Allient Inc 10-Q for FY2020 Q2

Allient Inc (ALNT)

10-Q 2020-08-05 For: 2020-06-30

Added on April 12, 2026

About this 10-Q

Allient Inc filed this 10-Q on August 5, 2020, covering the quarter ended June 30, 2020 (FY2020 Q2).

Headline figures

Quarter ended June 30, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $86.66M; down 6.4% from $92.63M a year earlier
Diluted EPS: $0.30; down 36.2% from $0.47 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	19

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26

	Item 4.	Controls and Procedures	27

PART II. OTHER INFORMATION			28

	Item 1A.	Risk Factors	28

	Item 5.	Other Information	28

	Item 6.	Exhibits	29


	June 30,		December 31,
	2020		2019
Assets
Current assets:
Cash and cash equivalents	$	19,019	$	13,416
Trade receivables, net of provision for credit losses of $605 and allowance for doubtful accounts of $405 at June 30, 2020 and December 31, 2019, respectively		49,595		44,429
Inventories		61,453		53,385
Prepaid expenses and other assets		3,699		4,413
Total current assets		133,766		115,643
Property, plant and equipment, net		53,465		53,008
Deferred income taxes		846		490
Intangible assets, net		67,378		62,497
Goodwill		59,501		52,935
Right of use assets		18,987		16,420
Other long-term assets		4,556		4,835
Total Assets	$	338,499	$	305,828
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	27,453	$	23,640
Accrued liabilities		22,210		23,001
Total current liabilities		49,663		46,641
Long-term debt		128,452		109,765
Deferred income taxes		4,649		3,399
Pension and post-retirement obligations		5,205		5,139
Right of use liabilities		15,471		13,715
Other long-term liabilities		8,779		7,975
Total liabilities		212,219		186,634
Stockholders’ Equity:
Common stock, no par value, authorized 50,000 shares; 9,744 and 9,599 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively		39,786		37,136
Preferred stock, par value $1.00 per share, authorized 5,000 shares; no shares issued or outstanding		—		—
Retained earnings		98,938		92,589
Accumulated other comprehensive loss		(12,444)		(10,531)
Total stockholders’ equity		126,280		119,194
Total Liabilities and Stockholders’ Equity	$	338,499	$	305,828


	For the three months ended				For the six months ended
	June 30,				June 30,
	2020		2019		2020		2019
Revenues	$	86,661	$	92,630	$	179,043	$	186,526
Cost of goods sold		60,201		64,208		124,541		130,442
Gross profit		26,460		28,422		54,502		56,084
Operating costs and expenses:
Selling		3,842		4,136		8,085		8,229
General and administrative		9,710		9,569		18,872		18,519
Engineering and development		6,197		5,676		12,431		11,483
Business development		177		3		424		56
Amortization of intangible assets		1,483		1,430		2,924		2,862
Total operating costs and expenses		21,409		20,814		42,736		41,149
Operating income		5,051		7,608		11,766		14,935
Other expense (income):
Interest expense		901		1,435		1,955		2,615
Other expense (income), net		17		(1)		76		(19)
Total other expense, net		918		1,434		2,031		2,596
Income before income taxes		4,133		6,174		9,735		12,339
Provision for income taxes		(1,237)		(1,729)		(2,804)		(3,424)
Net income	$	2,896	$	4,445	$	6,931	$	8,915
Basic earnings per share:
Earnings per share	$	0.30	$	0.47	$	0.73	$	0.95
Basic weighted average common shares		9,509		9,408		9,474		9,378
Diluted earnings per share:
Earnings per share	$	0.30	$	0.47	$	0.73	$	0.95
Diluted weighted average common shares		9,536		9,456		9,518		9,419
Net income	$	2,896	$	4,445	$	6,931	$	8,915
Foreign currency translation adjustment		1,932		548		(496)		(339)
Loss on derivatives		(329)		(436)		(1,417)		(698)
Comprehensive income	$	4,499	$	4,557	$	5,018	$	7,878


	Common Stock
										Accumulated
				Unamortized		Common Stock				Other		Total
				Cost of Equity		and Paid-in		Retained		Comprehensive		Stockholders'
(In thousands except per share data)	Shares	Amount		Awards		Capital		Earnings		Loss		Equity
Balances, December 31, 2019	9,599	$	41,642	$	(4,506)	$	37,136	$	92,589	$	(10,531)	$	119,194
Stock transactions under employee benefit stock plans	32		1,252				1,252						1,252
Issuance of restricted stock, net of forfeitures	104		3,574		(3,089)		485						485
Stock compensation expense					789		789						789
Shares withheld for payment of employee payroll taxes	(24)		(256)				(256)						(256)
Foreign currency translation adjustments											(2,428)		(2,428)
Accumulated income (loss) on derivatives											(1,432)		(1,432)
Tax effect of derivative transactions											344		344
Net income									4,035				4,035
Dividends to stockholders - $0.03									(290)				(290)
Balances, March 31, 2020	9,711		46,212		(6,806)		39,406		96,334		(14,047)		121,693
Issuance of restricted stock, net of forfeitures	38		1,222		(1,222)		—						—
Stock compensation expense					921		921						921
Shares withheld for payment of employee payroll taxes	(5)		(541)				(541)						(541)
Foreign currency translation adjustments											1,932		1,932
Accumulated income (loss) on derivatives											(433)		(433)
Tax effect of derivative transactions											104		104
Net income									2,896				2,896
Dividends to stockholders - $0.03									(292)				(292)
Balances, June 30, 2020	9,744	$	46,893	$	(7,107)	$	39,786	$	98,938	$	(12,444)	$	126,280


Cash and cash equivalents	$	11,437
Accounts receivable		4,129
Inventory		3,329
Other assets, net		769
Property, plant and equipment		1,185
Right of use assets		2,735
Intangible assets		7,800
Goodwill		6,552
Current liabilities		(7,277)
Lease liabilities		(2,739)
Net deferred income tax liabilities		(1,755)
Net purchase price	$	26,165


	Three months ended				Six months ended
	June 30,				June 30,
Target Market	2020		2019		2020		2019
Vehicle	$	18,584	$	30,778	$	46,639	$	64,374
Industrial		28,223		32,194		61,574		63,505
Medical		24,261		12,219		38,812		24,629
Aerospace & Defense		10,516		12,143		21,658		23,397
Other		5,077		5,296		10,360		10,621
Total	$	86,661	$	92,630	$	179,043	$	186,526



Beginning balance	$	52,935
Goodwill acquired (Note 2)		6,552
Effect of foreign currency translation		14
Ending balance	$	59,501


		June 30, 2020						December 31, 2019
		Gross		Accumulated		Net Book		Gross		Accumulated		Net Book
	Life	Amount		amortization		Value		Amount		amortization		Value
Customer lists	8 - 17 years	$	68,698	$	(21,315)	$	47,383	$	64,314	$	(19,311)	$	45,003
Trade name	10 - 19 years		13,733		(4,549)		9,184		12,222		(4,114)		8,108
Design and technologies	10 - 15 years		14,836		(4,037)		10,799		12,927		(3,554)		9,373
Patents	17 years		24		(12)		12		24		(11)		13
Total		$	97,291	$	(29,913)	$	67,378	$	89,487	$	(26,990)	$	62,497


	Estimated
	Amortization Expense
Remainder of 2020	$	2,976
2021		5,945
2022		5,990
2023		5,996
2024		5,670
Thereafter		40,801
Total estimated amortization expense	$	67,378


		Number of
		shares
Outstanding at beginning of period		186,702
Awarded		146,437
Vested		(88,128)
Forfeited		(1,811)
Outstanding at end of period		243,200


	Amount of gain (loss) recognized in OCI				Amount of gain (loss) recognized in OCI
	on derivatives				on derivative
Derivatives in cash flow hedging relationships	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019
Interest rate products	$	(448)	$	(387)	$	(1,560)	$	(597)

Level 1:	Quoted prices for identical assets or liabilities in active markets.
Level 2:	Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model - derived valuations whose inputs or significant value drivers are observable.
Level 3:	Significant inputs to the valuation model that are unobservable.


	June 30, 2020
	Level 1		Level 2		Level 3
Assets (liabilities)
Pension plan assets	$	5,598	$	—	$	—
Other long-term assets		4,411		—		—
Interest rate swaps		—		(2,228)		—


	June 30,		December 31,
	2020		2019
Parts and raw materials	$	42,886	$	35,849
Work-in-process		7,107		6,951
Finished goods		11,460		10,585
		61,453		53,385


	June 30,		December 31,
	2020		2019
Land	$	976	$	977
Building and improvements		13,604		13,366
Machinery, equipment, tools and dies		77,565		73,894
Furniture, fixtures and other		16,832		15,797
		108,977		104,034
Less accumulated depreciation		(55,512)		(51,026)
Property, plant and equipment, net	$	53,465	$	53,008


	Six months ended
	June 30,
	2020		2019
Cash paid for amounts included in the measurement of operating leases	$	2,126	$	2,069
ROU assets obtained in exchange for operating lease obligations	$	1,797	$	185
ROU assets recorded upon adoption of ASC 842	$	—	$	20,344
ROU assets obtained in acquisitions (Note 2)	$	2,735	$	—


2020	$	2,324
2021		4,181
2022		3,372
2023		2,688
2024		2,178
2025		2,051
Thereafter		4,413
Total undiscounted cash flows	$	21,207
Less: present value discount		(1,720)
Total lease liabilities	$	19,487


					Foreign Currency
	Defined Benefit				Translation
	Plan Liability		Cash Flow Hedges		Adjustment		Total
At March 31, 2020	$	(1,628)	$	(1,365)	$	(11,054)	$	(14,047)
Unrealized loss on cash flow hedges		—		(588)		—		(588)
Amounts reclassified from AOCI		—		155		—		155
Tax effect of cash flow hedges		—		104		—		104
Foreign currency translation gain		—		—		1,932		1,932
At June 30, 2020	$	(1,628)	$	(1,694)	$	(9,122)	$	(12,444)


	For the quarter ended						2020 vs. 2019
	June 30,						Variance
(Dollars in thousands, except per share data)	2020			2019			$			%
Revenues	$	86,661		$	92,630		$	(5,969)		(6)	%
Cost of goods sold		60,201			64,208			(4,007)		(6)	%
Gross profit		26,460			28,422			(1,962)		(7)	%
Gross margin percentage		30.5	%		30.7	%
Operating costs and expenses:
Selling		3,842			4,136			(294)		(7)	%
General and administrative		9,710			9,569			141		1	%
Engineering and development		6,197			5,676			521		9	%
Business development		177			3			174		5,800	%
Amortization of intangible assets		1,483			1,430			53		4	%
Total operating costs and expenses		21,409			20,814			595		3	%
Operating income		5,051			7,608			(2,557)		(34)	%
Interest expense		901			1,435			(534)		(37)	%
Other expense (income)		17			(1)			18		(1,800)	%
Total other expense		918			1,434			(516)		(36)	%
Income before income taxes		4,133			6,174			(2,041)		(33)	%
Provision for income taxes		(1,237)			(1,729)			492		(28)	%
Net income	$	2,896		$	4,445		$	(1,549)		(35)	%

Effective tax rate		29.9	%		28.0	%		1.9	%	7	%
Diluted earnings per share	$	0.30		$	0.47		$	(0.17)		(36)	%
Bookings	$	80,365		$	95,317		$	(14,952)		(16)	%
Backlog	$	127,701		$	133,507		$	(5,806)		(4)	%


					2020 vs.
	Six Months Ended				2019
	June 30,				Variance
	2020		2019		$
Net cash provided by operating activities	$	6,599	$	8,852	$	(2,253)
Net cash used in investing activities		(18,342)		(6,401)		(11,941)
Net cash provided by (used in) financing activities		17,275		(620)		17,895
Effect of foreign exchange rates on cash		71		(41)		112
Net increase in cash and cash equivalents	$	5,603	$	1,790	$	3,813


					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		per Share		Announced Plans or Programs	Under the Plans or Programs
04/01/20 to 04/30/20	28,365	⁽¹⁾	$	28.09	—	—
05/01/20 to 05/30/20	—			—	—	—
06/01/20 to 06/30/20	—			—	—	—
Total	28,365		$	—	—	—


(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)*.

DATE:	August 5, 2020	ALLIED MOTION TECHNOLOGIES INC.
		By:	/s/ Michael R. Leach
		Michael R. Leach
		Chief Financial Officer