Allient Inc 10-Q for FY2022 Q1

Allient Inc (ALNT)

10-Q 2022-05-04 For: 2022-03-31

Added on April 12, 2026

About this 10-Q

Allient Inc filed this 10-Q on May 4, 2022, covering the quarter ended March 31, 2022 (FY2022 Q1).

Headline figures

Quarter ended March 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $114.79M; up 12.9% from $101.68M a year earlier
Diluted EPS: $0.16; down 80.7% from $0.83 a year earlier

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Colorado		84-0518115
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

495 Commerce Drive, Amherst, New York (Address of principal executive offices)		14228 (Zip Code)

Title of each class		Trading Symbol		Name of each exchange on which registered
Common stock		AMOT		NASDAQ


PART I. FINANCIAL INFORMATION			Page No.

	Item 1.	Financial Statements

		Condensed Consolidated Balance Sheets – Unaudited	1

		Condensed Consolidated Statements of Income and Comprehensive Income – Unaudited	2

		Condensed Consolidated Statements of Stockholders’ Equity – Unaudited	3

		Condensed Consolidated Statements of Cash Flows – Unaudited	4

		Notes to Condensed Consolidated Financial Statements - Unaudited	5

	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	18

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24

	Item 4.	Controls and Procedures	25

PART II. OTHER INFORMATION			26

	Item 1A.	Risk Factors	26

	Item 5.	Unregistered Sales of Equity Securities and Use of Proceeds	26

	Item 6.	Other Information	26

	Item 7.	Exhibits	26


	March 31,		December 31,
	2022		2021
Assets
Current assets:
Cash and cash equivalents	$	16,919	$	22,463
Trade receivables, net of provision for credit losses of $581 and $506 at March 31, 2022 and December 31, 2021, respectively		68,600		51,239
Inventories		97,165		89,733
Prepaid expenses and other assets		11,243		12,522
Total current assets		193,927		175,957
Property, plant and equipment, net		65,513		56,983
Deferred income taxes		5,336		5,321
Intangible assets, net		101,344		103,786
Goodwill		106,568		106,633
Operating lease assets		13,607		16,983
Other long-term assets		8,167		5,122
Total Assets	$	494,462	$	470,785
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	38,792	$	36,714
Accrued liabilities		39,975		41,656
Total current liabilities		78,767		78,370
Long-term debt		178,619		158,960
Deferred income taxes		5,781		5,040
Pension and post-retirement obligations		3,886		3,932
Operating lease liabilities		10,060		12,792
Other long-term liabilities		23,678		23,929
Total liabilities		300,791		283,023
Stockholders’ Equity:
Common stock, no par value, authorized 50,000 shares; 15,534 and 15,361 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively		70,522		68,097
Preferred stock, par value $1.00 per share, authorized 5,000 shares; no shares issued or outstanding		—		—
Retained earnings		129,873		127,757
Accumulated other comprehensive loss		(6,724)		(8,092)
Total stockholders’ equity		193,671		187,762
Total Liabilities and Stockholders’ Equity	$	494,462	$	470,785


	For the three months ended
	March 31,
	2022		2021
Revenues	$	114,785	$	101,677
Cost of goods sold		81,325		71,609
Gross profit		33,460		30,068
Operating costs and expenses:
Selling		5,031		4,218
General and administrative		11,496		10,748
Engineering and development		9,385		6,959
Business development		848		19
Amortization of intangible assets		2,434		1,512
Total operating costs and expenses		29,194		23,456
Operating income		4,266		6,612
Other expense, net:
Interest expense		1,038		861
Other expense (income), net		45		(119)
Total other expense, net		1,083		742
Income before income taxes		3,183		5,870
Income tax (provision) benefit		(679)		6,057
Net income	$	2,504	$	11,927
Basic earnings per share:
Earnings per share	$	0.17	$	0.83
Basic weighted average common shares		15,096		14,306
Diluted earnings per share:
Earnings per share	$	0.16	$	0.83
Diluted weighted average common shares		15,599		14,438
Net income	$	2,504	$	11,927
Other comprehensive income:
Foreign currency translation adjustment		(1,233)		(4,007)
Gain on derivatives		2,601		708
Comprehensive income	$	3,872	$	8,628


	Common Stock									Accumulated Other Comprehensive Income (Loss)
										Foreign
				Unamortized		Common Stock				Currency		Accumulated				Total
				Cost of Equity		and Paid-in		Retained		Translation		income (loss)		Pension		Stockholders’
(In thousands except per share data)	Shares	Amount		Awards		Capital		Earnings		Adjustments		on derivatives		adjustments		Equity
Balances, December 31, 2021	15,361	$	73,106	$	(5,009)	$	68,097	$	127,757	$	(7,409)	$	180	$	(863)	$	187,762
Stock transactions under employee benefit stock plans	36		1,217				1,217										1,217
Issuance of restricted stock, net of forfeitures	141		5,140		(5,144)		(4)										(4)
Stock-based compensation expense					1,349		1,349										1,349
Shares withheld for payment of employee payroll taxes	(4)		(137)				(137)										(137)
Comprehensive (loss) income											(1,233)		3,423				2,190
Tax effect of derivative transactions													(822)				(822)
Net income									2,504								2,504
Dividends to stockholders - $0.025									(388)								(388)
Balances, March 31, 2022	15,534	$	79,326	$	(8,804)	$	70,522	$	129,873	$	(8,642)	$	2,781	$	(863)	$	193,671


	Three months ended
	March 31,
Target Market	2022		2021
Vehicle	$	32,582	$	34,451
Industrial		45,776		31,303
Medical		21,319		23,289
Aerospace & Defense		9,444		7,442
Other		5,664		5,192
Total	$	114,785	$	101,677


	Three months ended
	March 31,
Geography	2022		2021
North America (primarily U.S.)	$	72,378	$	56,642
Europe		33,749		37,162
Asia-Pacific		8,658		7,873
Total	$	114,785	$	101,677


		March 31,		December 31,
	Useful lives	2022		2021
Land		$	974	$	979
Building and improvements	5 - 39 years		23,883		14,398
Machinery, equipment, tools and dies	3 - 15 years		83,523		82,898
Construction work in progress			10,774		9,582
Furniture, fixtures and other	3 - 10 years		21,849		21,794
			141,003		129,651
Less accumulated depreciation			(75,490)		(72,668)
Property, plant and equipment, net		$	65,513	$	56,983


		March 31,
		2022
Beginning balance	$	106,633
Impact of measurement period adjustments of 2021 acquisitions		175
Effect of foreign currency translation		(240)
Ending balance	$	106,568


		March 31, 2022						December 31, 2021
		Gross		Accumulated		Net Book		Gross		Accumulated		Net Book
	Life	Amount		Amortization		Value		Amount		Amortization		Value
Customer lists	5-18 years	$	93,997	$	(29,071)	$	64,926	$	94,079	$	(27,639)	$	66,440
Trade name	10 - 19 years		14,645		(6,162)		8,483		14,649		(5,927)		8,722
Design and technologies	10 - 15 years		34,177		(6,242)		27,935		34,241		(5,617)		28,624
Total		$	142,819	$	(41,475)	$	101,344	$	142,969	$	(39,183)	$	103,786


	Estimated
	Amortization Expense
Remainder of 2022	$	7,382
2023		9,856
2024		9,528
2025		9,510
2026		9,412
2027		8,966
Thereafter		46,690
Total estimated amortization expense	$	101,344


		Number of
		shares
Outstanding at beginning of period		293,577
Awarded		150,054
Vested		(9,557)
Forfeited		(4,267)
Outstanding at end of period		429,807


		Asset Derivatives
		Fair value as of:
Derivatives designated as	Balance Sheet	March 31,		December 31,
hedging instruments	Location	2022		2021
Foreign currency contracts	Prepaid expenses and other assets	$	22	$	39
Interest rate products	Other long-term assets		3,643		340
		$	3,665	$	379

		Liability Derivatives
		Fair value as of:
Derivatives designated as	Balance Sheet	March 31,		December 31,
hedging instruments	Location	2022		2021
Interest rate products	Accrued liabilities	$	—	$	120
		$	—	$	120


	Amount of pre-tax gain recognized
	in OCI on derivatives
Derivatives in cash flow hedging relationships	Three months ended March 31,
	2022		2021
Interest rate products	$	3,237	$	704


	March 31,		December 31,
	2022		2021
Compensation and fringe benefits	$	8,255	$	14,666
Accrued business acquisition consideration		12,416		12,388
Warranty reserve		1,946		1,869
Income taxes payable		1,015		970
Operating lease liabilities - current		3,759		4,532
Finance lease obligations - current		318		—
Deferred revenue		7,647		2,425
Other accrued expenses		4,619		4,806
	$	39,975	$	41,656


	Operating Leases		Finance Leases
Remainder of 2022	$	3,184	$	551
2023		2,776		799
2024		2,302		815
2025		1,495		831
2026		877		848
2027		669		867
Thereafter		3,376		8,771
Total undiscounted cash flows	$	14,679	$	13,482
Less: present value discount		(860)		(3,861)
Total lease liabilities	$	13,819	$	9,621


							Foreign Currency
	Defined Benefit				Tax Effect of		Translation
	Plan Liability		Cash Flow Hedges		Cash Flow Hedges		Adjustment		Total
At December 31, 2020	$	(1,633)	$	(1,889)	$	451	$	(216)	$	(3,287)
Unrealized gain on cash flow hedges		—		704		(167)		—		537
Amounts reclassified from AOCI		—		225		(54)		—		171
Foreign currency translation loss		—		—		—		(4,007)		(4,007)
At March 31, 2021	$	(1,633)	$	(960)	$	230	$	(4,223)	$	(6,586)


	Amount of pre-tax loss reclassified
	from accumulated OCI into income
Location of (loss) gain reclassified	Three months ended March 31,
from accumulated OCI into income	2022		2021

Interest expense	$	(186)	$	(225)


		Total amounts of income and expense
		line items presented that reflect the
		effects of cash flow hedges recorded
		Three months ended March 31,
Derivatives designated as hedging instruments	Income Statement Location	2022		2021
Interest rate products	Interest Expense	$	1,038	$	861


	March 31, 2022
	Level 1		Level 2		Level 3
Assets (liabilities)
Pension plan assets	$	6,194	$	—	$	—
Deferred compensation plan assets		4,385		—		—
Foreign currency hedge contracts		—		22		—
Interest rate swaps, net		—		3,643		—
Contingent consideration		—		—		(4,900)


	For the three months ended						2022 vs. 2021
	March 31,						Variance
(Dollars in thousands, except per share data)	2022			2021			$		%
Revenues	$	114,785		$	101,677		$	13,108	13	%
Cost of goods sold		81,325			71,609			9,716	14	%
Gross profit		33,460			30,068			3,392	11	%
Gross margin percentage		29.2	%		29.6	%
Operating costs and expenses:
Selling		5,031			4,218			813	19	%
General and administrative		11,496			10,748			748	7	%
Engineering and development		9,385			6,959			2,426	35	%
Business development		848			19			829	NM
Amortization of intangible assets		2,434			1,512			922	61	%
Total operating costs and expenses		29,194			23,456			5,738	24	%
Operating income		4,266			6,612			(2,346)	(35)	%
Interest expense		1,038			861			177	21	%
Other expense (income), net		45			(119)			164	(138)	%
Total other expense		1,083			742			341	46	%
Income before income taxes		3,183			5,870			(2,687)	(46)	%
Income tax (provision) benefit		(679)			6,057			(6,736)	(111)	%
Net income	$	2,504		$	11,927		$	(9,423)	(79)	%

Effective tax rate		21.3	%		(103.2)	%
Diluted earnings per share	$	0.16		$	0.83		$	(0.67)	(81)	%
Bookings	$	155,295		$	114,644		$	40,651	35	%
Backlog	$	289,295		$	152,262		$	137,033	90	%


	Three months ended
	March 31, 2022
Revenue as reported	$	114,785
Currency impact unfavorable (favorable)		3,229
Revenue excluding foreign currency exchange impacts	$	118,014


	For the three months ended
	March 31,
			Per diluted				Per diluted
	2022		share		2021		share
Net income as reported	$	2,504	$	0.16	$	11,927	$	0.83
Non-GAAP adjustments, net of tax
Discrete income tax benefit		—		—		(7,373)		(0.51)
Acquisition inventory step-up amortization - net		596		0.04		—		—
Foreign currency loss (gain) - net		38		—		(9)		—
Business development costs - net		650		0.04		15		—
Non-GAAP adjusted net income and diluted earnings per share	$	3,788	$	0.24	$	4,560	$	0.32


					2022 vs.
	Three Months Ended				2021
	March 31,				Variance
	2022		2021		$
Net cash (used in) provided by operating activities	$	(13,396)	$	5,567	$	(18,963)
Net cash used in investing activities		(2,293)		(3,076)		783
Net cash provided by (used in) financing activities		10,221		(256)		10,477
Effect of foreign exchange rates on cash		(76)		(641)		565
Net (decrease) increase in cash and cash equivalents	$	(5,544)	$	1,594	$	(7,138)


				Total Number of Shares	Maximum Number of Shares
	Number of Shares	Average Price Paid		Purchased as Part of Publicly	that May Yet Be Purchased
Period	Purchased⁽¹⁾	per Share		Announced Plans or Programs	Under the Plans or Programs
01/01/22 to 01/31/22	1,110	$	36.88	—	—
02/01/22 to 02/28/22	—		—	—	—
03/01/22 to 03/31/22	2,831		33.85	—	—
Total	3,941	$	34.70	—	—


(a)	Exhibits

	31.1	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

	31.2	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

	32.1	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

	32.2	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

	101.1 SCH	Inline XBRL Taxonomy Extension Schema Document (filed herewith).

	101.2 CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith).

	101.3 DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document (filed herewith).

	101.4 LAB	Inline XBRL Taxonomy Extension Label Linkbase Document (filed herewith).

	101.5 PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith).

	104	Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in exhibits 101.) (filed herewith)*.

	* Denotes management contract or compensatory plan or arrangement.

DATE:	May 4, 2022	ALLIED MOTION TECHNOLOGIES INC.
		By:	/s/ Michael R. Leach
		Michael R. Leach
		Senior Vice President & Chief Financial Officer


Date: May 4, 2022	/s/ Richard S. Warzala
	Richard S. Warzala
	Chief Executive Officer