Applied Industrial Technologies — one of the few publicly-traded companies on Industrial Distribution's Big 50 List (No. 9) with a non-traditional fiscal calendar — reported its 2022 first quarter financial results on Oct. 27. The results were led by continued strong year-over-year sales growth for the industrial distributor and technical solutions provider that continues to ramp up its automation offerings via acquisitions.
Cleveland-based Applied — which distributes industrial motion, fluid power, flow control, automation and related maintenance supplies, posted total Q1 (July-September) sales of $892 million — a Q1 company record, up 19.2 percent year-over-year and narrowly trailing Q4's $896 million. Q1 organic sales jumped 16.3 percent, following 19.8 percent growth in Q4. Applied said the organic growth was led by strong growth in both its Service Center and Fluid Power & Flow Control segments.
By business segment in Q1:
- Service Center — which includes Applied's legacy distribution operations that include about 400 local service centers — sales of $601 million grew 17.1 percent year-over-year, with organic sales up 15.9 percent. Operating profit was $65 million.
- Fluid Power & Flow Control sales of $291 million jumped 24.0 percent year-over-year, with organic sales up 17.4 percent. Operating profit was $35 million.
Applied's Q1 gross profit jumped 18.3 percent year-over-year, with margin of 28.6 percent down 22 basis points. Q1 operating profit of $75 million jumped 42.6 percent. The company's total net profit was $53 million, up 52.3 percent year-over-year.
Applied is forecasting fiscal 2022 full-year sales growth of 8 to 10 percent, with organic growth of 7 to 9 percent.
Applied said that 25 of its top 30 industry verticals saw year-over-year growth in Q1, with the strongest trends in technology, chemicals, mining, lumber & wood, paper, aggregates and machinery.
Applied had full-year 2021 fiscal sales of $3.24 billion, down 0.3 percent from 2020, with organic sales down 1.8 percent and total profit of $145 million dwarfing 2020's $24 million.
"Looking ahead, supply chain and inflationary pressures across the industrial sector present ongoing uncertainty to our near-term outlook," said Neil Schrimsher, Applied president & CEO. "That said, underlying demand remains resilient entering our fiscal second quarter with organic sales up by a mid-teens percent year over year so far in October, while order and backlog trends are encouraging."