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'Results for the fourth quarter were slightly better than we had predicted, due to continuing improvement in gross profit margin as well as disciplined SD&A expense and asset management,' said Applied Chairman & CEO David L. Pugh. 'While sales were still down from last year in virtually every industry we serve, the rate of decline in daily sales continued to ease throughout the quarter, and net sales finished at the upper end of our guidance. Orders from automotive customers were stronger, while those in most other areas of the industrial economy remained weak.
'We continued to benefit from robust sales generated by our new catalogs of specialty maintenance products and fluid power components and systems. While still not a significant portion of our business, during the course of the year the daily sales rate from catalogs more than doubled.
'While overall business levels have not yet begun to rebound, and we do not anticipate a near-term resumption of organic sales growth, we are pleased at the ability of Applied to operate profitably during one of the most severe industrial recessions in decades. This is a testament to our talented organization of dedicated leaders and associates.
'Gross profit margin rose slightly in the quarter and the year as we improved buying practices and increased our sales through catalog channels, improving the profitability of our product mix. While we did an excellent job of cost control, there was no way to offset fully the loss of operating margin from the decline in sales. It is important for us to continue to provide critical support services to our customers even in a period of reduced purchases. Entering fiscal 2003, we will continue to implement strategies to increase operating margins through improved pricing, purchasing and marketing.
'Our balance sheet remains healthy. Cash provided from operations continued to be excellent. The company generated $69 million during fiscal 2002 compared to $37 million in the previous year. The company has available cash and resources to take advantage of opportunities to repurchase our shares and for potential acquisitions. A strong cash position also has allowed us to reduce our debt levels and maintain our cash dividend during this period of lower earnings.
Applied is one of the 947 public companies whose CEO and CFO are required by the SEC to file one-time sworn statements attesting to the accuracy of the company's most recent periodic reports. Because of its June 30 fiscal year-end, Applied's deadline for the certifications is Sept. 30, 2002.