On April 27, Cleveland, Ohio-based Applied Industrial Technologies announced its fiscal 2023 third-quarter earnings, which showed net sales of $1.1 billion, a 15.4% increase over the same quarter in fiscal 2022.
The change includes a 0.7% increase from acquisitions, offset by a negative 0.3% impact from foreign currency translation, Applied said in its earnings announcement.
Excluding these factors, Applied said sales increased 15% on an organic basis reflecting a 16.1% increase in the Service Center segment and a 13.1% increase in the Engineered Solutions segment. The company reported net income of $97.2 million, or $2.47 per share, and EBITDA of $140.3 million.
Applied’s fiscal 2023 3Q ended March 31.
“We reported another solid quarter as sales grew over 15% with ongoing support from our industry position,” said Neil A. Schrimsher, Applied’s President & CEO. “We continued to expand gross margins while remaining focused on managing costs given the current backdrop. These dynamics drove strong EBITDA margin expansion and earnings growth. At the same time, we remain focused on our investments in talent, technology, and our service solutions as we further enhance our capabilities and operational strength for the future. Overall, we continue to demonstrate the benefits of our strategy and ability to consistently execute.”
Earlier this month, Applied announced its acquisition of Rochester, New York-based Advanced Motion Systems Inc., which provides automation products, services and engineered solutions focused on machine vision, robotics and motion control products and technologies.
“Looking ahead, we remain constructive on underlying industrial sector fundamentals within North America,” Schrimsher said. “Customer feedback remains generally positive, while our internal initiatives and technical capabilities are supporting new growth opportunities. That said, consistent with our prior outlook and recent macroeconomic industrial reports, we expect underlying market demand and orders to continue to moderate near term as broader industry activity normalizes and customers rebalance spending levels against current macro uncertainty. Month to date in April, sales are trending up by a high single-digit percent on an organic basis compared to the prior year. Our diverse mix of growth tailwinds and business evolution puts us in a favorable position to sustain above-market growth, and our track record highlights our ability to execute across all parts of the cycle. Lastly, our balance sheet and liquidity are in a solid position, and we expect stronger cash generation going forward.”