Allient Inc 10-Q for FY2024 Q2

Allient Inc (ALNT)

10-Q 2024-08-07 For: 2024-06-30

Added on April 12, 2026

About this 10-Q

Allient Inc filed this 10-Q on August 7, 2024, covering the quarter ended June 30, 2024 (FY2024 Q2).

Headline figures

Quarter ended June 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $136.03M; down 7.3% from $146.77M a year earlier
Diluted EPS: $0.07; down 83.3% from $0.42 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		ALNT		NASDAQ


PART I. FINANCIAL INFORMATION			Page No.

	Item 1.	Financial Statements

		Condensed Consolidated Balance Sheets – Unaudited	1

		Condensed Consolidated Statements of Income and Comprehensive (Loss) 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	21

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29

	Item 4.	Controls and Procedures	30

PART II. OTHER INFORMATION			32

	Item 1A.	Risk Factors	32

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32

	Item 5.	Other Information	32

	Item 6.	Exhibits	33


	June 30,		December 31,
	2024		2023
Assets
Current assets:
Cash and cash equivalents	$	31,292	$	31,901
Trade receivables, net of provision for credit losses of $1,121 and $1,240 at June 30, 2024 and December 31, 2023, respectively		82,400		85,127
Inventories		121,653		117,686
Prepaid expenses and other assets		14,087		13,437
Total current assets		249,432		248,151
Property, plant, and equipment, net		69,598		67,463
Deferred income taxes		7,205		7,760
Intangible assets, net		107,093		111,373
Goodwill		132,914		131,338
Operating lease assets		21,798		24,032
Other long-term assets		7,726		7,425
Total Assets	$	595,766	$	597,542
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	32,883	$	39,129
Accrued liabilities		31,125		56,488
Total current liabilities		64,008		95,617
Long-term debt		236,908		218,402
Deferred income taxes		4,462		4,337
Pension and post-retirement obligations		2,752		2,679
Operating lease liabilities		17,457		19,532
Other long-term liabilities		4,464		5,400
Total liabilities		330,051		345,967
Stockholders’ Equity:
Common stock, no par value, authorized 50,000 shares; 16,841 and 16,308 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively		109,203		95,937
Preferred stock, par value $1.00 per share, authorized 5,000 shares; no shares issued or outstanding		—		—
Retained earnings		172,862		165,813
Accumulated other comprehensive loss		(16,350)		(10,175)
Total stockholders’ equity		265,715		251,575
Total Liabilities and Stockholders’ Equity	$	595,766	$	597,542


	For the three months ended				For the six months ended
	June 30,				June 30,
	2024		2023		2024		2023
Revenues	$	136,032	$	146,769	$	282,745	$	292,318
Cost of goods sold		95,356		100,792		194,692		200,507
Gross profit		40,676		45,977		88,053		91,811
Operating costs and expenses:
Selling		6,662		6,301		12,960		12,333
General and administrative		14,142		14,162		28,582		28,982
Engineering and development		10,293		9,952		21,360		20,339
Business development		1,569		400		1,926		597
Amortization of intangible assets		3,131		3,142		6,246		6,151
Total operating costs and expenses		35,797		33,957		71,074		68,402
Operating income		4,879		12,020		16,979		23,409
Other expense, net:
Interest expense		3,384		3,162		6,772		6,145
Other expense (income), net		46		(42)		(63)		145
Total other expense, net		3,430		3,120		6,709		6,290
Income before income taxes		1,449		8,900		10,270		17,119
Income tax provision		(299)		(2,131)		(2,218)		(4,035)
Net income	$	1,150	$	6,769	$	8,052	$	13,084
Basic earnings per share:
Earnings per share	$	0.07	$	0.42	$	0.49	$	0.82
Basic weighted average common shares		16,567		15,969		16,480		15,921
Diluted earnings per share:
Earnings per share	$	0.07	$	0.42	$	0.49	$	0.81
Diluted weighted average common shares		16,583		16,219		16,540		16,178
Net income	$	1,150	$	6,769	$	8,052	$	13,084
Other comprehensive income (loss):
Foreign currency translation adjustment		(1,178)		(426)		(5,586)		928
(Loss) gain on derivatives, net of tax		(511)		707		(589)		(426)
Comprehensive (loss) income	$	(539)	$	7,050	$	1,877	$	13,586


	Common Stock					Accumulated Other Comprehensive (Loss) Income
(In thousands except per share data)	Shares	Amount		Retained Earnings		Foreign Currency Translation Adjustments		Accumulated income (loss) on derivatives		Pension adjustments		Total Stockholders' Equity
Balances, December 31, 2023	16,308	$	95,937	$	165,813	$	(13,256)	$	3,425	$	(344)	$	251,575
Stock transactions under employee benefit stock plans	58		1,564										1,564
Issuance of restricted stock, net of forfeitures	167		(139)										(139)
Share issuance in connection with acquisitions	203		6,250										6,250
Share issuance to settle contingent consideration	174		4,874										4,874
Stock-based compensation expense			1,211										1,211
Shares withheld for payment of employee payroll taxes	(4)		(121)										(121)
Comprehensive loss							(4,408)		(102)				(4,510)
Tax effect of derivative transactions									24				24
Net income					6,902								6,902
Dividends to stockholders - $0.03					(500)								(500)
Balances, March 31, 2024	16,906	$	109,576	$	172,215	$	(17,664)	$	3,347	$	(344)	$	267,130
Issuance of restricted stock, net of forfeitures	(23)												—
Stock-based compensation expense			1,073										1,073
Shares withheld for payment of employee payroll taxes	(42)		(1,446)										(1,446)
Comprehensive loss							(1,178)		(673)				(1,851)
Tax effect of derivative transactions									162				162
Net income					1,150								1,150
Dividends to stockholders - $0.03					(503)								(503)
Balances, June 30, 2024	16,841	$	109,203	$	172,862	$	(18,842)	$	2,836	$	(344)	$	265,715


Cash and cash equivalents	$	881
Trade receivables		3,467
Inventories		9,100
Prepaid expenses and other assets		496
Property, plant, and equipment		4,258
Operating lease assets		378
Intangible assets		2,900
Goodwill		2,685
Other current liabilities		(3,188)
Deferred revenue		(55)
Operating lease liabilities		(378)
Net deferred income tax liabilities		(702)
Other noncurrent liabilities		(118)
Net purchase price	$	19,724


	Three months ended				Six months ended
	June 30,		June 30,		June 30,		June 30,
	2024		2023		2024		2023
Revenues	$	136,032	$	156,872	$	284,039	$	312,605
Income before income taxes	$	1,599	$	9,115	$	10,989	$	17,934


		June 30,		December 31,
	Useful lives	2024		2023
Land		$	1,776	$	973
Building and improvements	5 - 39 years		28,870		26,201
Machinery, equipment, tools and dies	3 - 15 years		104,174		99,711
Construction in progress			8,210		9,300
Furniture, fixtures and other	3 - 10 years		24,767		24,439
			167,797		160,624
Less accumulated depreciation			(98,199)		(93,161)
Property, plant, and equipment, net		$	69,598	$	67,463


		June 30,
		2024
Beginning balance	$	131,338
Goodwill acquired		2,752
Impact of measurement period adjustments of acquisitions (Note 2)		(67)
Effect of foreign currency translation		(1,109)
Ending balance	$	132,914


	Weighted Average	June 30, 2024						December 31, 2023
	Amortization	Gross		Accumulated		Net Book		Gross		Accumulated		Net Book
	Period	Amount		Amortization		Value		Amount		Amortization		Value
Customer lists	14.3 years	$	117,489	$	(46,308)	$	71,181	$	116,831	$	(42,421)	$	74,410
Trade name	13.9 years		16,054		(8,246)		7,808		15,572		(7,916)		7,656
Design and technologies	10.6 years		41,883		(13,779)		28,104		41,480		(12,173)		29,307
Total		$	175,426	$	(68,333)	$	107,093	$	173,883	$	(62,510)	$	111,373


Year ending December 31,	Total
	Estimated
	Amortization Expense
Remainder of 2024	$	6,273
2025		12,494
2026		12,397
2027		11,954
2028		11,220
Thereafter		52,755
Total estimated amortization expense	$	107,093


		Number of
		shares
Outstanding at beginning of period		254,110
Awarded		179,246
Vested		(115,982)
Forfeited		(28,664)
Outstanding at end of period		288,710


		Asset Derivatives
		Fair value as of:
Derivatives designated as	Balance Sheet	June 30,		December 31,
hedging instruments	Location	2024		2023
Foreign currency contracts	Prepaid expenses and other assets	$	2	$	54
Interest rate swaps	Prepaid expenses and other assets		1,298		2,254
Interest rate swaps	Other long-term assets		2,411		2,177
		$	3,711	$	4,485

		Liability Derivatives
		Fair value as of:
Derivatives designated as	Balance Sheet	June 30,		December 31,
hedging instruments	Location	2024		2023
Foreign currency contracts	Accrued liabilities	$	52	$	—
		$	52	$	—


	Amount of pre-tax gain (loss) recognized				Amount of pre-tax gain (loss) recognized
	in OCI on derivatives				in OCI on derivatives
Derivatives in cash flow hedging relationships	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
Interest rate swaps	$	360	$	1,877	$	1,295	$	1,131


	Three months ended				Six months ended
	June 30,				June 30,
Target Market	2024		2023		2024		2023
Industrial	$	63,484	$	65,588	$	133,078	$	128,845
Vehicle		28,662		34,739		63,316		65,570
Medical		19,235		20,887		38,321		44,562
Aerospace & Defense		18,477		18,979		35,295		40,266
Distribution and Other		6,174		6,576		12,735		13,075
Total	$	136,032	$	146,769	$	282,745	$	292,318


	Three months ended				Six months ended
	June 30,				June 30,
Geography	2024		2023		2024		2023
North America (primarily U.S.)	$	91,920	$	100,965	$	191,623	$	198,332
Europe		37,145		38,326		77,805		78,223
Asia-Pacific		6,967		7,478		13,317		15,763
Total	$	136,032	$	146,769	$	282,745	$	292,318


	June 30,		December 31,
	2024		2023
Parts and raw materials	$	89,463	$	87,381
Work-in-process		11,212		11,456
Finished goods		20,978		18,849
	$	121,653	$	117,686


	June 30,		December 31,
	2024		2023
Compensation and fringe benefits	$	11,714	$	17,251
Accrued business acquisition consideration		—		12,638
Warranty reserve		1,966		2,139
Income taxes payable		396		2,483
Operating lease liabilities – current		5,026		5,142
Finance lease obligations – current		429		412
Contract liabilities		2,467		2,137
Contingent consideration – current		270		7,720
Restructuring related accruals		1,437		—
Other accrued expenses		7,420		6,566
	$	31,125	$	56,488


	June 30, 2024
	Level 1		Level 2		Level 3
Assets (liabilities)
Pension plan assets	$	6,120	$	—	$	—
Deferred compensation plan assets		4,416		—		—
Foreign currency hedge contracts, net		—		(50)		—
Interest rate swaps, net		—		3,709		—
Contingent consideration		—		—		(270)


	Operating Leases		Finance Leases
Remainder of 2024	$	3,033	$	407
2025		5,151		831
2026		4,516		847
2027		3,798		867
2028		2,871		886
Thereafter		5,757		7,884
Total undiscounted cash flows	$	25,126	$	11,722
Less: present value discount		(2,643)		(2,907)
Total lease liabilities	$	22,483	$	8,815


							Foreign Currency
	Defined Benefit				Tax Effect of		Translation
	Plan Liability		Cash Flow Hedges		Cash Flow Hedges		Adjustment		Total
At March 31, 2024	$	(344)	$	4,329	$	(982)	$	(17,664)	$	(14,661)
Unrealized gain (loss) on cash flow hedges		—		360		(86)		—		274
Amounts reclassified from AOCI		—		(1,033)		248		—		(785)
Foreign currency translation loss		—		—		—		(1,178)		(1,178)
At June 30, 2024	$	(344)	$	3,656	$	(820)	$	(18,842)	$	(16,350)


	For the three months ended						2024 vs. 2023
	June 30,						Variance
(Dollars in thousands, except per share data)	2024			2023			$		%
Revenues	$	136,032		$	146,769		$	(10,737)	(7)	%
Cost of goods sold		95,356			100,792			(5,436)	(5)	%
Gross profit		40,676			45,977			(5,301)	(12)	%
Gross margin percentage		29.9	%		31.3	%
Operating costs and expenses:
Selling		6,662			6,301			361	6	%
General and administrative		14,142			14,162			(20)	—	%
Engineering and development		10,293			9,952			341	3	%
Business development		1,569			400			1,169	292	%
Amortization of intangible assets		3,131			3,142			(11)	—	%
Total operating costs and expenses		35,797			33,957			1,840	5	%
Operating income		4,879			12,020			(7,141)	(59)	%
Interest expense		3,384			3,162			222	7	%
Other expense (income), net		46			(42)			88	(210)	%
Total other expense		3,430			3,120			310	10	%
Income before income taxes		1,449			8,900			(7,451)	(84)	%
Income tax provision		(299)			(2,131)			1,832	(86)	%
Net income	$	1,150		$	6,769		$	(5,619)	(83)	%

Effective tax rate		20.6	%		23.9	%
Diluted earnings per share	$	0.07		$	0.42		$	(0.35)	(83)	%
Bookings	$	137,373		$	137,008		$	365	—	%
Backlog	$	259,002		$	298,695		$	(39,693)	(13)	%


	For the three months ended
	June 30,
			Per diluted				Per diluted
	2024		share		2023		share
Net income as reported	$	1,150	$	0.07	$	6,769	$	0.42
Non-GAAP adjustments, net of tax (1)
Amortization of intangible assets – net		2,475		0.15		2,407		0.14
Foreign currency loss (gain) – net		30		—		(11)		—
Acquisition and integration-related costs – net		77		—		124		0.01
Restructuring and business realignment costs – net		1,125		0.07		182		0.01
Non-GAAP adjusted net income and adjusted diluted earnings per share	$	4,857	$	0.29	$	9,471	$	0.58


					2024 vs.
	Six Months Ended				2023
	June 30,				Variance
(in thousands):	2024		2023		$
Net cash provided by operating activities	$	17,377	$	17,273	$	104
Net cash used in investing activities		(30,559)		(12,368)		(18,191)
Net cash provided by (used in) financing activities		13,314		(11,092)		24,406
Effect of foreign exchange rates on cash		(741)		(307)		(434)
Net increase in cash and cash equivalents	$	(609)	$	(6,494)	$	5,885


				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
04/01/24 to 04/30/24	42,078	$	34.43	—	—
05/01/24 to 05/31/24	82		26.70	—	—
06/01/24 to 06/30/24	—		—	—	—
Total	42,160	$	34.41	—	—


(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 7, 2024	ALLIENT INC.
		By:	/s/ James A. Michaud
		James A. Michaud
		Senior Vice President & Chief Financial Officer


Date: August 7, 2024	/s/ Richard S. Warzala
	Richard S. Warzala
	Chief Executive Officer