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ALLIENT INC (ALNT)·Q3 2015 Earnings Summary

Executive Summary

  • Q3 2015 revenue declined 6% year over year to $61.53M while diluted EPS increased 4% to $0.46; on a constant currency basis, revenue was flat and EPS rose 11%, highlighting significant FX headwinds but resilient profitability .
  • Bookings fell 17% to $55.1M and backlog decreased 16% to $67.8M, with volume and currency both contributing to softer demand indicators .
  • EBITDA was $9.03M versus $9.53M in Q3 2014 and improved sequentially from Q2 2015 ($7.61M), supported by operational efficiencies and cost control initiatives .
  • Management emphasized growth in Electronics and Medical, weakness across Aerospace & Defense, Industrial, Distribution, and Vehicle, and continued focus on Allied Systematic Tools and strategic M&A; net bank debt decreased by $9.1M vs Q2, improving financial flexibility .

What Went Well and What Went Wrong

What Went Well

  • EPS increased 4% YoY to $0.46 (11% at constant currency), demonstrating margin resilience despite FX headwinds .
  • Sequential EBITDA improvement (Q3: $9.03M vs Q2: $7.61M) reflects operational efficiencies and cost discipline; management highlighted Allied Systematic Tools driving process improvements .
  • End-market mix showed growth in Electronics and Medical, supporting profitability and strategic positioning; CEO: “we continue to focus on improving internal operations efficiencies... and... enhance our growth opportunities through strategic acquisitions” .

What Went Wrong

  • Revenue declined 6% YoY to $61.53M due entirely to FX (6% unfavorable currency impact); volumes were steady vs prior year, signaling currency-driven top-line pressure .
  • Bookings down 17% to $55.1M and backlog down 16% to $67.8M, with both volume and currency effects, raising near-term demand visibility concerns .
  • Broad-based weakness across Aerospace & Defense, Industrial, Distribution, and Vehicle markets (Vehicle also down in Q3 after being flat in Q2), highlighting macro and sector headwinds .

Financial Results

P&L and EPS (as reported)

MetricQ3 2014Q1 2015Q2 2015Q3 2015
Revenue ($USD Millions)$65.28 $59.58 $60.48 $61.53
Gross Margin ($USD Millions)$19.61 $17.50 $17.99 $18.94
Net Income ($USD Millions)$4.12 $2.98 $3.13 $4.28
Diluted EPS ($USD)$0.45 $0.32 $0.34 $0.46

Non-GAAP and Operating Metrics

MetricQ3 2014Q1 2015Q2 2015Q3 2015
EBITDA ($USD Millions)$9.53 $7.70 $7.61 $9.03
Total Operating Costs & Expenses ($USD Millions)$12.35 $11.87 $12.25 $11.91
Interest Expense ($USD Millions)$1.61 $1.52 $1.51 $1.50

Demand/Backlog KPIs

KPIQ1 2015Q2 2015Q3 2015
Bookings ($USD Millions)$58.1 $64.5 $55.1
Backlog ($USD Millions)$71.3 $75.6 $67.8

Balance Sheet Highlights

MetricDec 31, 2014Q1 2015Q2 2015Q3 2015
Cash & Equivalents ($USD Millions)$13.11 $11.04 $11.34 $17.90
Long-term Debt ($USD Millions)$67.13 $65.25 $63.38 $61.50
Net Bank Debt Commentary—Net bank debt $62.6M; slight uptick vs Dec ’14 Net bank debt $61.9M; +$0.2M vs Dec ’14 Net bank debt $52.8M; -$8.9M vs Dec ’14, -$9.1M vs Q2

End-market trends (qualitative)

MarketQ1 2015Q2 2015Q3 2015
ElectronicsGrowth Growth Growth
MedicalGrowth Growth Growth
Aerospace & DefenseGrowth Growth Down
VehicleFlat Flat Down
IndustrialFlat Down Down
DistributionDown Down Down

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Company GuidanceFY/Q3 2015Not providedNot providedMaintained (no formal guidance)

Note: The company did not issue formal quantitative guidance in the Q3 2015 materials; commentary focused on FX impacts, bookings/backlog, operational efficiencies, and strategic acquisition priorities .

Earnings Call Themes & Trends

Transcript for the November 12, 2015 call was not available in the document set. The press release references the conference call date but provides no transcript content .

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
FX impactRevenue -1% (Q1), -3% (Q2) due to unfavorable FX; constant currency revenue +6% YTD at Q2 Revenue -6% YoY entirely FX-driven; constant currency revenue flat, EPS +11% YoY Persistent headwind; magnified YoY in Q3
End-market mixGrowth in Aerospace & Defense, Medical, Electronics; Vehicle flat; Industrial flat; Distribution down Aerospace & Defense, Industrial, Distribution, Vehicle down; Electronics & Medical growth Mixed; broad-based weakness outside Electronics/Medical
Bookings/BacklogBookings $58.1M; backlog $71.3M; both down YoY from FX/volume Bookings $55.1M (-17% YoY), backlog $67.8M (-16% YoY) Softening demand indicators
Operations/CostEmphasis on Allied Systematic Tools; cost control Continued operational focus; sequential EBITDA improvement Improving efficiency; margin support
Capital & M&AStrategic acquisitions highlighted as growth lever Strong cash flow and improved debt position to enable future strategic acquisitions Capacity building for M&A

Management Commentary

  • “Measured in constant currency, revenues for the third quarter of 2015 would have been consistent with the prior year, and fully diluted earnings per share would have increased 11%… With strong cash flows and a continually improving debt position, we believe we have the required resources to enhance our growth opportunities through strategic acquisitions” — Dick Warzala, Chairman & CEO .
  • “For the quarter, we experienced growth in our Electronics and Medical markets. Our Aerospace and Defense, Industrial, Distribution and Vehicle markets were down” — CEO .
  • Prior quarters reinforced FX as a key comparator distortion and highlighted focus on Allied Systematic Tools and strategic acquisitions as long-term growth drivers .

Q&A Highlights

  • Q3 2015 earnings call transcript was not available, so Q&A themes and any guidance clarifications cannot be extracted from primary sources .

Estimates Context

  • Wall Street consensus (S&P Global) for Q3 2015 EPS and revenue was unavailable due to request limits today; therefore, a beat/miss determination vs consensus cannot be provided at this time (Values retrieved from S&P Global)*.

Key Takeaways for Investors

  • FX was the primary top-line headwind; on a constant currency basis, EPS expanded 11% YoY, underscoring underlying profitability strength despite currency translation pressures .
  • Demand indicators softened: bookings (-17% YoY) and backlog (-16% YoY) point to near-term volume pressure; monitor order trends and conversion in Q4 .
  • Sequential margin improvement reflected in EBITDA ($9.03M vs $7.61M in Q2) suggests operational efficiency gains are bearing fruit .
  • Electronics and Medical remain growth pockets; multi-market weakness (A&D, Industrial, Distribution, Vehicle) warrants cautious near-term revenue expectations .
  • Balance sheet strengthening (net bank debt down ~$9.1M vs Q2) enhances flexibility for strategic M&A, a management focus area .
  • Lack of formal guidance increases reliance on bookings/backlog and end-market commentary; with FX still a factor, constant currency analysis remains critical .
  • Without consensus data, traders should watch intra-quarter order flow, FX trends, and any M&A updates as potential stock catalysts.