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Applied Industrial Technologies Reports Fiscal 2012 Third Quarter Results and Declares Quarterly Dividend

 

CLEVELAND, April 26, 2012 /PRNewswire-FirstCall/ -- Applied Industrial Technologies (NYSE: AIT) today reported third quarter fiscal 2012 sales and earnings for the three months ended March 31, 2012.  

Net sales for the third quarter increased 7.0% to $605.5 million from $566.0 million in the comparable period a year ago.  Net income for the quarter increased 10.9% to $29.4 million, or $0.69 per share, compared to $26.5 million, or $0.61 per share, last year.

For the nine months ended March 31, 2012, sales increased 8.2% to $1.76 billion from $1.62 billion in the same period last year.  Net income increased 12.0% to $76.7 million, or $1.79 per share, compared to $68.5 million, or $1.58 per share, last year.

Commenting on the Company's performance, Applied's Chief Executive Officer Neil A. Schrimsher said, "We had solid business performance in the third quarter, continuing our sound operating discipline and focus on operational excellence.  We effectively translated our sales gains into good profit contribution, while continuing our asset management execution and strong cash generation.  As we finalize our long-range strategic plans, we are encouraged by our opportunities to generate profitable growth and increase shareholder value.

"Entering the final quarter of our fiscal year, we are operating in an active industrial economic environment.  We are maintaining our full fiscal 2012 sales guidance of $2.35 billion to $2.45 billion, and we are narrowing our earnings per share guidance to between $2.45 and $2.55 per share," said Schrimsher.

In addition, Mr. Schrimsher announced today that the Company's Board of Directors declared a quarterly cash dividend of $0.21 per common share, payable on May 31, 2012, to shareholders of record on May 15, 2012.

The Company will host its quarterly conference call for investors and analysts at 4 p.m. ET on April 26, 2012.  To join the call, dial 1-800-927-0469 or 1-847-944-7323 (for International callers) using passcode 32073750.  The call will be conducted by CEO Neil A Schrimsher, President & COO Benjamin J. Mondics, and Vice President & CFO Mark O. Eisele.  A live audio webcast can be accessed online at www.Applied.com.  A replay of the call will be available for two weeks by dialing 1-888-843-7419 or 1-630-652-3042 (International) using passcode 32073750.

With approximately 480 facilities and 4,600 employee associates, Applied Industrial Technologies is a leading industrial distributor that offers more than 4 million parts critical to the operations 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, plus solutions to meet inventory and storeroom management needs that help provide enhanced value to its customers.  For its fiscal year ended June 30, 2011, Applied posted sales of $2.2 billion.  Applied can be visited on the Internet at http://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. Forward-looking statements are often identified by qualifiers such as "guidance" and similar expressions. Applied intends that such forward-looking statements be subject to the safe harbors created thereby. 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 the Company 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, except as required by law.

 APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED STATEMENTS OF CONSOLIDATED INCOME

(In thousands, except per share data)




Three Months Ended
March 31,

Nine Months Ended
March 31,


2012

2011

2012

2011

Net Sales

$                605,461

$                      565,970

$            1,755,432

$            1,622,988

Cost of sales

437,848

409,404

1,273,646

1,179,021

Gross Profit

167,613

156,566

481,786

443,967

Selling, distribution and administrative,





  including depreciation

125,594

118,365

363,165

337,819

Operating Income

42,019

38,201

118,621

106,148

Interest expense, net

54

52

111

1,634

Other (income) expense, net

(1,887)

(2,645)

823

(3,409)

Income Before Income Taxes

43,852

40,794

117,687

107,923

Income Tax Expense

14,434

14,258

40,952

39,439

Net Income

$                  29,418

$                        26,536

$                 76,735

$                 68,484

Net Income Per Share - Basic

$                      0.70

$                            0.63

$                     1.82

$                     1.61

Net Income Per Share - Diluted

$                      0.69

$                            0.61

$                     1.79

$                     1.58

Average Shares Outstanding - Basic

42,109

42,446

42,157

42,409

Average Shares Outstanding - Diluted

42,779

43,339

42,838

43,254



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.


There were no LIFO layer liquidation benefits recognized for the nine months ended March 31, 2012.  We recorded overall LIFO benefits in the quarter and nine months ended March 31, 2011 of $0.4 million and $2.5 million, respectively, and LIFO reserves were reduced by the same amount.



APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)





March 31,


June 30,


2012


2011


Assets




 Cash and cash equivalents

$                79,408


$              91,092

 Accounts receivable, less allowances of $8,570 and $7,016

307,660


290,751

 Inventories

230,035


204,066

 Other current assets

31,897


33,005

      Total current assets

649,000


618,914

 Property, net

78,464


69,014

 Intangibles, net

88,768


89,551

 Goodwill

84,690


76,981

 Other assets

53,414


60,471

Total Assets

$              954,336


$            914,931





Liabilities




 Accounts payable

$              124,614


$            108,509

 Other accrued liabilities

101,081


106,179

      Total current liabilities

225,695


214,688

 Other liabilities

56,432


66,680

Total Liabilities

282,127


281,368

Shareholders' Equity

672,209


633,563

Total Liabilities and Shareholders' Equity

$              954,336


$            914,931



APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS

(In thousands)










Nine Months Ended


March 31,


2012


2011





Cash Flows from Operating Activities




Net income

$76,735


$68,484

Adjustments to reconcile net income to net cash provided




  by operating activities:




  Depreciation and amortization of property

8,388


8,466

  Amortization of intangibles

8,455


8,468

  Amortization of stock options and appreciation rights

1,810


2,169

  Gain on sale of property

(626)


(687)

  Other share-based compensation expense

3,470


3,103

  Changes in assets and liabilities, net of acquisitions

(39,625)


(29,275)

  Other, net

3,364


3,254

Net Cash provided by Operating Activities

61,971


63,982

Cash Flows from Investing Activities




Property purchases

(18,295)


(16,446)

Proceeds from property sales

1,209


1,079

Net cash paid for acquisition of businesses, net of cash acquired

(14,297)


(27,739)

Other



1,722

Net Cash used in Investing Activities

(31,383)


(41,384)

Cash Flows from Financing Activities




Repayments under revolving credit facility



(50,000)

Long-term debt repayment



(25,000)

Settlements of cross currency swap agreements



(12,752)

Purchase of treasury shares

(18,990)


(4,491)

Dividends paid

(24,939)


(21,649)

Excess tax benefits from share-based compensation

2,263


1,250

Exercise of stock options and appreciation rights

324


477

Net Cash used in Financing Activities

(41,342)


(112,165)

Effect of Exchange Rate Changes on Cash

(930)


2,349

Decrease in cash and cash equivalents

(11,684)


(87,218)

Cash and cash equivalents at beginning of period

91,092


175,777

Cash and Cash Equivalents at End of Period

$ 79,408


$ 88,559



SOURCE Applied Industrial Technologies

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