6309 Monarch Park Place, Suite 203
Niwot, CO 80503, USA
Phone (303) 443-5060
Toll free (888) 742-5060
"We achieved sales slightly above the higher end of our expectations for the quarter, despite a very difficult economic and competitive environment," said Applied Chairman & CEO David L. Pugh. "We are determined to outperform the general industrial economy through aggressive selling, disciplined asset management and operational excellence focused on delivering products and services accurately and on time. The industrial economy remains weak across the board, with no significant rebound expected through the remainder of our 2003 fiscal year."
Selling, distribution and administrative expenses as a percent of sales increased by approximately 0.3% in the second quarter from higher personnel, benefit and insurance costs. These additional costs were offset partially in the second quarter SD&A by a benefit of approximately $1.2 million from gains on sales of unneeded real estate.
"Our cash flow and balance sheet remain strong," Pugh said. "Our current ratio at Dec. 31 was 2.9 to 1 and our ratio of debt, net of cash to equity, was 0.18 to 1. Looking ahead, sales guidance for our fiscal third quarter is $365 million to $375 million. Earnings per share are forecast to be within a range of $0.15 to $0.20. We continue to maintain full fiscal guidance for earnings between $0.75 to $0.90 per share on sales ranging from $1.45 to $1.5 billion."
In October 2002, the company acquired certain assets of Industrial Equipment Co. Ltd. (IECO), a western Canadian distributor of bearings, power transmission and fluid power products, for approximately $12 million U.S. The operations of IECO are being integrated with Applied Industrial Technologies Ltd., Applied's wholly owned Canadian subsidiary.
With annual sales of approximately $20 million, these 16 additional locations add to Applied's presence in Alberta and British Columbia. Applied Industrial Technologies Ltd. operates as Bearing & Transmission and Hypower and now has 54 locations serving the western Canadian marketplace.