ALNT - Earnings call transcript Q3 2024

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Operator

Good day, and welcome to the Allient Third Quarter Fiscal Year 2024 Financial Results Conference Call. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Craig Mychajluk. Thank you. Please go ahead.

Craig Mychajluk

Yes. morning, good and you, everyone. Thank your We your as as today in certainly Allient. appreciate interest well time

Joining the Chief which outlook, and our update CEO; line and me on Chairman, the are we'll third and our on Jim Q&A. strategic and for Jim open call quarter are the XXXX up Michaud, provide to company's after our going Financial results Dick Warzala, Officer. review Dick an President and progress

were copy it [ of slides after the the at You released should slides, harbor that not, find yesterday today's If market results can allient.com, have those for reviewing on safe statement. please If closed. discussion. a you're that accompany the the to financial turn X website ] along you with our Slide

results by aware, Securities events forward-looking Q&A. to during actual well call. are as what other this you statements as formal future we is and the uncertainties in materially risks the to factors uncertainties with As company well make documents are from to Commission. on today's discussed that and discussion apply may as during call other as that well could and subject These risks other statements filed with earnings factors release These as the and stated as Exchange the the on differ cause are

discuss call, be performance. will at to will point want evaluating we our website non-GAAP out we sec.gov. I find that can or on well during documents in You today's our these measures, useful as believe some which

in a of or accordance substitute prepared this results not additional presentation information as You should with GAAP. isolation consider for the in

to that, measures the to of tables begin. reconciliations the release the turn it and Slide Dick? non-GAAP We X, slides. With to as over accompanying turn in I'll well have comparable Dick earnings to GAAP as please provided

Richard Warzala

Craig, you, welcome, and everyone. Thank

across most has softer customer our inventory This the evident and of most. in vehicle rebalancing automation impacted at year-over-year quarter markets with in ongoing with revenue This top million. decline reflects utilization revenue expected, reflected channel decline. served in line been inventory As industrial $XXX excess coming the performance a is our year-over-year being of broadly the for markets our our and

can is cost on position focus rebalancing is to and not to within control, market internal efforts our be the something emerge unwavering we much in we our stronger the organization and control, closer our our a in future. While customers reducing to realign ensure we to our in are

margin strong current confident the we the continue made in As sequential and quarter and with ahead. quarters reflected business driving commitment, in results, a we continued have our side of our to improvements strides and are cost improve in significant months will we

XXX points EBITDA X.X% points gross points climbed XXX sequentially adjusted Our basis operational XXX the of margin by basis by and Operating to our effectiveness by sequential to basis margin-focused rose XX.X%. to efficiency strategies. This margin improved highlights XX.X%. and margin improvement

adding more and We to operations million cash period also with solid quarter from generate the during $XX cash. in flow, $XX ended than continued million a the

will the as in in recently, and million third agreement, Additionally, amended $X.X we reduced quarter our highlight debt presentation. credit Jim by more the later

Accelerate noted as driving X. results, Our Simplify Slide actions to NOW on measurable are

our as redundancies date, million $X remaining annualized has savings our and implemented in processes, the profitability. be sustainable million early streamline discuss refining Jim will our customers, charges to which closer production to I quarter organizational to the and advancing and improvements to efficiencies. generate reducing million actions. The cost margin this $X progress. further in has and the currently contributed second is To these to to are operational to the related We our late goal initiative $XX restructuring in on operations reductions. and program expect contributed our yield is recent supporting with focused structure, optimizing This mentioned, we first

enhancing by our customer service market, time faster across means and improved we stronger industries. to are agility. our This operations, key Additionally, simplifying competitive positioning

identified alignment customer cost today's with more growth. With it needs opportunities to ] efforts with further to from ] rationalization macroeconomic operational for a conditions to Looking financials. me head stronger on These earnings ensure the and in-depth turn will greater continued Allient of market forward, to we power, both and the capitalize as XXXX. over future were let Jim into environment position capacity flexibility review [ [ emerge actively that, ongoing we

James Michaud

Thank you, everyone. X. Dick, and good Starting on Slide morning,

center XX%. $XXX,XXX. year-over-year to In XX% due exchange our to recent a foreign our by sectors, margin-enhancing of nominally significant contributions powersports vehicle largest decreased in $XXX demand vehicle additional the HVAC fluctuations along destocking. markets with sales and offset relatively our by in other downturn Most subverticals The quality of impact from million held currency markets, despite was industrial revenue decline gains largely efforts rate acquisition. our refine were year-over-year. by sharper-than-expected was X% quarter softer demand undertook we a on applications. to the customer Industrial steady inventory in notable data focus Second where power by and down These automation, favorable saw gains

medical which few in bright the persistent has space. that Our experienced were products, markets further also Outside this weakness the past customer of impacted trend surgical medical was spot, softened. a and of mobility in a a major by over bankruptcy sales, years continued instrument we

the catalysts sales growth markets basis of the a pursuing remained with X market, largest a Defense, shift actively and months, each positive anticipate program contribute our trailing we XX the driving the on to near change. side, contributing illustrates The note, across revenue due Aerospace key sales, XX-month XX% the timing. are declined mix sector future. Slide point marking industrial we over expansion. promising our trailing On opportunities defense in which several to in in Lastly, will XXX

by as market, levels as industry. In across higher same quarterly benefited our Both slowed vehicle automation automotive but and saw Over construction. the performance. past demand due lower the also powersports declined in year, inventory offset initially reset industrial and impacting demand the in was improvements, and supply factors Aerospace Medical to revenue Defense XX-month chain recently from has decreases trailing largely commercial the

distribution represented trailing sales our of Finally, the a X% over period. XX-month total channel, smaller component,

As with of $XX.X a profit gross shown was on Slide million margin X, XX.X%. gross

Our lower change acquisition. year-over-year higher-margin reflects our both margin of recent the top and contributions softness mix, line including with unfavorable from automation replacement sales an industrial margin

the recent despite favorable overall expect lower process, in due largely we sequential expenses. acquisition with third total X.X%. million. operating approximately income quarter, improvement million margin our $X.X Slide with restructuring operating are of margin reported over Looking increase of in incurred added charges simplification X, SNC basis These of primarily $X.X to time. charges, ahead, and bringing we to of the drive point an we million capacity, XXX to was sales. On severance integration are cash-based its and tied The our along mix In year-to-date to $X.X largely a margin the

of date profitability. expect growth. Operating for operating reduction current of of points restructuring. XXX and attributable points, improving our market excludes efforts of noncash percentage and Sequentially, diluted assets million $X.XX. the and at directly actions to $X.XX We reduction per of an income $X.X costs as focused quarter, million, our range XX.X% on translating accounted business recent basis quarter, $X.X expenses $X.X expenses increase results. revenue, challenges, the by restructuring X with Despite reached XX Adjusted sustainable a of $X.X basis remain we basis a efficient though share net well improved and offset underscore bottom to costs of These In cost revenue line between the shows foundation by commitment million. earnings amortization realignment following restructuring to stronger, building XX for cost costs. to total intangible more or partially end points the measures million income share, the expenses. Slide was diluted as the which as net development, the second per to

$X.X of XX.X% improvement targeting we points and EBITDA tax our rate as adjusted adjusted effective simplification margin expect revenue, for basis XX%. Internally a or use EBITDA are quarter from ongoing continue XX% of to was and performance. Our measure XXX efforts. our to million $XX.X X% tax further million to to percentage we XX.X%, was EBITDA Sequentially, Adjusted and EBITDA XXXX operational we and revenue. range increased progress rate full or through the rose

on operations reached for and from Year-to-date, now our capital million, Let's months $XX.X efficiencies cash that X net million. the and XX Capital generation balance X% expenditures over cash income. focus XX. sheet the adjustments totaled and improvement helped with driving a Slides working offset lower $X.X noncash year, prior

$X revised $XX have to the has our we XXXX focus turns outstanding Managing down year-end ordered in range to ] sales X softening we high-value elevated to to previous receiving While prior forecast increased inventory growth a our range since which to still lead million days levels. up days. high Inventory million X.X led though of ago. has declined lead a top to [ in expenditure to orders capital stock allocation to continue Due navigate refined long million we products million. invest year times -- extended recent opportunities, been effects $XX the and from projects. Accordingly, potential, to $XX continue we of sales, to on times, to priority, from are for inventory before XX placed remains priorities capital to the

from conditions. Total at ratio in approximately to Net though We due capitalization acquisition, about XXXX million $X.X with $XXX debt quarter. are represents net million the to SNC down we a debt year-end demand was actively working XX.X%. through align this million up inventory to of $XXX current at debt the paid

flexibility covenants through fiscal XXXX credit Dick expanded amendments As EBITDA add-backs. facilities, XXXX. The in our adding restrictive planning less included we amended our mentioned, financial and the

our updates, X.XX. these leverage stood ratio at With

hedging a our effective $XX adjustments, protect term, volatility. Simplify to rate interest of new entered reinforce with and rate swap, strategy rate interest to against over interest Accelerate we rate X-year combined potential Additionally, financial our helping interest with a the swap, NOW new discipline These debt execute management. into ability million

that, back Slide turn and XX, advance Our remain goals if on to over Dick. call to now primary debt. With I will cash strengthening you focused conversion financial reducing the

Richard Warzala

Thank you, Jim.

anticipated rates some decisions. ongoing down political and customers influenced reflected shift certain with of time We challenges levels the cycle, purchasing believe was as uncertainties impacting rates, interest order the lines by orders are higher the quarter active election adjust and third which inventory shift customer sequentially Our projects.

received diversified trends, XX in order solutions approximately defense and macro with reflected expect key markets portfolio most $XX comparison. very into managed Despite last in notably data conservation to automation have of year macro center these XXXX, factors, center have intelligence cover remains and million we a impacts [ electrification, orders artificial will the months persist is some year-over-year in ] the moderated QX in positive cancellations aligned energy pace growth-oriented demand reflecting while like previously growth, mentioned. with the appropriately. We importantly, and resilient do being had minimal been and trends with been Additionally, most the some are of orders exceptions data as expansion, delayed, our

backlog result in the order lead in our Our declined has supplied as enabled times long-term has In of supply cost implementing many potential. our strategy softness and meantime, chain reduction recent improved savings we last the conditions, actively for of initiatives year which and products. confident the over a and are the remain

Our XX. on outlook is outlined Slide

to we ahead, continuing with into as opportunities date, savings through Simplify XXXX. savings and drive to further $XX we in Accelerate move annualized process identifying million Looking of cost NOW are we program, to are our

from QX quarter, inventory at customers. we impact and the anticipate level rate For below our revenue given year-end continued the rebalancing fourth run slightly some typical a seasonality

softer persist us positions effectively. management most to first markets, through operational focus XXXX of these half and in efficiency demand the we headwinds to on While navigate cost expect our

to and aiming cash reduction, prioritizing generation also financial are reinforce We debt flexibility. our

to line allow mid-XXXX, to should return look we operating questions. opportunities let's to and These margins our As ] normalized levels revenue [ open growth us as flow. the a decrease, improved we to stronger for potential rates expect and company. With we in the consistent available stabilization on future operator, more interest capitalize by to inventories, that, approach order uncertainties of supported improvements

Operator

Greg from Palm [Operator Craig-Hallum Capital Instructions] Group. Our from comes first question

Greg Palm

way just as Dick, last, when one on talked back guess, curious you then or comments out the if months where we back I are other you of the is anything we playing and now, everything thinking expected? that X ago kind or look surprised

Richard Warzala

Yes.

I as expected, it's I operational and actions it's identified accelerating, we've playing and the numbers, generate by excitement think internally, the to beginning think And taken that out some and team, improvements our they're Greg. I internally. the think they're

So we I playing think as expected. they're out

Greg Palm

equal, what when what's impact reductions? And backdrop. change normalized I'm no destocking? of you're level through getting And all the the are sort revenue maybe macro What of quantify amount a inventory at you is, look -- able like sort the else of of of in to the from sort

Richard Warzala

a -- we what our Yes. think one it customers, -- Well, do at just I Well, good if look take of all okay. that's we is right. major from a

mentioned fourth feel year, I quarter QX million seeing, in and early think dollar our our to gives now that there's improvement impact had inventory early on customer month and But and we're expected we're has run down. see what I'm that from and seeing for a maybe of here couple That's through so comparing QX and rationalization rates. tell run us year, next channel expect greatest restocking, quarter you into for and right what largest QX next opportunity would the a that we a a to us we're and maybe rates what Jim that in -- because which forth. you third of I

Greg Palm

And that's specific customer? one

Richard Warzala

customer. That's specific one

Greg Palm

Wow.

Richard Warzala

think -- some And annualized basis, think I an been and than annual into blending then that improvement optimism start it's an more do some to but I yes, on -- that to we're see that. on going basis

that feel for definite is the for -- decrease the of do next some quarters. there next couple -- continue will we in Although

Greg Palm

Okay.

Richard Warzala

Yes.

Greg Palm

Understood.

Richard Warzala

add see And play of to in I some we everybody -- add And it quite some to it, center mean, artificial but don't I pretty we do want rolling then make there front excited in get that coming, And expansion, a -- out data I to role and significant that. intelligence because sure see to want do some -- we about momentum that we forward. opportunities are we the and that,

in demands the side of for business power it's that's The been into our so And increased pretty coming us. solid some that -- our and quality we -- here, happens future. see

real the going that's we of one forward. so spots And have bright

is a artificial us. upside and big intelligence So construction center the for certainly data

Greg Palm

you Since may be market of lot about specifically? what area. you rates end what And a Obviously, what excitement just it into kind of brought there's your growth that rates of visibility what in can are up, or been growth your sales have talk and levels? that your kind

Richard Warzala

out Yes. haven't that in -- -- don't Well, we past. we broken I the

growth And it's right about millions, us, So low I impact we're talk talking guess I you high but it's I double-digits. to But Greg, would that just the hesitate to can or it about do on tell now, an in that it. exponential the that has single-digits here. in

Greg Palm

it. Got

Okay. the shift of talk If with I the internally P&L, little not could to the a the just but what seeing of gears benefits terms just Simplify NOW and bit about cost-cutting program And to kind it? you're sounds million impact in way or there's like more flows then there's $X to Accelerate excitement. P&L maybe the another that the It Is that yet of terms still so specifically, through come. QX. about think even in to right

Richard Warzala

Yes.

is more you and customers. doing, with we're that greater with vertical opportunities focus feel even standpoint significant cost the numbers. to and cost see realization we'll And a the cost the more making at question in look restructuring from is organization -- realization closely much impact on tend so our in exciting the that changes reduction growth. our for say markets aligning always Internally, have love or I I would we to that because the we're that us it a we and

growth call and continuously us opportunities our yes, more And So, the that's the that will here. the top we There's the more on those. hold to and growth focused have customers accountable, generate in great get the are our refocused in and significant and do realigned very even some and to real cost will come. But margin on, opportunity it's excitement better more people to potential so, That's markets customers closely growth working come, line place. line them, -- I'll faster, we're to excitement reductions real to is top about a aligned respond generate future. those, that

Greg Palm

you of mostly signs to still line? is that come it or the terms seeing something Are yet that's yet top tangible any in of

Richard Warzala

measure to that some the that what could drive you now, answer growth? is is engage that opportunity we tangible yes. are can high-value getting say the in tell the activities we right to opportunities And I'll

So, term in a converted the basis, can majority still markets. our some be on are but longer short-term focus and

and we'll have base So company. new some and of we the yes, I and on as technology we're in some uptick think base we see but opportunities, product mostly get the programs designed -- leveraging full

used we in is controls access. And and the the at technology I we for motion, of vertical and pillars tip and think said, look we've of go when our market house, we talked to ago past defense. And example, Allient for back year about if X the launched So power. the you that's

bring, So [ we our of Defense. company, that outside presenting just really our AUSA, recently what offering solutions And compact at inside we clearly value showed meetings, chord meetings out in several some lightweight -- and position we because customers marketing with and had our and unique can were company were as that, pretty came it Allient our they a as booth, many we have in integrated a struck the AHAs ] to we there booth marketplace. our

lot So talking -- very will drew now, some I a going a significant. we're going the well in, than about opened truly was closer attention and up and an markets. And and convert of pretty were we selective to lightweighting we're closer you get We've past chase. I'm what I'll more there picking some the while of about. learned was lot doors this just that example as sure revenues occurring which right That's into longer-term opportunity markets tell the electrification, as make our of our lower the integration now is right hell some to we're considerable in in customers, to operation a we think the the a opportunities level technologies solutions But to each that big that, us of now -- customers.

healthy the going So that be some for future rationalization will good us of in I well. now, on think, right that's and as

So an of that's comes where example it. that's excitement the in, and

Greg Palm

Congrats on results forward. here luck and of going best the improved

Operator

Jackson next comes Securities. from Instructions] [Operator question Ted The Northland from

Edward Jackson

to to the we industrial kind regards So of I with mean, to to and for basically, very quarter And to know I reported the in they're on things a 'XX. don't Rockwell. Allient, did, grow morning. automation next the -- but Rockwell questions. like say, but else you then relevant like if a the industrial And Dick. start remainder I the look their going quarter, are, got about few that expecting I listen they I'm side, business this anyone just talked would good sequentially through of don't that the fiscal if

kind getting through that a industrial would And a start that? bogey [ that that at and business look normalization about to the as in perhaps channel. we'll with portion lackluster, be but Is I'm when to saying but the of think so, Rockwell, this business the will see taking your you inventory of build then industrial terms of off Rockwell you're from of that good channel, within of there, not backdrop, of backdrop again a your ] next [ just quarter you ]

Richard Warzala

Yes.

So largest it's I that clear our everyone customer. they're think very to

conversation... the in So

Edward Jackson

polite. be to Trying

Richard Warzala

And not multiple their think one And and impact just do I the their I know a it. has about when Yes. that and But for has Rockwell again because, certainly multiple I our conference future, direct It's of certainly, it's -- and products see operations. appreciate think on the you talks impacts us. operations. calls appreciate I it bringing are, I up after you projections

volume go their go grow so impact And expand we and as they and -- with and along goes the it. up, business

Edward Jackson

[indiscernible] you so Over longer -- and going with term, would -- hypothetically. along go we're just But the talk it. like to

Do there get many that? then a to starts kind how indicator you growth of Would you. go of -- verticals -- of about is you Would their play leading the -- to we there growth? So you timing of some that next it Allient? saying, within think for understand would quarter relative trail them I'm it? and are be through showing what hand-in-hand Rockwell terms for with I would the Would -- sort be there most in you the

Richard Warzala

Yes. Well, there's X things.

business automation obviously, projects. they're Rockwell's on they're So major -- is and automation, doing

their products as different pull ] from well product revenue, really And [ they base. many -- as they're okay. as suppliers it So recognizing own

-- that. revenue, long they're with be As would as they're there pulled recognizing then and doing installations along we

that So software. [ And of it's that. it's X you careful. they side their of that in or hardware hardware that to going -- increasing, and will will the increase the if sections segments one of starts equipment the with along report be have we their to ] business. There's business it, up the it, side It's as

it's installation automation the of that new projects occurring. So are

along. products that the for in course, that's be timing the prior occurs, plan or they they of acquire [ and that see I go ] they say But the and you. We'll what will when get As revenue, is have build for recognizing to tagging to to install have you us project. the installation them are that order needed needed would the out the an installation for to is and of

Edward Jackson

Okay.

Richard Warzala

though, we overexcited seen because channel, channel, you, the here there get that I inventory in having caution we've the in been don't significant. want to adjustments also would it's the that inventory

a to we've stick us get normalcy, So and then that have sharp and starting -- seen. that's that we'll demand a, down, return the settle hopefully, call drop-offs and we're versus steady-state it to demand will hockey a beginning on a the to see

Greg we that demand pretty question prior to numbers steady the that, been and not last state, year. steep from can and that saw in in and it's returning a for hockey a work state, a looking we're towards, ongoing that that normal are I increase the steady reflective demand steep for we gave plan decrease, pretty stick So steady and the

Edward Jackson

just the that second, in... start you just calendar quarter goes next know. in year, like on third year, they're it so next their question Well, call of expecting that to My sounds from

Richard Warzala

fiscal -- ended. quarter yes, they Let me -- though? fiscal has okay, because this, their their I Second, can clarify of year third year because

Edward Jackson

Yes. I'm saying Yes. -- calendar No, 'XX. calendar

Richard Warzala

Yes.

Edward Jackson

So -- the I to my market. over next vehicle want move question but to

it's going the you to it that into market So the that is mean, in have, And other names. get powersports. within major I not customer I'm and

and come can exit to talk data market. into those really I is in When look the being But -- want. to market you of commercial the the that if vehicles before much is, participates the back that around, a -- we kind see outlook is time market I construction. would, brought see it it environmental if I for softness market, near-term kind were 'XX. turns look XX% kind around as expecting who it if I you any market, that are half it -- kind that's it of The in of as like highlighted that You is if of there most as hoping like you would, question into of the move you business of looks as one looks kind powersports put of and mean, step year. clearly powersports to -- guess I construction X have -- vehicle by and question nowhere. and The and anyone going be is they starts second the people then seeing areas, kind areas me reframe back the growing looks the No next you cycle, see it mean, X aggregate. of vehicles, down maybe of -- will in let regulations. like there, I your kind up. The because you X at mean, it they're this in commercial 'XX out I think stabilize it's which

like I'll is the where do at So them -- that. just is rank market all the be -- segment, biggest to macro of you kind are in to going your What mean a of you? those exposures mix turn X, if of largest you vehicle between -- the help one your is, agree get kind there market terms my and the that handle about like would types better I second And, it the third? between this of kind to with the leave to think just just of of even in me around the when views? for is That question in

Richard Warzala

Fair Sure. question.

in to our down through gone offsetting our down, business our I of those internal this that will can look from that reported, vehicles, vehicle to the about So competitive which tell that. standpoint seen come their forth. see and that X -- whole, in we we're aggregate -- as we at that -- some maturation market, so you in time, now we you profiles. business now powersports the the channels feel But I have market prices has is very think supplying quite point in at the now talked are tell a and that. or going And course, we would while powersports I markets similar of being automotive you automotive that we've in powersports the as same

So have in we've shipping are won past that projects in, those. to the kicked we talked about, the we major and

still So the got and a between the closer we've -- although there margin it's those when but them, still balance getting is yes, although each at powersports But closer they're higher, to X. profiles, other, you -- look some And closer. you well. said closer that very what expect reflective of do as see is downturn, and construction. turnarounds. we rest of okay. said we are they them And what seen you getting We've -- The

what the But those to accurate, do into return And move out to we seen future. But the some that expect very the as just of we've saying improved was saying are we each equipment, is you're impacts our downturn. agricultural I offsetting conditions is bit up line. profiles margin of and still but one in down a of business little sum one which automotive and and other, the bottom kind is different, powersports the our think

Edward Jackson

then And accounting the really more just side. my last are Okay. questions on

think we about inventory, the for back and of So in inventory made should put presentation? would you you trends then, that how commentary how fourth about we the 'XX? quarter think shifting to it the given And through comments over some in the that there, how

James Michaud

Yes.

going think is continued And that items. an obviously, balancing I manage the a why internal act have the reduction. to of reason to initiative, what -- say continue the that long lead to see time you're is I we

that's end by to on correct start listen, to and acquisition think organic the QX basis, early $X exclude you XXXX. our going towards I our million an into if inventory recent But itself year-end. decreased since of

to our -- to we're some inventory, focus it's I a declines real and going see main ours. continue you So think of in

Edward Jackson

commentary thought of I the get last rate gave expectations, line and that on but of got kind swap, that the me was the I question, million my the will then swap? debt you pause. And $XX just on is, that in what's Okay. out

James Michaud

[ ]. X.XX

Edward Jackson

through quarter. Great job a difficult It working really in nice of terms a macroenvironment. was

Operator

comes Michael from question next from Principal Securities. McCroskey The

Michael McCroskey

You picked quite of all up new coverage. bit a

picked ask questions quarterlies, everything all I'm usually And question. doing so, up. before are your get I you usually on but my appreciate

more when those past, through this that's those that in But came see the consistent I flesh changes, a little and all light changed? you this don't the bit where covenants we little transparency from know what you through of challenge numbers? has start -- a give how can was, XX help much ] all's numbers coming process handled into to with with things you progressing months future projections, where it's very covenant and you always the how out you that Can problematic. thought like been landing giving [ getting Your [indiscernible] in appreciated.

James Michaud

sure. Yes,

not or return our the the timing the the see when here uncertainty Feds we how reflective when the to undertook ordering quarter. when cut much in out, election cycle, I from forecast to think and the may off just in attempted uncertainty pattern of all us, third that that, and normalization agreement cut I may can as you with think of they they imagine, customers' we that's continued do the to coming the we surrounding that and try

sure make and and have [ like investing ] So flexibility and I continue we to challenges to our headwinds. forward we was the that that as ensure we think to as reorganization activities it look in manage had we no the we're trying

new covenants. reflective I think that's in the

Michael McCroskey

I of that did assume can I sort covenant if that. starting, been working ask? change that frame What you've on time

James Michaud

It QX started and then the... in to goes

Michael McCroskey

started I'm No, you to an trying change. idea. I'm negotiate just that back get as when far as to looking it

James Michaud

the -- QX end of QX. at

Michael McCroskey

especially that Between ]. Looks seen pretty between number, you've as or what X.X and for ] how changing? Okay. then, [ you're a wide berth and now with Is you you number now is to seeing? to that comment wide then that change as [ any like can

James Michaud

gives headwinds. as I that the said, is. mentioned, just given manage need comfort to again, do, think, do It able I the think us we uncertainty to But to it to what I I be

that's think I changed So there's to don't anything relative that.

Richard Warzala

Yes.

million do on up that ] it's we I -- we have is get the had now we that also for the to made, think there in Michael, onetime agreement for. in had else press do and efforts release, -- month $X any in internally, basis costs. important credit and something and a trailing rationalization We credit that we those, that [ we previous we given weren't

cost multiples important Jim, get they held as and another that's think upfront clarity going against the not for top into we're at for going some I to in be of -- change maybe recognized [ hitting would with reductions, on the those. and looking were those, he's current in the and agreement. that's have ]. forward us to those maybe answer, looking costs But as but what And to far more more if to you're the of we granularity be that's because to would was us aspect go knew So been just those we it important significant cost because going

James Michaud

-- Yes. that I test I've going again, I'm that call I we we talked I have going to manage think think I'm we, what mean not we're it have some, significantly. cushion to about. as that ensure those seeing to

going feel any I -- to the It's think reorganization anything of like. call we the our that ensuring -- continued costs manage the that that. like and we're it our -- we in very efforts and to about we flexibility million the good have timing that savings, I'm just with $XX incur costs going to

there's is the think to think really again, going in -- I amendment I think I that. the where so, think reflects the And some I land. And dial flexibility

Operator

Management. The next question Vanatoc comes from from Robert Van Voorhis Capital

Robert Van Voorhis

pretty uninteresting can I terms release, margin. I in pretty out of -- press comment the mix just and question, of quarter? pretty it's last guess, this have a gross the quick. say on it called But impact probably just Because versus a you sustainability big could it So in know the you was quarter you I

moving So commentary closer this quarter? about helpful. we Just last on how that be I do normalized is any representative Is more mix it of would or quarter guess, to think is? what forward, it

James Michaud

space. a look at, selective. as growth we're us. about continue continued that, area, center in being we say positive and pretty We're opportunities we're expecting look Obviously, in that to, as that's at happening would I for we mentioned, what's as Dick the data more excited that Dick those mentioned,

So And mentioned enhance margin, that to take selective ours to being we're what and I on. take main we by we focus on of we've future. on continue our about excited as into we're the what would in really you tell it's and seeing a projects projects the quarters, type that's several of

Robert Van Voorhis

that commentary later the the from apologize on then comment of QX late, program, it. the second so joined if as I my and Got any be or helpful. were little or $X to the cuts of a can implemented of call I'm And million in just But any Simplify QX in question, sort I information. you repeating they terms second beginning of would

James Michaud

I first $X to $X million. with that QX. Again, those end underway million the towards well QX. towards mentioned, of as our achieve incremental So end our $XX the million, of would we happened were the We're say

it. way I that's to think So think the about

Richard Warzala

Robert, costs out. not are going in And have cost. We're we'll remember will too, EBITDA, though, offsetting impact. there to of that though, adjusted the pull But some onetime that going we're those course, the onetime realize to

Operator

I comments. closing concludes the to This management now for conference would to the session. over like back turn question-and-answer our

Richard Warzala

everyone, ] you, for for So thank Allient. [ and your joining in us on interest call today's

XX November will James conferences, Baird Cap We Raymond in the upcoming California. XX then Global X and November Conference the participating in on in Industrial Chicago Summit Small be on

we As Thank time, to free any at our talking and after reach for you look quarter please and results. participation, forward again have us with you to out day. feel always, XXXX great a your all to fourth

Operator

conference Thank has now you. Thank you concluded. The for attending today's presentation.

may disconnect. now You

Allient (ALNT) 7 Nov 242024 Q3 Earnings call transcript