ALLIENT INC

Previous wording

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.

Current 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.

Previous wording

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.

Current wording

Through 2024 and 2025, and continuing into 2026, 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 and geopolitical environments, including industrial headwinds with stronger earnings power, improved operational flexibility, and enhanced capacity to capitalize on future growth opportunities. Additional costs associated with our Simplify to Accelerate NOW program are expected to create additional annualized cost savings in 2026.

Previous wording

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.

Current wording

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 Fabrication Center of Excellence at its facility in Dothan, Alabama. The Company is transferring current assembly operations from Dothan and transferring 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.

Previous wording

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.

Current wording

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. The impact of the conflicts on our operational and financial performance will depend on future developments that cannot be predicted.

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 making adjustments 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 adjustmenting to minimize potential impacts to our business.

Previous wording

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.

Current 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.

Previous wording

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.

Current 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.

Previous wording

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.

Current 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.

Previous wording

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.

Current 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.

Previous wording

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.

Current 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.

Previous wording

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.

Current wording

RESTRUCTURING AND BUSINESS REALIGNMENT COSTS: Restructuring and business realignment costs decreased in the three months ended March 31, 2026 compared to 2025 primarily reflecting costs associated with the transfer of assembly operations from our Dothan, Alabama facility in 2025 and timing of other Simplify to Accelerate NOW actions.

Previous wording

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.

Current wording

INTEREST EXPENSE: Interest expense decreased in the three months ended March 31, 2026 compared to 2025 due to lower average debt balances.

Previous wording

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%.

Current 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%.

Previous wording

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 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 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.

Current 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.

Previous wording

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.

Current 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.

Previous wording

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.

Current wording

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 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.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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):

Current 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):

Previous wording

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):

Current 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):

Previous wording

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.

Current 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.

Previous wording

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.

Current 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.

Previous wording

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.

Current 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.

Previous wording

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.

Current 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.

Previous wording

The change in cash (used in)/provided by financing activities during the nine months ended September 30, 2025 is primarily due toborrowings 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.

Current 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.

Previous wording

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.

Current 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.

Previous wording

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%.

Current wording

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 bore 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 bore interest at 6.46%. Subsequently, the Series A Notes have returned to an interest rate of 5.960%.

Previous wording

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.

Current 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.