ALLIENT INC Q4 FY2024 earnings call

• In the fourth quarter, revenue was $122 million with a 31.5% gross margin; full-year revenue totaled $530 million.
• The SNC acquisition has complemented power quality capabilities, and the Simplify to Accelerate Now initiative delivered $10 million in annualized savings in 2024.
• Aim to drive an additional $6 to $7 million in annual savings in 2025; expanded machining at the Dothan, Alabama facility with one-time costs expected to pay off within a year.
• Realigned operations with the Dothan facility focusing on complex fabricated parts, while assembly operations are consolidated to Tulsa and Reno facilities for improved efficiency.

In the fourth quarter, Aerospace and defense sales increased 20% due to defense and space program timings. Medical market revenue rose 5% from solid demand in surgical instruments and respiratory equipment. Vehicle market sales decreased 46% due to powersports market struggles. Industrial market sales declined 11% despite power quality gains. The distribution channel represented 5% of total sales. For the full year, the industrial sector was the largest market, contributing 47% of trailing twelve-month sales, driven by power quality and growth in vehicle handling and semiconductor equipment.

• Target an additional $6 to $7 million in annual savings in 2025 from the Simplify to Accelerate Now program.
• Anticipate initial benefits from the Dothan facility expansion by late 2025.
• Prioritize reducing inventory, driving cost reductions through operational efficiencies, and continuing debt reduction in 2025.

• Tariff policies could impact the supply chain and increase costs.
• Inventory levels remain elevated due to extended supplier lead times.
• Backlog has declined due to shifting customer ordering patterns.

Q: Greg Palm inquired about geographies, end markets, and 2025 outlook.

A: Richard Warzala discussed North America strengthening, Europe's challenges, growth in the defense sector, and how the Simplify to Accelerate Now strategy improves responsiveness to customers.

Q: Ted Jackson asked about medical and powersports businesses, inventory normalization, etc.

A: Richard Warzala talked about medical segments (instrumentation and mobility) and powersports challenges, while James Michaud addressed Dothan restructuring costs and the interest rate swap details