ALLIENT INC

Previous wording

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.

Current wording

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 Williamsville, 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.

Previous wording

Throughout 2025 and into 2026, 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.

Current wording

Throughout 2025 and through the first two quarters of 2026, 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.

Previous wording

One-time costs in 2025 were approximately $4 million, primarily related to employee severance and other personnel-related expenses. Additional expenses of $862 have been incurred during the first quarter of 2026, with a total of approximately $2 to $3 million anticipated to be incurred throughout 2026, and will be substantively paid by the end of 2026.

Current wording

One-time costs in 2025 were approximately $4 million, primarily related to employee severance and other personnel-related expenses. Additional expenses of $641 and $1,503 have been incurred during the first three and six months of 2026, respectively, with a total of approximately $2 to $3 million anticipated to be incurred throughout 2026, and will be substantively paid by the end of 2026.

Previous wording

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 adjustmenting to minimize potential impacts to our business.

Current wording

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 adjusting to minimize potential impacts to our business.

Previous wording

In February 2026, the U.S. Supreme Court ruled that certain tariffs based on the International Emergency Economic Powers Act that were assessed and incurred in 2025 were unconstitutional. Following this ruling, the U.S. Court of International Trade began to develop a process to assess how to refund tariffs that were paid under the applicable executive orders. At this time, the Company has not begun the process of applying for, nor received any, refunds of tariffs paid. We continue to monitor the recent applicable rulings and will consider what refunds can be pursued.

Current wording

In February 2026, the U.S. Supreme Court ruled that certain tariffs based on the International Emergency Economic Powers Act that were assessed and incurred in 2025 were unconstitutional. Following this ruling, the U.S. Court of International Trade began to develop a process to assess how to refund tariffs that were paid under the applicable executive orders. At this time, the Company has begun the process of applying for refunds of tariffs paid. However, no tariff refunds have been approved and the Company has not received any refund payments. We continue to monitor the recent applicable rulings and will continue to monitor and consider what refunds can be pursued.

Previous wording

REVENUES: The increase in revenues during the three months ended March 31, 2026 reflects increases in many of our target markets, most significantly within Industrial and Vehicle. Our revenues for the three months ended March 31, 2026 were comprised of 50% to U.S. customers and 50% to customers primarily in Europe, Canada, and Asia-Pacific. The overall increase in revenue was primarily due to a foreign currency increase of 3.8 % and a 0.8% volume increase. Organic revenue increased 0.8% during the three months ended March 31, 2026. 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.

Current wording

REVENUES: The increase in revenues during the three months ended June 30, 2026 reflects increases in many of our target markets, most significantly within Industrial and Aerospace and Defense. Our revenues for the three months ended June 30, 2026 were comprised of 54% to U.S. customers and 46% to customers primarily in Europe, Canada, and Asia-Pacific. The overall increase in revenue was primarily due to a 9.3% volume increase and a foreign currency increase of 0.9%. Organic revenue increased 9.3% during the second quarter of 2026. 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.

Previous wording

ORDER BOOKINGS: Bookings increased in the three months ended March 31, 2026 compared to 2025, due to a 10.8% increase in volume and a 4.1% increase in foreign currency impact. The increase in bookings from the prior year quarter is impacted by improvements in customer demand levels across certain target markets, primarily within Industrial and Vehicle, in the current year.

Current wording

ORDER BOOKINGS: Bookings increased in the three months ended June 30, 2026 compared to 2025, due to a 48.3% increase in volume and a 0.8% increase in foreign currency impact. The increase in bookings from the prior year quarter is impacted by improvements in customer demand levels across certain target markets, primarily within Industrial and Aerospace and Defense, in the current year.

Previous wording

GROSS PROFIT AND GROSS MARGIN: Gross profit increased to $45,375 in the three months ended March 31, 2026 from $42,752 in the three months ended March 31, 2025, and gross margins increased to 32.7% for 2026, compared to 32.2% for 2025. 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.

Current wording

GROSS PROFIT AND GROSS MARGIN: Gross profit increased to $53,592 in the three months ended June 30, 2026 from $46,356 in the three months ended June 30, 2025, and gross margins increased to 34.9% for 2026, compared to 33.2% for 2025. 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.

Previous wording

SELLING EXPENSES: Selling expenses increased 17% during the three months ended March 31, 2026 compared to 2025, reflecting higher commissions driven by higher sales volumes, as well as higher marketing and sales-generating costs. Selling expenses as a percentage of revenues were 5% in each of the three months ended March 31, 2026 and 2025.

Current wording

SELLING EXPENSES: Selling expenses increased 26% during the three months ended June 30, 2026 compared to 2025, reflecting higher commissions driven by higher sales volumes, as well as higher marketing and sales-generating costs. Selling expenses as a percentage of revenues were 5% and 4% in the three months ended June 30, 2026 and 2025, respectively.

Previous wording

ENGINEERING AND DEVELOPMENT EXPENSES: Engineering and development expenses increased slightly by 1% in the three months ended March 31, 2026 compared to 2025. 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 March 31, 2026 and 2025.

Current wording

ENGINEERING AND DEVELOPMENT EXPENSES: Engineering and development expenses increased by 7% in the three months ended June 30, 2026 compared to 2025. 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 June 30, 2026 and 2025.

Previous wording

INCOME TAXES: The effective income tax rate was 21.0% and 20.2% for the three months ended March 31, 2026 and 2025, respectively. We expect our income tax rate for the full year 2026 to be approximately 21% to 23%.

Current wording

INCOME TAXES: The effective income tax rate was 20.2% and 23.1% for the three months ended June 30, 2026 and 2025, respectively. We expect our income tax rate for the full year 2026 to be approximately 21% to 23%.

Previous wording

NET INCOME AND ADJUSTED NET INCOME: Net income increased during the three months ended March 31, 2026 compared to 2025, primarily relating to slightly higher sales volume, including anincrease 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 March 31, 2026 and 2025 was $8,424 and $7,593, respectively. Adjusted diluted earnings per share for the first quarter of 2026 and 2025 were $0.50 and $0.46, 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.

Current wording

NET INCOME AND ADJUSTED NET INCOME: Net income increased during the three months ended June 30, 2026 compared to 2025, primarily relating to higher sales volume, including anincrease 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 June 30, 2026 and 2025 was $13,545 and $9,525, respectively. Adjusted diluted earnings per share for the second quarter of 2026 and 2025 were $0.80 and $0.57, 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.

Previous wording

EBITDA AND ADJUSTED EBITDA: EBITDA was $15,546 for the three months ended March 31, 2026 compared to $14,376 for the first quarter of 2025. Adjusted EBITDA was $17,276 and $17,472 for the first quarters of 2026 and 2025, 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.

Current wording

EBITDA AND ADJUSTED EBITDA: EBITDA was $21,733 for the three months ended June 30, 2026 compared to $17,255 for the second quarter of 2025. Adjusted EBITDA was $23,715 and $20,067 for the second quarters of 2026 and 2025, 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.

Previous wording

GENERAL AND ADMINISTRATIVE EXPENSES: General and administrative expenses increased 12% during the three months ended March 31, 2026 compared to 2025 due primarily to personnel-related costs and higher software licensing and information technology consulting costs. As a percentage of revenues, general and administrative expenses were 11% and 10% in the three months ended March 31, 2026 and 2025, respectively.

Current wording

GENERAL AND ADMINISTRATIVE EXPENSES: General and administrative expenses increased by 11% during the six months ended June 30, 2026 compared to the same period of 2025 due primarily to personnel-related costs and higher software licensing and information technology consulting costs. As a percentage of revenues, general and administrative expenses were 11% and 10% in 2026 and 2025, respectively.

Previous wording

The Company’s calculation of Revenue excluding foreign currency exchange impacts for the three months ended March 31, 2026 is as follows:

Current wording

The Company’s calculation of Revenue excluding foreign currency exchange impacts for the three and six months ended June 30, 2026 is as follows:

Previous wording

The Company’s calculation of organic revenue for the three months ended March 31, 2026 is as follows:

Current wording

The Company’s calculation of organic revenue for the three and six months ended June 30, 2026 is as follows:

Previous wording

The Company’s calculation of EBITDA and Adjusted EBITDA for the three months ended March 31, 2026 and 2025 is as follows (in thousands):

Current wording

The Company’s calculation of EBITDA and Adjusted EBITDA for the three and six months ended June 30, 2026 and 2025 is as follows (in thousands):

Previous wording

The Company’s calculation of Adjusted net income and Adjusted diluted earnings per share for the three months ended March 31, 2026 and 2025 is as follows (in thousands except per share amounts):

Current wording

The Company’s calculation of Adjusted net income and Adjusted diluted earnings per share for the three and six months ended June 30, 2026 and 2025 is as follows (in thousands except per share amounts):

Previous wording

The Company’s liquidity position as measured by cash and cash equivalents increased by $470 to a balance of $41,175 at March 31, 2026 from December 31, 2025.

Current wording

The Company’s liquidity position as measured by cash and cash equivalents increased by $1,383 to a balance of $42,088 at June 30, 2026 from December 31, 2025.

Previous wording

Of the $41,175 of cash and cash equivalents at March 31, 2026, $33,358 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.

Current wording

Of the $42,088 of cash and cash equivalents at June 30, 2026, $35,705 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.

Previous wording

During the three months ended March 31, 2026, the decrease in cash provided by operating activities is due to a decrease in cash inflows on collections on accounts receivable, additional accrued liabilities, payment of inventory, and prepaid expenses, offset in part by higher net income as adjusted by non-cash operating activity items.

Current wording

During the six months ended June 30, 2026, the decrease in cash provided by operating activities is due to a decrease in cash inflows on collections on accounts receivable and payment of inventory, offset in part by higher net income as adjusted by non-cash operating activity items and timing of payments in accounts payable.

Previous wording

The increase in cash used in investing activities in the three months ended March 31, 2026 relates to higher capital expenditures. Cash used in investing activities in the three months ended March 31, 2026 includes $2,168 for purchases of property and equipment compared to $1,060 during the three months ended March 31, 2025. Capital expenditures are expected to be between $12,000 and $15,000 for the full year 2026.

Current wording

The increase in cash used in investing activities in the six months ended June 30, 2026 relates to higher capital expenditures. Cash used in investing activities in the six months ended June 30, 2026 includes $7,070 for purchases of property and equipment compared to $3,189 during the six months ended June 30, 2025. Capital expenditures are expected to be between $12,000 and $15,000 for the full year 2026.

Previous wording

The change in cash used in financing activities during the three months ended March 31, 2026 is primarily due to debt repayments. Debt payments of $3,113 were made during the three months ended March 31, 2026. As of March 31, 2026, we had $121,962 of obligations under the Revolving Facility, excluding deferred financing costs.

Current wording

The change in cash used in financing activities during the six months ended June 30, 2026 is primarily due to debt repayments. Net debt payments of $7,227 were made during the six months ended June 30, 2026. As of June 30, 2026, we had $117,962 of obligations under the Revolving Facility, excluding deferred financing costs.

Previous wording

As of March 31, 2026, the unused Revolving Facility was $158,038. 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.

Current wording

As of June 30, 2026, the unused Revolving Facility was $162,038. 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.

Previous wording

The Company declared dividends of $0.03 per share during each of the three months ended March 31, 2026 and 2025. 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.

Current wording

The Company declared dividends of $0.07 per share during the six months ended June 30, 2026 and $0.06 per share during the six months ended 2025. 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.