Applied Industrial Technologies on Thursday reported increased sales and sharply higher earnings in the first quarter of its new fiscal year.
The Cleveland-based industrial motion and fluid power distributor — no. 8 on ID’s recently revealed Big 50 — announced quarterly sales of nearly $1.1 billion, a 3.1% increase compared to the same quarter last year, and net income of nearly $94 million, which was up 21.3% over that span.
The company outlined a boost in its sales numbers from acquisitions and from foreign currency translations, but one fewer selling day in the most recent quarter curtailed its overall total. Gross profit, operating income and EBITDA also increased year-over-year, and company officials said Applied also saw “favorable margin performance.”
“Considering the expected moderating sales growth environment, these results reflect another solid quarter of operational execution from our Applied team,” Applied President and CEO Neil Schrimsher said in a statement.
Schrimsher said the company’s service center segment experienced “resilient” underlying demand, while more diverse end-markets and growth tailwinds offset a more sluggish technology sector and “ongoing supply chain headwinds” in its engineered solutions division. Applied is also poised to grow in the Eastern U.S. in the wake of two bolt-on acquisitions by its service center segment.
The company raised its full-year sales growth forecast from 0% to 4% at the outset of the new fiscal year to the current 1% to 4%; Applied also expects earnings per share of $9.25 to $9.80 and EBITDA margins of 12% to 12.3%, up from $8.80 to $9.55 and 11.9% to 12.1%, respectively.
“We have yet to see any broad signs of a material demand reduction across our end markets, though we expect sales growth will remain muted near term as production activity and supply chains continue to normalize,” Schrimsher said.
