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Home » AIT Q3 results in line with guidance

AIT Q3 results in line with guidance

October 25, 2002
More about:  Applied Industrial,  Industrial,  PT/Motion Control/Fluid Power
Applied Industrial Technologies, Cleveland, OH, reported net sales for its first quarter ended Sept. 30 were $368 million, flat compared with $367 million in the comparable period a year ago. Net income for the quarter was $3.9 million versus a loss of $7.2 million last year. Last year's fiscal first quarter included a non-cash charge of $12.1 million impaired goodwill (SFAS 142) associated with Applied's fluid power business. Prior to the charge, last year's fiscal first quarter net income was $4.8 million.


'We worked diligently again this quarter to overcome the effects of a stagnant industrial economy by pursuing new sales opportunities, controlling expenses and managing assets, said Applied Chairman & CEO David L. Pugh. 'While our sales started to stabilize, our gross margin ...

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Applied Industrial Technologies, Cleveland, OH, reported net sales for its first quarter ended Sept. 30 were $368 million, flat compared with $367 million in the comparable period a year ago. Net income for the quarter was $3.9 million versus a loss of $7.2 million last year. Last year's fiscal first quarter included a non-cash charge of $12.1 million impaired goodwill (SFAS 142) associated with Applied's fluid power business. Prior to the charge, last year's fiscal first quarter net income was $4.8 million.


'We worked diligently again this quarter to overcome the effects of a stagnant industrial economy by pursuing new sales opportunities, controlling expenses and managing assets, said Applied Chairman & CEO David L. Pugh. 'While our sales started to stabilize, our gross margin decline is indicative of the tough competitive climate induced by shrinking demand.


'The market for our products remains weak in virtually every industry segment except automotive, and customers are cautious about their purchasing volumes in light of lower production and reduced capital expenditures. The Purchasing Managers' Index dipped below 50 again in September, indicating contraction in overall industrial demand.


'Overall, we were able to contain selling, distribution and administrative (SD&A) expenses in the first quarter, despite pressure from rising insurance costs. Included in first quarter SG&A is a benefit of approximately $1.3 million from various real estate transactions. Our cash flow and balance sheet remain strong. Our ratio of current assets to current liabilities once again improved in the first quarter and our ratio of debt, net of cash, to equity was 0.14 to 1. Our inventory levels are consistent with the level of business forecast in the coming months.


'Looking ahead, our sales guidance for our second fiscal quarter is $340 million to $350 million. We are maintaining full year fiscal 2003 guidance for sales ranging from $1.4 billion to $1.5 billion.' During the first quarter, the company repurchased 104,000 shares of stock for $1.8 million.

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