Applied Industrial Technologies Reports Fiscal 2014 First Quarter Results and Declares Dividend
CLEVELAND, Oct. 30, 2013 /PRNewswire-FirstCall/ -- Applied Industrial Technologies (NYSE: AIT) today reported first quarter fiscal 2014 sales and earnings for the three months ended September 30, 2013.
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Net sales for the quarter were $605.3 million, a decrease of less than 1% when compared with $610.5 million in the same quarter a year ago. Net income for the quarter was $26.8 million, or $0.63 per share, compared with $29.5 million, or $0.70 per share, in the first quarter of fiscal 2013.
Commenting on the results, Applied's President & Chief Executive Officer Neil A. Schrimsher said, "First quarter sales were below our expectations, as weaker industrial demand continued. Our earnings in the quarter were impacted by the lower volume along with our continued strategic investments across the Service Centers, Fluid Power businesses and Applied MSS.
"Based on the current industrial economic activity and near-term outlook, we are revising our full-year fiscal 2014 sales guidance to a range of $2.43 billion to $2.49 billion. Our full-year fiscal 2014 EPS guidance is revised to a range of $2.65 to $2.95 per share.
"While some economic uncertainty lingers, we are confident about our ability to perform in this industrial economy based on our strong market position, our dedicated associates, and our focused plan to accelerate growth and improve profitability. We are committed to expanding our value-add, extending our market reach, and enhancing our capabilities to serve our customers and generate shareholder value."
In addition, Mr. Schrimsher announced that the Company's Board of Directors declared a quarterly cash dividend of $0.23 per common share, payable on November 29, 2013, to shareholders of record on November 15, 2013.
During the quarter, the Company purchased 60,700 shares of its common stock in open market transactions for $3.0 million. At September 30, 2013, the Company had remaining authorization to purchase 1,080,000 additional shares.
Applied will host its quarterly conference call for investors and analysts at 10 a.m. ET on October 30. The call will be conducted by President & CEO Neil A. Schrimsher and CFO Mark O. Eisele. To join the call, dial 1-800-927-0469 or 1-847-944-7323 (for International callers) prior to the scheduled start using passcode 35737128. A live audio webcast can be accessed online at www.applied.com. A replay of the call will be available for two weeks by dialing 1-888-843-7419 or 1-630-652-3042 (International) using passcode 35737128.
With more than 500 facilities and 5,000 employee associates, Applied Industrial Technologies is a leading industrial distributor that offers more than five million parts to serve the needs of MRO and OEM customers in virtually every industry. In addition, Applied provides engineering, design and systems integration for industrial and fluid power applications, as well as customized mechanical, fabricated rubber and fluid power shop services. Applied also offers maintenance training and inventory management solutions that provide added value to its customers. Applied can be visited on the Internet at 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 "outlook," "guidance" and similar expressions. All forward-looking statements are based on current expectations regarding important risk factors including trends in the industrial sector of the economy, and other risk factors identified in Applied's most recent periodic report and other filings made with the Securities and Exchange Commission. 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.
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APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES | ||
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CONDENSED STATEMENTS OF CONSOLIDATED INCOME | ||
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(In thousands, except per share data) | ||
|
Three Months Ended | ||
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2013 |
2012 | |
|
Net Sales |
$ 605,305 |
$ 610,519 |
|
Cost of sales |
435,510 |
445,986 |
|
Gross Profit |
169,795 |
164,533 |
|
Selling, distribution and administrative, |
||
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including depreciation |
130,256 |
120,215 |
|
Operating Income |
39,539 |
44,318 |
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Interest expense, net |
61 |
25 |
|
Other (income) expense, net |
(1,091) |
(459) |
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Income Before Income Taxes |
40,569 |
44,752 |
|
Income Tax Expense |
13,725 |
15,220 |
|
Net Income |
$ 26,844 |
$ 29,532 |
|
Net Income Per Share - Basic |
$ 0.64 |
$ 0.70 |
|
Net Income Per Share - Diluted |
$ 0.63 |
$ 0.70 |
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Average Shares Outstanding - Basic |
42,157 |
41,966 |
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Average Shares Outstanding - Diluted |
42,637 |
42,477 |
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||
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(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. | ||
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There were no LIFO layer liquidation benefits recognized for the quarters ended September 30, 2013 and 2012. | ||
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(2) Effective July 1, 2013, the Company aligned the consolidation of the Company's Canadian subsidiaries in the consolidated financial statements which previously included results on a one month reporting lag. The Company has determined that the effect of this change is not material to the financial statements for all periods presented and therefore has not presented retrospective application of this change. The net impact of the lag elimination was $1.2 million of additional income and has been included within "Other (income) expense, net" on the Condensed Statements of Consolidated Income for the quarter ended September 30, 2013. |
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APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES | ||||||
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CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
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(Amounts in thousands) | ||||||
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September 30, |
June 30, | |||||
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Assets |
||||||
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Cash and cash equivalents |
$ 76,877 |
$ 73,164 | ||||
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Accounts receivable, less allowances of $7,582 and $7,937 |
320,281 |
329,880 | ||||
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Inventories |
302,404 |
281,417 | ||||
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Other current assets |
34,174 |
52,819 | ||||
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Total current assets |
733,736 |
737,280 | ||||
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Property, net |
81,149 |
83,243 | ||||
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Goodwill |
106,973 |
106,849 | ||||
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Intangibles, net |
87,961 |
91,267 | ||||
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Other assets |
40,270 |
40,067 | ||||
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Total Assets |
$ 1,050,089 |
$ 1,058,706 | ||||
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Liabilities |
||||||
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Accounts payable |
$ 131,195 |
$ 136,575 | ||||
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Other accrued liabilities |
94,380 |
109,325 | ||||
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Total current liabilities |
225,575 |
245,900 | ||||
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Other liabilities |
49,892 |
53,191 | ||||
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Total Liabilities |
275,467 |
299,091 | ||||
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Shareholders' Equity |
774,622 |
759,615 | ||||
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Total Liabilities and Shareholders' Equity |
$ 1,050,089 |
$ 1,058,706 | ||||
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APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES | ||||
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CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS | ||||
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(In thousands) | ||||
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Three Months Ended | ||||
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2013 |
2012 | |||
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Cash Flows from Operating Activities |
||||
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Net income |
$ 26,844 |
$ 29,532 | ||
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Adjustments to reconcile net income to net cash provided |
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by operating activities: |
||||
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Depreciation and amortization of property |
3,431 |
3,022 | ||
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Amortization of intangibles |
3,249 |
3,055 | ||
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Amortization of stock appreciation rights and options |
636 |
809 | ||
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Loss (gain) on sale of property |
35 |
(117) | ||
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Other share-based compensation expense |
754 |
1,035 | ||
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Changes in assets and liabilities, net of acquisitions |
(18,014) |
(13,456) | ||
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Other, net |
21 |
67 | ||
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Net Cash provided by Operating Activities |
16,956 |
23,947 | ||
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Cash Flows from Investing Activities |
||||
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Property purchases |
(1,571) |
(3,892) | ||
|
Proceeds from property sales |
183 |
243 | ||
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Net cash paid for acquisition of businesses, net of cash acquired |
- |
(35,409) | ||
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Net Cash used in Investing Activities |
(1,388) |
(39,058) | ||
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Cash Flows from Financing Activities |
||||
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Purchases of treasury shares |
(3,001) |
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Dividends paid |
(9,746) |
(8,867) | ||
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Excess tax benefits from share-based compensation |
1,516 |
1,168 | ||
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Acquisition holdback payments |
(606) |
(760) | ||
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Exercise of stock appreciation rights and options |
- |
36 | ||
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Net Cash used in Financing Activities |
(11,837) |
(8,423) | ||
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Effect of Exchange Rate Changes on Cash |
(18) |
1,765 | ||
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Increase (decrease) in cash and cash equivalents |
3,713 |
(21,769) | ||
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Cash and cash equivalents at beginning of period |
73,164 |
78,442 | ||
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Cash and Cash Equivalents at End of Period |
$ 76,877 |
$ 56,673 | ||
SOURCE Applied Industrial Technologies
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