Applied Industrial Technologies Reports 1% Increase in Net Income to $285.2 Million

Applied Industrial Technologies, Inc. reported a modest increase in financial performance for the nine months ending March 31, 2025, with net income rising to $285.2 million, a 1.0% increase from $282.3 million in the same period last year. The company’s revenue reached $3.34 billion, reflecting a 0.6% increase compared to $3.32 billion in the prior year. The growth was primarily driven by acquisitions, which contributed $117.6 million, while unfavorable foreign currency translation reduced sales by $18.8 million. The operating income for the period was $363.4 million, representing a slight increase from $356.5 million in the previous year.

In terms of operational metrics, the company experienced a decrease in sales from its Service Center Based Distribution segment, which fell by $30 million or 1.3%. Conversely, the Engineered Solutions segment saw an increase of $50 million or 4.7%, bolstered by acquisitions. The company’s gross profit margin improved to 30.2%, up from 29.5% in the prior year, aided by a decrease in LIFO expense and ongoing margin expansion initiatives. Selling, distribution, and administrative expenses increased by 3.4% to $645 million, primarily due to costs associated with acquisitions.

Strategically, Applied Industrial Technologies made significant acquisitions during the fiscal year, including Hydradyne, LLC, a provider of fluid power solutions, for $282.1 million. This acquisition, completed on December 31, 2024, is expected to enhance the company’s capabilities in the Engineered Solutions segment. The company also expanded its workforce, increasing employee headcount to 6,818 as of March 31, 2025, up from 6,562 at the end of the previous fiscal year, largely due to the Hydradyne acquisition.

The company’s balance sheet reflects total assets of $3.12 billion, an increase from $2.95 billion as of June 30, 2024. Current liabilities decreased to $474.2 million from $501.1 million, while total liabilities rose slightly to $1.29 billion. Shareholders' equity increased to $1.83 billion, up from $1.69 billion, driven by retained earnings growth. The company’s cash and cash equivalents decreased to $352.8 million from $460.6 million, primarily due to cash used for acquisitions and share repurchases.

Looking ahead, Applied Industrial Technologies anticipates continued growth driven by strategic acquisitions and operational efficiencies. The company remains focused on leveraging its expanded capabilities in the Engineered Solutions segment while navigating economic uncertainties that may impact demand. The management expects to maintain a strong financial position, supported by cash flow from operations and available credit facilities, to fund future growth initiatives.