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Management Discussion

• Applied Technology designs, manufactures, sells, and services innovative precision agriculture products, autonomous solutions, and information management tools, which are collectively referred to as precision agriculture equipment, that help farmers reduce costs, more precisely control inputs, and improve yields for the global agriculture market.
• •Market conditions. Grain commodity prices reached levels not seen since 2014 during the first quarter of fiscal 2022 and the prior year fourth quarter, providing optimism within the ag market. These improved conditions, along with more normalized economic activity, has improved both domestic and international ag markets, leading to an increase in demand from both OEMs and aftermarket retailers. The Company does not model comparative market share position for its divisions, but the Company believes Applied Technology maintained or increased its market share in the first three months of fiscal 2022.
• •Sales volume and selling prices. First quarter fiscal 2022 net sales increased $12.9 million or 30.6%, to $54.9 million compared to $42.0 million in the prior year. Higher sales volume, rather than a change in selling price, was the primary driver of this increase. Aftermarket and OEM sales were up 43.8% and 16.6% year-over-year, respectively. For the three-month period, domestic sales were up $4.8 million year-over-year and international sales were up $8.1 million year-over-year. Domestic OEM net sales in the first quarter of fiscal 2022 included a decrease in last time buy activity to a non-strategic OEM customer of $2.5 million year-over-year.