ALLIENT INC 10-K

Item 8. Financial Statements and Supplementary Data ​ REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the stockholders and the Board of Directors of Allient Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Allient Inc. 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. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Inventories – Refer to Note 1 to the financial statements Critical Audit Matter Description 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 quality. The Company’s estimate of the appropriate amount of obsolete or excess inventory, as well as inventory that is 35 Table of Contents 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. We identified the estimate of obsolete or excess inventory, as well as inventory that is not of saleable quality, as a critical audit matter because of the significant amount of judgment required by management when evaluating the assumptions for item specific estimates about the timing or level of demand for a specific part. This required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the reasonableness of the item specific estimates about the timing or level of demand for a specific part. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the valuation of obsolete or excess inventory, as well as inventory that is not of saleable quality, included the following, among others: ● We tested the effectiveness of internal controls over management’s review of the periodic calculation of the valuation for obsolete or excess inventory, as well as inventory that is not of saleable quality. ● We tested management’s process for determining the valuation of inventory, including: 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, NY March 5, 2026 We have served as the Company's auditor since 2018. ​ 36 Table of Contents ALLIENT INC. CONSOLIDATED BALANCE SHEETS (In thousands, except per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Assets ​ ​ ​ ​ ​ ​ Current assets: ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 40,705 ​ $ 36,102 Trade receivables, net of provision for credit losses of $ 887 and $ 1,628 at December 31, 2025 and December 31, 2024, respectively ​ ​ 88,775 ​ ​ 78,774 Inventories ​ 109,198 ​ 111,517 Prepaid expenses and other assets ​ 14,759 ​ 11,187 Total current assets ​ 253,437 ​ 237,580 Property, plant, and equipment, net ​ 61,771 ​ 65,685 Deferred income taxes ​ 10,509 ​ 9,116 Intangible assets, net ​ 88,391 ​ 99,671 Goodwill ​ 134,332 ​ 131,789 Operating lease assets ​ ​ 21,030 ​ ​ 23,748 Other long-term assets ​ 8,125 ​ 8,192 Total Assets ​ $ 577,595 ​ $ 575,781 Liabilities and Stockholders’ Equity ​ ​ ​ ​ ​ ​ Current liabilities: ​ ​ ​ ​ ​ ​ Accounts payable ​ $ 28,433 ​ $ 27,156 Accrued liabilities ​ 40,890 ​ 30,221 Total current liabilities ​ 69,323 ​ 57,377 Long-term debt ​ 180,389 ​ 224,177 Deferred income taxes ​ 3,241 ​ 3,642 Pension and post-retirement obligations ​ 1,239 ​ 1,667 Operating lease liabilities ​ ​ 16,431 ​ ​ 19,417 Other long-term liabilities ​ ​ 5,517 ​ ​ 4,647 Total liabilities ​ 276,140 ​ 310,927 Commitments and contingencies (Note 11) ​ ​ ​ ​ ​ ​ Stockholders’ Equity: ​ ​ ​ ​ ​ ​ Common stock, no par value, authorized 50,000 shares; 16,936 and 16,810 shares issued and outstanding at December 31, 2025 and December 31, 2024, respectively ​ 113,936 ​ 111,024 Preferred stock, par value $ 1.00 per share, authorized 5,000 shares; no shares issued or outstanding ​ — ​ — Retained earnings ​ 197,046 ​ 177,013 Accumulated other comprehensive loss ​ ( 9,527 ) ​ ( 23,183 ) Total stockholders’ equity ​ 301,455 ​ 264,854 Total Liabilities and Stockholders’ Equity ​ $ 577,595 ​ $ 575,781 ​ See accompanying notes to consolidated financial statements. ​ 37 Table of Contents ALLIENT INC. CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (In thousands, except per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended ​ ​ December 31, ​ December 31, ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Revenues ​ $ 554,478 ​ $ 529,968 ​ $ 578,634 Cost of goods sold ​ 372,769 ​ 364,277 ​ 394,951 Gross profit ​ 181,709 ​ 165,691 ​ 183,683 Operating costs and expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ Selling ​ 24,524 ​ 25,310 ​ 24,713 General and administrative ​ 57,853 ​ 55,669 ​ 58,403 Engineering and development ​ 38,836 ​ 39,761 ​ 41,665 Acquisition and integration-related costs ​ 47 ​ 445 ​ 2,958 Restructuring and business realignment costs ​ ​ 3,993 ​ ​ 1,971 ​ ​ 1,317 Amortization of intangible assets ​ 12,471 ​ 12,497 ​ 12,313 Total operating costs and expenses ​ 137,724 ​ 135,653 ​ 141,369 Operating income ​ 43,985 ​ 30,038 ​ 42,314 Other expense, net: ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense ​ 13,175 ​ 13,296 ​ 12,383 Other expense (income), net ​ 2,076 ​ ( 116 ) ​ 231 Total other expense, net ​ 15,251 ​ 13,180 ​ 12,614 Income before income taxes ​ 28,734 ​ 16,858 ​ 29,700 Income tax provision ​ ( 6,700 ) ​ ( 3,692 ) ​ ( 5,603 ) Net income ​ $ 22,034 ​ $ 13,166 ​ $ 24,097 Basic earnings per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings per share ​ $ 1.32 ​ $ 0.80 ​ $ 1.51 Basic weighted average common shares ​ 16,669 ​ 16,529 ​ 15,963 Diluted earnings per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings per share ​ $ 1.32 ​ $ 0.79 ​ $ 1.48 Diluted weighted average common shares ​ 16,732 ​ 16,603 ​ 16,272 Net income ​ $ 22,034 ​ $ 13,166 ​ $ 24,097 Other comprehensive income (loss): ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign currency translation adjustment ​ ​ 15,000 ​ ​ ( 12,033 ) ​ ​ 3,669 Change in accumulated loss on derivatives, net of tax ​ ​ ( 1,472 ) ​ ​ ( 1,450 ) ​ ​ ( 2,131 ) Pension adjustments, net of tax ​ ​ 128 ​ ​ 475 ​ ​ 250 Comprehensive income ​ $ 35,690 ​ $ 158 ​ $ 25,885 ​ See accompanying notes to consolidated financial statements. ​ 38 Table of Contents ALLIENT INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (In thousands, except per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Stock ​ ​ ​ Accumulated Other Comprehensive Loss ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign Currency ​ Accumulated ​ ​ ​ Total ​ ​ ​ ​ ​ ​ Retained ​ Translation ​ income (loss) on ​ Pension ​ Stockholders' (In thousands except per share data) ​ ​ ​ Shares ​ ​ ​ Amount ​ ​ ​ Earnings ​ ​ ​ Adjustments ​ ​ ​ derivatives ​ ​ ​ Adjustments ​ ​ ​ Equity Balances, December 31, 2022 15,978 ​ ​ 83,852 ​ ​ 143,576 ​ ​ ( 16,925 ) ​ ​ 5,556 ​ ​ ( 594 ) ​ ​ 215,465 Stock transactions under employee benefit stock plans 31 ​ ​ 1,246 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,246 Issuance of restricted stock, net of forfeitures 107 ​ ​ 129 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 129 Share issuance in connection with acquisitions ​ 250 ​ ​ 7,329 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 7,329 Stock compensation expense ​ ​ ​ ​ 5,477 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 5,477 Shares withheld for payment of employee payroll taxes ​ ( 58 ) ​ ​ ( 2,096 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 2,096 ) Comprehensive income (loss) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 3,669 ​ ​ ( 2,879 ) ​ ​ 333 ​ 1,123 Tax effect ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 748 ​ ​ ( 83 ) ​ 665 Net income ​ ​ ​ ​ ​ ​ ​ 24,097 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 24,097 Dividends to stockholders - $ 0.115 per share ​ ​ ​ ​ ​ ​ ​ ( 1,860 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 1,860 ) Balances, December 31, 2023 16,308 ​ ​ 95,937 ​ ​ 165,813 ​ ​ ( 13,256 ) ​ ​ 3,425 ​ ​ ( 344 ) ​ ​ 251,575 Stock transactions under employee benefit stock plans 58 ​ ​ 1,564 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,564 Issuance of restricted stock, net of forfeitures 120 ​ ​ ( 25 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 25 ) Share issuance in connection with acquisitions ​ 203 ​ ​ 6,250 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 6,250 Share issuance to settle contingent consideration ​ 174 ​ ​ 4,874 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 4,874 Stock compensation expense ​ ​ ​ ​ 4,147 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 4,147 Shares withheld for payment of employee payroll taxes ​ ( 53 ) ​ ​ ( 1,723 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 1,723 ) Comprehensive (loss) income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 12,033 ) ​ ​ ( 1,909 ) ​ ​ 711 ​ ( 13,231 ) Tax effect ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 459 ​ ​ ( 236 ) ​ 223 Net income ​ ​ ​ ​ ​ ​ ​ 13,166 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 13,166 Dividends to stockholders - $ 0.12 per share ​ ​ ​ ​ ​ ​ ​ ( 1,966 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 1,966 ) Balances, December 31, 2024 16,810 ​ ​ 111,024 ​ ​ 177,013 ​ ​ ( 25,289 ) ​ ​ 1,975 ​ ​ 131 ​ ​ 264,854 Stock transactions under employee benefit stock plans 33 ​ ​ 885 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 885 Issuance of restricted stock, net of forfeitures 146 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — Stock compensation expense ​ ​ ​ ​ 3,430 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 3,430 Shares withheld for payment of employee payroll taxes ​ ( 53 ) ​ ​ ( 1,403 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 1,403 ) Comprehensive income (loss) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 15,000 ​ ​ ( 1,971 ) ​ ​ 191 ​ 13,220 Tax effect ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 499 ​ ​ ( 63 ) ​ 436 Net income ​ ​ ​ ​ ​ ​ ​ 22,034 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 22,034 Dividends to stockholders - $ 0.12 per share ​ ​ ​ ​ ​ ​ ​ ( 2,001 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 2,001 ) Balances, December 31, 2025 16,936 ​ $ 113,936 ​ $ 197,046 ​ $ ( 10,289 ) ​ $ 503 ​ $ 259 ​ $ 301,455 ​ See accompanying notes to consolidated financial statements. ​ 39 Table of Contents ALLIENT INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended ​ ​ December 31, ​ December 31, ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Cash Flows From Operating Activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 22,034 ​ $ 13,166 ​ $ 24,097 Adjustments to reconcile net income to net cash provided by operating activities ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization ​ 25,407 ​ 25,891 ​ 25,068 Deferred income taxes ​ ( 1,795 ) ​ ( 2,353 ) ​ ( 5,036 ) Provision for excess and obsolete inventory ​ 3,891 ​ ​ 4,943 ​ ​ 2,487 Stock-based compensation expense ​ ​ 3,430 ​ ​ 4,147 ​ ​ 5,477 Debt issue cost amortization recorded in interest expense ​ ​ 648 ​ ​ 534 ​ ​ 300 Other ​ 610 ​ ( 119 ) ​ 1,424 Changes in operating assets and liabilities, net of acquisitions: ​ ​ ​ ​ ​ ​ ​ ​ ​ Trade receivables ​ ( 7,893 ) ​ 7,455 ​ ( 5,568 ) Inventories ​ 3,318 ​ 7,358 ​ ( 1,781 ) Prepaid expenses and other assets ​ ( 2,709 ) ​ 2,412 ​ 1,324 Accounts payable ​ 175 ​ ( 12,755 ) ​ ( 935 ) Accrued liabilities ​ 9,559 ​ ( 8,829 ) ​ ( 1,819 ) Net cash provided by operating activities ​ 56,675 ​ 41,850 ​ 45,038 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Flows From Investing Activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Consideration paid for acquisitions, net of cash acquired ​ — ​ ( 25,231 ) ​ ( 11,004 ) Purchase of property and equipment ​ ​ ( 6,989 ) ​ ​ ( 9,683 ) ​ ​ ( 11,603 ) Net cash used in investing activities ​ ( 6,989 ) ​ ( 34,914 ) ​ ( 22,607 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Flows From Financing Activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Proceeds from issuance of long-term debt ​ — ​ 76,898 ​ 11,000 Principal payments of long-term debt and finance lease obligations ​ ​ ( 44,448 ) ​ ​ ( 68,433 ) ​ ​ ( 28,395 ) Payment of contingent consideration ​ ​ — ​ ​ ( 2,450 ) ​ ​ — Payment of debt issuance costs ​ ( 44 ) ​ ( 3,154 ) ​ — Dividends paid to stockholders ​ ( 2,001 ) ​ ( 1,981 ) ​ ( 1,826 ) Tax withholdings related to net share settlements of restricted stock ​ ​ ( 1,203 ) ​ ​ ( 1,723 ) ​ ​ ( 2,096 ) Net cash used in financing activities ​ ( 47,696 ) ​ ( 843 ) ​ ( 21,317 ) Effect of foreign exchange rate changes on cash ​ 2,613 ​ ( 1,892 ) ​ 173 Net increase in cash and cash equivalents ​ 4,603 ​ 4,201 ​ 1,287 Cash and cash equivalents at beginning of period ​ 36,102 ​ 31,901 ​ 30,614 Cash and cash equivalents at end of period ​ $ 40,705 ​ $ 36,102 ​ $ 31,901 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Supplemental disclosure of cash flow information: ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock issued for acquisitions ​ $ — ​ $ 6,250 ​ $ 7,329 Stock issued to settle contingent consideration ​ $ — ​ $ 4,874 ​ $ — Property, plant and equipment purchases in accounts payable or accrued expenses ​ $ 376 ​ $ 336 ​ $ 1,427 Cash paid for interest ​ $ 12,971 ​ $ 12,059 ​ $ 12,200 Cash paid for income taxes ​ $ 8,986 ​ $ 7,804 ​ $ 12,687 ​ See accompanying notes to consolidated financial statements. ​ ​ 40 Table of Contents ALLIENT INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share data) 1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business The Company is engaged in the business of designing, manufacturing, and selling precision motion, control, power and structural composites to provide integrated system solutions as well as individual products, to a broad spectrum of customers throughout the world primarily for the industrial, vehicle, medical, and aerospace and defense markets. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions are eliminated in consolidation. For business combinations, net assets acquired, and liabilities assumed are recorded at their estimated fair values. Cash and Cash Equivalents Cash and cash equivalents include instruments which are readily convertible into cash (original maturities of three months or less) and which are not subject to significant risk of changes in interest rates. Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The provision for credit losses is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable; however, changes in circumstances relating to accounts receivable may result in a requirement for additional provisions in the future. Activity in the provision for credit losses for 2025 and 2024 was as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ December 31, 2024 Beginning balance ​ $ 1,628 ​ $ 1,240 Additional reserves ​ 343 ​ 562 Write-offs and recoveries ​ ( 1,058 ) ​ ( 190 ) Effect of foreign currency translation ​ ​ ( 26 ) ​ ​ 16 Ending balance ​ $ 887 ​ $ 1,628 ​ Inventories Inventories include costs of materials, direct labor and manufacturing overhead, and are stated at the lower of cost (first-in, first-out basis) or net realizable value, as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ December 31, ​ ​ 2025 ​ 2024 Parts and raw materials ​ $ 82,875 ​ $ 78,725 Work-in-process ​ 10,602 ​ 12,274 Finished goods ​ 15,721 ​ 20,518 ​ ​ $ 109,198 ​ $ 111,517 41 Table of Contents ALLIENT INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share data) ​ Property, Plant and Equipment Property, plant and equipment is classified as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ December 31, ​ ​ Useful lives ​ 2025 ​ 2024 Land ​ ​ ​ $ 1,798 ​ $ 1,770 Building and improvements 5 - 39 years ​ 30,215 ​ 29,161 Machinery, equipment, tools and dies 3 - 15 years ​ 121,774 ​ 110,194 Construction in progress ​ ​ ​ ​ 1,636 ​ ​ 2,856 Furniture, fixtures and other 3 - 10 years ​ 26,471 ​ 25,270 ​ ​ ​ ​ 181,894 ​ 169,251 Less accumulated depreciation ​ ​ ​ ( 120,123 ) ​ ( 103,566 ) Property, plant, and equipment, net ​ ​ ​ $ 61,771 ​ $ 65,685 ​ Depreciation expense is provided using the straight-line method over the estimated useful lives of the assets. Amortization of building improvements is provided using the straight-line method over the life of the lease term or the life of the asset, whichever is shorter. Maintenance and repair costs are charged to operations as incurred. Major additions and improvements are capitalized. The cost and related accumulated depreciation of retired or sold property are removed from the accounts and the resulting gain or loss, if any, is reflected in earnings. Depreciation expense was $ 12,936 , $ 13,194 , and $ 12,755 in 2025, 2024, and 2023, respectively. Intangible Assets Intangible assets, other than goodwill, are initially recorded at fair value and are amortized over their estimated useful lives using an accelerated or straight-line method which approximates the pattern of expected cash flows over the remaining useful lives of the intangible assets. Impairment of Long-Lived Assets The Company reviews the carrying values of its long-lived assets, including property, plant and equipment and intangible assets, on an annual basis and whenever events or changes in circumstances indicate that such carrying values may not be recoverable. Long-lived assets are recorded at their carrying amounts if the projected cash flows from their use will recover their carrying amounts on an undiscounted basis and without considering interest. If projected cash flows are less than their carrying value, the long-lived assets must be reduced to their estimated fair value. Judgment is required to project such cash flows and, if required, estimate the fair value of the impaired long-lived assets. The Company did not record any impairment charges for the years ended December 31, 2025, 2024, or 2023. ​ ​ ​ 42 Table of Contents ALLIENT INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share data) Goodwill Goodwill represents the excess of the purchase price over the fair value of identifiable net tangible and intangible assets acquired in a business combination. Goodwill is not amortized but is reviewed for impairment at least annually or more frequently if impairment indicators arise. The Company has defined one reporting unit that is the same as its operating segment. Goodwill is evaluated for impairment by first performing a qualitative assessment to determine whether a quantitative goodwill test is necessary. If it is determined, based on qualitative factors, that the fair value of the reporting unit may be more likely than not less than its carrying amount, or if significant adverse changes in the Company’s future financial performance occur that could materially impact fair value, a quantitative goodwill impairment test would be required. Additionally, the Company can elect to forgo the qualitative assessment and perform the quantitative test. 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, 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 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. Any changes in value are included in net income in the Company’s consolidated statements of income and comprehensive income. Warranty The Company offers warranty coverage for its products. The length of the warranty period for its products is generally three months to two years and varies based on the product sold. The Company estimates the costs of repairing products under warranty based on the historical average cost of the repairs. The assumptions used to estimate warranty accruals are re-evaluated periodically in light of actual experience and, when appropriate, the accruals are adjusted. Estimated warranty costs are recorded at the time of sale of the related product, and are considered a cost of goods sold. Changes in the Company’s reserve for product warranty claims during 2025, 2024, and 2023 were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Beginning balance ​ $ 1,966 ​ $ 2,139 ​ $ 2,160 Settlements ​ ( 632 ) ​ ( 272 ) ​ ( 296 ) Warranty expenditures ​ 343 ​ 196 ​ 243 Effect of foreign currency translation ​ 136 ​ ( 97 ) ​ 32 Ending balance ​ $ 1,813 ​ $ 1,966 ​ $ 2,139 ​ 43 Table of Contents ALLIENT INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share data) Accrued Liabilities Accrued liabilities consist of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Compensation and fringe benefits ​ $ 20,498 ​ $ 13,134 Warranty reserve ​ 1,813 ​ 1,966 Income taxes payable ​ ​ 1,853 ​ ​ 1,472 Operating lease liabilities – current ​ ​ 5,323 ​ ​ 5,088 Finance lease obligations – current ​ ​ 486 ​ ​ 448 Contract liabilities ​ ​ 3,767 ​ ​ 2,292 Restructuring related accruals ​ ​ 521 ​ ​ — Other accrued expenses ​ 6,629 ​ 5,821 ​ ​ $ 40,890 ​ $ 30,221 ​ 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 ​ ​ 3,993 ​ Cash payments ​ ​ ( 3,472 ) ​ December 31, 2025 ​ $ 521 ​ ​ ​ ​ ​ ​ ​ Foreign Currency Translation The assets and liabilities of the Company’s foreign subsidiaries are translated into U.S. dollars using end of period exchange rates. Changes in reported amounts of assets and liabilities of foreign subsidiaries that occur as a result of changes in exchange rates between foreign subsidiaries’ functional currencies and the U.S. dollar are included in foreign currency translation adjustment. Foreign currency translation adjustment is included in accumulated other comprehensive loss, a component of stockholders’ equity in the accompanying consolidated statements of stockholders’ equity. Revenue and expense transactions use an average rate prevailing during the month of the related transaction. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency of each of the operating locations are included in the other expense (income), net as incurred. 44 Table of Contents ALLIENT INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share data) Revenue Recognition Refer to Note 3, Revenue Recognition , for description of the Company’s policies regarding revenue recognition. Engineering and Development Costs The Company is engaged in a variety of engineering and design activities as well as basic research and development activities directed to the substantial improvement or new application of the Company’s existing technologies. Engineering and design as well as research and development costs are expensed as incurred. Basic and Diluted Earnings per Share Basic earnings per share is computed by dividing net income or loss by the weighted average number of shares of common stock outstanding. Diluted earnings per share is determined by dividing the net income by the sum of: (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. Basic and diluted weighted-average shares outstanding are as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Basic weighted average shares outstanding 16,669 16,529 15,963 Dilutive effect of potential common shares 63 74 309 Diluted weighted average shares outstanding 16,732 16,603 16,272 ​ ​ ​ ​ ​ ​ ​ ​ For 2025, 2024, and 2023, the anti-dilutive common shares excluded from the calculation of diluted income per share were 29,000 , 106,000 , and 22,000 , respectively. Comprehensive Income The Company’s comprehensive income as reported in the Consolidated Statements of Income and Comprehensive Income includes net income, foreign currency translation adjustments, the net change in cash flow hedges, net of tax, and defined benefit plan liability adjustments, net of tax. 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. ​ Fair Value Accounting Authoritative guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The guidance establishes a framework for measuring fair value, which utilizes observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. Preference is given to observable inputs. These two types of inputs create the following three-level fair value hierarchy: Level 1: Quoted prices for identical assets or liabilities in active markets. 45 Table of Contents ALLIENT INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share data) Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model-derived valuations whose inputs or significant value drivers are observable. Level 3: Significant inputs to the valuation model that are unobservable. ​ The Company’s financial assets and liabilities include cash and cash equivalents, accounts receivable, debt obligations, accounts payable, and accrued liabilities. The carrying amounts reported in the consolidated balance sheets for these assets approximate fair value because of the immediate or short-term maturities of these financial instruments. The following table presents the Company’s financial assets that are accounted for at fair value on a recurring basis as of December 31, 2025 and 2024, respectively, by level within the fair value hierarchy (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ ​ Level 1 ​ ​ ​ Level 2 ​ ​ ​ Level 3 Assets (liabilities) ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred compensation plan assets ​ $ 5,400 ​ $ — ​ $ — Foreign currency hedge contracts, net ​ ​ — ​ ​ ( 91 ) ​ ​ — Interest rate swaps, net ​ — ​ 580 ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ ​ ​ Level 1 ​ ​ ​ Level 2 ​ ​ ​ Level 3 Assets (liabilities) ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred compensation plan assets ​ $ 4,647 ​ $ — ​ $ — Foreign currency hedge contracts, net ​ — ​ ( 137 ) ​ — Interest rate swaps, net ​ — ​ 2,575 ​ — ​ Derivative Financial Instruments Financial Accounting Standards Board (“FASB”) Accounting Standards Codification ("ASC") No. 815, Derivatives and Hedging ("ASC 815"), provides the disclosure requirements for derivatives and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative instruments, (b) how the entity accounts for derivative instruments and related hedged items, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. Further, qualitative disclosures are required that explain the Company’s objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments. 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 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. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. 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. 46 Table of Contents ALLIENT INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share data) Income Taxes The current provision for income taxes represents actual or estimated amounts payable or refundable on tax return filings each year. Deferred tax assets and liabilities are recorded for the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and amounts reported in the accompanying consolidated balance sheets, and for operating loss and tax credit carryforwards. The change in deferred tax assets and liabilities for the period measures the deferred tax provision or benefit for the period. Effects of changes in enacted tax laws on deferred tax assets and liabilities are reflected as adjustments to the tax provision or benefit in the period of enactment. A valuation allowance may be provided to the extent management deems it is more likely than not that deferred tax assets will not be realized. The ultimate realization of net deferred tax assets is dependent upon the generation of future taxable income, in the appropriate taxing jurisdictions, during the periods in which temporary differences, net operating losses and tax credits and incentives become realizable. Management believes that it is more likely than not that the Company will realize the benefits of these temporary differences and operating loss and tax credit carryforwards, net of valuation allowances. It is the Company's policy to include interest and penalties related to income tax liabilities in income tax expense on the consolidated statements of income and comprehensive Income. In addition, the Company records uncertain tax positions in accordance with ASC 740, Income Taxes , ("ASC 740"). Pension and Postretirement Welfare Plans The Company records the service cost component of net benefit costs in cost of goods sold, selling, and general and administrative expenses. The interest cost component of net benefit costs is recorded in interest expense and the remaining components of net benefit costs, amortization of net losses and expected return on plan assets is recorded in other expense, net. Concentration of Credit Risk Trade receivables subject the Company to the potential for credit risk. To reduce this risk, the Company performs evaluations of its customers’ financial condition and creditworthiness at the time of sale, and updates those evaluations when necessary. See Note 14, Segment Information, for additional information regarding customer concentration. Use of Estimates The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions. Such estimates and assumptions affect the reported amounts of assets and liabilities as well as disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 47 Table of Contents ALLIENT INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share data) Recently Adopted Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. This enhances the disclosures around rate reconciliation, income taxes paid, and other related topics. The standard is effective for annual periods beginning after December 15, 2024. The Company 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)”. This improves financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. The amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company is assessing the impact of adopting the standard on our consolidated financial statements . ​ 2. ACQUISITIONS On January 11, 2024, the Company acquired 100 % of the outstanding shares of SNC Manufacturing Co., Inc. (a Wisconsin corporation) and Acutran de Mexico, S.A. de C.V. (a Mexican corporation), (collectively “SNC”), a premier designer and global manufacturer of electrical transformers serving blue-chip customers in defense, industrial automation, alternative power generation and energy, including electric utilities and renewable energy ​ The purchase price consisted of $ 20,000 in cash paid at closing. 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. ​ ​ ​ ​ ​ Cash and cash equivalents ​ ​ ​ $ 881 Trade receivables ​ ​ 3,467 Inventories ​ ​ 8,600 Prepaid expenses and other assets ​ 496 Property, plant, and equipment ​ 4,258 Operating lease assets ​ ​ 378 Intangible assets ​ ​ 2,900 Goodwill ​ 2,955 Other current liabilities ​ ​ ( 3,188 ) Deferred revenue ​ ​ ( 55 ) Operating lease liabilities ​ ​ ( 378 ) Net deferred income tax liabilities ​ ​ ( 472 ) Other noncurrent liabilities ​ ​ ( 118 ) Net purchase price ​ $ 19,724 ​ The fair values of the assets acquired were determined using one of three valuation approaches: market, income or cost. The selection of a particular method for a given asset depends on the reliability of available data and the nature of the asset, among other considerations. The market approach estimates the value for a subject asset based on available market pricing for comparable assets. The income approach estimates the value for a subject asset based on the present value of 48 Table of Contents ALLIENT INC. 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. The projected cash flows for each asset considered multiple factors from the perspective of a marketplace participant including revenue projections from existing customers, attrition trends, technology life-cycle assumptions, marginal tax rates and expected profit margins considering historical and expected margins. The cost approach estimates the value for a subject asset based on the cost to replace the asset and reflects the estimated reproduction or replacement cost for the asset, less an allowance for loss in value due to depreciation or obsolescence, with specific consideration given to economic obsolescence if indicated. These fair value measurement approaches are based on significant unobservable inputs, including management estimates and assumptions. ​ The intangible assets acquired consist of $ 1,500 of customers lists, $ 600 of trade name, and $ 800 of technology, which are being amortized over 12 , 10 , and 10 years , respectively. Goodwill generated is related to the assembled workforce, synergies between Allient’s other operations and SNC that are expected to occur as a result of the combined engineering knowledge, the ability of each of the operations to integrate each other’s products into more fully integrated system solutions, and Allient’s ability to utilize SNC’s management knowledge in providing complementary product offerings to the Company’s customers. ​ The goodwill resulting from the acquisition is not tax deductible. ​ 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. ​ Unaudited Pro Forma Financial Information ​ The following unaudited pro forma financial information presents the combined results of operations if the SNC acquisition had occurred as of January 1, 2023, and the Sierramotion acquisition had occurred as of January 1, 2022. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ ​ 2023 Revenues ​ $ 620,954 Income before income taxes ​ 31,558 ​ ​ The pro forma information includes certain adjustments, including depreciation and amortization expense, interest expense, and certain other adjustments. The pro forma amounts do not reflect adjustments for anticipated operating efficiencies that the Company expects to achieve as a result of these acquisitions. The pro forma financial information is for informational purposes only and does not purport to present what the Company’s results would have been had these transactions actually occurred on the date presented or to project the combined company’s results of operations or financial position for any future period. ​ ​ 3. REVENUE RECOGNITION Performance Obligations Performance Obligations Satisfied at a Point in Time The Company considers control of most products to transfer at a single point in time when control is transferred to the customer, generally when the products are shipped in accordance with an agreement and/or purchase order. Control is defined as the ability to direct the use of and obtain substantially all of the remaining benefits of the product. 49 Table of Contents ALLIENT INC. 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. The Company considers the customer’s purchase order, and the Company’s corresponding sales order acknowledgment as the contract with the customer. Sales, value add, and other taxes the Company collects concurrently with revenue-producing activities are excluded from revenue. Nature of Goods and Services The Company sells component and integrated controlled motion solutions to end customers and original equipment manufacturers (“OEM’s”) through the Company’s own direct sales force and authorized manufacturers’ representatives and distributors. The Company’s products include brushed and brushless DC motors, brushless servo and torque motors, coreless DC motors, integrated brushless motor-drives, gearmotors, gearing, modular digital servo drives, motion controllers, incremental and absolute optical encoders, active and passive filters for power quality and harmonic issues, and other controlled motion-related products. The Company’s target markets include Industrial, Vehicle, Medical, and Aerospace & Defense. Determining the Transaction Price The majority of the Company’s contracts have an original duration of less than one year. For these contracts, the Company applies the practical expedient and therefore does not consider the effects of the time value of money. For multiyear contracts, the Company uses judgment to determine whether there is a significant financing component. These contracts are generally those in which the customer has made an up-front payment. Contracts that management determines to include a significant financing component are discounted at the Company’s incremental borrowing rate. The Company incurs interest expense and accrues a contract liability. As the Company satisfies performance obligations and recognizes revenue from these contracts, interest expense is recognized simultaneously. Management does not have any contracts that include a significant financing component as of December 31, 2025. Disaggregation of Revenue The Company disaggregates revenue from contracts with customers into geographical regions and target markets. The Company determines that disaggregating revenue into these categories achieves the disclosure objective to depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. As noted in Note 14, Segment Information , the Company’s business consists of one reportable segment. ​ The revenues by geography in the table below are revenues derived from the Company’s foreign subsidiaries as provided in Note 14. A reconciliation of disaggregated revenue to segment revenue as well as revenue by geographical regions is provided in Note 14. The Company’s disaggregated revenues are as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 50 Table of Contents ALLIENT INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share data) ​ ​ Year ended December 31, Target Market ​ ​ ​ 2025 ​ ​ ​ 2024 ​ 2023 Industrial ​ $ 268,394 ​ $ 248,281 ​ $ 257,004 Vehicle ​ ​ 97,015 ​ ​ 102,701 ​ ​ 133,488 Medical ​ 81,687 ​ 77,959 ​ 84,515 Aerospace & Defense ​ 81,337 ​ 75,183 ​ 78,175 Distribution and Other ​ 26,045 ​ 25,844 ​ 25,452 Total ​ $ 554,478 ​ $ 529,968 ​ $ 578,634 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, Geography ​ ​ ​ 2025 ​ ​ ​ 2024 ​ 2023 North America (primarily U.S.) ​ $ 368,921 ​ $ 359,068 ​ $ 399,224 Europe ​ 160,661 ​ 145,617 ​ 150,608 Asia-Pacific ​ 24,896 ​ 25,283 ​ 28,802 Total ​ $ 554,478 ​ $ 529,968 ​ $ 578,634 ​ Contract Balances When the timing of the Company’s delivery of product is different from the timing of the payments made by customers, the Company recognizes either a contract asset (performance precedes customer payment) or a contract liability (customer payment precedes performance). Typically, contracts are paid in arrears and are recognized as receivables after the Company considers whether a significant financing component exists. Backlog represents written firm orders from a customer to deliver products and, in the case of blanket purchase orders, only includes the portion of the order for which a schedule or release has been agreed to with the customer. We believe our backlog represents our unsatisfied or partially unsatisfied performance obligations. Backlog as of December 31, 2025 was $ 232,925 . The Company expects to recognize 85 % of these performance obligations within the next twelve months with the remaining amount recognized between one and two years . The opening and closing balances of the Company’s contract liability are as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ ​ 2025 ​ 2024 Contract liabilities in accrued liabilities ​ $ 3,767 ​ $ 2,292 ​ ​ ​ ​ ​ ​ ​ ​ 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. In the years ended December 31, 2025 and 2024, the Company recognized revenue of $ 1,749 and $ 2,047 , respectively, that was included in the opening contract liabilities balance. Significant Payment Terms The Company’s contracts with its customers state the final terms of the sale, including the description, quantity, and price of each product or service purchased. Payments are typically due in full within 30-60 days of delivery. Since the customer agrees to a stated rate and price in the contract that do not vary over the contract, the majority of contracts do not contain variable consideration. 51 Table of Contents ALLIENT INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share data) Returns, Refunds, and Warranties In the normal course of business, the Company does not accept product returns unless the item is defective as manufactured. The Company establishes provisions for estimated returns and warranties. All contracts include a standard warranty clause to guarantee that the product complies with agreed specifications. Practical Expedients Incremental costs of obtaining a contract - the Company elected to expense the incremental costs of obtaining a contract when the amortization period for such contracts would have been one year or less . 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 . ​ 4. GOODWILL The change in the carrying amount of goodwill for 2025 and 2024 is as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ December 31, ​ ​ 2025 ​ ​ 2024 December 31, 2024 $ 131,789 ​ $ 131,338 Effect of foreign currency translation 2,543 ​ ( 2,504 ) December 31, 2025 $ 134,332 ​ $ 131,789 ​ ​ ​ 5. INTANGIBLE ASSETS Intangible assets on the Company’s consolidated balance sheets consist of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Average ​ December 31, 2025 ​ December 31, 2024 ​ ​ ​ ​ Amortization ​ ​ ​ Gross ​ ​ ​ Accumulated ​ ​ ​ Net Book ​ ​ ​ Gross ​ ​ ​ Accumulated ​ ​ ​ Net Book ​ ​ Period ​ Amount ​ Amortization ​ Value ​ Amount ​ Amortization ​ Value Customer lists 14.1 years ​ $ 117,927 ​ $ ( 59,006 ) ​ $ 58,921 ​ $ 116,370 ​ $ ( 50,098 ) ​ $ 66,272 Trade name 13.7 years ​ 16,105 ​ ( 9,471 ) ​ 6,634 ​ 15,890 ​ ( 8,564 ) ​ 7,326 Design and technologies 10.5 years ​ 42,232 ​ ( 19,396 ) ​ 22,836 ​ 41,390 ​ ( 15,317 ) ​ 26,073 Total ​ ​ ​ $ 176,264 ​ $ ( 87,873 ) ​ $ 88,391 ​ $ 173,650 ​ $ ( 73,979 ) ​ $ 99,671 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total amortization expense for intangible assets for the years 2025, 2024, and 2023 was $ 12,471 , $12,697 , and $ 12,313 , respectively. 52 Table of Contents ALLIENT INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share data) Estimated amortization expense for intangible assets is as follows (in thousands): ​ ​ ​ ​ ​ Year ending December 31, ​ ​ ​ Total ​ ​ Estimated ​ ​ ​ ​ Amortization Expense 2026 ​ 12,429 2027 ​ ​ 11,986 2028 ​ ​ 11,222 2029 ​ ​ 9,583 2030 ​ ​ 9,429 Thereafter ​ 33,742 Total estimated amortization expense ​ $ 88,391 ​ ​ ​ ​ ​ ​ 6. STOCK-BASED COMPENSATION PLANS Stock Incentive Plans 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. As of December 31, 2025, the Company had 477,139 shares of common stock available for grant under stock incentive plans. Restricted Stock The following is a summary of restricted stock grants, fair value and performance based awards: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Awards with ​ ​ ​ ​ Unvested ​ Weighted average performance ​ ​ restricted stock ​ grant date fair ​ vesting For the year ended December 31, ​ ​ ​ awards ​ ​ ​ value ​ ​ ​ requirements 2025 ​ 156,506 ​ $ 24.70 ​ 71,326 2024 ​ 205,188 ​ $ 29.15 ​ 107,377 2023 ​ 129,328 ​ $ 40.85 ​ 74,495 ​ The value at the date of award is amortized to compensation expense over the related service period, which is generally three years for time vested grants. Performance-based grants are generally subject to a 3 year or 5 year service period. Shares of non-vested restricted stock are forfeited if a recipient leaves the Company before the vesting date. Shares that are forfeited become available for future awards. For performance-based awards, the Company assesses the probability of the achievement of the awards during the year and recognizes expense accordingly. 53 Table of Contents ALLIENT INC. 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: ​ ​ ​ ​ ​ ​ Number of ​ ​ ​ ​ shares Unvested Balance, December 31, 2022 ​ ​ ​ 304,947 Awarded 129,328 Vested ( 154,208 ) Forfeited ( 25,957 ) Unvested Balance, December 31, 2023 254,110 Awarded 205,188 Vested ( 143,389 ) Forfeited ( 79,569 ) Unvested Balance, December 31, 2024 236,340 Awarded 156,506 Vested ( 149,237 ) Forfeited ( 9,239 ) Unvested Balance, December 31, 2025 234,370 ​ Share-Based Compensation Expense During 2025, 2024, and 2023 compensation expense net of forfeitures of $ 3,430 , $ 4,147 , and $ 5,477 was recorded, respectively. As of December 31, 2025, there was $ 4,165 of total unrecognized compensation expense related to restricted stock awards, of which approximately $ 2,242 is expected to be recognized in 2026. Employee Stock Ownership Plan The Company sponsors an Employee Stock Ownership Plan (“ESOP”) that covers all non-union U.S. employees who work over 1,000 hours per year. The terms of the ESOP require the Company to make an annual contribution equal to the greater of: 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 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. Defined Contribution Plan The Company sponsors the Allient 401(k) Tax Advantaged Investment Plan (“401(k)”) which covers substantially all its U.S. based employees. The plan provides for the deferral of employee compensation under Section 401(k) and a discretionary Company match. In 2025, 2024, and 2023 this match was 100 % per dollar of the first 3 % of participant deferral and 50 % per dollar of the next 2 % contribution, up to 4 % of a total 5 % participant deferral. Net costs related to this defined contribution plan were $ 2,895 , $ 2,751 , and $ 2,590 in 2025, 2024, and 2023, respectively. These amounts are included in general and administrative costs in the consolidated statements of income and comprehensive income. Dividends For the years ended December 31, 2025, 2024 and 2023 a total of $ 0.12 , $ 0.12 , and $ 0.115 per share on all outstanding shares was declared and paid, respectively. Total dividends paid for the years ended December 31, 2025, 2024, and 2023 were $ 2,001 , $ 1,981 , and $ 1,826 , respectively. 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. ​ 54 Table of Contents ALLIENT INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share data) 7. DEBT OBLIGATIONS Debt obligations consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Long-term Debt ​ ​ ​ ​ ​ ​ Revolving Credit Facility, long-term (1) ​ $ 124,962 ​ $ 168,962 Note Payable ​ ​ 50,000 ​ ​ 50,000 Unamortized debt issuance costs ​ ​ ( 2,339 ) ​ ​ ( 2,945 ) Finance lease obligations – noncurrent ​ ​ 7,766 ​ ​ 8,160 Long-term debt ​ $ 180,389 ​ $ 224,177 (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. On March 1, 2024, the Company entered into a Third Amended and Restated Credit Agreement (the “2024 Amended Credit Agreement”) for a $ 280 million revolving credit facility (the “Revolving Facility”). The changes made to the Company’s previous credit facility by the 2024 Amended Credit Agreement include: i) providing for a $ 50 million accordion amount and ii) extending the term from February 12, 2025 to March 1, 2029. Additionally, the Company has entered into a $ 150 million fixed-rate private shelf facility (the “2024 Note Payable Agreement”) under which $ 50.0 million of borrowings occurred on March 21, 2024. These agreements, collectively, are referred to as the “2024 Credit and Note Payable Agreements”. Pursuant to the 2024 Note Payable Agreement, the Company may from time to time issue and sell, and the borrower may consider in its sole discretion the purchase of, in one or a series of transactions, senior notes of the Company in an aggregate principal amount of up to $ 150 million (“Shelf Notes”). The Shelf Notes will have a maturity date of no more than 10.5 years after the date of original issuance and may be issued through March 1, 2027, unless either party terminates such issuance right. Debt issuance costs of $ 3.2 million were incurred related to the 2024 Credit and Note Payable Agreements and is included within unamortized debt issuance costs noted above. Borrowings under the Revolving Facility bear interest at the Term SOFR Rate (as defined in the 2024 Amended Credit Agreement) plus a margin of 1.25 % to 2.50 % or the Alternative Base Rate (as defined in the Amended Credit Agreement) plus a margin of 0.25 % to 1.50 % , in each case depending on the Company’s ratio of Funded Indebtedness (as defined in the 2024 Amended Credit Agreement) to Consolidated EBITDA (the “Leverage Ratio”). In addition, the Company is required to pay a commitment fee of between 0.15 % and 0.325 % quarterly on the unused portion of the Revolving Facility, also based on the Company’s Leverage Ratio. Financial covenants under the 2024 Credit and Note Payable Agreements require the Company to maintain a minimum interest coverage ratio of at least 3.0 :1.0 at the end of each fiscal quarter. In addition, the Company’s Leverage Ratio at the end of any fiscal quarter shall not be greater than 4.25 :1.0 through December 31, 2024 or greater than 3.75 :1.0 as of the end of any fiscal quarter thereafter; provided that the Company may elect to temporarily increase the Leverage Ratio to by 0.5 :1.0 following a material acquisition under the 2024 Credit and Note Payable Agreements. The 2024 Credit and Note Payable Agreements also include covenants and restrictions that limit the Company’s ability to incur additional indebtedness, merge, consolidate or sell all or substantially all its assets and enter into transactions with an affiliate of the Company on other than an arms’ length transaction. These covenants, which are described more fully in the 2024 Credit and Note Payable Agreements, to which reference is made for a complete statement of the covenants, are subject to certain exceptions. The Company was in compliance with all covenants as of 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 55 Table of Contents ALLIENT INC. 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”). The Series A Notes were issued pursuant to the Private Shelf Agreement. The Series A Notes represent senior promissory notes of the Company and will bear interest at 5.96 % and will mature on March 21, 2031. Interest on the Series A Notes will be payable quarterly on the 21st day of March, June, September and December in each year, commencing on June 21, 2024. Interest is computed on the basis of a 360-day year composed of twelve 30-day months. There are no separate covenants relating to the Series A Notes. All additional borrowings are subject to the leverage ratio compliance. The Series A Notes may be prepaid at the option of the Company, in accordance with the terms of the Private Shelf Agreement, at 100 % of the principal amount to be prepaid plus accrued interest plus the defined “Make-Whole Amount,” if any. The Make-Whole Amount is an amount equal to the excess, if any, of the discounted value of the remaining schedule payments with respect to principal on the Series A Notes being prepaid over the amount of the prepaid principal. ​ 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 % . ​ 8. DERIVATIVE FINANCIAL INSTRUMENTS The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, and foreign exchange risk primarily through the use of derivative financial instruments. The Company enters into foreign currency contracts with 30-day maturities to hedge its short-term balance sheet exposure, primarily intercompany, that are denominated in currencies (Euro, Mexican Peso, New Zealand Dollar, Chinese Renminbi, Swedish Krona, 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 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 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 56 Table of Contents ALLIENT INC. 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. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. In March 2022 the Company entered into an interest rate swap with a notional amount of $ 40,000 that matures in December 2026. In March 2023, the Company executed amendments to the existing swaps to amend the index on the interest rate derivatives from LIBOR to SOFR. These amendments had no material financial impact to the Company’s operations or financial position. In September 2024, the Company entered into an additional interest rate swap with a notional amount of $ 50,000 that matures in September 2027. As of December 31, 2025, the Company holds notional amounts of $ 90,000 in interest rate derivatives. ​ The changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income (loss) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During 2025 and 2024, such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt. ​ The Company estimates that an additional $ 646 will be reclassified as a reduction to interest expense over the next twelve months. Additionally, the Company does not use derivatives for trading or speculative purposes. The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the consolidated balance sheets as of December 31, 2025 and 2024 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Asset Derivatives ​ ​ ​ ​ Fair value as of: Derivatives designated as ​ Balance Sheet ​ December 31, ​ December 31, hedging instruments ​ ​ ​ Location ​ ​ ​ 2025 ​ ​ ​ 2024 Foreign currency contracts ​ Prepaid expenses and other assets ​ $ 7 ​ $ — Interest rate swaps ​ Prepaid expenses and other assets ​ $ 619 ​ $ — Interest rate swaps ​ Other long-term assets ​ $ — ​ $ 2,575 ​ ​ ​ ​ $ 626 ​ $ 2,575 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liability Derivatives ​ ​ ​ ​ Fair value as of: Derivatives designated as ​ Balance Sheet ​ December 31, ​ December 31, hedging instruments ​ ​ ​ Location ​ ​ ​ 2025 ​ ​ ​ 2024 Foreign currency contracts ​ Accrued liabilities ​ $ 98 ​ $ 137 Interest rate products ​ Accrued liabilities ​ ​ 39 ​ ​ — ​ ​ ​ ​ $ 137 ​ $ 137 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 57 Table of Contents ALLIENT INC. 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 (loss) recognized in OCI ​ ​ on derivatives Derivatives in cash flow hedging relationships ​ Year ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ 2023 Interest rate swaps ​ $ ( 520 ) ​ $ 2,284 ​ $ 935 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Location of gain reclassified ​ Amount of pre-tax gain reclassified from accumulated OCI into income from accumulated OCI into income ​ Year ended December 31, ​ ​ 2025 ​ 2024 ​ 2023 Interest expense ​ $ 1,451 ​ $ 4,193 ​ $ 3,814 ​ The table below presents the effect of the Company’s derivative financial instruments on the consolidated statements of income and comprehensive income for the years ended December 31, 2025, 2024, and 2023 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total amounts of income and expense line items presented ​ ​ ​ ​ that reflect the effects of cash flow hedges recorded ​ ​ ​ ​ Year ended December 31, Derivatives designated as hedging instruments ​ ​ ​ Income Statement Location ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Interest rate swaps Interest Expense ​ $ 13,175 ​ $ 13,296 ​ $ 12,383 ​ The Company does not have any offsetting of derivatives as of December 31, 2025 and 2024. ​ 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. ​ ​ 9. INCOME TAXES The provision for income taxes is based on income before income taxes as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended ​ ​ December 31, ​ December 31, ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Domestic ​ $ 10,781 ​ $ 3,951 ​ $ 18,630 Foreign ​ 17,953 ​ 12,907 ​ 11,070 Income before income taxes ​ $ 28,734 ​ $ 16,858 ​ $ 29,700 ​ ​ ​ ​ ​ ​ 58 Table of Contents ALLIENT INC. 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): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended ​ ​ December 31, ​ December 31, ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Current provision ​ ​ ​ ​ ​ ​ ​ ​ ​ Federal ​ $ 2,977 ​ $ 1,838 ​ $ 6,936 State ​ ​ 643 ​ ​ 685 ​ ​ 869 Foreign ​ 4,548 ​ 3,522 ​ 2,834 Total current provision ​ 8,168 ​ 6,045 ​ 10,639 Deferred benefit ​ ​ ​ ​ ​ ​ ​ ​ ​ Federal ​ ​ ( 585 ) ​ ​ ( 1,239 ) ​ ​ ( 3,569 ) State ​ ​ 59 ​ ​ ( 214 ) ​ ​ ( 518 ) Foreign ​ ( 942 ) ​ ( 900 ) ​ ( 949 ) Total deferred benefit ​ ( 1,468 ) ​ ( 2,353 ) ​ ( 5,036 ) Income tax provision ​ $ 6,700 ​ $ 3,692 ​ $ 5,603 ​ The provision for income taxes differs from the amount determined by applying the federal statutory rate as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ ​ ​ ​ Amount Percentage ​ U.S. federal statutory tax rate $ 6,034 21.0 % State and local income taxes, net of federal income tax effect (1) ​ 469 1.6 % Foreign tax effects ​ ​ ​ ​ ​ Germany ​ ​ ​ ​ Other ​ ​ 309 1.1 % New Zealand ​ ​ ​ ​ ​ Change in valuation allowance ​ ​ 379 1.3 % Other ​ ​ 3 - % Portugal ​ ​ ​ ​ ​ State and municipal surcharges ​ 348 1.2 % Investment tax credits ​ ​ ( 650 ) ( 2.3 ) % Changes in valuation allowances ​ ​ ( 465 ) ( 1.6 ) % Other ​ ​ 3 - % Other foreign jurisdictions ​ ​ 235 0.8 % Effect of changes in tax laws or rates enacted in the current period ​ ​ - - % Effect of cross-border tax laws ​ ​ ​ ​ ​ Global intangible low-taxed income ​ ​ 410 1.4 % Other ​ ​ ( 439 ) ( 1.5 ) % Tax credits ​ ​ ​ ​ ​ Federal research credit ​ ​ ( 628 ) ( 2.2 ) % Change in valuation allowance ​ ​ - - % Nontaxable or nondeductible items ​ ​ ​ ​ ​ Section 162(m) compensation ​ ​ 679 2.4 % Other ​ ​ 200 0.7 % Change in unrecognized tax benefits ​ ​ ( 180 ) ( 0.6 ) % Other adjustments ​ ​ ( 7 ) - % Total ​ $ 6,700 23.3 % (1) The tax effect in this category primarily reflects state and local taxes in Oklahoma ​ ​ ​ ​ ​ ​ 59 Table of Contents ALLIENT INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended ​ ​ ​ December 31, ​ December 31, ​ ​ ​ ​ ​ 2024 ​ 2023 ​ ​ ​ Tax provision, computed at statutory rate 21.0 % 21.0 % State tax, net of federal impact 1.0 % 1.7 % Change in valuation allowance ​ ( 2.9 ) % ( 1.5 ) % Effect of foreign tax rate differences 2.4 % 1.9 % Section 162(m) compensation ​ 4.8 % 2.4 % R&D Credit and incentives ​ ( 7.9 ) % ( 6.1 ) % Effect of Tax Cuts and Jobs Act ​ 1.6 % 0.3 % Unrecognized tax benefits ​ ( 1.1 ) % ( 0.7 ) % Other ​ 0.9 % ( 0.1 ) % Withholding tax on foreign distributions ​ 2.1 % - % Provision for income taxes 21.9 % 18.9 % ​ ​ ​ ​ ​ ​ 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): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Noncurrent deferred tax assets: ​ ​ ​ ​ ​ ​ Employee benefit plans ​ $ 1,632 ​ $ 1,735 Net operating loss and tax credit carryforwards ​ ​ 6,849 ​ ​ 6,711 Accrued expenses and reserves ​ ​ 3,608 ​ ​ 2,997 Research and development costs ​ ​ 12,637 ​ ​ 11,069 Other ​ 411 ​ 439 Total noncurrent deferred tax assets ​ 25,137 ​ 22,951 Valuation allowance ​ ( 2,399 ) ​ ( 2,262 ) Net noncurrent deferred tax assets: ​ $ 22,738 ​ $ 20,689 ​ ​ ​ ​ ​ ​ ​ Net noncurrent deferred tax liabilities: ​ ​ ​ ​ ​ ​ Property and equipment ​ $ 2,851 ​ $ 2,812 Goodwill and intangibles ​ ​ 12,393 ​ 11,762 Interest rate swap derivatives ​ ​ 130 ​ ​ 570 Other ​ ​ 96 ​ ​ 71 Total noncurrent deferred tax liabilities ​ $ 15,470 ​ $ 15,215 ​ ​ ​ ​ ​ ​ ​ Net deferred tax asset ​ $ 7,268 ​ $ 5,474 ​ ​ ​ ​ ​ ​ ​ Presented as follows: ​ ​ ​ ​ ​ ​ Noncurrent deferred income tax assets ​ $ 10,509 ​ $ 9,116 Noncurrent deferred income tax liabilities ​ ​ ( 3,241 ) ​ ​ ( 3,642 ) Net deferred tax asset ​ $ 7,268 ​ $ 5,474 ​ ​ ​ 60 Table of Contents ALLIENT INC. 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): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amount ​ ​ Jurisdiction ​ Tax Attribute ​ (in thousands) ​ Begin to expire U.S. State ​ Net Operating Losses (1) $ 9,297 2026 ​ International ​ Net Operating Losses - Unlimited Carryforward (1) $ 15,734 ​ No expiration ​ U.S. Federal ​ Foreign Tax Credits $ 1,002 ​ 2028 ​ International ​ Investment Tax Credits $ 325 ​ 2030 ​ U.S. Federal ​ R&D Tax Credits $ — ​ 2036 ​ U.S. State ​ R&D and Manufacturing Credits $ 547 ​ 2031 ​ (1) Net operating losses (NOL’s) are presented as pre-tax amounts. ​ 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. Management considers the scheduled reversal of deferred tax liabilities, projected verifiable future taxable income and tax planning strategies in making this assessment. ​ Starting in 2022, noncurrent deferred tax assets includes the effects of capitalization and amortization of R&D expenses as required by the 2017 Tax Cuts and Jobs Act. The Company generated excess foreign tax credits in 2017 due to the one-time transition tax required by enactment of the Tax Cuts and Jobs Act in the amount of $ 910 and foreign tax credits were generated in the amount of $ 92 as a result of a dividend paid from Canada and, at that time, determined it was more likely than not that it will not realize a tax benefit from these credits. The Company has incurred net operating losses in certain states with a tax effected benefit of $ 867 as of December 31, 2025 that it is more likely than not will not be realized. Additionally, the Company has deferred tax assets (including net operating loss carryforwards and tax credits) in certain foreign jurisdictions for which it has determined it is more likely than not it would not realize a tax benefit of $ 145 as of December 31, 2025. The amount of deferred tax assets considered realizable is subject to adjustment in future periods if estimates of future taxable income are changed. The Company believes that it is more likely than not that it will realize the benefits of its deferred tax assets, net of valuation allowances as of December 31, 2025. ​ The Company files income tax returns in various U.S. and foreign taxing jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal and state tax examinations in its major tax jurisdictions for periods before 2022. With few exceptions, the Company is no longer subject to tax examinations in the foreign jurisdictions for periods prior to 2020. ​ Due to a New Zealand tax legislation change in 2021 allowing for the use of pre-acquisition net operating loss carryforwards to be utilized on the acquirer's future period tax returns, the Company recognized, in 2021, $ 8,328 of net operating loss carryforwards generated in pre-acquisition periods by the Dynamic Controls New Zealand entities. The net operating loss carryforwards are now available for use by the Company beginning with the New Zealand tax returns filed for the 2020 tax period. The Company evaluated the tax legislation and considered the tax periods open for adjustment by the tax authorities which include the 2016-2020 tax years and has determined it is more likely than not it will not realize a benefit on $ 1,125 of the net operating loss carryforwards. The Company will adjust this unrecognized tax benefit in light of changing facts and circumstances and with the lapse of the statute of limitations. 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. ​ ​ 61 Table of Contents ALLIENT INC. 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): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ U.S. federal ​ $ 2,547 ​ U.S. state and local ​ ​ ​ Oklahoma ​ 550 ​ Other ​ ​ 513 ​ Total U.S. state and local ​ ​ 1,063 ​ Foreign ​ ​ ​ ​ Canada ​ ​ 1,096 ​ China ​ ​ 527 ​ Germany ​ ​ 979 ​ Netherlands ​ ​ 698 ​ Portugal ​ ​ 583 ​ Sweden ​ ​ 860 ​ Other ​ ​ 633 ​ Total foreign ​ ​ 5,376 ​ Total cash paid for income taxes, net of refunds ​ $ 8,986 ​ ​ ​ ​ ​ ​ ​ The summary of changes to the unrecognized tax benefit for the year ended December 31, 2025 is as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Beginning balance ​ $ 350 ​ $ 586 ​ $ 786 Additions from tax legislation changes for net operating loss carryforwards ​ — ​ — ​ — Reductions related to the lapse of the statute of limitations ​ ( 180 ) ​ ( 193 ) ​ ( 207 ) Effect of foreign currency translation ​ ​ 8 ​ ​ ( 43 ) ​ ​ 7 Ending balance ​ $ 178 ​ $ 350 ​ $ 586 ​ It is reasonably possible that a reduction of approximately $ 180 of the balance of unrecognized tax benefits may occur within the next twelve months as a result of the lapse of the statute of limitations. 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 consolidated statements of income and comprehensive income. In addition, the Company records uncertain tax positions in accordance with ASC 740. No material interest or penalties related to income tax liabilities were recognized for the years ended December 31, 2025, 2024, and 2023. ​ In general, it is the practice and intention of the Company to reinvest the earnings of its non-domestic subsidiaries in activities outside the United States. Exceptions may be made on a year-by-year basis to repatriate earnings of certain foreign subsidiaries based on cash needs in the United States. Certain foreign subsidiaries made distributions to other foreign subsidiaries which required a withholding tax remittance of $ 113 . 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. ​ 62 Table of Contents ALLIENT INC. 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. ​ 10. LEASES The Company has operating leases for office space, manufacturing facilities and equipment, computer equipment and automobiles. Many leases include one or more options to renew, some of which include options to extend the leases for a long-term period, and some leases include options to terminate the leases within 30 days . In certain of the Company's lease agreements, the rental payments are adjusted periodically to reflect actual charges incurred for capital area maintenance, utilities, inflation and/or changes in other indexes. The Company’s finance lease obligations relate to a manufacturing facility. As of December 31, 2025, finance lease assets of $ 7,037 are included in property, plant, and equipment , net, finance lease obligations of $ 486 are included in accrued liabilities , and $ 7,766 are included in long-term debt on the consolidated balance sheet. For the years ended December 31, 2025 and 2024, the components of operating lease expense were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ December 31, ​ ​ 2025 ​ ​ 2024 Fixed operating lease expense ​ $ 7,111 ​ $ 6,610 Variable operating lease expense ​ ​ 766 ​ ​ 735 Short-term lease expense ​ ​ 1,150 ​ ​ 826 ​ ​ $ 9,027 ​ $ 8,171 ​ Supplemental cash flow information related to the Company’s operating and finance leases for the years ended December 31, 2025 and 2024 are as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2025 ​ 2024 Cash paid for operating leases ​ ​ ​ $ 6,993 ​ ​ ​ $ 6,418 Cash paid for interest on finance lease obligations ​ ​ ​ $ 385 ​ ​ ​ $ 405 Assets acquired under operating leases ​ $ 1,816 ​ $ 6,011 Operating lease assets obtained in acquisitions ​ $ — ​ $ 378 ​ ​ ​ ​ ​ ​ ​ ​ 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2025 ​ ​ 2024 ​ Weighted average remaining lease term (in years) ​ 5.06 ​ ​ 5.73 ​ Weighted average discount rate ​ 4.74 % ​ 4.71 % ​ ​ 63 Table of Contents ALLIENT INC. 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): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating Leases ​ Finance Leases 2026 ​ ​ 6,203 ​ ​ 848 2027 ​ ​ 5,439 ​ ​ 867 2028 ​ ​ 4,085 ​ ​ 886 2029 ​ ​ 2,739 ​ ​ 906 2030 ​ ​ 2,178 ​ ​ 927 Thereafter ​ 3,662 ​ 6,051 Total undiscounted cash flows ​ $ 24,306 ​ $ 10,485 Less: present value discount ​ ​ ( 2,552 ) ​ ​ ( 2,233 ) Total lease liabilities ​ $ 21,754 ​ $ 8,252 ​ The Company leases certain facilities from companies for which a member of management is a part owner. In connection with such leases, the Company made payments to the lessor of $ 746 and $ 884 during the years ended December 31, 2025 and 2024, respectively. Future minimum lease payments under these leases as of December 31, 2025 are $ 5,083 . ​ 11. COMMITMENTS AND CONTINGENCIES Severance Benefit Agreements As of December 31, 2025, the Company has annually renewable employment agreements with certain of its executive officers. Among other things, the agreements provide for payments and other benefits if the employee’s employment terminates under certain circumstances, including the employee’s death, disability, voluntary resignation with good reason and involuntary termination without cause, as well as voluntary resignation with good reason and involuntary termination without cause within 90 days prior to or 24 months following a change in control of the Company. ​ Litigation The Company is involved in certain actions that have arisen out of the ordinary course of business. Management believes that resolution of the actions will not have a significant adverse effect on the Company’s consolidated financial statements. ​ 12. DEFERRED COMPENSATION ARRANGEMENTS The Company has a deferred compensation arrangement with its Chief Executive Officer. This arrangement provides the Board and its committees with another mechanism to provide pay for performance based incentive compensation. It also allows the Chief Executive Officer to make certain deferrals into the plan. The amount of the liability is comprised of liabilities from previous contributions. Amounts accrued relating to previous periods are $ 5,400 and $ 4,647 as of December 31, 2025 and 2024, respectively, which is included in other long-term liabilities in the consolidated balance sheets at December 31, 2025 and 2024. ​ 64 Table of Contents ALLIENT INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share data) 13. ACCUMULATED OTHER COMPREHENSIVE INCOME Accumulated Other Comprehensive Income (Loss) (“AOCI”) for the years ended December 31, 2025 and 2024 is comprised of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign Currency ​ ​ ​ ​ ​ Defined Benefit ​ ​ ​ Tax Effect of ​ Translation ​ ​ ​ ​ ​ ​ ​ Plan Liability ​ ​ ​ Cash Flow Hedges ​ ​ ​ Cash Flow Hedges ​ ​ ​ Adjustment ​ ​ ​ Total At December 31, 2024 ​ $ 131 ​ $ 2,522 ​ $ ( 547 ) ​ $ ( 25,289 ) ​ $ ( 23,183 ) Unrealized (loss) gain on cash flow hedges ​ ​ — ​ ​ ( 520 ) ​ ​ 138 ​ ​ — ​ ​ ( 382 ) Amounts reclassified from AOCI ​ ​ — ​ ​ ( 1,451 ) ​ ​ 361 ​ ​ — ​ ​ ( 1,090 ) Pension adjustments, net of tax ​ ​ 128 ​ ​ — ​ ​ — ​ ​ — ​ ​ 128 Foreign currency translation gain ​ ​ — ​ ​ — ​ ​ — ​ ​ 15,000 ​ ​ 15,000 At December 31, 2025 ​ $ 259 ​ $ 551 ​ $ ( 48 ) ​ $ ( 10,289 ) ​ $ ( 9,527 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign Currency ​ ​ ​ ​ ​ Defined Benefit ​ ​ ​ Tax Effect of ​ Translation ​ ​ ​ ​ ​ ​ ​ Plan Liability ​ ​ ​ Cash Flow Hedges ​ ​ ​ Cash Flow Hedges ​ ​ ​ Adjustment ​ ​ ​ Total At December 31, 2023 ​ $ ( 344 ) ​ $ 4,431 ​ $ ( 1,006 ) ​ $ ( 13,256 ) ​ $ ( 10,175 ) Unrealized gain (loss) on cash flow hedges ​ ​ — ​ ​ 2,284 ​ ​ ( 547 ) ​ ​ — ​ ​ 1,737 Amounts reclassified from AOCI ​ ​ — ​ ​ ( 4,193 ) ​ ​ 1,006 ​ ​ — ​ ​ ( 3,187 ) Pension adjustments, net of tax ​ ​ 475 ​ ​ — ​ ​ — ​ ​ — ​ ​ 475 Foreign currency translation loss ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 12,033 ) ​ ​ ( 12,033 ) At December 31, 2024 ​ $ 131 ​ $ 2,522 ​ $ ( 547 ) ​ $ ( 25,289 ) ​ $ ( 23,183 ) ​ ​ 14. SEGMENT INFORMATION The Company operates in one segment for the manufacture and marketing of specialty-controlled motion products and solutions for end user and OEM applications. The Company’s chief operating decision maker (“CODM”) has been identified as the Chief Executive Officer and President, who reviews operating results to make decisions about allocating resources, monitoring budgets, and assessing performance for the entire Company. The measure of segment profit or loss utilized is consolidated net income. The CODM uses this measures to compare results to prior periods and during our budgeting and forecasting process to assess profitability and enable decision making. The reports reviewed by the CODM do not provide for any significant expense categories beyond those as reported on the consolidated statement of income and comprehensive income. The accounting policies of the Company are described in Note 1 Significant Accounting Policies. 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. ​ Financial information related to the foreign subsidiaries is summarized below (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Revenues derived from foreign subsidiaries ​ $ 185,557 ​ $ 170,901 ​ $ 179,410 ​ 65 Table of Contents ALLIENT INC. 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. Revenues derived from foreign subsidiaries and identifiable assets outside of the United States are primarily attributable to Europe, China, Mexico and New Zealand. 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. 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. ​ ​ ​ ​ ​ ​ ​ ​ ​ 66 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. Not applicable. ​