Latest news with #NeilA.Schrimsher
Business Wire
5 days ago
- Business
- Business Wire
Applied Industrial Technologies Reports Fiscal 2025 Fourth Quarter
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 2025 fourth quarter and full year ended June 30, 2025. Net sales for the quarter of $1.2 billion increased 5.5% over the prior year. The change includes a 6.5% increase from acquisitions, partially offset by a negative 0.8% selling day impact and a negative 0.4% impact from foreign currency translation. Excluding these factors, sales increased 0.2% on an organic daily basis reflecting a 1.8% increase in the Engineered Solutions segment, partially offset by a 0.4% decrease in the Service Center segment. The Company reported net income of $107.8 million, or $2.80 per share, and EBITDA of $153.0 million. On a pre-tax basis, results include $2.9 million ($0.06 after tax per share) of LIFO expense compared to $0.3 million ($0.01 after tax per share) of LIFO expense in the prior-year period. For the twelve months ended June 30, 2025, sales of $4.6 billion increased 1.9% compared with the prior year. On an organic daily basis, sales declined 2.3%. Net income was $393.0 million, or $10.12 per share, and EBITDA was $562.1 million. On a pre-tax basis, full-year results include $7.7 million ($0.16 after tax per share) of LIFO expense compared to $13.0 million ($0.25 after tax per share) of LIFO expense in the prior-year period. Neil A. Schrimsher, Applied's President & Chief Executive Officer, commented, 'We ended fiscal 2025 on an encouraging note with fourth quarter sales and EPS exceeding our expectations. Sales returned to positive organic growth with underlying trends improving as the quarter progressed. This was driven by stronger than expected Engineered Solutions segment sales where our teams executed exceptionally well, including capitalizing on recent order strength and firming demand across several verticals. Service Center segment sales held steady against the muted end-market backdrop with sequential trends seasonally strong. M&A contribution was also encouraging with solid progress continuing to develop at Hydradyne. Lastly, we delivered another solid quarter of cash generation, culminating in record free cash flow in fiscal 2025 that enabled meaningful capital deployment throughout the year. Overall, I am extremely proud of what we accomplished within a challenging demand landscape. Our consistent outperformance reflects our commitment to excellence and ability to create value for all stakeholders in any environment.' Mr. Schrimsher added, 'Moving into fiscal 2026, we are highly focused on accelerating growth and making further progress on our long-term strategic objectives. Positive momentum has sustained into the first quarter with organic sales up year over year by an estimated 4% to date. Combined with greater contribution from company-specific growth initiatives, structural mix tailwinds, and easier comparisons, we are constructive on our set-up moving forward. That said, ongoing trade and interest rate uncertainty continue to impact broader demand visibility and customer capex decisions. We are mindful these dynamics could continue to restrain growth near term yet potentially create a strong demand environment once additional clarity emerges as U.S. industrial MRO and investment activity catches up to the favorable secular backdrop.' Fiscal 2026 Guidance and Outlook Today the Company is introducing fiscal 2026 EPS guidance in the range of $10.00 to $10.75 based on assumptions for total sales of up 4% to 7% including up 1% to 4% on an organic basis, as well as EBITDA margins of 12.2% to 12.5%. Guidance assumes ongoing economic, interest rate, and tariff related uncertainty continues to impact broader end-market demand through the first half of the year. Guidance also assumes incremental sales contribution from pricing compared to fiscal 2025, as well as ongoing inflationary headwinds and growth investments. Guidance does not assume contribution from future acquisitions or share buybacks. Mr. Schrimsher concluded, 'While we are encouraged by recent sales momentum heading into fiscal 2026, we are taking a prudent approach to our initial outlook pending greater clarity on trade policy, interest rates, and broader macro conditions. That said, as our recent results show, we are in a strong position to manage through various macro and trade scenarios as they develop. In addition, we expect another meaningful year of cash generation supporting ongoing M&A, share buybacks, and dividend growth. Lastly, our technical industry position, manufacturing domain expertise, and aligned strategy provide a compelling long-term growth and margin expansion opportunity as various secular and structural tailwinds continue to develop across the U.S. industrial economy. Our track record over the past five years provides strong evidence of our ability to deliver top-tier earnings growth and margin expansion. This includes compounded annual growth for EBITDA and EPS of 14% and 22%, respectively, as well as gross margins and EBITDA margins expanding 130 and 330 basis points, respectively. We look forward to building on this track record in fiscal 2026 and beyond as our performance and evolution continues to unfold.' Conference Call Information The Company will host a conference call at 10 a.m. ET today to discuss the quarter's results and outlook. A live audio webcast and supplemental presentation can be accessed on our Investor Relations site at To join by telephone, dial 800-715-9871 (toll free) or 646-307-1963 using conference ID 7270709. 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 (maintenance, repair, and operations) and OEM (original equipment manufacturing), and new system install applications in virtually all industrial markets through our multi-channel capabilities that provide choice, convenience, and expertise. For more information, visit 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,' 'outlook,' 'expect,' and derivative or similar expressions. All forward-looking statements are based on current expectations regarding important risk factors including trends and events in the industrial sector of the economy (such as the inflationary environment and supply chain strains), 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. 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. 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. Expand APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands) June 30, 2024 Assets Cash and cash equivalents $ 388,417 $ 460,617 Accounts receivable, net 769,699 724,878 Inventories 505,337 488,258 Other current assets 84,020 96,148 Total current assets 1,747,473 1,769,901 Property, net 128,154 118,527 Operating lease assets, net 188,654 133,289 Intangibles, net 348,600 245,870 Goodwill 699,374 619,395 Other assets 63,289 64,928 Total Assets $ 3,175,544 $ 2,951,910 Liabilities Accounts payable $ 280,124 $ 266,949 Current portion of long-term debt - 25,055 Other accrued liabilities 246,027 209,096 Total current liabilities 526,151 501,100 Long-term debt 572,300 572,279 Other liabilities 232,573 189,750 Total Liabilities 1,331,024 1,263,129 Shareholders' Equity 1,844,520 1,688,781 Total Liabilities and Shareholders' Equity $ 3,175,544 $ 2,951,910 Expand APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS (Unaudited) (In thousands) Year Ended June 30, 2025 2024 Cash Flows from Operating Activities Net income $ 392,988 $ 385,762 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of property 24,899 23,431 Amortization of intangibles 35,581 28,923 Provision for (recoveries of) losses on accounts receivable 5,978 (205 ) Amortization of stock appreciation rights 4,713 3,448 Other share-based compensation expense 7,289 9,496 Changes in assets and liabilities, net of acquisitions 26,926 (77,079 ) Other, net (5,989 ) (2,383 ) Net Cash provided by Operating Activities 492,385 371,393 Cash Flows from Investing Activities Acquisition of businesses, net of cash acquired (293,406 ) (72,090 ) Capital expenditures (27,187 ) (24,864 ) Proceeds from property sales 1,841 576 Life insurance proceeds - 971 Net Cash used in Investing Activities (318,752 ) (95,407 ) Cash Flows from Financing Activities Borrowings under revolving credit facility - 408 Long-term debt repayments (25,106 ) (25,251 ) Interest rate swap settlement receipts 12,095 14,470 Purchases of treasury shares (152,837 ) (73,388 ) Dividends paid (63,702 ) (55,879 ) Acquisition holdback payments (1,210 ) (681 ) Taxes paid for shares withheld for equity awards (14,847 ) (16,274 ) Exercise of stock appreciation rights and options - 127 Net Cash used in Financing Activities (245,607 ) (156,468 ) Effect of Exchange Rate Changes on Cash (226 ) (2,937 ) (Decrease) Increase in cash and cash equivalents (72,200 ) 116,581 Cash and Cash Equivalents at Beginning of Period 460,617 344,036 Expand APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES SUPPLEMENTAL INFORMATION RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (Unaudited) (In thousands) The Company supplemented the reporting of financial information determined under U.S. generally accepted accounting principles (GAAP) with reporting of non-GAAP financial measures. The Company believes that these non-GAAP measures provide meaningful information to assist shareholders in understanding financial results, assessing prospects for future performance, and provide a better baseline for analyzing trends in our underlying businesses. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. These non-GAAP financial measures should not be considered in isolation or as a substitute for reported results. These non-GAAP financial measures reflect an additional way of viewing aspects of operations that, when viewed with GAAP results, provide a more complete understanding of the business. The Company strongly encourages investors and shareholders to review company financial statements and publicly filed reports in their entirety and not to rely on any single financial measure. Expand Reconciliation of Net Income, a GAAP financial measure, to EBITDA, a non-GAAP financial measure: Three Months Ended June 30, Year Ended June 30, 2025 2024 2025 2024 Net Income $ 107,836 $ 103,491 $ 392,988 $ 385,762 Interest expense (income), net 1,322 (671 ) 612 2,831 Income tax expense 27,208 37,444 107,979 112,368 Depreciation and amortization of property 6,466 5,864 24,899 23,431 Amortization of intangibles 10,196 7,322 35,581 28,923 EBITDA $ 153,028 $ 153,450 $ 562,059 $ 553,315 The Company defines EBITDA as Earnings from operations before Interest, Taxes, Depreciation, and Amortization, a non-GAAP financial measure. EBITDA excludes items that may not be indicative of core operating results, a non-GAAP financial measure. Expand
Yahoo
01-05-2025
- Business
- Yahoo
Applied Industrial (NYSE:AIT) Posts Q1 Sales In Line With Estimates
Industrial products distributor Applied Industrial (NYSE:AIT) met Wall Street's revenue expectations in Q1 CY2025, with sales up 1.8% year on year to $1.17 billion. Its GAAP profit of $2.57 per share was 6.6% above analysts' consensus estimates. Is now the time to buy Applied Industrial? Find out in our full research report. Revenue: $1.17 billion vs analyst estimates of $1.17 billion (1.8% year-on-year growth, in line) EPS (GAAP): $2.57 vs analyst estimates of $2.41 (6.6% beat) Adjusted EBITDA: $144.9 million vs analyst estimates of $142 million (12.4% margin, 2.1% beat) EPS (GAAP) guidance for the full year is $9.93 at the midpoint, roughly in line with what analysts were expecting Operating Margin: 11.1%, in line with the same quarter last year Free Cash Flow Margin: 10.5%, up from 6.7% in the same quarter last year Organic Revenue fell 3.1% year on year (-0.1% in the same quarter last year) Market Capitalization: $9.34 billion Neil A. Schrimsher, Applied's President & Chief Executive Officer, commented, 'We delivered another quarter of strong operational performance. EBITDA and EPS exceeded our expectations, increasing 7% and 4%, respectively, over the prior year on 2% sales growth. Our Applied team did an outstanding job managing through ongoing demand weakness and macro uncertainty with the average daily sales organic decline of 3% holding relatively steady with last quarter and within our guidance. In addition, gross margins and EBITDA margins expanded nicely, further reflecting internal initiatives, channel execution, mix tailwinds, and solid cost management. We also achieved record third quarter cash generation and increased our share repurchase activity. Lastly, I am pleased with the early progress of our recent acquisition of Hydradyne with integration ongoing and financial contribution expected to increase in coming quarters.' Formerly called The Ohio Ball Bearing Company, Applied Industrial (NYSE:AIT) distributes industrial products–everything from power tools to industrial valves–and services to a wide variety of industries. A company's long-term performance is an indicator of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Unfortunately, Applied Industrial's 5.7% annualized revenue growth over the last five years was tepid. This was below our standard for the industrials sector and is a tough starting point for our analysis. Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Applied Industrial's recent performance shows its demand has slowed as its annualized revenue growth of 2.1% over the last two years was below its five-year trend. We can dig further into the company's sales dynamics by analyzing its organic revenue, which strips out one-time events like acquisitions and currency fluctuations that don't accurately reflect its fundamentals. Over the last two years, Applied Industrial's organic revenue was flat. Because this number is lower than its normal revenue growth, we can see that some mixture of acquisitions and foreign exchange rates boosted its headline results. This quarter, Applied Industrial grew its revenue by 1.8% year on year, and its $1.17 billion of revenue was in line with Wall Street's estimates. Looking ahead, sell-side analysts expect revenue to grow 8% over the next 12 months, an improvement versus the last two years. This projection is above average for the sector and indicates its newer products and services will spur better top-line performance. Software is eating the world and there is virtually no industry left that has been untouched by it. That drives increasing demand for tools helping software developers do their jobs, whether it be monitoring critical cloud infrastructure, integrating audio and video functionality, or ensuring smooth content streaming. Click here to access a free report on our 3 favorite stocks to play this generational megatrend. Applied Industrial has managed its cost base well over the last five years. It demonstrated solid profitability for an industrials business, producing an average operating margin of 10%. This result was particularly impressive because of its low gross margin, which is mostly a factor of what it sells and takes huge shifts to move meaningfully. Companies have more control over their operating margins, and it's a show of well-managed operations if they're high when gross margins are low. Looking at the trend in its profitability, Applied Industrial's operating margin rose by 3.8 percentage points over the last five years, as its sales growth gave it operating leverage. This quarter, Applied Industrial generated an operating profit margin of 11.1%, in line with the same quarter last year. This indicates the company's cost structure has recently been stable. Revenue trends explain a company's historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions. Applied Industrial's EPS grew at an astounding 63.6% compounded annual growth rate over the last five years, higher than its 5.7% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded. We can take a deeper look into Applied Industrial's earnings to better understand the drivers of its performance. As we mentioned earlier, Applied Industrial's operating margin was flat this quarter but expanded by 3.8 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; taxes and interest expenses can also affect EPS but don't tell us as much about a company's fundamentals. Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business. For Applied Industrial, its two-year annual EPS growth of 8.2% was lower than its five-year trend. We hope its growth can accelerate in the future. In Q1, Applied Industrial reported EPS at $2.57, up from $2.48 in the same quarter last year. This print beat analysts' estimates by 6.6%. Over the next 12 months, Wall Street expects Applied Industrial's full-year EPS of $9.97 to grow 7.3%. It was encouraging to see Applied Industrial beat analysts' EBITDA expectations this quarter. We were also happy its EPS outperformed Wall Street's estimates. On the other hand, its revenue was in line. Overall, this quarter had some key positives. The stock remained flat at $243.13 immediately after reporting. Should you buy the stock or not? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it's free. Sign in to access your portfolio
Associated Press
01-05-2025
- Business
- Associated Press
Applied Industrial Technologies Reports Fiscal 2025 Third Quarter Results; Announces Bolt-on Automation Acquisition & New Repurchase Authorization
CLEVELAND--(BUSINESS WIRE)--May 1, 2025-- 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 2025 third quarter ended March 31, 2025. Net sales for the quarter of $1.2 billion increased 1.8% over the prior year. The change includes a 6.6% increase from acquisitions, partially offset by a negative 0.8% selling day impact and a negative 0.9% impact from foreign currency translation. Excluding these factors, sales decreased 3.1% on an organic daily basis reflecting a 1.6% decrease in the Service Center segment and a 6.5% decrease in the Engineered Solutions segment. The Company reported net income of $99.8 million, or $2.57 per share, and EBITDA of $144.9 million. On a pre-tax basis, results include $2.2 million ($0.04 after tax per share) of LIFO expense compared to $4.8 million ($0.10 after tax per share) of LIFO expense in the prior-year period. Neil A. Schrimsher, Applied's President & Chief Executive Officer, commented, 'We delivered another quarter of strong operational performance. EBITDA and EPS exceeded our expectations, increasing 7% and 4%, respectively, over the prior year on 2% sales growth. Our Applied team did an outstanding job managing through ongoing demand weakness and macro uncertainty with the average daily sales organic decline of 3% holding relatively steady with last quarter and within our guidance. In addition, gross margins and EBITDA margins expanded nicely, further reflecting internal initiatives, channel execution, mix tailwinds, and solid cost management. We also achieved record third quarter cash generation and increased our share repurchase activity. Lastly, I am pleased with the early progress of our recent acquisition of Hydradyne with integration ongoing and financial contribution expected to increase in coming quarters.' Mr. Schrimsher added, 'Our results year to date highlight the benefits of our strategy and proven ability to navigate various market conditions. Moving forward, we are mindful of greater macro uncertainty and inflation following recent tariff actions, including potential demand implications near term as the landscape evolves. We have incorporated this uncertainty into our fourth quarter outlook, which assumes end-market weakness and organic sale declines persist near term as customers potentially continue to idle production and defer capital spending pending a more certain operating backdrop. That said, we remain focused on internal growth and margin initiatives, while our U.S. centric position provides resilience with over 70% of sales from MRO and aftermarket support including break-fix applications. Further, order and backlog trends remain positive across higher-margin engineered solutions, and we are favorably positioned to manage potential greater inflation given our technical industry position, minimal cross-border sourcing, structural mix tailwinds, and various self-help counter measures inherent to our strategy. Combined with our strong balance sheet, exposure to long-term secular tailwinds including reshoring, and easier comparisons moving forward, we remain constructive on our set-up into fiscal 2026 and beyond.' Updated Fiscal 2025 Guidance For fiscal 2025, the Company now projects EPS of $9.85 to $10.00 (prior $9.65 to $10.05) on sales growth of flat to up 1% (prior up 1% to 3%) including down 4% to 3% on an organic average daily basis (prior down 3% to 1%), and EBITDA margins of 12.3% to 12.4% (prior 12.2% to 12.4%). Updated guidance assumes fourth quarter EPS between $2.52 and $2.67 on total sales of down 1% to up 3% year over year and EBITDA margins of 12.3% to 12.4%. Fourth quarter sales guidance assumes average daily sales decline organically by a mid to low single-digit percent over the prior year. The updated outlook considers average daily sales in April declining by an estimated 3% organically year over year and greater economic uncertainty following recent tariff actions, inflationary headwinds, and ongoing growth investments. The updated outlook assumes limited direct impact from tariffs on pricing and cost inflation in the fourth quarter given the timing of announced supplier price increases, our product procurement exposure, and an evolving tariff and trade policy backdrop. Guidance does not assume contribution from future acquisitions or share buybacks. Acquisition of IRIS Factory Automation The Company today also announced that it has signed a definitive agreement to acquire IRIS Factory Automation (IRIS). Based in Aurora, IL, IRIS is a provider of automation products, services, and turn-key productized solutions focused on optimizing material handling and traceability workflows across production environments. The Company's productized solutions utilize advanced vision and robotic automation technologies that are seamlessly deployed within a customer's facility to optimize core processes such as palletizing, case packing, quality inspection, and packaging. IRIS operates with a team of over 30 associates from one location and serves customers across various industries including food & beverage, consumer products, and pharmaceutical. The transaction is expected to close this week. Mr. Schrimsher commented, 'We welcome IRIS to Applied as we continue the expansion of our automation platform. IRIS aligns well with our solutions-centric strategy, acting as a key technical consultant to customers' emerging automation needs through proprietary and cutting-edge turn-key solutions. In addition to broadening our footprint in the U.S. Midwest region, IRIS will enhance the scalability of our automation platform by further building out our portfolio of standardized solutions solving common automation needs. We believe this acquisition can drive strong growth synergy long-term as we leverage our core suppliers' leading automation technologies and Applied's access to legacy manufacturing verticals. Overall, I am encouraged with the continued progress we are making in positioning Applied as a leading provider and channel partner of next-generation automation solutions.' Share Repurchase Authorization The Company also announced that its Board of Directors authorized a new share buyback program to repurchase up to 1.5 million shares of the Company's common stock. The updated plan replaces the prior share repurchase plan. Shares may be purchased in open market and negotiated transactions. Dividend The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.46 per common share, payable on May 30, 2025, to shareholders of record on May 15, 2025. Conference Call Information The Company will host a conference call at 10 a.m. ET today to discuss the quarter's results and outlook. A live audio webcast and supplemental presentation can be accessed on our Investor Relations site at To join by telephone, dial 800-715-9871 (toll free) or 646-307-1963 using conference ID 7270709. 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 (maintenance, repair, and operations) and OEM (original equipment manufacturing), and new system install applications in virtually all industrial markets through our multi-channel capabilities that provide choice, convenience, and expertise. For more information, visit 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,' 'outlook,' 'believe,' and derivative or similar expressions. All forward-looking statements are based on current expectations regarding important risk factors including trends and events in the industrial sector of the economy (such as the inflationary environment and supply chain strains), 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. 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. View source version on CONTACT: Ryan D. Cieslak Director – Investor Relations & Treasury 216-426-4887 /[email protected] KEYWORD: UNITED STATES NORTH AMERICA OHIO INDUSTRY KEYWORD: ENGINEERING MACHINERY MACHINE TOOLS, METALWORKING & METALLURGY MANUFACTURING SOURCE: Applied Industrial Technologies, Inc. Copyright Business Wire 2025. PUB: 05/01/2025 06:30 AM/DISC: 05/01/2025 06:29 AM
