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For its fiscal 2006 first quarter, ended September 30, Applied Industrial Technologies, Cleveland, OH, reported net sales increased 7.3% to $443.2 million from $413.1 million in the comparable period a year ago. Net income for the quarter increased 29.2% to $16.9 million compared to $13.0 million last year. The company completed its acquisition of Spencer Industries, with trailing 12-month sales of approximately $49 million. AIT spent $15.7 million on acquisitions for the quarter, of which the Spencer acquisition was the only one announced.
This represents the twelfth consecutive quarter of year-over-year increases in earnings per share of 25 percent or more. Both sales and earnings per share for the quarter were within previously issued guidance.
Commenting on the performance, Applied Chairman & Chief Executive Officer David L. Pugh said, "This was another solid quarter, and we once again were very pleased with our results, which were achieved in spite of more slowly paced economic conditions and temporary business disruptions caused by localized severe weather. Our margin initiatives have allowed us to continue excellent earnings leverage on a slowing rate of sales growth. We continue to execute the business fundamentals quite well.
"At this point, we see fiscal 2006 second quarter earnings per share in the range of $0.43 to $0.49 on sales of $440 million to $450 million. For fiscal 2006 as a whole, we are raising our earnings guidance to a range of $2.05 to $2.15 per share on improved sales of between $1.85 billion and $1.89 billion - up from previous guidance of $2.00 to $2.10 per share."
During the first quarter of 2006, the company purchased 295,900 shares of its common stock in open market transactions for $10.2 million. At September 30, 2005, the company had remaining authorization to repurchase more than 535,000 additional shares.
At September 30, Applied acquired the assets of Spencer Industries, Inc., a regional fluid power distributor headquartered in Kent, Wash. Its trailing 12-month sales were approximately $49 million. Spencer will operate as a subsidiary of Applied under the name Spencer Fluid Power Inc. and its operating results will be included starting in the second quarter.
With more than 440 facilities and 4,500 employee-associates across North America, Applied Industrial Technologies is an industrial distributor that offers more than 2 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 June 30, 2005, Applied posted sales of $1.72 billion.