Applied Industrial Technologies — May 1, 2025 release

EXHIBIT 99.1 Applied Industrial Technologies Reports Fiscal 2025 Third Quarter Results; Announces Bolt-on Automation Acquisition & New Repurchase Authorization • Net Sales of $1.2 Billion Up 1.8% YoY; Down 3.1% on an Organic Daily Basis • Net Income of $99.8 Million, or $2.57 Per Share Up 3.7% YoY • EBITDA of $144.9 Million Up 6.8% YoY • Operating Cash Flow of $122.5 Million; Free Cash Flow of $114.9 Million Up 50% YoY • Updating Fiscal 2025 Guidance • Announcing Agreement to Acquire IRIS Factory Automation • Announcing New 1.5 Million Share Repurchase Authorization CLEVELAND, OHIO (May 1, 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 third quarter ended March 31, 2025. Net sales for the quarter of $1.2 billion increased 1.8% over the prior year. The change includes a 6.6% increase from acquisitions, partially offset by a negative 0.8% selling day impact and a negative 0.9% impact from foreign currency translation. Excluding these factors, sales decreased 3.1% on an organic daily basis reflecting a 1.6% decrease in the Service Center segment and a 6.5% decrease in the Engineered Solutions segment. The Company reported net income of $99.8 million, or $2.57 per share, and EBITDA of $144.9 million. On a pre-tax basis, results include $2.2 million ($0.04 after tax per share) of LIFO expense compared to $4.8 million ($0.10 after tax per share) of LIFO expense in the prior-year period. Neil A. Schrimsher, Applied’s President & Chief Executive Officer, commented, “We delivered another quarter of strong operational performance. EBITDA and EPS exceeded our expectations, increasing 7% and 4%, respectively, over the prior year on 2% sales growth. Our Applied team did an outstanding job managing through ongoing demand weakness and macro uncertainty with the average daily sales organic decline of 3% holding relatively steady with last quarter and within our guidance. In addition, gross margins and EBITDA margins expanded nicely, further reflecting internal initiatives, channel execution, mix tailwinds, and solid cost management. We also achieved record third quarter cash generation and increased our share repurchase activity. Lastly, I am pleased with the early progress of our recent acquisition of Hydradyne with integration ongoing and financial contribution expected to increase in coming quarters.” Mr. Schrimsher added, “Our results year to date highlight the benefits of our strategy and proven ability to navigate various market conditions. Moving forward, we are mindful of greater macro uncertainty and inflation following recent tariff actions, including potential demand implications near term as the landscape evolves. We have incorporated this uncertainty into our fourth quarter outlook, which assumes end-market weakness and organic sale declines persist near term as customers potentially continue to idle production and defer capital spending pending a more certain operating backdrop. That said, we remain focused on internal growth and margin initiatives, while our U.S. centric position provides resilience with over 70% of sales from MRO and aftermarket support including break-fix applications. Further, order and backlog trends remain positive across higher-margin engineered solutions, and we are favorably positioned to manage potential greater inflation given our technical industry position, minimal cross-border sourcing, structural mix tailwinds, and various self-help counter measures inherent to our strategy. Combined with our strong balance sheet, exposure to long-term secular tailwinds including reshoring, and easier comparisons moving forward, we remain constructive on our set-up into fiscal 2026 and beyond.” Updated Fiscal 2025 Guidance For fiscal 2025, the Company now projects EPS of $9.85 to $10.00 (prior $9.65 to $10.05) on sales growth of flat to up 1% (prior up 1% to 3%) including down 4% to 3% on an organic average daily basis (prior down 3% to 1%), and EBITDA margins of 12.3% to 12.4% (prior 12.2% to 12.4%). Updated guidance assumes fourth quarter EPS between $2.52 and $2.67 on total sales of down 1% to up 3% year over year and EBITDA margins of 12.3% to 12.4%. Fourth quarter sales guidance assumes average daily sales decline organically by a mid to low single-digit percent over the prior year. The updated outlook considers average daily sales in April declining by an estimated 3% organically year over year and greater economic uncertainty following recent tariff actions, inflationary headwinds, and ongoing growth investments. The updated outlook assumes limited direct impact from tariffs on pricing and cost inflation in the fourth quarter given the timing of announced supplier price increases, our product procurement exposure, and an evolving tariff and trade policy backdrop. Guidance does not assume contribution from future acquisitions or share buybacks. Acquisition of IRIS Factory Automation The Company today also announced that it has signed a definitive agreement to acquire IRIS Factory Automation (IRIS). Based in Aurora, IL, IRIS is a provider of automation products, services, and turn-key productized solutions focused on optimizing material handling and traceability workflows across production environments. The Company’s productized solutions utilize advanced vision and robotic automation technologies that are seamlessly deployed within a customer’s facility to optimize core processes such as palletizing, case packing, quality inspection, and packaging. IRIS operates with a team of over 30 associates from one location and serves customers across various industries including food & beverage, consumer products, and pharmaceutical. The transaction is expected to close this week. Mr. Schrimsher commented, “We welcome IRIS to Applied as we continue the expansion of our automation platform. IRIS aligns well with our solutions-centric strategy, acting as a key technical consultant to customers’ emerging automation needs through proprietary and cutting-edge turn-key solutions. In addition to broadening our footprint in the U.S. Midwest region, IRIS will enhance the scalability of our automation platform by further building out our portfolio of standardized solutions solving common automation needs. We believe this acquisition can drive strong growth synergy long-term as we leverage our core suppliers’ leading automation technologies and Applied’s access to legacy manufacturing verticals. Overall, I am encouraged with the continued progress we are making in positioning Applied as a leading provider and channel partner of next-generation automation solutions.” Share Repurchase Authorization The Company also announced that its Board of Directors authorized a new share buyback program to repurchase up to 1.5 million shares of the Company’s common stock. The updated plan replaces the prior share repurchase plan. Shares may be purchased in open market and negotiated transactions. Dividend The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.46 per common share, payable on May 30, 2025, to shareholders of record on May 15, 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 7270709. 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 March 31, Nine Months Ended March 31, 2025 2024 2025 2024 Net Sales $ 1,166,749  $ 1,146,390  $ 3,338,694  $ 3,318,731  Cost of sales 811,459  808,144  2,330,272  2,338,313  Gross Profit 355,290  338,246  1,008,422  980,418  Selling, distribution and administrative expense, including depreciation 225,888  217,040  644,978  623,938  Operating Income 129,402  121,206  363,444  356,480  Interest expense (income), net 853  265  (710) 3,502  Other expense (income) , net 1,267  (1,724) (1,769) (4,217) Income Before Income Taxes 127,282  122,665  365,923  357,195  Income tax expense 27,483  25,448  80,771  74,924  Net Income $ 99,799  $ 97,217  $ 285,152  $ 282,271  Net Income Per Share - Basic $ 2.60  $ 2.51  $ 7.43  $ 7.29  Net Income Per Share - Diluted $ 2.57  $ 2.48  $ 7.33  $ 7.18  Average Shares Outstanding - Basic  38,322 38,675  38,383 38,707 Average Shares Outstanding - Diluted  38,847 39,252  38,920 39,291 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) March 31, June 30,  2025 2024 Assets   Cash and cash equivalents $ 352,842  $ 460,617    Accounts receivable, net 754,638  724,878    Inventories 500,562  488,258    Other current assets 83,311  96,148         Total current assets 1,691,353  1,769,901    Property, net 127,039  118,527    Operating lease assets, net 191,099  133,289    Intangibles, net 350,946  245,870    Goodwill 694,193  619,395    Other assets 61,033  64,928  Total Assets $ 3,115,663   $ 2,951,910   Liabilities   Accounts payable $ 282,191  $ 266,949    Current portion of long-term debt —  25,055    Other accrued liabilities 191,999  209,096         Total current liabilities 474,190  501,100    Long-term debt 572,300  572,279    Other liabilities 241,692  189,750  Total Liabilities 1,288,182   1,263,129   Shareholders' Equity 1,827,481   1,688,781   Total Liabilities and Shareholders' Equity $ 3,115,663   $ 2,951,910   APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS (Unaudited)  (In thousands) Nine Months Ended March 31, 2025 2024 Cash Flows from Operating Activities Net income $ 285,152  $ 282,271  Adjustments to reconcile net income to net cash provided by operating activities:    Depreciation and amortization of property 18,433  17,567     Amortization of intangibles 25,385  21,601     Provision for losses on accounts receivable 2,652  1,001     Amortization of stock appreciation rights 3,570  2,570     Other share-based compensation expense 5,824  7,508     Changes in assets and liabilities, net of acquisitions 5,371  (77,403)    Other, net (1,050) (2,956) Net Cash provided by Operating Activities 345,337   252,159   Cash Flows from Investing Activities    Acquisition of businesses, net of cash acquired (273,312) (21,440)    Capital expenditures (18,295) (17,354)    Proceeds from property sales 1,022  514  Net Cash used in Investing Activities (290,585) (38,280) Cash Flows from Financing Activities    Long-term debt repayments (25,106) (25,188)    Interest rate swap settlement receipts 9,435  10,839     Purchases of treasury shares (79,794) (28,875)    Dividends paid (46,159) (41,524)    Acquisition holdback payments (1,210) (681)    Taxes paid for shares withheld for equity awards (14,332) (15,874)    Exercise of stock appreciation rights and options —  127  Net Cash used in Financing Activities (157,166) (101,176) Effect of Exchange Rate Changes on Cash (5,361) (206) (Decrease) Increase in cash and cash equivalents (107,775) 112,497  Cash and Cash Equivalents at Beginning of Period 460,617  344,036  Cash and Cash Equivalents at End of Period $ 352,842   $ 456,533     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: Nine Months Ended March 31, 2024 Pre-tax Tax Effect Net of Tax Per Share Diluted Impact Tax Rate Net income and net income per share $ 357,195   $ 74,924   $ 282,271   $ 7.18   21.0   %    Tax valuation allowance adjustment —  3,046  (3,046) (0.08) 0.8  % Adjusted net income and net income per share $ 357,195   $ 77,970   $ 279,225   $ 7.10   21.8   % Reconciliation of Net Income, a GAAP financial measure, to EBITDA, a non-GAAP financial measure: Three Months Ended March 31, Nine Months Ended March 31, 2025 2024 2025 2024 Net Income $ 99,799   $ 97,217   $ 285,152   $ 282,271   Interest expense (income), net 853  265  (710) 3,502  Income tax expense 27,483  25,448  80,771  74,924  Depreciation and amortization of property 6,583  5,802  18,433  17,567  Amortization of intangibles 10,218  6,951  25,385  21,601  EBITDA $ 144,936   $ 135,683   $ 409,031   $ 399,865   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 March 31,  Nine Months Ended March 31, 2025 2024 2025 2024 Net Cash provided by Operating Activities $ 122,453   $ 84,192   $ 345,337   $ 252,159   Capital expenditures (7,549) (7,491) (18,295) (17,354) Free Cash Flow $ 114,904   $ 76,701   $ 327,042   $ 234,805   Free cash flow is defined as net cash provided by operating activities less capital expenditures, a non-GAAP financial measure.