Applied Industrial Technologies FY 4Q15 Earnings Call Notes

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Deceleration in demand as moved through the year

“As we moved through fiscal 2015, we experienced deceleration in industrial demand, headwinds from energy markets, and the unfavorable impact of foreign currency translation. While the combination of these factors kept us from realizing our initial expectations for the year, we did achieve the highest level of sales and earnings per share in company history.”

Modest positive progressions month to month throughout the quarter

“if we look back at the quarter, I think month-to-month throughout the quarter, we saw modest positive progressions. I think Mark talked about the traditional core being up. I think from an oil and gas side, we’d say sequentially down in the teens. I think that’s perhaps consistent with the rig count movement.”

The greatest pressure in oil and gas are doing better

“The greatest pressure, the volatilities around the upstream drilling and completion, the businesses that are upstream production service-focused are doing better.”

Internal plans are higher than external guidance

“clearly, our internal plans are going to be higher than external guidance.”

18 product categories

” We say we represent 18 product categories across, and we’re intent on expanding those with current and new customers.

Seeing some improvement in August

“July year-over-year total, that would be mid-single digits from that July standpoint, right, because obviously, we know when it’s in the books. And then, we would see kind of improvements as we move from there. It’s early in August, but we would see improvement. So for us, maybe not all surprising as it go from closing of fiscal year into a new one, but that’s the year-over-year metric.”

Breakdown of industry performance

“our kind of top 30, 13 of them were up. I think increases would be in the expected categories like automotive, utility, food, and some of the construction-related ones like lumber, wood, aggregate, and so forth. Declines, as you would expect, in oil and gas. And I think mining may be stable off of a lower base and then some of the machinery manufacturers, but a large group or category and I think that varies to where they play in market. So if they’re into some of those that are down or a little more global participation, I think those are the ones that we would see being down. Others that are serving some of the more – the earlier segments that we talked about are faring better right now.”