What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-03-05 compared with 2025-03-05 · 137 added, 142 removed, 736 unchanged (27% of the section changed)

4 unchanged sentences

We have audited the accompanying consolidated balance sheets of Allient Inc.

and subsidiaries (the "Company") as of December 31, 2024 and 2023, the related consolidated statements of income and comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

and subsidiaries (the "Company") as of December 31, 2025 and December 31, 2024, the related consolidated statements of income and comprehensive income, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and December 31, 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 5, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting.

16 unchanged sentences

Inventories are measured on a first-in, first-out basis at the lower of cost or net realizable value.

The valuation of inventory requires the Company to estimate obsolete or excess inventory, as well as inventory that is not of saleable

The Company’s estimate of the appropriate amount of obsolete or excess inventory, as well as inventory that is not of saleable quality, uses certain inputs and involves judgment.

The valuation of inventory requires the Company to estimate obsolete or excess inventory, as well as inventory that is not of saleable quality.

The Company’s estimate of the appropriate amount of obsolete or excess inventory, as well as inventory that is

not of saleable quality, uses certain inputs and involves judgment.

Such inputs include data associated with historic trends, the demand forecast for inventory on-hand which includes customer orders, and item specific estimates about the timing or level of demand for a specific part.

5 unchanged sentences

● We tested management’s process for determining the valuation of inventory, including:

o We evaluated the appropriateness of specified inputs supporting management’s estimate, including the historic inventory trends and the forecasts.

o We evaluated whether the appropriateness of management’s methodology and assumptions used in developing the estimate are reasonable and consistent with the nature of the inventory, including the evaluation of item specific estimates about the timing or level of demand for a specific part.

o We evaluated management’s ability to accurately estimate obsolete or excess inventory, as well as inventory that is not of saleable quality by comparing actual results to management’s historical estimates.

o We considered events and trends discussed in industry and analyst reports and disclosed in recent press releases from the Company's major customers (including financial information) when evaluating the reasonableness of their assumptions.

o Evaluating the appropriateness of specified inputs supporting management’s estimate, including the historic inventory trends and the forecasts.

o Evaluating whether the appropriateness of management’s methodology and assumptions used in developing the estimate are reasonable and consistent with the nature of the inventory, including the evaluation of item specific estimates about the timing or level of demand for a specific part.

o Evaluating management’s ability to accurately estimate obsolete or excess inventory, as well as inventory that is not of saleable quality by comparing actual results to management’s historical estimates.

o Considering events and trends discussed in industry and analyst reports and disclosed in recent press releases from the Company's major customers (including financial information) when evaluating the reasonableness of their assumptions.

In addition, we also considered any changes within the business including restructuring events and strategic changes.

/s/ Deloitte & Touche, LLP

Williamsville, New York

Williamsville, NY

March 5, 2026

41 unchanged sentences

Engineering and development

Business development

Acquisition and integration-related costs

Restructuring and business realignment costs

Amortization of intangible assets

3 unchanged sentences

Interest expense

Other (income) expense, net

Other expense (income), net

Total other expense, net

7 unchanged sentences

Diluted weighted average common shares

Other comprehensive (loss) income:

Other comprehensive income (loss):

Foreign currency translation adjustment

Change in accumulated (loss) income on derivatives, net of tax

Change in accumulated loss on derivatives, net of tax

Pension adjustments, net of tax

14 unchanged sentences

Shares withheld for payment of employee payroll taxes

Comprehensive (loss) income

Comprehensive income (loss)

Dividends to stockholders - $ 0.115 per share

3 unchanged sentences

Share issuance in connection with acquisitions

Share issuance to settle contingent consideration

Stock compensation expense

Shares withheld for payment of employee payroll taxes

Comprehensive income (loss)

Comprehensive (loss) income

Dividends to stockholders - $ 0.12 per share

2 unchanged sentences

Issuance of restricted stock, net of forfeitures

Share issuance in connection with acquisitions

Share issuance to settle contingent consideration

Stock compensation expense

Shares withheld for payment of employee payroll taxes

Comprehensive (loss) income

Comprehensive income (loss)

Dividends to stockholders - $ 0.12 per share

28 unchanged sentences

Tax withholdings related to net share settlements of restricted stock

Net cash (used in) provided by financing activities

Net cash used in financing activities

Effect of foreign exchange rate changes on cash

6 unchanged sentences

Property, plant and equipment purchases in accounts payable or accrued expenses

Cash paid for interest

Cash paid for income taxes

See accompanying notes to consolidated financial statements.

18 unchanged sentences

Additional reserves

Write-offs and recoveries

Effect of foreign currency translation

1 unchanged sentence

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 (in thousands):

December 31, 2024

December 31, 2023

Parts and raw materials

34 unchanged sentences

If the qualitative assessment indicates that the quantitative analysis should be performed, or if management elects to bypass a qualitative assessment, the Company then evaluates goodwill for impairment by comparing the fair value of the reporting unit to its carrying amount, including goodwill.

At October 31, 2024, Allient performed its annual goodwill impairment test.

The Company elected to bypass the qualitative assessment and performed a quantitative analysis of the reporting unit.

As the fair value of our reporting unit exceeds its carrying value, Allient does not believe that our reporting unit is at risk for impairment.

The discounted cash flow method incorporates various assumptions, such as projected revenue growth rates, operating margins, the terminal growth rate, and the weighted-average cost of capital.

The comparable publicly traded companies’ method includes assumptions such as determination of relevant comparable companies and valuation multiple ranges.

The Company did no t record any goodwill impairment charges for the years ended December 31, 2024, 2023 or 2022.

At October 31, 2025, the Company performed its annual goodwill impairment test and determined, after performing a qualitative test of the reporting unit, that it is more likely than not that the fair value of the reporting unit exceeds its carrying amount.

Accordingly, there was no indication of impairment and the quantitative impairment test was not performed.

The Company did not record any goodwill impairment charges for the years ended December 31, 2025, 2024 or 2023.

Other Long-Term Assets

Other long-term assets include the noncurrent portion of interest rate derivatives of $ 2,575 that the Company has entered into in response to the variable interest rate exposure on long-term debt, as well as securities that the Company has purchased with the intent of funding the deferred compensation arrangements for certain executives of the Company.

Other long-term assets include any noncurrent portion of interest rate derivatives that the Company has entered into in response to the variable interest rate exposure on long-term debt, as well as securities that the Company has purchased with the intent of funding the deferred compensation arrangements for certain executives of the Company.

These items are accounted for at fair value on a recurring basis.

7 unchanged sentences

Beginning balance

Warranty reserves acquired

Warranty expenditures

6 unchanged sentences

Compensation and fringe benefits

Accrued business acquisition consideration

Warranty reserve

3 unchanged sentences

Contract liabilities

Contingent consideration – current

Restructuring related accruals

Other accrued expenses

As part of the Simplify to Accelerate NOW strategy, restructuring and business realignment costs of $ 1,971 are included within business development in the consolidated statements of income and comprehensive income for the year ended December 31, 2024, of which $ 1,958 has been paid during the year ended December 31, 2024.

As part of the Simplify to Accelerate NOW strategy, restructuring and business realignment costs of $ 3,993 are included in the consolidated statements of income and comprehensive income for the year ended December 31, 2025, of which $ 3,472 has been paid during the year ended December 31, 2025.

Costs associated with this realignment were approximately $ 4 million and relate primarily to employee severance and other personnel-related expenses.

These expenses were largely paid by the end of 2025.

Restructuring expenses for this initiative are included in restructuring and business realignment costs in the consolidated statement of income and comprehensive income.

The expenses incurred, as well as the amounts paid during the reporting period, are as follows:

Restructuring

related accruals

December 31, 2024

Expenses incurred

Cash payments

December 31, 2025

Foreign Currency Translation

5 unchanged sentences

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 operating locations are included in the other (income) expense, net as incurred.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

Revenue Recognition

7 unchanged sentences

(1) the weighted average number of common shares outstanding and (2) if not anti-dilutive, the effect of potential common shares determined utilizing the treasury stock method.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

Basic and diluted weighted-average shares outstanding are as follows (in thousands):

7 unchanged sentences

The Consolidated Statements of Income and Comprehensive Income and Note 13, Accumulated Other Comprehensive Income , contain additional information on the computation of the Company’s comprehensive income.

Supplemental Cash Flow Information

The following represents supplemental cash flow information for the years ended December 31, 2024, 2023, and 2022 (in thousands):

Year ended December 31,

Cash paid during the year for:

Fair Value Accounting

5 unchanged sentences

Quoted prices for identical assets or liabilities in active markets.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

Quoted prices for similar assets or liabilities in active markets;

2 unchanged sentences

Significant inputs to the valuation model that are unobservable.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

The Company’s financial assets and liabilities include cash and cash equivalents, accounts receivable, debt obligations, accounts payable, and accrued liabilities.

3 unchanged sentences

Assets (liabilities)

Pension plan assets

Deferred compensation plan assets

3 unchanged sentences

Assets (liabilities)

Pension plan assets

Deferred compensation plan assets

1 unchanged sentence

Interest rate swaps, net

Contingent consideration

The contingent consideration fair value measurement at December 31, 2023 represented amounts in connection with the acquisitions of Sierramotion, which had a maximum amount of $ 2,000 , and ALIO Industries (“ALIO”, a 2021 acquisition), which did not have a maximum amount.

The measurements are based on significant inputs not observable in the market and therefore constitute Level 3 inputs within the fair value hierarchy.

The contingent consideration at December 31, 2023 for the acquisition of Sierramotion consisted of Company stock and was paid in January 2024 at the maximum amount of $ 2,000 .

The contingent consideration at December 31, 2023 for the acquisition of ALIO of $ 5,757 was paid 50 % in Company stock and 50 % cash in February 2024.

The performance period for the ALIO contingent consideration has expired and there are no remaining contingent consideration liabilities as of December 31, 2024.

Fair value adjustments to contingent consideration after the acquisition date are included within business development in the consolidated statement of income and comprehensive income.

Derivative Financial Instruments

4 unchanged sentences

As required by ASC 815, the Company records all derivatives on the balance sheet at fair value.

The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

satisfied the criteria necessary to apply hedge accounting.

Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges.

1 unchanged sentence

The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply, or the Company elects not to apply hedge accounting.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

The current provision for income taxes represents actual or estimated amounts payable or refundable on tax return filings each year.

21 unchanged sentences

Recently Adopted Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board, (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, "Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures".

This ASU requires incremental disclosures related to an entity’s reportable segments, including (i) significant segment expense categories and amounts for each reportable segment that are provided to the chief operating decision maker (“CODM”), (ii) an aggregate amount and description of other segment items included in each reported measure, (iii) all annual disclosures about a reportable segment’s profit or loss and assets required by Topic 280 to be disclosed in interim periods, (iv) the title and position of the individual or the name of the group identified as the CODM and (v) an explanation of how the CODM uses the reported measures of segment profit or loss to assess performance and allocate resources to the segment.

The standard improves transparency by providing disaggregated expense information about an entity’s reportable segments.

The standard does not change the definition of a segment, the method for determining segments or the criteria for aggregating operating segments into reportable segments.

This guidance is effective for annual reporting periods beginning after December 15, 2023, and interim reporting periods beginning after December 15, 2024.

The Company adopted this guidance retrospectively during the year ended December 31, 2024, providing the additional disclosures as required.

For additional information, refer to Note 14, Segment Information .

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740):

2 unchanged sentences

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.

The Company adopted this guidance prospectively during the year ended December 31, 2025, providing the additional disclosures as required.

For additional information, refer to Note 9, Income Taxes.

Accounting Pronouncements Issued but not yet Adopted

In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40)”.

6 unchanged sentences

The purchase price consisted of $ 20,000 in cash paid at closing.

The purchase price allocation is final as of December 31, 2024.

Measurement period adjustments to the initial purchase price allocation were made during 2024 that resulted in a decrease of the purchase price of $ 67 , a decrease to inventory of $ 500 , a decrease to deferred income tax liabilities of $ 230 , and an increase to goodwill of $ 203 .

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

The purchase price allocation was final as of December 31, 2024.

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

Revenue of SNC included within the consolidated statements of income and comprehensive income during 2024 was $ 38,045 and net income was $ 3,066 in 2024.

15 unchanged sentences

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 income approach estimates the value for a subject asset based on the present value of

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

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.

5 unchanged sentences

The goodwill resulting from the acquisition is not tax deductible.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

On September 22, 2023, the Company acquired 100 % of the ownership interest in Sierramotion Inc.

(“Sierramotion”), a company headquartered in California, that specializes in designing and engineering turn-key motion components and mechatronic solutions for robotic, medical, industrial, defense, semiconductor, and other precision applications.

The purchase price for Sierramotion of $ 8,400 included $ 2,000 of contingent consideration which was paid in January 2024 (Note 1) and at closing which consisted of a combination of cash and Company stock.

The intangible assets of $ 4,100 and goodwill of $ 2,876 are expected to be deductible for tax purposes.

The purchase price allocation is final.

Transaction costs for the acquisition were not material.

The operating results of this acquisition are included in the consolidated financial statements beginning on the acquisition date and the revenue and earnings in the current year interim periods presented are not material.

The revenue and earnings of Sierramotion included within the consolidated statement of income and comprehensive income for the year ended December 31, 2023 is not material.

The goodwill resulting from the acquisition is not tax deductible.

On January 3, 2024, the final deferred acquisition payment for the Spectrum acquisition of $ 12,500 (comprised of 50 % cash and 50 % Company stock) was paid.

11 unchanged sentences

Control is defined as the ability to direct the use of and obtain substantially all of the remaining benefits of the product.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

The Company satisfies its performance obligations under a contract with a customer by transferring goods and services in exchange for generally monetary consideration from the customer.

1 unchanged sentence

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

Nature of Goods and Services

18 unchanged sentences

The Company’s disaggregated revenues are as follows (in thousands):

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

Year ended December 31,

4 unchanged sentences

North America (primarily U.S.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

Contract Balances

7 unchanged sentences

Contract liabilities in accrued liabilities

Contract liabilities in other long-term liabilities

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 as well as balances assumed in acquisitions.

4 unchanged sentences

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

Returns, Refunds, and Warranties

5 unchanged sentences

Time value of money - the Company elected not to adjust the promised amount of consideration for the effects of the time value of money for contracts in which the anticipated period between when the Company transfers the goods or services to the customer and when the customer pays is equal to one year or less .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

The change in the carrying amount of goodwill for 2025 and 2024 is as follows (in thousands):

Beginning balance

Goodwill acquired

Impact of measurement period adjustments of acquisitions (Note 2)

December 31, 2024

Effect of foreign currency translation

Ending balance

December 31, 2025

INTANGIBLE ASSETS

6 unchanged sentences

Total amortization expense for intangible assets for the years 2025, 2024, and 2023 was $ 12,471 , $12,697 , and $ 12,313 , respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

Estimated amortization expense for intangible assets is as follows (in thousands):

5 unchanged sentences

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

As of December 31, 2025, the Company had 477,139 shares of common stock available for grant under stock incentive plans.

10 unchanged sentences

For performance-based awards, the Company assesses the probability of the achievement of the awards during the year and recognizes expense accordingly.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

The following is a summary of restricted stock activity during years 2025, 2024, and 2023:

11 unchanged sentences

i) the Board established percentage of pretax income before the contribution ( 5 % in 2025, 2024, and 2023) or ii) the annual interest payable on any loan outstanding to the Company from the ESOP.

Company contributions

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

to the Plan accrued for 2024, 2023 and 2022, were $ 894 , $ 1,591 , and $ 1,248 , respectively.

Company contributions to the Plan accrued for 2025, 2024, and 2023, were $ 1,502 , $ 894 , and $ 1,591 , respectively.

These amounts are included in general and administrative costs in the consolidated statements of income and comprehensive income.

9 unchanged sentences

Based on the terms of the Company’s Credit Agreement, dividends paid to shareholders are acceptable, subject to the Company’s compliance with the covenants under the Credit Agreement.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

DEBT OBLIGATIONS

6 unchanged sentences

(1) The effective rate of the Revolving Credit Facility is 5.05 % at December 31, 2025 including the impact of the Company's interest rate swaps.

Amended Revolving Credit Facility

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”).

6 unchanged sentences

Debt issuance costs of $ 3.2 million were incurred related to the 2024 Credit and Note Payable Agreements and is included within unamortized debt issuance costs noted above.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

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 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”).

1 unchanged sentence

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;

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 :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.

2 unchanged sentences

The Company was in compliance with all covenants as of December 31, 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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

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 Amended 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 the Company’s non-realty assets and are fully and unconditionally guaranteed by certain of the Company’s subsidiaries.

As of December 31, 2025, the unused Revolving Facility was $ 155,038 .

The amount available to borrow may be reduced based upon the Company’s debt and EBITDA levels, which impacts its covenant calculations.

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”).

7 unchanged sentences

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 December 31, 2024, the unused Revolving Facility was $ 111,038 .

The amount available to borrow may be reduced based upon 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 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 % .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

The China Credit Facility (“the China Facility”) was a demand revolving facility used for working capital and capital equipment needs at the Company’s China operations.

There were no borrowings under the China Facility during 2023.

The Company closed the China Facility during 2023.

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 % .

DERIVATIVE FINANCIAL INSTRUMENTS

3 unchanged sentences

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, and 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 (income) expense, net in the consolidated statements of income and comprehensive income.

The resulting gains or losses are recorded in other expense (income), 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 $ 26,033 and $ 30,945 at December 31, 2025 and 2024, respectively.

The foreign currency contracts are recorded in the consolidated balance sheets at fair value and resulting gains or losses are recorded in other (income) expense, net in the consolidated statements of income and comprehensive income.

During the year ended December 31, 2024 and 2023, the Company had losses of $ 1,749 and $ 281 , respectively, on foreign currency contracts which is included in other (income) expense, net and generally offset the gains or losses from the foreign currency adjustments on the intercompany balances that are also included in other (income) expense, net.

The foreign currency contracts are recorded in the consolidated balance sheets at fair value and resulting gains or losses are recorded in other expense (income), net in the consolidated statements of income and comprehensive income.

During the year ended December 31, 2025 and 2024, the Company had a gain of $ 481 and a loss of $ 1,749 , respectively, on foreign currency contracts which is included in other (income) expense, net and generally

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

offset the gains or losses from the foreign currency adjustments on the intercompany balances that are also included in other expense (income), 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.

10 unchanged sentences

Additionally, the Company does not use derivatives for trading or speculative purposes.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

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

17 unchanged sentences

Accrued liabilities

Interest rate products

Accrued liabilities

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

The table below presents the effect of cash flow hedge accounting on other comprehensive (loss) income (OCI) for the years ended December 31, 2025, 2024, and 2023 (in thousands):

Amount of pre-tax gain recognized in OCI

Amount of pre-tax gain (loss) recognized in OCI

on derivatives

17 unchanged sentences

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

The provision for income taxes is based on income before income taxes as follows (in thousands):

1 unchanged sentence

Income before income taxes

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

Components of the total income tax provision are as follows (in thousands):

7 unchanged sentences

For the year ended

federal statutory tax rate

State and local income taxes, net of federal income tax effect (1)

Foreign tax effects

Change in valuation allowance

State and municipal surcharges

Investment tax credits

Changes in valuation allowances

Other foreign jurisdictions

Effect of changes in tax laws or rates enacted in the current period

Effect of cross-border tax laws

Global intangible low-taxed income

Federal research credit

Change in valuation allowance

Nontaxable or nondeductible items

Section 162(m) compensation

Change in unrecognized tax benefits

Other adjustments

(1) The tax effect in this category primarily reflects state and local taxes in Oklahoma

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

For the year ended

Tax provision, computed at statutory rate

5 unchanged sentences

Effect of Tax Cuts and Jobs Act

Subpart F income

Unrecognized tax benefits

1 unchanged sentence

Provision for income taxes

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

The tax effects of significant temporary differences and credit and operating loss carryforwards that give rise to the net deferred tax assets and tax liabilities are as follows (in thousands):

17 unchanged sentences

Net deferred tax asset

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

As of December 31, 2025, the Company has the following gross carryforwards available (in thousands):

12 unchanged sentences

(1) Net operating losses (NOL’s) are presented as pre-tax amounts.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

Realization of the Company’s recorded deferred tax assets is dependent upon the Company generating sufficient taxable income in the appropriate tax jurisdictions in future years to obtain benefit from the reversal of net deductible temporary differences and from utilization of net operating losses and tax credit carryforwards.

16 unchanged sentences

The lapse of the statute of limitations would be recorded as an adjustment to the provision for income taxes in the period of the statute closure.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

Cash paid for income taxes, net of refunds, were as follows (in thousands):

state and local

Total foreign

Total cash paid for income taxes, net of refunds

The summary of changes to the unrecognized tax benefit for the year ended December 31, 2025 is as follows (in thousands):

6 unchanged sentences

As of December 31, 2025, approximately $ 180 of unrecognized tax benefits would favorably impact the effective tax rate, if recognized.

It is the Company’s policy to include interest and penalties related to income tax liabilities in income tax expense in the

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

consolidated statements of income and comprehensive income.

It is the Company’s policy to include interest and penalties related to income tax liabilities in income tax expense in the consolidated statements of income and comprehensive income.

In addition, the Company records uncertain tax positions in accordance with ASC 740.

4 unchanged sentences

In 2025, the Company distributed a portion of these foreign earnings which have been previously taxed in the United States and remitted $ 35 of foreign withholding taxes.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

The Company does not intend to distribute the remaining previously taxed earnings resulting from the one-time transition tax under the Tax Cuts and Jobs Act or capital in foreign subsidiaries, and has not recorded any deferred taxes related to such amounts.

The remaining excess of the amount for financial reporting over the tax basis of investments in foreign subsidiaries is permanently reinvested, and the determination of any deferred tax liability on this amount is not practicable.

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 December 31, 2025, and there were no material impacts to income tax provision or the effective income tax rate.

The Company has operating leases for office space, manufacturing facilities and equipment, computer equipment and automobiles.

12 unchanged sentences

Operating lease assets obtained in acquisitions

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

The following table presents weighted average remaining lease term and discount rates related to the Company’s operating leases as of December 31, 2025 and 2024:

1 unchanged sentence

Weighted average discount rate

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

The following table presents the maturity of the Company’s operating and finance lease liabilities as of December 31, 2025 (in thousands):

30 unchanged sentences

At December 31, 2024

Unrealized gain (loss) on cash flow hedges

Unrealized (loss) gain on cash flow hedges

Amounts reclassified from AOCI

12 unchanged sentences

Pension adjustments, net of tax

Foreign currency translation gain

Foreign currency translation loss

At December 31, 2024

7 unchanged sentences

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

Financial information related to the foreign subsidiaries is summarized below (in thousands):

1 unchanged sentence

Revenues derived from foreign subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

Identifiable foreign fixed assets were $ 30,418 and $ 31,820 as of December 31, 2025 and 2024, respectively.

1 unchanged sentence

Sales to customers outside of the United States by all subsidiaries were $ 247,759 , $ 240,045 , and $ 239,897 during 2025, 2024, and 2023, respectively.

For 2023, and 2022 one customer (Customer A) accounted 10 % and 11 % of revenues, respectively, and one customer (Customer B) accounted for 12 % of revenues in 2023.

As of December 31, 2023 Customer B accounted for 15 % of trade receivables.

SUBSEQUENT EVENT

On February 6, 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.

No customers individually accounted for a material concentration of revenue for the years ended December 31, 2025 or 2024 nor accounts receivable as of December 31, 2025 or 2024.

For 2023, one customer (Customer A) accounted for 10 % of revenues, and one customer (Customer B) accounted for 12 % of revenues.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data