On August 15, 2024, Applied Industrial Technologies Inc (AIT, Financial) released its 8-K filing detailing the financial results for the fourth quarter and full fiscal year ending June 30, 2024. Applied Industrial Technologies Inc is a distributor of industrial products to the maintenance, repair, and operations market and the original equipment manufacturing industry. The company also provides engineering and design services for industrial and fluid power applications, operating primarily in North America, Australia, and New Zealand.
Performance Overview
For the fourth quarter, Applied Industrial Technologies Inc reported net sales of $1.2 billion, a slight increase of 0.2% year-over-year. This performance includes a 1.5% increase from acquisitions and a 0.8% positive impact from selling days, offset by a 0.1% negative impact from foreign currency translation. On an organic daily basis, sales declined by 2.0%, with the Service Center segment down 0.7% and the Engineered Solutions segment down 4.6%.
Net income for the quarter was $103.5 million, or $2.64 per share, surpassing the analyst estimate of $2.52 per share. EBITDA for the quarter stood at $153.5 million, up 9.6% year-over-year.
Full-Year Financial Achievements
For the full fiscal year 2024, Applied Industrial Technologies Inc reported net sales of $4.5 billion, a 1.5% increase compared to the previous year. Net income for the year was $385.8 million, or $9.83 per share, exceeding the annual estimate of $9.66 per share. Adjusted net income was $382.7 million, or $9.75 per share, reflecting an 11.4% year-over-year increase. EBITDA for the year was $553.3 million, up 5.5% from the prior year.
Key Financial Metrics
| Metric | Q4 2024 | Q4 2023 | FY 2024 | FY 2023 |
|---|---|---|---|---|
| Net Sales | $1.2 Billion | $1.16 Billion | $4.5 Billion | $4.41 Billion |
| Net Income | $103.5 Million | $92.2 Million | $385.8 Million | $346.7 Million |
| EPS (Diluted) | $2.64 | $2.35 | $9.83 | $8.84 |
| EBITDA | $153.5 Million | $140.1 Million | $553.3 Million | $524.5 Million |
Challenges and Outlook
Despite the positive financial performance, Applied Industrial Technologies Inc faced challenges, particularly a slowdown in end-market demand. The Fluid Power operations within the Engineered Solutions segment experienced significant inventory destocking and reduced production across OEM customers. The Service Center segment also saw mixed billing activity as customers managed MRO spending conservatively.
"Consistent with broader industrial datapoints in recent months, we saw a greater than expected slowdown in end-market demand as the quarter played out," commented Neil A. Schrimsher, President & CEO of Applied Industrial Technologies Inc.
Strategic Acquisitions and Fiscal 2025 Guidance
The company announced the acquisitions of Total Machine Solutions and Stanley Proctor, expected to generate annual sales of approximately $17 million in the first year. These acquisitions are aimed at enhancing Applied Industrial Technologies Inc's competitive position and growth potential.
For fiscal 2025, the company has issued guidance with total sales expected to range from -2.5% to +2.5% and EPS between $9.20 and $9.95. This guidance reflects current economic uncertainties and assumes a potential slowdown in end-market demand in the first half of the year, followed by stabilization in the second half.
"While we remain optimistic on our potential, we are taking a prudent approach to our initial 2025 outlook," added Mr. Schrimsher.
For more detailed information, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from Applied Industrial Technologies Inc for further details.
