What changed in this filing

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Item 1. Business

2025-03-05 compared with 2024-03-05 · 42 added, 46 removed, 134 unchanged (40% of the section changed)

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.

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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.

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

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

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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 Allient 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, Amherst, NY 14228-2313, Attention:

Recent Events

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

Simplify to Accelerate NOW:

During 2024, the Company commenced the Simplify to Accelerate NOW program.

This included initiatives to realign the Company’s manufacturing footprint and streamline the organization to enhance operational efficiency and drive profitability.

These initiatives are expected to position Allient to emerge from the current challenging macroeconomic environment and industrial headwinds with stronger earnings power, improved operational flexibility, and enhanced capacity to capitalize on future growth opportunities.

On February 6, 2025, the Company announced that consistent with its Simplify to Accelerate NOW strategy, it will expand upon current capabilities and skillsets to create a state-of-the-art Machining Center of Excellence at its facility in Dothan, Alabama.

The Company will transfer current assembly operations from Dothan and merge these capabilities into its facilities in Tulsa, Oklahoma and Reynosa, Mexico where Final Assembly, Integration and Test capabilities are the core competencies.

The realignment will improve business focus and better leverage the Company’s footprint to deliver high-precision system solutions for demanding applications in various served markets including Aerospace and Defense, Medical and Electronic Test and Assembly Equipment.

One-time costs required to implement the changes are estimated to be approximately $4 to $5 million, primarily related to employee severance and other personnel related expenses, and are expected to be substantially incurred during 2025.

The initiative is expected to support our goal of driving an additional $6 to $7 million in annualized cost savings.

government has proposed updating existing trade policies with Mexico, China, and other countries.

These updates include potential tariffs on a wide range of products and good imported to the U.S.

We have significant manufacturing in Mexico and China as well as globally throughout the world.

Official government policies and agreements will be monitored for potential impacts to our business.

In 2024 we continued to refine our strategy to expand our vertical market focus to accelerate our growth.

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

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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.

In recent years, 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.

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.

While gross domestic products began to rebound in 2023 from the widespread impacts of inflation, increasing interest rates, and other restrictive financial conditions in 2022, the factors contributing to supply chain disruptions, labor shortages, and global inflation remained persistent through 2023 and 2024, along with continued elevated geopolitical instability.

There are varying degrees of impact on our customers, and thus our business around the world, with Europe experiencing the greatest amount of stress in 2023 and 2024.

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.

Changing order patterns, supply chain disruptions, and the evolution of our business required us to carry larger inventories in 2024 and 2023 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

On January 11, 2024, the Company acquired 100% of the interest in SNC Manufacturing Co., Inc.

(“SNC”), a privately-owned 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.

SNC has experience in industrial automation, defense, medical, and alternative energy markets, and their offerings are complementary to existing power quality capabilities and provide additional low-cost manufacturing capacity.

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.

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 .

Airex combines its patented winding technology with robotic manufacturing to produce linear motors – ironless and iron core, rotary motors, voice coils, wound electromagnetic components and sub-components.

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”.

FPH is an Ontario, Canada headquartered industry leader in the development of technically advanced, reliable and cost-effective electrical drive systems which provide high torque and precision motion for the defense industry, as well as light weighting technologies for existing and future ground-based vehicles in the defense industry.

FPH provides concept engineering, prototyping, validation, and production.

FPH also develops composites, advanced materials and hybrid products and solutions that achieve significant weight reduction and higher strength.

This acquisition provides the Company with a deeper penetration within defense applications including the necessary manufacturing licenses and certifications.

ThinGap, Inc.:

On May 24, 2022, the Company acquired 100% of the outstanding stock of ThinGap, Inc.

(“ThinGap”), a privately-owned California headquartered developer and manufacturer of high performance, zero clogging slotless motors for use in aerospace, defense, and medical applications that require precise performance in a compact, yet high-torque-to-volume solutions.

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.

MARKETS AND APPLICATIONS

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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 Allient Solution Centers that evaluate and focus all Allient 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

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”).

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

Allient Organization:

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Included in backlog as of December 31, 2024 is $7,353 from the acquisition completed in 2024.

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 decrease in our backlog year over year reflects decreases within each of the target markets, most significantly in Vehicle.

Decreases in revenues compared to the prior year period are largely impacted by elevated shipments during the prior year period as supply chains normalized, combined with elevated inventory levels and slowing demand at our customers .

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

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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.

No customers exceed 10% of total sales in 2024.

Sales to one customer (Customer A) were 10% of total sales in 2023 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.

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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.

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.

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

Beginning as a result of the COVID-19 pandemic, and continuing in subsequent years, due to resulting economic and supply chain disruptions, we have experienced upward pricing pressure and challenges with availability of parts and raw materials.

In addition, workplace disruptions and restrictions on the movement of raw materials and goods, both at our own facilities and at our customers and suppliers has led to increases in prices and freight costs.

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Our engineering and development (E&D) activities are for the development of new products, enhancement of the functionality, effectiveness and reliability of current products, to redesign products to reduce the cost of manufacturing of products or to expand the types of applications for which our products and solutions can be used.

Our engineering and development expenditures for the years ended December 31, 2023 and 2022 were $41,665 and $38,561, respectively, or 7% and 8% of sales in 2023 and 2022, respectively.

Our engineering and development expenditures for the years ended December 31, 2024 and 2023 were $39,761 and $41,665, respectively, or 7% of sales in both 2024 and 2023.

We believe E&D is critical to our ongoing success and expect to continue to invest at similar levels in the future.

Of these expenditures, no material amounts were charged directly to customers, although we record non-recurring engineering charges to certain customers for custom engineering required to develop products that meet the customer’s specifications.

Environmental Issues

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

Sustainability

On December 6, 2024, Allient published its second annual Sustainability Report covering the Company’s fiscal year 2023.

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.

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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, Equity, and Inclusion

Anti-Discrimination

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 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.

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

The Company is committed to identifying a talented and innovative workforce through a culture that promotes fair treatment and anti-discriminatory values.

The Human Capital and Compensation Committee is responsible for setting the tone at the top and the oversight of the Company’s diversity and inclusion initiatives.

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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