Applied Industrial Technologies Inc (AIT) has reported a 0.58 percent rise in profit for the quarter ended Dec. 31, 2016. The company has earned $24.08 million, or $0.61 a share in the quarter, compared with $23.95 million, or $0.61 a share for the same period last year. Revenue during the quarter went down marginally by 0.36 percent to $608.12 million from $610.35 million in the previous year period. Gross margin for the quarter contracted 1 basis points over the previous year period to 28.36 percent. Total expenses were 93.81 percent of quarterly revenues, up from 93.71 percent for the same period last year. That has resulted in a contraction of 9 basis points in operating margin to 6.19 percent.
Operating income for the quarter was $37.66 million, compared with $38.36 million in the previous year period.
Commenting on the results, Applied’s president and chief executive officer Neil A. Schrimsher said, “Midway through our fiscal year, we are pleased with the continued operational enhancements and efficiencies throughout our organization. We are also encouraged by the improving sales per day developments and remain focused on expanding our capabilities with new and existing customers.”
Applied Industrial Technologies forecasts revenue to decline in the range of 2 percent to 1 percent for the fiscal year 2017. For fiscal year 2017, the company expects diluted earnings per share to be in the range of $2.50 to $2.60.
Operating cash flow improves significantly
Applied Industrial Technologies Inc has generated cash of $45.66 million from operating activities during the first half, up 34.90 percent or $11.81 million, when compared with the last year period. The company has spent $4.06 million cash to meet investing activities during the first six months as against cash outgo of $28.79 million in the last year period. It has incurred net capital expenditure of $4.06 million on net basis during the first six months, down 26.72 percent or $1.48 million from year ago period.
The company has spent $37.02 million cash to carry out financing activities during the first six months as against cash outgo of $14.35 million in the last year period.
Cash and cash equivalents stood at $62.86 million as on Dec. 31, 2016, up 12.98 percent or $7.22 million from $55.63 million on Dec. 31, 2015.
Working capital decreases marginally
Applied Industrial Technologies Inc has witnessed a decline in the working capital over the last year. It stood at $545.21 million as at Dec. 31, 2016, down 2.55 percent or $14.24 million from $559.45 million on Dec. 31, 2015. Current ratio was at 3.30 as on Dec. 31, 2016, down from 3.53 on Dec. 31, 2015.
Cash conversion cycle (CCC) has decreased to 60 days for the quarter from 99 days for the last year period. Days sales outstanding were almost stable at 52 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 37 days for the quarter compared with 75 days for the previous year period. At the same time, days payable outstanding went up to 30 days for the quarter from 27 for the same period last year.
Debt comes down
Applied Industrial Technologies Inc has recorded a decline in total debt over the last one year. It stood at $327.19 million as on Dec. 31, 2016, down 10.85 percent or $39.80 million from $366.99 million on Dec. 31, 2015. Total debt was 25.27 percent of total assets as on Dec. 31, 2016, compared with 27.18 percent on Dec. 31, 2015. Debt to equity ratio was at 0.48 as on Dec. 31, 2016, down from 0.52 as on Dec. 31, 2015. Interest coverage ratio improved to 17.93 for the quarter from 17.78 for the same period last year.
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