Applied Industrial Technologies Reports Fiscal 2016 Fourth Quarter and Year-End Results
OREANDA-NEWS. August 15, 2016.
Net sales for the quarter were
For the 12 months ended
Commenting on the results, Applied's President & Chief Executive Officer
Neil A. Schrimsher said, “Our fourth quarter and full-year results reflect an economic environment that continues to be challenging. Sequentially, fourth quarter demand was generally flat compared to the third quarter, including reduced demand in oil and gas, mining and other industrial end markets.”
“Throughout fiscal 2016, we were disciplined in our operations, implementing appropriate cost controls and restructuring measures that lower our cost base and strengthen our competitive position. We remain on track to realize the targeted
“Across Applied, we have opportunities to advance our business in the current industrial economy and position ourselves for improvement in long-term performance. We are continuing to build on our strengths via investments in technology, talent initiatives and strategic acquisitions, as evidenced by our recent acquisition of Seals Unlimited. This is an excellent addition that enhances our bearings and power transmission platform in
Balance Sheet and Liquidity
During fiscal 2016, the Company returned more than
Outlook
Today the Company also provided its initial outlook for fiscal year 2017. For the full year, the Company is forecasting a sales change in the range of negative 3.0% to up 1.0%, and expects earnings per share in the range of
Mr. Schrimsher concluded, “In this current industrial economic environment, we remain focused on serving our customers, enhancing our value-add capabilities and delivering benefits for all Applied stakeholders. With our solid foundation, strong balance sheet and significant position as a well-diversified industrial distributor, we have much to offer and even greater potential, and we are committed to performing in any environment.”
Conference Call Information
Applied will host its quarterly conference call for investors and analysts at
Neil A. Schrimsher – President & CEO, and
Mark O. Eisele – CFO will discuss the Company's performance. To join the call, 1-888-343-1302 or 1-303-223-4368 (for International callers). A live audio webcast can be accessed online through the investor relations portion of the Company's website at www.applied.com. A replay of the call will be available for two weeks by dialing 1-800-633-8284 or 1-402-977-9140 (International) using passcode 21814774.
About
Founded in 1923,
This press release contains statements that are forward-looking, as that term is defined by the
APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES | ||||||||||||
CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS | ||||||||||||
(In thousands, except per share data) | ||||||||||||
Three Months Ended June 30, |
Year Ended June 30, |
|||||||||||
2016 |
2015 |
2016 |
2015 |
|||||||||
Net Sales | \\$ | 634,006 | \\$ | 677,540 | \\$ | 2,519,428 | \\$ | 2,751,561 | ||||
Cost of sales | 455,556 | 485,734 | 1,812,006 | 1,981,747 | ||||||||
Gross Profit | 178,450 | 191,806 | 707,422 | 769,814 | ||||||||
Selling, distribution and administrative, | ||||||||||||
including depreciation | 136,005 | 143,931 | 553,827 | 585,195 | ||||||||
Goodwill impairment | - | - | 64,794 | - | ||||||||
Operating Income | 42,445 | 47,875 | 88,801 | 184,619 | ||||||||
Interest expense, net | 2,059 | 2,131 | 8,763 | 7,869 | ||||||||
Other expense (income), net | (64 | ) | 1,142 | 1,060 | 879 | |||||||
Income Before Income Taxes | 40,450 | 44,602 | 78,978 | 175,871 | ||||||||
Income Tax Expense | 14,383 | 16,557 | 49,401 | 60,387 | ||||||||
Net Income | \\$ | 26,067 | \\$ | 28,045 | \\$ | 29,577 | \\$ | 115,484 | ||||
Net Income Per Share - Basic | \\$ | 0.67 | \\$ | 0.70 | \\$ | 0.75 | \\$ | 2.82 | ||||
Net Income Per Share - Diluted | \\$ | 0.66 | \\$ | 0.70 | \\$ | 0.75 | \\$ | 2.80 | ||||
Average Shares Outstanding - Basic | 39,030 | 40,062 | 39,254 | 40,892 | ||||||||
Average Shares Outstanding - Diluted | 39,286 | 40,335 | 39,466 | 41,187 | ||||||||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
||||||||||||
(1) Applied uses the last-in, first-out (LIFO) method of valuing U.S. inventory. An actual valuation of inventory under the LIFO method can only be made at the end of each year based on the inventory levels and costs at that time. Accordingly, interim LIFO calculations are based on management's estimates of expected year-end inventory levels and costs and are subject to the final year-end LIFO inventory determination. | ||||||||||||
In fiscal 2016, reductions in U.S. inventories, primarily in the bearings pool, resulted in liquidation of LIFO inventory quantities carried at lower costs prevailing in prior years. The overall impact of these LIFO layer liquidations occurred in the fourth quarter of fiscal 2016 and increased gross profit by \\$2.1 million in the fourth quarter and for the year ended June 30, 2016. There were no LIFO layer liquidation benefits recognized for the period ended June 30, 2015. | ||||||||||||
(2) During the third quarter of fiscal 2016, the Company performed its annual goodwill impairment test. As a result of the test, the Company determined that all of the goodwill associated with the Australia/New Zealand Service Center Based Distribution reporting unit was impaired as of January 1, 2016. This impairment is the result of the decline in the mining and extraction industries in Asia and the resulting reduced customer spending due to a decline in demand throughout Asia. Further, due to sustained declines in oil prices and reduced customer spending in Canada, the Company determined that the goodwill associated with the Canada Service Center Based Distribution reporting unit was also impaired as of January 1, 2016. Accordingly, the Company recognized a gross combined impairment charge of \\$64.8 million for goodwill in the third quarter of fiscal 2016, which after taxes had a negative impact on earnings of \\$63.8 million and reduced earnings per share by \\$1.62 per share. | ||||||||||||
(3) On June 14, 2016, the Company acquired the stock of Seals Unlimited, a distributor of sealing, fastener and hose products for a purchase price of \\$6.4 million. The financial results of the operations acquired have been included in the Service Center Based Distribution Segment as of the acquisition date. | ||||||||||||
(4) In November 2015, the FASB issued its final standard for the balance sheet classification of deferred taxes. The amendments in this standard require that deferred tax assets and liabilities be classified as noncurrent in the balance sheet. This update is effective for financial statements issued for annual periods beginning after December 15, 2016, with early adoption permitted. The Company has early adopted this standard in the second quarter of fiscal 2016 and has applied the new standard retrospectively to the prior period presented in the Condensed Consolidated Balance Sheets. The impact of this change in accounting principle on balances previously reported as of June 30, 2015 was to decrease other current assets \\$13.3 million, increase other assets \\$10.9 million and decrease other liabilities \\$2.4 million. | ||||||||||||
APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(Amounts in thousands) | ||||||||
June 30, 2016 |
June 30, 2015 |
|||||||
Assets | ||||||||
Cash and cash equivalents | \\$ | 59,861 | \\$ | 69,470 | ||||
Accounts receivable, less allowances of \\$11,034 and \\$10,621 | 347,857 | 376,305 | ||||||
Inventories | 338,221 | 362,419 | ||||||
Other current assets | 35,687 | 37,816 | ||||||
Total current assets | 781,626 | 846,010 | ||||||
Property, net | 107,765 | 104,447 | ||||||
Goodwill | 202,700 | 254,406 | ||||||
Intangibles, net | 191,240 | 198,828 | ||||||
Other assets | 29,198 | 28,865 | ||||||
Total Assets | \\$ | 1,312,529 | \\$ | 1,432,556 | ||||
Liabilities | ||||||||
Accounts payable | \\$ | 148,543 | \\$ | 179,825 | ||||
Current portion of long-term debt | 3,352 | 3,349 | ||||||
Other accrued liabilities | 122,493 | 126,898 | ||||||
Total current liabilities | 274,388 | 310,072 | ||||||
Long-term debt | 324,982 | 317,646 | ||||||
Other liabilities | 55,243 | 63,510 | ||||||
Total Liabilities | 654,613 | 691,228 | ||||||
Shareholders' Equity | 657,916 | 741,328 | ||||||
Total Liabilities and Shareholders' Equity | \\$ | 1,312,529 | \\$ | 1,432,556 | ||||
APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES | |||||||
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS | |||||||
(In thousands) | |||||||
Year Ended June 30, |
|||||||
2016 | 2015 | ||||||
Cash Flows from Operating Activities | |||||||
Net income | \\$ | 29,577 | \\$ | 115,484 | |||
Adjustments to reconcile net income to net cash provided | |||||||
by operating activities: | |||||||
Goodwill impairment | 64,794 | - | |||||
Depreciation and amortization of property | 15,966 | 16,578 | |||||
Amortization of intangibles | 25,580 | 25,797 | |||||
Amortization of stock appreciation rights and options | 1,543 | 1,610 | |||||
Loss (gain) on sale of property | 337 | (1,291 | ) | ||||
Other share-based compensation expense | 2,524 | 2,896 | |||||
Changes in assets and liabilities, net of acquisitions | 22,888 | (3,445 | ) | ||||
Other, net | (2,217 | ) | (3,091 | ) | |||
Net Cash provided by Operating Activities | 160,992 | 154,538 | |||||
Cash Flows from Investing Activities | |||||||
Property purchases | (13,130 | ) | (14,933 | ) | |||
Proceeds from property sales | 603 | 1,932 | |||||
Acquisition of businesses, net of cash acquired | (62,504 | ) | (160,620 | ) | |||
Net Cash used in Investing Activities | (75,031 | ) | (173,621 | ) | |||
Cash Flows from Financing Activities | |||||||
Net repayments under revolving credit facility | (19,000 | ) | (17,000 | ) | |||
Long-term debt borrowings | 125,000 | 170,000 | |||||
Long-term debt repayments | (98,662 | ) | (2,717 | ) | |||
Deferred financing costs | (719 | ) | - | ||||
Purchases of treasury shares | (37,465 | ) | (76,515 | ) | |||
Dividends paid | (43,330 | ) | (42,663 | ) | |||
Acquisition holdback payments | (18,913 | ) | (7,693 | ) | |||
Other, net | 1,104 | 1,277 | |||||
Net Cash (used in) provided by Financing Activities | (91,985 | ) | 24,689 | ||||
Effect of Exchange Rate Changes on Cash | (3,585 | ) | (7,325 | ) | |||
Decrease in cash and cash equivalents | (9,609 | ) | (1,719 | ) | |||
Cash and cash equivalents at beginning of period | 69,470 | 71,189 | |||||
Cash and Cash Equivalents at End of Period | \\$ | 59,861 | \\$ | 69,470 | |||
Комментарии