Applied Industrial Technologies has recently released its 10-K report, revealing a detailed look at the company's financial performance and operations. Applied Industrial Technologies, Inc. distributes industrial motion, power, control, and automation technology solutions in North America, Australia, New Zealand, and Singapore. The company operates in two segments, Service Center Based Distribution and Engineered Solutions, serving various industries, including agriculture, food processing, cement, chemicals, and petrochemicals, among others. Applied Industrial Technologies was founded in 1923 and is headquartered in Cleveland, Ohio.
The company reported consolidated sales of $4.5 billion for fiscal 2024, representing a 1.5% increase compared to the prior year. The gross profit margin increased to 29.8% from 29.2% in fiscal 2023, while operating margin increased to 11.1% from 10.7%. Diluted earnings per share for fiscal 2024 were $9.83, up from $8.84 in fiscal 2023. Shareholders' equity stood at $1,688.8 million at June 30, 2024, compared to $1,458.4 million at June 30, 2023, and working capital increased to $1,268.8 million at June 30, 2024, from $1,106.5 million at June 30, 2023. The current ratio was 3.5 to 1 at June 30, 2024, compared to 3.0 to 1 at June 30, 2023.
Applied Industrial Technologies closely monitors economic indices such as Industrial Production (IP), Manufacturing Capacity Utilization (MCU), and the Purchasing Managers Index (PMI) to gauge industrial economic activity in the United States. The company's performance historically correlates well with the MCU, which measures productivity and calculates a ratio of actual manufacturing output versus potential full capacity output.
The company's Service Center Based Distribution segment reported a 3.0% increase in sales, driven by positive demand for technical MRO products and solutions, internal sales initiatives, and price increases. Meanwhile, sales in the Engineered Solutions segment decreased by 1.6%, primarily reflecting lower fluid power sales and softer sales across automation operations.
Sales in the United States increased by 1.9%, with acquisitions adding $50.0 million, while sales from other countries increased by 0.1%, with acquisitions adding $6.4 million. The gross profit margin increased to 29.8% in fiscal 2024 from 29.2% in fiscal 2023, primarily reflecting benefits from ongoing margin initiatives and countermeasures in response to inflation dynamics.
The company's working capital at June 30, 2024, was $1,268.8 million, an increase from $1,106.5 million at June 30, 2023. Net cash provided by operating activities was $371.4 million for fiscal 2024, up from $344.0 million in fiscal 2023.
In terms of liquidity and capital resources, the company expects that its existing cash, cash equivalents, funds available under the revolving credit facility, and cash provided from operations will be sufficient to finance normal working capital needs, payment of dividends, acquisitions, investments in properties, facilities and equipment, debt service, and the purchase of additional company common stock.
Following these announcements, the company's shares moved 1.3%, and are now trading at a price of $202.62. For more information, read the company's full 10-K submission here.
