Allient Inc 10-Q for FY2021 Q3

Allient Inc (ALNT)

10-Q 2021-11-03 For: 2021-09-30

Added on April 12, 2026

About this 10-Q

Allient Inc filed this 10-Q on November 3, 2021, covering the quarter ended September 30, 2021 (FY2021 Q3).

Headline figures

Quarter ended September 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $103.51M; up 9.4% from $94.65M a year earlier
Diluted EPS: $0.41; up 46.4% from $0.28 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	5

		Notes to Condensed Consolidated Financial Statements - Unaudited	6

	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	19

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28

	Item 4.	Controls and Procedures	29

PART II. OTHER INFORMATION			29

	Item 1A.	Risk Factors	29

	Item 5.	Unregistered Sales of Equity Securities and Use of Proceeds	31

	Item 6.	Other Information	31

	Item 7.	Exhibits	31


	September 30,		December 31,
	2021		2020
Assets
Current assets:
Cash and cash equivalents	$	19,209	$	23,131
Trade receivables, net of provision for credit losses of $545 and $382 at September 30, 2021 and December 31, 2020, respectively		55,723		47,377
Inventories		72,239		62,978
Prepaid expenses and other assets		10,365		8,728
Total current assets		157,536		142,214
Property, plant and equipment, net		55,215		55,428
Deferred income taxes		7,188		330
Intangible assets, net		60,643		65,859
Goodwill		60,583		61,860
Right of use assets		17,104		19,023
Other long-term assets		5,341		4,483
Total Assets	$	363,610	$	349,197
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	35,131	$	27,668
Accrued liabilities		27,315		24,862
Total current liabilities		62,446		52,530
Long-term debt		109,312		120,079
Deferred income taxes		4,230		4,659
Pension and post-retirement obligations		5,139		5,340
Right of use liabilities		13,126		14,975
Other long-term liabilities		6,945		8,558
Total liabilities		201,198		206,141
Stockholders’ Equity:
Common stock, no par value, authorized 50,000 shares; 14,715 and 14,632 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively		43,792		41,278
Preferred stock, par value $1.00 per share, authorized 5,000 shares; no shares issued or outstanding		—		—
Retained earnings		126,568		105,065
Accumulated other comprehensive loss		(7,948)		(3,287)
Total stockholders’ equity		162,412		143,056
Total Liabilities and Stockholders’ Equity	$	363,610	$	349,197


	For the three months ended				For the nine months ended
	September 30,				September 30,
	2021		2020		2021		2020
Revenues	$	103,509	$	94,653	$	306,723	$	273,696
Cost of goods sold		71,488		66,513		213,417		191,054
Gross profit		32,021		28,140		93,306		82,642
Operating costs and expenses:
Selling		4,365		3,734		12,979		11,819
General and administrative		10,620		10,008		32,549		28,880
Engineering and development		6,768		6,434		20,967		18,865
Business development		94		8		268		432
Amortization of intangible assets		1,504		1,499		4,527		4,423
Total operating costs and expenses		23,351		21,683		71,290		64,419
Operating income		8,670		6,457		22,016		18,223
Other expense, net:
Interest expense		777		844		2,445		2,799
Other (income) expense, net		(29)		231		(158)		307
Total other expense, net		748		1,075		2,287		3,106
Income before income taxes		7,922		5,382		19,729		15,117
Income tax (provision) benefit		(1,950)		(1,369)		2,804		(4,173)
Net income	$	5,972	$	4,013	$	22,533	$	10,944
Basic earnings per share:
Earnings per share	$	0.41	$	0.28	$	1.57	$	0.77
Basic weighted average common shares		14,411		14,271		14,375		14,231
Diluted earnings per share:
Earnings per share	$	0.41	$	0.28	$	1.56	$	0.76
Diluted weighted average common shares		14,502		14,369		14,478		14,309
Net income	$	5,972	$	4,013	$	22,533	$	10,944
Other comprehensive income:
Foreign currency translation adjustment		(2,528)		3,433		(5,580)		2,937
Gain (loss) on derivatives		155		70		919		(1,347)
Comprehensive income	$	3,599	$	7,516	$	17,872	$	12,534


	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, 2020	14,632	$	47,085	$	(5,807)	$	41,278	$	105,065	$	(216)	$	(1,438)	$	(1,633)	$	143,056
Stock transactions under employee benefit stock plans	32		988				988										988
Issuance of restricted stock, net of forfeitures	81		3,001		(2,872)		129										129
Stock-based compensation expense					797		797										797
Shares withheld for payment of employee payroll taxes	(21)		(256)				(256)										(256)
Comprehensive (loss) income											(4,007)		929				(3,078)
Tax effect of derivative transactions													(221)				(221)
Net income									11,927								11,927
Dividends to stockholders - $0.02									(294)								(294)
Balances, March 31, 2021	14,724		50,818		(7,882)		42,936		116,698		(4,223)		(730)		(1,633)		153,048
Issuance of restricted stock, net of forfeitures	15		472		(474)		(2)										(2)
Stock-based compensation expense					1,000		1,000										1,000
Shares withheld for payment of employee payroll taxes	(23)		(1,344)				(1,344)										(1,344)
Comprehensive income											955		74				1,029
Tax effect of derivative transactions													(18)				(18)
Net income									4,634								4,634
Dividends to stockholders - $0.025									(368)								(368)
Balances, June 30, 2021	14,716		49,946		(7,356)		42,590		120,964		(3,268)		(674)		(1,633)		157,979
Issuance of restricted stock, net of forfeitures	1		22		(23)		(1)										(1)
Stock-based compensation expense					1,303		1,303										1,303
Shares withheld for payment of employee payroll taxes	(2)		(100)				(100)										(100)
Comprehensive (loss) income											(2,528)		203				(2,325)
Tax effect of derivative transactions													(48)				(48)
Net income									5,972								5,972
Dividends to stockholders - $0.025									(368)								(368)
Balances, September 30, 2021	14,715	$	49,868	$	(6,076)	$	43,792	$	126,568	$	(5,796)	$	(519)	$	(1,633)	$	162,412


	Three months ended				Nine months ended
	September 30,				September 30,
Target Market	2021		2020		2021		2020
Vehicle	$	33,931	$	32,378	$	102,113	$	79,017
Industrial		35,269		25,307		100,351		86,882
Medical		21,030		23,448		64,554		62,260
Aerospace & Defense		8,291		8,844		24,313		30,503
Other		4,988		4,676		15,392		15,034
Total	$	103,509	$	94,653	$	306,723	$	273,696


		September 30,		December 31,
	Useful lives	2021		2020
Land		$	984	$	999
Building and improvements	5 - 39 years		14,297		14,169
Machinery, equipment, tools and dies	3 - 15 years		81,330		79,738
Construction work in progress			9,370		6,821
Furniture, fixtures and other	3 - 10 years		19,245		16,313
			125,226		118,040
Less accumulated depreciation			(70,011)		(62,612)
Property, plant and equipment, net		$	55,215	$	55,428


		September 30,
		2021
Beginning balance	$	61,860
Effect of foreign currency translation		(1,277)
Ending balance	$	60,583


		September 30, 2021						December 31, 2020
		Gross		Accumulated		Net Book		Gross		Accumulated		Net Book
	Life	Amount		Amortization		Value		Amount		Amortization		Value
Customer lists	8 - 17 years	$	69,237	$	(26,558)	$	42,679	$	69,833	$	(23,636)	$	46,197
Trade name	10 - 19 years		13,888		(5,706)		8,182		14,055		(5,061)		8,994
Design and technologies	10 - 15 years		15,134		(5,362)		9,772		15,531		(4,874)		10,657
Patents	17 years		24		(14)		10		24		(13)		11
Total		$	98,283	$	(37,640)	$	60,643	$	99,443	$	(33,584)	$	65,859


	Estimated
	Amortization Expense
Remainder of 2021	$	1,500
2022		6,048
2023		6,060
2024		5,733
2025		5,715
2026		5,703
Thereafter		29,884
Total estimated amortization expense	$	60,643


		Number of
		shares
Outstanding at beginning of period		357,342
Awarded		109,462
Vested		(145,094)
Forfeited		(10,044)
Outstanding at end of period		311,666


		Liability Derivatives
		Fair value as of:
Derivatives designated as	Balance Sheet	September 30,		December 31,
hedging instruments	Location	2021		2020
Interest rate products	Accrued liabilities	$	313	$	—
Interest rate products	Other long-term liabilities		370		1,889
Foreign currency contracts	Accrued liabilities		38		—
		$	721	$	1,889


	Amount of pre-tax (loss) gain 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 September 30,				Nine months ended September 30,
	2021		2020		2021		2020
Interest rate products	$	(34)	$	(133)	$	513	$	(2,184)


	September 30, 2021
	Level 1		Level 2		Level 3
Assets (liabilities)
Pension plan assets	$	6,765	$	—	$	—
Deferred compensation plan assets		4,458		—		—
Interest rate swaps		—		(683)		—
Foreign currency hedge contracts		—		(38)		—


	For the nine months ended
	September 30,
	2021		2020
Cash Flows From Operating Activities:
Net income	$	22,533	$	10,944
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		13,317		11,682
Deferred income taxes		(7,440)		(931)
Stock-based compensation expense		3,100		2,640
Debt issue cost amortization recorded in interest expense		106		109
Other		1,235		360
Changes in operating assets and liabilities, net of acquisition:
Trade receivables		(9,586)		(2,136)
Inventories		(11,747)		(4,575)
Prepaid expenses and other assets		(675)		(725)
Accounts payable		8,168		492
Accrued liabilities		909		(2,840)
Net cash provided by operating activities		19,920		15,020

Cash Flows From Investing Activities:
Purchase of property and equipment		(9,761)		(6,560)
Consideration paid for acquisitions, net of cash acquired		—		(14,728)
Net cash used in investing activities		(9,761)		(21,288)

Cash Flows From Financing Activities:
Borrowings on long-term debt		819		26,979
Principal payments of long-term debt		(11,417)		(12,299)
Payment of debt issuance costs		—		(401)
Dividends paid to stockholders		(1,007)		(875)
Tax withholdings related to net share settlements of restricted stock		(1,700)		(814)
Net cash (used in) provided by financing activities		(13,305)		12,590
Effect of foreign exchange rate changes on cash		(776)		489
Net (decrease) increase in cash and cash equivalents		(3,922)		6,811
Cash and cash equivalents at beginning of period		23,131		13,416
Cash and cash equivalents at end of period	$	19,209	$	20,227

Supplemental disclosure of cash flow information:
Property, plant and equipment purchases in accounts payable or accrued expenses	$	630	$	398


	September 30,		December 31,
	2021		2020
Parts and raw materials	$	54,077	$	44,750
Work-in-process		7,785		6,186
Finished goods		10,377		12,042
	$	72,239	$	62,978


Remainder of 2021	$	1,296
2022		4,389
2023		3,151
2024		2,379
2025		2,173
2026		1,143
Thereafter		4,229
Total undiscounted cash flows	$	18,760
Less: present value discount		(1,287)
Total lease liabilities	$	17,473


							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 three months ended						2021 vs. 2020
	September 30,						Variance
(Dollars in thousands, except per share data)	2021			2020			$		%
Revenues	$	103,509		$	94,653		$	8,856	9	%
Cost of goods sold		71,488			66,513			4,975	7	%
Gross profit		32,021			28,140			3,881	14	%
Gross margin percentage		30.9	%		29.7	%
Operating costs and expenses:
Selling		4,365			3,734			631	17	%
General and administrative		10,620			10,008			612	6	%
Engineering and development		6,768			6,434			334	5	%
Business development		94			8			86	NM	%
Amortization of intangible assets		1,504			1,499			5	0	%
Total operating costs and expenses		23,351			21,683			1,668	8	%
Operating income		8,670			6,457			2,213	34	%
Interest expense		777			844			(67)	(8)	%
Other (income) expense, net		(29)			231			(260)	(113)	%
Total other expense		748			1,075			(327)	(30)	%
Income before income taxes		7,922			5,382			2,540	47	%
Income tax provision		(1,950)			(1,369)			(581)	42	%
Net income	$	5,972		$	4,013		$	1,959	49	%

Effective tax rate		24.6	%		25.4	%
Diluted earnings per share	$	0.41		$	0.28		$	0.13	46	%
Bookings	$	119,940		$	88,958		$	30,982	35	%
Backlog	$	185,561		$	123,700		$	61,861	50	%


	For the three months ended
	September 30,
			Per diluted				Per diluted
	2021		share		2020		share
Net income as reported	$	5,972	$	0.41	$	4,013	$	0.28
Non-GAAP adjustments, net of tax
Foreign currency (gain) loss - net		(50)		—		211		0.01
Business development costs - net		72		—		6		—
Non-GAAP adjusted net income and diluted earnings per share	$	5,994	$	0.41	$	4,230	$	0.29


					2021 vs.
	Nine Months Ended				2020
	September 30,				Variance
	2021		2020		$
Net cash provided by operating activities	$	19,920	$	15,020	$	4,900
Net cash used in investing activities		(9,761)		(21,288)		11,527
Net cash (used in) provided by financing activities		(13,305)		12,590		(25,895)
Effect of foreign exchange rates on cash		(776)		489		(1,265)
Net (decrease) increase in cash and cash equivalents	$	(3,922)	$	6,811	$	(10,733)


				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) (2)}	per Share		Announced Plans or Programs	Under the Plans or Programs
07/01/21 to 07/31/21	38	$	35.35	—	—
08/01/21 to 08/31/21	—		—	—	—
09/01/21 to 09/30/21	2,330		34.65	—	—
Total	2,368	$		—	—


(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:	November 3, 2021	ALLIED MOTION TECHNOLOGIES INC.
		By:	/s/ Michael R. Leach
		Michael R. Leach
		Senior Vice President & Chief Financial Officer