What changed in this filing

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Item 1. Business

2024-03-05 compared with 2023-03-07 · 68 added, 73 removed, 112 unchanged (56% of the section changed)

Allied Motion Technologies Inc.

(“Allied Motion” or the “Company” or “we” or “our”) is a global company that designs, manufactures and sells precision and specialty controlled motion components and systems used in a broad range of industries.

Effective August 23, 2023, Allied Motion Technologies Inc.

(“Allied Motion”) changed its name to Allient Inc.

(“Allient” or the “Company”).

In conjunction with the name change, Allient’s ticker symbol has changed from “AMOT” to “ALNT”.

The name change reflects the Company’s commitment to and progress in transforming its business from a products-based business in motion control to a solutions-oriented company that addresses its customers’ requirements for Motion, Controls and Power technologies for a multitude of applications.

We are a global company that designs, manufactures and sells precision and specialty controlled motion components and systems used in a broad range of industries.

Our target markets include Industrial, Vehicle, Medical, and Aerospace & Defense (A&D).

We are headquartered in Amherst, NY, and have global operations and sell to markets across the United States, Canada, South America, Europe and Asia-Pacific.

We are headquartered in Amherst, NY, and have global production operations and sell to markets across the United States, Canada, South America, Europe and Asia-Pacific.

We are known worldwide for our expertise in electro-magnetic, mechanical and electronic motion technology.

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Our products and solutions include nano precision positioning systems, servo control systems, motion controllers, digital servo amplifiers and drives, brushless servo, torque, and coreless motors, brush motors, integrated motor-drives, gear motors, gearing, incremental and absolute optical encoders, active (electronic) and passive (magnetic) filters for power quality and harmonic issues, Industrial safety rated input/output Modules, Universal Industrial Communications Gateways, light-weighting technologies, and other controlled motion-related products.

Allied Motion was established in 1962 under the laws of Colorado and operates in the United States, Canada, Mexico, Europe and Asia-Pacific.

Allient was established in 1962 under the laws of Colorado and operates in the United States, Canada, Mexico, Europe and Asia-Pacific.

We are headquartered in Amherst, New York and the mailing address of our corporate headquarters is 495 Commerce Drive, Suite 3, Amherst, New York 14228.

The telephone number at this location is (716) 242-8634.

Our website is www.alliedmotion.com.

We trade under the ticker symbol “AMOT” on the NASDAQ exchange.

The Company maintains a website at www.alliedmotion.com.

Our website is www.allient.com.

We trade under the ticker symbol “ALNT” on the NASDAQ exchange.

The Company maintains a website at www.allient.com.

We make available, free of charge on or through our website our annual reports on Form 10 K, quarterly reports on Form 10 Q, current reports on Form 8 K, and amendments to those reports as soon as reasonably practicable after we electronically file or furnish such materials to the SEC.

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We intend to disclose on our website any amendment to, or waiver of, the Codes that would otherwise be required to be disclosed under the rules of the SEC and the Nasdaq Global Market.

A copy of both Codes is also available in print to any stockholder upon written request addressed to Allied Motion Technologies Inc., 495 Commerce Drive, Suite 3, Amherst, NY 14228-2313, Attention:

A copy of both Codes is also available in print to any stockholder upon written request addressed to Allient Inc., 495 Commerce Drive, Suite 3, Amherst, NY 14228-2313, Attention:

Recent Events

The continued presence of COVID-19 has and will likely continue to create uncertainties and disruptions to the Company as well as the global economy.

This has resulted in operational and financial challenges and risks.

In response, we implemented extensive additional health and safety protocols from time to time in keeping with governmental requirements and best practices.

As a result of the continued evolving presence of variants of the virus, and related global impacts, there are likely to be ongoing disruptions to certain supply chains as well as impacts on customer demand that may present additional challenges and volatility to our business.

During 2022, inflation negatively impacted our input costs and pricing, primarily for labor and materials.

We, our customers, and our suppliers also began to experience the effect of a higher interest rate environment.

In 2023 we refined our strategy to expand our vertical market focus to accelerate our growth.

Throughout its history, the Company has expanded our capabilities to be a leading global provider of motion solutions.

More recently, we have been building our controls and power technologies, both organically and through acquisitions.

The evolution of these additional pillars of our business enhances our overall value proposition, expands our addressable markets and is aligned with mega technology trends.

These advancements required us to refine our strategy to leverage the value opportunity that exists in three technology pillars – Motion, Controls and Power.

In addition, we are structuring our organization with focused market selling and support teams to increase solution sales opportunities under our new brand -Allient.

This refined strategy is reflected in the change of our corporate name from Allied Motion Technologies Inc.

to Allient Inc, short for Allied Nexus Technologies.

Allient captures the opportunity that exists at the nexus of these three technology pillars and recognizes the unique capabilities the combination offers.

Beginning in 2022 and continuing into 2023, inflation negatively impacted our input costs and pricing, primarily for labor and materials.

We, our customers, and our suppliers also experienced the effect of a higher interest rate environment.

Gross domestic product growth slowed throughout 2022 largely due to the widespread impacts of inflation, increasing interest rates, and more restrictive financial conditions.

Supply chain disruptions, labor shortages, and global inflation remain persistent, along with elevated geopolitical instability.

Specifically, the current conflict in Ukraine has created geopolitical unrest resulting in economic uncertainty and

volatility with regard to energy prices, interest rates and our supply chain.

We are monitoring the developments as they unfold in order to react accordingly.

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

The Company does not believe the impact on our results to be material at this time.

The Inflation Reduction Act of 2022 (the “IRA”) was signed into law in August 2022.

The IRA is federal legislation designed to raise revenue from lowering of prescription drug prices and imposition of certain corporate tax measures, while authorizing spending on energy and climate change initiatives, subsidizing the Affordable Care Act, and enacting certain tax reforms.

Management continues to monitor any potential impact of the IRA on our results.

No immediate or direct effect from the legislation is anticipated to have a material impact on our results at this time.

The CHIPS and Science Act (“CHIPS”) was signed into law in August 2022.

CHIPS is a federal statue providing funding for research and domestic production of semiconductors.

Additional funding can be provided through CHIPS to various federal agencies as well as towards climate science research.

No immediate or direct material effect from the legislation is anticipated to have a material impact on our results at this time.

Beginning in the last half of 2021, certain regions of China experienced energy shortages which have, for brief periods of time, impacted our facilities.

The impact was not material to our results during 2021 and 2022, however, there continue to be uncertainties related to the energy shortages that may impact us in 2023 and beyond.

We have been able to proactively mitigate the impact of the restrictions on energy usage to date by managing our scheduling at the impacted facilities.

While gross domestic products began to rebound in 2023, the factors contributing to supply chain disruptions, labor shortages, and global inflation remained persistent into 2023, along with elevated geopolitical instability.

There are varying degress of impact on our customers, and thus our business around the world, with Europe experiencing the greatest amount of stress in 2023.

The current geopolitical conflicts are creating higher levels of economic uncertainty and increased volatility with respect to energy prices, interest rates, our supply chain, and certain customer ordering patterns.

We are closely monitoring the developments and continue to adjust our production platform to react to changing customer ordering patterns and realize efficiencies.

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

Changing order patterns, supply chain disruptions, and the evolution of our business have required us to carry larger inventories in 2023 and 2022 to meet the needs of our customers, especially as they return to a new normal after the disruptions caused by the COVID-19 pandemic.

In addition, aerospace and defense customers ordering patterns continue to change quickly based on the geopolitical conflicts and sovereign governments priorities and budgets to address those conflicts.

RECENT ACQUISITIONS

Sierramotion:

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

(“Sierramotion”), a privately-owned company specializing in designing and engineering turn-key motion components and mechatronic (mechanical, electrical, and control) solutions for robotic, medical, industrial, defense, semiconductor, and other precision applications.

Sierramotion has experience and know-how designing and applying products in electro-mechanical systems with moving magnets or moving coils for rotary, linear, and arc shaped applications.

They provide customized design and integration capabilities, testing, performance simulations, prototype development, and low volume production for a variety of high precision and custom critical applications.

On June 17, 2022, the Company acquired 100% of the membership interests of Airex, LLC (“Airex”), a privately-owned New Hampshire headquartered developer of high precision electromagnetic products and solutions for the aerospace and defense, life sciences, semiconductor, and commercial industrial applications .

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Airex expands the Company’s motor offerings as well as enhances its quality systems to support broad mission critical defense programs, as well as other high demanding industries such as life sciences and semiconductor.

All operations of Airex were moved from New Hampshire to our Tulsa, Oklahoma facility in late 2023.

On May 30, 2022, the Company acquired 100% of the direct and indirect legal and beneficial ownership of the shares of FPH Group Inc., a corporation incorporated pursuant to the laws of the Province of Ontario and the membership interests of Transtar International, LLC, a Michigan limited liability company, collectively “FPH”.

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ThinGap designs, engineers, and manufactures low profile, brushless DC motor kits and assemblies that utilize a proprietary wave-wound stator architecture and highly optimized rotors.

ThinGap expands the Company’s precision motion capabilities and advances its strategy to provide integrated motion solutions in the robotics, semiconductor, and instrumentation markets.

Spectrum Controls:

On December 30, 2021, we acquired Spectrum Controls, Inc.

(“Spectrum Controls”), a Washington headquartered innovator and manufacturer of I/O and Universal Communications Gateway products.

Spectrum Controls designs and manufactures a wide range of highly sophisticated I/O modules, marquee displays, and

industrial gateways for broad industrial controls applications through partnerships with Programmable Logic Controller (“PLC”) manufacturers and distributors.

This acquisition provides us with the opportunity to enhance our position as a value-added solutions supplier to the industrial automation and industrial controls market.

ALIO Industries:

On November 4, 2021, we acquired ALIO Industries (“ALIO”), a Colorado headquartered innovator and manufacturer of advanced linear and rotary motion systems for nano-precision applications .

ALIO designs, engineers, and manufactures nano technology motion systems for state-of-the-art applications in silicon photonics, micro assembly, digital pathology, genome sequencing, laser processing and microelectronics.

ALIO is well recognized for their technology and expertise in nanometer level positioning.

This expertise in high precision positioning and robotic technology solutions will enhance our portfolio of motion solution offerings.

ORMEC Systems Corp.

On November 2, 2021, the Company acquired ORMEC Systems Corp.

(“ORMEC”), a New York headquartered developer and manufacturer of mission critical electro-mechanical automation solutions and motion control products including multi-axis controls, electronic drives and actuators for the automation and aerospace industries.

In addition to its products, ORMEC designs and manufactures complete electro-mechanical and software solutions for custom automation applications.

ORMEC strengthens the Company’s technical expertise and adds a higher level of precision motion control systems and solutions to its offerings.

ThinGap expands the

Company’s precision motion capabilities and advances its strategy to provide integrated motion solutions in the robotics, semiconductor, and instrumentation markets.

MARKETS AND APPLICATIONS

The Company’s growth strategy is focused on becoming the recognized leader in designing products and innovating controlled motion solutions in its selected target markets by further developing its products and service platform to utilize multiple Allied Motion technologies to provide enhanced solutions, products, and value for its customers.

Our strategy further defines Allied Motion as being a “technology/know-how” driven company and to remain successful, the company continuously invests in its area of excellence.

The Company’s growth strategy is focused on becoming the recognized leader in designing products and innovating controlled motion solutions in its selected target markets by further developing its products and service platform to utilize multiple Allient technologies to provide enhanced solutions, products, and value for its customers.

Our strategy further defines Allient as being a “technology/know-how” driven company and to remain successful, the company continuously invests in its area of excellence.

This platform development emphasizes a combination of technologies to create enhanced products, solutions, and value to meet the emerging needs of the Company’s selected target markets.

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We expect our recent acquisitions will further drive our success.

Our strong financial condition, along with Allied Systematic Tools (“AST”) continuous improvement initiatives in quality, delivery, and cost provide a positive outlook for the continued long-term growth and profitability of the Company.

Our strong financial condition, along with Allient Systematic Tools (“AST”) continuous improvement initiatives in quality, delivery, and cost provide a positive outlook for the continued long-term growth and profitability of the Company.

The Company sells its products and solutions into a subset of the following broad markets:

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trucks, buses, boats, utility, recreational (e.g., RVs, ATVs (all-terrain vehicles), specialty automotive, automated and remotely guided vehicles) .

equipment, automated pharmacy dispensing equipment, kidney dialysis equipment, respiratory ventilators, heart pumps, and patient handling equipment (e.g., wheel chairs, scooters, stair lifts, patient lifts, transport tables and hospital beds).

surgical robots, prosthetics, electric powered surgical hand pieces, programmable pumps to meter and administer infusions associated with chemotherapy, pain control and antibiotics, nuclear imaging systems, radiology equipment, automated pharmacy dispensing equipment, kidney dialysis equipment, respiratory ventilators, heart pumps, and patient handling equipment (e.g., wheel chairs, scooters, stair lifts, patient lifts, transport tables and hospital beds).

Aerospace & Defense :

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We design and develop our products within our Technology Centers and can manufacture these products and solutions in various facilities located in the United States, Canada, Mexico, Europe and Asia-Pacific.

We also operate Allied Motion Solution Centers that evaluate and focus all Allied Motion products to create integrated controlled motion solutions for our customers.

We also operate Allient Solution Centers that evaluate and focus all Allient products to create integrated controlled motion solutions for our customers.

We sell our products and solutions globally to a broad spectrum of customers through our own direct sales force and authorized manufacturers’ representatives and distributors.

Our customers include end users and original equipment manufacturers (“OEMs”).

Allied Motion Sales Organization:

Our customers include end users and original

equipment manufacturers (“OEMs”).

Allient Organization:

The Company’s sales organization is focused on becoming the best sales and service force in its industry.

Through the One Team approach for providing products and controlled motion solutions that best address customers’ needs, the Company has broadened the knowledge and skills of its direct sales force, while creating sales and service support in its Solution Centers.

This enables the entire sales organization to be capable of selling all products designed, developed and produced by Allied Motion globally.

This enables the entire sales organization to be capable of selling all products designed, developed and produced by Allient globally.

The Company’s primary channels to market include the direct sales force and external authorized Sales Representatives, Agents and Distributors that provide field coverage in Asia-Pacific, Europe, Canada, Israel and the Americas.

While most of the Company’s sales are directly to OEMs, it has expanded its market reach through Distribution channels.

Allied Motion Solution Centers :

Allied Motion has Solution Centers in China, Europe and North America that enable the design and sale of individual component products as well as integrated controlled motion systems that utilize multiple Allied Motion products and technologies.

Allient Solution Centers :

Allient has Solution Centers in China, Europe and North America that enable the design and sale of individual component products as well as integrated controlled motion systems that utilize multiple Allient products and technologies.

In addition to providing sales and applications support, the solution center function may include final assembly, integration and tests as required to support customers within their geographic region.

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Backlog as of December 31, 2023 was $276,093 compared with $330,078 as of December 31, 2022.

Included in backlog as of December 31, 2022 is $21,222 from the acquisitions completed in 2022.

Included in backlog as of December 31, 2023 is $2,344 from the acquisition completed in 2023.

The decrease in our backlog is partially driven by the return of our customers to more normal ordering patterns subsequent to the disruptions in business and supply chains which occurred during the COVID-19 pandemic.

The time to convert the majority of backlog to sales is approximately three to nine months.

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There is no assurance that the Company’s backlog from these customers will be converted into revenue.

Major Customer

Sales to one customer were 11% of total sales in 2022 and 15% of total sales in 2021.

We believe the diversification of the target markets and customers we serve reduces our exposure to negative developments with any single customer.

Major Customers

Sales to one customer (Customer A) were 10% of total sales in 2023 and 11% of total sales in 2022 and to another customer (Customer B) were 12% of total sales in 2023.

We believe the broad diversification of the target markets and customers we serve reduces our exposure to negative developments with any single customer.

Competitive Environment

Our products and solutions are sold into the global market with a large and diverse group of competitors that vary by product, geography, industry and application.

The controlled motion market is highly fragmented with many competitors, some of which are substantially larger and have greater resources than Allied Motion.

We believe our competitive advantages include our electro-magnetic, mechanical and electronic controlled motion expertise, the breadth

of our motor technologies and our ability to integrate these technologies with our encoders, gearing, power electronics, digital control technologies and network/feedback communications capabilities, as well as our global presence.

The controlled motion market is highly fragmented with many competitors, some of which are substantially larger and have greater resources than Allient.

We believe our competitive advantages include our electro-magnetic, mechanical and electronic controlled motion expertise, the breadth of our motor technologies and our ability to integrate these technologies with our encoders, gearing, power electronics, digital control technologies and network/feedback communications capabilities, as well as our global presence.

Unlike many of our competitors, we are unique in our ability to provide custom-engineered controlled motion solutions that integrate the products we manufacture such as embedded or external electrical control solutions with our motors.

We compete on technological capabilities, quality, reliability, service responsiveness, delivery speed and price.

Our competitors include Altra Industrial Motion, Ametek, Inc., Parker Hannifin Corporation and other smaller competitors.

Our competitors include Ametek, Inc., Parker Hannifin Corporation, Regal Rexnord, and other smaller competitors.

Availability and Prices of Parts and Raw Materials

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We cannot quickly establish additional or replacement suppliers for these materials in some cases because of these rigid requirements.

For these critical raw materials, we maintain minimum safety stock levels and partner with suppliers through contract to help ensure the continuity of supply.

For these critical raw materials, we maintain minimum safety stock levels and partner with

suppliers through contract to help ensure the continuity of supply.

As a result of the COVID-19 pandemic and resulting economic and supply chain disruptions, we have experienced upward pricing pressure and challenges with availability of parts and raw materials.

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We consider the component parts of our different product lines to be generally available and current suppliers to be reliable and capable of satisfying anticipated needs under normal conditions.

As discussed herein, as a result of the COVID-19 pandemic and supply chain disruptions, we have experienced increased costs and have purposely increased certain inventories to manage global supply chain issues.

As discussed herein, because of the supply chain disruptions, we have experienced increased costs and have purposely increased certain inventories to manage global supply chain issues.

Engineering and Development Activities

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Environmental Issues

On December 14, 2023, Allient published its inaugural Sustainability Report covering the Company’s fiscal year 2022.

The report highlights Allient’s vision for and approach to corporate sustainability and details key initiatives it is undertaking in the areas of environmental stewardship, social responsibility and well-being, and corporate governance.

The report outlines key achievements as well as disclosing key and pertinent data in alignment with the Sustainability Accounting Standards Board and the Task Force on Climate-Related Financial Disclosures reporting standards.

The Company takes its responsibility to be a good steward of the environment seriously and we adopt policies and procedures under the guidance of the Board of Directors that advance our performance.

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The Board of Directors provides oversight as part of their environmental, social and governance (“ESG”) initiatives and we will continue to monitor emerging developments and assess our performance in this area.

We may face additional economic and

operational impacts from ESG regulations as well as impacts from our suppliers and customers as they adhere to the laws and regulations.

We may face additional economic and operational impacts from ESG regulations as well as impacts from our suppliers and customers as they adhere to the laws and regulations.

International Operations

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This highly visible effort encourages employee engagement and active management and leadership involvement.

Diversity and Inclusion

Diversity, Equity, and Inclusion

The Company is committed to apply fair labor practices while respecting the national and local laws of the countries and communities where we have operations.

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The Company does not engage in or tolerate unlawful conduct, including discrimination, intimidation, or harassment.

The Company strives to establish relationships with key organizations and associations that foster diversity and inclusion initiatives in the communities where it is located.

The Company strives to establish relationships with key organizations and associations that foster

diversity and inclusion initiatives in the communities where it is located.

The Company is committed to identifying a talented and innovative workforce through a culture that promotes human equity and emphasizes the benefits of a diverse and inclusive workforce and pipeline of talent.

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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 1. Business