CLEVELAND, May 1, 2014 /PRNewswire/ — Applied Industrial Technologies (NYSE: AIT) today reported third quarter fiscal 2014 sales and earnings for the three months ended March 31, 2014.

Net sales for the quarter were $618.0 million, a decrease of 0.6% compared with $621.7 million in the same quarter a year ago. Foreign currency exchange rates resulted in a negative 1.6% impact on sales in the March 2014 quarter. Net income for the quarter was $30.4 million, or $0.72 per share, compared with $29.3 million, or $0.69 per share, in the third quarter of fiscal 2013. The March 2014 quarter includes one-time tax benefits of $2.8 million, or $0.07 per share.

For the nine months ended March 31, 2014, sales decreased 0.9% to $1.81 billion from $1.82 billion in the same period last year. Net income was $83.1 million, or $1.96 per share, compared with $85.9 million, or $2.02 per share, last year.

The company also announced it has acquired Reliance Industrial Products (Reliance) of Nisku, Alberta, Canada – a leading supplier to the upstream oil and gas industry.

Commenting on the results, Applied’s President & Chief Executive Officer Neil A. Schrimsher said, “We faced some market headwinds earlier in the quarter, and we made nice progress with our ERP business transformation. With our most recent ‘Go Live’ in April, our entire U.S. Service Center network is now operating on our new system. In addition, we are very pleased to add Reliance to our Company, significantly enhancing our capabilities to serve oil and gas markets in North America.”

Reliance was founded in 1993 as a specialty hose and fitting supplier to serve the unique needs of the oilfield drilling industry. The business has expanded to offer a full range of products and services including design and manufacturing, hydraulic and mechanical repair, and oilfield, hydraulic and safety products.

Reliance primarily serves the oil and gas industry in Western Canada and the United States with some exposure to transportation, mining and construction. The business operates from 15 locations with ten in Western Canada and five in the United States in Texas, North Dakota, Colorado and Louisiana.

Reliance employs 256 people in Canada and 88 in the United States, and generated 2013 annual sales of US$135 million. The purchase price of US$189 million was funded with $168 million in cash, with the remainder due to the sellers in future periods. The cash funding comes from $32 million of cash on hand in Canada and $136 million in borrowings ($36 million under Applied’s bank revolving credit facility and a new $100 million bank term loan agreement).

While Reliance will be neutral to Applied’s net income for fiscal 2014 due to one-time acquisition costs, the acquisition will provide incremental EPS of $0.12 to $0.15 for fiscal 2015.

“The addition of Reliance creates new opportunities for synergies across our businesses. Combined with our Texas Oilpatch Services (TOPS) operation in Houston, we have a strong foundation for growth in the areas of Fluid Conveyance and Oilfield Supplies,” said Mr. Schrimsher.

“With our fourth quarter acquisition expenses and our current view of overall business activity, we are adjusting our sales and earnings guidance for our full 2014 fiscal year to EPS of $2.60 to $2.75 on sales of $2.45 billion to $2.48 billion. All across Applied, we are excited about our growth prospects, encouraged by our ERP transformation progress, and committed to executing our long-range strategy for increased shareholder value.”

In addition, Mr. Schrimsher announced that the Company’s Board of Directors declared a quarterly cash dividend of $0.25 per common share. The dividend is payable on May 30, 2014, to shareholders of record on May 15, 2014.

During the quarter, the Company purchased 208,200 shares of its common stock in open market transactions for $10.2 million. Fiscal year to date, the Company has purchased 495,000 shares for a total of $24.0 million. At March 31, 2014, the Company had remaining authorization to purchase 646,500 additional shares.

Applied will host its quarterly conference call for investors and analysts at 10 a.m. ET on May 1. Neil A. Schrimsher – President & CEO, and Mark O. Eisele – CFO will discuss the Company’s performance. To join the call, dial 1-800-747-9564 or 1-212-231-2905 (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 21711890.

With more than 500 facilities and 5,000 employee associates, Applied Industrial Technologies is a leading industrial distributor that offers more than five million parts to serve the needs of MRO and OEM customers in virtually every industry. In addition, Applied provides engineering, design and systems integration for industrial and fluid power applications, as well as customized mechanical, fabricated rubber and fluid power shop services. Applied also offers maintenance training and inventory management solutions that provide added value to its customers. Applied can be visited on the Internet at www.applied.com.

This press release contains statements that are forward-looking, as that term is defined by the Securities and Exchange Commission in its rules, regulations and releases. Applied intends that such forward-looking statements be subject to the safe harbors created thereby. Forward-looking statements are often identified by qualifiers such as “guidance,” “will,” and similar expressions. All forward-looking statements are based on current expectations regarding important risk factors including trends in the industrial sector of the economy, and other risk factors identified in Applied’s most recent periodic report and other filings made with the Securities and Exchange Commission. Accordingly, actual results may differ materially from those expressed in the forward-looking statements, and the making of such statements should not be regarded as a representation by Applied or any other person that the results expressed therein will be achieved. Applied assumes no obligation to update publicly or revise any forward-looking statements, whether due to new information, or events, or otherwise.

SOURCE Applied Industrial Technologies