UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 13, 2003
APPLIED INDUSTRIAL TECHNOLOGIES, INC.
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(Exact name of registrant as specified in its charter)
OHIO 1-2299 34-0117420
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(State or Other Jurisdiction of (Commission File (I.R.S. Employer
Incorporation or Organization) Number) Identification No.)
One Applied Plaza, Cleveland, Ohio 44115
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (216) 426-4000.
ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
Attached to this filing and incorporated by reference herein is the
text of registrant's press release dated October 13, 2003 regarding first
quarter results.
None of the contents of this Form 8-K should be deemed incorporated by
reference into a Securities Act registration statement.
SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
APPLIED INDUSTRIAL TECHNOLOGIES, INC.
(Registrant)
By: /s/ Fred D. Bauer
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Fred D. Bauer
Vice President-General Counsel
& Secretary
Date: October 14, 2003
APPLIED INDUSTRIAL TECHNOLOGIES REPORTS FIRST QUARTER
SALES AND EARNINGS IN LINE WITH GUIDANCE
CLEVELAND, OHIO (October 13, 2003) - Applied Industrial Technologies (NYSE: AIT)
today reported that financial results for its fiscal 2004 first quarter, which
ended September 30, 2003, were consistent with the company's previously provided
guidance.
Net sales for the quarter were $361,146,000, down 1.9% compared with
$368,019,000 in the comparable period a year ago. Earnings per share rose 25%.
Net income for the quarter was $4,832,000, or $0.25 per share, versus income of
$3,905,000 or $0.20 per share, last year.
Commenting on results, Applied Chairman & Chief Executive Officer David L. Pugh
said, "While the economic outlook remains troubling, we continue to make
progress on profit levels by focusing on margin management.
"Operating margin for the first quarter was particularly strong when you
consider last year's first quarter results included the benefit of relatively
high real estate gains. The company also had $359,000 of additional expense in
this current quarter as we began to expense stock options pursuant to our
election to adopt SFAS 123 and 148. All elements of our balance sheet are well
under control, and we are in a solid financial position.
"Looking ahead, our sales guidance for our second quarter is $340 million to
$350 million, with earnings per share between $0.20 and $0.25. We are
maintaining full year fiscal 2004 guidance for earnings between $1.10 and $1.20
per share with sales ranging from $1.4 billion to $1.5 billion."
During the first quarter, the company repurchased 91,000 shares of its common
stock for approximately $2 million. At September 30, 2003, board authorization
was in place to repurchase up to 1 million additional shares.
Applied will host its fourth quarter conference call at 4 p.m. ET today,
(Monday, October 13). To join the call, dial 1-800-810-0924 and passcode 399869.
The call will be conducted by Chairman & CEO David L. Pugh, President & COO Bill
L. Purser, and CFO John R. Whitten. The call will also be webcast and can be
accessed live online at
-More-
www.applied.com and will be archived there for seven days. A replay of the
teleconference will be available at 1-888-203-1112 from 6 p.m. ET on October 13
through midnight on October 27.
With more than 430 facilities and 4,300 employee associates across North
America, 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, 2003, the Company posted sales of $1.46 billion. Applied can be visited on
the Internet at www.applied.com.
This press release contains statements that are forward-looking, as that term is
defined by the Securities and Exchange Commission in its rules, regulations and
releases. Forward-looking statements are often identified by qualifiers such as
"expect," "guidance," "see" and similar expressions. Applied intends that such
forward-looking statements be subject to the safe harbors created thereby. All
forward-looking statements are based on current expectations regarding important
risk factors including trends in the industrial sector of the economy, and other
risk factors identified in Applied's most recent periodic report and other
filings made with the Securities and Exchange Commission. Accordingly, actual
results may differ materially from those expressed in the forward-looking
statements, and the making of such statements should not be regarded as a
representation by the Company or any other person that the results expressed
therein will be achieved. Applied assumes no obligation to update publicly or
revise any forward-looking statements, whether due to new information, or
events, or otherwise.
(A financial summary is attached.)
#####
For more information, contact John R. Whitten, Vice President - Chief Financial
Officer & Treasurer, at 216/426-4245.
APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CONSOLIDATED INCOME
(Thousands, except per share data)
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Three Months Ended
September 30
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2003 2002
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NET SALES $ 361,146 $ 368,019
Cost of sales 267,669 278,117
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GROSS PROFIT 93,477 89,902
Selling, distribution and administrative 84,481 82,058
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OPERATING INCOME 8,996 7,844
Interest expense, net 1,318 1,261
Other 166 288
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INCOME BEFORE INCOME TAXES 7,512 6,295
INCOME TAXES 2,680 2,390
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NET INCOME $ 4,832 $ 3,905
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NET INCOME PER SHARE - BASIC $ 0.25 $ 0.21
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NET INCOME PER SHARE - DILUTED $ 0.25 $ 0.20
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AVERAGE SHARES OUTSTANDING - BASIC 19,008 19,016
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AVERAGE SHARES OUTSTANDING - DILUTED 19,413 19,289
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(1) Cost of sales for interim financial statements is computed using estimated
gross profit percentages, which are adjusted throughout the year based upon
available information. Adjustments to actual cost are primarily made based
upon physical inventories and the effect of year-end inventory quantities
on LIFO costs.
(2) During the quarter ended September 30, 2003, the Company adopted the fair
value recognition provisions of SFAS 123, "Accounting for Stock-Based
Compensation," using the modified prospective method for the transition.
Under the modified prospective method, stock based compensation cost
recognized during this fiscal year is the same as that which would have
been recognized had the fair value recognition provisions been applied to
all awards granted after July 1, 1995. The compensation expense recorded
during the quarter ended September 30, 2003 was $359 or $.01 per share.
APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amount in Thousands)
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September 30, June 30,
2003 2003
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ASSETS
Cash $37,088 $55,079
Accounts receivable, less allowances of $6,200 and $6,100 173,218 173,915
Inventories 163,998 159,798
Other current assets 12,643 11,702
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Total current assets 386,947 400,494
Property - net 82,953 77,942
Goodwill 49,609 49,687
Other assets 24,963 25,281
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TOTAL ASSETS $544,472 $553,404
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LIABILITIES
Accounts payable $71,902 $75,411
Other current liabilities 55,075 65,724
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Total current liabilities 126,977 141,135
Long-term debt 78,360 78,558
Other liabilities 25,563 25,855
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TOTAL LIABILITIES 230,900 245,548
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SHAREHOLDERS' EQUITY 313,572 307,856
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $544,472 $553,404
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APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS
(Amount in Thousands)
Three Months Ended September 30
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2003 2002
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CASH PROVIDED FROM OPERATIONS:
Net income $4,832 $3,905
Items not requiring cash:
Depreciation and amortization 4,085 4,159
Other 2,781 594
Gain on sale of property (37) (1,329)
Cash effect of changes in working capital (20,295) 13,587
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CASH PROVIDED FROM (USED IN) OPERATIONS (8,634) 20,916
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INVESTING ACTIVITIES:
Property purchases (8,742) (2,884)
Proceeds from property sales 636 2,931
Deposits and other 215 1,488
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CASH PROVIDED FROM (USED IN) INVESTING ACTIVITIES (7,891) 1,535
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FINANCING ACTIVITIES:
Proceeds from termination of interest rate swap 2,517
Purchase of common stock for treasury (1,982) (1,773)
Cash dividends paid (2,294) (2,304)
Other 2,810 93
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CASH USED BY FINANCING ACTIVITIES (1,466) (1,467)
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INCREASE (DECREASE) IN CASH $(17,991) $20,984
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