- Net Sales of $1.1 Billion Up 15.4% YoY; Up 15.0% on an Organic
Basis
- Net Income of $97.2 Million, or $2.47 Per Share
- Adjusted Net Income of $93.5 Million, or $2.38 Per Share Up
36.3% YoY
- EBITDA of $140.3 Million Up 29.2% YoY
- Updating Fiscal 2023 Guidance to Reflect Fiscal Third Quarter
Performance
Applied Industrial Technologies (NYSE: AIT), a leading
value-added distributor and technical solutions provider of
industrial motion, fluid power, flow control, automation
technologies, and related maintenance supplies, today reported
results for its fiscal 2023 third quarter ended March 31, 2023.
Net sales for the quarter increased 15.4% to $1.1 billion from
$980.7 million in the prior year. The change includes a 0.7%
increase from acquisitions, offset by a negative 0.3% impact from
foreign currency translation. Excluding these factors, sales
increased 15.0% on an organic basis reflecting a 16.1% increase in
the Service Center segment and a 13.1% increase in the Engineered
Solutions segment. The Company reported net income of $97.2
million, or $2.47 per share, and EBITDA of $140.3 million. Results
include a net tax benefit of $3.7 million, or $0.09 per share, from
a deferred tax valuation allowance adjustment. Excluding this item,
the Company reported non-GAAP adjusted net income of $93.5 million,
or $2.38 per share. On a pre-tax basis, results include $8.2
million ($0.16 after tax per share) of LIFO expense compared to
$7.4 million ($0.14 after tax per share) of LIFO expense in the
prior-year period.
Neil A. Schrimsher, Applied’s President & Chief Executive
Officer, commented, “We reported another solid quarter as sales
grew over 15% with ongoing support from our industry position. We
continued to expand gross margins while remaining focused on
managing costs given the current backdrop. These dynamics drove
strong EBITDA margin expansion and earnings growth. At the same
time, we remain focused on our investments in talent, technology,
and our service solutions as we further enhance our capabilities
and operational strength for the future. Overall, we continue to
demonstrate the benefits of our strategy and ability to
consistently execute.”
Mr. Schrimsher added, “Looking ahead, we remain constructive on
underlying industrial sector fundamentals within North America.
Customer feedback remains generally positive, while our internal
initiatives and technical capabilities are supporting new growth
opportunities. That said, consistent with our prior outlook and
recent macroeconomic industrial reports, we expect underlying
market demand and orders to continue to moderate near term as
broader industry activity normalizes and customers rebalance
spending levels against current macro uncertainty. Month to date in
April, sales are trending up by a high single-digit percent on an
organic basis compared to the prior year. Our diverse mix of growth
tailwinds and business evolution puts us in a favorable position to
sustain above-market growth, and our track record highlights our
ability to execute across all parts of the cycle. Lastly, our
balance sheet and liquidity are in a solid position, and we expect
stronger cash generation going forward.”
Updated Fiscal 2023 Guidance For fiscal 2023, the Company
now projects EPS of $8.47 to $8.60 on an adjusted basis (prior
$8.10 to $8.50), sales growth of 14% to 15% (prior 13% to 15%), and
EBITDA margins of 11.7% to 11.8% (prior 11.5% to 11.7%). Updated
adjusted EPS guidance excludes the $3.7 million net tax benefit in
the fiscal 2023 third quarter related to a deferred tax valuation
allowance adjustment. Guidance incorporates ongoing economic
uncertainty and inflationary pressures. Guidance does not assume
contribution from potential future acquisitions.
Dividend Today the Company announced that its Board of
Directors declared a quarterly cash dividend of $0.35 per common
share, payable on May 31, 2023, to shareholders of record on May
15, 2023.
Conference Call Information Applied will host its
quarterly conference call for investors and analysts at 10 a.m. ET
on April 27, 2023. Neil A. Schrimsher – President & CEO, and
David K. Wells – CFO will discuss the Company's performance. A
supplemental investor presentation detailing latest quarter results
and the Company’s outlook is available for reference on the
investor relations portion of the Company’s website at
www.applied.com. To join the call, dial 800-945-5981 (toll free) or
212-231-2929 (for International callers) using conference ID
22026611. A live audio webcast can be accessed online through the
investor relations portion of the Company's website at
www.applied.com. A replay of the call will be available for two
weeks by dialing 800-633-8625 or 402-977-9141 (International) using
conference ID 22026611.
About Applied® Applied Industrial Technologies is a
leading value-added distributor and technical solutions provider of
industrial motion, fluid power, flow control, automation
technologies, and related maintenance supplies. Our leading brands,
specialized services, and comprehensive knowledge serve MRO and OEM
end users in virtually all industrial markets through our
multi-channel capabilities that provide choice, convenience, and
expertise. For more information, visit www.applied.com.
This press release contains statements that are forward-looking,
as that term is defined by the Securities and Exchange Commission
in its rules, regulations and releases. Applied intends that such
forward-looking statements be subject to the safe harbors created
thereby. Forward-looking statements are often identified by
qualifiers such as “expect,” “will,” “guidance,” “projects,”
“assume”, and derivative or similar expressions. All
forward-looking statements are based on current expectations
regarding important risk factors including trends in the industrial
sector of the economy (such as the inflationary environment and
supply chain strains), the effects of the health crisis associated
with the COVID-19 pandemic on our business operations, results of
operations, and financial condition, and other risk factors
identified in Applied's most recent periodic report and other
filings made with the Securities and Exchange Commission, many of
which risks are amplified by circumstances arising out of the
COVID-19 pandemic. Accordingly, actual results may differ
materially from those expressed in the forward-looking statements,
and the making of such statements should not be regarded as a
representation by Applied or any other person that the results
expressed therein will be achieved. Applied assumes no obligation
to update publicly or revise any forward-looking statements,
whether due to new information, or events, or otherwise.
APPLIED INDUSTRIAL
TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF
CONSOLIDATED INCOME
(Unaudited)
(In thousands, except per share
data)
Three Months Ended March
31,
Nine Months Ended March
31,
2023
2022
2023
2022
Net Sales
$
1,132,035
$
980,662
$
3,254,720
$
2,749,217
Cost of sales
798,917
693,338
2,306,314
1,948,928
Gross Profit
333,118
287,324
948,406
800,289
Selling, distribution and administrative expense,
including depreciation
206,207
191,481
602,070
551,655
Operating Income
126,911
95,843
346,336
248,634
Interest expense, net
4,773
5,852
17,438
20,249
Other (income) expense, net
(142
)
469
1,624
(712
)
Income Before Income Taxes
122,280
89,522
327,274
229,097
Income tax expense
25,093
21,216
72,750
50,796
Net Income
$
97,187
$
68,306
$
254,524
$
178,301
Net Income Per Share - Basic
$
2.52
$
1.78
$
6.60
$
4.63
Net Income Per Share - Diluted
$
2.47
$
1.75
$
6.49
$
4.56
Average Shares Outstanding - Basic
38,617
38,453
38,574
38,470
Average Shares Outstanding - Diluted
39,268
39,098
39,203
39,102
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(1) Applied uses the last-in, first-out (LIFO) method of valuing
U.S. inventory. An actual valuation of inventory under the LIFO
method can only be made at the end of each year based on the
inventory levels and costs at that time. Accordingly, interim LIFO
calculations are based on management's estimates of expected
year-end inventory levels and costs and are subject to the final
year-end LIFO inventory determination.
APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In
thousands)
March 31, 2023 June 30, 2022
Assets Cash and
cash equivalents
$
182,127
$
184,474
Accounts receivable, net
705,638
656,429
Inventories
526,978
449,821
Other current assets
92,002
68,805
Total current assets
1,506,745
1,359,529
Property, net
115,383
111,896
Operating lease assets, net
101,960
108,052
Intangibles, net
243,133
250,590
Goodwill
577,235
563,205
Other assets
64,182
59,316
Total Assets
$
2,608,638
$
2,452,588
Liabilities
Accounts payable
$
276,024
$
259,463
Current portion of long-term debt
25,196
40,174
Other accrued liabilities
179,372
199,990
Total current liabilities
480,592
499,627
Long-term debt
597,006
649,150
Other liabilities
150,380
154,456
Total Liabilities
1,227,978
1,303,233
Shareholders' Equity
1,380,660
1,149,355
Total Liabilities and Shareholders' Equity
$
2,608,638
$
2,452,588
APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND
SUBSIDIARIES
CONDENSED STATEMENTS OF
CONSOLIDATED CASH FLOWS
(Unaudited)
(In thousands)
Nine Months Ended March
31,
2023
2022
Cash Flows from Operating
Activities Net income
$
254,524
$
178,301
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization of property
16,598
16,215
Amortization of intangibles
23,189
24,096
Provision for losses on accounts receivable
4,676
2,905
Amortization of stock appreciation rights and options
2,322
2,897
Other share-based compensation expense
7,419
6,064
Changes in assets and liabilities, net of acquisitions
(142,092
)
(106,136
)
Other, net
(2,609
)
9,481
Net Cash provided by Operating Activities
164,027
133,823
Cash Flows from Investing
Activities Acquisition of businesses, net of cash
acquired
(35,667
)
(6,974
)
Capital expenditures
(20,809
)
(11,674
)
Proceeds from property sales
226
494
Life insurance proceeds
-
3,159
Cash payments for loans on company-owned life insurance
-
(14,835
)
Net Cash used in Investing Activities
(56,250
)
(29,830
)
Cash Flows from Financing
Activities Net (repayments) borrowings under revolving
credit facility
(27,000
)
442,592
Long-term debt repayments
(40,185
)
(550,432
)
Interest rate swap settlement receipts (payments)
5,501
(4,812
)
Payment of debt issuance costs
-
(1,956
)
Purchases of treasury shares
(716
)
(13,604
)
Dividends paid
(39,829
)
(38,612
)
Acquisition holdback payments
(1,510
)
(2,361
)
Taxes paid for shares withheld for equity awards
(7,914
)
(4,405
)
Exercise of stock appreciation rights and options
127
224
Net Cash used in Financing Activities
(111,526
)
(173,366
)
Effect of Exchange Rate Changes on Cash
1,402
(288
)
Decrease in cash and cash equivalents
(2,347
)
(69,661
)
Cash and Cash Equivalents at Beginning of Period
184,474
257,745
Cash and Cash Equivalents at End of Period
$
182,127
$
188,084
APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND
SUBSIDIARIES
SUPPLEMENTAL
INFORMATION
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
(Unaudited)
(In thousands)
The Company supplemented the
reporting of financial information determined under U.S. generally
accepted accounting principles (GAAP) with reporting of non-GAAP
financial measures. The Company believes that these non-GAAP
measures provide meaningful information to assist shareholders in
understanding financial results, assessing prospects for future
performance, and provide a better baseline for analyzing trends in
our underlying businesses. Because non-GAAP financial measures are
not standardized, it may not be possible to compare these financial
measures with other companies' non-GAAP financial measures having
the same or similar names. These non-GAAP financial measures should
not be considered in isolation or as a substitute for reported
results. These non-GAAP financial measures reflect an additional
way of viewing aspects of operations that, when viewed with GAAP
results, provide a more complete understanding of the business. The
Company strongly encourages investors and shareholders to review
company financial statements and publicly filed reports in their
entirety and not to rely on any single financial measure.
Reconciliation of Net income and Net income per share, GAAP
financial measures, with Adjusted Net income andAdjusted Net income
per share, non-GAAP financial measures: Three Months
Ended March 31, 2023 Pre-tax Tax Effect Net of
Tax Per ShareDiluted Impact Tax Rate Net
income and net income per share
$
122,280
$
25,093
$
97,187
$
2.47
20.5
%
Tax valuation allowance adjustment, net
-
3,657
(3,657
)
(0.09
)
3.0
%
Adjusted net income and net income per share
$
122,280
$
28,750
$
93,530
$
2.38
23.5
%
Nine Months Ended March 31, 2023 Pre-tax
Tax Effect Net of Tax Per ShareDiluted Impact
Tax Rate Net income and net income per share
$
327,274
$
72,750
$
254,524
$
6.49
22.2
%
Tax valuation allowance adjustment, net
-
3,657
(3,657
)
(0.09
)
1.1
%
Adjusted net income and net income per share
$
327,274
$
76,407
$
250,867
$
6.40
23.3
%
Reconciliation of Net Income, a GAAP financial measure, to
EBITDA, a non-GAAP financial measure:
Three Months Ended March
31,
Nine Months Ended March
31,
2023
2022
2023
2022
Net Income
$
97,187
$
68,306
$
254,524
$
178,301
Interest expense, net
4,773
5,852
17,438
20,249
Income tax expense
25,093
21,216
72,750
50,796
Depreciation and amortization of property
5,565
5,352
16,598
16,215
Amortization of intangibles
7,670
7,891
23,189
24,096
EBITDA
$
140,288
$
108,617
$
384,499
$
289,657
The Company defines EBITDA as Earnings from operations
before Interest, Taxes, Depreciation, and Amortization, a non-GAAP
financial measure. EBITDA excludes items that may not be indicative
of core operating results, a non-GAAP financial measure.
Reconciliation of Net Cash provided by Operating activities, a
GAAP financial measure, to Free Cash Flow, a non-GAAP financial
measure:
Three Months Ended March
31,
Nine Months Ended March
31,
2023
2022
2023
2022
Net Cash provided by Operating Activities
$
75,204
$
52,559
$
164,027
$
133,823
Capital expenditures
(7,992
)
(4,164
)
(20,809
)
(11,674
)
Free Cash Flow
$
67,212
$
48,395
$
143,218
$
122,149
Free cash flow is defined as net cash provided by operating
activities less capital expenditures, a non-GAAP financial measure.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230427005108/en/
Ryan D. Cieslak Director – Investor Relations & Treasury
216-426-4887 / rcieslak@applied.com
Applied Industrial Techn... (NYSE:AIT)
Graphique Historique de l'Action
De Avr 2024 à Mai 2024
Applied Industrial Techn... (NYSE:AIT)
Graphique Historique de l'Action
De Mai 2023 à Mai 2024