NYSE$AIT

Applied Industrial Technologies Inc · Q3 2022 earnings

Q3 2022 earnings · · Investor relations

Briefing

Achieved record sales and earnings, driven by strong business momentum and effective management of inflationary pressures.

Applied Industrial Technologies reported a strong third quarter with record sales and earnings. Net sales increased by 16.6% year-over-year to $980.7 million, and net income was $68.3 million, or $1.75 per share. The company is raising its fiscal year 2022 guidance for sales, EBITDA margins, and EPS.

  • Net sales increased 16.6% year-over-year to $980.7 million.
  • Organic daily sales increased 14.7%.
  • Net income was $68.3 million, or $1.75 per share.
  • Fiscal 2022 guidance raised for sales, EBITDA margin, and EPS.

Headline financials

Total Revenue

$981M

Previous: $841M+16.6%
EPS (adj)

$1.89

Previous: $1.37+38.0%
Organic Sales Growth

14.7%

No prior period
Free Cash Flow

$68.3M

Previous: $56.1M+21.8%
Net Income

$68.3M

Previous: $56.1M+21.8%
Operating Income

$95.8M

Previous: $74.5M+28.7%
Gross Profit

$287M

Previous: $247M+16.2%
Cash & Equivalents

$188M

Previous: $304M-38.1%
Total Assets

$2.38B

Previous: $2.31B+3.4%

Revenue & EPS history

Applied Industrial Technologies · Revenue · Quarterly

$981M

Q3 2022+16.6%vs Q3 2021
Beat estimate in 15 of 16 quarters(94%)
ActualEstimate

Revenue by segment

Applied Industrial Technologies · $1.1B total across 2 segments · Q1 2023

  • Engineered Solutions
    $550M
  • Service Center
    $550M

Forward guidance

The Company is raising guidance for fiscal 2022 and now projects EPS of $6.15 to $6.25 (prior $5.70 to $5.90), sales growth of 14.8% to 15.3% including 13.6% to 14.1% on an organic basis (prior 11.5% to 12.5% including 10.5% to 11.5% organic), and EBITDA margins of 10.5% to 10.6% (prior 10.1% to 10.3%).

Tailwinds

  • Positive demand trends are persisting across our business with organic sales month to date in April up by a low double-digit percent year over year.
  • Expect ongoing benefits from our operational execution.
  • Expect benefits from inventory management.
  • Expect benefits from internal margin initiatives.
  • Organic growth and incremental margin momentum is providing a path to achieve our interim annual EBITDA margin target of 11% potentially sooner than expected.

Headwinds

  • We continue to navigate an extremely dynamic supply chain.
  • We continue to navigate an inflationary environment.
  • Guidance does not assume contribution from potential future acquisitions.
  • Forward-looking statements are based on current expectations regarding important risk factors including trends in the industrial sector of the economy (such as the inflationary environment and supply chain strains)
  • The effects of the health crisis associated with the COVID-19 pandemic on our business operations, results of operations, and financial condition

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q3 2022

Historical avgQ3 2022

+0.2%

Avg return

Earnings day

+1.2%

Avg return

5 days after

+4.1%

Avg return

30 days after

39%

26 / 67 earnings

Positive

+14.6%

Q1 2017

Best reaction

-9.1%

Q3 2020

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q3 2026+3.0%+1.6%+3.4%
Q2 2026-6.8%-7.5%+0.7%
Q1 2026-0.8%-1.1%-1.0%
Q3 2025-0.6%-5.6%-1.0%
Q2 2025+0.9%+2.5%-0.7%
Q1 2025+3.3%+5.2%+23.8%
Q4 2024+1.3%+0.3%+2.5%
Q3 2024-2.8%-1.5%+5.2%
Q2 2024+0.9%+3.8%+7.5%
Q1 2024-1.0%+0.8%+7.4%
Q4 2023+7.5%+7.4%+10.9%
Q3 2023+3.1%+0.9%-2.7%
Q2 2023+14.5%+16.9%+13.4%
Q1 2023+8.7%+11.1%+13.0%
Q4 2022+7.0%+9.5%+2.7%
Q3 2022+8.8%+11.0%+7.2%
Q2 2022+3.4%+3.2%+4.1%
Q1 2022-2.7%-4.4%-1.1%
Q4 2021-0.5%-1.8%-4.3%
Q3 2021+0.2%+6.0%+2.6%
Q2 2021-8.6%-3.8%+10.9%
Q1 2021+2.5%+6.9%+34.2%
Q4 2020-7.1%-8.0%-16.8%
Q3 2020-9.1%-8.5%+2.4%
Q2 2020-0.6%-1.0%+1.3%
Q1 2020+4.1%+8.9%+11.1%
Q4 2019-2.5%-0.0%+6.3%
Q3 2019-2.5%-3.5%-10.2%
Q2 2019-2.7%-2.4%-0.5%
Q1 2019-0.7%-1.2%-3.7%
Q4 2018-1.1%+2.4%+2.7%
Q3 2018-9.1%-9.2%-2.7%
Q2 2018+4.8%+4.6%+3.6%
Q1 2018-1.1%-3.9%-6.3%
Q4 2017+4.3%+2.6%+5.9%
Q3 2017-0.2%+0.5%-3.8%
Q2 2017-2.7%-5.9%-2.0%
Q1 2017+14.6%+15.8%+37.4%
Q4 2016-4.9%-5.0%-2.4%
Q3 2016-0.0%
Q2 2016+2.9%
Q1 2016+3.9%
Q4 2015+5.0%
Q3 2015+0.6%
Q2 2015-0.5%
Q1 2015-2.0%
Q4 2014-2.5%
Q3 2014-1.6%
Q2 2014+9.9%
Q1 2014-8.9%
Q4 2013-5.1%
Q3 2013+8.9%
Q2 2013+2.7%
Q1 2013-2.1%
Q4 2012+8.2%
Q3 2012-0.3%
Q2 2012-4.8%
Q1 2012-7.0%
Q4 2009-6.0%
Q4 2011-6.0%
Q3 2010-1.9%
Q3 2011-1.9%
Q2 2011-1.4%
Q1 2010-0.5%
Q2 2010-0.5%
Q4 2010-0.5%
Q1 2011-0.5%

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