All statements contained herein that are not statements of historical fact constitute “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, and may contain the word “believe,” “anticipate,” “expect,” “project,” “intend,” “will continue,” “will likely result,” “should” or words or phrases of similar meaning. Forward-looking statements involve known and unknown risks and uncertainties that may cause actual results to differ materially from the expected results described in the forward-looking statements. The risks and uncertainties include those associated with: the domestic and foreign general business and economic conditions in the markets we serve, including political and currency risks and adverse changes in local legal and regulatory environments; the severity, magnitude and duration of the impact of global pandemics, including impacts from businesses’ and governments’ responses to the impact 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 global pandemic impacts will 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 geopolitical conflicts and their ability to create instability and economic uncertainty; the introduction of new technologies and the impact of competitive products; the ability to protect the Company’s intellectual property; our ability to sustain, manage or forecast our growth and product acceptance to accurately align capacity with demand; the continued success of our customers and the ability to realize the full amounts reflected in our order backlog as revenue; the loss of significant customers or the enforceability of the Company’s contracts in connection with a merger, acquisition, disposition, bankruptcy, or otherwise; our ability to meet the technical specifications of our customers; the performance of subcontractors or suppliers and the continued availability of parts and components; failure of a key information technology system, process or site or a breach of information security, including a cybersecurity breach, ransomware, or failure of one or more key information technology systems, networks, processes, associated sites or service providers; changes in government regulations; the availability of financing and our access to capital markets, borrowings, or financial transactions to hedge certain risks; the ability to attract and retain qualified personnel, and in particular those who can design new applications and products for the motion industry; the ability to implement our corporate strategies designed for growth and improvement in profits including to identify and consummate favorable acquisitions to support external growth and the development of new technologies; the ability to successfully integrate an acquired business into our business model without substantial costs, delays, or problems; our ability to control costs, including the establishment and operation of low cost region manufacturing and component sourcing capabilities; and in the Company’s Annual Report in Form 10-K. Actual results, events and performance may differ materially from the Company’s forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements as a prediction of actual results. 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.
New risk factors emerge from time to time, and it is not possible for management to predict all such risk factors, nor can it assess the impact of all such risk factors on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. The Company’s expectations, beliefs and projections are believed to have a reasonable basis; however, the Company makes no assurance that expectations, beliefs, or projections will be achieved.
Overview
We are a global company that is engaged in the business of designing, manufacturing, and selling precision motion, control, power, and structural composites to provide integrated system solutions as well as individual products, to a broad spectrum of customers throughout the world primarily for the industrial, vehicle, medical, and aerospace and defense markets. We are headquartered in Williamsville, NY, and have operations in the United States, Canada, Mexico, Europe, and Asia-Pacific. We are known worldwide for our expertise in electro-magnetic, mechanical, and electronic motion technology. We sell component and integrated controlled motion solutions to end customers and OEMs through our own direct sales force and authorized manufacturers’ representatives and distributors. Our 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 input/output Modules, Universal Industrial Communications Gateways, light-weighting technologies, transformers, and other controlled motion-related products.
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Throughout 2025 and through the first two quarters of 2026, we continue to refine our strategy to expand our vertical market focus to accelerate our growth. Throughout its history, the Company has expanded our capabilities to be a leading global provider of motion solutions. More recently, we have been building our controls and power technologies, both organically and through acquisitions. The evolution of these additional pillars of our business enhances our overall value proposition, expands our addressable markets and is aligned with mega technology trends. These advancements required us to refine our strategy to leverage the value opportunity that exists in three technology pillars – Motion, Controls, and Power.
Recent Events
Through 2024 and 2025, and continuing into 2026, the Company has been executing its Simplify to Accelerate NOW program. This included initiatives to realign the Company’s manufacturing footprint and streamline the organization to enhance operational efficiency and drive profitability. These initiatives are expected to position Allient to emerge from the current challenging macroeconomic and geopolitical environments, including industrial headwinds with stronger earnings power, improved operational flexibility, and enhanced capacity to capitalize on future growth opportunities. Additional costs associated with our Simplify to Accelerate NOW program are expected to create additional annualized cost savings in 2026.
During the first quarter of 2025, the Company announced that consistent with its Simplify to Accelerate NOW strategy, it will expand upon current capabilities and skillsets to create a state-of-the-art Fabrication Center of Excellence at its facility in Dothan, Alabama. The Company is transferring current assembly operations from Dothan and transferring these capabilities into its facilities in Tulsa, Oklahoma and Reynosa, Mexico where Final Assembly, Integration and Test capabilities are the core competencies. The realignment will improve business focus and better leverage the Company’s footprint to deliver high-precision system solutions for demanding applications in various served markets including Aerospace and Defense, Medical and Electronic Test and Assembly Equipment.
One-time costs in 2025 were approximately $4 million, primarily related to employee severance and other personnel-related expenses. Additional expenses of $641 and $1,503 have been incurred during the first three and six months of 2026, respectively, with a total of approximately $2 to $3 million anticipated to be incurred throughout 2026, and will be substantively paid by the end of 2026.
Global Environment
The current geopolitical conflicts are creating higher levels of economic uncertainty and increased volatility with respect to energy prices, interest rates, our supply chain (in particular, with respect to changes and proposed changes to tariffs and trade policies), and certain customer ordering patterns. We are closely monitoring the developments and continue to adjust our production platform to react to changing customer ordering patterns. The impact of the conflicts on our operational and financial performance will depend on future developments that cannot be predicted.
The U.S. government has proposed and implemented certain updates to existing foreign trade policies. These updates include new and increased tariffs, or potential tariffs, on a wide range of products and goods imported to the U.S., and certain countries have responded with reciprocal tariffs and/or trade restrictions. We have manufacturing operations in Mexico, China, and Europe, amongst other locations globally throughout the world, and source certain components from locations that may be impacted by these policy changes. Official government policies and agreements continue to be closely monitored, and our operations remain agile in adjusting to minimize potential impacts to our business.
In February 2026, the U.S. Supreme Court ruled that certain tariffs based on the International Emergency Economic Powers Act that were assessed and incurred in 2025 were unconstitutional. Following this ruling, the U.S. Court of International Trade began to develop a process to assess how to refund tariffs that were paid under the applicable executive orders. At this time, the Company has begun the process of applying for refunds of tariffs paid. However, no tariff refunds have been approved and the Company has not received any refund payments. We continue to monitor the recent applicable rulings and will continue to monitor and consider what refunds can be pursued.
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Operating Results
Three months ended June 30, 2026 compared to three months ended June 30, 2025
For the three months ended 2026 vs. 2025
June 30, Variance
(Dollars in thousands, except per share data) 2026 2025 $ %
Revenues $ 153,770 $ 139,578 $ 14,192 10 %
Cost of goods sold 100,178 93,222 6,956 7 %
Gross profit 53,592 46,356 7,236 16 %
Gross margin percentage 34.9 % 33.2 %
Operating costs and expenses:
Selling 7,583 6,026 1,557 26 %
General and administrative 15,941 14,439 1,502 10 %
Engineering and development 10,684 9,944 740 7 %
Acquisition and integration-related costs — 23 (23) (100) %
Restructuring and business realignment costs 641 1,122 (481) (43) %
Amortization of intangible assets 3,133 3,125 8 — %
Total operating costs and expenses 37,982 34,679 3,303 10 %
Operating income 15,610 11,677 3,933 34 %
Interest expense 2,523 3,552 (1,029) (29) %
Other expense, net 68 823 (755) (92) %
Total other expense 2,591 4,375 (1,784) (41) %
Income before income taxes 13,019 7,302 5,717 78 %
Income tax provision (2,628) (1,685) (943) 56 %
Net income $ 10,391 $ 5,617 $ 4,774 85 %
Effective tax rate 20.2 % 23.1 %
Diluted earnings per share $ 0.61 $ 0.34 $ 0.27 83 %
Bookings $ 201,302 $ 135,032 $ 66,270 49 %
Backlog $ 298,031 $ 236,586 $ 61,445 26 %
REVENUES: The increase in revenues during the three months ended June 30, 2026 reflects increases in many of our target markets, most significantly within Industrial and Aerospace and Defense. Our revenues for the three months ended June 30, 2026 were comprised of 54% to U.S. customers and 46% to customers primarily in Europe, Canada, and Asia-Pacific. The overall increase in revenue was primarily due to a 9.3% volume increase and a foreign currency increase of 0.9%. Organic revenue increased 9.3% during the second quarter of 2026. Organic revenue is a non-GAAP measure. Refer to information included in “Non-GAAP Measures” below for a discussion and reconciliation of the non-GAAP measures.
ORDER BOOKINGS: Bookings increased in the three months ended June 30, 2026 compared to 2025, due to a 48.3% increase in volume and a 0.8% increase in foreign currency impact. The increase in bookings from the prior year quarter is impacted by improvements in customer demand levels across certain target markets, primarily within Industrial and Aerospace and Defense, in the current year.
GROSS PROFIT AND GROSS MARGIN: Gross profit increased to $53,592 in the three months ended June 30, 2026 from $46,356 in the three months ended June 30, 2025, and gross margins increased to 34.9% for 2026, compared to 33.2% for 2025. Gross profit and gross margin percentage were impacted favorably by higher sales volume, improved product mix, and operational improvements driven by our Simplify to Accelerate NOW strategy.
SELLING EXPENSES: Selling expenses increased 26% during the three months ended June 30, 2026 compared to 2025, reflecting higher commissions driven by higher sales volumes, as well as higher marketing and sales-generating costs. Selling expenses as a percentage of revenues were 5% and 4% in the three months ended June 30, 2026 and 2025, respectively.
GENERAL AND ADMINISTRATIVE EXPENSES: General and administrative expenses increased 10% during the three months ended June 30, 2026 compared to 2025 due primarily to personnel-related costs and higher software licensing and information
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technology consulting costs. As a percentage of revenues, general and administrative expenses were 10% in each of the three months ended June 30, 2026 and 2025.
ENGINEERING AND DEVELOPMENT EXPENSES: Engineering and development expenses increased by 7% in the three months ended June 30, 2026 compared to 2025. The increase primarily reflects higher incentive compensation, partially offset by the cost reduction actions taken as part of our Simplify to Accelerate NOW strategy. As a percentage of revenues, engineering and development expenses were 7% in each of the three months ended June 30, 2026 and 2025.
RESTRUCTURING AND BUSINESS REALIGNMENT COSTS: Restructuring and business realignment costs decreased in the three months ended June 30, 2026 compared to 2025 primarily reflecting costs associated with the transfer of assembly operations from our Dothan, Alabama facility in 2025 and timing of other Simplify to Accelerate NOW actions.
AMORTIZATION OF INTANGIBLE ASSETS: Amortization of intangible assets remained consistent compared to the prior year period.
INTEREST EXPENSE: Interest expense decreased in the three months ended June 30, 2026 compared to 2025 due to lower average debt balances.
INCOME TAXES: The effective income tax rate was 20.2% and 23.1% for the three months ended June 30, 2026 and 2025, respectively. We expect our income tax rate for the full year 2026 to be approximately 21% to 23%.
NET INCOME AND ADJUSTED NET INCOME: Net income increased during the three months ended June 30, 2026 compared to 2025, primarily relating to higher sales volume, including an increase in organic revenue, and improvements to gross profit margin percentage, reflecting the actions in our Simplify to Accelerate NOW strategy. Adjusted net income for the quarters ended June 30, 2026 and 2025 was $13,545 and $9,525, respectively. Adjusted diluted earnings per share for the second quarter of 2026 and 2025 were $0.80 and $0.57, respectively. Adjusted net income and adjusted diluted earnings per share are non-GAAP measures. See information included in “Non–GAAP Measures” below for a discussion of the non-GAAP measure and reconciliation of net income to adjusted net income and diluted earnings per share to adjusted diluted earnings per share.
EBITDA AND ADJUSTED EBITDA: EBITDA was $21,733 for the three months ended June 30, 2026 compared to $17,255 for the second quarter of 2025. Adjusted EBITDA was $23,715 and $20,067 for the second quarters of 2026 and 2025, respectively. EBITDA and Adjusted EBITDA are non-GAAP measures. EBITDA consists of income before interest expense, provision for income taxes, and depreciation and amortization. Adjusted EBITDA also excludes stock-based compensation expense, foreign currency gain/loss and certain other items. Refer to information included in “Non-GAAP Measures” below for a discussion of the non-GAAP measure and a reconciliation of net income to EBITDA and Adjusted EBITDA.
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Six months ended June 30, 2026 compared to six months ended June 30, 2025
For the six months ended 2026 vs. 2025
June 30, Variance
(Dollars in thousands, except per share data) 2026 2025 $ %
Revenues $ 292,685 $ 272,381 $ 20,304 7 %
Cost of goods sold 193,718 183,273 10,445 6 %
Gross profit 98,967 89,108 9,859 11 %
Gross margin percentage 33.8 % 32.7 %
Operating costs and expenses:
Selling 14,609 12,040 2,569 21 %
General and administrative 31,343 28,252 3,091 11 %
Engineering and development 20,325 19,498 827 4 %
Acquisition and integration-related costs — 23 (23) (100) %
Restructuring and business realignment costs 1,503 2,621 (1,118) (43) %
Amortization of intangible assets 6,256 6,218 38 1 %
Total operating costs and expenses 74,036 68,652 5,384 8 %
Operating income 24,931 20,456 4,475 22 %
Interest expense 5,076 7,187 (2,111) (29) %
Other expense, net 53 1,507 (1,454) NM %
Total other expense, net 5,129 8,694 (3,565) (41) %
Income before income taxes 19,802 11,762 8,040 68 %
Income tax provision (4,054) (2,588) (1,466) 57 %
Net income $ 15,748 $ 9,174 $ 6,574 72 %
Effective tax rate 20.5 % 22.0 %
Diluted earnings per share $ 0.93 $ 0.55 $ 0.38 69 %
Bookings $ 359,377 $ 272,655 $ 86,722 32 %
Backlog $ 298,031 $ 236,586 $ 61,445 26 %
REVENUES: The increase in revenues for the year to date 2026 reflects increases primarily within Industrial and Aerospace and Defense markets. Our revenues for the period ended June 30, 2026 was comprised of 53% to U.S. customers and 47% to customers primarily in Europe, Canada and Asia-Pacific. The overall increase in revenue was due to a 5.1% volume increase and a 2.4% favorable currency impact. Organic revenue increased 5.1% during the year to date 2026. Organic revenue is a non-GAAP measure. Refer to information included in “Non-GAAP Measures” below for a discussion and reconciliation of the non-GAAP measures.
ORDER BOOKINGS: Orders increased for the year to date 2026 compared to 2025, and included a 29.4% increase in volume as well as a 2.4% increase in foreign currency impact. The increase in orders reflects steady demand in the Industrial market and continued strength in Aerospace & Defense.
GROSS PROFIT AND GROSS MARGIN: Gross profit increased to $98,967 for year to date 2026 from $89,108 in 2025 driven by increases in sales, and gross margins increased to 33.8% for 2026, compared to 32.7% for 2025. Gross profit and gross margin percentage were impacted favorably by higher sales volume, improved product mix, and operational improvements driven by our Simplify to Accelerate NOW strategy.
SELLING EXPENSES: Selling expenses increased 21% during year to date 2026 compared to 2025, reflecting higher commissions driven by higher sales volumes, as well as higher marketing and sales-generating costs. Selling expenses as a percentage of revenues were 5% and 4% during year to date 2026 and 2025, respectively.
GENERAL AND ADMINISTRATIVE EXPENSES: General and administrative expenses increased by 11% during the six months ended June 30, 2026 compared to the same period of 2025 due primarily to personnel-related costs and higher software licensing and information technology consulting costs. As a percentage of revenues, general and administrative expenses were 11% and 10% in 2026 and 2025, respectively.
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ENGINEERING AND DEVELOPMENT EXPENSES: Engineering and development expenses increased by 4% during the year to date 2026 compared to 2025, primarily reflecting higher incentive compensation, partially offset by the cost reduction actions taken as part of our Simplify to Accelerate NOW strategy. As a percentage of revenues, engineering and development expenses were 7% for each of the six months ended June 30, 2026 and 2025.
RESTRUCTURING AND BUSINESS REALIGNMENT COSTS: Restructuring and business realignment costs decreased in 2026 compared to 2025 primarily reflecting restructuring-related costs primarily associated with costs recognized in 2025 relating to the transfer of assembly operations from our Dothan, Alabama facility.
AMORTIZATION OF INTANGIBLE ASSETS: Amortization of intangible assets remained consistent compared to the prior year period.
INTEREST EXPENSE: Interest expense decreased by 29% for the year to date 2026 compared to 2025 primarily due to lower average debt levels.
INCOME TAXES: For the six months ended June 30, 2026 and 2025, the effective income tax rate was 20.5% and 22.0%, respectively. The change in rates compared to the prior year is primarily due to the impact of discrete tax costs on share based awards. We expect our income tax rate for the full year 2026 to be approximately 21% to 23%.
NET INCOME AND ADJUSTED NET INCOME: Net income increased during year to date 2026 compared to 2025, primarily relating to increased sales and improved gross margin, partially offset by an increase in operating expenses. Adjusted net income for the six month periods ended June 30, 2026 and 2025 was $21,969 and $17,118, respectively. Adjusted diluted earnings per share for year to date 2026 and 2025 were $1.30 and $1.03, respectively. Adjusted net income and adjusted diluted earnings per share are non-GAAP measures. See information included in “Non– GAAP Measures” below for a discussion of the non-GAAP measure and reconciliation of net income to Adjusted net income and diluted earnings per share to Adjusted diluted earnings per share.
EBITDA AND ADJUSTED EBITDA: EBITDA was $37,279 for year to date 2026 compared to $31,631 for year to date 2025. Adjusted EBITDA was $40,991 and $37,539 for year to date 2026 and 2025, respectively. EBITDA and Adjusted EBITDA are non-GAAP measures. EBITDA consists of income before interest expense, provision for income taxes, and depreciation and amortization. Adjusted EBITDA also excludes stock-based compensation expense, foreign currency gain/loss and certain other items. Refer to information included in “Non-GAAP Measures” below for a discussion of the non-GAAP measure and a reconciliation of net income to EBITDA and Adjusted EBITDA.
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Non-GAAP Measures
Organic revenue, EBITDA, Adjusted EBITDA, Adjusted net income and Adjusted diluted earnings per share are provided for information purposes only and are not measures of financial performance under GAAP. Management believes the presentation of these financial measures reflecting non-GAAP adjustments provides important supplemental information to investors and other users of our financial statements in evaluating the operating results of the Company as distinct from results that include items that are not indicative of ongoing operating results. In particular, those charges and credits that are not directly related to operating unit performance, and that are not a helpful measure of the performance of our underlying business particularly in light of their unpredictable nature. These non-GAAP disclosures have limitations as analytical tools, should not be viewed as a substitute for revenue and net income determined in accordance with GAAP, and should not be considered in isolation or as a substitute for analysis of the Company’s results as reported under GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies. In addition, the supplemental presentation should not be construed as an inference that the Company’s future results will be unaffected by similar adjustments to net income determined in accordance with GAAP. Organic revenue is reported revenues adjusted for the impact of foreign currency and the revenue contribution from acquisitions.
The Company believes that revenue excluding foreign currency exchange impacts is a useful measure in analyzing sales results. The Company excludes the effect of currency translation from revenue for this measure because currency translation is not fully 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 is often a useful measure of a Company’s operating performance and is a significant basis used by the Company’s management to measure the operating performance of the Company’s business because EBITDA excludes charges for depreciation, amortization and interest expense that have resulted from our debt financings, acquisitions, as well as our provision for income tax expense. EBITDA is frequently used as one of the bases for comparing businesses in the Company’s industry.
The Company also believes that Adjusted EBITDA provides helpful information about the operating performance of its business. Adjusted EBITDA excludes stock-based compensation expense, as well as acquisition and integration-related costs, restructuring and business realignment 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.
Management uses Adjusted net income and Adjusted diluted earnings per share to assess the Company’s consolidated financial and operating performance. Adjusted net income and Adjusted diluted earnings per share are provided for informational purposes only and are not a measure of financial performance under GAAP. These measures help management make decisions that are expected to facilitate meeting current financial goals as well as achieving optimal financial performance. Adjusted net income provides management with a measure of financial performance of the Company based on operational factors as it removes the impact of certain non-routine items from the Company’s operating results. Adjusted diluted earnings per share provides management with an indication of how Adjusted net income would be reflected on a per share basis for comparison to the GAAP diluted earnings per share measure. Adjusted net income is a key metric used by senior management and the Company’s board of directors to review the consolidated financial performance of the business. This measure adjusts net income determined in accordance with GAAP to reflect changes in financial results associated with the highlighted expense and income items.
The Company’s calculation of Revenue excluding foreign currency exchange impacts for the three and six months ended June 30, 2026 is as follows:
Three months ended Six months ended
June 30, 2026 June 30, 2026
Revenue as reported $ 153,770 $ 292,685
Less: Foreign currency impact - (favorable) / unfavorable (1,255) (6,341)
Revenue excluding foreign currency exchange impacts $ 152,515 $ 286,344
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The Company’s calculation of organic revenue for the three and six months ended June 30, 2026 is as follows:
Three months ended Six months ended
June 30, 2026 June 30, 2026
Revenue change over prior year 10.2 % 7.5 %
Less: Impact of acquisitions and foreign currency (0.9) (2.4)
Organic growth 9.3 % 5.1 %
The Company’s calculation of EBITDA and Adjusted EBITDA for the three and six months ended June 30, 2026 and 2025 is as follows (in thousands):
Three months ended Six months ended
June 30, June 30,
2026 2025 2026 2025
Net income as reported $ 10,391 $ 5,617 $ 15,748 $ 9,174
Interest expense 2,523 3,552 5,076 7,187
Provision for income tax 2,628 1,685 4,054 2,588
Depreciation and amortization 6,191 6,401 12,401 12,682
EBITDA 21,733 17,255 37,279 31,631
Stock-based compensation expense 998 835 1,846 1,755
Acquisition and integration-related costs — 23 — 23
Restructuring and business realignment costs 641 1,122 1,503 2,621
Foreign currency loss (gain) 343 832 363 1,509
Adjusted EBITDA $ 23,715 $ 20,067 $ 40,991 $ 37,539
The Company’s calculation of Adjusted net income and Adjusted diluted earnings per share for the three and six months ended June 30, 2026 and 2025 is as follows (in thousands except per share amounts):
For the three months ended
June 30,
Per diluted Per diluted
2026 share 2025 share
Net income as reported $ 10,391 $ 0.61 $ 5,617 $ 0.34
Non-GAAP adjustments, net of tax (1)
Amortization of intangible assets – net 2,400 0.14 2,394 0.14
Foreign currency loss – net 263 0.02 637 0.04
Acquisition and integration-related costs – net — — 18 —
Restructuring and business realignment costs – net 491 0.03 859 0.05
Non-GAAP adjusted net income and adjusted diluted earnings per share $ 13,545 $ 0.80 $ 9,525 $ 0.57
(1) Applies a blended federal, state, and foreign tax rate of approximately 23% applicable to the non-GAAP adjustments.
For the six months ended
June 30,
Per diluted Per diluted
2026 share 2025 share
Net income as reported $ 15,748 $ 0.93 $ 9,174 $ 0.55
Non-GAAP adjustments, net of tax (1)
Amortization of intangible assets – net 4,792 0.28 4,763 0.29
Foreign currency loss (gain) – net 278 0.02 1,156 0.07
Acquisition and integration-related costs – net — — 18 —
Restructuring and business realignment costs – net 1,151 0.07 2,007 0.12
Non-GAAP adjusted net income and adjusted diluted earnings per share $ 21,969 $ 1.30 $ 17,118 $ 1.03
(1) Applies a blended federal, state, and foreign tax rate of approximately 23% applicable to the non-GAAP adjustments.
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Liquidity and Capital Resources
The Company’s liquidity position as measured by cash and cash equivalents increased by $1,383 to a balance of $42,088 at June 30, 2026 from December 31, 2025.
2026 vs.
Six Months Ended 2025
June 30, Variance
(in thousands): 2026 2025 $
Net cash provided by operating activities $ 20,127 $ 38,435 $ (18,308)
Net cash used in investing activities (7,070) (3,189) (3,881)
Net cash used in financing activities (11,102) (24,286) 13,184
Effect of foreign exchange rates on cash (572) 2,853 (3,425)
Net increase in cash and cash equivalents $ 1,383 $ 13,813 $ (12,430)
Of the $42,088 of cash and cash equivalents at June 30, 2026, $35,705 was located at our foreign subsidiaries and may be subject to withholding tax if repatriated back to the U.S. The Company regularly evaluates opportunities to optimize cash available from operations in all geographies.
During the six months ended June 30, 2026, the decrease in cash provided by operating activities is due to a decrease in cash inflows on collections on accounts receivable and payment of inventory, offset in part by higher net income as adjusted by non-cash operating activity items and timing of payments in accounts payable.
The increase in cash used in investing activities in the six months ended June 30, 2026 relates to higher capital expenditures. Cash used in investing activities in the six months ended June 30, 2026 includes $7,070 for purchases of property and equipment compared to $3,189 during the six months ended June 30, 2025. Capital expenditures are expected to be between $12,000 and $15,000 for the full year 2026.
The change in cash used in financing activities during the six months ended June 30, 2026 is primarily due to debt repayments. Net debt payments of $7,227 were made during the six months ended June 30, 2026. As of June 30, 2026, we had $117,962 of obligations under the Revolving Facility, excluding deferred financing costs.
Financial covenants under the 2024 Credit and Note Payable Agreements require the Company to maintain a minimum interest coverage ratio of at least 3.0:1.0 at the end of each fiscal quarter. In addition, the Company’s Leverage Ratio at the end of any fiscal quarter shall not be greater than 4.25:1.0 through December 31, 2024 or greater than 3.75 to 1.0 as of the end of any fiscal quarter thereafter; provided that the Company may elect to temporarily increase the Leverage Ratio to by 0.5:1.0 following a material acquisition under the 2024 Credit and Note Payable Agreements. The 2024 Credit and Note Payable Agreements also include covenants and restrictions that limit the Company’s ability to incur additional indebtedness, merge, consolidate or sell all or substantially all of its assets and enter into transactions with an affiliate of the Company on other than an arms’ length transaction. These covenants, which are described more fully in the 2024 Credit and Note Payable Agreements, to which reference is made for a complete statement of the covenants, were modified as of October 22, 2024, and are subject to certain exceptions. The Company was in compliance with all covenants as of June 30, 2026.
As of June 30, 2026, the unused Revolving Facility was $162,038. The amount available to borrow could be limited by our debt and EBITDA levels, which impacts our covenant calculations. The Revolving Facility matures March 1, 2029. The Series A Senior Notes, under the 2024 Note Payable Agreement, are due March 21, 2031.
On October 22, 2024, the Company entered into a Second Amendment to the Third Amended and Restated Credit Agreement and a Second Amendment to the Note Purchase and Private Shelf Agreement (collectively, the “October 2024 Credit and Note Payable Amendments”). These amendments include provisions to increase the maximum Leverage Ratio to 4.5:1.0 for the quarters ending March 31, 2025 and June 30, 2025, 4.0:1.0 for the quarter ending September 30, 2025, and returning to 3.75:1.0 for the quarter ending December 31, 2025 and thereafter. From January 1, 2025 through September 30, 2025, borrowings under the Revolving Facility bore interest at Term SOFR plus a margin of 2.50% and a commitment fee of 0.325% on the unused portion of the Revolving Facility. Also, from October 1, 2024 through September 30, 2025, the Series A Notes bore interest at 6.46%. Subsequently, the Series A Notes have returned to an interest rate of 5.960%.
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The Company declared dividends of $0.07 per share during the six months ended June 30, 2026 and $0.06 per share during the six months ended 2025. The Company’s working capital, capital expenditure and dividend requirements are expected to be funded from cash provided by operations and amounts available under the Amended Credit Agreement.
We believe our diverse markets, our strong market position in many of our businesses, and the steps we have taken to improve operational efficiency and strengthen our balance sheet, such as retaining cash to support shorter term needs and amending our revolving credit facility leaves us well-positioned to manage our business. We continually assess our liquidity and cash positions taking geopolitical and other market uncertainties into consideration. Based on our analysis, we believe our existing balances of cash, our currently anticipated operating cash flows, and our available financing under agreements in place will be more than sufficient to meet our cash needs arising in the ordinary course of business for the next twelve months.