Applied Industrial Technologies (Cleveland, Ohio) is reporting financial results for its first quarter 2002, July 1 - September 30, 2001.

The company reports net sales were off sharply, down 12.6% from USD $420.8 million last year to $368.0 million this year. Net income was similarly affected, falling to $4.9 million from $7.2 million a year ago.

AIT indicated its gross profit margin actually improved in the quarter, due to the success of a number of profitability and marketing initiatives. However, overall operating margin still declined due to the reduction in sales volume.

David Pugh, Chairman and CEO, said, "Given the economic environment, we expected this to be a very difficult quarter, and that was the case. The lower current quarter sales and net income under recessionary conditions stand in contrast to the higher performance achieved a year ago in a more favorable economy. The industrial recession which began late last year has shown no signs of improvement. Our manufacturing-based customers continue to experience lower demand across virtually every industry and geographic region of the U.S. Our September sales were tracking to expectation prior to September 11, and then softened for the remainder of the month."

Mr. Pugh went on to comment about coming quarters, echoing statements from across North America's struggling manufacturing sector: "At this point, we remain cautious about the business outlook for the remainder of fiscal 2002. We are unable to forecast any improvement in economic or market conditions for the remainder of our fiscal year. We expect sales for the second quarter to decline by at least 10% from the previous year. We continue to expect fiscal 2002 sales in a range of $1.5 billion to $1.6 billion."