Applied industrial technologies reports fiscal 2022 third 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 2022 third quarter ended march 31, 2022. net sales for the quarter increased 16.6% to $980.7 million from $840.9 million in the prior year. the change includes a 0.4% increase from acquisitions and a 1.6% benefit from one extra selling day, partially offset by a negative 0.1% impact from foreign currency translation. excluding these factors, sales increased 14.7% on an organic daily basis reflecting a 13.6% increase in the service center segment and a 17.1% increase in the fluid power & flow control segment. the company reported net income of $68.3 million, or $1.75 per share, and ebitda of $108.6 million. on a pre-tax basis, results include $7.4 million ($0.14 after tax per share) of lifo expense compared to $0.8 million ($0.02 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 strong quarter with sales and earnings achieving new records. underlying business momentum strengthened further during the quarter, while our technical industry position is supporting greater growth opportunities and our ability to effectively manage through ongoing inflationary pressures industry wide. combined with solid cost leverage, ebitda grew more than 25% over the prior year and nearly 40% on a 2-year stack basis, while ebitda margin exceeded 11%, representing a key milestone for the company. in addition, free cash generation increased year over year and sequentially inclusive of ongoing working capital investment. this performance is driving strong improvement in our returns on capital, and demonstrates applied’s increasingly favorable and differentiated position as requirements and secular investments across the industrial supply chain continue to expand.” mr. schrimsher added, “based on our third quarter performance and our current outlook, we are raising fiscal 2022 guidance for sales, ebitda margins, and eps for the second time this year. positive demand trends are persisting across our business with organic sales month to date in april up by a low double-digit percent year over year. while we continue to navigate an extremely dynamic supply chain and inflationary environment, we expect ongoing benefits from our operational execution, inventory management, and internal margin initiatives. in addition, our organic growth and incremental margin momentum is providing a path to achieve our interim annual ebitda margin target of 11% potentially sooner than expected. combined with our expanding solutions in emerging areas of the industrial economy and balance sheet flexibility, we remain poised to create significant value for our customers, associates, and all stakeholders within any operational environment.” fiscal 2022 guidance the company is raising guidance for fiscal 2022 and now projects eps of $6.15 to $6.25 (prior $5.70 to $5.90), sales growth of 14.8% to 15.3% including 13.6% to 14.1% on an organic basis (prior 11.5% to 12.5% including 10.5% to 11.5% organic), and ebitda margins of 10.5% to 10.6% (prior 10.1% to 10.3%). guidance does not assume contribution from potential future acquisitions. share repurchases during the quarter, the company purchased 35,000 shares of its common stock in open market transactions for $3.5 million. at march 31, 2022, the company had remaining authorization to purchase approximately 318,000 additional shares. dividend today the company announced that its board of directors declared a quarterly cash dividend of $0.34 per common share, payable on may 31, 2022, to shareholders of record on may 16, 2022. conference call information applied will host its quarterly conference call for investors and analysts at 10 a.m. et on april 28, 2022. 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 877-311-4351 (toll free) or 614-999-9139 (for international callers) using conference id 2092603. 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 855-859-2056 or 800-585-8367 (both toll free), or 404-537-3406 (international) using conference id 2092603. 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,” “assume”, “projects”, 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. march 31, march 31, 2022 2021 2022 2021 $ 980,662 $ 840,937 $ 2,749,217 $ 2,340,031 693,338 593,712 1,948,928 1,667,491 287,324 247,225 800,289 672,540 191,481 172,758 551,655 498,659 - - - 49,528 95,843 74,467 248,634 124,353 5,852 7,608 20,249 22,919 469 (1,657 ) (712 ) (1,746 ) 89,522 68,516 229,097 103,180 21,216 12,453 50,796 17,667 $ 68,306 $ 56,063 $ 178,301 $ 85,513 $ 1.78 $ 1.44 $ 4.63 $ 2.21 $ 1.75 $ 1.42 $ 4.56 $ 2.18 38,453 38,835 38,470 38,779 39,098 39,412 39,102 39,261 $ 188,084 $ 257,745 618,079 516,322 425,373 362,547 63,504 59,961 1,295,040 1,196,575 111,166 115,589 95,049 87,111 258,501 279,628 563,751 560,077 60,064 32,827 $ 2,383,571 $ 2,271,807 $ 247,639 $ 208,162 40,166 43,525 176,551 176,013 464,356 427,700 681,197 784,855 139,624 126,706 1,285,177 1,339,261 1,098,394 932,546 $ 2,383,571 $ 2,271,807 applied industrial technologies, inc. and subsidiaries condensed statements of consolidated cash flows (unaudited) (in thousands) nine months ended march 31, 2022 2021 $ 178,301 $ 85,513 16,215 15,641 24,096 26,238 - 49,528 2,897 1,930 6,064 4,660 (106,136 ) 33,574 12,386 (13,675 ) 133,823 203,409 (6,974 ) (30,023 ) (11,674 ) (12,177 ) 494 691 3,159 - (14,835 ) - (29,830 ) (41,509 ) 442,592 - (550,432 ) (82,070 ) (4,812 ) (2,122 ) (1,956 ) (399 ) (13,604 ) - (38,612 ) (37,772 ) (2,361 ) (2,344 ) (4,405 ) (5,990 ) 224 163 (173,366 ) (130,534 ) (288 ) 4,099 (69,661 ) 35,465 257,745 268,551 $ 188,084 $ 304,016 applied industrial technologies, inc. and subsidiaries supplemental information reconciliation of gaap to non-gaap financial measures $ 68,516 $ 12,453 $ 56,063 $ 1.42 18.2 % (2,609 ) (613 ) (1,996 ) 0.05 23.5 % $ 65,907 $ 11,840 $ 54,067 $ 1.37 18.0 % $ 103,180 $ 17,667 $ 85,513 $ 2.18 17.1 % 49,528 11,769 37,759 0.96 23.8 % 7,772 1,847 5,925 0.15 23.8 % (2,609 ) (613 ) (1,996 ) (0.05 ) 23.5 % $ 157,871 $ 30,670 $ 127,201 $ 3.24 19.4 % three months ended nine months ended march 31, march 31, 2022 2021 2022 2021 $ 68,306 $ 56,063 $ 178,301 $ 85,513 5,852 7,608 20,249 22,919 21,216 12,453 50,796 17,667 5,352 5,080 16,215 15,641 7,891 8,236 24,096 26,238 $ 108,617 $ 89,440 $ 289,657 $ 167,978 - - - 49,528 - - - 7,772 - (2,609 ) - (2,609 ) $ 108,617 $ 86,831 $ 289,657 $ 222,669 march 31, march 31, 2022 2021 2022 2021 $ 52,559 $ 44,053 $ 133,823 $ 203,409 (4,164 ) (3,728 ) (11,674 ) (12,177 ) $ 48,395 $ 40,325 $ 122,149 $ 191,232
