0000109563FALSE00001095632025-01-292025-01-29


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

January 29, 2025
Date of Report (date of earliest event reported)

APPLIED INDUSTRIAL TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Ohio
1-2299
34-0117420
(State or other jurisdiction of incorporation or organization)
(Commission File Number)
(I.R.S. Employer Identification No.)
One Applied Plaza
Cleveland
Ohio
44115
(Address of Principal Executive Offices)
(Zip Code)
(216) 426-4000
Registrant's telephone number, including area code

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, without par valueAITNew York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
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ITEM 2.02.     RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

    On January 29, 2025, Applied Industrial Technologies, Inc. (“Applied”) issued a press release related to its earnings for the fiscal year 2025 second quarter ended December 31, 2024. The release is attached as Exhibit 99.1 to this Report on Form 8-K.

    The information in this Report on Form 8-K, including the Exhibit, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act.



ITEM 9.01     FINANCIAL STATEMENTS AND EXHIBITS
(d)    Exhibits.

Exhibit No.Description
99.1
104
Cover Page Interactive Data File (embedded within the Inline XBRL document).


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

APPLIED INDUSTRIAL TECHNOLOGIES, INC.
(Registrant)
By: /s/ Jon S. Ploetz
Jon S. Ploetz, Vice President-General Counsel & Secretary
Date: January 29, 2025




EXHIBIT 99.1
appliedlogo.jpg

Applied Industrial Technologies Reports Fiscal 2025 Second Quarter Results

•Net Sales of $1.1 Billion Down 0.4% YoY; Down 3.4% on an Organic Daily Basis
•Net Income of $93.3 Million, or $2.39 Per Share Up 6.7% vs. Prior-Year Adjusted EPS
•EBITDA of $135.1 Million Up 3.3% YoY
•Operating Cash Flow of $95.1 Million; Free Cash Flow of $89.9 Million
•Quarterly Dividend Increased 24% to $0.46 Per Share
•Raising FY25 Guidance to Reflect F2Q25 Performance and the Recent Hydradyne Acquisition

CLEVELAND, OHIO (January 29, 2025) – Applied Industrial Technologies (NYSE: AIT), a leading value-added distributor and technical solutions provider of industrial motion, fluid power, flow control, automation technologies, and related maintenance supplies, today reported results for its fiscal 2025 second quarter ended December 31, 2024.

Net sales for the quarter of $1.1 billion decreased 0.4% over the prior year. The change includes a 1.9% increase from acquisitions and a 1.6% benefit from one extra selling day, partially offset by a negative 0.5% impact from foreign currency translation. Excluding these factors, sales decreased 3.4% on an organic daily basis reflecting a 1.9% decrease in the Service Center segment and a 6.3% decrease in the Engineered Solutions segment. The Company reported net income of $93.3 million, or $2.39 per share, and EBITDA of $135.1 million. On a pre-tax basis, results include $0.7 million ($0.01 after tax per share) of LIFO expense compared to $3.4 million ($0.07 after tax per share) of LIFO expense in the prior-year period.

Neil A. Schrimsher, Applied’s President & Chief Executive Officer, commented, “Fiscal second quarter EBITDA and EPS exceeded our expectations, increasing a respective 3% and 7% year over year on relatively unchanged sales. Demand remained mixed during the quarter with seasonal factors and holiday timing limiting customer activity in December. That said, our team continued to execute well with organic sales trends inline with our guidance, while strong gross margin performance and cost controls drove solid EBITDA margin expansion during the quarter. Additionally, the closing of our Hydradyne acquisition at the end of December represents another notable milestone in our story and provides solid growth and operational momentum moving forward. Overall, we had a productive second quarter that highlights our business resilience, self-help opportunities, and favorable industry position.”

Mr. Schrimsher added, “We are raising fiscal 2025 guidance to reflect second quarter performance and initial estimated contribution from our recent Hydradyne acquisition. Our updated outlook assumes industrial activity remains muted near term given current economic policy uncertainty and a more gradual pace to interest rate cuts. This is reflected in January sales trending down by a mid single-digit percent on an organic basis over prior-year levels. That said, we believe a growth inflection in end-market demand is near considering improving industrial macro indicators in recent months, pent-up technical MRO activity, and easing comparisons. In addition, order momentum and business funnels are building across our technology vertical, while a more favorable regulatory backdrop, stabilizing machinery markets, and reenergized secular demand post the election should provide additional support. Combined with ongoing self-help margin opportunities and balance sheet capacity, we remain constructive on our set-up and ability to accelerate sales and earnings growth in coming quarters. Lastly, I am pleased to announce our


Board has approved a 24% increase in our quarterly dividend, which highlights the conviction we have in our outlook and financial position moving forward, as well as our ongoing capital allocation opportunities.”

Updated Fiscal 2025 Guidance
For fiscal 2025, the Company now projects EPS of $9.65 to $10.05 (prior $9.25 to $10.00) on sales growth of up 1% to 3% (prior down 2.5% to up 2.5%) including down 3% to 1% on an organic daily basis (prior down 4% to up 1%), and EBITDA margins of 12.2% to 12.4% (prior 12.1% to 12.3%). Updated guidance assumes initial estimated contribution from the Company’s recent Hydradyne acquisition, which closed on December 31, 2024. In addition, updated guidance incorporates ongoing economic uncertainty and potential margin pressures on muted sales trends near term, ongoing inflationary headwinds, and growth investments. Guidance does not assume contribution from future acquisitions or share buybacks.

Dividend
Today the Company also announced that its Board of Directors approved a 24% increase in the quarterly cash dividend to $0.46 per common share, payable on February 28, 2025, to shareholders of record on February 14, 2025. This represents the 16th dividend increase since 2010.

Conference Call Information
The Company will host a conference call at 10 a.m. ET today to discuss the quarter’s results and outlook. A live audio webcast and supplemental presentation can be accessed on our Investor Relations site at https://ir.applied.com. To join by telephone, dial 800-715-9871 (toll free) or 646-307-1963 using conference ID 2139950. Replays of the call will be available via webcast, as well as by telephone for one week by dialing 800-770-2030 (toll free) using conference ID 2139950.

About Applied®
Applied Industrial Technologies is a leading value-added distributor and technical solutions provider of industrial motion, fluid power, flow control, automation technologies, and related maintenance supplies. Our leading brands, specialized services, and comprehensive knowledge serve MRO (maintenance, repair, and operations) and OEM (original equipment manufacturing), and new system install applications in virtually all industrial markets through our multi-channel capabilities that provide choice, convenience, and expertise. For more information, visit 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 “expect,” “will,” “guidance,” “assume,” “outlook,” “believe,” and derivative or similar expressions. All forward-looking statements are based on current expectations regarding important risk factors including trends and events in the industrial sector of the economy (such as the inflationary environment and supply chain strains), results of operations, and financial condition, 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.





# # #

CONTACT INFORMATION

Ryan D. Cieslak
Director – Investor Relations & Treasury
216-426-4887 / rcieslak@applied.com












































 APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CONSOLIDATED INCOME
(Unaudited)
(In thousands, except per share data)
Three Months Ended December 31,Six Months Ended December 31,
2024202320242023
Net Sales$1,073,001 $1,077,153 $2,171,945 $2,172,341 
Cost of sales744,951 760,063 1,518,813 1,530,169 
Gross Profit328,050 317,090 653,132 642,172 
Selling, distribution and administrative expense, including depreciation207,180 202,496 419,090 406,898 
Operating Income 120,870 114,594 234,042 235,274 
Interest (income) expense, net(936)1,917 (1,563)3,237 
Other (income) expense, net(755)(2,924)(3,036)(2,493)
Income Before Income Taxes122,561 115,601 238,641 234,530 
Income tax expense29,271 24,373 53,288 49,476 
Net Income$93,290 $91,228 $185,353 $185,054 
Net Income Per Share - Basic$2.43 $2.35 $4.83 $4.78 
Net Income Per Share - Diluted$2.39 $2.32 $4.76 $4.71 
Average Shares Outstanding - Basic38,427 38,744 38,413 38,722 
Average Shares Outstanding - Diluted38,963 39,302 38,956 39,307 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



1) Applied uses the last-in, first-out (LIFO) method of valuing U.S. inventory. An actual valuation of inventory under the LIFO method can only be made at the end of each year based on the inventory levels and costs at that time. Accordingly, interim LIFO calculations are based on management's estimates of expected year-end inventory levels and costs and are subject to the final year-end LIFO inventory determination.






APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
December 31,June 30,
 20242024
Assets
  Cash and cash equivalents$303,441 $460,617 
  Accounts receivable, net696,239 724,878 
  Inventories518,044 488,258 
  Other current assets96,972 96,148 
       Total current assets1,614,696 1,769,901 
  Property, net125,336 118,527 
  Operating lease assets, net195,318 133,289 
  Intangibles, net360,748 245,870 
  Goodwill686,148 619,395 
  Other assets62,395 64,928 
Total Assets$3,044,641 $2,951,910 
Liabilities
  Accounts payable$240,889 $266,949 
  Current portion of long-term debt— 25,055 
  Other accrued liabilities188,551 209,096 
       Total current liabilities429,440 501,100 
  Long-term debt572,300 572,279 
  Other liabilities249,389 189,750 
Total Liabilities1,251,129 1,263,129 
Shareholders' Equity1,793,512 1,688,781 
Total Liabilities and Shareholders' Equity$3,044,641 $2,951,910 




APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS
(Unaudited)
 (In thousands)
Six Months Ended
December 31,
20242023
Cash Flows from Operating Activities
Net income$185,353 $185,054 
Adjustments to reconcile net income to net cash provided
by operating activities:
   Depreciation and amortization of property11,850 11,765 
   Amortization of intangibles15,167 14,650 
   Provision for losses on accounts receivable3,605 1,026 
   Amortization of stock appreciation rights and options2,453 1,710 
   Other share-based compensation expense3,101 4,237 
   Changes in assets and liabilities, net of acquisitions1,451 (47,855)
   Other, net(96)(2,620)
Net Cash provided by Operating Activities222,884 167,967 
Cash Flows from Investing Activities
   Acquisition of businesses, net of cash acquired(273,142)(21,440)
   Capital expenditures(10,746)(9,863)
   Proceeds from property sales922 471 
Net Cash used in Investing Activities(282,966)(30,832)
Cash Flows from Financing Activities
   Long-term debt repayments(25,106)(25,125)
   Interest rate swap settlement receipts6,797 7,194 
   Purchases of treasury shares(30,084)(10,677)
   Dividends paid(28,469)(27,155)
   Acquisition holdback payments(1,210)(681)
   Taxes paid for shares withheld for equity awards (13,037)(12,914)
   Exercise of stock appreciation rights and options— 127 
Net Cash used in Financing Activities(91,109)(69,231)
Effect of Exchange Rate Changes on Cash(5,985)915 
(Decrease) Increase in cash and cash equivalents(157,176)68,819 
Cash and Cash Equivalents at Beginning of Period460,617 344,036 
Cash and Cash Equivalents at End of Period$303,441 $412,855 




  APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Unaudited)
(In thousands)
The Company supplemented the reporting of financial information determined under U.S. generally accepted accounting principles (GAAP) with reporting of non-GAAP financial measures. The Company believes that these non-GAAP measures provide meaningful information to assist shareholders in understanding financial results, assessing prospects for future performance, and provide a better baseline for analyzing trends in our underlying businesses. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. These non-GAAP financial measures should not be considered in isolation or as a substitute for reported results. These non-GAAP financial measures reflect an additional way of viewing aspects of operations that, when viewed with GAAP results, provide a more complete understanding of the business. The Company strongly encourages investors and shareholders to review company financial statements and publicly filed reports in their entirety and not to rely on any single financial measure.
Reconciliation of Net income and Net income per share, GAAP financial measures, with Adjusted Net income and
Adjusted Net income per share, non-GAAP financial measures:
Three Months Ended December 31, 2023
Pre-taxTax EffectNet of TaxPer Share
Diluted Impact		Tax Rate
Net income and net income per share$115,601 $24,373 $91,228 $2.32 21.1 %
   Tax valuation allowance adjustment— 3,046 (3,046)(0.08)2.6 %
Adjusted net income and net income per share$115,601 $27,419 $88,182 $2.24 23.7 %
Six Months Ended December 31, 2023
Pre-taxTax EffectNet of TaxPer Share
Diluted Impact		Tax Rate
Net income and net income per share$234,530 $49,476 $185,054 $4.71 21.1 %
   Tax valuation allowance adjustment— 3,046 (3,046)(0.08)1.3 %
Adjusted net income and net income per share$234,530 $52,522 $182,008 $4.63 22.4 %



Reconciliation of Net Income, a GAAP financial measure, to EBITDA, a non-GAAP financial measure:
Three Months Ended December 31, Six Months Ended
December 31,
2024202320242023
Net Income $93,290 $91,228 $185,353 $185,054 
Interest (income) expense, net(936)1,917 (1,563)3,237 
Income tax expense29,271 24,373 53,288 49,476 
Depreciation and amortization of property5,926 6,048 11,850 11,765 
Amortization of intangibles 7,567 7,257 15,167 14,650 
EBITDA$135,118 $130,823 $264,095 $264,182 
The Company defines EBITDA as Earnings from operations before Interest, Taxes, Depreciation, and Amortization, a non-GAAP financial measure. EBITDA excludes items that may not be indicative of core operating results, a non-GAAP financial measure.
Reconciliation of Net Cash provided by Operating activities, a GAAP financial measure, to Free Cash Flow, a non-GAAP financial measure:
 Three Months Ended
December 31,		Six Months Ended
December 31,
2024202320242023
Net Cash provided by Operating Activities$95,137 $101,758 $222,884 $167,967 
Capital expenditures(5,197)(5,523)(10,746)(9,863)
Free Cash Flow$89,940 $96,235 $212,138 $158,104 
Free cash flow is defined as net cash provided by operating activities less capital expenditures, a non-GAAP financial measure.

v3.24.4
Cover Page Document
Jan. 29, 2025
Cover [Abstract]  
Entity Central Index Key 0000109563
Document Type 8-K
Document Period End Date Jan. 29, 2025
Entity Registrant Name APPLIED INDUSTRIAL TECHNOLOGIES, INC.
Entity Incorporation, State or Country Code OH
Entity File Number 1-2299
Entity Tax Identification Number 34-0117420
Entity Address, Address Line One One Applied Plaza
Entity Address, City or Town Cleveland
Entity Address, State or Province OH
Entity Address, Postal Zip Code 44115
City Area Code 216
Local Phone Number 426-4000
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, without par value
Trading Symbol AIT
Security Exchange Name NYSE
Entity Emerging Growth Company false
Amendment Flag false
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