Applied Industrial Technologies' sales increase 15.8%
Applied Industrial Technologies, a value-added distributor and technical solutions provider of industrial motion, fluid power, flow control, automation technologies, and related maintenance supplies, reported results for its fiscal 2023 fourth quarter and full year ended June 30, 2023.
Net sales for the quarter increased 9.1% to $1.2 billion from $1.1 billion in the prior year. The change includes a 0.7% increase from acquisitions, offset by a negative 0.2% impact from foreign currency translation. Excluding these factors, sales increased 8.6% on an organic basis reflecting a 9.1% increase in the Service Center segment and a 7.5% increase in the Engineered Solutions segment. The company reported net income of $92.2 million, or $2.35 per share, and EBITDA of $140.0 million. On a pre-tax basis, results include $8.1 million ($0.15 after tax per share) of LIFO expense compared to $10.8 million ($0.22 after tax per share) of LIFO expense in the prior-year period.
For the 12 months ended June 30, 2023, sales of $4.4 billion increased 15.8% compared with the prior year, or 15.7% on an organic basis. Net income was $346.7 million, or $8.84 per share, and EBITDA was $524.5 million. Non-GAAP adjusted net income was $343.1 million, or $8.75 per share. On a pre-tax basis, full-year results include $34.2 million ($0.66 after tax per share) of LIFO expense compared to $26.5 million ($0.53 after tax per share) of LIFO expense in the prior-year period.
“We had a strong finish to fiscal 2023 with fourth quarter sales, EBITDA, and EPS exceeding our expectations, said President & Chief Executive Officer Neil A. Schrimsher. "Sales grew a solid 9% organically over the prior year against challenging comparisons. While broader end-market activity was more mixed, underlying demand for our differentiated portfolio of technical solutions and service capabilities remained firm as secular tailwinds and our sales initiatives continue to gain momentum. At the same time, we expanded gross margins by 35 basis points over the prior year, produced double-digit EBITDA growth for the tenth straight quarter, and generated record free cash flow. Overall, fiscal 2023 was a pivotal year for our business with sales exceeding $4 billion and EBITDA margins reaching record highs on the back of top-tier organic growth, steadfast execution, and ongoing expansion of our next-generation Automation platform. This underlying performance further validates the power of the Applied team and our position in today’s industrial economy.
“Moving into fiscal 2024, we remain focused on meeting the needs of our customers and continuing to progress towards our long-term strategic objectives as we navigate an uncertain macroeconomic backdrop," Schrimsher added. "Through early August, organic sales are up by a low single-digit percent compared to prior-year levels. We expect broader market activity to moderate further near term as customers normalize production levels and manage through a higher interest rate environment. That said, we continue to believe any near-term slowdown will be transitional and short in nature given positive tailwinds underpinning the industrial sector, and a greater focus on supply chain reliability and capacity investments. In addition, we remain constructive on our growth potential beyond cycle conditions considering our exposure to secular tailwinds, sustained share gain opportunities, and continued momentum around our cross-selling initiative. We also expect another meaningful year of cash generation, which combined with our strong balance sheet provides significant M&A fire power and capital deployment capacity to enhance returns for all stakeholders.”
Highlights:
- Fourth Quarter Net Sales of $1.2 Billion Up 9.1% YoY; Up 8.6% on an Organic Basis
- Fourth Quarter Net Income of $92.2 Million, or $2.35 Per Share Up 16.1% YoY
- Fourth Quarter EBITDA of $140.0 Million Up 16.7% YoY
- Full-Year Net Sales of $4.4 Billion Up 15.8% YoY; Up 15.7% on an Organic Basis
- Full-Year Net Income of $346.7 Million, or $8.84 Per Share
- Full-Year Adjusted Net Income of $343.1 Million, or $8.75 Per Share Up 32.9% YoY
- Full-Year EBITDA of $524.5 Million Up 28.1% YoY
- Establishes Fiscal 2024 Guidance and Updates Intermediate Financial Objectives
Read more details here.
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