Applied Industrial Technologies (AIT) lifts 2027 outlook after double-digit Q4 growth
Rhea-AI Filing Summary
Applied Industrial Technologies reported strong fiscal 2026 results with record quarterly performance in the fourth quarter ended June 30, 2026. Fourth quarter net sales were $1.35 billion, up 10.4% year over year, including 9.7% organic growth. Segment organic sales rose 12.9% in Engineered Solutions and 7.9% in Service Center. Net income was $118.6 million, or $3.17 diluted EPS, and EBITDA reached $177.6 million, up 16.1% year over year.
For the full year, net sales were $5.0 billion, up 8.8% (organic growth 5.4%). Full-year net income was $414.5 million, or $10.95 diluted EPS, with EBITDA of $618.2 million, up 10.0%. Service Center EBITDA margin was 14.0% and Engineered Solutions 14.4%. Operating cash flow was $484.1 million and free cash flow $460.5 million. The company reduced long-term debt to $262.3 million from $572.3 million, while cash ended at $127.1 million.
For fiscal 2027, Applied guides to EPS of $11.65–$12.15, total sales growth of 4.0%–6.5%, and EBITDA margins of 12.5%–12.8%. It also raised intermediate targets to $7 billion in sales and 14% EBITDA margins over the next five years.
Positive
- Q4 revenue growth was strong at 10.4% year over year, with 9.7% organic growth driven by both major segments.
- Profitability improved: Q4 EBITDA rose 16.1% to $177.6 million, and full-year EBITDA increased 10.0% to $618.2 million.
- Earnings expanded: full-year net income reached $414.5 million and diluted EPS $10.95, up 8.2% year over year.
- Balance sheet de-risking: long-term debt declined sharply to $262.3 million from $572.3 million.
- Strong cash generation with fiscal 2026 operating cash flow of $484.1 million and free cash flow of $460.5 million.
- Fiscal 2027 guidance calls for continued growth, with sales up 4.0%–6.5% and EPS of $11.65–$12.15.
- Raised intermediate targets to $7 billion in sales and 14% EBITDA margins over five years, signaling confidence in multi-year growth.
Negative
- None.
Insights
Analyzing...
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Q4 2026 Net Sales: $1,352,687 thousand
Q4 2026 Diluted EPS: $3.17
FY 2026 Net Sales: $4,966,686 thousand
+5 more
8 metrics
Q4 2026 Net Sales
$1,352,687 thousand
Three months ended June 30, 2026; up 10.4% year over year
Q4 2026 Diluted EPS
$3.17
Three months ended June 30, 2026; net income of $118.6 million
FY 2026 Net Sales
$4,966,686 thousand
Year ended June 30, 2026; up 8.8% year over year
FY 2026 Diluted EPS
$10.95
Year ended June 30, 2026; net income of $414.5 million, up 8.2% YoY
FY 2026 EBITDA
$618,159 thousand
Year ended June 30, 2026; EBITDA up 10.0% year over year
Long-Term Debt
$262,300 thousand
Balance at June 30, 2026, down from $572,300 thousand at June 30, 2025
FY 2026 Free Cash Flow
$460,517 thousand
Year ended June 30, 2026; net cash provided by operating activities less capital expenditures
FY 2027 EPS Guidance
$11.65 to $12.15
Guidance for fiscal year ending June 30, 2027
Key Terms
EBITDA, free cash flow, LIFO expense, organic basis, +2 more
6 terms
EBITDA financial
"Fourth quarter operating income of $159.3 million; EBITDA of $177.6 million"
EBITDA stands for earnings before interest, taxes, depreciation, and amortization. It measures a company's profitability by focusing on the money it makes from its core operations, ignoring expenses like taxes and accounting adjustments. Investors use EBITDA to compare how well different companies are performing financially, as it provides a clearer picture of operational success without the influence of financial structure or accounting choices.
free cash flow financial
"Free Cash Flow $159,743 $138,156 $460,517 $465,198"
Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.
LIFO expense financial
"results include $6.4 million ($0.13 after tax per share) of LIFO expense"
LIFO expense is the extra cost recorded on the income statement when a company uses the last-in, first-out (LIFO) inventory method, which treats the most recently purchased or produced items as sold first. During rising prices this boosts cost of goods sold and reduces reported profit, so investors track it to understand how accounting choices, not sales volume, affect earnings — like valuing a grocery shelf by ringing up the newest, pricier items first.
organic basis financial
"Excluding these factors, sales increased 9.7% on an organic basis"
"Organic basis" refers to the growth in a company's revenue or sales that comes from its existing operations, without including the effects of acquisitions, divestments, or other external changes. It shows how well a company's core business is performing on its own, much like tracking the natural growth of a plant without considering external factors. For investors, understanding organic growth helps assess the true strength and sustainability of a company's fundamental business.
Engineered Solutions segment financial
"reflecting a 12.9% increase in the Engineered Solutions segment"
Service Center segment financial
"and a 7.9% increase in the Service Center segment"
Earnings Snapshot
Q4 Net Sales: $1,352,687 thousand · Guidance included
Quarter and year ended June 30, 2026
Q4 Net Sales
$1,352,687 thousand
Up 10.4% year over year; organic growth 9.7%
Q4 Diluted EPS
$3.17
Net income of $118.6 million, up 13.2% year over year
FY 2026 Net Sales
$4,966,686 thousand
Up 8.8% year over year; organic growth 5.4%
FY 2026 Diluted EPS
$10.95
Net income of $414.5 million; EPS up 8.2% year over year
Q4 EBITDA
$177,607 thousand
Up 16.1% year over year
FY 2026 EBITDA
$618,159 thousand
Up 10.0% year over year
Guidance
For fiscal 2027, the company guides to EPS of $11.65–$12.15, total sales growth of 4.0%–6.5%, and EBITDA margins of 12.5%–12.8%, and targets $7 billion in sales with 14% EBITDA margins over the next five years.
FAQ
How did Applied Industrial Technologies (AIT) perform in Q4 fiscal 2026?
Applied Industrial Technologies reported Q4 2026 net sales of $1.35 billion, up 10.4% year over year. Organic sales grew 9.7%, while net income reached $118.6 million and diluted EPS was $3.17, with EBITDA of $177.6 million.
What were AIT’s full-year fiscal 2026 sales and earnings?
For fiscal 2026, Applied generated $5.0 billion in net sales, up 8.8% year over year. Organic growth was 5.4%. Full-year net income was $414.5 million, and diluted EPS was $10.95, while EBITDA totaled $618.2 million.
What guidance did Applied Industrial Technologies (AIT) give for fiscal 2027?
For fiscal 2027, Applied projects EPS of $11.65 to $12.15, total sales growth of 4.0%–6.5%, and EBITDA margins of 12.5%–12.8%. Guidance reflects macro uncertainty, inflationary headwinds, and planned growth investments, excluding future acquisitions or share repurchases.
How are AIT’s business segments performing?
In Q4 2026, Engineered Solutions delivered 12.9% organic sales growth with 15.1% EBITDA margin. The Service Center segment posted 7.9% organic growth and 14.5% EBITDA margin, showing broad-based strength across the company’s operations.
What is AIT’s cash flow and leverage profile after fiscal 2026?
Applied generated $484.1 million of operating cash flow and $460.5 million of free cash flow in fiscal 2026. Long-term debt fell to $262.3 million, while cash and cash equivalents ended at $127.1 million, indicating reduced leverage and solid liquidity.
What are AIT’s new intermediate financial targets?
Applied raised its intermediate objectives to $7 billion in annual sales and 14% EBITDA margins. The company expects to reach these goals over the next five years, depending on macro conditions, M&A timing, internal initiatives, and other business factors.
How did AIT’s organic sales grow across fiscal 2026?
For fiscal 2026, total organic sales grew 5.4%. The Service Center segment delivered 4.9% organic growth, while Engineered Solutions achieved 6.3% organic growth, supported by demand for technical MRO, engineering expertise, and automation-related solutions.
AI-generated analysis. How Rhea-AI works. Not financial advice.
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
Date of Report (date of earliest event reported)
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) | |||||||||
(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):
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
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.
o
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On August 13, 2026, Applied Industrial Technologies, Inc. (“Applied”) issued a press release related to its earnings for the fiscal year 2026 fourth quarter ended June 30, 2026. 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 | Press release of Applied Industrial Technologies, Inc. dated August 13, 2026 | ||||
| 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: August 13, 2026 | |||||
EXHIBIT 99.1
Financial Release
For Immediate Release
Applied Industrial Technologies Reports Fiscal 2026 Fourth Quarter
and Full-Year Results; Issues Guidance for Fiscal 2027
•Fourth Quarter Net Sales of $1.4 Billion Up 10.4% YoY; Up 9.7% on an Organic Basis
•Fourth Quarter Net Income of $118.6 Million, or $3.17 Per Share Up 13.2% YoY
•Fourth Quarter Operating Income of $159.3 Million; EBITDA of $177.6 Million Up 16.1% YoY
•Full-Year Net Sales of $5.0 Billion Up 8.8% YoY; Up 5.4% on an Organic Basis
•Full-Year Net Income of $414.5 Million, or $10.95 Per Share Up 8.2% YoY
•Full-Year Operating Income of $549.5 Million; EBITDA of $618.2 Million Up 10.0% YoY
•Establishes FY27 Guidance Including Total Sales +4.0% to +6.5% and EPS of $11.65 to $12.15
•Increases Intermediate Financial Targets to Sales of $7 Billion and EBITDA Margins of 14%
CLEVELAND, OHIO (August 13, 2026) – 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 2026 fourth quarter and full year ended June 30, 2026.
Net sales for the quarter of $1.4 billion increased 10.4% over the prior year. The change includes a 0.3% increase from acquisitions and a benefit of 0.4% from foreign currency translation. Excluding these factors, sales increased 9.7% on an organic basis reflecting a 12.9% increase in the Engineered Solutions segment and a 7.9% increase in the Service Center segment. The Company reported net income of $118.6 million, or $3.17 per share, and EBITDA of $177.6 million. On a pre-tax basis, results include $6.4 million ($0.13 after tax per share) of LIFO expense compared to $2.9 million ($0.06 after tax per share) of LIFO expense in the prior-year period.
For the twelve months ended June 30, 2026, sales of $5.0 billion increased 8.8% compared with the prior year. On an organic basis, sales increased 5.4%. Net income was $414.5 million, or $10.95 per share, and EBITDA was $618.2 million. On a pre-tax basis, full-year results include $21.5 million ($0.43 after tax per share) of LIFO expense compared to $7.7 million ($0.16 after tax per share) of LIFO expense in the prior-year period.
Neil A. Schrimsher, Applied’s President & Chief Executive Officer, commented, “We had a strong finish to fiscal 2026 with fourth quarter sales, EBITDA, and EPS achieving record quarterly levels and exceeding our expectations. Organic sales growth of 10% was the strongest in more than three years with trends strengthening across both segments. The growth momentum building across the business reflects our differentiated technical position and ongoing sales initiatives, which are intensifying within an increasingly favorable end-market backdrop. Combined with steady gross margin performance and solid operating leverage, we expanded EBITDA margins by more than 60 basis points, and achieved mid-teens EBITDA, EPS, and free cash growth compared to the prior-year fourth quarter. Overall, fiscal 2026 was a pivotal year showcasing the ongoing positive transformation at Applied including early signs of the growth potential taking shape across our business. The foundation of this progress is rooted in the power of the Applied team, and their commitment to our strategy and long-term vision of the Company.”
Mr. Schrimsher added, “We enter fiscal 2027 in a great position with various growth tailwinds and operational momentum continuing to develop. Positive top-line trends have sustained into the first quarter with organic sales up year over year by an estimated 7% to date. We are mindful of ongoing inflationary headwinds and macro uncertainty, as well as more difficult comparisons as fiscal 2027 plays out. That said, the demand recovery appears durable and increasingly influenced by structural and secular tailwinds. Our Service Center segment continues to benefit from elevated technical MRO spending and internal sales initiatives, while order momentum remains positive across our Engineered Solutions segment reflecting demand for our leading engineering and application expertise, as well as exposure to faster growing verticals. Combined with an active M&A pipeline and ongoing margin expansion opportunities, we are well positioned moving forward.”
Fiscal 2027 Guidance and Updated Intermediate Financial Targets
Applied is introducing guidance for the fiscal year ending June 30, 2027 as follows:
•EPS: $11.65 to $12.15
•Total sales growth: 4.0% to 6.5%
•EBITDA margins: 12.5% to 12.8%
Guidance incorporates macro uncertainty tied to ongoing geopolitical events and trade policy dynamics, as well as broader inflationary headwinds and growth investments. Guidance does not assume contribution from future acquisitions or share buybacks.
In addition, the Company is increasing its intermediate financial objectives and now targets sales of $7 billion and EBITDA margins of 14%. The Company expects to achieve these targets over the next five years depending on various factors including the trajectory of broader macro conditions, the timing and scope of M&A, progress with internal initiatives, and other factors.
Mr. Schrimsher concluded, “Given our performance in recent years and the meaningful growth opportunity we have moving forward, we believe now is an opportune time to update our intermediate financial objectives. Our ongoing evolution has positioned Applied at the intersection of exciting and powerful growth trends tied to rising technical support at customer plants, industrial system upgrades, automation adoption, and the build out of critical infrastructure across both legacy and emerging customer verticals. In addition, our balance sheet and cash generation provide meaningful capacity to further compound our growth through ongoing M&A, while our margin expansion potential remains notable and supported by structural mix tailwinds, internal initiatives, and inherent operating leverage as we continue to scale the business. Overall, our teams and strategy are now firmly focused on these next milestones, which highlight a compelling outlook for sustained value creation long-term.”
Conference Call Information
The Company will host a conference call at 10 a.m. ET to discuss the quarter’s results and outlook. A live audio webcast and presentation can be accessed on our Investor Relations site at https://ir.applied.com. To join by telephone, dial 833-461-5787 (toll free) using conference ID 599 839 625.
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,” 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 June 30, | Year Ended June 30, | ||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||
| Net Sales | $ | 1,352,687 | $ | 1,224,730 | $ | 4,966,686 | $ | 4,563,424 | |||||||||
| Cost of sales | 941,469 | 849,993 | 3,459,901 | 3,180,265 | |||||||||||||
| Gross Profit | 411,218 | 374,737 | 1,506,785 | 1,383,159 | |||||||||||||
| Selling, distribution and administrative expense, including depreciation | 251,913 | 239,652 | 957,316 | 884,630 | |||||||||||||
| Operating Income | 159,305 | 135,085 | 549,469 | 498,529 | |||||||||||||
| Interest expense, net | 3,556 | 1,322 | 7,938 | 612 | |||||||||||||
| Other income, net | (2,040) | (1,281) | (2,743) | (3,050) | |||||||||||||
| Income Before Income Taxes | 157,789 | 135,044 | 544,274 | 500,967 | |||||||||||||
| Income tax expense | 39,189 | 27,208 | 129,749 | 107,979 | |||||||||||||
| Net Income | $ | 118,600 | $ | 107,836 | $ | 414,525 | $ | 392,988 | |||||||||
| Net Income Per Share - Basic | $ | 3.21 | $ | 2.84 | $ | 11.09 | $ | 10.26 | |||||||||
| Net Income Per Share - Diluted | $ | 3.17 | $ | 2.80 | $ | 10.95 | $ | 10.12 | |||||||||
| Average Shares Outstanding - Basic | 36,924 | 38,008 | 37,377 | 38,289 | |||||||||||||
| Average Shares Outstanding - Diluted | 37,409 | 38,511 | 37,857 | 38,816 | |||||||||||||
| APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES | ||||||||||||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||
| Assets | ||||||||||||||||||||
| Cash and cash equivalents | $ | 127,130 | $ | 388,417 | ||||||||||||||||
| Accounts receivable — net | 831,244 | 769,699 | ||||||||||||||||||
| Inventories | 508,979 | 505,337 | ||||||||||||||||||
| Other current assets | 111,376 | 84,020 | ||||||||||||||||||
| Total current assets | 1,578,729 | 1,747,473 | ||||||||||||||||||
| Property — net | 131,651 | 128,154 | ||||||||||||||||||
| Operating lease assets — net | 213,199 | 188,654 | ||||||||||||||||||
| Identifiable intangibles — net | 312,814 | 348,600 | ||||||||||||||||||
| Goodwill | 704,700 | 699,374 | ||||||||||||||||||
| Other assets | 68,880 | 63,289 | ||||||||||||||||||
| Total Assets | $ | 3,009,973 | $ | 3,175,544 | ||||||||||||||||
| Liabilities | ||||||||||||||||||||
| Accounts payable | $ | 341,094 | $ | 280,124 | ||||||||||||||||
| Other accrued liabilities | 271,317 | 246,027 | ||||||||||||||||||
| Total current liabilities | 612,411 | 526,151 | ||||||||||||||||||
| Long-term debt | 262,300 | 572,300 | ||||||||||||||||||
| Other liabilities | 273,513 | 232,573 | ||||||||||||||||||
| Total Liabilities | 1,148,224 | 1,331,024 | ||||||||||||||||||
| Shareholders' Equity | 1,861,749 | 1,844,520 | ||||||||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 3,009,973 | $ | 3,175,544 | ||||||||||||||||
| APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES | ||||||||||||||
| CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS | ||||||||||||||
| (Unaudited) | ||||||||||||||
| (In thousands) | ||||||||||||||
| Year Ended June 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Cash Flows from Operating Activities | ||||||||||||||
| Net income | $ | 414,525 | $ | 392,988 | ||||||||||
| Adjustments to reconcile net income to net cash provided | ||||||||||||||
| by operating activities: | ||||||||||||||
| Depreciation and amortization of property | 25,875 | 24,899 | ||||||||||||
| Amortization of intangibles | 40,072 | 35,581 | ||||||||||||
| Deferred income taxes | 26,264 | (6,362) | ||||||||||||
| Provision for losses on accounts receivable | 4,613 | 5,978 | ||||||||||||
| Amortization of stock appreciation rights | 5,519 | 4,713 | ||||||||||||
| Other share-based compensation expense | 7,385 | 7,289 | ||||||||||||
| Changes in operating assets and liabilities, net of acquisitions | (38,904) | 26,926 | ||||||||||||
| Other | (1,267) | 373 | ||||||||||||
| Net Cash provided by Operating Activities | 484,082 | 492,385 | ||||||||||||
| Cash Flows from Investing Activities | ||||||||||||||
| Cash paid for acquisition of businesses, net of cash acquired | (11,424) | (293,406) | ||||||||||||
| Capital expenditures | (23,565) | (27,187) | ||||||||||||
| Proceeds from property sales | 1,090 | 1,841 | ||||||||||||
| Net Cash used in Investing Activities | (33,899) | (318,752) | ||||||||||||
| Cash Flows from Financing Activities | ||||||||||||||
| Repayments under revolving credit facility | (310,000) | — | ||||||||||||
| Long-term debt repayments | — | (25,106) | ||||||||||||
| Interest rate swap settlement receipts | 5,765 | 12,095 | ||||||||||||
| Payment of debt issuance costs | (1,611) | — | ||||||||||||
| Purchases of treasury shares | (317,218) | (152,837) | ||||||||||||
| Dividends paid | (72,598) | (63,702) | ||||||||||||
| Acquisition holdback payments | (1,390) | (1,210) | ||||||||||||
| Taxes paid for shares withheld | (14,487) | (14,847) | ||||||||||||
| Net Cash used in Financing Activities | (711,539) | (245,607) | ||||||||||||
| Effect of exchange rate changes on cash | 69 | (226) | ||||||||||||
| Decrease in cash and cash equivalents | (261,287) | (72,200) | ||||||||||||
| Cash and Cash Equivalents at Beginning of Period | 388,417 | 460,617 | ||||||||||||
| Cash and Cash Equivalents at End of Period | $ | 127,130 | $ | 388,417 | ||||||||||
APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES | ||||||||||||||
| SUPPLEMENTAL INFORMATION | ||||||||||||||
| RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES | ||||||||||||||
| (Unaudited) | ||||||||||||||
| (In thousands) | ||||||||||||||
| The Company supplements 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 providing a better baseline for analyzing trends in our underlying businesses. Because non-GAAP financial measures do not have a standard definition, it may not be possible to compare these non-GAAP 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. The Company believes 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, a GAAP financial measure, to EBITDA, a non-GAAP financial measure: | |||||||||||||||||
| Three Months Ended June 30, | Year Ended June 30, | ||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||
| Net Income | $ | 118,600 | $ | 107,836 | $ | 414,525 | $ | 392,988 | |||||||||
| Interest expense, net | 3,556 | 1,322 | 7,938 | 612 | |||||||||||||
| Income tax expense | 39,189 | 27,208 | 129,749 | 107,979 | |||||||||||||
| Depreciation and amortization of property | 6,403 | 6,466 | 25,875 | 24,899 | |||||||||||||
| Amortization of intangibles | 9,859 | 10,196 | 40,072 | 35,581 | |||||||||||||
| EBITDA | $ | 177,607 | $ | 153,028 | $ | 618,159 | $ | 562,059 | |||||||||
| The Company defines EBITDA as Earnings from operations before Interest, Taxes, Depreciation, and Amortization. EBITDA is a non-GAAP financial measure which excludes items that may not be indicative of core operating results. | |||||||||||||||||
| Reconciliation of Net Cash provided by Operating activities, a GAAP financial measure, to Free Cash Flow, a non-GAAP financial measure: | |||||||||||||||||
| Three Months Ended June 30, | Year Ended June 30, | ||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||
| Net Cash provided by Operating Activities | $ | 164,996 | $ | 147,048 | $ | 484,082 | $ | 492,385 | |||||||||
| Capital expenditures | (5,253) | (8,892) | (23,565) | (27,187) | |||||||||||||
| Free Cash Flow | $ | 159,743 | $ | 138,156 | $ | 460,517 | $ | 465,198 | |||||||||
| Free cash flow is a non-GAAP financial measure and is defined as net cash provided by operating activities less capital expenditures. | |||||||||||||||||
| APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES | |||||||||||||||||
| SALES GROWTH BY REPORTABLE SEGMENT | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| (Percent change compared to prior-year period) | |||||||||||||||||
| For the three months ended June 30, 2026 | |||||||||||||||||
| Reported Sales | Selling Days Impact (1) | Acquisitions | Foreign Currency | Organic Change | |||||||||||||
| Service Center | 9.0 | % | — | 0.5 | % | 0.6 | % | 7.9 | % | ||||||||
| Engineered Solutions | 12.9 | % | — | — | — | 12.9 | % | ||||||||||
| Total Company | 10.4 | % | 0.0 % | 0.3 | % | 0.4 | % | 9.7 | % | ||||||||
(1) Based on U.S. selling days; there were 63.5 selling days in both Q4 FY26 and Q4 FY25. | |||||||||||||||||
| For the year ended June 30, 2026 | |||||||||||||||||
| Reported Sales | Selling Days Impact (1) | Acquisitions | Foreign Currency | Organic Change | |||||||||||||
| Service Center | 5.6 | % | — | 0.2 | % | 0.5 | % | 4.9 | % | ||||||||
| Engineered Solutions | 15.1 | % | — | 8.8 | % | — | 6.3 | % | |||||||||
| Total Company | 8.8 | % | 0.0 % | 3.1 | % | 0.3 | % | 5.4 | % | ||||||||
(1) Based on U.S. selling days; there were 252.5 selling days in both FY26 and FY25. | |||||||||||||||||
| APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES | ||||||||||||||||||||
| NET SALES, OPERATING INCOME, EBITDA, & EBITDA MARGIN BY | ||||||||||||||||||||
| REPORTABLE SEGMENT & CORPORATE & OTHER EXPENSE, NET | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||
| Three Months Ended June 30, | Twelve Months Ended June 30, | |||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||
| Service Center Segment: | ||||||||||||||||||||
| Net Sales | $ | 849,497 | $ | 779,180 | $ | 3,184,231 | $ | 3,014,348 | ||||||||||||
| Operating income | $ | 118,391 | $ | 101,286 | $ | 426,124 | $ | 393,470 | ||||||||||||
| Depreciation and amortization of property | 4,433 | 4,213 | 17,386 | 17,492 | ||||||||||||||||
| Amortization of intangibles | 755 | 751 | 2,980 | 3,144 | ||||||||||||||||
| EBITDA | $ | 123,579 | $ | 106,250 | $ | 446,490 | $ | 414,106 | ||||||||||||
| EBITDA margin - % of sales | 14.5 | % | 13.6 | % | 14.0 | % | 13.7 | % | ||||||||||||
| Engineered Solutions Segment: | ||||||||||||||||||||
| Net Sales | $ | 503,190 | $ | 445,550 | $ | 1,782,455 | $ | 1,549,076 | ||||||||||||
| Operating income | $ | 65,147 | $ | 54,095 | $ | 210,524 | $ | 188,738 | ||||||||||||
| Depreciation and amortization of property | 1,970 | 2,253 | 8,489 | 7,407 | ||||||||||||||||
| Amortization of intangibles | 9,104 | 9,445 | 37,092 | 32,437 | ||||||||||||||||
| EBITDA | $ | 76,221 | $ | 65,793 | $ | 256,105 | $ | 228,582 | ||||||||||||
| EBITDA margin - % of sales | 15.1 | % | 14.8 | % | 14.4 | % | 14.8 | % | ||||||||||||
| Corporate & other expense, net | $ | 24,233 | $ | 20,296 | $ | 87,179 | $ | 83,679 | ||||||||||||