[10-Q] ALLIENT INC Quarterly Earnings Report

[10-Q] ALLIENT INC Quarterly Earnings Report

[10-Q] ALLIENT INC Quarterly Earnings Report

NASDAQ:ALNT

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NASDAQ:ALNT

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(Neutral)

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(Neutral)

Form Type

10-Q

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11/05/2025 - 04:11 PM

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Table of Contents

927

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025.

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________________to _________________________

Commission file number 0-04041

ALLIENT INC.

(Exact name of Registrant as Specified in Its Charter)


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)

(716) 242-8634

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol		Name of each exchange on which registered
Common stock		ALNT		NASDAQ

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past ninety (90) days. Yes ⌧ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ⌧ No ◻

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Securities Exchange Act.

Large accelerated filer ◻

Accelerated filer ⌧

Non-accelerated filer ◻

Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ⌧

Number of Shares of the only class of Common Stock outstanding: 16,943,497 as of November 5, 2025

Table of Contents

ALLIENT INC.

INDEX


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	20

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29

	Item 4.	Controls and Procedures	30

PART II. OTHER INFORMATION			30

	Item 1A.	Risk Factors	30

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30

	Item 5.	Other Information	31

	Item 6.	Exhibits	31

Table of Contents

ALLIENT INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

(Unaudited)


	September 30,		December 31,
	2025		2024
Assets
Current assets:
Cash and cash equivalents	$	39,476	$	36,102
Trade receivables, net of provision for credit losses of $1,177 and $1,628 at September 30, 2025 and December 31, 2024, respectively		91,718		78,774
Inventories		111,360		111,517
Prepaid expenses and other assets		15,502		11,187
Total current assets		258,056		237,580
Property, plant, and equipment, net		62,599		65,685
Deferred income taxes		8,277		9,116
Intangible assets, net		91,296		99,671
Goodwill		134,142		131,789
Operating lease assets		21,996		23,748
Other long-term assets		8,717		8,192
Total Assets	$	585,083	$	575,781
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	33,724	$	27,156
Accrued liabilities		39,302		30,221
Total current liabilities		73,026		57,377
Long-term debt		190,259		224,177
Deferred income taxes		3,338		3,642
Pension and post-retirement obligations		1,549		1,667
Operating lease liabilities		17,474		19,417
Other long-term liabilities		5,265		4,647
Total liabilities		290,911		310,927
Stockholders’ Equity:
Common stock, no par value, authorized 50,000 shares; 16,936 and 16,810 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively		113,325		111,024
Preferred stock, par value $1.00 per share, authorized 5,000 shares; no shares issued or outstanding		—		—
Retained earnings		191,163		177,013
Accumulated other comprehensive loss		(10,316)		(23,183)
Total stockholders’ equity		294,172		264,854
Total Liabilities and Stockholders’ Equity	$	585,083	$	575,781

See accompanying notes to condensed consolidated financial statements.

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ALLIENT INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(In thousands, except per share data)

(Unaudited)


	For the three months ended				For the nine months ended
	September 30,				September 30,
	2025		2024		2025		2024
Revenues	$	138,743	$	125,213	$	411,124	$	407,958
Cost of goods sold		92,562		85,949		275,835		280,641
Gross profit		46,181		39,264		135,289		127,317
Operating costs and expenses:
Selling		6,217		6,323		18,257		19,283
General and administrative		14,112		13,856		42,364		42,438
Engineering and development		9,687		9,056		29,185		30,416
Acquisition and integration-related costs		17		(201)		40		256
Restructuring and business realignment costs		836		479		3,457		1,948
Amortization of intangible assets		3,132		3,135		9,350		9,381
Total operating costs and expenses		34,001		32,648		102,653		103,722
Operating income		12,180		6,616		32,636		23,595
Other expense, net:
Interest expense		3,401		3,435		10,588		10,207
Other expense, net		457		468		1,964		405
Total other expense, net		3,858		3,903		12,552		10,612
Income before income taxes		8,322		2,713		20,084		12,983
Income tax provision		(1,845)		(612)		(4,433)		(2,830)
Net income	$	6,477	$	2,101	$	15,651	$	10,153
Basic earnings per share:
Earnings per share	$	0.39	$	0.13	$	0.94	$	0.61
Basic weighted average common shares		16,695		16,574		16,658		16,513
Diluted earnings per share:
Earnings per share	$	0.39	$	0.13	$	0.94	$	0.61
Diluted weighted average common shares		16,780		16,605		16,708		16,581
Net income	$	6,477	$	2,101	$	15,651	$	10,153
Other comprehensive income (loss):
Foreign currency translation adjustment		(1,385)		5,821		14,121		235
Loss on derivatives, net of tax		(219)		(1,379)		(1,254)		(1,968)
Comprehensive income	$	4,873	$	6,543	$	28,518	$	8,420

See accompanying notes to condensed consolidated financial statements.

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ALLIENT INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except per share data)

(Unaudited)


	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, 2024	16,810	$	111,024	$	177,013	$	(25,289)	$	1,975	$	131	$	264,854
Stock transactions under employee benefit stock plans	33		886										886
Issuance of restricted stock, net of forfeitures	135		(11)										(11)
Stock-based compensation expense			920										920
Shares withheld for payment of employee payroll taxes	(3)		(97)										(97)
Comprehensive income (loss)							3,862		(856)				3,006
Tax effect of derivative transactions									231				231
Net income					3,557								3,557
Dividends to stockholders - $0.03					(518)								(518)
Balances, March 31, 2025	16,975	$	112,722	$	180,052	$	(21,427)	$	1,350	$	131	$	272,828
Issuance of restricted stock, net of forfeitures	6		(43)										(43)
Stock-based compensation expense			835										835
Shares withheld for payment of employee payroll taxes	(43)		(927)										(927)
Comprehensive income (loss)							11,644		(540)				11,104
Tax effect of derivative transactions									130				130
Net income					5,617								5,617
Dividends to stockholders - $0.03					(482)								(482)
Balances, June 30, 2025	16,938	$	112,587	$	185,187	$	(9,783)	$	940	$	131	$	289,062
Issuance of restricted stock, net of forfeitures	—												—
Stock-based compensation expense			835										835
Shares withheld for payment of employee payroll taxes	(2)		(97)										(97)
Comprehensive loss							(1,385)		(288)				(1,673)
Tax effect of derivative transactions									69				69
Net income					6,477								6,477
Dividends to stockholders - $0.03					(501)								(501)
Balances, September 30, 2025	16,936	$	113,325	$	191,163	$	(11,168)	$	721	$	131	$	294,172


	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 acquisition	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) income							(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) income							(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
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 (loss) income							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

See accompanying notes to condensed consolidated financial statements.

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ALLIENT INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	For the nine months ended
	September 30,
	2025		2024
Cash Flows From Operating Activities:
Net income	$	15,651	$	10,153
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		19,105		19,248
Deferred income taxes		287		(45)
Stock-based compensation expense		2,590		3,382
Debt issue cost amortization recorded in interest expense		485		379
Other		3,729		3,248
Changes in operating assets and liabilities, net of acquisitions:
Trade receivables		(10,679)		6,012
Inventories		1,863		5,500
Prepaid expenses and other assets		(3,372)		142
Accounts payable		5,583		(12,259)
Accrued liabilities		7,874		(6,302)
Net cash provided by operating activities		43,116		29,458

Cash Flows From Investing Activities:
Consideration paid for acquisitions, net of cash acquired		—		(25,231)
Purchase of property and equipment		(5,090)		(6,903)
Net cash used in investing activities		(5,090)		(32,134)

Cash Flows From Financing Activities:
Proceeds from issuance of long-term debt		—		76,898
Principal payments of long-term debt and finance lease obligations		(34,334)		(61,333)
Payment of contingent consideration		—		(2,450)
Payment of debt issuance costs		(41)		(2,329)
Dividends paid to stockholders		(1,501)		(1,505)
Tax withholdings related to net share settlements of restricted stock		(1,121)		(1,596)
Net cash (used in) provided by financing activities		(36,997)		7,685
Effect of foreign exchange rate changes on cash		2,345		208
Net increase (decrease) in cash and cash equivalents		3,374		5,217
Cash and cash equivalents at beginning of period		36,102		31,901
Cash and cash equivalents at end of period	$	39,476	$	37,118

Supplemental disclosure of cash flow information:
Stock issued for acquisitions	$	—	$	6,250
Stock issued to settle contingent consideration	$	—	$	4,874
Property, plant and equipment purchases in accounts payable or accrued expenses	$	201	$	952
Debt issuance costs in accounts payable or accrued expenses	$	—	$	568
Cash paid for interest	$	10,271	$	8,821
Cash paid for income taxes	$	7,876	$	6,914

See accompanying notes to condensed consolidated financial statements.

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ALLIENT INC.

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

1. BASIS OF PREPARATION AND PRESENTATION

Allient Inc. (“Allient” or the “Company”) is engaged in the business of designing, manufacturing, and selling precision motion, control, power and structural composites to provide integrated system solutions as well as individual products, to a broad spectrum of customers throughout the world primarily for the industrial, vehicle, medical, and aerospace and defense markets.

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

The assets and liabilities of the Company’s foreign subsidiaries are translated into U.S. dollars using end of period exchange rates. Changes in reported amounts of assets and liabilities of foreign subsidiaries that occur as a result of changes in exchange rates between the foreign subsidiaries’ functional currencies and the U.S. dollar are included in foreign currency translation adjustment. Foreign currency translation adjustment is included in accumulated other comprehensive loss, a component of stockholders’ equity in the accompanying condensed consolidated statements of stockholders’ equity. Revenue and expense transactions use an average rate prevailing during the month of the related transaction. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency of each of the foreign subsidiaries are included in the results of operations as incurred in other expense, net.

The condensed consolidated financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and include all adjustments which are, in the opinion of management, necessary for a fair presentation. Certain information and footnote disclosures normally included in financial statements which are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations. The Company believes that the disclosures herein are adequate to make the information presented not misleading. The financial data for the interim periods may not necessarily be indicative of results to be expected for the year.

The preparation of financial statements in accordance with U.S. GAAP requires management to make certain estimates and assumptions. Such estimates and assumptions affect the reported amounts of assets and liabilities as well as disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates.

It is suggested that the accompanying condensed consolidated financial statements be read in conjunction with the Consolidated Financial Statements and related Notes to such statements included in the Annual Report on Form 10-K for the year ended December 31, 2024 that was previously filed by the Company.

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. This enhances the disclosures around rate reconciliation, income taxes paid, and other related topics. The standard is effective for annual periods beginning after December 15, 2024. The Company is assessing the impact of adopting the standard on our consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40)”. This improves financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. The amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company is assessing the impact of adopting the standard on our consolidated financial statements.

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ALLIENT INC.

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

2.	ACQUISITIONS

On January 11, 2024, the Company acquired 100% of the outstanding shares of SNC Manufacturing Co., Inc. (a Wisconsin corporation) and Acutran de Mexico, S.A. de C.V. (a Mexican corporation), (collectively “SNC”), a premier designer and global manufacturer of electrical transformers serving blue-chip customers in defense, industrial automation, alternative power generation and energy, including electric utilities and renewable energy.

The purchase price consisted of $20,000 in cash paid at closing, subject to customary post-closing working capital adjustments. The purchase price allocation is now final.

The Company incurred $313 of transaction costs related to the acquisition during 2024, which are included in acquisition and integration-related costs on the condensed consolidated statements of income and comprehensive income.


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		2,955
Other current liabilities		(3,188)
Deferred revenue		(55)
Operating lease liabilities		(378)
Net deferred income tax liabilities		(472)
Other noncurrent liabilities		(118)
Net purchase price	$	19,724

The fair values of the assets acquired were determined using one of three valuation approaches: market, income or cost. The selection of a particular method for a given asset depended on the reliability of available data and the nature of the asset, among other considerations. The market approach estimates the value for a subject asset based on available market pricing for comparable assets. The income approach estimates the value for a subject asset based on the present value of cash flows projected to be generated by the asset. The projected cash flows were discounted at a required rate of return that reflects the relative risk of the asset and the time value of money. The projected cash flows for each asset considered multiple factors from the perspective of a marketplace participant including revenue projections from existing customers, attrition trends, technology life-cycle assumptions, marginal tax rates and expected profit margins considering historical and expected margins. The cost approach estimates the value for a subject asset based on the cost to replace the asset and reflects the estimated reproduction or replacement cost for the asset, less an allowance for loss in value due to depreciation or obsolescence, with specific consideration given to economic obsolescence if indicated. These fair value measurement approaches are based on significant unobservable inputs, including management estimates and assumptions.

The intangible assets acquired consist of $1,500 of customers lists, $600 of trade name, and $800 of technology, which are being amortized over 12, 10, and 10 years, respectively. Goodwill generated is related to the assembled workforce, synergies between Allient’s other operations and SNC that are expected to occur as a result of the combined engineering knowledge, the ability of each of the operations to integrate each other’s products into more fully integrated system solutions, and Allient’s ability to utilize SNC’s management knowledge in providing complementary product offerings to the Company’s customers.

The goodwill resulting from the acquisition is not tax deductible.

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ALLIENT INC.

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

Unaudited Pro Forma Financial Information

The following unaudited pro forma financial information presents the combined results of operations if the SNC acquisition had occurred as of January 1, 2023:


	Nine months ended
	September 30,
	2024
Revenues	$	409,252
Income before income taxes	$	13,702

The pro forma information includes certain adjustments, including depreciation and amortization expense, interest expense, and certain other adjustments. The pro forma amounts do not reflect adjustments for anticipated operating efficiencies that the Company expects to achieve as a result of these acquisitions. The pro forma financial information is for informational purposes only and does not purport to present what the Company’s results would have been had these transactions actually occurred on the date presented or to project the combined company’s results of operations or financial position for any future period.

3. REVENUE RECOGNITION

Performance Obligations

The Company considers control of most products to transfer at a single point in time when control is transferred to the customer, generally when the products are shipped in accordance with an agreement and/or purchase order. Control is defined as the ability to direct the use of and obtain substantially all of the remaining benefits of the product.

The Company satisfies its performance obligations under a contract with a customer by transferring goods and services in exchange for monetary consideration from the customer. The Company considers the customer’s purchase order, and the Company’s corresponding sales order acknowledgment as the contract with the customer. For some customers, control, and a sale, is transferred at a point in time when the product is delivered to a customer. For a limited number of contracts, for which revenue derived is not material in the periods presented, the Company recognizes revenue over time in proportion to costs incurred.

Sales, value add, and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue.

Nature of Goods and Services

The Company designs, manufactures, and sells precision motion, control, power, and structural components to provide integrated system solutions as well as individual products to end customers and original equipment manufacturers (“OEM’s”) through the Company’s own direct sales force and authorized manufacturers’ representatives and distributors. The Company’s products include brushed and brushless DC motors, brushless servo and torque motors, coreless DC motors, integrated brushless motor-drives, gearmotors, gearing, modular digital servo drives, motion controllers, incremental and absolute optical encoders, active and passive filters for power quality and harmonic issues, transformers, and other controlled motion-related products. The Company’s target markets include Industrial, Vehicle, Medical, and Aerospace & Defense.

Determining the Transaction Price

The majority of the Company’s contracts have an original duration of less than one year. For these contracts, the Company applies the practical expedient and therefore does not consider the effects of the time value of money. For multiyear contracts, the Company uses judgment to determine whether there is a significant financing component. These contracts are generally those in which the customer has made an up-front payment. Contracts that management determines to include a significant financing component are discounted at the Company’s incremental borrowing rate. The Company incurs interest expense and accrues a contract liability. As the Company satisfies performance obligations and recognizes revenue from these contracts, interest expense is recognized simultaneously.

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ALLIENT INC.

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

Management does not have any contracts that include a significant financing component as of September 30, 2025 and December 31, 2024.

Disaggregation of Revenue

The Company disaggregates revenue from contracts with customers into geographical regions and target markets. The Company determines that disaggregating revenue into these categories achieves the disclosure objective to depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. As noted below in Note 18, Segment Information, the Company’s business consists of one reportable segment. Revenue by geographic region is based on point of shipment origin.

A disaggregation of revenue by target market and geography is provided below:


	Three months ended				Nine months ended
	September 30,				September 30,
Target Market	2025		2024		2025		2024
Industrial	$	71,023	$	59,152	$	198,904	$	192,230
Vehicle		21,584		20,353		71,278		83,669
Medical		21,656		20,507		60,803		58,828
Aerospace & Defense		18,755		18,332		60,753		53,627
Distribution and Other		5,725		6,869		19,386		19,604
Total	$	138,743	$	125,213	$	411,124	$	407,958


	Three months ended				Nine months ended
	September 30,				September 30,
Geography	2025		2024		2025		2024
North America (primarily U.S.)	$	94,838	$	85,263	$	273,463	$	276,886
Europe		37,470		33,859		118,517		111,664
Asia-Pacific		6,435		6,091		19,144		19,408
Total	$	138,743	$	125,213	$	411,124	$	407,958

Contract Balances

When the timing of the Company’s delivery of product is different from the timing of the payments made by customers, the Company recognizes either a contract asset (performance precedes customer payment) or a contract liability (customer payment precedes performance). Typically, contracts are paid in arrears and are recognized as receivables after the Company considers whether a significant financing component exists.

The opening and closing balances of the Company’s contract liabilities are as follows:

The difference between the opening and closing balances of the Company’s contract liabilities primarily results from the timing difference between the Company’s performance and the customer’s payment. In the nine months ended September 30, 2025 and 2024, the Company recognized revenue of $1,203 and $1,108, respectively, that was included in the opening contract liabilities balance.

Significant Payment Terms

The Company’s contracts with its customers state the final terms of the sale, including the description, quantity, and price of each product or service purchased. Payments are typically due in full within 30-60 days of delivery. Since the customer agrees to a stated rate and price in the contract that do not vary over the contract, the majority of contracts do not contain variable consideration.

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ALLIENT INC.

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

Returns, Refunds, and Warranties

In the normal course of business, the Company does not accept product returns unless the item is defective as manufactured. The Company establishes provisions for estimated returns and warranties. All contracts include a standard warranty clause to guarantee that the product complies with agreed specifications.

4. INVENTORIES

Inventories include costs of materials, direct labor and manufacturing overhead, and are stated at the lower of cost (first-in, first-out basis) or net realizable value, as follows:


	September 30,		December 31,
	2025		2024
Parts and raw materials	$	82,504	$	78,725
Work-in-process		12,431		12,274
Finished goods		16,425		20,518
	$	111,360	$	111,517

5. PROPERTY, PLANT AND EQUIPMENT

Property, plant, and equipment is classified as follows:


		September 30,		December 31,
	Useful lives	2025		2024
Land		$	1,798	$	1,770
Building and improvements	5 - 39 years		29,923		29,161
Machinery, equipment, tools and dies	3 - 15 years		119,687		110,194
Construction in progress			2,511		2,856
Furniture, fixtures and other	3 - 10 years		26,293		25,270
			180,212		169,251
Less accumulated depreciation			(117,613)		(103,566)
Property, plant, and equipment, net		$	62,599	$	65,685

Depreciation expense was $3,291 and $3,312 for the three months ended September 30, 2025 and 2024, respectively. For the nine months ended September 30, 2025 and 2024, depreciation expense was approximately $9,755 and $9,667, respectively.

6. GOODWILL

The change in the carrying amount of goodwill for the nine months ended September 30, 2025 is as follows:


		September 30,
		2025
December 31, 2024	$	131,789
Effect of foreign currency translation		2,353
September 30, 2025	$	134,142

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ALLIENT INC.

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

7. INTANGIBLE ASSETS

Intangible assets on the Company’s condensed consolidated balance sheets consist of the following:


	Weighted Average	September 30, 2025						December 31, 2024
	Amortization	Gross		Accumulated		Net Book		Gross		Accumulated		Net Book
	Period	Amount		Amortization		Value		Amount		Amortization		Value
Customer lists	14.1 years	$	117,690	$	(56,883)	$	60,807	$	116,370	$	(50,098)	$	66,272
Trade name	13.7 years		16,100		(9,273)		6,827		15,890		(8,564)		7,326
Design and technologies	10.5 years		42,149		(18,487)		23,662		41,390		(15,317)		26,073
Total		$	175,939	$	(84,643)	$	91,296	$	173,650	$	(73,979)	$	99,671

Amortization expense for intangible assets was $3,132 and $3,135 for the three months ended September 30, 2025 and 2024, respectively. For the nine months ended September 30, 2025 and 2024, amortization expense was $9,350 and $9,381, respectively.

Estimated future intangible asset amortization expense as of September 30, 2025 is as follows:


Year ending December 31,	Total
	Estimated
	Amortization Expense
Remainder of 2025		3,124
2026		12,400
2027		11,958
2028		11,193
2029		9,554
Thereafter		43,067
Total estimated amortization expense	$	91,296

8. STOCK-BASED COMPENSATION

Stock Incentive Plans

The Company’s Stock Incentive Plans provide for the granting of stock awards, including restricted stock, stock options and stock appreciation rights, to employees and non-employees, including directors of the Company.

Restricted Stock

For the nine months ended September 30, 2025, 151,836 shares of unvested restricted stock were awarded at a weighted average market value of $24.03. Of the restricted shares granted, 71,326 shares have performance-based vesting conditions. Stock-based compensation expense for awards with performance-based vesting conditions are reassessed each reporting period and recognized based upon the probability that performance will be achieved. The value of the shares expected to vest is amortized to compensation expense over the related service period, which is normally three years, or over the estimated performance period. Shares of unvested restricted stock are generally forfeited if a recipient leaves the Company before the vesting date. Shares that are forfeited become available for future awards.

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ALLIENT INC.

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

The following is a summary of restricted stock activity for the nine months ended September 30, 2025:


		Number of
		shares
Outstanding at beginning of period		236,340
Awarded		151,836
Vested		(129,857)
Forfeited		(8,544)
Outstanding at end of period		249,775

Stock-based compensation expense, net of forfeitures, of $835 and $1,098 was recorded for the three months ended September 30, 2025 and 2024, respectively. For the nine months ended September 30, 2025 and 2024, stock-based compensation expense, net of forfeitures, of $2,590 and $3,382 was recorded, respectively.

9. ACCRUED LIABILITIES

Accrued liabilities consist of the following:


	September 30,		December 31,
	2025		2024
Compensation and fringe benefits	$	17,865	$	13,134
Warranty reserve		2,286		1,966
Income taxes payable		881		1,472
Operating lease liabilities – current		5,360		5,088
Finance lease obligations – current		476		448
Contract liabilities		3,198		2,292
Restructuring related accruals		1,139		—
Other accrued expenses		8,097		5,821
	$	39,302	$	30,221

In line with the Company’s Simplify to Accelerate NOW strategy, during the first quarter of 2025, the Company began to create a state-of-the-art Machining Center of Excellence at the facility in Dothan, Alabama. Assembly operations from Dothan have begun to be merged into facilities in Tulsa, Oklahoma and Reynosa, Mexico.

Costs associated with this realignment are expected to be approximately $4 to $5 million and relate primarily to employee severance and other personnel-related expenses. These expenses are expected to be substantially incurred and paid by the end of 2025.

Restructuring expenses for this initiative, which are included in restructuring and business realignment costs in the condensed consolidated statement of income and comprehensive income, are as follows:



	Restructuring
	related accruals

December 31, 2024	$	—
Expenses incurred		1,499
Cash payments		(354)
March 31, 2025		1,145
Expenses incurred		1,122
Cash payments		(657)
June 30, 2025		1,610
Expenses incurred		836
Cash payments		(1,307)
September 30, 2025	$	1,139

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ALLIENT INC.

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

10. DEBT OBLIGATIONS

Debt obligations consisted of the following:


	September 30,		December 31,
	2025		2024
Long-term Debt
Revolving Credit Facility, long-term (1)	$	134,963	$	168,962
Note Payable		50,000		50,000
Unamortized debt issuance costs		(2,501)		(2,945)
Finance lease obligations – noncurrent		7,797		8,160
Long-term debt	$	190,259	$	224,177

(1)

The effective interest rate on long-term debt obligations is 5.85% at September 30, 2025.

On March 1, 2024, the Company entered into a Third Amended and Restated Credit Agreement (the “2024 Amended Credit Agreement”) for a $280 million revolving credit facility (the “Revolving Facility”). The changes made to the Company’s previous credit facility by the 2024 Amended Credit Agreement include: i) providing for a $50 million accordion amount and ii) extending the term from February 12, 2025 to March 1, 2029. Additionally, the Company has entered into a $150 million fixed-rate private shelf facility (the “2024 Note Payable Agreement”) under which $50.0 million of borrowings occurred on March 21, 2024. These agreements, collectively, are referred to as the “2024 Credit and Note Payable Agreements”. Pursuant to the 2024 Note Payable Agreement, the Company may from time to time issue and sell, and the borrower may consider in its sole discretion the purchase of, in one or a series of transactions, senior notes of the Company in an aggregate principal amount of up to $150 million (“Shelf Notes”). The Shelf Notes will have a maturity date of no more than 10.5 years after the date of original issuance and may be issued through March 1, 2027, unless either party terminates such issuance right. Debt issuance costs of $3.2 million were incurred related to the 2024 Credit and Note Payable Agreements and are included within unamortized debt issuance costs noted above.

Borrowings under the Revolving Facility bear interest at the Term SOFR Rate (as defined in the 2024 Amended Credit Agreement) plus a margin of 1.25% to 2.50% or the Alternative Base Rate (as defined in the 2024 Amended Credit Agreement) plus a margin of 0.25% to 1.50%, in each case depending on the Company’s ratio of Funded Indebtedness (as defined in the 2024 Amended Credit Agreement) to Consolidated EBITDA (the “Leverage Ratio”). In addition, the Company is required to pay a commitment fee of between 0.15% and 0.325% quarterly on the unused portion of the Revolving Facility, also based on the Company’s Leverage Ratio.

Financial covenants under the 2024 Credit and Note Payable Agreements require the Company to maintain a minimum interest coverage ratio of at least 3.0:1.0 at the end of each fiscal quarter. In addition, the Company’s Leverage Ratio at the end of any fiscal quarter shall not be greater than 4.25:1.0 through December 31, 2024 or greater than 3.75 to 1.0 as of the end of any fiscal quarter thereafter; provided that the Company may elect to temporarily increase the Leverage Ratio by 0.5:1.0 following a material acquisition under the 2024 Credit and Note Payable Agreements. The 2024 Credit and Note Payable Agreements also include covenants and restrictions that limit the Company’s ability to incur additional indebtedness, merge, consolidate or sell all or substantially all of its assets and enter into transactions with an affiliate of the Company on other than an arms’ length transaction. These covenants, which are described more fully in the 2024 Credit and Note Payable Agreements, to which reference is made for a complete statement of the covenants, are subject to certain exceptions. The Company was in compliance with all covenants as of September 30, 2025.

The 2024 Credit and Note Payable Agreements also include customary events of default, including failure to pay principal, interest or fees when due, failure to comply with covenants, if any representation or warranty made by the Company is false or misleading in any material respect, default under certain other indebtedness, certain insolvency or receivership events affecting the Company and its subsidiaries, the occurrence of certain material judgments, the occurrence of certain ERISA events, the invalidity of the loan documents or a change in control of the Company. The amounts outstanding under the Revolving Facility may be accelerated upon certain events of default.

The obligations under the 2024 Credit and Note Payable Agreements are secured by substantially all of the Company’s non-realty assets and are fully and unconditionally guaranteed by certain of the Company’s subsidiaries.

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ALLIENT INC.

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

On March 21, 2024, the Company issued and sold $50.0 million in aggregate principal amount of the Series A Senior Notes due March 21, 2031 (the “Series A Notes”). The Series A Notes were issued pursuant to the 2024 Note Payable Agreement. The Series A Notes represent senior promissory notes of the Company and will bear interest at 5.96% and will mature on March 21, 2031. Interest on the Series A Notes will be payable quarterly on the 21st day of March, June, September and December in each year, commencing on June 21, 2024. Interest is computed on the basis of a 360-day year composed of twelve 30-day months. There are no separate covenants relating to the Series A Notes. All additional borrowings are subject to the leverage ratio compliance. The Series A Notes may be prepaid at the option of the Company, in accordance with the terms of the 2024 Note Payable Agreement, at 100% of the principal amount to be prepaid plus accrued interest plus the defined “Make-Whole Amount,” if any. The Make-Whole Amount is an amount equal to the excess, if any, of the discounted value of the remaining schedule payments with respect to principal on the Series A Notes being prepaid over the amount of the prepaid principal.

As of September 30, 2025, the unused Revolving Facility was $145,037. The amount available to borrow under the 2024 Credit and Note Payable Agreements may be limited by the Company’s debt and EBITDA levels, which impacts its covenant calculations.

On October 22, 2024, the Company entered into a Second Amendment to the Third Amended and Restated Credit Agreement and a Second Amendment to the Note Purchase and Private Shelf Agreement (collectively, the “October 2024 Credit and Note Payable Amendments”). These amendments include provisions to increase the maximum Leverage Ratio to 4.5:1.0 for the quarter ending March 31, 2025 and June 30, 2025, 4.0:1.0 for the quarter ending September 30, 2025, and returning to 3.75:1.0 for the quarter ending December 31, 2025 and thereafter. From January 1, 2025 through September 30, 2025, borrowings under the Revolving Facility will bear interest at Term SOFR plus a margin of 2.50% and a commitment fee of 0.325% on the unused portion of the Revolving Facility. Also, from October 1, 2024 through September 30, 2025, the Series A Notes will bear interest at 6.46%.

11. DERIVATIVE FINANCIAL INSTRUMENTS

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, and foreign exchange risk primarily through the use of derivative financial instruments.

The Company enters into foreign currency contracts with 30-day maturities to hedge its short-term balance sheet exposure, primarily intercompany, that are denominated in currencies (Euro, Mexican Peso, New Zealand Dollar, Chinese Renminbi, Swedish Krona, Canadian Dollar) other than the subsidiary’s functional currency and are adjusted to current values using period-end exchange rates. The resulting gains or losses are recorded in other expense, net in the condensed consolidated statements of income and comprehensive income. To minimize foreign currency exposure, the Company had foreign currency contracts with notional amounts of $27,887 and $30,945 at September 30, 2025 and December 31, 2024, respectively. The foreign currency contracts are recorded in the condensed consolidated balance sheets at fair value and resulting gains or losses are recorded in other expense, net in the condensed consolidated statements of income and comprehensive income. During the three and nine months ended September 30, 2025, the Company had a gain of $815 and a loss of $254, respectively, and during the three and nine months ended September 30, 2024, the Company had losses of $461 and $380, respectively on foreign currency contracts which is included in other expense, net and generally offset the gains or losses from the foreign currency adjustments on the intercompany balances that are also included in other expense, net.

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements on its variable-rate debt. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. In March 2022 the Company entered into an interest rate swap with a notional amount of $40,000 that matures in December 2026. In March 2023, the Company executed amendments to the existing swaps to amend the index on the interest rate derivatives from LIBOR to SOFR. These amendments had no material financial impact to the Company’s operations or financial position. In September 2024, the Company entered into an additional interest rate swap with a notional amount of $50,000 that matures in September 2027.

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ALLIENT INC.

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

The changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive loss and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During 2025 and 2024, such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt.

As of September 30, 2025, the Company estimates that $821 will be reclassified as a decrease to interest expense over the next twelve months related to its interest rate derivatives. The Company does not use derivatives for trading or speculative purposes.

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024:


		Asset Derivatives
		Fair value as of:
Derivatives designated as	Balance Sheet	September 30,		December 31,
hedging instruments	Location	2025		2024
Foreign currency contracts	Prepaid expenses and other assets	$	43	$	—
Interest rate swaps	Other long-term assets	$	848	$	2,575
		$	891	$	2,575

		Liability Derivatives
		Fair value as of:
Derivatives designated as	Balance Sheet	September 30,		December 31,
hedging instruments	Location	2025		2024
Foreign currency contracts	Accrued liabilities	$	—	$	137

The tables below present the effect of cash flow hedge accounting on other comprehensive income (“OCI”) for the three and nine months ended September 30, 2025 and 2024:


	Amount of pre-tax (loss) gain recognized				Amount of pre-tax (loss) 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,
	2025		2024		2025		2024
Interest rate swaps	$	(219)	$	(745)	$	(1,254)	$	566

Amount of pre-tax gain reclassified

from accumulated OCI into income

Location of gain reclassified

Three months ended September 30,

Nine months ended September 30,

from accumulated OCI into income

2025

2024

2025

2024

Interest expense

385

1,064

1,140

3,134

The table below presents the line items that reflect the effect of the Company’s derivative financial instruments on the condensed consolidated statements of income and comprehensive income for the three and nine months ended September 30, 2025 and 2024:

Total amounts of income and expense

line items presented that reflect the

effects of cash flow hedges recorded

Three months ended September 30,

Nine months ended September 30,

Derivatives designated as hedging instruments

Income Statement Location

2025

2024

2025

2024

Interest rate swaps

Interest Expense

3,401

3,435

10,588

10,207

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ALLIENT INC.

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

The tables below present a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of September 30, 2025 and December 31, 2024. The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented in the condensed consolidated balance sheets:

Derivative assets:

Net amounts

Gross amounts

of assets

Gross amounts not offset in the consolidated

As of

Gross amounts

offset in the

presented in the

balance sheets

September 30,

of recognized

consolidated

Financial

Cash collateral

2025

assets

balance sheets

instruments

received

Net amount

Derivatives

891

—

891

—

891

Net amounts

Gross amounts

of assets

Gross amounts not offset in the consolidated

As of

Gross amounts

offset in the

presented in the

balance sheets

December 31,

of recognized

consolidated

Financial

Cash collateral

2024

assets

balance sheets

instruments

received

Net amount

Derivatives

2,575

—

2,575

—

2,575

Derivative liabilities:

Net amounts

Gross amounts

of liabilities

Gross amounts not offset in the consolidated

As of

Gross amounts

offset in the

presented in the

balance sheets

December 31,

of recognized

consolidated

Financial

Cash collateral

2024

liabilities

balance sheets

instruments

received

Net amount

Derivatives

137

—

137

—

137

The Company has agreements with each of its derivative counterparties that contain a provision where if the Company either defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations.

12. FAIR VALUE

Authoritative guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date.

The guidance establishes a framework for measuring fair value which utilizes observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. Preference is given to observable inputs.

These two types of inputs create the following three – level fair value hierarchy:

Level 1:

Quoted prices for identical assets or liabilities in active markets.

Level 2:

Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model – derived valuations whose inputs or significant value drivers are observable.

Level 3:

Significant inputs to the valuation model that are unobservable.

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ALLIENT INC.

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

The Company’s financial assets and liabilities include cash and cash equivalents, accounts receivable, debt obligations, accounts payable, and accrued liabilities. The carrying amounts reported in the condensed consolidated balance sheets for these assets and liabilities approximate their fair value because of the immediate or short-term maturities of these financial instruments.

The following tables presents the Company’s financial assets (liabilities) that are accounted for at fair value on a recurring basis as of September 30, 2025 and December 31, 2024, respectively, by level within the fair value hierarchy:


	September 30, 2025
	Level 1		Level 2		Level 3
Assets (liabilities)
Pension plan assets	$	6,054	$	—	$	—
Deferred compensation plan assets		5,186		—		—
Foreign currency hedge contracts, net		—		43		—
Interest rate swaps, net		—		848		—


	December 31, 2024
	Level 1		Level 2		Level 3
Assets (liabilities)
Pension plan assets	$	6,164	$	—	$	—
Deferred compensation plan assets		4,647		—		—
Foreign currency hedge contracts, net		—		(137)		—
Interest rate swaps, net		—		2,575		—

13. INCOME TAXES

The income tax provision for interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter, the estimate of the annual effective tax rate is updated, and if the estimated effective tax rate changes, a cumulative adjustment is made. There is potential for volatility of the effective tax rate due to several factors, including changes in the mix of the pre-tax income and the jurisdictions to which it relates, changes in tax laws, settlements with taxing authorities and foreign currency fluctuations.

The effective income tax rate was 22.2% and 22.6% for the three months ended September 30, 2025 and 2024, respectively. For the nine months ended September 30, 2025 and 2024, the effective income tax rate was 22.1% and 21.8%, respectively.

On July 4, 2025, legislation commonly referred to as the One Big Beautiful Bill Act (“OBBBA”) was signed into law which, among other things, modifies the income tax treatment of research and development expenses, as well as includes revisions to bonus depreciation and international tax regimes. The effects of OBBBA are reflected in the results for the three months ended September 30, 2025, and there were no material impacts to income tax provision or the effective income tax rate.

14. LEASES

The Company has operating leases for office space, manufacturing facilities and equipment, computer equipment and automobiles. Many leases include one or more options to renew, some of which include options to extend the leases for a long-term period, and some leases include options to terminate the leases within 30 days. In certain of the Company’s lease agreements, the rental payments are adjusted periodically to reflect actual charges incurred for capital area maintenance, utilities, inflation and/or changes in other indexes.

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ALLIENT INC.

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

Supplemental cash flow information related to the Company’s operating and finance leases for the nine months ended September 30, 2025 and 2024 was as follows:


	September 30,
	2025		2024
Cash paid for operating leases	$	5,000	$	4,791
Cash paid for interest on finance lease obligations	$	291	$	305
Assets acquired under operating leases	$	1,609	$	3,709
Operating lease assets obtained in acquisitions	$	—	$	378

The Company’s finance lease obligations relate to a manufacturing facility. Finance lease assets of $7,103 and $7,577 as of September 30, 2025 and December 31, 2024, respectively, are included in property, plant and equipment, net. As of September 30, 2025, finance lease obligations of $476 are included in accrued liabilities and $7,797 are included in long-term debt on the condensed consolidated balance sheet. As of December 31, 2024, finance lease obligations of $448 are included in accrued liabilities and $8,160 are included in long-term debt on the condensed consolidated balance sheet.

The following table presents the maturity of the Company’s operating and finance lease liabilities as of September 30, 2025:


	Operating Leases		Finance Leases
Remainder of 2025		1,616		208
2026		6,111		848
2027		5,347		867
2028		4,003		866
2029		2,727		906
Thereafter		5,816		6,978
Total undiscounted cash flows	$	25,620	$	10,673
Less: present value discount		(2,786)		(2,400)
Total lease liabilities	$	22,834	$	8,273

As of September 30, 2025, the Company has entered into leases for additional office space with future minimum lease payments of $4,817 that have yet to be commenced.

The Company has operating leases for certain facilities from companies for which a member of management is a part owner. In connection with such leases, the Company made fixed minimum lease payments to the lessor of $272 and $798 during the three and nine months ended September 30, 2025 and $242 and $726 during the three and nine months ended September 30, 2024, respectively, and is obligated to make payments of $274 during the remainder of 2025. Future fixed minimum lease payments under these leases as of September 30, 2025 are $6,693.

15. ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME

Accumulated Other Comprehensive (Loss) Income (“AOCI”) for the three and nine months ended September 30, 2025 and 2024 is comprised of the following:


							Foreign Currency
	Defined Benefit				Tax Effect of		Translation
	Plan Liability		Cash Flow Hedges		Cash Flow Hedges		Adjustment		Total
At June 30, 2025	$	131	$	1,126	$	(186)	$	(9,783)	$	(8,712)
Unrealized gain (loss) on cash flow hedges		—		97		(23)		—		74
Amounts reclassified from AOCI		—		(385)		92		—		(293)
Foreign currency translation gain		—		—		—		(1,385)		(1,385)
At September 30, 2025	$	131	$	838	$	(117)	$	(11,168)	$	(10,316)

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ALLIENT INC.

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)


							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 loss		—		—		—		5,821		5,821
At September 30, 2024	$	(344)	$	1,847	$	(390)	$	(13,021)	$	(11,908)


							Foreign Currency
	Defined Benefit				Tax Effect of		Translation
	Plan Liability		Cash Flow Hedges		Cash Flow Hedges		Adjustment		Total
At December 31, 2024	$	131	$	2,522	$	(547)	$	(25,289)	$	(23,183)
Unrealized gain (loss) on cash flow hedges		—		(544)		143		—		(401)
Amounts reclassified from AOCI		—		(1,140)		287		—		(853)
Foreign currency translation gain		—		—		—		14,121		14,121
At September 30, 2025	$	131	$	838	$	(117)	$	(11,168)	$	(10,316)


							Foreign Currency
	Defined Benefit				Tax Effect of		Translation
	Plan Liability		Cash Flow Hedges		Cash Flow Hedges		Adjustment		Total
At December 31, 2023	$	(344)	$	4,431	$	(1,006)	$	(13,256)	$	(10,175)
Unrealized gain (loss) on cash flow hedges		—		550		(136)		—		414
Amounts reclassified from AOCI		—		(3,134)		752		—		(2,382)
Foreign currency translation gain		—		—		—		235		235
At September 30, 2024	$	(344)	$	1,847	$	(390)	$	(13,021)	$	(11,908)

The realized gains and losses relating to the Company’s interest rate swap hedges were reclassified from AOCI and included in interest expense in the condensed consolidated statements of income and comprehensive income.

16. DIVIDENDS PER SHARE

The Company declared a quarterly dividend of $0.03 per share in the first, second and third quarters of 2025 and 2024.

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ALLIENT INC.

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

17. EARNINGS PER SHARE

Basic and diluted weighted-average shares outstanding are as follows:


	Three months ended		Nine months ended
	September 30,		September 30,
	2025	2024	2025	2024
Basic weighted average shares outstanding	16,695	16,574	16,658	16,513
Dilutive effect of potential common shares	85	31	50	68
Diluted weighted average shares outstanding	16,780	16,605	16,708	16,581

For the three and nine months ended September 30, 2025, the anti-dilutive common shares excluded from the calculation of diluted earnings per share were 26,000 and 35,000, respectively. For the three and nine months ended September 30, 2024, the anti-dilutive common shares excluded from the calculation of diluted earnings per share were 128,000 and 74,000, respectively.

18. SEGMENT INFORMATION

The Company operates in one segment for the manufacture and marketing of specialty-controlled motion products and solutions for end user and OEM applications. The Company’s chief operating decision maker (“CODM”) has been identified as the Chief Executive Officer and President, who reviews operating results to make decisions about allocating resources, monitoring budgets, and assessing performance for the entire Company. The measure of segment profit or loss utilized is consolidated net income. The CODM uses this measure to compare results to prior periods and during our budgeting and forecasting process to assess profitability and enable decision making. The reports reviewed by the CODM do not provide for any significant expense categories beyond those as reported on the consolidated statement of income and comprehensive income. The accounting policies of the Company are described in Note 1 Significant Accounting Policies in the 2024 Form 10-K.

The CODM utilizes consolidated net income, which is available in our consolidated statements of income and comprehensive income, as the measurement for assessing financial performance.

For the three months ended September 30, 2025 and 2024, revenue was comprised of 57% and 56%, respectively, shipped to U.S. customers. Revenue for each of the nine months ended September 30, 2025 and 2024 was comprised of 55%, shipped to U.S. customers. The remainder of revenues for all periods were shipped to foreign customers, primarily in Europe, Canada, and Asia-Pacific.

Identifiable foreign fixed assets were $34,263 and $31,820 as of September 30, 2025 and December 31, 2024, respectively. Identifiable assets outside of the U.S. are attributable to Europe, China, Mexico, and Asia-Pacific.

For the three and nine months ended September 30, 2025 and 2024, no customers individually accounted for a material concentration of revenue nor accounts receivable.

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

All statements contained herein that are not statements of historical fact constitute “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, and may contain the word “believe,” “anticipate,” “expect,” “project,” “intend,” “will continue,” “will likely result,” “should” or words or phrases of similar meaning. Forward-looking statements involve known and unknown risks and uncertainties that may cause actual results to differ materially from the expected results described in the forward-looking statements. The risks and uncertainties include those associated with: the domestic and foreign general business and economic conditions in the markets we serve, including political and currency risks and adverse changes in local legal and regulatory environments; the severity, magnitude and duration of the impact of global pandemics, including impacts from businesses’ and governments’ responses to the impact on our operations and personnel, and on commercial activity and demand across our and our customers’ businesses, and on global supply chains; our inability to predict the extent to which global pandemic impacts will adversely impact our business operations, financial performance, results of operations, financial position, the prices of our securities and the achievement of our strategic objectives; the geopolitical conflicts and their ability to create instability and economic uncertainty; the introduction of new technologies and the impact of competitive products; the ability to protect the Company’s intellectual property; our ability to sustain, manage or forecast our growth and product acceptance to accurately align capacity with demand; the continued success of our customers and the ability to realize the full amounts reflected in our order backlog as revenue; the loss of significant customers or the enforceability of the Company’s contracts in connection with a merger, acquisition, disposition, bankruptcy, or otherwise; our ability to meet the technical specifications of our customers; the performance of subcontractors or suppliers and the continued availability of parts and components; failure of a key information technology system, process or site or a breach of information security, including a cybersecurity breach, ransomware, or failure of one or more key information technology systems, networks, processes, associated sites or service providers; changes in government regulations; the availability of financing and our access to capital markets, borrowings, or financial transactions to hedge certain risks; the ability to attract and retain qualified personnel, and in particular those who can design new applications and products for the motion industry; the ability to implement our corporate strategies designed for growth and improvement in profits including to identify and consummate favorable acquisitions to support external growth and the development of new technologies; the ability to successfully integrate an acquired business into our business model without substantial costs, delays, or problems; our ability to control costs, including the establishment and operation of low cost region manufacturing and component sourcing capabilities; and in the Company’s Annual Report in Form 10-K. Actual results, events and performance may differ materially from the Company’s forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements as a prediction of actual results. 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.

New risk factors emerge from time to time, and it is not possible for management to predict all such risk factors, nor can it assess the impact of all such risk factors on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. The Company’s expectations, beliefs and projections are believed to have a reasonable basis; however, the Company makes no assurance that expectations, beliefs, or projections will be achieved.

Overview

We are a global company that is engaged in the business of designing, manufacturing, and selling precision motion, control, power, and structural composites to provide integrated system solutions as well as individual products, to a broad spectrum of customers throughout the world primarily for the industrial, vehicle, medical, and aerospace and defense markets. We are headquartered in Amherst, NY, and have operations in the United States, Canada, Mexico, Europe, and Asia-Pacific. We are known worldwide for our expertise in electro-magnetic, mechanical, and electronic motion technology. We sell component and integrated controlled motion solutions to end customers and OEMs through our own direct sales force and authorized manufacturers’ representatives and distributors. Our products include nano precision positioning systems, servo control systems, motion controllers, digital servo amplifiers and drives, brushless servo, torque, and coreless motors, brush motors, integrated motor-drives, gear motors, gearing, incremental and absolute optical encoders, active (electronic) and passive (magnetic) filters for power quality and harmonic issues, Industrial safety rated input/output Modules, Universal Industrial Communications Gateways, light-weighting technologies, transformers, and other controlled motion-related products.

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Throughout 2024 and into 2025, we continue to refine our strategy to expand our vertical market focus to accelerate our growth. Throughout its history, the Company has expanded our capabilities to be a leading global provider of motion solutions. More recently, we have been building our controls and power technologies, both organically and through acquisitions. The evolution of these additional pillars of our business enhances our overall value proposition, expands our addressable markets and is aligned with mega technology trends. These advancements required us to refine our strategy to leverage the value opportunity that exists in three technology pillars – Motion, Controls and Power. In addition, we are structuring our organization with focused market selling and support teams to increase solution sales opportunities under our new brand - Allient. This refined strategy is reflected in the 2023 change of our corporate name from Allied Motion Technologies Inc. to Allient Inc, short for Allied Nexus Technologies. Allient captures the opportunity that exists at the nexus of these three technology pillars and recognizes the unique capabilities the combination offers.

Recent Events

Beginning in 2024, and continuing into 2025, the Company has been executing its Simplify to Accelerate NOW program. This included initiatives to realign the Company’s manufacturing footprint and streamline the organization to enhance operational efficiency and drive profitability. These initiatives are expected to position Allient to emerge from the current challenging macroeconomic environment and industrial headwinds with stronger earnings power, improved operational flexibility, and enhanced capacity to capitalize on future growth opportunities.

During the first quarter of 2025, the Company announced that consistent with its Simplify to Accelerate NOW strategy, it will expand upon current capabilities and skillsets to create a state-of-the-art Machining Center of Excellence at its facility in Dothan, Alabama. The Company will transfer current assembly operations from Dothan and merge these capabilities into its facilities in Tulsa, Oklahoma and Reynosa, Mexico where Final Assembly, Integration and Test capabilities are the core competencies.

The realignment will improve business focus and better leverage the Company’s footprint to deliver high-precision system solutions for demanding applications in various served markets including Aerospace and Defense, Medical and Electronic Test and Assembly Equipment. One-time costs required to implement the changes are estimated to be approximately $4 to $5 million, primarily related to employee severance and other personnel related expenses and are expected to be substantially incurred during 2025. The actions undertaken in 2025 under this initiative are expected to support our goal of driving an additional $6 to $7 million in annualized cost savings.

On July 4, 2025, legislation commonly referred to as the One Big Beautiful Bill Act (“OBBBA”) was signed into law which, among other things, modifies the income tax treatment of research and development expenses, as well as includes revisions to bonus depreciation and international tax regimes. The effects of OBBBA are reflected in our results for the three months ended September 30, 2025, and there were no material impacts to our income tax provision or effective tax rate.

Global Environment

The U.S. government has proposed and implemented certain updates to existing foreign trade policies. These updates include new and increased tariffs, or potential tariffs, on a wide range of products and goods imported to the U.S., and certain countries have responded with reciprocal tariffs and/or trade restrictions. We have manufacturing operations in Mexico, China, and Europe, amongst other locations globally throughout the world, and source certain components from locations that may be impacted by these policy changes. Official government policies and agreements continue to be closely monitored and our operations remain agile in making adjustments to minimize potential impacts to our business.

The current geopolitical conflicts are creating higher levels of economic uncertainty and increased volatility with respect to energy prices, interest rates, our supply chain (in particular, with respect to changes and proposed changes to tariffs and trade policies), and certain customer ordering patterns. We are closely monitoring the developments and continue to adjust our production platform to react to changing customer ordering patterns and availability of certain raw materials with a focus on realizing efficiencies. The impact of the conflicts on our operational and financial performance will depend on future developments that cannot be predicted.

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Operating Results

Three months ended September 30, 2025 compared to three months ended September 30, 2024


	For the three months ended						2025 vs. 2024
	September 30,						Variance
(Dollars in thousands, except per share data)	2025			2024			$		%
Revenues	$	138,743		$	125,213		$	13,530	11	%
Cost of goods sold		92,562			85,949			6,613	8	%
Gross profit		46,181			39,264			6,917	18	%
Gross margin percentage		33.3	%		31.4	%
Operating costs and expenses:
Selling		6,217			6,323			(106)	(2)	%
General and administrative		14,112			13,856			256	2	%
Engineering and development		9,687			9,056			631	7	%
Acquisition and integration-related costs		17			(201)			218	(108)	%
Restructuring and business realignment costs		836			479			357	75	%
Amortization of intangible assets		3,132			3,135			(3)	—	%
Total operating costs and expenses		34,001			32,648			1,353	4	%
Operating income		12,180			6,616			5,564	84	%
Interest expense		3,401			3,435			(34)	(1)	%
Other expense, net		457			468			(11)	(2)	%
Total other expense		3,858			3,903			(45)	(1)	%
Income before income taxes		8,322			2,713			5,609	207	%
Income tax provision		(1,845)			(612)			(1,233)	201	%
Net income	$	6,477		$	2,101		$	4,376	208	%

Effective tax rate		22.2	%		22.6	%
Diluted earnings per share	$	0.39		$	0.13		$	0.26	206	%
Bookings	$	133,119		$	102,631		$	30,488	30	%
Backlog	$	230,984		$	238,492		$	(7,508)	(3)	%

REVENUES: The increase in revenues during the three months ended September 30, 2025 reflects increases in each of our target markets, most significantly within Industrial. Our revenues for the three months ended September 30, 2025 was comprised of 57% to U.S. customers and 43% to customers primarily in Europe, Canada, and Asia-Pacific. The overall increase in revenue was primarily due to a 9.0% volume increase and a foreign currency increase of 1.8%. Organic revenue increased 9.0% during the three months ended September 30, 2025. Organic revenue is a non-GAAP measure. Refer to information included in “Non-GAAP Measures” below for a discussion and reconciliation of the non-GAAP measures.

ORDER BOOKINGS: Bookings increased in the three months ended September 30, 2025 compared to 2024, due to a 27.3% increase in volume and a 2.4% increase in foreign currency impact. The increase in bookings from the prior year quarter is impacted by improvements in customer demand levels across each target market in the current year, partially offset by changes in customer order patterns in reacting to elevated inventory levels in the prior year period.

GROSS PROFIT AND GROSS MARGIN: Gross profit increased to $46,181 in the three months ended September 30, 2025 from $39,264 in the three months ended September 30, 2024, and gross margins increased to 33.3% for 2025, compared to 31.4% for 2024. Gross profit and gross margin percentage were impacted favorably by higher sales volume, improved product mix, and operational improvements driven by our Simplify to Accelerate NOW strategy.

SELLING EXPENSES: Selling expenses decreased 2% during the three months ended September 30, 2025 compared to 2024, reflecting cost reduction actions taken as part of our Simplify to Accelerate NOW strategy as well as impacts of sales mix. Selling expenses as a percentage of revenues were 4% and 5% in the three months ended September 30, 2025 and 2024, respectively.

GENERAL AND ADMINISTRATIVE EXPENSES: General and administrative expenses increased 2% during the three months ended September 30, 2025 compared to 2024 due primarily to higher incentive compensation, offset in part by cost reduction actions

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taken reflecting our Simplify to Accelerate NOW strategy. As a percentage of revenues, general and administrative expenses were 10% and 11% in the three months ended September 30, 2025 and 2024, respectively.

ENGINEERING AND DEVELOPMENT EXPENSES: Engineering and development expenses increased by 7% in the three months ended September 30, 2025 compared to 2024. The increase primarily reflects higher incentive compensation, partially offset by the cost reduction actions taken as part of our Simplify to Accelerate NOW strategy. As a percentage of revenues, engineering and development expenses were 7% in each of the three months ended September 30, 2025 and 2024.

ACQUISITION AND INTEGRATION-RELATED COSTS: Acquisition and integration-related costs were not significant in the current and prior year period. The three months ended September 30, 2024 included a fair value measurement reduction of $270 due to acquisition-related contingent consideration.

RESTRUCTURING AND BUSINESS REALIGNMENT COSTS: Restructuring and business realignment costs increased in the three months ended September 30, 2025 compared to 2024 primarily reflecting costs primarily associated with the transfer of assembly operations from our Dothan, Alabama facility in 2025 and timing of other Simplify to Accelerate NOW actions as compared with the prior year, which primarily occurred in the three months ended June 30, 2024.

AMORTIZATION OF INTANGIBLE ASSETS: Amortization of intangible assets remained consistent compared to the prior year period.

INTEREST EXPENSE: Interest expense decreased in the three months ended September 30, 2025 compared to 2024 due to lower average debt balances, partially offset by higher average effective interest rates due to maturity of certain interest rate swaps. Interest expense incurred is partially offset by reductions to interest expense realized through our interest rate swaps.

INCOME TAXES: The effective income tax rate was 22.2% and 22.6% for the three months ended September 30, 2025 and 2024, respectively. We expect our income tax rate for the full year 2025 to be approximately 21% to 23%.

NET INCOME AND ADJUSTED NET INCOME: Net income increased during the three months ended September 30, 2025 compared to 2024, primarily relating to slightly higher sales volume, including an increase in organic revenue, and improvements to gross profit margin percentage, reflecting the actions in our Simplify to Accelerate NOW strategy. Adjusted net income for the quarters ended September 30, 2025 and 2024 was $9,885 and $5,068, respectively. Adjusted diluted earnings per share for the third quarter of 2025 and 2024 were $0.59 and $0.31, respectively. Adjusted net income and adjusted diluted earnings per share are non-GAAP measures. See information included in “Non–GAAP Measures” below for a discussion of the non-GAAP measure and reconciliation of net income to adjusted net income and diluted earnings per share to adjusted diluted earnings per share.

EBITDA AND ADJUSTED EBITDA: EBITDA was $18,146 for the three months ended September 30, 2025 compared to $12,595 for the third quarter of 2024. Adjusted EBITDA was $20,299 and $14,432 for the third quarters of 2025 and 2024, respectively. EBITDA and Adjusted EBITDA are non-GAAP measures. EBITDA consists of income before interest expense, provision for income taxes, and depreciation and amortization. Adjusted EBITDA also excludes stock-based compensation expense, foreign currency gain/loss and certain other items. Refer to information included in “Non-GAAP Measures” below for a discussion of the non-GAAP measure and a reconciliation of net income to EBITDA and Adjusted EBITDA.

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Nine months ended September 30, 2025 compared to nine months ended September 30, 2024


	For the nine months ended						2025 vs. 2024
	September 30,						Variance
(Dollars in thousands, except per share data)	2025			2024			$		%
Revenues	$	411,124		$	407,958		$	3,166	1	%
Cost of goods sold		275,835			280,641			(4,806)	(2)	%
Gross profit		135,289			127,317			7,972	6	%
Gross margin percentage		32.9	%		31.2	%
Operating costs and expenses:
Selling		18,257			19,283			(1,026)	(5)	%
General and administrative		42,364			42,438			(74)	(0)	%
Engineering and development		29,185			30,416			(1,231)	(4)	%
Acquisition and integration-related costs		40			256			(216)	(84)	%
Restructuring and business realignment costs		3,457			1,948			1,509	77	%
Amortization of intangible assets		9,350			9,381			(31)	—	%
Total operating costs and expenses		102,653			103,722			(1,069)	(1)	%
Operating income		32,636			23,595			9,041	38	%
Interest expense		10,588			10,207			381	4	%
Other expense, net		1,964			405			1,559	385	%
Total other expense, net		12,552			10,612			1,940	18	%
Income before income taxes		20,084			12,983			7,101	55	%
Income tax provision		(4,433)			(2,830)			(1,603)	57	%
Net income	$	15,651		$	10,153		$	5,498	54	%

Effective tax rate		22.1	%		21.8	%
Diluted earnings per share	$	0.94		$	0.61		$	0.33	54	%
Bookings	$	405,774		$	362,131		$	43,643	12	%
Backlog	$	230,984		$	238,492		$	(7,508)	(3)	%

REVENUES: The increase in revenues for the nine months ended September 30, 2025 reflects increases primarily within Aerospace and Defense, Industrial, and Medical markets, partially offset by a decrease in the Vehicle market. The increase in revenue is partially offset by elevated shipments during the first three months of the prior year period as supply chains normalized, combined with elevated inventory levels and slower demand at our customers in the first three months of the current year. Our revenues for the period ended September 30, 2025 was comprised of 55% to U.S. customers and 45% to customers primarily in Europe, Canada and Asia-Pacific. The overall increase in revenue was due to a 0.7% favorable foreign currency impact and a 0.1% volume increase. Organic revenue decreased 0.2% during nine months ended September 30, 2025. Organic revenue is a non-GAAP measure. Refer to information included in “Non-GAAP Measures” below for a discussion and reconciliation of the non-GAAP measures.

ORDER BOOKINGS: Orders increased for the nine months ended September 30, 2025 compared to 2024, and included a 11.2% increase in volume as well as a 0.8% increase in foreign currency impact. The increase in bookings from the prior year quarter is impacted by changes in customer order patterns in reacting to elevated inventory levels in the prior year period and improvements in customer demand levels across each target market in the current year.

GROSS PROFIT AND GROSS MARGIN: Gross profit increased to $135,289 for the nine months ended September 30, 2025 from $127,317 in 2024 driven by decreases in cost of goods sold, and gross margins increased to 32.9% for 2025, compared to 31.2% for 2024. Gross profit and gross margin percentage were impacted favorably by improved product mix and operational improvements driven by our Simplify to Accelerate NOW strategy.

SELLING EXPENSES: Selling expenses decreased 5% during the nine months ended September 30, 2025 compared to 2024, reflecting cost reduction actions taken as part of our Simplify to Accelerate NOW strategy as well as impacts of sales mix. Selling expenses as a percentage of revenues were 4% and 5% during the nine months ended September 30, 2025 and 2024, respectively.

GENERAL AND ADMINISTRATIVE EXPENSES: General and administrative expenses remained consistent during the nine months ended September 30, 2025 compared to the same period of 2024, reflecting cost reduction actions taken as part of our

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Simplify to Accelerate NOW strategy, offset, in part, by higher incentive compensation. As a percentage of revenues, general and administrative expenses were 10% in each of 2025 and 2024.

ENGINEERING AND DEVELOPMENT EXPENSES: Engineering and development expenses decreased by 4% during the nine months ended September 30, 2025 compared to 2024, reflecting cost reduction actions taken as part of our Simplify to Accelerate NOW strategy. As a percentage of revenues, engineering and development expenses were 7% for each of the nine months ended September 30, 2025 and 2024.

ACQUISITION AND INTEGRATION-RELATED COSTS: Acquisition and integration-related costs decreased in 2025 compared to 2024 primarily reflecting costs incurred in 2024 relating to a prior year acquisition.

RESTRUCTURING AND BUSINESS REALIGNMENT COSTS: Restructuring and business realignment costs increased in 2025 compared to 2024 primarily reflecting restructuring-related costs primarily associated with the transfer of assembly operations from our Dothan, Alabama facility.

AMORTIZATION OF INTANGIBLE ASSETS: Amortization of intangible assets remained consistent for the nine months ended September 30, 2025 compared to 2024.

INTEREST EXPENSE: Interest expense increased by 4% for the nine months ended September 30, 2025 compared to 2024 primarily due to an increase in the average effective interest rate on debt due to maturity of certain interest rate swaps, partially offset by lower average debt levels. Interest expense incurred is partially offset by reductions to interest expense realized through our interest rate swaps.

INCOME TAXES: For the nine months ended September 30, 2025 and 2024, the effective income tax rate was 22.1% and 21.8%, respectively. We expect our income tax rate for the full year 2025 to be approximately 21% to 23%.

NET INCOME AND ADJUSTED NET INCOME: Net income increased during the nine months ended September 30, 2025 compared to 2024, primarily relating to higher sales volume and improvements to gross profit margin percentage, as well as a decrease in operating expenses. Adjusted net income for the nine month periods ended September 30, 2025 and 2024 was $27,003 and $19,471, respectively. Adjusted diluted earnings per share for the nine months ended September 30, 2025 and 2024 were $1.62 and $1.17, respectively. Adjusted net income and adjusted diluted earnings per share are non-GAAP measures. See information included in “Non– GAAP Measures” below for a discussion of the non-GAAP measure and reconciliation of net income to Adjusted net income and diluted earnings per share to Adjusted diluted earnings per share.

EBITDA AND ADJUSTED EBITDA: EBITDA was $49,777 for the nine months ended September 30, 2025 compared to $42,438 for the nine months ended September 30, 2024. Adjusted EBITDA was $57,838 and $48,404 for the nine months ended September 30, 2025 and 2024, respectively. EBITDA and Adjusted EBITDA are non-GAAP measures. EBITDA consists of income before interest expense, provision for income taxes, and depreciation and amortization. Adjusted EBITDA also excludes stock-based compensation expense, foreign currency gain/loss and certain other items. Refer to information included in “Non-GAAP Measures” below for a discussion of the non-GAAP measure and a reconciliation of net income to EBITDA and Adjusted EBITDA.

Non-GAAP Measures

Organic revenue, EBITDA, Adjusted EBITDA, Adjusted net income and Adjusted diluted earnings per share are provided for information purposes only and are not measures of financial performance under GAAP. Management believes the presentation of these financial measures reflecting non-GAAP adjustments provides important supplemental information to investors and other users of our financial statements in evaluating the operating results of the Company as distinct from results that include items that are not indicative of ongoing operating results. In particular, those charges and credits that are not directly related to operating unit performance, and that are not a helpful measure of the performance of our underlying business particularly in light of their unpredictable nature. These non-GAAP disclosures have limitations as analytical tools, should not be viewed as a substitute for revenue and net income determined in accordance with GAAP, and should not be considered in isolation or as a substitute for analysis of the Company’s results as reported under GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies. In addition, the supplemental presentation should not be construed as an inference that the Company’s future results will be unaffected by similar adjustments to net income determined in accordance with GAAP. Organic revenue is reported revenues adjusted for the impact of foreign currency and the revenue contribution from acquisitions.

The Company believes that revenue excluding foreign currency exchange impacts is a useful measure in analyzing sales results. The Company excludes the effect of currency translation from revenue for this measure because currency translation is not fully under

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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.

The Company believes EBITDA is often a useful measure of a Company’s operating performance and is a significant basis used by the Company’s management to measure the operating performance of the Company’s business because EBITDA excludes charges for depreciation, amortization and interest expense that have resulted from our debt financings, acquisitions, as well as our provision for income tax expense. EBITDA is frequently used as one of the bases for comparing businesses in the Company’s industry.

The Company also believes that Adjusted EBITDA provides helpful information about the operating performance of its business. Adjusted EBITDA excludes stock-based compensation expense, as well as 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.

Management uses Adjusted net income and Adjusted diluted earnings per share to assess the Company’s consolidated financial and operating performance. Adjusted net income and Adjusted diluted earnings per share are provided for informational purposes only and are not a measure of financial performance under GAAP. These measures help management make decisions that are expected to facilitate meeting current financial goals as well as achieving optimal financial performance. Adjusted net income provides management with a measure of financial performance of the Company based on operational factors as it removes the impact of certain non-routine items from the Company’s operating results. Adjusted diluted earnings per share provides management with an indication of how Adjusted net income would be reflected on a per share basis for comparison to the GAAP diluted earnings per share measure. Adjusted net income is a key metric used by senior management and the Company’s board of directors to review the consolidated financial performance of the business. This measure adjusts net income determined in accordance with GAAP to reflect changes in financial results associated with the highlighted expense and income items.

The Company’s calculation of Revenue excluding foreign currency exchange impacts for the three and nine months ended September 30, 2025 is as follows:


	Three months ended		Nine months ended
	September 30, 2025		September 30, 2025
Revenue as reported	$	138,743	$	411,124
Favorable currency impact		(2,259)		(2,822)
Revenue excluding foreign currency exchange impacts	$	136,484	$	408,302

The Company’s calculation of organic revenue for the three and nine months ended September 30, 2025 is as follows:


	Three months ended		Nine months ended
	September 30, 2025		September 30, 2025
Revenue change over prior year	10.8	%	0.8	%
Less: Impact of acquisitions and foreign currency	1.8		1.0
Organic revenue	9.0	%	(0.2)	%

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The Company’s calculation of EBITDA and Adjusted EBITDA for the three and nine months ended September 30, 2025 and 2024 is as follows (in thousands):


	Three months ended				Nine months ended
	September 30,				September 30,
	2025		2024		2025		2024
Net income as reported	$	6,477	$	2,101	$	15,651	$	10,153
Interest expense		3,401		3,435		10,588		10,207
Provision for income tax		1,845		612		4,433		2,830
Depreciation and amortization		6,423		6,447		19,105		19,248
EBITDA		18,146		12,595		49,777		42,438
Stock-based compensation expense		835		1,098		2,590		3,382
Acquisition and integration-related costs (1)		17		(201)		40		256
Restructuring and business realignment costs		836		479		3,457		1,948
Foreign currency loss		465		461		1,974		380
Adjusted EBITDA	$	20,299	$	14,432	$	57,838	$	48,404

(1)

Includes a Q3 2024 fair value measurement reduction of $270 due to acquisition-related contingent consideration.

The Company’s calculation of Adjusted net income and Adjusted diluted earnings per share for the three and nine months ended September 30, 2025 and 2024 is as follows (in thousands except per share amounts):


	For the three months ended
	September 30,
			Per diluted				Per diluted
	2025		share		2024		share
Net income as reported	$	6,477	$	0.39	$	2,101	$	0.13
Non-GAAP adjustments, net of tax (1)
Amortization of intangible assets – net		2,399		0.14		2,401		0.14
Foreign currency loss – net		356		0.02		353		0.02
Acquisition and integration-related costs – net (2)		13		—		(154)		(0.01)
Restructuring and business realignment costs – net		640		0.04		367		0.02
Non-GAAP adjusted net income and adjusted diluted earnings per share	$	9,885	$	0.59	$	5,068	$	0.31

(1)

Applies a blended federal, state, and foreign tax rate of approximately 23% applicable to the non-GAAP adjustments.

(2)

Includes a Q3 2024 fair value measurement gross reduction of $270 due to acquisition-related contingent consideration.


	For the nine months ended
	September 30,
			Per diluted				Per diluted
	2025		share		2024		share
Net income as reported	$	15,651	$	0.94	$	10,153	$	0.61
Non-GAAP adjustments, net of tax (1)
Amortization of intangible assets – net		7,162		0.43		7,339		0.44
Foreign currency loss – net		1,512		0.09		291		0.02
Acquisition and integration-related costs – net (2)		31		—		196		0.01
Restructuring and business realignment costs – net		2,647		0.16		1,492		0.09
Non-GAAP adjusted net income and adjusted diluted earnings per share	$	27,003	$	1.62	$	19,471	$	1.17

(1)

Applies a blended federal, state, and foreign tax rate of approximately 23% applicable to the non-GAAP adjustments.

(2)

Includes a Q3 2024 fair value measurement gross reduction of $270 due to acquisition-related contingent consideration.

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Liquidity and Capital Resources

The Company’s liquidity position as measured by cash and cash equivalents increased by $3,374 to a balance of $39,476 at September 30, 2025 from December 31, 2024.


					2025 vs.
	Nine Months Ended				2024
	September 30,				Variance
(in thousands):	2025		2024		$
Net cash provided by operating activities	$	43,116	$	29,458	$	13,658
Net cash used in investing activities		(5,090)		(32,134)		27,044
Net cash (used in) provided by financing activities		(36,997)		7,685		(44,682)
Effect of foreign exchange rates on cash		2,345		208		2,137
Net increase (decrease) in cash and cash equivalents	$	3,374	$	5,217	$	(1,843)

Of the $39,476 of cash and cash equivalents at September 30, 2025, $34,293 was located at our foreign subsidiaries and may be subject to withholding tax if repatriated back to the U.S. The Company regularly evaluates opportunities to optimize cash available from operations in all geographies.

During the nine months ended September 30, 2025, the increase in cash provided by operating activities is due to higher net income as adjusted by non-cash operating activity items, offset by decrease in cash inflows on collections on accounts receivable.

The decrease in cash used in investing activities in the nine months ended September 30, 2025 relates to $20,000 in cash paid for the acquisition of SNC, net of cash acquired of $881, as well as $6,250 of cash paid relating to the 2022 Spectrum acquisition in the first quarter of 2024. Cash used in investing activities in the nine months ended September 30, 2025 includes $5,090 for purchases of property and equipment compared to $6,903 during the nine months ended September 30, 2024. Capital expenditures are expected to be between $6,500 and $8,500 for the full year 2025.

The change in cash (used in)/provided by financing activities during the nine months ended September 30, 2025 is primarily due to borrowings of $20,000 to fund the SNC acquisition during the first quarter of 2024. Debt payments of $34,334 were made during the nine months ended September 30, 2025. The $50,000 Notes issued in March 2024 were used to pay down the Revolving Facility. As of September 30, 2025, we had $134,963 of obligations under the Revolving Facility, excluding deferred financing costs.

Financial covenants under the 2024 Credit and Note Payable Agreements require the Company to maintain a minimum interest coverage ratio of at least 3.0:1.0 at the end of each fiscal quarter. In addition, the Company’s Leverage Ratio at the end of any fiscal quarter shall not be greater than 4.25:1.0 through December 31, 2024 or greater than 3.75 to 1.0 as of the end of any fiscal quarter thereafter; provided that the Company may elect to temporarily increase the Leverage Ratio to by 0.5:1.0 following a material acquisition under the 2024 Credit and Note Payable Agreements. The 2024 Credit and Note Payable Agreements also include covenants and restrictions that limit the Company’s ability to incur additional indebtedness, merge, consolidate or sell all or substantially all of its assets and enter into transactions with an affiliate of the Company on other than an arms’ length transaction. These covenants, which are described more fully in the 2024 Credit and Note Payable Agreements, to which reference is made for a complete statement of the covenants, were modified as of October 22, 2024, and are subject to certain exceptions. The Company was in compliance with all covenants as of September 30, 2025.

As of September 30, 2025, the unused Revolving Facility was $145,037. The amount available to borrow could be limited by our debt and EBITDA levels, which impacts our covenant calculations. The Revolving Facility matures March 1, 2029. The Series A Senior Notes, under the 2024 Note Payable Agreement, are due March 21, 2031.

On October 22, 2024, the Company entered into a Second Amendment to the Third Amended and Restated Credit Agreement and a Second Amendment to the Note Purchase and Private Shelf Agreement (collectively, the “October 2024 Credit and Note Payable Amendments”). These amendments include provisions to increase the maximum Leverage Ratio to 4.5:1.0 for the quarters ending March 31, 2025 and June 30, 2025, 4.0:1.0 for the quarter ending September 30, 2025, and returning to 3.75:1.0 for the quarter ending December 31, 2025 and thereafter. From January 1, 2025 through September 30, 2025, borrowings under the Revolving Facility will bear interest at Term SOFR plus a margin of 2.50% and a commitment fee of 0.325% on the unused portion of the Revolving Facility. Also, from October 1, 2024 through September 30, 2025, the Series A Notes will bear interest at 6.46%.

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The Company declared dividends of $0.09 per share during each of the nine months ended September 30, 2025 and 2024. The Company’s working capital, capital expenditure and dividend requirements are expected to be funded from cash provided by operations and amounts available under the Amended Credit Agreement.

We believe our diverse markets, our strong market position in many of our businesses, and the steps we have taken to improve operational efficiency and strengthen our balance sheet, such as retaining cash to support shorter term needs and amending our revolving credit facility leaves us well-positioned to manage our business. We continually assess our liquidity and cash positions taking geopolitical and other market uncertainties into consideration. Based on our analysis, we believe our existing balances of cash, our currently anticipated operating cash flows, and our available financing under agreements in place will be more than sufficient to meet our cash needs arising in the ordinary course of business for the next twelve months.

Item 3. Qualitative and Quantitative Disclosures about Market Risk

Foreign Currency

We have international operations in The Netherlands, Sweden, Germany, China, Portugal, Canada, Czech Republic, Mexico, the United Kingdom, and New Zealand which expose us to foreign currency exchange rate fluctuations due to transactions denominated in Euros, Swedish Krona, Chinese Renminbi, Canadian dollar, Czech Krona, Mexican pesos, British Pound Sterling, and New Zealand dollar, respectively. We continuously evaluate our foreign currency risk, and we take action from time to time in order to best mitigate these risks. A hypothetical 10% change in the value of the U.S. dollar in relation to our most significant foreign currency exposures would have had an impact of approximately $4,753 on our sales for the nine months ended September 30, 2025. This amount is not indicative of the hypothetical net earnings impact due to partially offsetting impacts on cost of sales and operating expenses in those currencies. For the three months ended September 30, 2025, we estimate that foreign currency exchange rate fluctuations increased revenues by $2,259. We estimate that foreign currency exchange rate fluctuations during the nine months ended September 30, 2025 increased revenues in comparison to the nine months ended September 30, 2024 by $2,822.

We translate all assets and liabilities of our foreign operations, where the U.S. dollar is not the functional currency, at the period-end exchange rate and translate sales and expenses at the average exchange rates in effect during the period. The net effect of these translation adjustments is recorded in the condensed consolidated financial statements as comprehensive income. The translation adjustments were a loss of $1,385 and a gain of $5,821 for the three months ended September 30, 2025 and 2024, respectively. The translation adjustments were gains of $14,121 and $235 for the nine months ended September 30, 2025 and 2024, respectively. Translation adjustments are not adjusted for income taxes as they relate to permanent investments in our foreign subsidiaries. A hypothetical 10% change in the value of the U.S. dollar in relation to our most significant foreign currency net assets would have had an impact of approximately $18,530 on our foreign net assets as of September 30, 2025.

We have contracts to hedge our short-term balance sheet exposure, primarily intercompany, that are denominated in currencies (Euro, Mexican Peso, New Zealand Dollar, Chinese Renminbi, Swedish Krona) other than the subsidiary’s functional currency and are adjusted to current values using period-end exchange rates. The resulting gains or losses are recorded in other expense, net in the consolidated statements of income and comprehensive income. To minimize foreign currency exposure, the Company had foreign currency contracts with notional amounts of $27,887 at September 30, 2025. The foreign currency contracts are recorded in the condensed consolidated balance sheets at fair value and resulting gains or losses are recorded in other expense, net in the condensed consolidated statements of income and comprehensive income. During the three and nine months ended September 30, 2025, we recorded a gain of $815 and a loss of $254, respectively, on foreign currency contracts which are included in other expense, net and generally offset the gains or losses from the foreign currency adjustments on the intercompany balances that are also included in other expense, net. Net foreign currency transaction gains and losses included in other expense, net amounted to losses of $1,974 and losses of $380 for the nine months ended September 30, 2025 and 2024, respectively.

Interest Rates

The Series A Notes under our 2024 Note Payable Agreement will bear interest at a fixed rate 5.96% and will mature on March 21, 2031. Interest on the Notes will be payable quarterly on the 21st day of March, June, September and December in each year, commencing on June 21, 2024. As amended on October 22, 2024, the Series A Notes will bear interest at 6.46% from October 1, 2024 through September 30, 2025. Interest will be computed on the basis of a 360-day year composed of twelve 30-day months.

Interest rates on our Credit Facility are based on Term SOFR plus a margin of 1.25% to 2.50% (2.50% at September 30, 2025), depending on the Company’s ratio of total funded indebtedness to consolidated EBITDA. As amended on October 22, 2024, borrowings under the Credit Facility will bear interest at Term SOFR plus a margin of 2.50% from January 1, 2025 through

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September 30, 2025. We use interest rate derivatives to add stability to interest expense and to manage our exposure to interest rate movements. We primarily use interest rate swaps as part of our interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. In March 2022 the Company entered into an interest rate swap with a notional amount of $40,000 that matures in December 2026. In September 2024, the Company entered into an additional interest rate swap with a notional amount of $50,000 that matures in September 2027.

As of September 30, 2025, we had $134,963 outstanding under the Revolving Facility (excluding deferred financing fees), of which $90,000 is currently being hedged. Refer to Note 10, Debt Obligations, of the notes to consolidated financial statements for additional information about our outstanding debt. A hypothetical one percentage point (100 basis points) change in the Base Rate on the $44,963 of unhedged floating rate debt outstanding at September 30, 2025 would have approximately a $450 impact on our interest expense for the nine months ended September 30, 2025.

Item 4. Controls and Procedures

Conclusion regarding the effectiveness of disclosure controls and procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer (principal accounting officer), evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of September 30, 2025. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Based on management’s evaluation of our disclosure controls and procedures as of September 30, 2025, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective.

Changes in internal control over financial reporting

During the quarter ended September 30, 2025, there were no changes in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1A. Risk Factors

There have been no material changes to the risk factors disclosed in the Company’s Form 10-K for the year ended December 31, 2024, except to the extent factual information disclosed elsewhere in this Form 10-Q relates to such risk factors. For a full discussion of these risk factors, please refer to “Item 1A. Risk Factors” in the 2024 Annual Report and 10-K.

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

Issuer Purchases of Equity Securities


				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
07/01/25 to 07/31/25	82	$	29.88	—	—
08/01/25 to 08/31/25	1,399		42.29	—	—
09/01/25 to 09/30/25	752		45.38	—	—
Total	2,233	$	42.87	—	—

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(1)

As permitted under the Company’s equity compensation plan, these shares were withheld by the Company to satisfy tax withholding obligations in connection with the vesting of stock. Shares withheld for tax withholding obligations do not affect the total number of shares available for repurchase under any approved common stock repurchase plan. At September 30, 2025, the Company did not have an authorized stock repurchase plan in place.

Item 5. Other Information

None of the Company’s directors or executive officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (each as defined I Item 408(a) of Regulation S-K) during the quarter ended September 30, 2025.

Item 6. Exhibits


(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).

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

DATE:	November 5, 2025	ALLIENT INC.
		By:	/s/ James A. Michaud
		James A. Michaud
		Senior Vice President & Chief Financial Officer

Source: View Original Filing on SEC EDGAR

September 30,

December 31,

Contract liabilities in accrued liabilities