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Applied Industrial Technologies,Cleveland, OH, reported net sales for its second quarter ended Dec. 31, 2004, were $404.1 million, up 12.4 percent from $359.7 million in the same period a year ago. Net income for the quarter increased 94 percent to $10.0 million from $5.1 million a year ago.
For the six months ended Dec. 31, 2004, sales increased 13.4 percent to $817.3 million from $720.9 million in the same period last year. Net income increased 131 percent to $23.0 million versus $10.0 million last year.
"We were once again pleased with the strength of our quarterly results, and with our ability to convert sales increases to proportionately higher levels of profitability," said Applied Chairman & CEO David L. Pugh. "This was a direct result of the continued focus on our core strategies of profitable sales growth, cost containment and asset management.
"Sales continued strong across all geographic regions, product technologies and customer industries. Productivity improvements served as an offset to margin pressures created by inflation in vendor prices, as well as a shift in our product and customer mix.
"Selling, distribution and administrative expenses for the second quarter stayed essentially flat compared to last year, even with a sales increase of more than 12 percent. We continued to actively manage our expenses with special attention paid to discretionary spending, helping to raise our operating margin to 4.3 percent this quarter, compared with 2.6 percent in the same period last year.
"At this point, we believe our fiscal 2005 third quarter sales will be in the range of $430 to $440 million. Sales for all of fiscal 2005 are expected in the range of between $1.68 billion and $1.70 billion. Based on our stronger sales forecast, we are raising our EPS guidance for the full fiscal year and now expect to earn $1.55 to $1.62 per share compared to our previous guidance of $1.43 to $1.57."
Through the first six months of fiscal 2005, the company purchased 357,000 shares of its common stock for $7.2 million. At Dec. 31, 2004, the company had remaining authorization to repurchase approximately 1,001,000 additional shares.
With 430 facilities and 4,300 employee associates across North America, Applied Industrial Technologies offers two million parts critical to the operations 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. For its fiscal year ended Jun. 30, 2004, Applied posted sales of $1.52 billion. Applied can be visited on the Internet at http://www.applied.com .