Allient Inc. Q1 FY2026 earnings call

Dick noted entering 2026 from a stronger position with progress on strategy, growth in various metrics. End market sales mix impacts margins, with strength in vehicle (commercial automotive) and industrial (automation, power quality for data centers). Orders up 15% y-o-y and 9% sequentially with a book-to-bill of 1.14. Absorbed elevated operating costs, including Dothan transition carryover. Made significant investments in R&D and product development, repositioning portfolio towards higher value applications. Examples include efforts to bring Alliant Intelligent Controls to market and accelerate defense motor and control development.

First quarter revenue increased 5% to $138.9 million. On a constant currency basis, revenue grew 1% organically. Foreign currency translation provided a favorable impact of $5.1 million. 50% of Q1 revenue was generated in the U.S. Industrial was the primary growth engine, up 8% year-over-year. Vehicle revenue increased 7% driven by commercial automotive. Medical revenue increased 2% with steady demand in some areas and softness in others. Aerospace and defense declined 3% due to program timing and cancellation. Industrial remains the largest vertical at roughly half of trailing 12-month revenue. Gross margin expanded 50 basis points year over year to 32.7% on gross profit of $45.4 million. Operating income increased to $9.3 million, or 6.7% of revenue. Net income increased 51% to $5.4 million, or $0.32 per diluted share.

Believes positioned to build on Q1 momentum with strong bookings and backlog. Will remain disciplined on cash generation, capital spending, and deleveraging. Simplify to Accelerate Now initiatives ongoing. Constructive but realistic about macro environment, monitoring developments. Confident in portfolio aligned with long-term secular drivers.

U.S. trade policy changes, including Supreme Court ruling on IEPA tariffs with refund uncertainty and incremental tariffs expiring in July. Restructuring and business realignment costs elevated during Dothan transition.

Questions from Jerry Sweeney on A&D opportunities, data center retrofit; Max Michaelis on A&D momentum, vehicle orders; Greg Palm on facility transition costs, bookings; Tom Osano on operating margins, vehicle order trends. Answers include discussion on A&D replenishment, data center growth, vehicle order trends, transition costs, and margin outlook.