On Aug. 10, Cleveland, Ohio-based Applied Industrial Technologies announced its fiscal 2023 fourth-quarter and total-year earnings report, which included 4Q net sales of $1.2 billion, an increase of 9.1% year-over-year and an increase of 8.6% on an organic basis. The company’s fiscal year ended June 30.
The 9.1% sales gain marked a deceleration from 3Q’s 15.4% increase but still registers as healthy growth when compared to the industry at large.
Fourth-quarter net income was $92.2 million, up 16.1% YoY. The change includes a 0.7% increase from acquisitions, offset by a negative-0.2% impact from foreign currency translation. EBITDA for the quarter was $140 million, up 16.7% over the same period last year.
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Fiscal 4Q 2023 Segment Results:
- Service Center Based Distribution: Representing 67% of fiscal 2023 sales, this segment reported $781.9 million in sales during the quarter, an 8.8% increase over the same quarter last year. Operating income was $95.1 million.
- Engineered Solutions: This segment reported $76.2 million in sales during the quarter, a 9.7% YoY increase. For the quarter, operating income was $54.3 million.
Applied also said it is increasing its intermediate financial outlook, now targeting sales of more than $5.5 billion and EBITDA margins of over 13% within the next five years or sooner.
For its total-year financials, the company reported sales of $4.4 billion, an increase of 15.8% compared with the prior year, or 15.7% on an organic basis. Net income for the year was $346.7 million, while EBITDA was $524.5 million.
“We had a strong finish to fiscal 2023 with fourth quarter sales, EBITDA, and EPS exceeding our expectations,” said Neil A. Schrimsher, Applied President and CEO. “Sales grew a solid 9% organically over the prior year against challenging comparisons. While broader end-market activity was more mixed, underlying demand for our differentiated portfolio of technical solutions and service capabilities remained rm as secular tailwinds and our sales initiatives continue to gain momentum. At the same time, we expanded gross margins by 35 basis points over the prior year, produced double-digit EBITDA growth for the tenth straight quarter, and generated record free cash flow. Overall, fiscal 2023 was a pivotal year for our business with sales exceeding $4 billion and EBITDA margins reaching record highs on the back of top-tier organic growth, steadfast execution, and ongoing expansion of our next-generation Automation platform. This underlying performance further validates the power of the Applied team and our position in today’s industrial economy.”
Applied was No. 12 on MDM’s 2023 Top Industrial Distributors List and No. 2 for bearings/power transmission distributors.
As part of the company’s 100-year anniversary, Applied representatives rang The Closing Bell at the New York Stock Exchange on June 21.
In April, the company 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.