Applied Industrial Technologies Reports Fiscal 2021 First Quarter Results
October 28, 2020 at 06:30 AM EDT
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 2021 first quarter ended September 30, 2020.
Net sales for the quarter decreased 12.7% to $747.8 million from $856.4 million in the prior year. The change includes a 1.1% increase from acquisitions, partially offset by a 0.4% negative impact from foreign currency translation. Excluding these factors, sales decreased 13.4% on an organic basis reflecting a 14.4% decline in the Service Center segment and a 11.2% decline in the Fluid Power & Flow Control segment. The Company reported net income of $34.8 million, or $0.89 per share, and EBITDA of $67.6 million.
Neil A. Schrimsher, Applied’s President & Chief Executive Officer, commented “I’m encouraged by the start to our fiscal 2021. We are executing well and positioning the Company for stronger growth, while remaining focused on the health and safety of our associates and customers as we continue to navigate through the impact from the ongoing pandemic. While demand remains below prior year levels, customer activity appears to be firming, which combined with our internal initiatives drove sequential improvement in underlying sales trends and earnings performance through our fiscal first quarter. Customers are gradually increasing facility utilization and production levels, as evidenced by initial recovery in our local account sales. This is a positive sign for the industrial economy. We are also benefiting from our technical solution capabilities and a more diversified end-market mix. That said, the pace of end-market improvement remains gradual and at times inconsistent. Additionally, visibility remains limited entering the seasonally slower winter months as customers continue to manage through an uncertain macro outlook.”
Mr. Schrimsher added, “Importantly, our capabilities and company-specific opportunities provide a solid position to execute our strategic plan and optimize our earnings power. This is highlighted by first quarter results and our strong balance sheet, as well as our recent acquisition of Advanced Control Solutions (ACS), which further expands our emerging automation platform and growth potential. As the industrial economy recovers, we are increasingly critical to customers within many end markets as maintenance, production, and efficiency requirements ramp across their core operational infrastructure. I remain proud of our team’s continued effort, and we look forward to showcasing the strength of our expanding value proposition going forward.”
Conference Call Information
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,” “outlook,” “project,” “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, 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.