Applied Industrial Technologies reports Q4 EPS $2.35, consensus $2.17

Reports Q4 revenue $1.2B, consensus $1.12B. Neil Schrimsher, CEO, commented, “We had a strong finish to fiscal 2023 with Q4 sales, EBITDA, and EPS exceeding our expectations. Sales grew a solid 9% organically over the prior year against challenging comparisons…At the same time, we expanded gross margins by 35 basis points over the prior year, produced double-digit EBITDA growth for the tenth straight quarter, and generated record free cash flow. Overall, FY23 was a pivotal year for our business with sales exceeding $4B and EBITDA margins reaching record highs on the back of top-tier organic growth, steadfast execution, and ongoing expansion of our next-generation Automation platform…Moving into FY24, we remain focused on meeting the needs of our customers and continuing to progress towards our long-term strategic objectives as we navigate an uncertain macroeconomic backdrop…We expect broader market activity to moderate further near term as customers normalize production levels and manage through a higher interest rate environment. That said, we continue to believe any near-term slowdown will be transitional and short in nature given positive tailwinds underpinning the industrial sector, and a greater focus on supply chain reliability and capacity investments. In addition, we remain constructive on our growth potential beyond cycle conditions considering our exposure to secular tailwinds, sustained share gain opportunities, and continued momentum around our cross-selling initiative. We also expect another meaningful year of cash generation, which combined with our strong balance sheet provides significant M&A fire power and capital deployment capacity to enhance returns for all stakeholders.”