Financial Summary
Net sales for the fourth quarter ended December 31, 2022, were $509.8 million, compared to $487.7 million in the comparable quarter of 2021, an increase of 4.5 percent driven by sales increases across the Agriculture and Earthmoving / Construction (EMC) segments. Excluding the sale of Australian wheel business and foreign exchange impacts, net sales increased 10% compared to fourth quarter 2021. Overall net sales were influenced by both increased volume from higher demand in the EMC segment, along with price increases across all segments. The contributing factors to the increase in demand in the EMC segment were recovery in construction markets, including the return to normalized supply and demand levels in the market. Price increases have been implemented due to rising raw material costs and other inflationary impacts in the markets, including freight and energy.Gross profit for the fourth quarter ended December 31, 2022, was $76.7 million, compared to $62.5 million in the comparable prior year period. Gross margin was 15.0 percent of net sales for the quarter, a 220 basis point improvement compared to 12.8 percent of net sales in the comparable prior year period. The increase in gross profit and margin was driven by the impact of increases in sales volume and favorable impact of fixed cost absorption within the EMC segment, as well as production efficiencies. In addition, cost reduction initiatives were executed across the Company's global operations.Selling, general, administrative, research and development (SGARD) expenses for the fourth quarter of 2022 were $33.3 million, compared to $35.6 million for the comparable prior year period. As a percentage of net sales, SGARD was 6.5 percent, compared to 7.3 percent for the comparable prior year period.Income from operations for the fourth quarter of 2022 was $40.9 million, or 8.0 percent of net sales, compared to $24.3 million, or 5.0 percent of net sales, for the fourth quarter of 2021. The increase in income was primarily due to the higher sales and improvements in gross profit margins as well as lower SGARD expenses.The income tax benefit for the fourth quarter of 2022 was $16.0 million as compared to $8.8 million for the fourth quarter of 2021. The increase in the income tax benefit was primarily due to the favorable impact of the domestic federal and state valuation allowance release, which is primarily the result of continued domestic profitability and the ability to utilize the remaining historic net operating losses in the future. The income tax benefit was partially offset by incremental income tax expense in foreign tax jurisdictions associated with the improved profitability in the fourth quarter of 2022 as compared to the fourth quarter of 2021. The Company excluded the impacts of the income tax benefit within both adjusted net income applicable to common shareholders and adjusted EBITDA.Agricultural Segment
(amounts in thousands) |
Three Months Ended December 31
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Twelve Months Ended December 31
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2022
|
2021
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% Increase/ Decrease
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2022
|
2021
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% Increase
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Net Sales | $274,796 | $264,764 | 3.8% | $1,192,239 | $949,400 | 25.6% |
Gross Profit | $37,791 | $37,513 | 0.7% | $193,585 | $135,807 | 42.5% |
Profit Margin | 13.8% | 14.2% | (2.8) % | 16.2% | 14.3% | 13.3% |
Income from Operations | $24,348 | $23,438 | 3.9% | $130,474 |
$77,666
|
68.0%
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