Financial Data and Key Metrics Changes - In Q4 2024, the company reported revenue of $122 million, with a gross margin of 31.5%, showing a sequential improvement despite soft volume [9][19] - For the full year, revenue totaled $530 million, reflecting anticipated demand softness due to inventory rebalancing [10] - Operating cash flow reached nearly $42 million, with total debt at approximately $240 million following the acquisition of SNC [10][39] - Net income for the quarter was $3 million, translating to earnings per diluted share of $0.18, while adjusted net income was $5.2 million or $0.31 per diluted share [32] Business Line Data and Key Metrics Changes - Aerospace and defense sales increased by 20%, while medical market revenue rose by 5% [20][21] - Vehicle market sales decreased by 46%, primarily due to reduced demand for powersports [21] - Industrial market sales declined by 11%, despite strong performance in power quality sales [22] Market Data and Key Metrics Changes - US customers accounted for 54% of total sales, down from 59% in the previous year [19] - The industrial sector remained the largest market, contributing 47% of trailing twelve-month sales, driven by strong demand in power quality [24] - The distribution channel showed modest growth, representing 5% of total sales over the trailing twelve-month period [26] Company Strategy and Development Direction - The company is focused on operational efficiencies and positioning for long-term growth through initiatives like "Simplify to Accelerate Now," which delivered $10 million in annualized savings [12][13] - The Dothan facility is expanding machining capabilities to support strategic goals, with expected benefits by late 2025 [14][15] - The company is actively pursuing opportunities in the defense sector and has formed a new business unit to capitalize on these prospects [46] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in key industrial and vehicle markets but emphasized resilience and commitment to execution [8] - The outlook for 2025 anticipates a moderated pace of orders across most markets, with expected strength in data center expansion [48] - Management remains optimistic about long-term operational improvements despite near-term inefficiencies during transitions [49] Other Important Information - The company is committed to reducing debt, having lowered total debt by $16 million over the year [11][39] - Cash and cash equivalents increased by 13% to $36.1 million, reinforcing financial flexibility [36] - The effective tax rate for the quarter was 22.2%, with expectations for the full year 2025 to range between 21% and 23% [33] Q&A Session Summary Question: Insights on geographical and end-market performance - Management noted that North America is strengthening, while Europe faces ongoing softness, particularly in Germany [57][58] Question: Potential for growth in Europe - Management indicated a "wait and see" approach regarding potential growth in Europe due to ongoing uncertainties [64][65] Question: Data center market exposure and growth expectations - Management highlighted significant growth in the data center market, with expectations for continued opportunities, albeit at a slower pace than previous years [68][69] Question: Stability in medical and powersports businesses - Management acknowledged stabilization in the medical business but noted challenges in the powersports market, which remains flat [75][84] Question: Inventory normalization and its impact - Management confirmed that inventory levels are expected to normalize later in the year, with gradual improvements anticipated [102][103] Question: Dothan restructuring costs and reporting - Management stated that restructuring costs will be included in the financials but not broken out individually [108][112] Question: Interest rate for the new swap - Management confirmed the interest rate for the swap is approximately 3.2% [115]

Company Performance - Allient (ALNT) reported quarterly earnings of $0.31 per share, exceeding the Zacks Consensus Estimate of $0.26 per share, but down from $0.55 per share a year ago, representing an earnings surprise of 19.23% [1] - The company posted revenues of $122.01 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.98%, but down from $141 million year-over-year [2] - Over the last four quarters, Allient has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times [2] Stock Outlook - Allient shares have declined approximately 4.4% since the beginning of the year, compared to a decline of 1.8% for the S&P 500 [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is $0.33 on revenues of $125.45 million, and for the current fiscal year, it is $1.83 on revenues of $522.49 million [7] Industry Context - The Electronics - Miscellaneous Components industry, to which Allient belongs, is currently ranked in the bottom 39% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Allient's stock performance [5][6]

Revenue and Income - Revenue for 2024 was $529,968, a decrease of 8.4% from $578,634 in 2023, with the Industrial and Vehicle markets experiencing declines[143]. - Net income for 2024 was $13,166, or $0.79 per diluted share, a 45% decrease compared to $24,097, or $1.48 per diluted share in 2023[143]. - Revenues for 2024 decreased to $529,968, down 8% from $578,634 in 2023, primarily due to a volume decrease of 8% and elevated inventory levels[173]. - Adjusted net income for 2024 was $24,679, down from $37,458 in 2023, with adjusted diluted earnings per share decreasing to $1.49 from $2.30[183]. - The company reported a comprehensive income of $158,000 for 2024, a significant drop from $25,885,000 in 2023[226]. - Operating income fell by 29% to $30,038 in 2024, compared to $42,314 in 2023[173]. - The income before income taxes for the year ended December 31, 2024, was $16,858,000, a decrease from $29,700,000 in 2023[324]. Bookings and Backlog - Bookings fell to $480,031 in 2024, an 8% decrease from $520,275 in 2023, with backlog decreasing by 17% to $230,788[143]. - Bookings for 2024 were $480,031, an 8% decrease from $520,275 in 2023, with backlog also declining by 16% to $230,788[173]. - The company's backlog as of December 31, 2024, was $230,788, with an expectation to recognize 85% of these performance obligations within the next twelve months[288]. Expenses and Costs - Gross profit decreased by 10% to $165,691 in 2024, resulting in a gross margin of 31.3%, down from 31.7% in 2023[143]. - General and administrative expenses decreased by 5% to $55,669 in 2024, reflecting cost reduction actions[177]. - Cash paid for interest in 2024 was $12,059 thousand, a slight decrease from $12,200 thousand in 2023, while income taxes paid decreased to $7,804 thousand from $12,687 thousand[255]. - The total operating lease expense for 2024 was $8,171,000, compared to $8,769,000 in 2023, reflecting a decrease of approximately 6.8%[337]. Dividends - The company declared dividends of $0.12 per share in 2024, with a payout ratio of 15% compared to 8% in 2023[144]. - The company declared dividends of $0.12 per share in 2024, up from $0.115 per share in 2023[202]. - For the years ended December 31, 2024, 2023, and 2022, total dividends paid were $1,981,000, $1,826,000, and $1,536,000, respectively, with per share dividends of $0.12, $0.115, and $0.10[305]. Assets and Liabilities - As of December 31, 2024, the company recorded $111,517 in inventory, representing approximately 19% of total assets[165]. - Goodwill recorded on the balance sheet as of December 31, 2024, was $131,789, representing about 23% of total assets[168]. - Total current assets decreased to $237,580,000 in 2024 from $248,151,000 in 2023, primarily due to a reduction in trade receivables and inventories[225]. - Total liabilities decreased to $310,927,000 in 2024 from $345,967,000 in 2023, with a significant reduction in current liabilities[225]. - The company’s long-term debt increased to $224,177,000 in 2024 from $218,402,000 in 2023, indicating a slight rise in leverage[225]. Cash Flow - Net cash provided by operating activities decreased by $3,188 to $41,850 in 2024 from $45,038 in 2023[193]. - Cash used in investing activities increased by $12,307 to $(34,914) in 2024, primarily due to a $20,000 cash payment for the acquisition of SNC[195]. - Cash used in financing activities decreased by $20,474 to $(843) in 2024, reflecting $20,000 borrowed from the Amended Revolving Facility for the SNC acquisition[196]. - Cash and cash equivalents increased to $36,102,000 in 2024 from $31,901,000 in 2023, indicating improved liquidity[225]. Acquisitions - The company acquired SNC Manufacturing Co. for a purchase price of $20,000 thousand, with SNC contributing $38,045 thousand in revenue and $3,066 thousand in net income during 2024[271][272]. - The company acquired 100% of Sierramotion Inc. for a total purchase price of $8,400, which includes $2,000 of contingent consideration[277]. - The company incurred $313 thousand in transaction costs related to the acquisition of SNC, which are included in business development expenses[271]. Financial Instruments and Risk Management - The Company holds notional amounts of $90,000,000 in interest rate derivatives as of December 31, 2024, to manage exposure to interest rate movements[319]. - The Company had foreign currency contracts with notional amounts of $30,945,000 and $22,193,000 at December 31, 2024, and 2023, respectively, resulting in losses of $1,749,000 and $281,000 for the years ended December 31, 2024, and 2023[318]. Taxation - The effective tax rate increased to 21.9% in 2024 from 18.9% in 2023, influenced by various tax provisions and credits[181]. - The total income tax provision for 2024 was $3,692,000, compared to $5,603,000 in 2023, reflecting a provision rate of 21.9%[324]. - Noncurrent deferred tax assets increased to $22,951,000 in 2024 from $20,877,000 in 2023, primarily due to research and development costs[325]. Future Outlook - The company plans to expand machining capabilities at its Dothan, Alabama facility, expected to yield initial benefits by the end of 2025[154]. - The company plans to focus on new product development and market expansion strategies to drive future growth[226]. - The company expects capital expenditures in 2025 to be approximately $10,000 to $12,000[195].

Core Viewpoint - Northland Capital Markets analyst upgraded Allient Inc. from Market Perform to Outperform, raising the price forecast from $30 to $35, citing improvements in the industrial market and expectations of reduced negative impacts from a weaker vehicle market as FY25 progresses [1] Company Performance - The analyst projects a 14.9% year-over-year sales decline in Q4 to $120 million, closely aligning with the consensus estimate of $119.7 million, attributing challenges to a weaker macro environment and reduced demand from major customers [2] - For FY25, sales are estimated to decline slightly from $527.9 million in FY24 to $518.2 million, while adjusted EBITDA is projected to grow by 16.6% to $68.9 million [3] - There are concerns regarding the FY25 consensus sales estimate being slightly too high, particularly for the second half, with a consensus of $268.0 million compared to the analyst's estimate of $262.4 million [3] Market Reaction - Following the analyst's upgrade, ALNT shares increased by 7% to $26.30 [3]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than the traditional "buying low and selling high" approach, aiming for quicker profits [1] Group 1: Momentum Investing Characteristics - Fast-moving trending stocks can be difficult to enter at the right time, as they may lose momentum if future growth does not justify their high valuations [2] - A safer strategy involves investing in bargain stocks that exhibit recent price momentum, utilizing tools like the Zacks Momentum Style Score to identify such opportunities [3] Group 2: Allient (ALNT) Stock Analysis - Allient (ALNT) has shown a price increase of 28.9% over the past four weeks, indicating growing investor interest [4] - Over the past 12 weeks, ALNT's stock has gained 40%, with a beta of 1.61, suggesting it moves 61% more than the market [5] - ALNT has a Momentum Score of B, indicating a favorable time to invest based on its momentum [6] - The stock has received a Zacks Rank 1 (Strong Buy) due to upward revisions in earnings estimates, which typically attract more investors [7] - ALNT is trading at a Price-to-Sales ratio of 0.81, suggesting it is undervalued at 81 cents for each dollar of sales [7] Group 3: Additional Investment Opportunities - Besides ALNT, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting further investment opportunities [8] - Investors can explore over 45 Zacks Premium Screens tailored to different investing styles to identify potential winning stocks [9]

Core Viewpoint - U.S. markets are facing uncertainty due to a hawkish stance from the Federal Reserve and political developments, leading investors to adopt a cautious approach. A relative price strength strategy is suggested as a resilient method for identifying investment opportunities while minimizing risks in volatile markets [1]. Group 1: Relative Price Strength Strategy - The relative price strength strategy focuses on stocks that outperform their peers, which is crucial for identifying potential winning investments [3][4]. - Stocks that show impressive earnings growth or valuation multiples but underperform compared to broader groups may indicate underlying issues [3]. - It is essential to assess whether an investment has upside potential, particularly for stocks that have outperformed the S&P 500 over the past 1 to 3 months and possess solid fundamentals [5]. Group 2: Screening Parameters - Screening parameters include relative price changes over 12 weeks, 4 weeks, and 1 week, ensuring stocks have consistently outperformed the S&P 500 [7]. - Positive estimate revisions for the current quarter's earnings are also considered, as upward revisions typically lead to additional price gains [6]. - Stocks must have a Zacks Rank of 1 (Strong Buy), a current price of at least $5, and an average 20-day volume of at least 50,000 to ensure adequate liquidity [8]. Group 3: Company Highlights - **Rigel Pharmaceuticals (RIGL)**: Focuses on innovative small-molecule drugs with a market cap of $424.5 million. The 2024 earnings estimate indicates 112.1% growth, and shares have increased by 157.4% over the past year [11][12]. - **Synchrony Financial (SYF)**: A leading consumer financial services company with a market cap of $25.5 billion. The 2024 earnings estimate suggests 25.6% growth, and shares have risen by 117.9% in the last year [13]. - **SkyWest, Inc. (SKYW)**: Operates as a regional airline with a market cap of $4.5 billion. The 2024 earnings estimate indicates 829.8% growth, and shares have gained 135% in a year [14]. - **Allient Inc. (ALNT)**: Designs and manufactures precision motion control systems with a market cap of $408.3 million. The 2024 earnings estimate has increased by 10.9%, but shares have lost 8.7% in the past year [15][16]. - **Rush Street Interactive (RSI)**: Develops online gaming platforms with a 2024 earnings estimate indicating 235.7% growth. Shares have surged by 137.8% in the last year [17][18].

Group 1: Sappi Limited (SPPJY) - Sappi Limited is a wood fiber-based renewable resources company with a Zacks Rank 1 [1] - The Zacks Consensus Estimate for its current year earnings has increased by 13.7% over the last 60 days [1] - The company has a price-to-earnings ratio (P/E) of 4.99, compared to 5.10 for the industry, and possesses a Value Score of A [1] Group 2: Townsquare Media, Inc. (TSQ) - Townsquare Media, Inc. is a digital media and marketing solutions company with a Zacks Rank 1 [2] - The Zacks Consensus Estimate for its current year earnings has increased by 10.3% over the last 60 days [2] - The company has a price-to-earnings ratio (P/E) of 9.21, compared to 24.23 for the S&P, and possesses a Value Score of A [2] Group 3: Allient Inc. (ALNT) - Allient Inc. is an industrial manufacturing company with a Zacks Rank 1 [3] - The Zacks Consensus Estimate for its current year earnings has increased by 8.5% over the last 60 days [3] - The company has a price-to-earnings ratio (P/E) of 16.69, compared to 22.10 for the industry, and possesses a Value Score of A [3]

Core Viewpoint - Allient (ALNT) shares have increased by 24.4% in the past four weeks, closing at $23.28, with a potential upside of 26% based on Wall Street analysts' mean price target of $29.33 [1] Price Targets and Analyst Estimates - The mean price target consists of three short-term estimates with a standard deviation of $1.15, indicating a range where the lowest estimate of $28 suggests a 20.3% increase, while the highest estimate of $30 indicates a 28.9% increase [2] - A low standard deviation among price targets suggests strong agreement among analysts regarding the stock's price movement, which can serve as a starting point for further research [7] Earnings Estimates and Analyst Sentiment - Analysts show growing optimism about ALNT's earnings prospects, as indicated by a positive trend in earnings estimate revisions, which historically correlates with near-term stock price movements [9] - Over the last 30 days, the Zacks Consensus Estimate for ALNT's current year earnings has increased by 8.6%, with one estimate moving higher and no negative revisions [10] Zacks Rank and Investment Potential - ALNT holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate factors, indicating strong potential for upside in the near term [11]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher," contrasting with traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Momentum investing can be risky as stocks may lose momentum when their valuations exceed future growth potential [1] - A safer approach involves investing in bargain stocks that exhibit recent price momentum, identified through the Zacks Momentum Style Score [2] Group 2: Allient (ALNT) Stock Analysis - Allient (ALNT) has shown a price increase of 24.4% over the past four weeks, indicating growing investor interest [3] - Over the past 12 weeks, ALNT gained 12.7%, demonstrating its ability to deliver positive returns over a longer timeframe [4] - ALNT has a beta of 1.51, suggesting it moves 51% more than the market in either direction, indicating fast-paced momentum [4] - The stock has a Momentum Score of B, suggesting it is an opportune time to invest [5] - ALNT has a Zacks Rank 1 (Strong Buy) due to upward revisions in earnings estimates, which attract more investors [6] - The stock is trading at a Price-to-Sales ratio of 0.71, indicating it is reasonably valued at 71 cents for each dollar of sales [6] Group 3: Additional Investment Opportunities - Besides ALNT, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting further investment opportunities [7] - Zacks offers over 45 Premium Screens tailored to different investing styles, aiding in stock selection [8]

Financial Data and Key Metrics Changes - Revenue for Q3 2024 was $125 million, a year-over-year decline of 14% [15][8] - Gross margin improved by 150 basis points sequentially to 31.4% [10] - Operating margin rose by 170 basis points to 5.3% [10] - Adjusted EBITDA margin climbed by 130 basis points to 11.5% [10] - Net income reached $2.1 million, translating to earnings per diluted share of $0.13 [25] Business Line Data and Key Metrics Changes - Vehicle markets saw a 38% decline, primarily due to decreased demand in power sports [15] - Industrial markets decreased by 9%, despite gains in power quality sales to HVAC and data center sectors [16] - Medical markets softened, with persistent weakness in medical mobility products [17] - Aerospace & Defense sales declined due to program timing, but promising opportunities are being pursued [18] Market Data and Key Metrics Changes - Industrial sector remained the largest market, contributing 47% of trailing 12-month sales, marking a 400 basis point expansion [19] - Vehicle market revenue declined, with higher demand in commercial automotive offset by lower demand in power sports and construction [20] - Distribution channel represented 4% of total sales over the trailing 12-month period [20] Company Strategy and Development Direction - The company is focused on cost reduction and operational efficiency through the "Simplify to Accelerate NOW" initiative, targeting $10 million in annualized savings [11][36] - Efforts are being made to streamline operations and enhance agility, aiming for faster time to market and improved customer service [13] - The company is identifying further cost rationalization opportunities to align with market conditions and customer needs as it heads into 2025 [14] Management's Comments on Operating Environment and Future Outlook - Management noted that order rates have declined as customers adjust inventory levels, influenced by higher interest rates and political uncertainties [33] - Despite challenges, the diversified portfolio remains resilient, with alignment to macro trends like AI and data center growth [34] - The company expects a moderated pace of orders to persist into 2025, with some positive impacts from growth-oriented trends [34] Other Important Information - Cash from operations reached $29.5 million year-to-date, a 9% improvement over the prior year [27] - Total debt was approximately $231 million, with a net debt-to-capitalization ratio of 41.6% [29] - The company amended its credit agreement to add flexibility in financial planning through fiscal 2025 [29] Q&A Session Summary Question: Any surprises in the current performance compared to previous expectations? - Management indicated that performance is playing out as expected, with operational improvements generating internal excitement [39] Question: What is the normalized level of revenue post-inventory destocking? - Management suggested a potential couple of million-dollar monthly improvement in run rates as inventory levels normalize [41] Question: How does the company view the industrial automation market moving forward? - Management acknowledged that Rockwell's performance impacts them directly, and they expect to follow similar trends [56] Question: What is the outlook for the vehicle market? - Management noted that while power sports demand has decreased, internal automotive business is offsetting some losses [66] Question: How is the company managing inventory levels? - Management expects continued reduction in inventory as they navigate long lead times and align with current demand [68] Question: What is the rate on the new interest rate swap? - The rate on the $50 million interest rate swap is 3.32% [69]