Applied Industrial Technologies Reports Fiscal 2015 First Quarter Results, Declares Dividend and Announces New Stock Repurchase Plan
- Sales up 16%; EPS up 10.5%
CLEVELAND, Oct. 29, 2014 /PRNewswire/ -- Applied Industrial Technologies (NYSE: AIT) today reported first quarter fiscal 2015 sales and earnings for the three months ended September 30, 2014.
Net sales for the quarter grew 16% to $702.3 million from $605.3 million in the same quarter a year ago. Net income for the quarter increased to $29.1 million from $26.8 million, and earnings per share rose 10.5% to $0.70 per share, compared with $0.63 per share in the first quarter of fiscal 2014.
Commenting on the results, Applied's President & Chief Executive Officer Neil A. Schrimsher said, "We are pleased to report a solid start to the fiscal year with double-digit sales and earnings per share growth for the quarter. Our overall sales increase reflects a 13.3% lift from our recent acquisitions and a 3.2% contribution from core underlying operations, offset by a negative foreign currency translation impact of 0.5%.
"We enter our second quarter with positive momentum, and we are well-positioned for continued improvements in sales, operations and earnings. All across Applied, we are focused on expanding our value-add, extending our market reach, and enhancing our capabilities to serve our customers.
"Looking ahead, we see an industrial market that offers continued opportunities for growth, and we are maintaining our full fiscal 2015 guidance for earnings per share between $2.95 and $3.20 per share, on a sales increase of 13% - 16%."
In addition, Mr. Schrimsher announced that the Company's Board of Directors declared a quarterly cash dividend of $0.25 per common share, payable on November 28, 2014, to shareholders of record on November 14, 2014.
During the quarter, the Company purchased 214,000 shares of its common stock in open market transactions for $10.4 million. At September 30, 2014, the Company had remaining authorization to purchase 167,600 additional shares. In addition, on October 27, the Board of Directors authorized the repurchase of up to an additional 1.5 million shares of the Company's common stock – a plan that replaces the prior share repurchase plan. The new authorization represents approximately 4% of the shares currently outstanding, and these purchases can be made in open market and negotiated transactions.
"The Board's authorization of a new stock repurchase plan reflects our confidence in the Company's financial strength and strategic plan, and our ongoing commitment to generating increased shareholder value," added Mr. Schrimsher.
Applied will host its quarterly conference call for investors and analysts at 10 a.m. ET on October 29. Neil A. Schrimsher – President & CEO, and Mark O. Eisele – CFO will discuss the Company's performance. To join the call, dial 1-800-755-1805 or 1-212-231-2910 (for International callers). 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 1-800-633-8284 or 1-402-977-9140 (International) using passcode 21734241.
With more than 560 facilities and 5,800 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 "see," "guidance," 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, 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.
| APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES |
||
| CONDENSED STATEMENTS OF CONSOLIDATED INCOME |
||
| (In thousands, except per share data) |
||
| Three Months Ended |
||
| 2014 |
2013 |
|
| Net Sales |
$ 702,325 |
$ 605,305 |
| Cost of sales |
507,393 |
435,510 |
| Gross Profit |
194,932 |
169,795 |
| Selling, distribution and administrative, |
||
| including depreciation |
148,767 |
130,256 |
| Operating Income |
46,165 |
39,539 |
| Interest expense, net |
1,662 |
61 |
| Other (income) expense, net |
244 |
(1,091) |
| Income Before Income Taxes |
44,259 |
40,569 |
| Income Tax Expense |
15,137 |
13,725 |
| Net Income |
$ 29,122 |
$ 26,844 |
| Net Income Per Share - Basic |
$ 0.70 |
$ 0.64 |
| Net Income Per Share - Diluted |
$ 0.70 |
$ 0.63 |
| Average Shares Outstanding - Basic |
41,467 |
42,157 |
| Average Shares Outstanding - Diluted |
41,829 |
42,637 |
| 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 |
||||||
| (Amounts in thousands) |
||||||
| September 30, |
June 30, |
|||||
| Assets |
||||||
| Cash and cash equivalents |
$ 52,033 |
$ 71,189 |
||||
| Accounts receivable, less allowances of $10,513 and $10,385 |
403,521 |
375,732 |
||||
| Inventories |
367,291 |
335,747 |
||||
| Other current assets |
51,915 |
53,480 |
||||
| Total current assets |
874,760 |
836,148 |
||||
| Property, net |
106,683 |
103,596 |
||||
| Goodwill |
259,156 |
193,494 |
||||
| Intangibles, net |
208,497 |
159,508 |
||||
| Other assets |
19,823 |
41,423 |
||||
| Total Assets |
$ 1,468,919 |
$ 1,334,169 |
||||
| Liabilities |
||||||
| Accounts payable |
$ 145,614 |
$ 172,401 |
||||
| Current portion of long-term debt |
2,842 |
2,720 |
||||
| Other accrued liabilities |
123,526 |
115,834 |
||||
| Total current liabilities |
271,982 |
290,955 |
||||
| Long-term debt |
321,418 |
167,992 |
||||
| Other liabilities |
84,814 |
74,914 |
||||
| Total Liabilities |
678,214 |
533,861 |
||||
| Shareholders' Equity |
790,705 |
800,308 |
||||
| Total Liabilities and Shareholders' Equity |
$ 1,468,919 |
$ 1,334,169 |
||||
| APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES |
||||
| CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS |
||||
| (In thousands) |
||||
| Three Months Ended |
||||
| 2014 |
2013 |
|||
| Cash Flows from Operating Activities |
||||
| Net income |
$ 29,122 |
$ 26,844 |
||
| Adjustments to reconcile net income to net cash provided |
||||
| by operating activities: |
||||
| Depreciation and amortization of property |
4,211 |
3,431 |
||
| Amortization of intangibles |
6,491 |
3,249 |
||
| Amortization of stock appreciation rights and options |
577 |
636 |
||
| (Gain) loss on sale of property |
(5) |
35 |
||
| Other share-based compensation expense |
592 |
754 |
||
| Changes in assets and liabilities, net of acquisitions |
(58,891) |
(18,014) |
||
| Other, net |
(198) |
21 |
||
| Net Cash provided by (used in) Operating Activities |
(18,101) |
16,956 |
||
| Cash Flows from Investing Activities |
||||
| Property purchases |
(3,100) |
(1,571) |
||
| Proceeds from property sales |
3 |
183 |
||
| Acquisition of businesses, net of cash acquired |
(129,810) |
- |
||
| Net Cash used in Investing Activities |
(132,907) |
(1,388) |
||
| Cash Flows from Financing Activities |
||||
| Net borrowings under revolving credit facility |
34,000 |
- |
||
| Long-term debt borrowings |
120,238 |
- |
||
| Long-term debt repayments |
(690) |
- |
||
| Purchases of treasury shares |
(10,400) |
(3,001) |
||
| Dividends paid |
(10,402) |
(9,746) |
||
| Excess tax benefits from share-based compensation |
556 |
1,516 |
||
| Acquisition holdback payments |
- |
(606) |
||
| Net Cash provided by (used in) Financing Activities |
133,302 |
(11,837) |
||
| Effect of Exchange Rate Changes on Cash |
(1,450) |
(18) |
||
| Increase (decrease) in cash and cash equivalents |
(19,156) |
3,713 |
||
| Cash and cash equivalents at beginning of period |
71,189 |
73,164 |
||
| Cash and Cash Equivalents at End of Period |
$ 52,033 |
$ 76,877 |
||
SOURCE Applied Industrial Technologies
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