AIT Applied Industrial Technologies

NYSE
$361.95

Applied Industrial Technologies Reports Fiscal 2026 Fourth Quarter and Full-Year Results; Issues Fiscal 2027 Guidance, Increases Intermediate Financial Targets

Thursday, August 13, 2026 · 6:30 AM ET Business Wire
  • 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--(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 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.

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,
2026		June 30,
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 EndedYear Ended
June 30,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 EndedYear Ended
June 30,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)		AcquisitionsForeign
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)		AcquisitionsForeign
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

 

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

Source: Applied Industrial Technologies, Inc.

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