Allied Motion Reports Operating Income Growth of 60% to a Record $12.0 Million on Revenue of $146.8 Million in Second Quarter 2023
-
Revenue grew
20% to a record with organic growth of$146.8 million 17% on a constant currency basis for the quarter -
Gross margin was
31.3% with operating income up60% to a record , up 210 basis points$12.0 million -
Net income up
48% to or$6.8 million per diluted share$0.42 -
Adjusted net income up
23% to per share$0.58 -
Generated
of cash from operations and reduced debt balance$13.7 million during the quarter$9.4 million
“Driving overall margin improvement continues to be an emphasis within Allied and while we did experience a slight contraction in our gross margin, primarily due to mix, our operating leverage improvements delivered record operating income of
He added, “While we have experienced positive improvements in the supply chain, which has helped to reduce our backlogs, we do expect some near-term challenges with macro-economic softness in parts of
Second Quarter 2023 Results (Narrative compares with prior-year period unless otherwise noted)
Revenue increased
Industrial markets sales were up
Gross margin was
Operating costs and expenses were
Net income increased
Earnings before interest, taxes, depreciation, amortization, stock-based compensation expense, business development costs, and foreign currency gains/losses (“Adjusted EBITDA”) was
Year-to-Date (YTD) 2023 Results (Narrative compares with prior-year period unless otherwise noted)
Revenue of
Gross margin was
Net income increased to
Balance Sheet and Cash Flow Review
Cash and cash equivalents were
Cash provided by operating activities was
Total debt of
Orders and Backlog Summary ($ in thousands)
Q2 2023 |
Q1 2023 |
Q4 2022 |
Q3 2022 |
Q2 2022 |
||||||||||||
Orders |
$ |
137,008 |
$ |
123,198 |
$ |
145,564 |
$ |
126,158 |
$ |
139,209 |
||||||
Backlog |
$ |
298,695 |
$ |
308,635 |
$ |
330,078 |
$ |
310,186 |
$ |
323,873 |
Foreign currency translation had an unfavorable
Backlog decreased
Conference Call and Webcast
The Company will host a conference call and webcast on Thursday, August 3, 2023 at 10:00 am ET. During the conference call, management will review the financial and operating results and discuss Allied Motion’s corporate strategy and outlook. A question and answer session will follow.
To listen to the live call, dial (412) 317-5185. In addition, the webcast and slide presentation may be found at: www.alliedmotion.com/investor-relations.
A telephonic replay will be available from 2:00 pm ET on the day of the call through Thursday, August 10, 2023. To listen to the archived call, dial (412) 317-6671 and enter replay pin number 10180165 or access the webcast replay via the Company’s website. A transcript will also be posted to the website once available.
About Allied Motion Technologies Inc.
Allied Motion (Nasdaq: AMOT) designs, manufactures and sells precision and specialty-controlled motion products and solutions that are used in a broad range of applications within the Industrial, Vehicle, Medical, and Aerospace & Defense Markets. Headquartered in
Allied Motion is focused on controlled motion applications and is known worldwide for its expertise in electro-magnetic, mechanical, and electronic controlled motion technologies. Its products 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 I/O Modules, Universal Industrial Communications Gateways, light-weighting technologies, and other controlled motion-related products.
The Company’s growth strategy is focused on becoming a leading global controlled motion solution provider in its selected target markets by further developing its products and services platform to utilize multiple Allied Motion technologies which create increased value solutions for its customers. The Company routinely posts news and other important information on its website at www.alliedmotion.com.
Safe Harbor Statement
The statements in this news release and in the Company’s August 3, 2023 conference call that relate to future plans, events or performance are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance, or achievements. Examples of forward-looking statements include, among others, statements the Company makes regarding expected operating results, anticipated levels of capital expenditures, the Company’s belief that it has sufficient liquidity to fund its business operations, and expectations with respect to the conversion of backlog to sales. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on the Company’s current beliefs, expectations and assumptions regarding the future of the Company’s business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the Company’s control. The Company’s actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, general economic and business conditions, conditions affecting the industries served by the Company and its subsidiaries, conditions affecting the Company's customers and suppliers, competitor responses to the Company's products and services, the overall market acceptance of such products and services, the pace of bookings relative to shipments, the ability to expand into new markets and geographic regions, the success in acquiring new business, the impact of changes in income tax rates or policies, the severity, magnitude and duration of the COVID-19 pandemic, including impacts of the pandemic and of businesses’ and governments’ responses to the pandemic on our operations and personnel, and on commercial activity and demand across our and our customers’ businesses, and on global supply chains; our inability to predict the extent to which the COVID-19 pandemic and related impacts will continue to adversely impact our business operations, financial performance, results of operations, financial position, the prices of our securities and the achievement of our strategic objectives, the ability to attract and retain qualified personnel, the ability to successfully integrate an acquired business into our business model without substantial costs, delays, or problems, and other factors disclosed in the Company's periodic reports filed with the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it is not possible for us to predict the occurrence of those matters or the manner in which they may affect us. The Company has no obligation or intent to release publicly any revisions to any forward looking statements, whether as a result of new information, future events, or otherwise.
FINANCIAL TABLES FOLLOW
ALLIED MOTION TECHNOLOGIES INC. |
||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME |
||||||||||||||||
(In thousands, except per share data) |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
For the three months ended |
|
For the six months ended |
||||||||||||
|
|
June 30, |
|
June 30, |
||||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Revenue |
|
$ |
146,769 |
|
|
$ |
122,722 |
|
|
$ |
292,318 |
|
|
$ |
237,507 |
|
Cost of goods sold |
|
|
100,792 |
|
|
|
82,948 |
|
|
|
200,507 |
|
|
|
164,273 |
|
Gross profit |
|
|
45,977 |
|
|
|
39,774 |
|
|
|
91,811 |
|
|
|
73,234 |
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling |
|
|
6,301 |
|
|
|
5,808 |
|
|
|
12,333 |
|
|
|
10,839 |
|
General and administrative |
|
|
14,162 |
|
|
|
12,595 |
|
|
|
28,982 |
|
|
|
24,091 |
|
Engineering and development |
|
|
9,952 |
|
|
|
9,791 |
|
|
|
20,339 |
|
|
|
19,177 |
|
Business development |
|
|
400 |
|
|
|
1,417 |
|
|
|
597 |
|
|
|
2,265 |
|
Amortization of intangible assets |
|
|
3,142 |
|
|
|
2,645 |
|
|
|
6,151 |
|
|
|
5,079 |
|
Total operating costs and expenses |
|
|
33,957 |
|
|
|
32,256 |
|
|
|
68,402 |
|
|
|
61,451 |
|
Operating income |
|
|
12,020 |
|
|
|
7,518 |
|
|
|
23,409 |
|
|
|
11,783 |
|
Other expense, net: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense |
|
|
3,162 |
|
|
|
1,525 |
|
|
|
6,145 |
|
|
|
2,563 |
|
Other (income) expense, net |
|
|
(42 |
) |
|
|
(279 |
) |
|
|
145 |
|
|
|
(234 |
) |
Total other expense, net |
|
|
3,120 |
|
|
|
1,246 |
|
|
|
6,290 |
|
|
|
2,329 |
|
Income before income taxes |
|
|
8,900 |
|
|
|
6,272 |
|
|
|
17,119 |
|
|
|
9,454 |
|
Income tax provision |
|
|
(2,131 |
) |
|
|
(1,691 |
) |
|
|
(4,035 |
) |
|
|
(2,370 |
) |
Net income |
|
$ |
6,769 |
|
|
$ |
4,581 |
|
|
$ |
13,084 |
|
|
$ |
7,084 |
|
Basic earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings per share |
|
$ |
0.42 |
|
|
$ |
0.30 |
|
|
$ |
0.82 |
|
|
$ |
0.47 |
|
Basic weighted average common shares |
|
|
15,969 |
|
|
|
15,355 |
|
|
|
15,921 |
|
|
|
15,226 |
|
Diluted earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings per share |
|
$ |
0.42 |
|
|
$ |
0.29 |
|
|
$ |
0.81 |
|
|
$ |
0.45 |
|
Diluted weighted average common shares |
|
|
16,219 |
|
|
|
15,932 |
|
|
|
16,178 |
|
|
|
15,752 |
|
ALLIED MOTION TECHNOLOGIES INC. |
||||||||
CONSOLIDATED BALANCE SHEETS |
||||||||
(In thousands, except per share data) |
||||||||
(Unaudited) |
||||||||
|
|
|
|
|
|
|
||
|
|
June 30, |
|
December 31, |
||||
|
|
2023 |
|
|
2022 |
|
||
Assets |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
24,120 |
|
|
$ |
30,614 |
|
Trade receivables, net of provision for credit losses of |
|
|
87,245 |
|
|
|
76,213 |
|
Inventories |
|
|
116,098 |
|
|
|
117,108 |
|
Prepaid expenses and other assets |
|
|
11,781 |
|
|
|
12,072 |
|
Total current assets |
|
|
239,244 |
|
|
|
236,007 |
|
Property, plant, and equipment, net |
|
|
68,518 |
|
|
|
68,640 |
|
Deferred income taxes |
|
|
3,765 |
|
|
|
4,199 |
|
Intangible assets, net |
|
|
113,160 |
|
|
|
119,075 |
|
Goodwill |
|
|
127,987 |
|
|
|
126,366 |
|
Operating lease assets |
|
|
21,852 |
|
|
|
22,807 |
|
Other long-term assets |
|
|
10,968 |
|
|
|
11,253 |
|
Total Assets |
|
$ |
585,494 |
|
|
$ |
588,347 |
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
42,368 |
|
|
$ |
39,467 |
|
Accrued liabilities |
|
|
45,389 |
|
|
|
48,121 |
|
Total current liabilities |
|
|
87,757 |
|
|
|
87,588 |
|
Long-term debt |
|
|
227,106 |
|
|
|
235,454 |
|
Deferred income taxes |
|
|
6,024 |
|
|
|
6,262 |
|
Pension and post-retirement obligations |
|
|
2,861 |
|
|
|
3,009 |
|
Operating lease liabilities |
|
|
17,557 |
|
|
|
18,795 |
|
Other long-term liabilities |
|
|
7,395 |
|
|
|
21,774 |
|
Total liabilities |
|
|
348,700 |
|
|
|
372,882 |
|
Stockholders’ Equity: |
|
|
|
|
|
|
||
Common stock, no par value, authorized 50,000 shares; 16,268 and 15,978 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively |
|
|
92,483 |
|
|
|
83,852 |
|
Preferred stock, par value |
|
|
— |
|
|
|
— |
|
Retained earnings |
|
|
155,772 |
|
|
|
143,576 |
|
Accumulated other comprehensive loss |
|
|
(11,461 |
) |
|
|
(11,963 |
) |
Total stockholders’ equity |
|
|
236,794 |
|
|
|
215,465 |
|
Total Liabilities and Stockholders’ Equity |
|
$ |
585,494 |
|
|
$ |
588,347 |
|
ALLIED MOTION TECHNOLOGIES INC. |
||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
(In thousands) |
||||||||
(Unaudited) |
||||||||
|
|
|
|
|
|
|
||
|
|
For the six months ended |
||||||
|
|
June 30, |
||||||
|
|
2023 |
|
|
2022 |
|
||
Cash Flows From Operating Activities: |
|
|
|
|
|
|
||
Net income |
|
$ |
13,084 |
|
|
$ |
7,084 |
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
12,535 |
|
|
|
12,531 |
|
Deferred income taxes |
|
|
(14 |
) |
|
|
1,222 |
|
Stock-based compensation expense |
|
|
2,811 |
|
|
|
2,490 |
|
Debt issue cost amortization recorded in interest expense |
|
|
150 |
|
|
|
71 |
|
Other |
|
|
685 |
|
|
|
793 |
|
Changes in operating assets and liabilities, net of acquisitions: |
|
|
|
|
|
|
||
Trade receivables |
|
|
(11,151 |
) |
|
|
(15,407 |
) |
Inventories |
|
|
832 |
|
|
|
(22,003 |
) |
Prepaid expenses and other assets |
|
|
287 |
|
|
|
1,601 |
|
Accounts payable |
|
|
2,822 |
|
|
|
9,850 |
|
Accrued liabilities |
|
|
(4,768 |
) |
|
|
1,478 |
|
Net cash provided by (used in) operating activities |
|
|
17,273 |
|
|
|
(290 |
) |
|
|
|
|
|
|
|
||
Cash Flows From Investing Activities: |
|
|
|
|
|
|
||
Consideration paid for acquisitions, net of cash acquired |
|
|
(6,250 |
) |
|
|
(44,569 |
) |
Purchase of property and equipment |
|
|
(6,118 |
) |
|
|
(6,354 |
) |
Net cash used in investing activities |
|
|
(12,368 |
) |
|
|
(50,923 |
) |
|
|
|
|
|
|
|
||
Cash Flows From Financing Activities: |
|
|
|
|
|
|
||
Proceeds from issuance of long-term debt |
|
|
4,000 |
|
|
|
64,203 |
|
Principal payments of long-term debt and finance lease obligations |
|
|
(12,567 |
) |
|
|
(3,406 |
) |
Dividends paid to stockholders |
|
|
(872 |
) |
|
|
(776 |
) |
Tax withholdings related to net share settlements of restricted stock |
|
|
(1,653 |
) |
|
|
(1,240 |
) |
Net cash (used in) provided by financing activities |
|
|
(11,092 |
) |
|
|
58,781 |
|
Effect of foreign exchange rate changes on cash |
|
|
(307 |
) |
|
|
(1,185 |
) |
Net (decrease) increase in cash and cash equivalents |
|
|
(6,494 |
) |
|
|
6,383 |
|
Cash and cash equivalents at beginning of period |
|
|
30,614 |
|
|
|
22,463 |
|
Cash and cash equivalents at end of period |
|
$ |
24,120 |
|
|
$ |
28,846 |
|
|
|
|
|
|
|
|
ALLIED MOTION TECHNOLOGIES INC.
Reconciliation of Non-GAAP Financial Measures
(In thousands)
(Unaudited)
In addition to reporting revenue and net income, which are
The Company believes that Revenue excluding foreign currency exchange rate impacts is a useful measure in analyzing organic sales results. The Company excludes the effect of currency translation from revenue for this measure because currency translation is not under management’s control, is subject to volatility and can obscure underlying business trends. The portion of revenue attributable to currency translation is calculated as the difference between the current period revenue and the current period revenue after applying foreign exchange rates from the prior period.
The Company believes EBITDA and Adjusted EBITDA are often a useful measure of a Company’s operating performance and are a significant basis used by the Company’s management to evaluate and compare the core operating performance of its business from period to period by removing the impact of the capital structure (interest), tangible and intangible asset base (depreciation and amortization), taxes, stock-based compensation expense, business development costs, foreign currency gains/losses on short-term assets and liabilities, and other items that are not indicative of the Company’s core operating performance. EBITDA and Adjusted EBITDA do not represent and should not be considered as an alternative to net income, operating income, net cash provided by operating activities or any other measure for determining operating performance or liquidity that is calculated in accordance with GAAP.
The Company’s calculation of Revenue excluding foreign currency exchange impacts for the three and six months ended June 30, 2023 is as follows:
Three Months Ended |
|
Six Months Ended |
||||
June 30, 2023 |
|
June 30, 2023 |
||||
Revenue as reported |
$ |
146,769 |
|
$ |
292,318 |
|
Foreign currency impact |
|
410 |
|
|
3,662 |
|
Revenue excluding foreign currency exchange impacts |
$ |
147,179 |
|
$ |
295,980 |
The Company’s calculation of Adjusted EBITDA for the three and six months ended June 30, 2023 and 2022 is as follows:
Three Months Ended |
|
|
Six Months Ended |
||||||||||||
June 30, |
|
|
June 30, |
||||||||||||
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
||||
Net income |
$ |
6,769 |
|
$ |
4,581 |
|
|
$ |
13,084 |
$ |
7,084 |
|
|||
Interest expense |
3,162 |
|
1,525 |
|
|
6,145 |
|
2,563 |
|
||||||
Provision for income tax |
2,131 |
|
1,691 |
|
|
4,035 |
|
2,370 |
|
||||||
Depreciation and amortization |
6,390 |
|
6,096 |
|
|
12,535 |
|
12,531 |
|
||||||
EBITDA |
18,452 |
|
|
13,893 |
|
|
35,799 |
24,548 |
|
||||||
Stock compensation expense |
1,544 |
|
|
1,141 |
|
|
2,811 |
|
2,490 |
|
|||||
Foreign currency (gain) loss |
(15 |
) |
|
(254 |
) |
|
199 |
|
(203 |
) |
|||||
Business development costs |
400 |
|
|
1,417 |
|
|
597 |
|
2,265 |
|
|||||
Adjusted EBITDA |
$ |
20,381 |
|
$ |
16,197 |
|
|
$ |
39,406 |
$ |
29,100 |
|
ALLIED MOTION TECHNOLOGIES INC.
Reconciliation of GAAP Net Income and Diluted Earnings per Share to
Non-GAAP Adjusted Net Income and Adjusted Diluted Earnings per Share
(In thousands, except per share data)
(Unaudited)
The Company’s calculation of Adjusted net income and Adjusted diluted earnings per share for the three and six months ended June 30, 2023 and 2022 is as follows:
Three Months Ended |
|||||||||||||
June 30, |
|||||||||||||
|
2023 |
|
Per diluted
|
|
|
2022 |
|
Per diluted
|
|||||
Net income as reported |
$ |
6,769 |
|
$ |
0.42 |
$ |
4,581 |
|
$ |
0.29 |
|
||
Non-GAAP adjustments, net of tax (1) |
|||||||||||||
Amortization of intangible assets - net |
|
|
2,407 |
|
|
0.14 |
|
|
2,233 |
|
|
0.14 |
|
Foreign currency gain/ loss - net |
|
|
(11 |
) |
|
- |
|
|
(194 |
) |
|
(0.01 |
) |
Business development costs - net |
|
306 |
|
|
0.02 |
|
1,085 |
|
|
0.06 |
|
||
Adjusted net income and adjusted diluted EPS |
$ |
9,471 |
|
$ |
0.58 |
$ |
7,705 |
|
$ |
0.48 |
|
||
Weighted average diluted shares outstanding |
|
16,219 |
|
15,932 |
|
Six Months Ended |
||||||||||||
June 30, |
||||||||||||
|
2023 |
Per diluted
|
|
|
2022 |
|
Per diluted
|
|||||
Net income as reported |
$ |
13,084 |
$ |
0.81 |
$ |
7,084 |
|
$ |
0.45 |
|
||
Non-GAAP adjustments, net of tax (1) |
||||||||||||
Amortization of intangible assets - net |
|
|
4,712 |
|
0.29 |
|
|
4,693 |
|
|
0.30 |
|
Foreign currency gain/ loss - net |
|
|
152 |
|
0.01 |
|
|
(155 |
) |
|
(0.01 |
) |
Business development costs - net |
|
457 |
|
0.03 |
|
1,735 |
|
|
0.11 |
|
||
Adjusted net income and adjusted diluted EPS |
$ |
18,405 |
$ |
1.14 |
$ |
13,357 |
|
$ |
0.85 |
|
||
Weighted average diluted shares outstanding |
|
16,178 |
|
15,752 |
|
___________________ | |||||
(1) |
Applies a blended federal, state, and foreign tax rate of approximately |
Adjusted net income and diluted EPS are defined as net income as reported, adjusted for certain items, including amortization of intangible assets and unusual non-recurring items. Adjusted net income and diluted EPS are not a measure determined in accordance with GAAP in
View source version on businesswire.com: https://www.businesswire.com/news/home/20230802878852/en/
Investor Contact:
Deborah K. Pawlowski / Craig P. Mychajluk
Kei Advisors LLC
716-843-3908 / 716-843-3832
dpawlowski@keiadvisors.com cmychajluk@keiadvisors.com
Source: Allied Motion Technologies Inc.