Allient Inc 10-Q for FY2020 Q3

Allient Inc (ALNT)

10-Q 2020-11-04 For: 2020-09-30

Added on April 12, 2026

About this 10-Q

Allient Inc filed this 10-Q on November 4, 2020, covering the quarter ended September 30, 2020 (FY2020 Q3).

Headline figures

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

Revenue: $94.65M; down 2.0% from $96.63M a year earlier
Diluted EPS: $0.42; down 14.3% from $0.49 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 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28

	Item 5.	Other Information	28

	Item 6.	Exhibits	29


	September 30,		December 31,
	2020		2019
Assets
Current assets:
Cash and cash equivalents	$	20,227	$	13,416
Trade receivables, net of provision for credit losses of $580 and allowance for doubtful accounts of $405 at September 30, 2020 and December 31, 2019, respectively		51,265		44,429
Inventories		61,643		53,385
Prepaid expenses and other assets		6,620		4,413
Total current assets		139,755		115,643
Property, plant and equipment, net		54,058		53,008
Deferred income taxes		895		490
Intangible assets, net		66,366		62,497
Goodwill		60,460		52,935
Right of use assets		18,115		16,420
Other long-term assets		4,202		4,835
Total Assets	$	343,851	$	305,828
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	29,312	$	23,640
Accrued liabilities		22,821		23,001
Total current liabilities		52,133		46,641
Long-term debt		124,387		109,765
Deferred income taxes		4,721		3,399
Pension and post-retirement obligations		5,229		5,139
Right of use liabilities		14,643		13,715
Other long-term liabilities		8,346		7,975
Total liabilities		209,459		186,634
Stockholders’ Equity:
Common stock, no par value, authorized 50,000 shares; 9,757 and 9,599 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively		40,674		37,136
Preferred stock, par value $1.00 per share, authorized 5,000 shares; no shares issued or outstanding		—		—
Retained earnings		102,659		92,589
Accumulated other comprehensive loss		(8,941)		(10,531)
Total stockholders’ equity		134,392		119,194
Total Liabilities and Stockholders’ Equity	$	343,851	$	305,828


	For the three months ended				For the nine months ended
	September 30,				September 30,
	2020		2019		2020		2019
Revenues	$	94,653	$	96,633	$	273,696	$	283,159
Cost of goods sold		66,513		66,603		191,054		197,045
Gross profit		28,140		30,030		82,642		86,114
Operating costs and expenses:
Selling		3,734		4,144		11,819		12,373
General and administrative		10,008		9,932		28,880		28,451
Engineering and development		6,434		5,705		18,865		17,188
Business development		8		8		432		64
Amortization of intangible assets		1,499		1,429		4,423		4,291
Total operating costs and expenses		21,683		21,218		64,419		62,367
Operating income		6,457		8,812		18,223		23,747
Other expense:
Interest expense		844		1,359		2,799		3,974
Other expense, net		231		140		307		121
Total other expense, net		1,075		1,499		3,106		4,095
Income before income taxes		5,382		7,313		15,117		19,652
Provision for income taxes		(1,369)		(2,695)		(4,173)		(6,119)
Net income	$	4,013	$	4,618	$	10,944	$	13,533
Basic earnings per share:
Earnings per share	$	0.42	$	0.49	$	1.15	$	1.44
Basic weighted average common shares		9,514		9,414		9,487		9,390
Diluted earnings per share:
Earnings per share	$	0.42	$	0.49	$	1.15	$	1.43
Diluted weighted average common shares		9,579		9,464		9,539		9,435
Net income	$	4,013	$	4,618	$	10,944	$	13,533
Foreign currency translation adjustment		3,433		(2,369)		2,937		(2,708)
Gain (loss) on derivatives		70		(105)		(1,347)		(803)
Comprehensive income	$	7,516	$	2,144	$	12,534	$	10,022


	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
Issuance of restricted stock, net of forfeitures	14		555		(555)		—						—
Stock compensation expense					905		905						905
Shares withheld for payment of employee payroll taxes	(1)		(17)				(17)						(17)
Foreign currency translation adjustments											3,433		3,433
Accumulated income (loss) on derivatives											91		91
Tax effect of derivative transactions											(21)		(21)
Net income									4,013				4,013
Dividends to stockholders - $0.03									(292)				(292)
Balances, September 30, 2020	9,757	$	47,431	$	(6,757)	$	40,674	$	102,659	$	(8,941)	$	134,392


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		6,629
Current liabilities		(7,354)
Lease liabilities		(2,739)
Net deferred income tax liabilities		(1,755)
Net purchase price	$	26,165


	Three months ended				Nine months ended
	September 30,				September 30,
	2020		2019		2020		2019
Revenues	$	94,653	$	104,277	$	278,858	$	306,191
Net income	$	3,976	$	4,805	$	11,569	$	12,762
Earnings per share - basic	$	0.42	$	0.51	$	1.22	$	1.36
Earnings per share - diluted	$	0.42	$	0.51	$	1.21	$	1.35



Beginning balance	$	52,935
Goodwill acquired (Note 2)		6,629
Effect of foreign currency translation		896
Ending balance	$	60,460


		September 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	$	69,112	$	(22,462)	$	46,650	$	64,314	$	(19,311)	$	45,003
Trade name	10 - 19 years		13,837		(4,799)		9,038		12,222		(4,114)		8,108
Design and technologies	10 - 15 years		15,103		(4,437)		10,666		12,927		(3,554)		9,373
Patents	17 years		24		(12)		12		24		(11)		13
Total		$	98,076	$	(31,710)	$	66,366	$	89,487	$	(26,990)	$	62,497


	Estimated
	Amortization Expense
Remainder of 2020	$	1,499
2021		5,984
2022		6,031
2023		6,040
2024		5,713
Thereafter		41,099
Total estimated amortization expense	$	66,366


		Number of
		shares
Outstanding at beginning of period		186,702
Awarded		160,437
Vested		(93,260)
Forfeited		(2,583)
Outstanding at end of period		251,296


	Amount of pre-tax loss recognized				Amount of pre-tax loss recognized
	in OCI on derivatives				in OCI on derivative
Derivatives in cash flow hedging relationships	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Interest rate products	$	(133)	$	(108)	$	(2,184)	$	(914)

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.


	September 30, 2020
	Level 1		Level 2		Level 3
Assets (liabilities)
Pension plan assets	$	5,898	$	—	$	—
Deferred compensation plan assets		4,777		—		—
Interest rate swaps		—		(2,137)		—


	Three months ended				Nine months ended
	September 30,				September 30,
Target Market	2020		2019		2020		2019
Vehicle	$	32,378	$	33,001	$	79,017	$	97,375
Industrial		25,307		30,572		86,882		94,076
Medical		23,448		14,550		62,260		39,180
Aerospace & Defense		8,844		12,621		30,503		36,018
Other		4,676		5,889		15,034		16,510
Total	$	94,653	$	96,633	$	273,696	$	283,159


	September 30,		December 31,
	2020		2019
Parts and raw materials	$	42,150	$	35,849
Work-in-process		7,843		6,951
Finished goods		11,650		10,585
	$	61,643	$	53,385


	September 30,		December 31,
	2020		2019
Land	$	987	$	977
Building and improvements		13,823		13,366
Machinery, equipment, tools and dies		66,064		58,358
Construction work in progress		14,318		15,536
Furniture, fixtures and other		17,606		15,797
		112,798		104,034
Less accumulated depreciation		(58,740)		(51,026)
Property, plant and equipment, net	$	54,058	$	53,008


	Nine months ended
	September 30,
	2020		2019
Cash paid for amounts included in the measurement of operating leases	$	3,341	$	3,101
ROU assets obtained in exchange for operating lease obligations	$	2,395	$	260
ROU assets recorded upon adoption of ASC 842	$	—	$	20,344
ROU assets obtained in acquisitions (Note 2)	$	2,735	$	—


2020 (remaining 3 months)	$	1,214
2021		4,334
2022		3,413
2023		2,684
2024		2,140
2025		1,990
Thereafter		4,403
Total undiscounted cash flows	$	20,178
Less: present value discount		(1,410)
Total lease liabilities	$	18,768


							Foreign Currency
	Defined Benefit				Tax effect of		Translation
	Plan Liability		Cash Flow Hedges		Cash Flow Hedges		Adjustment		Total
At June 30, 2020	$	(1,628)	$	(2,228)	$	534		(9,122)	$	(12,444)
Unrealized loss on cash flow hedges		—		(133)		33		—		(100)
Amounts reclassified from AOCI		—		224		(54)		—		170
Foreign currency translation gain		—		—		—		3,433		3,433
At September 30, 2020	$	(1,628)	$	(2,137)	$	513	$	(5,689)	$	(8,941)


	For the quarter ended						2020 vs. 2019
	September 30,						Variance
(Dollars in thousands, except per share data)	2020			2019			$		%
Revenues	$	94,653		$	96,633		$	(1,980)	(2)	%
Cost of goods sold		66,513			66,603			(90)	(0)	%
Gross profit		28,140			30,030			(1,890)	(6)	%
Gross margin percentage		29.7	%		31.1	%
Operating costs and expenses:
Selling		3,734			4,144			(410)	(10)	%
General and administrative		10,008			9,932			76	1	%
Engineering and development		6,434			5,705			729	13	%
Business development		8			8			—	—	%
Amortization of intangible assets		1,499			1,429			70	5	%
Total operating costs and expenses		21,683			21,218			465	2	%
Operating income		6,457			8,812			(2,355)	(27)	%
Interest expense		844			1,359			(515)	(38)	%
Other expense, net		231			140			91	65	%
Total other expense		1,075			1,499			(424)	(28)	%
Income before income taxes		5,382			7,313			(1,931)	(26)	%
Provision for income taxes		(1,369)			(2,695)			1,326	(49)	%
Net income	$	4,013		$	4,618		$	(605)	(13)	%

Effective tax rate		25.4	%		36.9	%		(11.5)	(31)	%
Diluted earnings per share	$	0.42		$	0.49		$	(0.07)	(14)	%
Bookings	$	88,958		$	90,726		$	(1,768)	(2)	%
Backlog	$	123,700		$	125,821		$	(2,121)	(2)	%


					2020 vs.
	Nine Months Ended				2019
	September 30,				Variance
	2020		2019		$
Net cash provided by operating activities	$	15,020	$	17,004	$	(1,984)
Net cash used in investing activities		(21,288)		(9,280)		(12,008)
Net cash provided by (used in) financing activities		12,590		(7,513)		20,103
Effect of foreign exchange rates on cash		489		(306)		795
Net increase (decrease) in cash and cash equivalents	$	6,811	$	(95)	$	6,906


					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
07/01/20 to 07/31/20	404	⁽¹⁾	$	35.02	—	—
08/01/20 to 08/31/20	68			39.63	—	—
09/01/20 to 09/30/20	—			—	—	—
Total	472		$	—	—	—


(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:	November 4, 2020	ALLIED MOTION TECHNOLOGIES INC.
		By:	/s/ Michael R. Leach
		Michael R. Leach
		Chief Financial Officer