Allient (ALNT) - 2024 Q3 - Quarterly Report

Financial Performance - Revenues for Q3 2024 were $125,213 thousand, a decrease of 14$145,319 thousand in Q3 2023[103] - Gross profit decreased to $39,264 thousand in Q3 2024 from$47,498 thousand in Q3 2023, with gross margin percentage dropping to 31.4% from 32.7%[105] - Net income for Q3 2024 was $2,101 thousand, down 68$6,666 thousand in Q3 2023[103] - Net income for the nine months ended September 30, 2024, decreased to $10,153 from$19,750 in 2023, representing a 49% decline[114] - Adjusted net income for the nine months ended September 30, 2024, was $19,471, down from$28,386 in 2023, a decrease of 31%[125] - Revenues for the nine months ended September 30, 2024, were $407,958, a decrease of 7$437,637 in 2023[114] - EBITDA for the nine months ended September 30, 2024, was $42,438, down from$54,042 in 2023, a decrease of 21%[126] - Adjusted EBITDA for the nine months ended September 30, 2024, was $48,404, compared to$60,255 in 2023, a decrease of 20%[126] - Organic revenue decreased by 13.9% during the year to date 2024[114] - Organic revenue decreased by 21.5% for the three months ended September 30, 2024, and 13.9% for the nine months ended September 30, 2024[132] Bookings and Backlog - Bookings decreased by 34.2% in Q3 2024 compared to the same period in 2023, primarily due to a significant order in the defense market received in Q3 2023[104] - Bookings for the nine months ended September 30, 2024, were $362,131, a decrease of 13$415,113 in 2023[114] - Backlog as of September 30, 2024, was $238,492, down 23$309,636 in 2023[114] Expenses and Cost Management - Engineering and development expenses decreased by 15% in Q3 2024 compared to Q3 2023, reflecting cost reduction actions[108] - Selling expenses increased by 5% in Q3 2024 compared to Q3 2023, primarily due to costs associated with recent acquisitions[106] - Total operating costs and expenses decreased by 8% in Q3 2024 compared to Q3 2023, amounting to $32,648 thousand[103] - Selling expenses increased by 5$5,217 to $37,118 as of September 30, 2024, compared to December 31, 2023[136] - Net cash provided by operating activities for the nine months ended September 30, 2024, was$29,458, an increase of $2,326 from$27,132 in 2023[137] - Cash used in investing activities increased to $(32,134) for the nine months ended September 30, 2024, compared to$(18,854) in 2023, primarily due to a $20 million acquisition[139] Acquisitions and Strategic Initiatives - The company completed the acquisition of SNC in Q1 2024 and Sierramotion in Q3 2023, focusing on integrating these acquisitions for future growth[101] - The company expects annual cost savings of approximately$10 million from the "Simplify to Accelerate NOW" strategy, which aims to enhance efficiency and reduce working capital[100] Foreign Currency and Interest Rates - A hypothetical 10% change in the value of the U.S. dollar would have impacted sales by approximately $4,213 for the nine months ended September 30, 2024[147] - The company had foreign currency contracts with notional amounts of$24,438 as of September 30, 2024, and recorded losses of $461 and$380 on these contracts for the three and nine months ended September 30, 2024, respectively[149] - Interest on the Series A Notes will be payable quarterly at a fixed rate of 5.96% until maturity on March 21, 2031, with an amended rate of 6.46% from October 1, 2024, through September 30, 2025[150] - As of September 30, 2024, the company had $175,962 outstanding under the Revolving Facility, with$150,000 currently being hedged[152] - A hypothetical one percentage point change in the Base Rate on $25,962 of unhedged floating rate debt would impact interest expense by approximately$200 for the nine months ended September 30, 2024[152] - The company entered into interest rate swaps with a combined notional amount of $60,000 maturing in December 2024 and an additional swap of$40,000 maturing in December 2026[151] Internal Controls and Risk Factors - No changes in internal control over financial reporting materially affected the company during the quarter ended September 30, 2024[155] - Management concluded that disclosure controls and procedures were effective as of September 30, 2024[154] - There were no material changes to the risk factors disclosed in the company's Form 10-K for the year ended December 31, 2023[156] Translation Adjustments - Translation adjustments resulted in a gain of $5,805 for the three months ended September 30, 2024, compared to a loss of$2,923 for the same period in 2023[148] - For the nine months ended September 30, 2024, translation adjustments were a gain of $235, while a loss of$1,995 was recorded for the same period in 2023[148] Dividends - The Company declared dividends of $0.09 per share during the nine months ended September 30, 2024, compared to$0.085 per share in 2023[144]