Contraction in industrial demand keeps Applied results flat
Cleveland, OH -- Oct. 22, 2002 -- First quarter 2003 results for Applied Industrial Technologies produced sales of...
Cleveland, OH — Oct. 22, 2002 — First quarter 2003 results for Applied Industrial Technologies produced sales of $368,019,000, flat compared with $367,990,000 in the comparable period a year ago (all figures in U.S. dollars). Net income for the quarter was $3,905,000, or $0.20 per share, versus a loss of $7,211,000, or $0.38 per share, last year.
Last year’s fiscal first quarter included a non-cash charge of $12.1 million, or $0.63 per share, for impaired goodwill associated with Applied’s fluid power business. Prior to the charge, last year’s fiscal first quarter net income was $4,889,000, or $0.25 per share.
Commenting on results, Applied chairman and chief executive officer David L. Pugh said, “We worked diligently again this quarter to overcome the effects of a stagnant industrial economy by pursuing new sales opportunities, controlling expenses and managing assets. While our sales started to stabilize, our gross margin decline is indicative of the tough competitive climate induced by shrinking demand.
“The market for our products remains weak in virtually every industry segment except automotive, and customers are cautious about their purchasing volumes in light of lower production and reduced capital expenditures. The Purchasing Managers’ Index dipped below 50 again in September, indicating contraction in overall industrial demand.
“Looking ahead, our sales guidance for our second fiscal quarter is $340 million to $350 million, with earnings per share between $0.15 and $0.20. We are maintaining full year fiscal 2003 guidance for earnings between $0.75 and $0.90 per share on sales ranging from $1.4 billion to $1.5 billion.”
During the first quarter, the company repurchased 104,000 shares of stock for $1.8 million. At September 30, 2002, board authorization was in place to repurchase up to 435,000 additional shares.
With more than 440 facilities and 4,500 employee-associates across North America, Cleveland-based Applied Industrial Technologies offers more than 2 million parts critical to the operations of MRO and OEM customers in virtually every industry. In addition, Applied provides engineering, design and systems integration for industrial and fluid power applications, as well as customized mechanical, fabricated rubber and fluid power shop services.
For its fiscal year ended June 30, 2002, the Company posted sales of $1.45 billion. Applied can be visited on the Internet at www.appliedindustrial.com .