Applied Industrial Technologies (AIT) reported third-quarter fiscal 2024 (ended Mar 31, 2024) earnings of $2.48 per share, which surpassed the Zacks Consensus Estimate of $2.40. The bottom line jumped 4.2% year over year.Net revenues of $1,146 million underperformed the consensus estimate of $1.148 million. The top line inched up 1.3% year over year. Acquisitions boosted the top line by 1.2% while foreign-currency translation had a positive impact of 0.2%. Organic sales increased 0.7% year over year. Howeve ...

Part I [Item 1: Financial Statements](index=4&type=section&id=Item%201%3A%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including income, comprehensive income, balance sheet, cash flow, and equity statements, with detailed notes [Condensed Statements of Consolidated Income](index=4&type=section&id=Condensed%20Statements%20of%20Consolidated%20Income) For the nine months ended March 31, 2024, net sales increased to $3.32 billion and net income rose to $282.3 million, with diluted EPS at $7.18 | Financial Metric (in thousands) | Three Months Ended Mar 31, 2024 | Three Months Ended Mar 31, 2023 | Nine Months Ended Mar 31, 2024 | Nine Months Ended Mar 31, 2023 | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $1,146,390 | $1,132,035 | $3,318,731 | $3,254,720 | | **Gross profit** | $338,246 | $333,118 | $980,418 | $948,406 | | **Operating income** | $121,206 | $126,911 | $356,480 | $346,336 | | **Net income** | $97,217 | $97,187 | $282,271 | $254,524 | | **Net income per share - diluted** | $2.48 | $2.47 | $7.18 | $6.49 | [Condensed Statements of Consolidated Comprehensive Income](index=5&type=section&id=Condensed%20Statements%20of%20Consolidated%20Comprehensive%20Income) For the nine months ended March 31, 2024, comprehensive income was $273.1 million, primarily impacted by a net other comprehensive loss of $9.2 million | Metric (in thousands) | Nine Months Ended Mar 31, 2024 | Nine Months Ended Mar 31, 2023 | | :--- | :--- | :--- | | **Net income** | $282,271 | $254,524 | | **Other comprehensive (loss) income, net of tax** | $(9,193) | $6,651 | | **Comprehensive income, net of tax** | $273,078 | $261,175 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2024, total assets increased to $2.85 billion, total liabilities decreased to $1.19 billion, and shareholders' equity grew to $1.67 billion | Balance Sheet Item (in thousands) | March 31, 2024 | June 30, 2023 | | :--- | :--- | :--- | | **Total current assets** | $1,767,682 | $1,646,807 | | **Total Assets** | $2,854,943 | $2,743,332 | | **Total current liabilities** | $468,406 | $540,344 | | **Total Liabilities** | $1,185,919 | $1,284,895 | | **Total Shareholders' Equity** | $1,669,024 | $1,458,437 | [Condensed Statements of Consolidated Cash Flows](index=7&type=section&id=Condensed%20Statements%20of%20Consolidated%20Cash%20Flows) For the nine months ended March 31, 2024, net cash from operating activities significantly increased to $252.2 million, leading to a $112.5 million net increase in cash | Cash Flow Activity (in thousands) | Nine Months Ended Mar 31, 2024 | Nine Months Ended Mar 31, 2023 | | :--- | :--- | :--- | | **Net Cash provided by Operating Activities** | $252,159 | $164,027 | | **Net Cash used in Investing Activities** | $(38,280) | $(56,250) | | **Net Cash used in Financing Activities** | $(101,176) | $(111,526) | | **Increase (Decrease) in Cash and Cash Equivalents** | $112,497 | $(2,347) | [Condensed Statements of Shareholders' Equity](index=8&type=section&id=Condensed%20Statements%20of%20Shareholders%27%20Equity) Shareholders' equity increased to $1.67 billion, driven by net income, partially offset by dividends, treasury stock purchases, and other comprehensive loss - Total Shareholders' Equity grew to **$1,669,024 thousand** at March 31, 2024, from **$1,458,437 thousand** at June 30, 2023[23](index=23&type=chunk) - Key activities impacting equity during the nine months ended March 31, 2024 include net income of **$282.3 million**, dividend payments of **$41.5 million**, and treasury stock purchases of **$28.9 million**[20](index=20&type=chunk)[23](index=23&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations of accounting policies and financial results, including revenue disaggregation, acquisitions, goodwill, debt, derivatives, and segment performance [Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202%3A%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q3 and nine-month fiscal 2024 financial results, covering sales growth, segment performance, margin improvements, operating expenses, and the company's strong liquidity position [Overview](index=24&type=section&id=Overview) Q3 FY2024 consolidated sales rose 1.3% to $1.15 billion, with operating income at $121.2 million and net income flat at $97.2 million | Metric | Q3 FY2024 (in Billions/Millions) | Q3 FY2023 (in Billions/Millions) | | :--- | :--- | :--- | | **Consolidated Sales** | $1.146 B | $1.132 B | | **Sales Growth** | 1.3% | - | | **Operating Income** | $121.2 M | $126.9 M | | **Operating Margin** | 10.6% | 11.2% | - The ISM Purchasing Managers Index (PMI) rose to **50.3** in March 2024, indicating expansion, up from **47.1** in December 2023[83](index=83&type=chunk) - The Manufacturing Capacity Utilization (MCU) index slightly decreased to **78.4** in March 2024[83](index=83&type=chunk) [Results of Operations (Three Months Ended March 31, 2024 and 2023)](index=25&type=section&id=Results%20of%20Operations%20%28Three%20Months%29) Q3 2024 sales increased 1.3% to $1.15 billion, with mixed segment performance, improved gross margin, and increased SD&A expenses | Segment | Q3 2024 Sales (in Millions) | Change vs Q3 2023 | Organic Change | | :--- | :--- | :--- | :--- | | **Service Center Based Distribution** | $789.4 M | +3.6% | +1.8% | | **Engineered Solutions** | $357.0 M | -3.6% | -4.0% | - Gross profit margin was positively impacted by **30 basis points** due to a **$3.4 million** decrease in LIFO expense compared to the prior year quarter[92](index=92&type=chunk) - SD&A expenses increased by **$10.8 million (5.3%)**, primarily due to a **$4.9 million** increase in bad debt expense[93](index=93&type=chunk) [Results of Operations (Nine Months Ended March 31, 2024 and 2023)](index=27&type=section&id=Results%20of%20Operations%20%28Nine%20Months%29) For the nine months ended March 31, 2024, sales grew 2.0% to $3.32 billion, with improved gross profit margin and a 10.9% rise in net income | Segment | Nine Months 2024 Sales (in Millions) | Change vs Nine Months 2023 | Organic Change | | :--- | :--- | :--- | :--- | | **Service Center Based Distribution** | $2,265.2 M | +3.7% | +2.1% | | **Engineered Solutions** | $1,053.5 M | -1.5% | -2.7% | - Gross profit margin for the nine-month period was positively impacted by **40 basis points** due to a **$13.4 million** decrease in LIFO expense[106](index=106&type=chunk) - The effective income tax rate decreased to **21.0%** from **22.2%**, primarily due to the reversal of a tax valuation allowance in Mexico[111](index=111&type=chunk) [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity, with total debt reduced to $597.1 million, working capital increased to $1.3 billion, and cash from operations significantly rising | Metric (in Millions) | March 31, 2024 | June 30, 2023 | | :--- | :--- | :--- | | **Working Capital** | $1,299.3 M | $1,106.5 M | | **Current Ratio** | 3.8 to 1 | 3.0 to 1 | | **Total Debt** | $597.1 M | $622.2 M | - Net cash provided by operating activities increased to **$252.2 million** for the nine months ended March 31, 2024, up from **$164.0 million** in the prior year period[116](index=116&type=chunk) - The company was in compliance with all financial covenants, with net indebtedness at less than **0.4 times** consolidated EBITDA, well below the required maximum of **3.75 times**[125](index=125&type=chunk) [Cautionary Statement Under Private Securities Litigation Reform Act](index=32&type=section&id=Cautionary%20Statement%20Under%20Private%20Securities%20Litigation%20Reform%20Act) This section contains forward-looking statements, warning that actual results may differ materially due to various uncontrollable risk factors, including economic conditions and supply chain issues - The company identifies several important risk factors that could cause actual results to differ from forward-looking statements[130](index=130&type=chunk)[131](index=131&type=chunk) - Key risks cited include: customer operations levels, inflation, supply chain issues, competitive pressures, information system security, and ability to integrate acquisitions[132](index=132&type=chunk) [Item 3: Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203%3A%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk disclosures have not materially changed since the last annual report, referring readers to the Form 10-K for detailed information - There have been no material changes in the company's market risk exposures since the fiscal year ended June 30, 2023[135](index=135&type=chunk) [Item 4: Controls and Procedures](index=34&type=section&id=Item%204%3A%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2024, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[137](index=137&type=chunk) - No material changes to the company's internal control over financial reporting occurred during the third fiscal quarter of 2024[138](index=138&type=chunk) Part II [Item 1: Legal Proceedings](index=35&type=section&id=Item%201%3A%20Legal%20Proceedings) The company is involved in various legal proceedings but does not anticipate a material adverse effect on its financial position or results - The company does not expect any pending legal proceedings to have a material adverse effect on its consolidated financial position, results, or cash flows[140](index=140&type=chunk) [Item 2: Unregistered Sales of Equity Securities and Use of Proceeds](index=35&type=section&id=Item%202%3A%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q3 2024, the company repurchased 100,053 shares at an average price of $181.89, with 1,337,000 shares remaining authorized for repurchase | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | **Jan 2024** | 37,053 | $168.18 | | **Feb 2024** | 0 | $0.00 | | **Mar 2024** | 63,000 | $189.96 | | **Total Q3 2024** | **100,053** | **$181.89** | - As of March 31, 2024, the company has authorization to repurchase an additional **1,337,000 shares**[141](index=141&type=chunk) [Item 5: Other Information](index=35&type=section&id=Item%205%3A%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 trading plans or other non-Rule 10b5-1 trading arrangements during the quarter - No directors or officers adopted or terminated any Rule 10b5-1 trading plans or other non-Rule 10b5-1 trading arrangements during the quarter[142](index=142&type=chunk) [Item 6: Exhibits](index=35&type=section&id=Item%206%3A%20Exhibits) This section lists exhibits filed with the Form 10-Q, including corporate governance documents, debt agreements, CEO/CFO certifications, and Inline XBRL financial data - The report includes standard exhibits such as CEO and CFO certifications (Rule 13a-14(a)/15d-14(a) and Section 1350) and financial statements in Inline XBRL format[147](index=147&type=chunk)[148](index=148&type=chunk)

Applied Industrial Technologies, Inc. (NYSE:AIT) Q3 2024 Earnings Conference Call April 25, 2024 10:00 AM ET Company Participants Ryan Cieslak – Director-Investor Relations and Treasury Neil Schrimsher – President and Chief Executive Officer Dave Wells – Chief Financial Officer Conference Call Participants David Manthey – Baird Christopher Glynn - Oppenheimer Ken Newman – KeyBanc Chris Dankert – Loop Capital Aaron Reed - Northcoast Research Operator Welcome to the Fiscal 2024 Third Quarter Earnings Call for ...

The U.S. manufacturing sector is making a rebound after months of slowdown in activity. Easing price pressures is boosting demand, which is driving orders at U.S. factories and leading to higher production.The Commerce Department said on Apr 24 that orders for U.S. manufactured goods made to last more than three years rose 2.6% in March, slightly above the consensus estimate of a rise of 2.5%.However, durable goods orders for February were revised down from 1.4% to 0.7%, indicating that although manufacturi ...

Applied Industrial Technologies (AIT) came out with quarterly earnings of $2.48 per share, beating the Zacks Consensus Estimate of $2.40 per share. This compares to earnings of $2.38 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 3.33%. A quarter ago, it was expected that this industrial products company would post earnings of $2.11 per share when it actually produced earnings of $2.24, delivering a surprise of 6.16%.Over the ...

EXHIBIT 99.1 Applied Industrial Technologies Reports Fiscal 2024 Third Quarter Results and Announces Strategic Automation Acquisition • Net Sales of $1.1 Billion Up 1.3% YoY; Up 0.7% on an Organic Daily Basis • Net Income of $97.2 Million, or $2.48 Per Share; EBITDA of $135.7 Million • Operating Cash Flow of $84.2 Million; Free Cash Flow of $76.7 Million • Signed Definitive Agreement to Acquire Grupo Kopar, Expanding Automation Platform • Updating Fiscal 2024 Guidance CLEVELAND, OHIO (April 25, 2024) – Appl ...

Core Viewpoint - Applied Industrial Technologies, Inc (AIT) is positioned favorably for an upcoming earnings report, with analysts raising earnings estimates, indicating potential for an earnings beat [1][2] Earnings Estimates - The Most Accurate Estimate for AIT's current quarter is $2.41 per share, slightly above the Zacks Consensus Estimate of $2.40 per share, reflecting recent upward revisions by analysts [1] - AIT has a Zacks Earnings ESP of +0.63%, suggesting positive trends leading into the earnings season [1] Historical Performance - Stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have shown a positive surprise rate of nearly 70% and average annual returns exceeding 28% over the past decade [2] - AIT holds a Zacks Rank of 1 (Strong Buy), further enhancing its attractiveness to investors ahead of the earnings report [2]

We are in the first busy week of the first-quarter 2024 earnings season, and results are so far in line with expectations. Several industrial product companies are gearing up for their earnings releases next week, and some are set to beat. These companies currently carry a favorable Zacks Rank. The combination of a favorable Zacks Rank and an earnings beat should drive their stock prices in the near term.Industrial Product in Q1 at a GlanceIndustrial production declined 1.8% year over year in the first quar ...

Core Viewpoint - Growth stocks are appealing due to their potential for above-average financial growth, but identifying those that can fulfill their potential is challenging due to associated risks and volatility [1] Group 1: Company Overview - Applied Industrial Technologies (AIT) is currently highlighted as a recommended growth stock, possessing a favorable Growth Score and a top Zacks Rank [1][6] - The company has a historical EPS growth rate of 22.5%, with projected EPS growth of 8.5% this year, surpassing the industry average of 8.3% [3] - AIT's year-over-year cash flow growth stands at 26.9%, significantly higher than the industry average of 8.1%, with a historical annualized cash flow growth rate of 15% over the past 3-5 years compared to the industry average of 9.1% [4] Group 2: Earnings and Estimates - There have been upward revisions in current-year earnings estimates for AIT, with the Zacks Consensus Estimate increasing by 0.7% over the past month [5] - The combination of strong earnings growth, cash flow growth, and positive earnings estimate revisions has positioned AIT as a Zacks Rank 1 stock and earned it a Growth Score of B [6][7]

Two factors often determine stock prices in the long run: earnings and interest rates. Investors can't control the latter, but they can focus on a company's earnings results every quarter.Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive earnings surprises.The ability to identify stocks that are likely to top quarterly ...