Greetings, and welcome to the Allient Inc. second quarter fiscal year 2024 financial results conference call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Deborah Pawlowski of Investor Relations for Allient. Please go ahead. Thank you, Joe, and good morning, everyone. We certainly appreciate your time today as well as your interest in Allient. Joining me on the call are Dick Warzala, our Chairman, President, and CEO, and Jim Michaud, our Chief Financial Officer. In fact, join me in welcoming Jim to his first earnings call with us, as he just joined Allient on June 3 this year. Dick and Jim are going to review our second quarter 2024 results and provide an update on the company's strategic progress and outlook. After which, we will open up the lines for Q&A. You should have a copy of the financial results that were released yesterday after the market closed. If not, you can find it on our website at allient.com. Along with, also posted there will be the slides that accompany today's discussion. If you are reviewing those slides, please turn to slide 2 for the safe harbor statement. As you are aware, we may make forward-looking statements on this call during the formal discussion as well as during the Q&A. These statements apply to future events that are subject to risks and uncertainties, as well as other factors that could cause actual results to differ materially from what is stated on today's call. These risks and uncertainties and other factors are discussed in the earnings release, as well as with other documents filed by the company with the Securities and Exchange Commission. You can find these documents on our website or at sec.gov. I want to point out as well that during today's call, we will discuss some non-GAAP measures, which we believe will be useful in evaluating our performance. You should not consider the presentation of this additional information in isolation or as a substitute for results prepared in accordance with GAAP. We've provided reconciliations of Non-GAAP to comparable GAAP measures in the tables accompanying the earnings release as well as the slides. For that, please turn to slide three, and I will turn it over to Dick to begin. Thank you, Debbie, and welcome, everyone. Before we delve into this quarter's discussion, I'm excited to be on the call with our new CFO, who, as Deb mentioned, has been with us now for just over two months. During this time, Jim has been intimately engaged with our team to gain an understanding of our processes and to support the advancement of our Simplify to Accelerate Now strategy, especially given his experience with similar types of initiatives in his previous roles. As a financial leader in both multinational, public, and private companies, Jim brings an extensive background of establishing high-performing finance operations and transforming organizations, which makes him a valuable addition to our team. We're confident that Jim's contributions will be instrumental in helping to assure we achieve our strategic goals. Moving on to the quarter, I am proud of the efforts of our team to address the market headwinds that we've had to face. While the quarter started off decently, we saw a significant shift in demand in June. This decline was broadly evident across most of our served markets, but was felt most acutely in industrial automation, where destocking continues, as well as the Power sports market, which reflects a reduction in consumer demand. As you may have noticed, several public companies in similar markets have already reported their end market demand challenges and ultimately a reduction in year-over-year revenue. I should also note that we believe the pushout in orders is the result of inventory adjustments, the extended level of higher interest rates, especially with apparent reductions in the not-so-distant future, combined with political uncertainty. Our diversification does help somewhat as we continue to benefit from the macro trends of electrification, energy conservation, and automation. Nonetheless, our actions to Simplify to Accelerate Now could not be more timely. As we have discussed, we are on an accelerated path to reorganize, to be more productive and drive stronger earnings power, and given current market conditions, our approximately $5 million in annualized savings realized to date are even more relevant. Our decremental margin reflects top-line softness, unfavorable mix, and inventory reserves. The mix impact included the replacement of higher-margin, incremental industrial automation sales with lower-margin sales from our most recent acquisition. We expect our simplification process, combined with the implementation of our integration plans and the capacity gained with the acquisition of SNC, will drive an improved margin profile in the future. As noted on slide 4, our Simplify to Accelerate Now plan is even more meaningful given the current market conditions. As we mentioned, we executed $5 million in annualized cost reductions in the second quarter, and we're working on implementing an additional $5 million in annualized cost savings in the second half of 2024. A key focus of the restructuring involves transferring specific production activities from various U.S. operations to our existing lower-cost facilities in Mexico. Additionally, we have reduced our workforce across most global operations to align with expected demand. Jim will further discuss the restructuring charges and inventory adjustments in the quarter related to these actions. While we are moving decisively to reduce our cost structure, we continue to implement programs aimed at driving future growth. We remain confident in our long-term strategy and the fundamental strength of our value proposition. With that, let me turn it over to Jim for a more in-depth review of the financials. Thank you, Dick, and good morning, everyone. As this is my first earnings call with the company, I want to start by expressing my gratitude for the warm welcome I received from the team and for the opportunity to work with such a talented group. In my short time here, I've been impressed by the dedication and resilience of our team. I'm excited to be part of Allient and to contribute to our ongoing success. Today, I'll provide an overview of our financial performance for the quarter, including key highlights in areas where we are focusing our efforts. Starting on slide five, second quarter revenue of $136 million was down year-over-year by 7%. The impact of foreign currency exchange rate fluctuations was nominally unfavorable by $700,000. During the quarter, our vehicle markets experienced a 17% decline in sales, primarily driven by reduced demand in power sports and continued weakness in the agricultural vertical. These impacts were partially offset by increased demand in commercial automotive, thanks to the ramp-up of new programs that we have won over the years. The industrial market saw a 3% decrease despite strengthened power quality sales, notably to the HVAC and data center market, and additional sales from our recent acquisition. These bright spots were counterbalanced by lower demand in industrial automation, as Dick noted, and within our pumps and material handling markets. Our medical markets also saw a decline, which was broad-based, but primarily due to the persistent softness in medical mobility products and solutions, a trend that has persisted over the past few years. The bankruptcy of a large customer in this space has also had an impact on demand. In the aerospace and defense sector, sales declined primarily due to program timing within the space industry. However, we are seeing positive movement on the defense side, with several notable opportunities that we are working. Slide 6 highlights the shift in our revenue mix across markets over the trailing 12 months, along with the catalyst for each change. The industrial vertical maintained its position as our largest market, accounting for 46% of the total trailing 12 months sales, a notable expansion of 500 basis points. The 14% growth in the space industry reflects strong demand for power quality. On a trailing 12-month basis, industrial automation had benefited from supply chain environment improvements, but has recently fallen back as the industry resets with inventory levels. Vehicle market revenue remained flat on a trailing twelve-month basis, with higher demand in commercial automotive offset by lower demand in power sports and agriculture. Both the medical and aerospace and defense saw a decrease on a trailing twelve-month basis, reflecting the same impacts as the past quarter. Lastly, sales through the distribution channel, a small component of total sales, accounted for 4% of the trailing twelve-month period. As detailed on slide 7, gross profit was $40.7 million, and gross margin was 29.9%. The 140 basis point decline was primarily due to under absorption on lower volume, an unfavorable mix, including the expected margin dilution from the SNC acquisition, and $1.2 million in non-cash inventory reserves. Half of the inventory write-down was related to the bankruptcy I mentioned earlier, and the rest was mostly due to changes in projected demand. We believe our underlying business can command a higher margin profile, but we have to work in order to get there. On slide eight, you can see the lower gross profit. $1.5 million of restructuring and business realignment costs and higher engineering expenses impacted operating income, resulting in income of $4.9 million and operating margin of 3.6%. Costs related to the restructuring were primarily severance. Operating costs and expenses were 26.3% of revenue, an increase of 320 basis points, of which 110 basis points were attributable to the restructuring costs. We are intensely focused on improving our profitability despite market conditions. Slide nine shows net income was $1.2 million, and earnings per diluted share was $0.07. Adjusted Net Income of $4.9 million or $0.29 per diluted share, adjusts for the non-cash amortization of intangible assets to address the accounting requirements of an innovative and acquisitive company. The effective tax rate for the quarter was 20.6%. We anticipate our income tax rate for the full year 2024 to be approximately 21%-23%. We use Adjusted EBITDA as an internal metric to gauge our progress and operating performance. Given margin pressures, Adjusted EBITDA came in at $13.9 million or 10.2% of revenue. We believe this should be a mid-teen adjusted EBITDA margin business, and our simplification actions are intended to get us there on a more consistent basis. Let me talk to cash generation and our balance sheet on Slides 10 and 11. Year-to-date, cash from operations was $17.4 million, improved over the prior year as working capital efficiencies and non-cash adjustment helped to offset lower net income. Capital expenditures for the first six months totaled $5.3 million. While we continue to invest in several growth opportunities, we are fine-tuning our plans to concentrate on high potential, high-value projects. Consequently, we have revised our 2024 capital expenditure forecast to a range of $11 million-$15 million, down from our previous expectation of $13 million-$17 million. Inventory turns declined to 2.9 from year-end, while our days sales outstanding stayed flat at 56 days. Total debt of approximately $237 million increased from year-end 2023 due to the SNC acquisition. We paid down $3.3 million in the quarter. Debt net of cash was about $206 million, representing 43.6% of net debt to capitalization. As defined in our credit agreement, our bank leverage ratio was 3.29 times. Our financial priorities are to strengthen cash conversion and reduce debt. With that, if you advance to Slide 12, I will now turn the call back over to Dick. Thank you, Jim. Orders increased 12% sequentially in the quarter, driven by power quality projects and the ramp-up of our commercial automotive programs. The sequential improvement in demand is somewhat encouraging, although there is an impact on orders as our customers continue to reduce inventory levels. Additionally, we are experiencing delays in the launch of certain projects, which may be a result of the upcoming election and expected decrease in interest rates. Importantly, while we are getting some order pushouts, order cancellations are minimal and being addressed appropriately. We expect the slowdown will extend through this year and into 2025. The decline in backlog is attributed to continued improvements within the supply chain, as lead times were reduced, and we shipped products that were in our backlog as a result of the previous market conditions. Our outlook is outlined on Slide 13. We are taking decisive steps to align our business with current market conditions. We anticipate the challenging environment to persist through the second half of 2024, with our annualized revenue run rate expected to fall below $500 million over the next few quarters. This projection reflects substantial inventory rebalancing by our customers as the supply chain returns to normal, some market erosion and a relatively weak industrial automation environment. We expect that the reduction of uncertainty, settling of lower interest rates, and normalized in-inventory should get us back to stronger revenue sometime in mid-2025. As we streamline our operations, we believe we can enhance customer service and strengthen our long-term competitiveness. Our goal is to make Allient easier to do business with and accelerate our speed to market with new product innovations. The strategy is also expected to position us to better handle the current macroeconomic environment and industrial challenges. We aim to achieve our target of $10 million in annualized savings this year, and to identify and execute further actions beyond this target to ensure we emerge as a stronger, more resilient enterprise with higher earnings power. With that, operator, let's open the line for questions. Thank you. Ladies and gentlemen, if you would like to ask a question, please press star one on your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants speaking using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from the line of Greg Palm with Craig-Hallum. Please proceed. Yeah, thanks. This is Danny Eggert, on for Greg today. I guess maybe just digging into more, what you saw and what you're seeing, you know, June, the kind of significant falloff in demand. You said that was kind of weighted towards, you know, industrial automation and power sports. I guess as we've moved through July now and into early August, I guess, how has that changed? Are you seeing some of that weakness spread across the other end markets? Or I guess, just anything more you can give on, you know, end market, geography, what you're seeing, you know, quarter to date so far. Sure, Danny. I would say to you that we see a continuation of what we experienced in June. And I think just to be clear, you know, we had mentioned that we started the quarter quite well. April and May were relatively solid, and then June was a significant drop-off. We do expect that that will continue, as we mentioned here, through the remainder of the year and potentially into 2025. Looking at the incoming order rates, and as you're asking to look out in, you know, what has occurred in July and so forth, you know, there were some mixed signals. We did see a couple encouraging signs that maybe things will come back, but it's hard to gauge based on one month. I would, I know, caution us to not get carried away, that, you know, we did see a couple positive signs there and that things were going to change drastically. So, you know, sticking with what we've stated here, the industrial automation, the rebalancing that we saw for inventories and the impact it had, especially on us, and the other markets. We didn't talk much about geographic markets, but certainly Europe was impacted. Again, some mixed signals. So it's, for us right now, our emphasis is going to be on getting the business adjusted, readjusted, and aligned, to take cost out, to become a, you know, a more profitable company based on a, on a lower cost base. That's really our focus, and it'll continue to be our focus this year and into next year. Yeah. I guess just based on that kind of mixed signals and it kind of sounds like maybe some uncertain visibility. I mean, the $5 million or $500 million run rate through the second half, and I think it even kind of said maybe over the next several quarters. But there's also a chance that maybe kind of the inventories start returning, you know, in early 2025 before maybe normal run rates in mid-2025. So I guess looking out into 2025, should we kind of expect, you know, gradual improvement starting early in the year before getting to, you know, more normalized levels? Or do you expect kind of that $500 million run rate to last into Q1 next year as well before starting to really improve? Yeah, I would say based on what we know today, I would expect that to continue into Q1. Okay. And certainly, if something changes there and we see some, you know, the dynamics of the market start to change, we certainly will keep everybody abreast of it. So but saying that and, running the business with, I think, the anticipation that that would be the case, the $500 million annualized run rate, it just makes it more important for us to continue to streamline, to reorganize, to make sure that we take the cost out, and that's our focus, and that'll continue to be our focus. So we, we mentioned also, I would just say to you here, we talked about in the second half of 2024, the additional $5 million, and I will tell you that's substantially already identified and will be fully executed very early here in the second half. Yeah, and then I guess- Cost adjustment, realigning the business just to be, you know, not to take... Yeah, I guess, the market swings and the uncertainties we talked about, things could change, and they could change pretty rapidly if certain things fall into place. But, we're not running our business in that manner. We're running our business that we'll take control of what we can control, and we'll get it done. Sure. And on that, you know, added, you know, $5 million, now $10 million of cost takeouts, I know you mentioned you're still looking for additional opportunities. Do you feel like there's some more levers to pull if things continue to worsen or stay at this kind of level for longer than you're expecting? Is there more cost takeouts just to kind of, you know, buoy some of that profitability? Yes. And it'll have nothing to do on whether markets continue to worsen or not. I mean, there are, we've taken a really hard look at everything and structure-wise and so forth, and there are definitely some additional opportunities identified. It's just a matter of how much can we execute and get implemented, you know, in the short period of time. Okay, great. I will leave it there. Thanks. Thank you, Danny. The next question comes from the line of Brett Kearney with Gabelli Funds. Please proceed. Hi, Dick and Jim. Good morning. Thanks for taking my question. Morning, Brett. Great to hear some of the new commercial vehicle awards ramping up. Curious, you know, with the puts and takes in the global economy, what you're hearing from customers and some of the other recent new vehicle programs you've won, and kind of what customers are looking for in kind of pushing forward with those ramps as well. Sure. Well, you know, it's interesting is that there has been, and I think it's been in the news, about the EV side of the electric vehicle side of it, and most of our solutions are agnostic to what the, you know, if it's a combustion engine or electric engine, we're agnostic to that. So we did see that there had been a downshift in demand, and we experienced that in the second quarter. So it was essentially a pushout of one quarter. I'm sorry, one month. And so I think they've adjusted for it, and going forward, we should see steady demand there. I wouldn't suggest that it's gonna increase beyond where we are today, but we do have some other programs that we're working on that should, you know, not this year, but will ramp in and ramp up next year as well. But so there was an impact there, although it was relatively short and hopefully that's all been adjusted for and moving forward, we'll see the steady state demand. The big challenge was some inventory adjustments that at key customers where, you know, it was go, go, go, go, go, ship, ship, ship, everything you've got, and then all of a sudden, "Hold on, we've got-- we've got some challenges here. We're gonna have to adjust." And they were quite significant. Excellent. Very helpful. And then if I could just ask one more on A&D. Just curious, as you look out the next year or two, what you're seeing, I guess, both space market as well as traditional defense opportunities for the company? ... Yeah, very, very encouraging. We have mentioned in the past that we've been, you know, we've worked on several applications, and, you know, at some point they had to ramp up, and I think, you know, some of the projects were pushed to the right as decision making and so forth. But there's a significant number of projects, and we are starting to see a slow ramp up in demand in some of the areas that we would have expected to have already seen that. So A&D is a bright spot, as well as medical. We see some good opportunities in medical, too. Terrific. Thanks so much, Dick. Thank you, Brett. Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star one on your telephone keypad. The next question comes from the line of Ted Jackson with Northland Securities. Please proceed. Thanks. I was a little concerned I wasn't getting recognized by your system for, the question queue. But- I see you're on there, Ted. You're there. I'm out, I'm out there. I pay attention, Dick. So- Okay. I wanted to welcome Jim aboard, although I think he missed the boat and went straight into the water. But hopefully it'll all turn around. You know, it'll all turn around. Yeah. You're getting in at the bottom, Jim. You're getting in at the bottom. That's what I'm gonna say. You have nowhere to go but up. So my questions are a couple things. First of all, on the $5 million cost savings that you've already done and the $5 million that's coming, how should we think about how that rolls through the model with regards to kind of OpEx and gross margins? Sure. Primarily, we focused on, you know, fixed cost, and so there are some... Maybe Jim can answer this a little more granularity as far as the fixed manufacturing costs that were reduced, but also primarily it's an OpEx, and that's where our focus was. I mean, in that cost, I mean, and needless to say, as volumes reduced, the variable costs were reduced as well. So we don't- Mm-hmm. That's not a number we're reporting. We're strictly reporting what we saw was incremental savings, although we did take the differential in direct labor costs between U.S. labor and Mexican labor as part of that, but that was a relatively small portion. Most of it has been in the operating expenses, and certainly there's been some fixed manufacturing overhead as well. As far as the, is your question beyond that, as far as the timing? That was kind of the next part, is how would we think about it? Well, I mean, it sounds like your $5 million is already kind of done, so we can think about that, you know, coming to play in the second half of this year. And then the next $5 million sounds like we'll see maybe some of that in fourth or first quarter. I mean, it's kind of what I interpreted, but some color on that would be great, too, Dick. Yeah, I mean, you're absolutely correct. On the first $5 million, it's already in, and, you know, we've taken the charges against it, and we'll be experiencing and realizing the benefit of that immediately. The next $5 million that we talked about, some of it's in, has already been implemented here in the second half, and I would tell you, most of it will be done early in the second half. So we will start to see some benefit of that as well. Going into next year, we'll have the full benefit of the $10 million in cost reductions. And as we mentioned, there's other, you know, there's other actions that we can take. It's just that the we need a little bit more time and make sure that we execute them in a proper manner, but there's more to come. Okay. My next question is, just going into revenue mix, excuse me, and, and guidance. I mean, you, you saw weakness pretty much across the business. I mean, generally speaking, with, you know, the, the ones that really stood out for you being industrial automation and, you know, let's call it, you know, recreational vehicles. When you look at your outlook, this, you know, $500 million run rate that we are to expect to see for the next several quarters, can you provide some color with regards to, where that weakness will be concentrated from an end market perspective? I'm gonna assume it's the markets that have already been addressed, but I want to make sure. And then from a geographic perspective, where that weakness might be, and if you can kind of tie all that together, that'd be great. Thanks. Sure. So powersports, we would expect—I mean, and again, we pay attention to what our customers are saying in the market and what they see the trends, and, and the future trends coming. So I would say to you that that's certainly one that we expect to have weaker demand from. Okay, and it's pretty much across the board. The industrial piece is the wild card. We're taking a cautionary approach here. We're planning our business that it's not gonna come back rapidly. But what we—what I'd say to you, it has the potential, as we get into the fourth quarter of this year, to return to a certainly a much better level for us. As far as the other markets go, I think, yes, the overall, we see, you know, a decrease, but we mentioned already that, the aerospace and defense, space applications, seeing an uptick there and seeing medical. So, you know... We're planning cautiously, and we're acting aggressively to make sure that the foundation just gets stronger. And it needs to get stronger to achieve the goals that we're not forgetting about, that we've established for ourselves in the past of, margin improvement. The geographic side of it, yes, Europe has seen a significant—and I have to be careful because as you know, Ted, we play in pockets and niche markets and so forth. And while the overall market can be classified as industrial, you really got to look at the specifics of what is it that we do in industrial or vehicle. Because as we mentioned, it's not automotive, it's agricultural. And you can see, I think, you know, the information out there and the downturn in, you know, the agricultural equipment markets and so forth. So I think as we look at that, and you say geographic, other than where we've had some strength and new programs kicking in, and/or, you know, the acceleration of some others, the general market in Europe is down, and it's down 8%-10%. And that reflects some... While we have some increases, we have, you know, further decreases that go beyond the 8%-10% in some specific markets. But we do, again, I would say this to you, that we're starting to see some mixed signals there that perhaps it's coming back. But as I say, I'll just repeat myself. We're going to plan cautiously, and we're going to react, you know, really aggressively to get the cost structure in line where it should be to achieve the margins we said we were going to achieve, you know, we've been talking about for, you know, last couple of years. Okay. My final question, and just kind of probably makes logical sense, but, you know, kind of given you a full plate right now with, you know, challenging macro backdrop, you know, a fair amount of, you know, business restructuring going on, is it fair to assume that, you know, the growth, the M&A side of the growth strategy is going to be set aside while you kind of, you know, get the ship right, right-sized and, you know, things battened down? Or is it like, are you still keeping, you know, the, you know, keeping a pretty active effort on that front? And that's my last question. It's fair to say that. I mean, we're focused on cash, and we're focused on getting the debt paid down, you know, and so forth. So, yes, I mean, we continue to identify and groom opportunities for the future. It's in the short term here, we will-- it would have to be something totally exceptional, and we'd have to go after it in a different way than what we've done in the past. So our focus is on internal operations, continue to groom for the long term, the acquisitions, but in the meantime, you know, we're not aggressively going after things that open in the market right now. Okay. All right. Thanks for taking my questions. I'll talk to you guys soon. Thank you, Ted. Thank you. This concludes our question and answer session. I'd like to turn the call back to Dick Warzala for closing remarks. Thank you, everyone, for joining us on today's call and for your interest in Allient. As always, please feel free to reach out to us at any time, and we look forward to talking with all of you again after our third quarter 2024 results in November. Thank you for your participation, and have a great day. This concludes today's conference. You may now disconnect your lines.