CLEVELAND, Jan. 29, 2015 /PRNewswire/ -- Applied
Industrial Technologies (NYSE: AIT) today reported second quarter
fiscal 2015 sales and earnings for the three months ended
December 31, 2014.
Net sales for the quarter were $691.7
million, an increase of 18.9% compared with $581.9 million in the same quarter a year ago.
Net income for the quarter increased to $29.7 million from $25.9
million, and earnings per share rose 18.0% to $0.72 per share, compared with $0.61 per share in the second quarter of fiscal
2014.
For the six months ended December 31,
2014, sales increased 17.4% to $1.39
billion from $1.19 billion in
the same period last year. Net income increased to
$58.8 million from $52.8 million, and earnings per share increased
13.7% to $1.41 per share from
$1.24 per share last year.
Commenting on the results, Applied's President & Chief
Executive Officer Neil A. Schrimsher
said, "Applied is a strong, diversified industrial distributor, and
we are pleased with the continued sales and earnings growth in the
second quarter. Our overall sales increase reflects 15.8% of
acquisition related volume coupled with a 4.5% rise in our core
underlying operations, offset by a negative foreign currency
translation impact of 1.4%.
"Looking forward, we see an industrial economic environment that
continues to present opportunities for organic and acquired growth.
While the recent decline in oil prices creates some challenges, we
are fully engaged in executing our acquisition integration plans as
well as our broader growth initiatives across our industrial served
markets.
"Entering the second half of fiscal 2015, we are narrowing our
full-year guidance range for earnings per share to between
$2.95 and $3.10 per share, on a sales
increase of 13% to 15%. Our leadership team and dedicated
associates remain focused on serving our customers, achieving our
strategic objectives, and delivering our commitments in the second
half of fiscal 2015."
In addition, Mr. Schrimsher announced that the Company's Board
of Directors declared an 8% increase in the quarterly cash dividend
to $0.27 per common share. The
dividend is payable on February 27,
2015, to shareholders of record on February 13, 2015. This is the Company's sixth
dividend increase since 2010, representing a cumulative increase of
80% in the quarterly dividend over this five-year period.
"Increasing our dividend reflects confidence in our business
position and a commitment to generating increased shareholder
value."
During the quarter, the Company purchased 249,900 shares of its
common stock in open market transactions for $11.5 million. Fiscal year to date, the Company
has purchased 463,900 shares for a total of $21.9 million. At December
31, 2014, the Company had remaining authorization to
purchase 1,382,500 additional shares.
Applied will host its quarterly conference call for investors
and analysts at 10 a.m. ET on
Thursday, January 29. Neil A. Schrimsher – President & CEO, and
Mark O. Eisele – CFO will discuss
the Company's performance. To join the call, dial 1-800-755-1805
or
1-212-231-2910 (for International callers). 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
1-800-633-8284 or
1-402-977-9140 (International) using passcode 21758815.
With more than 560 facilities and 5,800 employee associates,
Applied Industrial Technologies is a leading industrial distributor
that offers more than five million parts to serve the needs 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 and inventory management solutions that
provide added value to its customers. Applied can be visited on the
Internet at 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 "see," "guidance," 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, 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.
|
APPLIED
INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES
|
|
CONDENSED
STATEMENTS OF CONSOLIDATED INCOME
|
|
(In thousands, except
per share data)
|
|
|
|
|
|
|
Three Months
Ended
December 31,
|
Six Months
Ended
December 31,
|
|
2014
|
2013
|
2014
|
2013
|
|
Net
Sales
|
$ 691,702
|
$
581,949
|
$ 1,394,027
|
$ 1,187,254
|
|
Cost of
sales
|
495,989
|
418,566
|
1,003,382
|
854,076
|
|
Gross
Profit
|
195,713
|
163,383
|
390,645
|
333,178
|
|
Selling, distribution
and administrative,
|
|
|
|
|
|
including depreciation
|
148,906
|
123,546
|
297,673
|
253,802
|
|
Operating
Income
|
46,807
|
39,837
|
92,972
|
79,376
|
|
Interest (income)
expense, net
|
1,955
|
(152)
|
3,617
|
(91)
|
|
Other (income)
expense, net
|
380
|
(270)
|
624
|
(1,361)
|
|
Income Before
Income Taxes
|
44,472
|
40,259
|
88,731
|
80,828
|
|
Income Tax
Expense
|
14,765
|
14,350
|
29,902
|
28,075
|
|
Net
Income
|
$ 29,707
|
$
25,909
|
$ 58,829
|
$ 52,753
|
|
Net Income Per
Share - Basic
|
$
0.72
|
$
0.62
|
$
1.42
|
$
1.25
|
|
Net Income Per
Share - Diluted
|
$
0.72
|
$
0.61
|
$
1.41
|
$
1.24
|
|
Average Shares
Outstanding - Basic
|
41,228
|
42,076
|
41,348
|
42,116
|
|
Average Shares
Outstanding - Diluted
|
41,533
|
42,462
|
41,678
|
42,547
|
|
|
|
|
|
|
|
|
|
|
|
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.
|
|
|
(2) On July 1, 2014,
the Company acquired 100% of the outstanding stock of Knox Oil
Field Supply Inc. ("Knox"), headquartered in San Angelo, Texas, for
a purchase price of $132.0 million.
On July 1, 2014, the Company acquired
substantially all of the net assets of Rodamientos y Derivados del
Norte S.A de C.V., a Mexican distributor of bearings and power
transmission products and related products, and Great Southern
Bearings / Northam Bearings, a Western Australia distributor of
bearings and power transmission products. On November 3, 2014, the
Company acquired Ira Pump and Supply Inc., a Texas distributor of
oilfield pumps and supplies. The combined total purchase price of
these acquisitions was $54.6 million.
The financial results of the operations acquired
have been included in the Service Center Based Distribution Segment
as of the acquisition date.
|
|
|
(3) Effective
July 1, 2013, the Company aligned the consolidation of the
Company's Canadian subsidiaries in the consolidated financial
statements which previously included results on a one month
reporting lag. The Company has determined that the effect of this
change is not material to the financial statements for all periods
presented and therefore has not presented retrospective application
of this change. The net impact of the lag elimination was $1.2
million of additional income and has been included within "Other
(income) expense, net" on the Condensed Statements of Consolidated
Income for the six months ended December 31, 2013.
|
|
APPLIED INDUSTRIAL
TECHNOLOGIES, INC. AND SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
2014
|
|
June 30,
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
33,184
|
|
$ 71,189
|
|
Accounts
receivable, less allowances of $10,767 and $10,385
|
385,326
|
|
375,732
|
|
Inventories
|
|
|
401,474
|
|
335,747
|
|
Other current
assets
|
|
|
57,773
|
|
53,480
|
|
Total current
assets
|
|
877,757
|
|
836,148
|
|
Property,
net
|
|
|
107,352
|
|
103,596
|
|
Goodwill
|
|
|
|
260,256
|
|
193,494
|
|
Intangibles,
net
|
|
|
216,305
|
|
159,508
|
|
Other
assets
|
|
|
18,780
|
|
41,423
|
|
Total
Assets
|
|
|
$ 1,480,450
|
|
$ 1,334,169
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
Accounts
payable
|
|
|
$
150,938
|
|
$ 172,401
|
|
Current
portion of long-term debt
|
|
2,720
|
|
2,720
|
|
Other accrued
liabilities
|
|
117,993
|
|
115,834
|
|
Total current
liabilities
|
|
271,651
|
|
290,955
|
|
Long-term
debt
|
|
|
346,636
|
|
167,992
|
|
Other
liabilities
|
|
|
80,497
|
|
74,914
|
|
Total
Liabilities
|
|
|
698,784
|
|
533,861
|
|
Shareholders'
Equity
|
|
781,666
|
|
800,308
|
|
Total Liabilities
and Shareholders' Equity
|
$ 1,480,450
|
|
$ 1,334,169
|
|
APPLIED INDUSTRIAL
TECHNOLOGIES, INC. AND SUBSIDIARIES
|
|
CONDENSED
STATEMENTS OF CONSOLIDATED CASH FLOWS
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
December 31,
|
|
|
|
|
2014
|
|
2013
|
|
|
|
|
|
|
Cash Flows from
Operating Activities
|
|
|
|
|
|
Net income
|
|
$
58,829
|
|
$ 52,753
|
|
Adjustments to
reconcile net income to net cash provided
|
|
|
|
|
|
by
operating activities:
|
|
|
|
|
|
Depreciation and amortization of property
|
|
8,331
|
|
6,792
|
|
Amortization of intangibles
|
|
13,059
|
|
6,330
|
|
Amortization of stock appreciation rights and options
|
|
825
|
|
931
|
|
Gain on
sale of property
|
|
(4)
|
|
(10)
|
|
Other
share-based compensation expense
|
|
679
|
|
2,286
|
|
Changes
in assets and liabilities, net of acquisitions
|
|
(80,863)
|
|
(36,996)
|
|
Other,
net
|
|
317
|
|
577
|
|
Net Cash provided
by Operating Activities
|
|
1,173
|
|
32,663
|
|
Cash Flows from
Investing Activities
|
|
|
|
|
|
Property
purchases
|
|
(7,806)
|
|
(4,126)
|
|
Proceeds
from property sales
|
|
187
|
|
324
|
|
Acquisition of businesses, net of cash acquired
|
|
(165,646)
|
|
(17,000)
|
|
Net Cash used in
Investing Activities
|
|
(173,265)
|
|
(20,802)
|
|
Cash Flows from
Financing Activities
|
|
|
|
|
|
Net
borrowings under revolving credit facility
|
|
10,000
|
|
15,000
|
|
Long-term debt borrowings
|
|
170,241
|
|
-
|
|
Long-term debt repayments
|
|
(1,597)
|
|
-
|
|
Purchases of treasury shares
|
|
(21,849)
|
|
(13,838)
|
|
Dividends paid
|
|
(20,742)
|
|
(19,471)
|
|
Excess
tax benefits from share-based compensation
|
|
906
|
|
2,057
|
|
Acquisition holdback payments
|
|
(287)
|
|
(1,032)
|
|
Exercise
of stock appreciation rights and options
|
|
120
|
|
97
|
|
Net Cash provided
by (used in) Financing Activities
|
|
136,792
|
|
(17,187)
|
|
Effect of Exchange
Rate Changes on Cash
|
|
(2,705)
|
|
(1,254)
|
|
Decrease in cash
and cash equivalents
|
|
(38,005)
|
|
(6,580)
|
|
Cash and cash
equivalents at beginning of period
|
|
71,189
|
|
73,164
|
|
Cash and Cash
Equivalents at End of Period
|
|
$
33,184
|
|
$ 66,584
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/applied-industrial-technologies-reports-fiscal-2015-second-quarter-results-and-raises-dividend-300027360.html
SOURCE Applied Industrial Technologies