Core Insights - Several industrial products stocks are highlighted on the Zacks Rank 1 (Strong Buy) list, with 16 companies from the sector competing for recognition [1] - Three stocks, Applied Industrial Technologies, Atmus Filtration Technologies, and Belden, are particularly recommended by brokers, each receiving an average recommendation of 1.0 [1] Applied Industrial Technologies (AIT) - AIT is recognized for its engineering, design, and system integration services, with all four brokers covering the stock giving it a strong buy rating [1] - The stock is approaching its 52-week high of $201, having increased by 7% this month [1] - Annual earnings are projected to rise by 9% in fiscal 2024 and an additional 2% in FY25, reaching $9.72 per share [2] - The forward earnings multiple is 20.4X, with an average price target of $211.25 indicating an 8% upside potential [2] Atmus Filtration Technologies (ATMU) - ATMU, a manufacturer of advanced filtration products, has all six brokers rating it as a strong buy [4] - The average price target is $35.42, suggesting a 16% upside [4] - EPS is expected to decline by 2% this year but is forecasted to rebound with a 5% increase in FY25, reaching $2.38 per share [4] Belden (BDC) - Belden, which specializes in cable, connectivity, and networking products, has all five brokers rating it as a strong buy [6] - The stock has surged by 15% this month following a Q1 EPS of $1.24, surpassing the Zacks Consensus of $1.05 by 18% [6] - Annual earnings are expected to decline by 15% in FY24 but are projected to rebound with a 29% increase next year, reaching $7.47 per share [6] - The average price target is $104.60, indicating a 13% upside from current levels [6] Conclusion - The upward trend in earnings estimate revisions for Applied Industrial Technologies, Atmus Filtration Technologies, and Belden positions them as strong performers in the current quarter [7]

Manufacturing Sector Overview - The U.S. manufacturing sector is showing signs of recovery, with new orders for manufacturing goods increasing by $9.1 billion in March, representing a 1.6% month-over-month growth, consistent with consensus estimates [1] - March marked the second consecutive month of growth in factory orders, following a 1.2% increase in February [1] - Shipments rose by $1.5 billion, or 0.3%, reaching $583.3 billion, after a 1.4% increase in February [1] - New orders for manufactured durable goods increased by $7.3 billion, or 2.6%, totaling $283.3 billion, driven primarily by a $6.9 billion, or 7.8%, rise in transportation equipment orders [1] Inflation and Federal Reserve Actions - Inflation decreased from a peak of 9.1% in June 2022 to 3.5% in March 2024, leading to expectations of potential rate cuts by the Federal Reserve [2] - Federal Reserve Chairman Jerome Powell indicated that another rate hike is unlikely in the near future, with plans for three rate cuts by the end of the year [2] - Market participants anticipate the first rate cut to occur in June, which would benefit the manufacturing sector and the broader economy by alleviating price pressures [2] Investment Opportunities in Manufacturing Stocks - Five manufacturing stocks are highlighted as ideal investment opportunities: Applied Industrial Technologies, Inc. (AIT), AZZ Inc. (AZZ), AptarGroup, Inc. (ATR), Eaton Corporation plc (ETN), and Chart Industries, Inc. (GTLS) [3] - AIT is expected to have an earnings growth of 8.9% for the current year, with a Zacks Rank of 1 [4] - AZZ is projected to achieve a 6.6% earnings growth, with a Zacks Rank of 2 [4] - ATR anticipates an 11.7% earnings growth, also holding a Zacks Rank of 2 [5] - ETN is expected to see a 14.6% earnings growth, currently with a Zacks Rank of 2 [6] - GTLS is forecasted to have a significant earnings growth of 96.7%, maintaining a Zacks Rank of 2 [6]

Group 1: Reddit (RDDT) Performance - Reddit's stock gained 48.4% on its first day of trading, reaching a high of $74.90 by March 26, more than double its IPO price of $34 [1] - The launch of options trading contributed to the stock's early success, with approximately 90,000 options traded on the first day [1] - Daily options volume for Reddit stock has decreased significantly in April, dropping from 82,357 on April 1 to 32,154 on April 8 [1] Group 2: Bellring Brands (BRBR) - Bellring Brands has grown sales from $854 million in 2019 to $1.67 billion in 2023, achieving a compound annual growth rate of 18.3% [3] - The company expects revenues to grow by 12% in 2024, reaching $1.87 billion [3] - Bellring's stock trades at 46 times its trailing 12-month adjusted earnings per share and 30 times the 2024 estimate of $1.60 [3] Group 3: Applied Industrial Technologies (AIT) - Applied Industrial Technologies has appreciated by 14.9% annually since adopting its current stock symbol AIT, outperforming the S&P 500 [5] - The May 17 $195 call option has an ask price of $7.90, requiring a 4.1% down payment [6] - AIT's share price needs to increase by 3.2% over the next 38 days for the option to be considered for exercise [6] Group 4: UFP Industries (UFPI) - UFP Industries has seen its shares appreciate by 13.7% annually since going public in 1993, with a 106% increase since October 2020 [7][8] - The company expects to grow annual sales by 7% to 10% over the next five years, with an average adjusted EBITDA margin of 12.5% [8] - UFP Industries anticipates benefiting from a potential decline in interest rates later this year and into 2025 [8]

Industry Overview - The Zacks Manufacturing – General Industrial industry is experiencing growth due to the recovery in domestic and export orders for industrial products and the rise in e-commerce business [1] - Companies in this industry produce a variety of industrial equipment and provide services to sectors such as mining, oil and gas, agriculture, and transportation [2] Current Trends - Industrial production increased by 0.4% in March 2024, with manufacturing output rising by 0.5%, indicating a positive trend in manufacturing activities [3] - The ISM's manufacturing index registered 50.3% in March 2024, signaling expansion in U.S. manufacturing activity [3] - The New Order Index increased by 2.2 percentage points, suggesting a return to expansion territory for new orders [3] Supply Chain and Technological Advancements - Supply-chain disruptions are easing, particularly regarding electronic components, which is expected to support growth in 2024 [4] - Companies are focusing on digitizing operations, enhancing competitiveness through improved productivity and lower costs [4] Financial Performance and Valuation - The Zacks Manufacturing – General Industrial industry ranks 69, placing it in the top 27% of over 250 Zacks industries, indicating strong near-term prospects [6] - The industry's earnings estimates for the current year have increased by 2.7% over the past year, reflecting positive analyst sentiment [7] - The industry has outperformed both the broader sector and the S&P 500 index, appreciating by 27% compared to 23.6% and 23.5% respectively [8] Current Valuation Metrics - The industry is currently trading at a forward 12-month Price-to-Earnings (P/E) ratio of 22.02X, higher than the S&P 500's 20.75X and the sector's 18.26X [9] Notable Companies - **Applied Industrial Technologies (AIT)**: Expected to benefit from strength in various end markets, with a projected sales growth of 1-3% for fiscal 2024. The company has gained 39.3% in the past year [11] - **Chart Industries (GTLS)**: Anticipated to benefit from a record backlog and strength in key markets, with shares gaining 15.8% in the past year [12] - **Ingersoll Rand (IR)**: Positioned to benefit from a solid product portfolio and increased orders, with shares gaining 63.5% in the past year [13] - **RBC Bearings (RBC)**: Expected to gain from strength in the Aerospace segment, with shares increasing by 6.8% in the past year [14]

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 ...