Applied Industrial Technologies(US:AIT)2025-01-29 21:09Financial Performance - Net sales for the three months ended December 31, 2024, were $1,073,001, a slight decrease of 0.02% compared to $1,077,153 in the same period of 2023[11]. - Gross profit increased to $328,050 for the three months ended December 31, 2024, representing a 3.1% increase from $317,090 in 2023[11]. - Operating income for the six months ended December 31, 2024, was $234,042, a decrease of 0.5% compared to $235,274 in 2023[11]. - Net income for the three months ended December 31, 2024, was $93,290, up 2.3% from $91,228 in 2023[11]. - Net income for the six months ended December 31, 2024, was $185,353 thousand, compared to $185,054 thousand for the same period in 2023, reflecting a slight increase of 0.2%[29]. - Net income for the six months ended December 31, 2024, was $189,609, slightly up from $186,067 in 2023, representing an increase of 1.4%[47]. - The company reported a comprehensive loss of $19,326 thousand for the six months ended December 31, 2024, compared to a comprehensive loss of $7,074 thousand for the same period in 2023[29]. - The company reported a comprehensive income of $73,964 for the three months ended December 31, 2024, compared to $93,952 in 2023, indicating a decrease of 21.3%[13]. Assets and Liabilities - Total assets increased to $3,044,641 as of December 31, 2024, compared to $2,951,910 as of June 30, 2024, reflecting a growth of 3.1%[16]. - Total liabilities decreased slightly to $1,251,129 as of December 31, 2024, from $1,263,129 as of June 30, 2024[16]. - The company’s retained earnings increased to $2,292,902 as of December 31, 2024, compared to $2,121,838 as of June 30, 2024, indicating a growth of 8.1%[16]. - Total shareholders' equity increased to $1,793,512 thousand as of December 31, 2024, up from $1,688,781 thousand as of June 30, 2024, representing an increase of approximately 6.2%[29]. - Total debt as of December 31, 2024, was $572,300, down from $597,405 as of June 30, 2024[59]. Cash Flow and Investments - Cash and cash equivalents decreased to $303,441 as of December 31, 2024, down from $460,617 as of June 30, 2024[16]. - The company reported a net cash provided by operating activities of $222,884 for the six months ended December 31, 2024, compared to $167,967 in 2023, an increase of 32.6%[20]. - Cash used in investing activities increased significantly to $283.0 million, primarily due to acquisitions, compared to $30.8 million in the prior year[124]. - The Company repurchased 127,376 shares of common stock for $30.0 million during the six months ended December 31, 2024, compared to $10.7 million for 62,947 shares in the prior year[125]. Acquisitions - The company made acquisitions totaling $273,142 during the six months ended December 31, 2024, compared to $21,440 in the same period of 2023[20]. - The acquisition of Hydradyne, completed on December 31, 2024, was valued at $276,091 and is expected to enhance the Engineered Solutions segment[43]. - The Company acquired Total Machine Solutions for $6,500, with net tangible assets of $1,024 and identifiable intangible assets of $2,738, resulting in goodwill of $2,738[48]. - The acquisition of Stanley Proctor was completed for $3,924, with net tangible assets of $498 and identifiable intangible assets of $1,725, leading to goodwill of $1,701[49]. - Grupo Kopar was acquired for $61,225, with net liabilities of $2,870 and total intangible assets including goodwill of $64,095[50]. - Bearing Distributors, Inc. was acquired for $17,926, with net tangible assets of $4,102 and intangible assets including goodwill of $13,824[51]. - Cangro Industries, Inc. was acquired for $6,219, with net tangible assets of $2,070 and intangible assets including goodwill of $4,149[53]. Revenue and Sales - Total revenue for the three months ended December 31, 2024, was $1,073,001, a slight decrease of 0.2% compared to $1,077,153 in the same period of 2023[37]. - For the six months ended December 31, 2024, total revenue was $2,171,945, remaining relatively stable compared to $2,172,341 in 2023[38]. - The United States contributed $929,549 to total revenue in Q2 2024, down from $944,652 in Q2 2023, reflecting a decrease of 1.6%[37]. - The Fluid Power segment represented 20.0% of total revenue for the three months ended December 31, 2024, consistent with the previous year[38]. - General Industry accounted for 35.4% of total revenue in Q2 2024, compared to 36.0% in Q2 2023, showing a shift in revenue distribution[38]. Expenses and Margins - Selling, distribution, and administrative expenses (SD&A) increased by $4.7 million or 2.3%, with SD&A as a percentage of sales rising to 19.3%[97]. - Operating income increased by $6.3 million or 5.5%, with operating income as a percentage of sales rising to 11.3% from 10.6%[98]. - The gross profit margin improved to 30.6% for the quarter ended December 31, 2024, compared to 29.4% in the prior year[88]. - The company incurred $1,473 in third-party costs related to the Hydradyne acquisition during the six months ended December 31, 2024[43]. Accounting and Compliance - The company is currently evaluating the impacts of recently issued accounting guidance on its financial statements and related disclosures, which may affect future reporting[32]. - The company expects that the new accounting standards will not have a material impact on its consolidated financial statements but will enhance disclosures[33]. - The effective income tax rate increased to 22.3% for the six months ended December 31, 2024, compared to 21.1% for the same period in 2023, with an expected full-year tax rate for fiscal 2025 in the range of 23.0% to 24.0%[118].