Allient reports 32.7% gross margin
Reporting its financial results for its third quarter ending September 30, Allient Inc. (formerly known as Allied Motion Technologies Inc.) said its gross margin was 32.7%, up 50 basis points from the prior-year period as higher volume and favorable mix more than offset elevated raw material costs.
“Our third quarter was strong and reflected solid top-line results, record gross margin, and robust cash generation that enabled us to reduce our debt and complete a strategic acquisition. In addition, we secured a $31 million defense market order during the quarter, a testament to our enhanced positioning within the sector and the strength of our quoting and activity over the past year,” said Chairman and CEO Dick Warzala. “Once again, our Industrial markets led the way with 32% sales growth over last year’s third quarter, largely driven by industrial automation projects and power quality solutions. Also contributing were improvements within the supply chain environment, which supported the shipping of some long lead projects.
"We still see exciting opportunities as we expand our presence in targeted verticals, launch innovative solutions and further streamline our business for greater efficiency," he continued. "While the global outlook has softened, particularly in Europe, we expect our business for the remainder of the year to reflect a pre COVID-19 environment and be consistent directionally with our fourth quarter results from prior years. The increasing global unrest we are all experiencing, has the potential to present additional challenges in our day-to-day operations and I’m confident that the Team at Allient has the experience and dedication to navigate through these uncertainties while remaining focused on executing our long-term strategy. In summary, we are excited and confident in our future, as we believe we are well-positioned to create additional value for all stakeholders of our company.”
Third Quarter 2023 Results (Narrative compares with prior-year period unless otherwise noted)
Revenue increased 8%, or $10.9 million, to $145.3 million and reflected strong industrial sales, which included shipping some long lead projects which were in backlog. The acquisition of Sierramotion did not have a material impact on sales during the third quarter. Excluding the favorable impact of foreign currency exchange rate fluctuations on revenue of $1.8 million, organic growth was 7%. Sales to U.S. customers were 61% of total sales for the third quarter of 2023 compared with 59% in 2022, with the balance of sales to customers primarily in Europe, Canada and Asia-Pacific. See the attached table for a description of non-GAAP financial measures and reconciliation of revenue excluding foreign currency exchange rate fluctuations.
Industrial markets sales were up 32% in the quarter, benefiting from strong end market demand within industrial automation, material and vehicle handling, oil & gas, and HVAC. Aerospace & Defense sales decreased 7%, largely due to program timing within the space industry. Sales in the Vehicle markets decreased 7%, as higher commercial automotive demand was more than offset by lower demand within agricultural vehicles, which largely reflected softness in Europe, largely influenced by the Ukrainian conflict. Medical market revenue was down 1%, as softer medical mobility demand was mostly offset by a more normalized pre COVID-19 sales environment focused on surgical and instrumentation related end markets. Sales through the Distribution channel, which are a small component of total sales, were down 7%.
INDUSTRIAL SUPPLY MAGAZINE
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