Allient Inc 10-Q for FY2024 Q3

Allient Inc (ALNT)

10-Q 2024-11-06 For: 2024-09-30

Added on April 12, 2026

About this 10-Q

Allient Inc filed this 10-Q on November 6, 2024, covering the quarter ended September 30, 2024 (FY2024 Q3).

Headline figures

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

Revenue: $125.21M; down 13.8% from $145.32M a year earlier
Diluted EPS: $0.13; down 68.3% from $0.41 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 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	31

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


	September 30,		December 31,
	2024		2023
Assets
Current assets:
Cash and cash equivalents	$	37,118	$	31,901
Trade receivables, net of provision for credit losses of $1,239 and $1,240 at September 30, 2024 and December 31, 2023, respectively		82,549		85,127
Inventories		117,605		117,686
Prepaid expenses and other assets		13,582		13,437
Total current assets		250,854		248,151
Property, plant, and equipment, net		68,396		67,463
Deferred income taxes		7,663		7,760
Intangible assets, net		104,593		111,373
Goodwill		134,390		131,338
Operating lease assets		23,627		24,032
Other long-term assets		6,912		7,425
Total Assets	$	596,435	$	597,542
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	28,894	$	39,129
Accrued liabilities		32,292		56,488
Total current liabilities		61,186		95,617
Long-term debt		231,415		218,402
Deferred income taxes		4,078		4,337
Pension and post-retirement obligations		2,735		2,679
Operating lease liabilities		19,343		19,532
Other long-term liabilities		4,811		5,400
Total liabilities		323,568		345,967
Stockholders’ Equity:
Common stock, no par value, authorized 50,000 shares; 16,840 and 16,308 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively		110,278		95,937
Preferred stock, par value $1.00 per share, authorized 5,000 shares; no shares issued or outstanding		—		—
Retained earnings		174,497		165,813
Accumulated other comprehensive loss		(11,908)		(10,175)
Total stockholders’ equity		272,867		251,575
Total Liabilities and Stockholders’ Equity	$	596,435	$	597,542


	For the three months ended				For the nine months ended
	September 30,				September 30,
	2024		2023		2024		2023
Revenues	$	125,213	$	145,319	$	407,958	$	437,637
Cost of goods sold		85,949		97,821		280,641		298,328
Gross profit		39,264		47,498		127,317		139,309
Operating costs and expenses:
Selling		6,323		6,021		19,283		18,354
General and administrative		13,856		14,642		42,438		43,624
Engineering and development		9,056		10,702		30,416		31,041
Business development		278		1,194		2,204		1,791
Amortization of intangible assets		3,135		3,075		9,381		9,226
Total operating costs and expenses		32,648		35,634		103,722		104,036
Operating income		6,616		11,864		23,595		35,273
Other expense, net:
Interest expense		3,435		3,164		10,207		9,309
Other expense, net		468		42		405		187
Total other expense, net		3,903		3,206		10,612		9,496
Income before income taxes		2,713		8,658		12,983		25,777
Income tax provision		(612)		(1,992)		(2,830)		(6,027)
Net income	$	2,101	$	6,666	$	10,153	$	19,750
Basic earnings per share:
Earnings per share	$	0.13	$	0.42	$	0.61	$	1.24
Basic weighted average common shares		16,574		15,979		16,513		15,940
Diluted earnings per share:
Earnings per share	$	0.13	$	0.41	$	0.61	$	1.22
Diluted weighted average common shares		16,605		16,237		16,581		16,198
Net income	$	2,101	$	6,666	$	10,153	$	19,750
Other comprehensive income (loss):
Foreign currency translation adjustment		5,821		(2,923)		235		(1,995)
Loss on derivatives, net of tax		(1,379)		(170)		(1,968)		(596)
Comprehensive income	$	6,543	$	3,573	$	8,420	$	17,159


	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
Stock transactions under employee benefit stock plans													—
Issuance of restricted stock, net of forfeitures													—
Share issuance in connection with acquisitions													—
Stock-based compensation expense			1,098										1,098
Shares withheld for payment of employee payroll taxes	(1)		(23)										(23)
Comprehensive income (loss)							5,821		(1,809)				4,012
Tax effect of derivative transactions									430				430
Net income					2,101								2,101
Dividends to stockholders - $0.03					(466)								(466)
Balances, September 30, 2024	16,840	$	110,278	$	174,497	$	(13,021)	$	1,457	$	(344)	$	272,867


Cash and cash equivalents	$	881
Trade receivables		3,467
Inventories		8,600
Prepaid expenses and other assets		496
Property, plant, and equipment		4,258
Operating lease assets		378
Intangible assets		2,900
Goodwill		3,075
Other current liabilities		(3,188)
Deferred revenue		(55)
Operating lease liabilities		(378)
Net deferred income tax liabilities		(592)
Other noncurrent liabilities		(118)
Net purchase price	$	19,724


	Three months ended		Nine months ended
	September 30,		September 30,		September 30,
	2023		2024		2023
Revenues	$	156,797	$	409,252	$	469,392
Income before income taxes	$	9,261	$	13,702	$	27,286


		September 30,		December 31,
	Useful lives	2024		2023
Land		$	1,786	$	973
Building and improvements	5 - 39 years		29,090		26,201
Machinery, equipment, tools and dies	3 - 15 years		107,222		99,711
Construction in progress			8,138		9,300
Furniture, fixtures and other	3 - 10 years		25,322		24,439
			171,558		160,624
Less accumulated depreciation			(103,162)		(93,161)
Property, plant, and equipment, net		$	68,396	$	67,463


		September 30,
		2024
Beginning balance	$	131,338
Goodwill acquired		2,752
Impact of measurement period adjustments of acquisitions (Note 2)		323
Effect of foreign currency translation		(23)
Ending balance	$	134,390


	Weighted Average	September 30, 2024						December 31, 2023
	Amortization	Gross		Accumulated		Net Book		Gross		Accumulated		Net Book
	Period	Amount		Amortization		Value		Amount		Amortization		Value
Customer lists	14.1 years	$	118,164	$	(48,641)	$	69,523	$	116,831	$	(42,421)	$	74,410
Trade name	13.7 years		16,186		(8,496)		7,690		15,572		(7,916)		7,656
Design and technologies	10.5 years		42,245		(14,865)		27,380		41,480		(12,173)		29,307
Total		$	176,595	$	(72,002)	$	104,593	$	173,883	$	(62,510)	$	111,373


Year ending December 31,	Total
	Estimated
	Amortization Expense
Remainder of 2024	$	3,305
2025		12,570
2026		12,472
2027		12,028
2028		11,280
Thereafter		52,938
Total estimated amortization expense	$	104,593


		Number of
		shares
Outstanding at beginning of period		254,110
Awarded		186,758
Vested		(119,335)
Forfeited		(42,162)
Outstanding at end of period		279,371


		Asset Derivatives
		Fair value as of:
Derivatives designated as	Balance Sheet	September 30,		December 31,
hedging instruments	Location	2024		2023
Foreign currency contracts	Prepaid expenses and other assets	$	27	$	54
Interest rate swaps	Prepaid expenses and other assets		567		2,254
Interest rate swaps	Other long-term assets		1,348		2,177
		$	1,942	$	4,485

		Liability Derivatives
		Fair value as of:
Derivatives designated as	Balance Sheet	September 30,		December 31,
hedging instruments	Location	2024		2023
Foreign currency contracts	Accrued liabilities	$	13	$	—
		$	13	$	—


	Amount of pre-tax (loss) gain recognized				Amount of pre-tax gain 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,
	2024		2023		2024		2023
Interest rate swaps	$	(745)	$	790	$	566	$	1,995


	Three months ended				Nine months ended
	September 30,				September 30,
Target Market	2024		2023		2024		2023
Industrial	$	59,152	$	64,921	$	192,230	$	193,766
Vehicle		20,353		32,989		83,669		98,559
Medical		20,507		21,693		58,828		66,254
Aerospace & Defense		18,332		19,972		53,627		60,237
Distribution and Other		6,869		5,744		19,604		18,821
Total	$	125,213	$	145,319	$	407,958	$	437,637


	Three months ended				Nine months ended
	September 30,				September 30,
Geography	2024		2023		2024		2023
North America (primarily U.S.)	$	85,263	$	102,502	$	276,886	$	300,834
Europe		33,859		35,456		111,664		113,679
Asia-Pacific		6,091		7,361		19,408		23,124
Total	$	125,213	$	145,319	$	407,958	$	437,637


	September 30,		December 31,
	2024		2023
Parts and raw materials	$	85,670	$	87,381
Work-in-process		11,897		11,456
Finished goods		20,038		18,849
	$	117,605	$	117,686


	Operating Leases		Finance Leases
Remainder of 2024	$	1,593	$	204
2025		5,681		831
2026		4,958		848
2027		4,203		867
2028		3,259		886
Thereafter		8,001		7,884
Total undiscounted cash flows	$	27,695	$	11,520
Less: present value discount		(3,383)		(2,809)
Total lease liabilities	$	24,312	$	8,711


	September 30, 2024
	Level 1		Level 2		Level 3
Assets (liabilities)
Pension plan assets	$	6,399	$	—	$	—
Deferred compensation plan assets		4,747		—		—
Foreign currency hedge contracts, net		—		14		—
Interest rate swaps, net		—		1,915		—
Contingent consideration		—		—		—


							Foreign Currency
	Defined Benefit				Tax Effect of		Translation
	Plan Liability		Cash Flow Hedges		Cash Flow Hedges		Adjustment		Total
At June 30, 2024	$	(344)	$	3,656	$	(820)	$	(18,842)	$	(16,350)
Unrealized gain (loss) on cash flow hedges		—		(745)		175		—		(570)
Amounts reclassified from AOCI		—		(1,064)		255		—		(809)
Foreign currency translation gain		—		—		—		5,821		5,821
At September 30, 2024	$	(344)	$	1,847	$	(390)	$	(13,021)	$	(11,908)


	For the three months ended						2024 vs. 2023
	September 30,						Variance
(Dollars in thousands, except per share data)	2024			2023			$		%
Revenues	$	125,213		$	145,319		$	(20,106)	(14)	%
Cost of goods sold		85,949			97,821			(11,872)	(12)	%
Gross profit		39,264			47,498			(8,234)	(17)	%
Gross margin percentage		31.4	%		32.7	%
Operating costs and expenses:
Selling		6,323			6,021			302	5	%
General and administrative		13,856			14,642			(786)	(5)	%
Engineering and development		9,056			10,702			(1,646)	(15)	%
Business development		278			1,194			(916)	(77)	%
Amortization of intangible assets		3,135			3,075			60	2	%
Total operating costs and expenses		32,648			35,634			(2,986)	(8)	%
Operating income		6,616			11,864			(5,248)	(44)	%
Interest expense		3,435			3,164			271	9	%
Other expense, net		468			42			426	1,014	%
Total other expense		3,903			3,206			697	22	%
Income before income taxes		2,713			8,658			(5,945)	(69)	%
Income tax provision		(612)			(1,992)			1,380	(69)	%
Net income	$	2,101		$	6,666		$	(4,565)	(68)	%

Effective tax rate		22.6	%		23.0	%
Diluted earnings per share	$	0.13		$	0.41		$	(0.28)	(68)	%
Bookings	$	102,631		$	154,908		$	(52,277)	(34)	%
Backlog	$	238,492		$	309,636		$	(71,144)	(23)	%


	For the three months ended
	September 30,
			Per diluted				Per diluted
	2024		share		2023		share
Net income as reported	$	2,101	$	0.13	$	6,666	$	0.41
Non-GAAP adjustments, net of tax (1)
Amortization of intangible assets – net		2,401		0.14		2,355		0.15
Foreign currency loss – net		353		0.02		44		—
Acquisition and integration-related costs – net (2)		(154)		(0.01)		298		0.02
Restructuring and business realignment costs – net		367		0.02		617		0.04
Non-GAAP adjusted net income and adjusted diluted earnings per share	$	5,068	$	0.31	$	9,980	$	0.61


					2024 vs.
	Nine Months Ended				2023
	September 30,				Variance
(in thousands):	2024		2023		$
Net cash provided by operating activities	$	29,458	$	27,132	$	2,326
Net cash used in investing activities		(32,134)		(18,854)		(13,280)
Net cash provided by (used in) financing activities		7,685		(14,500)		22,185
Effect of foreign exchange rates on cash		208		(556)		764
Net increase (decrease) in cash and cash equivalents	$	5,217	$	(6,778)	$	11,995


				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
07/01/24 to 07/31/24	—	$	—	—	—
08/01/24 to 08/31/24	—		—	—	—
09/01/24 to 09/30/24	1,102		21.24	—	—
Total	1,102	$	21.24	—	—


(a)	Exhibits
	10.1	First Amendment, dated as of July 30, 2024, to Third Amended and Restated Credit Agreement dated as of March 1, 2024, among Allient Inc. and Allied Motion Technologies B.V. as Borrowers, HSBC Bank USA, National Association, as Administrative Agent, and the other financial institutions signatory thereto. (Incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed October 25, 2024).

	10.2	Second Amendment, dated as of October 22, 2024, to Third Amended and Restated Credit Agreement dated as of March 1, 2024, among Allient Inc. and Allied Motion Technologies B.V. as Borrowers, HSBC Bank USA, National Association, as Administrative Agent, and the other financial institutions signatory thereto. (Incorporated by reference to Exhibit 10.2 of the Company’s Form 8-K filed October 25, 2024).

	10.3	First Amendment, dated as of July 30, 2024, to Note Purchase and Private Shelf Agreement dated as of March 1, 2024, among Allient Inc. and each of the holders of the Notes signatory thereto. (Incorporated by reference to Exhibit 10.3 of the Company’s Form 8-K filed October 25, 2024).

	10.4	Second Amendment, dated as of October 22, 2024, to Note Purchase and Private Shelf Agreement dated as of March 1, 2024, among Allient Inc. and each of the holders of the Notes signatory thereto. (Incorporated by reference to Exhibit 10.4 of the Company’s Form 8-K filed October 25, 2024).

	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 6, 2024	ALLIENT INC.
		By:	/s/ James A. Michaud
		James A. Michaud
		Senior Vice President & Chief Financial Officer


Date: November 6, 2024	/s/ Richard S. Warzala
	Richard S. Warzala
	Chief Executive Officer