Applied Industrial Technologies Reports Fiscal 2026 First Quarter Results

CLEVELAND--( BUSINESS WIRE)--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 first quarter ended September 30, 2025.

Net sales for the quarter of $1.2 billion increased 9.2% over the prior year. The change includes a 6.3% increase from acquisitions, partially offset by a negative 0.1% impact from foreign currency translation. Excluding these factors, sales increased 3.0% on an organic basis reflecting a 4.4% increase in the Service Center segment and a 0.4% decrease in the Engineered Solutions segment. The Company reported net income of $100.8 million, or $2.63 per share, and EBITDA of $146.3 million. On a pre-tax basis, results include $2.6 million ($0.05 after tax per share) of LIFO expense compared to $2.0 million ($0.04 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 solid first quarter, delivering double-digit EBITDA and EPS growth that exceeded our expectations. Total sales increased 9% year over year on stronger organic sales growth and M&A contribution. Organic growth was led by our shorter-cycle Service Center segment reflecting traction with internal initiatives, firming technical MRO demand, and our industry position. Engineered Solutions segment organic sales were relatively unchanged from the prior year but remain favorably positioned with segment orders continuing to trend positive. In addition, favorable operating leverage, cost control, and channel execution resulted in first quarter EBITDA margins of 12.2% expanding nearly 50 basis points over the prior-year period, which was ahead of our guidance. Overall, I’m encouraged by our teams’ ongoing execution and the positive momentum building across Applied.”

Mr. Schrimsher added, “Following first quarter results, we are reiterating fiscal 2026 sales and EBITDA margin guidance established in mid-August. Near term, we expect improvement in end-market demand to remain gradual and bifurcated as macro and trade policy uncertainty persists into the seasonally slower fall and winter months. Combined with ongoing inflationary pressures and an evolving tariff backdrop, we believe a prudent approach to guidance remains warranted at this time. That said, we remain constructive on our set-up and positive indications that continue to develop. Customer sentiment continues to gradually improve, and we are making solid progress on various initiatives that are expanding new business funnels and growth opportunities. These dynamics could be further catalyzed by lower interest rates and reemerging capital investment across the North American industrial sector in coming quarters. Lastly, our M&A pipeline remains active and in position to supplement our growth and earnings potential.”

Fiscal 2026 Guidance

Today, the Company is modestly increasing fiscal 2026 EPS guidance to a range of $10.10 to $10.85 (prior $10.00 to $10.75) to primarily reflect fiscal 2026 first quarter performance and a slightly lower diluted share count assumption reflecting fiscal 2026 first quarter share repurchases. The Company is maintaining guidance for sales of up 4% to up 7% including up 1% to 4% on an organic basis, as well as EBITDA margins of 12.2% to 12.5%. Guidance incorporates ongoing macro uncertainty tied to the evolving trade and tariff backdrop, as well as 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 declared a quarterly cash dividend of $0.46 per common share, payable on November 28, 2025, to shareholders of record on November 14, 2025.

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 7388794. 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 7388794.

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,” “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.

APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED STATEMENTS OF CONSOLIDATED INCOME

(Unaudited)

(In thousands, except per share data)

Three Months Ended

September 30,

2025

2024

1,199,523

1,098,944

838,094

773,862

361,429

325,082

232,399

211,910

129,030

113,172

993

(627

)

(548

)

(2,281

)

128,585

116,080

27,778

24,017

100,807

92,063

2.67

2.40

2.63

2.36

37,757

38,398

38,271

38,944

APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)

September 30,

2025

June 30,

2025

418,716

388,417

753,443

769,699

521,675

505,337

71,457

84,020

1,765,291

1,747,473

129,532

128,154

185,730

188,654

338,895

348,600

699,862

699,374

66,164

63,289

3,185,474

3,175,544

276,855

280,124

220,900

246,027

497,755

526,151

572,300

231,664

232,573

1,301,719

1,331,024

1,883,755

1,844,520

3,185,474

3,175,544

APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS

(Unaudited)

(In thousands)

Three Months Ended

September 30,

2025

2024

100,807

92,063

6,486

5,924

10,203

7,600

(1,671

)

1,056

1,494

1,326

1,831

1,675

(584

)

16,587

751

1,516

119,317

127,747

(2,280

)

(10,498

)

(7,301

)

(5,549

)

831

(9,546

)

(15,216

)

(63

)

2,698

3,738

(53,175

)

(9,980

)

(17,383

)

(14,218

)

(1,210

)

(1,210

)

(9,495

)

(12,314

)

(78,565

)

(34,047

)

(907

)

(581

)

30,299

77,903

388,417

460,617

418,716

538,520

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 provide 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.

Three Months Ended

September 30,

2025

2024

100,807

92,063

993

(627

)

27,778

24,017

6,486

5,924

10,203

7,600

146,267

128,977

Three Months Ended

September 30,

2025

2024

119,317

127,747

(7,301

)

(5,549

)

112,016

122,198