Allient Inc 10-Q for FY2023 Q1

Allient Inc (ALNT)

10-Q 2023-05-03 For: 2023-03-31

Added on April 12, 2026

About this 10-Q

Allient Inc filed this 10-Q on May 3, 2023, covering the quarter ended March 31, 2023 (FY2023 Q1).

Headline figures

Quarter ended March 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $145.55M; up 26.8% from $114.79M a year earlier
Net income: $6.32M; up 152.2% from net income of $2.5M a year earlier
Diluted EPS: $0.39; up 143.8% from $0.16 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	17

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23

	Item 4.	Controls and Procedures	24

PART II. OTHER INFORMATION			25

	Item 1A.	Risk Factors	25

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25

	Item 6.	Exhibits	25


	March 31,		December 31,
	2023		2022
Assets
Current assets:
Cash and cash equivalents	$	25,145	$	30,614
Trade receivables, net of provision for credit losses of $1,122 and $1,192 at March 31, 2023 and December 31, 2022, respectively		87,043		76,213
Inventories		116,229		117,108
Prepaid expenses and other assets		13,432		12,072
Total current assets		241,849		236,007
Property, plant, and equipment, net		69,127		68,640
Deferred income taxes		3,984		4,199
Intangible assets, net		116,027		119,075
Goodwill		126,567		126,366
Operating lease assets		23,432		22,807
Other long-term assets		9,947		11,253
Total Assets	$	590,933	$	588,347
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	41,151	$	39,467
Accrued liabilities		45,722		48,121
Total current liabilities		86,873		87,588
Long-term debt		236,506		235,454
Deferred income taxes		5,817		6,262
Pension and post-retirement obligations		2,823		3,009
Operating lease liabilities		19,186		18,795
Other long-term liabilities		9,547		21,774
Total liabilities		360,752		372,882
Stockholders’ Equity:
Common stock, no par value, authorized 50,000 shares; 16,293 and 15,978 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively		92,435		83,852
Preferred stock, par value $1.00 per share, authorized 5,000 shares; no shares issued or outstanding		—		—
Retained earnings		149,488		143,576
Accumulated other comprehensive loss		(11,742)		(11,963)
Total stockholders’ equity		230,181		215,465
Total Liabilities and Stockholders’ Equity	$	590,933	$	588,347


	For the three months ended
	March 31,
	2023		2022
Revenues	$	145,549	$	114,785
Cost of goods sold		99,715		81,325
Gross profit		45,834		33,460
Operating costs and expenses:
Selling		6,032		5,031
General and administrative		14,820		11,496
Engineering and development		10,387		9,385
Business development		197		848
Amortization of intangible assets		3,009		2,434
Total operating costs and expenses		34,445		29,194
Operating income		11,389		4,266
Other expense, net:
Interest expense		2,983		1,038
Other expense, net		187		45
Total other expense, net		3,170		1,083
Income before income taxes		8,219		3,183
Income tax provision		(1,904)		(679)
Net income	$	6,315	$	2,504
Basic earnings per share:
Earnings per share	$	0.40	$	0.17
Basic weighted average common shares		15,872		15,096
Diluted earnings per share:
Earnings per share	$	0.39	$	0.16
Diluted weighted average common shares		16,137		15,599
Net income	$	6,315	$	2,504
Other comprehensive income:
Foreign currency translation adjustment		1,354		(1,233)
(Loss) gain on derivatives, net of tax		(1,133)		2,601
Comprehensive income	$	6,536	$	3,872


	Common Stock									Accumulated Other Comprehensive (Loss) Income
(In thousands except per share data)	Shares	Amount		Unamortized Cost of Equity Awards		Common Stock and Paid-in Capital		Retained Earnings		Foreign Currency Translation Adjustments		Accumulated income (loss) on derivatives		Pension adjustments		Total Stockholders' Equity
Balances, December 31, 2022	15,978	$	89,522	$	(5,670)	$	83,852	$	143,576	$	(16,925)	$	5,556	$	(594)	$	215,465
Stock transactions under employee benefit stock plans	31		1,246				1,246										1,246
Issuance of restricted stock, net of forfeitures	103		4,621		(4,655)		(34)										(34)
Share issuance in connection with acquisition	185				6,250		6,250										6,250
Stock-based compensation expense					1,267		1,267										1,267
Shares withheld for payment of employee payroll taxes	(4)		(146)				(146)										(146)
Comprehensive income (loss)											1,354		(1,565)				(211)
Tax effect of derivative transactions													432				432
Net income									6,315								6,315
Dividends to stockholders - $0.025									(403)								(403)
Balances, March 31, 2023	16,293	$	95,243	$	(2,808)	$	92,435	$	149,488	$	(15,571)	$	4,423	$	(594)	$	230,181


	Three months ended
	March 31,
Target Market	2023		2022
Industrial	$	63,256	$	45,776
Vehicle		30,831		32,582
Medical		23,674		21,319
Aerospace & Defense		21,287		9,444
Other		6,501		5,664
Total	$	145,549	$	114,785


	Three months ended
	March 31,
Geography	2023		2022
North America (primarily U.S.)	$	97,367	$	72,378
Europe		39,897		33,749
Asia-Pacific		8,285		8,658
Total	$	145,549	$	114,785


		March 31,
		2023
Beginning balance	$	126,366
Effect of foreign currency translation		201
Ending balance	$	126,567


		March 31, 2023						December 31, 2022
		Gross		Accumulated		Net Book		Gross		Accumulated		Net Book
	Life	Amount		Amortization		Value		Amount		Amortization		Value
Customer lists	5 - 18 years	$	112,437	$	(36,318)	$	76,119	$	112,378	$	(34,377)	$	78,001
Trade name	10 - 19 years		15,322		(7,176)		8,146		15,320		(6,900)		8,420
Design and technologies	10 - 15 years		41,266		(9,504)		31,762		41,212		(8,558)		32,654
Total		$	169,025	$	(52,998)	$	116,027	$	168,910	$	(49,835)	$	119,075


	Estimated
	Amortization Expense

Remainder of 2023	$	9,205
2024		11,881
2025		11,865
2026		11,767
2027		11,323
Thereafter		59,986
Total estimated amortization expense	$	116,027


		Number of
		shares
Outstanding at beginning of period		304,947
Awarded		109,789
Vested		(9,552)
Forfeited		(1,210)
Outstanding at end of period		403,974


		Asset Derivatives
		Fair value as of:
Derivatives designated as	Balance Sheet	March 31,		December 31,
hedging instruments	Location	2023		2022
Foreign currency contracts	Prepaid expenses and other assets	$	31	$	48
Interest rate swaps	Other long-term assets		5,745		7,236
		$	5,776	$	7,284


	Amount of pre-tax (loss) gain recognized
	in OCI on derivatives
Derivatives in cash flow hedging relationships	Three months ended March 31,
	2023		2022
Interest rate swaps	$	(746)	$	3,237


	Amount of pre-tax gain (loss) reclassified
	from accumulated OCI into income
Location of gain (loss) reclassified	Three months ended March 31,
from accumulated OCI into income	2023		2022

Interest expense	$	819	$	(186)


	March 31,		December 31,
	2023		2022
Parts and raw materials	$	87,335	$	89,100
Work-in-process		11,570		11,686
Finished goods		17,324		16,322
	$	116,229	$	117,108


	March 31,		December 31,
	2023		2022
Land	$	969	$	965
Building and improvements		24,966		25,093
Machinery, equipment, tools and dies		91,467		89,144
Construction work in progress		15,525		14,197
Furniture, fixtures and other		22,637		22,461
		155,564		151,860
Less accumulated depreciation		(86,437)		(83,220)
Property, plant, and equipment, net	$	69,127	$	68,640


	March 31,		December 31,
	2023		2022
Compensation and fringe benefits	$	11,305	$	15,818
Accrued business acquisition consideration		12,416		12,500
Warranty reserve		2,326		2,160
Income taxes payable		4,737		3,934
Operating lease liabilities - current		4,525		4,224
Finance lease obligations - current		386		377
Contract liabilities		4,610		4,807
Other accrued expenses		5,417		4,301
	$	45,722	$	48,121


	Operating Leases		Finance Leases
Remainder of 2023		4,048		599
2024		5,008		815
2025		4,105		831
2026		3,561		848
2027		3,022		867
Thereafter		6,830		8,771
Total undiscounted cash flows	$	26,574	$	12,731
Less: present value discount		(2,863)		(3,427)
Total lease liabilities	$	23,711	$	9,304


		Total amounts of income and expense
		line items presented that reflect the
		effects of cash flow hedges recorded
		Three months ended March 31,
Derivatives designated as hedging instruments	Income Statement Location	2023		2022
Interest rate swaps	Interest Expense	$	2,983	$	1,038


	March 31, 2023
	Level 1		Level 2		Level 3
Assets (liabilities)
Pension plan assets	$	5,576	$	—	$	—
Deferred compensation plan assets		4,048		—		—
Foreign currency hedge contracts		—		31		—
Interest rate swaps, net		—		5,745		—
Contingent consideration		—		—		(4,100)


							Foreign Currency
	Defined Benefit				Tax Effect of		Translation
	Plan Liability		Cash Flow Hedges		Cash Flow Hedges		Adjustment		Total
At December 31, 2022	$	(594)	$	7,310	$	(1,754)	$	(16,925)	$	(11,963)
Unrealized (loss) gain on cash flow hedges		—		(746)		202		—		(544)
Amounts reclassified from AOCI		—		(819)		230		—		(589)
Foreign currency translation loss		—		—		—		1,354		1,354
At March 31, 2023	$	(594)	$	5,745	$	(1,322)	$	(15,571)	$	(11,742)


	For the three months ended						2023 vs. 2022
	March 31,						Variance
(Dollars in thousands, except per share data)	2023			2022			$		%
Revenues	$	145,549		$	114,785		$	30,764	27	%
Cost of goods sold		99,715			81,325			18,390	23	%
Gross profit		45,834			33,460			12,374	37	%
Gross margin percentage		31.5	%		29.2	%
Operating costs and expenses:
Selling		6,032			5,031			1,001	20	%
General and administrative		14,820			11,496			3,324	29	%
Engineering and development		10,387			9,385			1,002	11	%
Business development		197			848			(651)	(77)	%
Amortization of intangible assets		3,009			2,434			575	24	%
Total operating costs and expenses		34,445			29,194			5,251	18	%
Operating income		11,389			4,266			7,123	167	%
Interest expense		2,983			1,038			1,945	187	%
Other expense (income), net		187			45			142	316	%
Total other expense		3,170			1,083			2,087	193	%
Income before income taxes		8,219			3,183			5,036	158	%
Income tax (provision) benefit		(1,904)			(679)			(1,225)	NM	%
Net income	$	6,315		$	2,504		$	3,811	152	%

Effective tax rate		23.2	%		21.3	%
Diluted earnings per share	$	0.39		$	0.16		$	0.23	145	%
Bookings	$	123,198		$	155,295		$	(32,097)	(21)	%
Backlog	$	308,635		$	289,295		$	19,340	7	%


	Three months ended
	March 31, 2023
Revenue as reported	$	145,549
Currency impact unfavorable (favorable)		3,252
Revenue excluding foreign currency exchange impacts	$	148,801


	For the three months ended
	March 31,
			Per diluted				Per diluted
	2023		share		2022		share
Net income as reported	$	6,315	$	0.39	$	2,504	$	0.16
Non-GAAP adjustments, net of tax (1)
Amortization of intangible assets – net		2,305		0.14		2,460		0.16
Foreign currency loss – net		164		0.01		38		—
Business development costs – net		151		0.01		650		0.04
Non-GAAP adjusted net income and adjusted diluted earnings per share	$	8,935	$	0.55	$	5,652	$	0.36


					2023 vs.
	Three Months Ended				2022
	March 31,				Variance
(in thousands):	2023		2022		$
Net cash provided by (used in) operating activities	$	3,586	$	(13,396)	$	16,982
Net cash used in investing activities		(9,804)		(2,293)		(7,511)
Net cash provided by financing activities		738		10,221		(9,483)
Effect of foreign exchange rates on cash		11		(76)		87
Net decrease in cash and cash equivalents	$	(5,469)	$	(5,544)	$	75


				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
01/01/23 to 01/31/23	1,105	$	39.26	—	—
02/01/23 to 02/28/23	—		—	—	—
03/01/23 to 03/31/23	3,115		43.16	—	—
Total	4,220	$	42.14	—	—


(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:	May 3, 2023	ALLIED MOTION TECHNOLOGIES INC.
		By:	/s/ Michael R. Leach
		Michael R. Leach
		Senior Vice President & Chief Financial Officer


Date: May 3, 2023	/s/ Richard S. Warzala
	Richard S. Warzala
	Chief Executive Officer