and $ 4.5 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 $ 1.5 million, $ 1.2 million, and $ 1.1 million for the years ended December 31, 2025, 2024 and 2023, 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) 2025 2024 2023 Net Sales Wholegoods $ 1,277,041 $ 1,287,596 $ 1,347,264 Parts 261,652 279,071 286,164 Other * 65,022 61,846 56,223 Consolidated $ 1,603,715 $ 1,628,513 $ 1,689,651 *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, Brazil, Netherlands 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. The Company’s Chief Operating Decision Maker (CODM) is the Chief Executive Officer. The CODM is responsible for evaluating the performance of the Company’s operating segments. This evaluation of operating segments supports the allocation of resources, both financial and human, to optimize income from operations as the measure of segment profit and loss. Our reportable segments are our two Divisions: Vegetation Management and Industrial Equipment. 78 The CODM focuses heavily on operating performance and reviews mainly non-GAAP measures, such as bookings and backlog, absorption, and headcount. However, a few GAAP measures used to assess segment performance and allocation resources are: • Division Net Sales • Division Cost of Sales • Division Operating Expenses • Division Income from Operations Vegetation Industrial December 31, 2025 (in thousands) Division Division Consolidated Net Sales $ 654,053 $ 949,662 $ 1,603,715 Less: Cost of Sales ( 509,073 ) ( 696,825 ) ( 1,205,898 ) Operating Expenses ( 122,012 ) ( 124,192 ) ( 246,204 ) Income from Operations 22,968 128,645 151,613 Interest Income 5,569 Other Income (Expense) ( 2,793 ) Interest Expense ( 14,877 ) Income Before Taxes 139,512 Taxes 35,711 Net Income $ 103,801 Vegetation Industrial December 31, 2024 (in thousands) Division Division Consolidated Net Sales $ 785,199 $ 843,314 $ 1,628,513 Less: Cost of Sales ( 589,759 ) ( 626,266 ) ( 1,216,025 ) Operating Expenses ( 138,883 ) ( 108,797 ) ( 247,680 ) Income from Operations 56,557 108,251 164,808 Interest Income 2,637 Other Income (Expense) 2,731 Interest Expense ( 20,548 ) Income Before Taxes 149,628 Taxes 33,698 Net Income $ 115,930 79 Vegetation Industrial December 31, 2023 (in thousands) Division Division Consolidated Net Sales $ 979,040 $ 710,611 $ 1,689,651 Less: Cost of Sales ( 699,573 ) ( 536,434 ) ( 1,236,007 ) Operating Expenses ( 157,383 ) ( 98,294 ) ( 255,677 ) Income from Operations 122,084 75,883 197,967 Interest Income 1,485 Other Income (Expense) 1,761 Interest Expense ( 26,093 ) Income Before Taxes 175,120 Taxes 38,959 Net Income $ 136,161 The following table presents the goodwill and total identifiable assets by reporting segment for the years ended December 31, 2025 and 2024: December 31, (in thousands) 2025 2024 Goodwill Vegetation Management $ 129,773 $ 126,729 Industrial Equipment 84,838 76,298 Consolidated $ 214,611 $ 203,027 Identifiable Assets Vegetation Management $ 920,814 $ 852,007 Industrial Equipment 685,802 598,272 Consolidated $ 1,606,616 $ 1,450,279 80 19. ACCUMULATED OTHER COMPREHENSIVE LOSS Changes in accumulated other comprehensive loss by component, net of tax, were as follows: Twelve Months Ended December 31, 2025 2024 (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 $ ( 80,832 ) $ ( 1,390 ) $ 627 $ ( 81,595 ) $ ( 51,785 ) $ ( 1,972 ) $ ( 760 ) $ ( 54,517 ) Other comprehensive income (loss) before reclassifications 34,396 — ( 2,954 ) 31,442 ( 29,047 ) — 277 ( 28,770 ) Amounts reclassified from accumulated other comprehensive loss — 207 848 1,055 — 582 1,110 1,692 Other comprehensive income (loss) 34,396 207 ( 2,106 ) 32,497 ( 29,047 ) 582 1,387 ( 27,078 ) Balance as of end of period $ ( 46,436 ) $ ( 1,183 ) $ ( 1,479 ) $ ( 49,098 ) $ ( 80,832 ) $ ( 1,390 ) $ 627 $ ( 81,595 ) 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) 2025 2024 2023 Net sales $ 478,428 $ 484,941 $ 465,827 Income from operations 59,484 66,243 60,774 Income before income taxes 59,905 86,938 59,630 Identifiable assets 544,992 482,818 387,165 81 Following is other selected geographic financial information on the Company’s operations: Geographic Financial Information December 31, (in thousands) 2025 2024 2023 Geographic net sales: United States $ 1,146,608 $ 1,145,570 $ 1,208,068 Canada 149,185 149,514 134,254 France 86,238 89,723 96,946 United Kingdom 83,716 80,192 73,179 Brazil 32,999 39,855 43,990 Netherlands 20,227 35,612 33,461 Australia 15,705 21,251 27,480 Germany 10,179 8,850 11,790 Other 58,858 57,946 60,483 Total net sales $ 1,603,715 $ 1,628,513 $ 1,689,651 Geographic location of long-lived assets: United States $ 460,911 $ 466,755 $ 476,371 United Kingdom 38,362 34,794 34,349 Canada 33,287 32,338 32,551 Netherlands 25,059 23,880 27,872 France 36,731 22,631 19,681 Brazil 12,871 11,177 13,218 Australia 844 918 1,097 Germany 167 — — Total long-lived assets $ 608,232 $ 592,493 $ 605,139 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. 82 22. SUBSEQUENT EVENTS On January 26, 2026, the Company acquired 100 % of the issued and outstanding equity capital of Petersen Industries, LLC (“Petersen”). Petersen is a leading manufacturer of specialized truck-mounted grapple loader equipment, serving both municipal and industrial customers. The signing of the acquisition purchase agreement was previously announced on December 10, 2025. The primary reason for the Petersen acquisition was to acquire business operations in an adjacent market, truck-mounted grapple loader equipment, where the Company sees compelling future opportunities. The acquisition price was $ 166.5 million plus customary working capital adjustments and was funded through the Company’s cash and its Revolver Facility. The Company is in the process of performing a preliminary allocation of the purchase price to the identifiable assets acquired and liabilities assumed. Because the valuation procedures are ongoing, the Company is unable to provide the initial allocation of the purchase price at this time. The results of Petersen will be included in the Company’s consolidated financial statements beginning on the acquisition date. Management has evaluated this subsequent event and determined that it does not require adjustment to the consolidated financial statements as of December 31, 2025, but does require disclosure to ensure the financial statements are not misleading. 83