Applied Industrial Technologies on Thursday posted a slight increase in sales during its fiscal fourth quarter, wrapping up the full year with a 1.5% increase in annual revenue.
The Cleveland-based distributor — no. 8 on ID’s most recent Big 50 — reported $4.48 billion in sales in the 12 months ending June 30, up from $4.41 billion in revenue during the previous fiscal year. Full-year gross profit rose from $1.29 billion to $1.34 billion over that span, while operating income and net income climbed from $473 million and $347 million, respectively, to $496 million and $386 million.
In the final quarter of the year, Applied reported $1.16 billion in sales. Although that represented a 0.2% year-over-year increase, the company’s recent acquisitions and additional business days in the quarter bolstered the overall number; on a daily average basis, organic sales were down 2%.
Quarterly profit, operating income and net income, however, were up in the quarter — the latter at a 12.6% clip.
Applied President and CEO Neil Schrimsher said in a statement that the company saw a greater end-market slowdown than previously expected as the fourth quarter progressed. Its fluid power business, in particular, suffered amid inventory de-stocking and reduced OEM production, while its service center segment saw mixed results due to more conservative customer MRO spending.
“These results provide further evidence of the benefits our strategy, ongoing evolution, and operational discipline can deliver in any environment, as well as the margin improvement potential ahead as we continue to leverage our differentiated industry position and internal initiatives,” Schrimsher said.
Although he said the company could benefit from several “potential catalysts on the horizon,” Applied’s initial forecast for the new fiscal year anticipates sales ranging from 2.5% below last year’s total to 2.5% above it.
“We believe industrial activity could remain muted near term as customers await clarity on interest rates and the upcoming U.S. election,” Schrimsher said.
Applied also announced its acquisition of two companies in its earnings release: Total Machine Solutions, a New Jersey power transmission distributor, and Ohio hydraulics and pneumatics provider Stanley Proctor. Terms of the deals were not disclosed.
The company on Wednesday announced the election of Microchip Technology executive Rich Simoncic to its board of directors, replacing Dan Komnenovich, who will depart after reaching the mandatory retirement age of 72.
