Allient Reports Gross and Operating Margin Expansion on Revenue of $146.7 Million in First Quarter 2024
- First quarter gross margin expanded 80 basis points to 32.3%
-
Operating income increased 6% to
$12.1 million with a margin of 8.2%, which was up 40 basis points -
Net income per diluted share increased 8% to
$0.42 ; Adjusted net income per share was$0.58 , up 5% -
Generated
$9.2 million of cash from operations, more than double last year’s first quarter
“In pursuit of sustained earnings growth and additional cash generation, our teams have identified key strategic actions for 2024. These encompass footprint rationalization, simplification of customer interactions and order processing, reduction of product development timelines, and the continued integration of AST, our lean toolkit, throughout Allient. The initiatives are being phased in with initial benefits to be realized in 2024 and continuing for the next 2+ years, supporting our margin expansion in line with our previously stated goal of 100 total basis point annual improvement via gross margin expansion and operating expense reduction. Guided by our mantra and fueled by strategic foresight, we are poised to seize new opportunities, drive operational excellence, and deliver value to our stakeholders."
First Quarter 2024 Results (Narrative compares with prior-year period unless otherwise noted)
Revenue increased 1%, or
Sales in the Vehicle markets increased 12% due to higher demand within commercial automotive, partially offset by lower demand within agricultural vehicles, which primarily reflected softness in
Gross margin was 32.3%, up 80 basis points from the prior-year period as higher volume, favorable mix and pricing more than offset elevated raw material costs.
Operating costs and expenses were 24.0% of revenue, up 30 basis points, largely due to higher engineering and business development expenses as a result of the recent acquisitions, partially offset by lower general and administrative costs. Operating income increased 6% to
The effective income tax rate was 21.8% and 23.2% for the first quarter of 2024 and 2023, respectively. The lower effective tax rate in the first quarter of 2024 was primarily due to the realization of certain deferred income tax assets that had been reserved in prior years, as well as the impact of the mix of foreign and domestic income. The Company expects its income tax rate for the full year 2024 to be approximately 21% to 23%.
Net income increased 9% to
Earnings before interest, taxes, depreciation, amortization, stock-based compensation expense, business development costs, and foreign currency gains/losses (“Adjusted EBITDA”) was
Balance Sheet and Cash Flow Review
Cash and cash equivalents were
Capital expenditures were
On
Total debt of
Orders and Backlog Summary ($ in thousands)
|
Q1 2024 |
|
Q4 2023 |
|
Q3 2023 |
|
Q2 2023 |
|
Q1 2023 |
|||||
Orders |
$ |
122,127 |
$ |
105,162 |
$ |
154,908 |
$ |
137,008 |
$ |
123,198 |
||||
Backlog |
$ |
258,130 |
$ |
276,093 |
$ |
309,636 |
$ |
298,695 |
$ |
308,635 |
First quarter orders increased 16% sequentially, due to recent acquisitions along with higher bookings for industrial automation and power quality projects, and the ramp of new commercial automotive programs. Foreign currency translation had a favorable
The sequential decline in backlog reflects the continued improvements within the supply chain, which has enabled the reduction of long-lead times for industrial market projects. The time to convert the majority of the backlog to sales is approximately three to nine months.
Conference Call and Webcast
The Company will host a conference call and webcast on
To listen to the live call, dial (201) 389-0920. In addition, the webcast and slide presentation may be found at: www.allient.com/investors.
A telephonic replay will be available from
About
Allient (Nasdaq: ALNT) is a global engineering and manufacturing enterprise that develops solutions to drive the future of market-moving industries, including medical, life sciences, aerospace and defense, industrial automation, robotics, semi-conductor, transportation, agriculture, construction and facility infrastructure. A family of globally responsible companies, Allient takes a One-Team approach to “Connect What Matters” and provides the most robust, reliable, and high-value products and systems by utilizing its core Motion, Controls, and Power technologies and platforms.
Headquartered in
Safe Harbor Statement
The statements in this news release that relate to future plans, events or performance are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance, or achievements. Examples of forward-looking statements include, among others, statements the Company makes regarding expected operating results, anticipated levels of capital expenditures, the Company’s belief that it has sufficient liquidity to fund its business operations, and expectations with respect to the conversion of backlog to sales. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on the Company’s current beliefs, expectations and assumptions regarding the future of the Company’s business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the Company’s control. The Company’s actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, general economic and business conditions, conditions affecting the industries served by the Company and its subsidiaries, conditions affecting the Company's customers and suppliers, competitor responses to the Company's products and services, the overall market acceptance of such products and services, the pace of bookings relative to shipments, the ability to expand into new markets and geographic regions, the success in acquiring new business, the impact of changes in income tax rates or policies, commercial activity and demand across our and our customers’ businesses, global supply chains, the prices of our securities and the achievement of our strategic objectives, the ability to attract and retain qualified personnel, the ability to successfully integrate an acquired business into our business model without substantial costs, delays, or problems, and other factors disclosed in the Company's periodic reports filed with the
FINANCIAL TABLES FOLLOW
ALLIENT INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) (Unaudited) |
|||||||||
|
|||||||||
|
|
For the three months ended |
|
||||||
|
|
|
|
||||||
|
|
2024 |
|
2023 |
|
||||
Revenue |
|
$ |
146,713 |
|
|
$ |
145,549 |
|
|
Cost of goods sold |
|
|
99,336 |
|
|
|
99,715 |
|
|
Gross profit |
|
|
47,377 |
|
|
|
45,834 |
|
|
Operating costs and expenses: |
|
|
|
|
|
|
|
||
Selling |
|
|
6,298 |
|
|
|
6,032 |
|
|
General and administrative |
|
|
14,440 |
|
|
|
14,820 |
|
|
Engineering and development |
|
|
11,067 |
|
|
|
10,387 |
|
|
Business development |
|
|
357 |
|
|
|
197 |
|
|
Amortization of intangible assets |
|
|
3,115 |
|
|
|
3,009 |
|
|
Total operating costs and expenses |
|
|
35,277 |
|
|
|
34,445 |
|
|
Operating income |
|
|
12,100 |
|
|
|
11,389 |
|
|
Other expense, net: |
|
|
|
|
|
|
|
||
Interest expense |
|
|
3,388 |
|
|
|
2,983 |
|
|
Other (income) expense, net |
|
|
(109 |
) |
|
|
187 |
|
|
Total other expense, net |
|
|
3,279 |
|
|
|
3,170 |
|
|
Income before income taxes |
|
|
8,821 |
|
|
|
8,219 |
|
|
Income tax provision |
|
|
(1,919 |
) |
|
|
(1,904 |
) |
|
Net income |
|
$ |
6,902 |
|
|
$ |
6,315 |
|
|
Basic earnings per share: |
|
|
|
|
|
|
|
||
Earnings per share |
|
$ |
0.42 |
|
|
$ |
0.40 |
|
|
Basic weighted average common shares |
|
|
16,394 |
|
|
|
15,872 |
|
|
Diluted earnings per share: |
|
|
|
|
|
|
|
||
Earnings per share |
|
$ |
0.42 |
|
|
$ |
0.39 |
|
|
Diluted weighted average common shares |
|
|
16,497 |
|
|
|
16,137 |
|
|
ALLIENT INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except per share data) |
|||||||||
|
|
(Unaudited) |
|
|
|
||||
|
|
|
|
|
|
||||
|
|
2024 |
|
2023 |
|
||||
Assets |
|
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
31,514 |
|
|
$ |
31,901 |
|
|
Trade receivables, net of provision for credit losses of |
|
|
87,905 |
|
|
|
85,127 |
|
|
Inventories |
|
|
124,909 |
|
|
|
117,686 |
|
|
Prepaid expenses and other assets |
|
|
15,646 |
|
|
|
13,437 |
|
|
Total current assets |
|
|
259,974 |
|
|
|
248,151 |
|
|
Property, plant, and equipment, net |
|
|
70,349 |
|
|
|
67,463 |
|
|
Deferred income taxes |
|
|
7,132 |
|
|
|
7,760 |
|
|
Intangible assets, net |
|
|
110,236 |
|
|
|
111,373 |
|
|
|
|
|
133,159 |
|
|
|
131,338 |
|
|
Operating lease assets |
|
|
22,911 |
|
|
|
24,032 |
|
|
Other long-term assets |
|
|
7,838 |
|
|
|
7,425 |
|
|
Total Assets |
|
$ |
611,599 |
|
|
$ |
597,542 |
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
|
||
Accounts payable |
|
$ |
38,961 |
|
|
$ |
39,129 |
|
|
Accrued liabilities |
|
|
34,147 |
|
|
|
56,488 |
|
|
Total current liabilities |
|
|
73,108 |
|
|
|
95,617 |
|
|
Long-term debt |
|
|
240,176 |
|
|
|
218,402 |
|
|
Deferred income taxes |
|
|
4,760 |
|
|
|
4,337 |
|
|
Pension and post-retirement obligations |
|
|
2,781 |
|
|
|
2,679 |
|
|
Operating lease liabilities |
|
|
18,478 |
|
|
|
19,532 |
|
|
Other long-term liabilities |
|
|
5,166 |
|
|
|
5,400 |
|
|
Total liabilities |
|
|
344,469 |
|
|
|
345,967 |
|
|
Stockholders’ Equity: |
|
|
|
|
|
|
|
||
Common stock, no par value, authorized 50,000 shares; 16,906 and 16,308 shares issued and outstanding at |
|
|
109,576 |
|
|
|
95,937 |
|
|
Preferred stock, par value |
|
|
— |
|
|
|
— |
|
|
Retained earnings |
|
|
172,215 |
|
|
|
165,813 |
|
|
Accumulated other comprehensive loss |
|
|
(14,661 |
) |
|
|
(10,175 |
) |
|
Total stockholders’ equity |
|
|
267,130 |
|
|
|
251,575 |
|
|
Total Liabilities and Stockholders’ Equity |
|
$ |
611,599 |
|
|
$ |
597,542 |
|
|
ALLIENT INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) |
|||||||||
For the three months ended |
|||||||||
|
|||||||||
|
2024 |
|
2023 |
||||||
Cash Flows From Operating Activities: |
|||||||||
Net income |
$ |
6,902 |
|
$ |
6,315 |
|
|||
Adjustments to reconcile net income to net cash provided by operating activities |
|||||||||
Depreciation and amortization |
|
6,385 |
|
|
6,145 |
|
|||
Deferred income taxes |
|
297 |
|
|
(290 |
) |
|||
Stock-based compensation expense |
1,211 |
|
1,267 |
|
|||||
Debt issue cost amortization recorded in interest expense |
156 |
|
75 |
|
|||||
Other |
|
411 |
|
|
395 |
|
|||
Changes in operating assets and liabilities, net of acquisitions: |
|||||||||
Trade receivables |
|
(292 |
) |
|
(10,587 |
) |
|||
Inventories |
|
(119 |
) |
|
1,340 |
|
|||
Prepaid expenses and other assets |
|
(1,236 |
) |
|
(1,115 |
) |
|||
Accounts payable |
|
(2,022 |
) |
|
1,548 |
|
|||
Accrued liabilities |
|
(2,514 |
) |
|
(1,507 |
) |
|||
Net cash provided by operating activities |
|
9,179 |
|
|
3,586 |
|
|||
Cash Flows From Investing Activities: |
|||||||||
Consideration paid for acquisitions, net of cash acquired |
|
(25,527 |
) |
|
(6,250 |
) |
|||
Purchase of property and equipment |
|
(2,973 |
) |
|
(3,554 |
) |
|||
Net cash used in investing activities |
|
(28,500 |
) |
|
(9,804 |
) |
|||
Cash Flows From Financing Activities: |
|||||||||
Proceeds from issuance of long-term debt |
|
76,850 |
|
|
4,000 |
|
|||
Principal payments of long-term debt and finance lease obligations |
(53,230 |
) |
(3,116 |
) |
|||||
Payment of contingent consideration |
(2,450 |
) |
— |
|
|||||
Payment of debt issuance costs |
|
(1,532 |
) |
|
— |
|
|||
Tax withholdings related to net share settlements of restricted stock |
|
(100 |
) |
|
(146 |
) |
|||
Net cash provided by financing activities |
|
19,538 |
|
|
738 |
|
|||
Effect of foreign exchange rate changes on cash |
|
(604 |
) |
|
11 |
|
|||
Net decrease in cash and cash equivalents |
|
(387 |
) |
|
(5,469 |
) |
|||
Cash and cash equivalents at beginning of period |
|
31,901 |
|
|
30,614 |
|
|||
Cash and cash equivalents at end of period |
$ |
31,514 |
|
$ |
25,145 |
|
|||
ALLIENT INC.
Reconciliation of Non-GAAP Financial Measures
(In thousands)
(Unaudited)
In addition to reporting revenue and net income, which are
The Company believes that Revenue excluding foreign currency exchange rate impacts is a useful measure in analyzing organic sales results. The Company excludes the effect of currency translation from revenue for this measure because currency translation is not fully under management’s control, is subject to volatility and can obscure underlying business trends. The portion of revenue attributable to currency translation is calculated as the difference between the current period revenue and the current period revenue after applying foreign exchange rates from the prior period. Organic revenue is reported revenues adjusted for the impact of foreign currency and the revenue contribution from acquisitions.
The Company believes EBITDA and Adjusted EBITDA are often a useful measure of a Company’s operating performance and are a significant basis used by the Company’s management to evaluate and compare the core operating performance of its business from period to period by removing the impact of the capital structure (interest), tangible and intangible asset base (depreciation and amortization), taxes, stock-based compensation expense, business development costs, foreign currency gains/losses on short-term assets and liabilities, and other items that are not indicative of the Company’s core operating performance. EBITDA and Adjusted EBITDA do not represent and should not be considered as an alternative to net income, operating income, net cash provided by operating activities or any other measure for determining operating performance or liquidity that is calculated in accordance with GAAP.
The Company’s calculation of Revenue excluding foreign currency exchange impacts for the three months ended
Three Months Ended |
||||
|
||||
Revenue as reported |
$ |
146,713 |
|
|
Foreign currency impact |
|
(238 |
) |
|
Revenue excluding foreign currency exchange impacts |
$ |
146,475 |
|
The Company’s calculation of organic revenue for the three months ended
Three Months Ended |
|||
|
|||
Revenue increase year over year |
0.8 |
% |
|
Less: Impact of acquisitions and foreign currency |
6.7 |
% |
|
Organic revenue |
(5.9 |
)% |
The Company’s calculation of Adjusted EBITDA for the three months ended
Three Months Ended |
|||||
|
|||||
2024 |
|
2023 |
|||
Net income |
$ |
6,902 |
|
$ |
6,315 |
Interest expense |
|
3,388 |
|
|
2,983 |
Provision for income tax |
|
1,919 |
|
|
1,904 |
Depreciation and amortization |
|
6,385 |
|
|
6,145 |
EBITDA |
|
18,594 |
|
|
17,347 |
Stock-based compensation expense |
|
1,211 |
|
|
1,267 |
Foreign currency (gain) loss |
|
(120 |
) |
|
214 |
Business development costs |
|
357 |
|
|
197 |
Adjusted EBITDA |
$ |
20,042 |
|
$ |
19,025 |
ALLIENT INC.
Reconciliation of GAAP Net Income and Diluted Earnings per Share to
Non-GAAP Adjusted Net Income and Adjusted Diluted Earnings per Share
(In thousands, except per share data)
(Unaudited)
The Company’s calculation of Adjusted net income and Adjusted diluted earnings per share for the three months ended
|
||||||||||||||
|
|
For the three months ended |
||||||||||||
|
|
|
||||||||||||
|
|
|
|
|
Per diluted |
|
|
|
|
Per diluted |
||||
|
|
2024 |
|
share |
|
2023 |
|
share |
||||||
Net income as reported |
|
$ |
6,902 |
|
|
$ |
0.42 |
|
|
$ |
6,315 |
|
$ |
0.39 |
Non-GAAP adjustments, net of tax (1) |
|
|
|
|
|
|
|
|
|
|
|
|
||
Amortization of intangible assets – net |
|
|
2,463 |
|
|
|
0.15 |
|
|
|
2,305 |
|
|
0.14 |
Foreign currency (gain) loss – net |
|
|
(92 |
) |
|
|
(0.01 |
) |
|
|
164 |
|
|
0.01 |
Business development costs – net |
|
|
273 |
|
|
|
0.02 |
|
|
|
151 |
|
|
0.01 |
Non-GAAP adjusted net income and adjusted diluted earnings per share |
|
$ |
9,546 |
|
|
$ |
0.58 |
|
|
$ |
8,935 |
|
$ |
0.55 |
Weighted average diluted shares outstanding |
|
|
|
|
|
16,497 |
|
|
|
|
|
|
16,137 |
____________________________
(1) Applies a blended federal, state, and foreign tax rate of 23% applicable to the non-GAAP adjustments. |
Adjusted net income and diluted EPS are defined as net income as reported, adjusted for certain items, including amortization of intangible assets and unusual non-recurring items. Adjusted net income and diluted EPS are not a measure determined in accordance with GAAP in
View source version on businesswire.com: https://www.businesswire.com/news/home/20240508112647/en/
Investor Contacts:
716-843-3908 / 716-843-3832
dpawlowski@keiadvisors.com / cmychajluk@keiadvisors.com
Source: