Applied industrial technologies reports fiscal 2023 second quarter results
Cleveland--(business wire)--applied industrial technologies (nyse: ait), a leading value-added distributor and technical solutions provider of industrial motion, fluid power, flow control, automation technologies, and related maintenance supplies, today reported results for its fiscal 2023 second quarter ended december 31, 2022. net sales for the quarter increased 20.9% to $1.1 billion from $876.9 million in the prior year. the change includes a 0.5% increase from acquisitions, offset by a negative 0.7% impact from foreign currency translation. excluding these factors, sales increased 21.1% on an organic basis across both the service center segment and engineered solutions segment. the company reported net income of $80.5 million, or $2.05 per share, and ebitda of $125.5 million. on a pre-tax basis, results include $8.9 million ($0.17 after tax per share) of lifo expense compared to $4.7 million ($0.09 after tax per share) of lifo expense in the prior-year period. neil a. schrimsher, applied’s president & chief executive officer, commented, “we had another solid quarter with organic sales growth exceeding 21% against difficult comparisons. the broader u.s. manufacturing environment remained productive during the quarter, and we continue to benefit from our internal sales initiatives, industry position, and channel capabilities. this is presenting recurring growth opportunities across both legacy and new market verticals. from technical mro support to advanced engineered solutions, we are playing a broader and more integral role across the industrial supply chain as customers embrace service requirements and investments. concurrently, we continue to control costs and leverage operational enhancements, resulting in record ebitda margins and notable eps growth. overall, these results further demonstrate our enhanced growth profile and earnings power as we capitalize on our strategy and various secular, structural, and company-specific tailwinds.” mr. schrimsher added, “based on our second quarter performance and updated outlook, we are raising fiscal 2023 guidance for sales, ebitda margins, and eps. while order rates are gradually normalizing and macro uncertainty is persisting, i am encouraged by our performance year to date and ongoing company-specific growth and margin opportunities moving forward. organic sales are up by a low-twenty percent month to date in january compared to prior-year levels. underlying industrial sector fundamentals within north america remain favorable long term, and we expect ongoing benefits from a more diverse mix of growth tailwinds tied to our channel strategy and business evolution in recent years. in addition, our cash generation and balance sheet provide capacity to supplement our growth going forward. this includes the ongoing build-out of our advanced automation platform, as highlighted by the acquisition of automation, inc. in early november 2022. overall, i am proud of our team’s continued effort, and we look forward to further showcasing the strength of our differentiated industry position into the second half of fiscal 2023 and beyond.” updated fiscal 2023 guidance for fiscal 2023, the company now projects eps of $8.10 to $8.50 (prior $6.90 to $7.55), sales growth of 13% to 15% (prior 5% to 9% including 6% to 10% on an organic basis) and ebitda margins of 11.5% to 11.7% (prior 10.9% to 11.2%). guidance incorporates ongoing economic uncertainty, inflationary pressures, and supply chain headwinds. guidance does not assume contribution from potential future acquisitions. dividend today the company also announced that its board of directors approved an increase in the quarterly cash dividend to $0.35 per common share, payable on february 28, 2023, to shareholders of record on february 15, 2023. this represents the 14th dividend increase since 2010. conference call information applied will host its quarterly conference call for investors and analysts at 10 a.m. et on january 26, 2023. neil a. schrimsher – president & ceo, and david k. wells – cfo will discuss the company's performance. a supplemental investor presentation detailing latest quarter results and the company’s outlook is available for reference on the investor relations portion of the company’s website at www.applied.com. to join the call, dial 877-248-0132 (toll free) or 212-231-2902 (for international callers) using conference id 22024595. a live audio webcast can be accessed online through the investor relations portion of the company's website at www.applied.com. a replay of the call will be available for two weeks by dialing 800-633-8625 or 402-977-9141 (international) using conference id 22024595. about applied® applied industrial technologies is a leading value-added distributor and technical solutions provider of industrial motion, fluid power, flow control, automation technologies, and related maintenance supplies. our leading brands, specialized services, and comprehensive knowledge serve mro and oem end users in virtually all industrial markets through our multi-channel capabilities that provide choice, convenience, and expertise. for more information, visit 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. applied intends that such forward-looking statements be subject to the safe harbors created thereby. forward-looking statements are often identified by qualifiers such as "expect," “will,” “guidance,” “projects,” “assume”, and derivative or similar expressions. all forward-looking statements are based on current expectations regarding important risk factors including trends in the industrial sector of the economy (such as the inflationary environment and supply chain strains), the effects of the health crisis associated with the covid-19 pandemic on our business operations, results of operations, and financial condition, and other risk factors identified in applied's most recent periodic report and other filings made with the securities and exchange commission, many of which risks are amplified by circumstances arising out of the covid-19 pandemic. 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 applied 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. three months ended december 31, six months ended december 31, 2022 2021 2022 2021 $ 1,060,280 $ 876,874 $ 2,122,685 $ 1,768,555 751,775 619,249 1,507,397 1,255,590 308,505 257,625 615,288 512,965 195,612 179,448 395,863 360,174 112,893 78,177 219,425 152,791 6,185 7,007 12,665 14,397 758 (869 ) 1,766 (1,181 ) 105,950 72,039 204,994 139,575 25,493 15,013 47,657 29,580 $ 80,457 $ 57,026 $ 157,337 $ 109,995 $ 2.09 $ 1.48 $ 4.08 $ 2.86 $ 2.05 $ 1.46 $ 4.02 $ 2.81 38,579 38,456 38,552 38,479 39,208 39,122 39,162 39,104 december 31, 2022 june 30, 2022 $ 165,538 $ 184,474 654,510 656,429 523,021 449,821 79,183 68,805 1,422,252 1,359,529 112,790 111,896 105,797 108,052 246,739 250,590 572,319 563,205 63,007 59,316 $ 2,522,904 $ 2,452,588 $ 250,407 $ 259,463 25,189 40,174 171,609 199,990 447,205 499,627 624,052 649,150 155,771 154,456 1,227,028 1,303,233 1,295,876 1,149,355 $ 2,522,904 $ 2,452,588 2022 2021 $ 157,337 $ 109,995 11,033 10,863 15,519 16,205 9,573 1,328 1,871 2,516 4,001 3,268 (111,542 ) (61,066 ) 1,031 (1,845 ) 88,823 81,264 (25,516 ) (6,974 ) (12,817 ) (7,510 ) 128 442 - (14,835 ) (38,205 ) (28,877 ) - 442,592 (40,123 ) (550,371 ) 2,684 (3,294 ) - (1,794 ) (716 ) (10,064 ) (26,259 ) (25,465 ) (1,510 ) (1,070 ) (3,340 ) (4,093 ) 127 116 (69,137 ) (153,443 ) (417 ) (1,846 ) (18,936 ) (102,902 ) 184,474 257,745 $ 165,538 $ 154,843 applied industrial technologies, inc. and subsidiaries supplemental information reconciliation of gaap to non-gaap financial measures (unaudited) (in thousands) three months ended december 31, six months ended december 31, 2022 2021 2022 2021 $ 80,457 $ 57,026 $ 157,337 $ 109,995 6,185 7,007 12,665 14,397 25,493 15,013 47,657 29,580 5,552 5,436 11,033 10,863 7,814 8,084 15,519 16,205 $ 125,501 $ 92,566 $ 244,211 $ 181,040 three months ended december 31, six months ended december 31, 2022 2021 2022 2021 $ 62,880 $ 32,622 $ 88,823 $ 81,264 (7,263 ) (3,889 ) (12,817 ) (7,510 ) $ 55,617 $ 28,733 $ 76,006 $ 73,754
