Allient Reports First Quarter 2025 Results, Highlights Strong Sequential Growth in Sales, Margins, and Earnings

• Revenue was $132.8 million with gross margin at 32.2% despite lower year-over-year revenue; Higher volume and favorable mix sequentially drove gross margin expansion of 70 basis points compared with fourth quarter of 2024
• Simplify to Accelerate NOW actions supported a 130 basis point sequential improvement in operating margin, reaching 6.6%
• Diluted earnings per share (EPS) were $0.21, with adjusted EPS of $0.46
• Total orders increased 17% sequentially, resulting in a book-to-bill ratio of 1.04
• Operating cash flow was $13.9 million, up 52%, and ended the quarter with $47.8 million of cash; Debt, net of cash, was reduced by $13.6 million during the quarter to $174.4 million
• The Company’s leverage ratio was 2.91 at quarter end, as described in the reconciliation of non-GAAP financial measures

BUFFALO, N.Y.--(BUSINESS WIRE)-- Allient Inc. (Nasdaq: ALNT) (“Allient” or the “Company”), a global designer and manufacturer of precision and specialty Motion, Controls and Power products and solutions for targeted industries and applications, today reported financial results for its first quarter ended March 31, 2025.

Dick Warzala, Chairman and CEO, commented, “Our first quarter results demonstrate the strength of our diversified business model and the effectiveness of our strategic initiatives. We achieved solid sequential growth in sales and profitability overall as we continue to more closely align our business with our customers and focus on taking the necessary actions to ensure we achieve our long-term strategic goals and objectives. Our 'Simplify to Accelerate NOW' actions are aligned with our strategy and are delivering meaningful improvements to our operational performance and positioning us for long-term success.​

“We are closely monitoring the evolving trade environment, including recent tariff developments. Additionally, our team is focused on mitigating the impact of the emerging and changing rare earth mineral trade constraints which is introducing new complexities for manufacturers. While these factors present challenges, we remain committed to agility and resilience in our operations. Our focus on innovation, efficiency, and customer value continues to guide us as we adapt to the changing landscape and strive to deliver sustained value to our stakeholders.”

First Quarter 2025 Results (Narrative compares with prior-year period unless otherwise noted)

Revenue decreased 9%, or $13.9 million, to $132.8 million, primarily due to anticipated demand softness in Industrial and Vehicle markets, partially offset by strength in Industrial market applications where our power quality solutions are needed, as well as in Aerospace & Defense. Sequentially, revenue increased $10.8 million, or 9%, over the fourth quarter of 2024. The impact of foreign currency exchange rate fluctuations was unfavorable by $1.8 million. Sales to U.S. customers were 52% of total sales compared with 58% in the first quarter last year, with the balance of sales to customers primarily in Europe, Canada and Asia-Pacific. See the attached table for a description of non-GAAP financial measures and reconciliation of revenue excluding foreign currency exchange rate fluctuations.

Market Performance:

• Aerospace & Defense revenue increased 25%, primarily driven by the timing of key defense and space program deliveries.
• Medical market revenue remained flat, as solid demand for surgical instruments and improved sales in medical mobility solutions were offset by softness in pump-related products.
• Vehicle market sales declined 34%, largely attributable to reduced demand for powersports.
• Industrial market revenue decreased 10%. Strength in power quality sales, particularly to the HVAC/data center market, was more than offset by lower demand in industrial automation due to inventory destocking by the Company’s largest customer.
• Distribution channel sales, while representing a smaller portion of total revenue, rose 21%, reflecting broader demand for the Company’s diversified product offerings.

Gross margin for the first quarter was 32.2%, a slight decrease of 10 basis points compared with the same period last year, despite lower year-over-year volume. On a sequential basis, gross margin improved by

70 basis points, reflecting the positive impact of higher volume and a favorable product mix.

Operating costs and expenses totaled 25.6% of revenue, an increase of 160 basis points year-over-year. The increase is predominately due to higher restructuring and business realignment costs contributing to 110 basis points of the increase; and to a lesser extent the impacts of reduced operating leverage on lower sales volume. Sequentially, operating costs and expenses improved by 60 basis points, benefiting from improved operating leverage and the impact of the Company’s Simplify to Accelerate NOW initiative. These gains were partially offset by an increase in restructuring and business realignment costs.

Operating income was $8.8 million, or 6.6% of revenue, compared with $12.1 million, or 8.2% of revenue in the prior-year period. Sequentially, operating income increased 36% and operating margin expanded by 130 basis points.

The effective income tax rate was 20.2% and 21.8% for the first quarter of 2025 and 2024, respectively. The Company expects its income tax rate for the full year 2025 to be approximately 21% to 23%.

Net income was $3.6 million, or $0.21 per diluted share, compared with $6.9 million, or $0.42 per diluted share, in the prior-year period. Sequentially, net income improved from $3.0 million, or $0.18 per diluted share. Adjusted net income, which excludes amortization of intangible assets related to acquisitions, acquisition and integration-related costs, restructuring and business realignment costs, and other non-recurring items, was $7.6 million, or $0.46 per diluted share. This compared with $9.5 million, or $0.59 per diluted share, in the first quarter of 2024 and $5.2 million, or $0.31 per diluted share, in the fourth quarter of 2024. See the attached tables for a description of non-GAAP financial measures and reconciliation table for Adjusted Net Income and Diluted Earnings per Share.

Earnings before interest, taxes, depreciation, amortization, stock-based compensation expense, acquisition and integration-related costs, restructuring and business realignment costs, and foreign currency gains/losses (“Adjusted EBITDA”) was $17.5 million, or 13.2% of revenue, compared with $20.0 million, or 13.7% of revenue. Sequentially, Adjusted EBITDA as a percentage of revenue was up 160 basis points. The Company believes that, when used in conjunction with measures prepared in accordance with U.S. generally accepted accounting principles, Adjusted EBITDA, which is a non-GAAP measure, helps in the understanding of its operating performance. See the attached table for a description of non-GAAP financial measures and reconciliation table for Adjusted EBITDA.

Balance Sheet and Cash Flow Review

Cash and cash equivalents increased 32% to $47.8 million compared with $36.1 million at year-end 2024. Cash provided by operating activities increased to $13.9 million compared with $9.2 million in the prior year’s first quarter, which reflected improved working capital.

Capital expenditures were $1.1 million for the quarter and largely focused on new customer projects. This compared with $3.0 million of capital expenditures in the prior-year period. The Company expects 2025 capital expenditures to range between $10 million to $12 million.

Total debt of $222.2 million was down $2.0 million from year-end 2024. Debt, net of cash, was reduced by $13.6 million during the quarter to $174.4 million, or 39.0% of net debt to capitalization. The Company’s leverage ratio, calculated as total net debt divided by trailing twelve months of Adjusted EBITDA, improved to 2.91x, down from 3.01x at December 31, 2024. The bank leverage ratio, as defined in the Company’s credit agreement, which amongst other items excludes foreign cash, was 3.56x at quarter-end, remaining in compliance with all covenants. See the attached table for a description of non-GAAP financial measures and reconciliation table for Total Net Debt and Leverage Ratio.

Orders and Backlog Summary ($ in thousands)

		Q1 2025			Q4 2024			Q3 2024			Q2 2024			Q1 2024
Orders		$	137,622		$	117,900		$	102,631		$	137,373		$	122,127
Backlog		$	237,323		$	230,788		$	238,492		$	259,002		$	258,130

First quarter orders increased 17% sequentially, driven by strong demand in the Industrial market applications where our power quality solutions are needed, as well as in Aerospace & Defense. On a year-over-year basis, orders rose 13%, supported by similar end-market momentum. Foreign currency translation negatively impacted orders by $1.7 million compared with the prior-year period.

Backlog grew 3% sequentially, reflecting the improved order rate. However, backlog was down year-over-year as customers adjust their ordering patterns to manage elevated inventory levels, and reflected adverse foreign currency exchange rate impacts. The majority of the backlog is expected to convert to revenue within three to nine months, consistent with the Company’s historical conversion patterns.

Conference Call and Webcast

The Company will host a conference call and webcast on Thursday, May 8, 2025, at 10:00 am ET.

During the conference call, management will review the financial and operating results and discuss Allient’s corporate strategy and outlook. A question-and-answer session will follow.

To listen to the live call, dial (412) 634-6879. In addition, the webcast and slide presentation may be found at: www.allient.com/investors.

A telephonic replay will be available from 2:00 pm ET on the day of the call through Thursday, May 22, 2025.

To listen to the archived call, dial (412) 317-6671 and enter replay pin number 10198077 or access the webcast replay via the Company’s website. A transcript will also be posted to the website once available.

About Allient Inc.

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 Buffalo, N.Y., Allient employs more than 2,500 team members around the world. To learn more, visit www.allient.com.

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 savings from restructuring and simplifying actions, the cost of implementing such actions, operating results, expectations for the level of sales, 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 Securities and Exchange Commission. Any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it is not possible for us to predict the occurrence of those matters or the manner in which they may affect us. The Company has no obligation or intent to release publicly any revisions to any forward looking statements, whether as a result of new information, future events, or otherwise.

FINANCIAL TABLES FOLLOW

ALLIENT INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
	For the three months ended
	March 31,
	2025			2024
Revenue	$	132,803		$	146,713
Cost of goods sold		90,051			99,336
Gross profit		42,752			47,377
Operating costs and expenses:
Selling		6,014			6,298
General and administrative		13,813			14,440
Engineering and development		9,554			11,067
Acquisition and integration-related costs		—			326
Restructuring and business realignment costs		1,499			31
Amortization of intangible assets		3,093			3,115
Total operating costs and expenses		33,973			35,277
Operating income		8,779			12,100
Other expense, net:
Interest expense		3,635			3,388
Other expense (income), net		684			(109)
Total other expense, net		4,319			3,279
Income before income taxes		4,460			8,821
Income tax provision		(903)			(1,919)
Net income	$	3,557		$	6,902
Basic earnings per share:
Earnings per share	$	0.21		$	0.42
Basic weighted average common shares		16,599			16,394
Diluted earnings per share:
Earnings per share	$	0.21		$	0.42
Diluted weighted average common shares		16,638			16,497

ALLIENT INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
		March 31,			December 31,
		2025			2024
Assets
Current assets:
Cash and cash equivalents		$	47,753		$	36,102
Trade receivables, net of provision for credit losses of $1,362 and $1,628 at March 31, 2025 and December 31, 2024, respectively			88,136			78,774
Inventories			105,571			111,517
Prepaid expenses and other assets			12,413			11,187
Total current assets			253,873			237,580
Property, plant, and equipment, net			64,467			65,685
Deferred income taxes			8,771			9,116
Intangible assets, net			96,741			99,671
Goodwill			132,359			131,789
Operating lease assets			23,445			23,748
Other long-term assets			7,243			8,192
Total Assets		$	586,899		$	575,781
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable		$	30,646		$	27,156
Accrued liabilities			32,428			30,221
Total current liabilities			63,074			57,377
Long-term debt			222,202			224,177
Deferred income taxes			3,408			3,642
Pension and post-retirement obligations			1,597			1,667
Operating lease liabilities			19,070			19,417
Other long-term liabilities			4,720			4,647
Total liabilities			314,071			310,927
Stockholders’ Equity:
Common stock, no par value, authorized 50,000 shares; 16,975 and 16,810 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively			112,722			111,024
Preferred stock, par value $1.00 per share, authorized 5,000 shares; no shares issued or outstanding			—			—
Retained earnings			180,052			177,013
Accumulated other comprehensive loss			(19,946)			(23,183)
Total stockholders’ equity			272,828			264,854
Total Liabilities and Stockholders’ Equity		$	586,899		$	575,781

ALLIENT INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
	For the three months ended
	March 31,
	2025			2024
Cash Flows From Operating Activities:
Net income	$	3,557		$	6,902
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		6,281			6,385
Deferred income taxes		49			297
Stock-based compensation expense		920			1,211
Debt issue cost amortization recorded in interest expense		161			156
Other		1,039			411
Changes in operating assets and liabilities, net of acquisitions:
Trade receivables		(8,415)			(292)
Inventories		6,511			(119)
Prepaid expenses and other assets		(1,024)			(1,236)
Accounts payable		2,863			(2,022)
Accrued liabilities		1,986			(2,514)
Net cash provided by operating activities		13,928			9,179
Cash Flows From Investing Activities:
Consideration paid for acquisitions, net of cash acquired		—			(25,527)
Purchase of property and equipment		(1,060)			(2,973)
Net cash used in investing activities		(1,060)			(28,500)
Cash Flows From Financing Activities:
Proceeds from issuance of long-term debt		—			76,850
Principal payments of long-term debt and finance lease obligations		(2,110)			(53,230)
Payment of contingent consideration		—			(2,450)
Payment of debt issuance costs		(17)			(1,532)
Tax withholdings related to net share settlements of restricted stock		(63)			(100)
Net cash (used in) provided by financing activities		(2,190)			19,538
Effect of foreign exchange rate changes on cash		973			(604)
Net increase (decrease) in cash and cash equivalents		11,651			(387)
Cash and cash equivalents at beginning of period		36,102			31,901
Cash and cash equivalents at end of period	$	47,753		$	31,514

ALLIENT INC.
Reconciliation of Non-GAAP Financial Measures
(In thousands, Unaudited)

In addition to reporting revenue and net income, which are U.S. generally accepted accounting principle (“GAAP”) measures, the Company presents Revenue excluding foreign currency exchange rate impacts, Organic revenue, EBITDA and Adjusted EBITDA (earnings before interest, income taxes, depreciation and amortization, stock-based compensation expense, acquisition and integration-related costs, restructuring and business realignment costs, and foreign currency gains/losses), total net debt, and leverage ratio, which are non-GAAP measures.

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, acquisition and integration-related costs, restructuring and business realignment 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. In addition to the performance measures identified above, we believe that total net debt and leverage ratio provide meaningful measures of liquidity and a useful basis for assessing our ability to fund our activities, including the financing of acquisitions and debt repayments. Total net debt is calculated as total debt less cash and cash equivalents. Leverage ratio is total net debt divided by adjusted EBITDA for the trailing twelve months.

The Company’s calculation of Revenue excluding foreign currency exchange impacts for the three months ended March 31, 2025 is as follows:

		Three Months Ended
		March 31, 2025
Revenue as reported		$	132,803
Foreign currency impact			1,819
Revenue excluding foreign currency exchange impacts		$	134,622

The Company’s calculation of organic revenue for the three months ended March 31, 2025 is as follows:

		Three Months Ended
		March 31, 2025
Revenue decrease year over year		(9.4)%
Add: Impact of acquisitions and foreign currency		0.3%
Organic revenue		(9.1)%

ALLIENT INC.
Reconciliation of Non-GAAP Financial Measures
(In thousands, Unaudited)

The Company’s calculation of Adjusted EBITDA for the three months ended March 31, 2025 and 2024 is as follows:

		Three Months Ended
		March 31,
		2025			2024
Net income		$	3,557		$	6,902
Interest expense			3,635			3,388
Provision for income tax			903			1,919
Depreciation and amortization			6,281			6,385
EBITDA			14,376			18,594
Stock-based compensation expense			920			1,211
Acquisition and integration-related costs			—			326
Restructuring and business realignment costs			1,499			31
Foreign currency loss / (gain)			677			(120)
Adjusted EBITDA		$	17,472		$	20,042

The Company’s calculation of Total Net Debt and Leverage Ratio as of March 31, 2025 and December 31, 2024 is as follows:

	March 31, 2025			December 31, 2024
Total debt	$	222,202		$	224,177
Less: cash and cash equivalents	$	47,753		$	36,102
Total net debt (Non-GAAP)	$	174,449		$	188,075
TTM Adjusted EBITDA (Non-GAAP)	$	59,955		$	62,525
Leverage Ratio (Non-GAAP)		2.91			3.01

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 March 31, 2025 and 2024 is as follows:

		For the three months ended
		March 31,
		2025			Per diluted share			2024			Per diluted share
Net income as reported		$	3,557		$	0.21		$	6,902		$	0.42
Non-GAAP adjustments, net of tax (1)
Amortization of intangible assets - net			2,369			0.15			2,463			0.15
Foreign currency loss (gain) - net			519			0.03			(92)			(0.01)
Acquisition and integration-related costs - net			-			-			250			0.02
Restructuring and business realignment costs - net			1,148			0.07			23			-
Non-GAAP adjusted net income and diluted EPS		$	7,593		$	0.46		$	9,546		$	0.58
Weighted average diluted shares outstanding						16,638						16,272

(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 the United States, and may not be comparable to the measure as used by other companies. Nevertheless, the Company believes that providing non-GAAP information, such as adjusted net income and diluted EPS are important for investors and other readers of the Company’s financial statements and assists in understanding the comparison of the current quarter’s and current year’s net income and diluted EPS to the historical periods’ net income and diluted EPS.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250507892192/en/

Investor Contacts:

Deborah K. Pawlowski / Craig P. Mychajluk

Alliance Advisors IR

716-843-3908 / 716-843-3832

dpawlowski@allianceadvisors.com / cmychajluk@allianceadvisors.com

Source: Allient Inc.