UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~SEPTEMBER~~DECEMBER 3031, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___ to ___

Commission file number 1-2299

APPLIED INDUSTRIAL TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)


Ohio			34-0117420
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification Number)

One Applied Plaza	Cleveland	Ohio	44115
(Address of principal executive offices)			(Zip Code)

(216) 426-4000

Registrant's telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, without par value	AIT	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

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Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		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.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

There were 37,~~717~~302,~~910~~440 (no par value) shares of common stock outstanding on ~~October~~January 1716, ~~2025~~2026.

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APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

INDEX

PageNo.

Part I:

FINANCIAL INFORMATION

Item 1:

Financial Statements

Condensed Statements of Consolidated Income - Three Months Ended September 30, 2025 and 2024

Condensed Statements of Consolidated Income - Three and Six Months Ended December 31, 2025 and 2024

Condensed Statements of Consolidated Comprehensive Income - Three Months EndedSeptember 30, 2025 and 2024

Condensed Statements of Consolidated Comprehensive Income - Three and Six Months Ended December 31, 2025 and 2024

Condensed Consolidated Balance Sheets - September 30, 2025 and June 30, 2025

Condensed Consolidated Balance Sheets - December 31, 2025 and June 30, 2025

Condensed Statements of Consolidated Cash Flows - Three Months Ended September 30, 2025 and 2024

Condensed Statements of Consolidated Cash Flows - Six Months Ended December 31, 2025 and 2024

Condensed Statements of Shareholders' Equity - Three Months Ended September 30, 2025 and 2024

Condensed Statements of Shareholders' Equity - Three and Six Months Ended December 31, 2025 and 2024

Notes to Condensed Consolidated Financial Statements

Item 2:

Management’s Discussion and Analysis of Financial Condition and Results of Operations

1823

Item 3:

Quantitative and Qualitative Disclosures About Market Risk

2532

Item 4:

Controls and Procedures

2633

Part II:

OTHER INFORMATION

Item 1:

Legal Proceedings

2734

Item 2:

Unregistered Sales of Equity Securities and Use of Proceeds

2734

Item 5:

Other Information

2734

Item 6:

Exhibits

2735

Signatures

2937

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PART I: FINANCIAL INFORMATION

ITEM I: FINANCIAL STATEMENTS

APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED STATEMENTS OF CONSOLIDATED INCOME

(Unaudited)

(In thousands, except per share amounts)

	Three Months Ended				Six Months Ended
	September 30,
	December 31,				December 31,
	2025		2024		2025		2024
Net sales	$	1,~~199~~163,~~523~~023	$	1,~~098~~073,~~944~~001	$	2,362,546	$	2,171,945
Cost of sales	~~838~~809,~~094~~689		~~773~~744,~~862~~951		1,647,783		1,518,813
Gross profit	~~361~~353,~~429~~334		~~325~~328,~~082~~050		714,763		653,132
Selling, distribution and administrative expense, including depreciation	~~232~~230,~~399~~125		~~211~~207,~~910~~180		462,524		419,090
Operating income	~~129~~123,~~030~~209		~~113~~120,~~172~~870		252,239		234,042
Interest expense (income), net	~~993~~942		(~~627~~936)		1,935		(1,563)
Other income, net	(~~548~~505)		(~~2,281~~755)		(1,053)		(3,036)
Income before income taxes	~~128~~122,~~585~~772		~~116~~122,~~080~~561		251,357		238,641
Income tax expense	27,~~778~~423		2429,~~017~~271		55,201		53,288
Net income	$	~~100~~95,~~807~~349	$	9293,~~063~~290	$	196,156	$	185,353
Net income per share - basic	$	2.6754	$	2.4043	$	5.21	$	4.83
Net income per share - diluted	$	2.6351	$	2.3639	$	5.14	$	4.76
Weighted average common shares outstanding for basic computation	37,~~757~~595		38,~~398~~427		37,676		38,413
Dilutive effect of potential common shares	~~514~~460		~~546~~536		485		543
Weighted average common shares outstanding for diluted computation	38,~~271~~055		38,~~944~~963		38,161		38,956

See notes to condensed consolidated financial statements.

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APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME

(Unaudited)

(In thousands)

	Three Months Ended				Six Months Ended
	September 30,
	December 31,				December 31,
	2025		2024		2025		2024
Net income per the condensed statements of consolidated income	$	~~100~~95,~~807~~349	$	9293,~~063~~290	$	196,156	$	185,353
Other comprehensive loss, before tax:
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments	~~809~~3,777		(218,~~266~~594)		4,586		(20,860)
Post-employment benefits:
Reclassification of net actuarial losses (gains) and prior service cost into other income, net and included in net periodic pension costs	4		(5)
Reclassification of net actuarial gains and prior service cost, net, into other income, net and included in net periodic pension costs	2		(8)		6		(13)
Unrealized gain (loss) on cash flow hedge	~~188~~74		(43,~~159)~~188		262		(971)
Reclassification of interest from cash flow hedge into interest income, net	(3,734)		(4,691)
Reclassification of interest from cash flow hedge into interest expense (income), net	(3,419)		(4,091)		(7,153)		(8,782)
Total other comprehensive loss, before tax	(2,733)		(11,121)
Total other comprehensive income (loss), before tax	434		(19,505)		(2,299)		(30,626)
Income tax benefit related to items of other comprehensive loss	(~~844~~810)		(2,179)		(1,654)		(2,358)
Other comprehensive loss, net of tax	(1,889)		(8,942)
Other comprehensive income (loss), net of tax	1,244		(19,326)		(645)		(28,268)
Comprehensive income, net of tax	$	9896,~~918~~593	$	8373,~~121~~964	$	195,511	$	157,085

See notes to condensed consolidated financial statements.

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APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)

	September 30,2025		June 30,2025
	December 31,2025		June 30,2025
ASSETS
Current assets
Cash and cash equivalents	$	~~418~~405,~~716~~986	$	388,417
Accounts receivable, net	~~753~~706,~~443~~902		769,699
Inventories	~~521~~529,~~675~~003		505,337
Other current assets	71106,~~457~~568		84,020
Total current assets	1,~~765~~748,~~291~~459		1,747,473
Property, less accumulated depreciation of $260,805 and $256,016	129,532		128,154
Property, less accumulated depreciation of $265,192 and $256,016	129,531		128,154
Operating lease assets, net	~~185~~181,~~730~~831		188,654
Identifiable intangibles, net	~~338~~328,~~895~~787		348,600
Goodwill	~~699~~701,~~862~~422		699,374
Other assets	6669,~~164~~292		63,289
TOTAL ASSETS	$	3,~~185~~159,~~474~~322	$	3,175,544
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	~~276~~258,~~855~~235	$	280,124
Compensation and related benefits	7384,~~284~~396		99,630
Other current liabilities	~~147~~132,~~616~~851		146,397
Total current liabilities	~~497~~475,~~755~~482		526,151
Long-term debt	572,300		572,300
Other liabilities	~~231~~237,~~664~~132		232,573
TOTAL LIABILITIES	1,~~301~~284,~~719~~914		1,331,024
Shareholders’ equity
Preferred stock—no par value; 2,500 shares authorized; none issued or outstanding	—		—
Common stock—no par value; 80,000 shares authorized; 54,213 shares issued	10,000		10,000
Additional paid-in capital	~~198~~200,~~241~~168		198,970
Retained earnings	2,~~548~~626,~~791~~827		2,447,931
Treasury shares—at cost (16,496 and 16,345 shares, respectively)	(779,702)		(720,695)
Treasury shares—at cost (16,829 and 16,345 shares, respectively)	(870,256)		(720,695)
Accumulated other comprehensive loss	(9392,~~575~~331)		(91,686)
TOTAL SHAREHOLDERS’ EQUITY	1,~~883~~874,~~755~~408		1,844,520
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	3,~~185~~159,~~474~~322	$	3,175,544

See notes to condensed consolidated financial statements.

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APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS

(Unaudited)

(In thousands)

Three Months Ended

Six Months Ended

September 30,

December 31,

2025

2024

Cash Flows from Operating Activities

Net income

~~100~~196,~~807~~156

92185,~~063~~353

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization of property

613,~~486~~076

511,~~924~~850

Amortization of intangibles

1020,~~203~~329

715,~~600~~167

(Recovery of) provision for losses on accounts receivable

(~~1,671~~240)

13,~~056~~605

Amortization of stock appreciation rights

12,~~494~~887

12,~~326~~453

Other share-based compensation expense

13,~~831~~280

13,~~675~~101

Changes in operating assets and liabilities, net of acquisitions

(~~584~~26,230)

161,~~587~~451

Other, net

~~751~~9,718

~~1,516~~(96)

Net Cash provided by Operating Activities

~~119~~218,~~317~~976

~~127~~222,~~747~~884

Cash Flows from Investing Activities

Net cash paid for acquisitions, net of cash acquired

(2,~~280~~425)

(10273,~~498~~142)

Capital expenditures

(713,~~301~~578)

(510,~~549~~746)

Proceeds from property sales

35642

~~831~~922

Net Cash used in Investing Activities

(915,~~546~~361)

(15282,~~216~~966)

Cash Flows from Financing Activities

Long-term debt repayments

—

(6325,106)

Purchases of treasury shares

(53,175)

(9,980)

Interest rate swap settlement receipts

5,083

6,797

Interest rate swap settlement receipts

2,698

3,738

Payment of debt issuance costs

(1,611)

—

Dividends paid

(17,383)

(14,218)

Purchases of treasury shares

(143,401)

(30,084)

Dividends paid

(34,723)

(28,469)

Acquisition holdback payments

(1,210)

Taxes paid for shares withheld

(9,495)

(12,314)

Exercise of stock appreciation rights and options

(1)

—

Net Cash used in Financing Activities

(78,565)

(34,047)

Taxes paid for shares withheld

(11,191)

(13,037)

Effect of Exchange Rate Changes on Cash

(907)

(581)

Net Cash used in Financing Activities

(187,054)

(91,109)

Increase in Cash and Cash Equivalents

30,299

77,903

Effect of Exchange Rate Changes on Cash

1,008

(5,985)

Increase (Decrease) in Cash and Cash Equivalents

17,569

(157,176)

Cash and Cash Equivalents at Beginning of Period

388,417

460,617

Cash and Cash Equivalents at End of Period

~~418~~405,~~716~~986

~~538~~303,~~520~~441

See notes to condensed consolidated financial statements.

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APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY

(Unaudited)

(In thousands)

For the Period EndedSeptember 30, 2025	Shares ofCommonStockOutstanding	CommonStock		AdditionalPaid-InCapital		RetainedEarnings		TreasuryShares-at Cost		AccumulatedOtherComprehensiveLoss		TotalShareholders'Equity
For the Period EndedDecember 31, 2025	Shares ofCommonStockOutstanding	CommonStock		AdditionalPaid-InCapital		RetainedEarnings		TreasuryShares-at Cost		AccumulatedOtherComprehensiveIncome (Loss)		TotalShareholders'Equity
Balance at June 30, 2025	37,868	$	10,000	$	198,970	$	2,447,931	$	(720,695)	$	(91,686)	$	1,844,520
Net income						100,807						100,807
Other comprehensive loss										(1,889)		(1,889)
Purchases of common stock for treasury	(204)							(53,566)				(53,566)
Treasury shares issued for:
Exercise of stock appreciation rights	15			(1,098)				(1,270)				(2,368)
Performance share awards	25			(1,942)				(2,905)				(4,847)
Restricted stock units	14			(1,013)				(1,132)				(2,145)
Compensation expense — stock appreciation rights				1,494								1,494
Other share-based compensation expense				1,831								1,831
Other	—			(1)		53		(134)				(82)
Balance at September 30, 2025	37,718	$	10,000	$	198,241	$	2,548,791	$	(779,702)	$	(93,575)	$	1,883,755
Net income						95,349						95,349
Other comprehensive income										1,244		1,244
Cash dividends — $0.46 per share						(17,306)						(17,306)
Purchases of common stock for treasury	(347)							(89,807)				(89,807)
Treasury shares issued for:
Exercise of stock appreciation rights	13			(897)				(764)				(1,661)
Restricted stock units	1			(19)				19				—
Compensation expense — stock appreciation rights				1,393								1,393
Other share-based compensation expense				1,449								1,449
Other	(1)			1		(7)		(2)				(8)
Balance at December 31, 2025	37,384	$	10,000	$	200,168	$	2,626,827	$	(870,256)	$	(92,331)	$	1,874,408

For the Period Ended September 30, 2024	Shares of Common Stock Outstanding	Common Stock		Additional Paid-In Capital		Retained Earnings		Treasury Shares- at Cost		Accumulated Other Comprehensive Loss		Total Shareholders' Equity
Balance at June 30, 2024	38,409	$	10,000	$	193,778	$	2,121,838	$	(559,269)	$	(77,566)	$	1,688,781
Net income						92,063						92,063
Other comprehensive loss										(8,942)		(8,942)
Cash dividends — $0.37 per share						(9)						(9)
Purchases of common stock for treasury	(52)							(10,479)				(10,479)
Treasury shares issued for:
Exercise of stock appreciation rights	19			(1,106)				(1,339)				(2,445)
Performance share awards	34			(2,213)				(3,294)				(5,507)
Restricted stock units	37			(2,123)				(2,136)				(4,259)
Compensation expense — stock appreciation rights				1,326								1,326
Other share-based compensation expense				1,675								1,675
Other	(1)			(12)		(24)		(91)				(127)
Balance at September 30, 2024	38,446	$	10,000	$	191,325	$	2,213,868	$	(576,608)	$	(86,508)	$	1,752,077

See notes to condensed consolidated financial statements.

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APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY

(Unaudited)

(In thousands)


For the Period Ended December 31, 2024	Shares of Common Stock Outstanding	Common Stock		Additional Paid-In Capital		Retained Earnings		Treasury Shares- at Cost		Accumulated Other Comprehensive Income (Loss)		Total Shareholders' Equity
Balance at June 30, 2024	38,409	$	10,000	$	193,778	$	2,121,838	$	(559,269)	$	(77,566)	$	1,688,781
Net income						92,063						92,063
Other comprehensive loss										(8,942)		(8,942)
Cash dividends — $0.37 per share						(9)						(9)
Purchases of common stock for treasury	(52)							(10,479)				(10,479)
Treasury shares issued for:
Exercise of stock appreciation rights	19			(1,106)				(1,339)				(2,445)
Performance share awards	34			(2,213)				(3,294)				(5,507)
Restricted stock units	37			(2,123)				(2,136)				(4,259)
Compensation expense — stock appreciation rights				1,326								1,326
Other share-based compensation expense				1,675								1,675
Other	(1)			(12)		(24)		(91)				(127)
Balance at September 30, 2024	38,446	$	10,000	$	191,325	$	2,213,868	$	(576,608)	$	(86,508)	$	1,752,077
Net income						93,290						93,290
Other comprehensive loss										(19,326)		(19,326)
Cash dividends — $0.37 per share						(14,253)						(14,253)
Purchases of common stock for treasury	(75)							(20,103)				(20,103)
Treasury shares issued for:
Exercise of stock appreciation rights	6			(321)				(402)				(723)


Compensation expense — stock appreciation rights				1,127								1,127
Other share-based compensation expense				1,426								1,426
Other						(3)						(3)
Balance at December 31, 2024	38,377	$	10,000	$	193,557	$	2,292,902	$	(597,113)	$	(105,834)	$	1,793,512

See notes to condensed consolidated financial statements.

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APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except per share amounts) (Unaudited)

1. BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the financial position of Applied Industrial Technologies, Inc. (the “Company”, or “Applied”) as of ~~September~~December 3031, 2025, and the results of its operations and its cash flows for the ~~three~~six month periods ended ~~September~~December 3031, 2025 and 2024, have been included. The condensed consolidated balance sheet as of June 30, 2025 has been derived from the audited consolidated financial statements at that date. This Quarterly Report on Form 10-Q should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended June 30, 2025.

Operating results for the ~~three~~ six-month period ended ~~September~~December 3031, 2025 are not necessarily indicative of the results that may be expected for the remainder of the fiscal year ending June 30, 2026.

Inventory

Inventories are valued at average cost, using the last-in, first-out (LIFO) method for U.S. inventories. An actual valuation of inventory under the LIFO method can be made only 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. LIFO expense of $26,~~622~~933 and $~~1,976~~667 in the three months ended ~~September~~December 3031, 2025 and 2024, respectively, and $9,555 and $2,643 in the six months ended December 31, 2025 and 2024, respectively, is recorded in cost of sales in the condensed statements of consolidated income.

Reportable Segments

The Company's reportable segments are: Service Center and Engineered Solutions. These reportable segments contain the Company's various operating segments which are aggregated based upon similar economic and operating characteristics. The Service Center segment operates through local service centers and distribution centers with a focus on providing products and services addressing the maintenance and repair of motion control infrastructure and production equipment. Products primarily include industrial bearings, motors, belting, drives, couplings, pumps, linear motion products, hydraulic and pneumatic components, filtration supplies, and hoses, as well as other related supplies for general operational needs of customers’ machinery and equipment. The Engineered Solutions segment includes our operations that specialize in distributing, engineering, designing, integrating, and repairing hydraulic and pneumatic fluid power technologies; engineered flow control products and services; and advanced automation solutions including machine vision, robotics, motion control, and smart technologies. See Note 9 for further details.

Recently Issued Accounting Guidance

In ~~September~~December 2025, the Financial Accounting Standards Board ("FASB") issued its final ~~accounting~~Accounting ~~standard~~Standard ~~updated~~Update ("ASU") which ~~amends~~makes ~~certain~~improvements ~~aspects~~to ofthe ~~existing~~Accounting ~~guidance~~Standards onCodification ~~the~~("ASC") ~~accounting~~in ~~for~~response ~~and~~to ~~disclosure~~feedback offrom ~~software~~stakeholders. ~~costs~~ This standard, issued as ASU 2025-0612, ~~removes~~specifically ~~all~~updates ~~references~~the toCodification ~~project~~for ~~stages~~a ~~throughout~~broad ~~existing~~range ~~accounting~~of ~~literature~~Topics ~~and~~arising ~~clarifies~~from ~~the~~technical ~~threshold~~corrections, ~~entities~~unintended ~~apply~~application toof ~~begin~~the ~~capitalizing~~Codification, ~~costs~~clarifications, and other minor improvements. This update is effective for annual reporting periods beginning after December 15, ~~2027~~2026, ~~and~~including interim reporting periods within those annual reporting periods. ~~Early adoption is permitted as of the beginning of an annual period.~~ The Company is currently evaluating the ~~impacts~~effect of this guidance on its financial statements and related disclosures.

In ~~July~~December 2025, the FASB issued its final ~~standard~~ASU which amends ~~the~~and ~~guidance~~clarifies on the ~~measurement~~interim ofdisclosure ~~credit~~requirements ~~losses~~associated ~~for~~with ~~accounts~~ASC ~~receivable~~Topic ~~and~~270 ~~contract~~- ~~assets~~Interim Reporting. This standard, issued as ASU 2025-0511, provides aclarity ~~practical~~about ~~expedient to assume that~~ current ~~conditions~~requirements asto ofhelp ~~the~~entities ~~balance~~determine ~~sheet~~whether ~~date~~disclosures ~~will~~not ~~persist~~specified ~~through~~in ~~the~~ASC ~~reasonable~~270 ~~and~~should ~~supportable forecast period for eligible assets. Entities will still~~ be ~~required~~provided ~~to adjust historical data used~~ in ~~the~~interim ~~estimation~~reporting ~~of expected credit losses to reflect current conditions~~periods. ~~The~~This ~~amendments~~update ~~will~~is be effective for ~~annual~~interim reporting periods beginning after December 15, ~~2025, and interim reporting periods within those annual periods~~2027. ~~Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance.~~ The Company is currently evaluating the ~~impacts~~effect of this guidance on its financial statements and related disclosures.

In ~~November~~September ~~2024~~2025, the FASB issued its final ~~standard~~ASU which amends certain aspects of existing guidance on the ~~Disaggregation~~accounting offor ~~Income~~and ~~Statement~~disclosure ~~Expenses~~of ~~(DISE).~~software costs This standard, issued as ASU ~~2024~~2025-0306, ~~requires~~removes ~~disclosures~~all ~~about~~references ~~specific~~to ~~types~~project ofstages ~~expenses~~throughout ~~included~~existing inaccounting ~~the~~literature ~~expense~~and ~~captions~~clarifies ~~presented on~~ the ~~face~~threshold ofentities ~~the~~apply ~~income~~to ~~statement~~begin ascapitalizing ~~well as disclosures about selling expenses~~costs. This update is effective for annual periods beginning after December 15, ~~2026~~2027, and interim reporting periods within those annual periods. Early adoption is permitted as of the beginning of an annual period. The Company is currently evaluating the effect of this guidance on its financial statements and related disclosures.

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APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except per share amounts) (Unaudited)

~~after~~In ~~December~~July 152025, ~~2027~~the FASB issued its final standard which amends the guidance on the measurement of credit losses for accounts receivable and contract assets. ~~The~~This ~~requirements~~standard, ~~can~~issued as ASU 2025-05, provides a practical expedient to assume that current conditions as of the balance sheet date will persist through the reasonable and supportable forecast period for eligible assets. Entities will still be ~~applied~~required ~~prospectively~~to ~~with~~adjust historical data used in the ~~option~~estimation of expected credit losses to reflect current conditions. The amendments will be effective for ~~retrospective~~annual ~~application~~periods beginning after December 15, 2025, and interim reporting periods within those annual periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. The Company is currently evaluating the ~~impacts~~effect of this guidance on its financial statements and related disclosures.

In ~~December~~November ~~2023~~2024, the FASB issued its final standard toon ~~improve~~the ~~income~~Disaggregation ~~tax~~of ~~disclosures.~~Income Statement Expenses (DISE). This standard, issued as ASU ~~2023~~2024-0903, requires ~~public~~disclosures ~~business~~about ~~entities~~specific totypes ~~annually~~of ~~disclose~~expenses ~~specific~~included ~~categories~~ in the ~~income~~expense ~~tax~~captions ~~rate~~presented ~~reconciliation~~on ~~and~~the ~~provide~~face ~~additional~~of ~~information~~the ~~for~~income ~~reconciling~~statement ~~items~~as ~~that~~well ~~meet~~as adisclosures ~~quantitative~~about ~~threshold.~~selling expenses. This update is effective for annual periods beginning after December 15, ~~2024.~~2026, ~~The~~and ~~Company~~interim isperiods ~~currently~~within ~~evaluating~~annual ~~the~~periods ~~impacts~~beginning ofafter ~~this~~December ~~guidance~~15, on2027. The ~~its~~requirements ~~financial~~can ~~statements~~be ~~and~~applied ~~related~~prospectively ~~disclosures,~~with ~~and expects~~ the ~~standard~~option ~~will~~for ~~only~~retrospective ~~impact~~application. The ~~its~~Company ~~income~~is ~~taxes~~currently ~~disclosures~~evaluating ~~with~~the noeffect ~~material~~of ~~impact~~this toguidance ~~the~~on ~~consolidated~~its financial statements and related disclosures.

In December 2023, the FASB issued its final standard to improve income tax disclosures. This standard, issued as ASU 2023-09, requires public business entities to annually disclose specific categories in the income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. This update is effective for annual periods beginning after December 15, 2024. The Company is currently evaluating the impact of this guidance on its financial statements and related disclosures and expects the standard will only impact its income taxes disclosures with no material effect to the consolidated financial statements.

2. REVENUE RECOGNITION

Disaggregation of Revenues

The following tables present the Company's net sales by reportable segment and by geographic areas based on the location of the facility shipping the product for the three and six months ended ~~September~~December 3031, 2025 and 2024. Other countries consist of Mexico, Australia, New Zealand, Singapore, and Costa Rica.

Three Months Ended September 30,

Three Months Ended December 31,

2025

2024

Service Center

Engineered Solutions

Total

Service Center

Engineered Solutions

Total

Geographic Areas:

United States

~~656~~625,~~804~~157

~~399~~398,~~683~~893

1,~~056~~024,~~487~~050

~~625~~599,~~682~~801

~~331~~329,~~551~~748

~~957~~929,~~233~~549

Canada

7574,~~317~~528

—

7574,~~317~~528

7177,~~476~~777

—

7177,~~476~~777

Other countries

5047,~~353~~638

1716,~~366~~807

6764,~~719~~445

5246,~~581~~249

1719,~~654~~426

7065,~~235~~675

Total

~~782~~747,~~474~~323

~~417~~415,~~049~~700

1,~~199~~163,~~523~~023

~~749~~723,~~739~~827

349,~~205~~174

1,~~098~~073,~~944~~001

The following tables present the Company’s percentage of revenue by reportable segment and major customer industry for the three months ended September 30, 2025 and 2024:


	Six Months Ended December 31,
	2025						2024
	Service Center		Engineered Solutions		Total		Service Center		Engineered Solutions		Total
Geographic Areas:
United States	$	1,281,961	$	798,576	$	2,080,537	$	1,225,483	$	661,299	$	1,886,782
Canada	149,845		—		149,845		149,253		—		149,253
Other countries	97,991		34,173		132,164		98,830		37,080		135,910
Total	$	1,529,797	$	832,749	$	2,362,546	$	1,473,566	$	698,379	$	2,171,945

	Three Months Ended September 30,
	2025						2024
	Service Center		Engineered Solutions		Total		Service Center		Engineered Solutions		Total
General Industry	34.4	%	42.5	%	37.1	%	35.2	%	39.0	%	36.4	%
Industrial Machinery	7.9	%	24.0	%	13.5	%	8.1	%	22.6	%	12.5	%
Food	15.9	%	2.6	%	11.3	%	15.3	%	3.1	%	11.5	%
Metals	11.5	%	7.1	%	10.0	%	11.2	%	8.2	%	10.3	%
Forest Products	11.8	%	2.1	%	8.4	%	11.8	%	3.2	%	9.2	%
Chem/Petrochem	2.7	%	13.0	%	6.3	%	2.9	%	16.2	%	6.9	%
Cement & Aggregate	7.6	%	1.2	%	5.4	%	7.3	%	1.3	%	5.5	%
Transportation	3.5	%	5.2	%	4.1	%	3.8	%	4.7	%	4.1	%
Oil & Gas	4.7	%	2.3	%	3.9	%	4.4	%	1.7	%	3.6	%
Total	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%

The following tables present the Company’s percentage of revenue by reportable segment and major customer industry for the three and six months ended December 31, 2025 and 2024:

~~The following tables present the Company’s percentage of revenue by reportable segment and product line for the three months ended September 30, 2025 and 2024:~~9

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except per share amounts) (Unaudited)

	Three Months Ended September 30,
	Three Months Ended December 31,
	2025						2024
	Service Center		Engineered Solutions		Total		Service Center		Engineered Solutions		Total
Power Transmission	37.5	%	8.6	%	27.5	%	37.9	%	11.0	%	29.7	%
General Industry	34.6	%	44.7	%	38.1	%	34.6	%	36.6	%	35.4	%
General MRO & Other	22.3	%	25.0	%	23.2	%	22.2	%	18.1	%	20.8	%
Industrial Machinery	7.9	%	24.7	%	13.9	%	8.0	%	23.0	%	12.8	%
Fluid Power	14.3	%	37.7	%	22.4	%	13.9	%	33.8	%	20.0	%
Food	15.5	%	3.1	%	11.1	%	15.2	%	3.9	%	11.5	%
Bearings, Linear & Seals	25.9	%	0.3	%	17.0	%	26.0	%	0.5	%	18.2	%
Metals	11.7	%	5.6	%	9.5	%	10.9	%	8.3	%	10.0	%
Specialty Flow Control	—	%	28.4	%	9.9	%	—	%	36.6	%	11.3	%
Forest Products	11.3	%	2.1	%	8.0	%	12.0	%	3.5	%	9.2	%
Chem/Petrochem	2.5	%	11.8	%	5.9	%	2.9	%	17.0	%	7.5	%
Cement & Aggregate	8.2	%	1.4	%	5.8	%	7.9	%	1.6	%	5.9	%
Transportation	3.5	%	4.9	%	4.0	%	3.5	%	4.1	%	3.7	%
Oil & Gas	4.8	%	1.7	%	3.7	%	5.0	%	2.0	%	4.0	%
Total	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%


	Six Months Ended December 31,
	2025						2024
	Service Center		Engineered Solutions		Total		Service Center		Engineered Solutions		Total
General Industry	34.4	%	43.3	%	37.5	%	34.8	%	37.8	%	35.8	%
Industrial Machinery	7.9	%	25.1	%	14.0	%	8.0	%	22.8	%	12.7	%
Food	15.7	%	3.0	%	11.2	%	15.3	%	3.5	%	11.5	%
Metals	11.6	%	6.4	%	9.8	%	11.1	%	8.2	%	10.2	%
Forest Products	11.6	%	2.1	%	8.2	%	11.9	%	3.4	%	9.2	%
Chem/Petrochem	2.6	%	11.6	%	5.8	%	2.9	%	16.6	%	7.2	%
Cement & Aggregate	7.9	%	1.3	%	5.6	%	7.6	%	1.4	%	5.7	%
Transportation	3.5	%	5.2	%	4.1	%	3.7	%	4.4	%	3.9	%
Oil & Gas	4.8	%	2.0	%	3.8	%	4.7	%	1.9	%	3.8	%
Total	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%

The following tables present the Company’s percentage of revenue by reportable segment and product line for the three and six months ended December 31, 2025 and 2024:


	Three Months Ended December 31,
	2025						2024
	Service Center		Engineered Solutions		Total		Service Center		Engineered Solutions		Total
Power Transmission	38.1	%	8.5	%	27.5	%	38.0	%	10.6	%	29.2	%
General MRO & Other	22.6	%	25.9	%	23.8	%	22.6	%	21.5	%	22.1	%
Fluid Power	14.4	%	35.3	%	21.8	%	14.2	%	32.0	%	20.0	%
Bearings, Linear & Seals	24.9	%	1.5	%	16.6	%	25.2	%	0.4	%	17.2	%
Specialty Flow Control	—	%	28.8	%	10.3	%	—	%	35.5	%	11.5	%
Total	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%

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APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except per share amounts) (Unaudited)


	Six Months Ended December 31,
	2025						2024
	Service Center		Engineered Solutions		Total		Service Center		Engineered Solutions		Total
Power Transmission	37.8	%	8.5	%	27.5	%	38.0	%	10.8	%	29.4	%
General MRO & Other	22.5	%	25.5	%	23.5	%	22.3	%	19.9	%	21.5	%
Fluid Power	14.3	%	36.5	%	22.1	%	14.1	%	32.9	%	20.0	%
Bearings, Linear & Seals	25.4	%	0.9	%	16.8	%	25.6	%	0.4	%	17.7	%
Specialty Flow Control	—	%	28.6	%	10.1	%	—	%	36.0	%	11.4	%
Total	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%

Contract Assets and Liabilities

Depending on the terms of the contracts with certain customers, the Company may receive payments from customers before the goods or services are delivered, typically as down payments for products to be delivered in the future. These amounts are recorded as contract liabilities (deferred revenue), as the performance obligations have not yet been satisfied. The Company’s contract assets consist of unbilled amounts resulting from contracts for which revenue is recognized over time using the cost-to-cost method, and for which revenue recognized exceeds the amount billed to the customer.

Activity related to contract assets and contract liabilities, which are included in other current assets and other current liabilities on the condensed consolidated balance sheet, is as follows:

September 30, 2025

June 30, 2025

$ Change

% Change

December 31, 2025

June 30, 2025

$ Change

% Change

Contract assets

1215,~~283~~074

11,659

~~624~~3,415

529.43

Contract liabilities

2835,~~748~~297

29,244

~~(496)~~6,053

(120.7)

The change in balances noted above of the Company's contract assets primarily results from the timing difference between the Company's performance and when the customer is billed.

3. BUSINESS COMBINATIONS

The operating results of all acquired entities are included within the consolidated operating results of the Company from the date of each respective acquisition.

On January 17, 2026, the Company acquired substantially all the net assets of Thompson Industrial Supply, a California based industrial distributor, for $9.0 million, which will be included in the Service Center segment.

Hydradyne Acquisition

On December 31, 2024, the Company acquired all of the membership interests of Hydradyne, LLC (Hydradyne), a Dallas, Texas based provider of fluid power solutions and value-added services including product offerings in hydraulics, pneumatics, electromechanical, instrumentation, filtration and fluid conveyance. The purchase price is $282,136, which was funded using available cash. Hydradyne is included in the Engineered Solutions segment.

The following table summarizes the assets acquired and liabilities assumed in connection with this acquisition based on their ~~preliminary~~ estimated fair values at the acquisition date~~, which are subject to adjustment~~. ~~The areas that remain open primarily relate to working capital adjustments. The purchase accounting will be finalized within one year from the acquisition date.~~

911

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except per share amounts) (Unaudited)

	Hydradyne Acquisition
Cash and cash equivalents	$	13,~~332~~146
Accounts receivable	42,~~852~~436
Inventories	44,085
Other current assets	~~1,001~~996
Property, net	6,483
Operating lease assets	52,257
Identifiable intangible assets	126,050
Goodwill	6768,~~345~~217
Other assets	111
Total assets acquired	$	353,~~516~~781
Accounts payable and accrued liabilities	15,~~506~~771
Other current liabilities	4,546
Other liabilities	51,328
Net assets acquired	$	282,136

During the quarter ended December 31, 2025, the Company recorded purchase accounting working capital adjustments related to the Hydradyne acquisition, which decreased the fair value of net tangible assets acquired by $872, and increased goodwill by $872.

The acquired goodwill is expected to be deductible for income tax purposes.

Net sales and net income from the Hydradyne acquisition included in the Company's results are $63,128 and $3,581 for the three months ended ~~September~~December 3031, 2025, ~~are~~and $66129,~~595~~723 and $47,~~353~~934 for the six months ended December 31, ~~respectively~~2025.

~~The following unaudited pro forma consolidated results of operations are prepared as if the Hydradyne acquisition (including the related acquisition costs) occurred at the beginning of fiscal 2024:~~12

	Three Months Ended
	September 30,
Pro forma	2024
Sales	$	1,167,505
Net income	94,086
Diluted net income per share	$	2.42

The pro forma amounts are calculated after applying the Company's accounting policies and adjusting the results to reflect additional amortization that would have been recorded assuming the fair value adjustments to identified intangible assets were applied as of July 1, 2023. Additional amortization of $2,737 is included in the pro forma results for the three months ended September 30, 2024. In addition, a pro forma adjustment of $2,761 for the three months ended September 30, 2024 was made for interest income that would not have been earned as a result of the cash used for the acquisition. The pro forma net income amounts also incorporate an adjustment to the recorded income tax expense for the income tax effect of the pro forma adjustments described above. These pro forma results of operations do not include any anticipated synergies or other effects of the planned integration of Hydradyne; accordingly, such pro forma adjustments do not purport to be indicative of the results of operations that actually would have resulted had the acquisition occurred as of the date indicated or that may result in the future.

Other Fiscal 2025 Acquisitions

On May 1, 2025, the Company acquired substantially all of the net assets of IRIS Factory Automation (IRIS), an Aurora, Illinois provider of automation products, services, and turn-key productized solutions focused on optimizing material handling and traceability workflows across production environments. IRIS is included in the Engineered Solutions segment. The purchase price for IRIS was $14,696, net tangible assets acquired were $145, identifiable intangible assets were $7,810, and goodwill was $6,741; the values are based upon preliminary estimated fair values at the acquisition date, which are subject to adjustment.

On August 1, 2024, the Company acquired substantially all of the net assets of Total Machine Solutions (TMS), a Fairfield, New Jersey based provider of electrical and mechanical power transmission products and solutions including

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except per share amounts) (Unaudited)

~~bearings, drives, motors, conveyor components, and related repair services. TMS is included in the Service Center segment.~~ The ~~purchase~~following ~~price~~unaudited ~~for~~pro ~~TMS~~forma ~~was~~consolidated ~~$6,025,~~results ~~net~~of ~~tangible~~operations ~~assets~~are ~~acquired~~prepared ~~were~~as ~~$1,115,~~if ~~identifiable~~the ~~intangible~~Hydradyne ~~assets~~acquisition ~~were~~(including ~~$2,738~~the ~~and~~related ~~goodwill~~acquisition ~~was~~costs) ~~$2,172~~occurred ~~based upon estimated fair values~~ at the ~~acquisition~~beginning ~~date.~~ of fiscal 2024:

On August 1, 2024, the Company acquired 100% of the outstanding shares of Stanley Proctor, a Twinsburg, Ohio based provider of hydraulic, pneumatic, measurement, control, and instrumentation components, as well as fluid power engineered systems. Stanley Proctor is included in the Engineered Solutions segment. The purchase price for Stanley Proctor was $3,924, net tangible assets acquired were $362, identifiable intangible assets were $1,725 and goodwill was $1,837 based upon estimated fair values at the acquisition date.


	Three Months Ended		Six Months Ended
	December 31,		December 31,
Pro forma	2024		2024
Sales	$	1,133,758	$	2,301,263
Net income	95,520		189,609
Diluted net income per share	$	2.45	$	4.87

The pro forma amounts are calculated after applying the Company's accounting policies and adjusting the results to reflect additional amortization that would have been recorded assuming the fair value adjustments to identified intangible assets were applied as of July 1, 2023. Additional amortization of $2,736 is included in the pro forma results for the three months ended December 31, 2024, and additional amortization of $5,473 is included in the pro forma results for the six months December 31, 2024. In addition, pro forma adjustments of $2,761 for the three months ended December 31, 2024 and of $5,522 for the six months December 31, 2024 were made for interest income that would not have been earned as a result of the cash used for the acquisition. The pro forma net income amounts also incorporate an adjustment to the recorded income tax expense for the income tax effect of the pro forma adjustments described above. These pro forma results of operations do not include any anticipated synergies or other effects of the planned integration of Hydradyne; accordingly, such pro forma adjustments do not purport to be indicative of the results of operations that would have resulted had the acquisition occurred as of the date indicated or that may result in the future.

Other Fiscal 2025 Acquisitions

On May 1, 2025, the Company acquired substantially all the net assets of IRIS Factory Automation (IRIS), an Aurora, Illinois provider of automation products, services, and turn-key productized solutions focused on optimizing material handling and traceability workflows across production environments. IRIS is included in the Engineered Solutions segment. The purchase price for IRIS was $14,696, net tangible assets acquired were $145, identifiable intangible assets were $7,810, and goodwill was $6,741; the values are based upon preliminary estimated fair values at the acquisition date, which are subject to adjustment.

On August 1, 2024, the Company acquired substantially all the net assets of Total Machine Solutions (TMS), a Fairfield, New Jersey based provider of electrical and mechanical power transmission products and solutions including bearings, drives, motors, conveyor components, and related repair services. TMS is included in the Service Center segment. The purchase price for TMS was $6,025, net tangible assets acquired were $1,115, identifiable intangible assets were $2,738, and goodwill was $2,172 based upon estimated fair values at the acquisition date.

On August 1, 2024, the Company acquired 100% of the outstanding shares of Stanley Proctor, a Twinsburg, Ohio based provider of hydraulic, pneumatic, measurement, control, and instrumentation components, as well as fluid power engineered systems. Stanley Proctor is included in the Engineered Solutions segment. The purchase price for Stanley Proctor was $3,924, net tangible assets acquired were $362, identifiable intangible assets were $1,725, and goodwill was $1,837 based upon estimated fair values at the acquisition date.

For all other fiscal 2025 acquisitions, the Company funded the acquisitions using available cash and the results of operations for the acquired entities are not material in relation to the Company's consolidated financial statements.

4. GOODWILL AND INTANGIBLES

The changes in the carrying amount of goodwill for both the Service Center segment and the Engineered Solutions segment for the fiscal year ended June 30, 2025 and the ~~three~~ six-month period ended ~~September~~December 3031, 2025 are as follows:

	Service Center		Engineered Solutions		Total
Balance at June 30, 2024	$	219,574	$	399,821	$	619,395
Goodwill acquired during the year	2,262		77,847		80,109
Other, primarily currency translation	(130)		—		(130)
Balance at June 30, 2025	221,706		477,668		699,374
Goodwill acquired during the period	507		281		788
Other, primarily currency translation	(300)		—		(300)
Balance at September 30, 2025	$	221,913	$	477,949	$	699,862

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except per share amounts) (Unaudited)


	Service Center		Engineered Solutions		Total
Balance at June 30, 2024	$	219,574	$	399,821	$	619,395
Goodwill acquired during the year	2,262		77,847		80,109

Other, primarily currency translation	(130)		—		(130)
Balance at June 30, 2025	$	221,706	$	477,668	$	699,374
Goodwill acquired during the period	507		1,238		1,745

Other, primarily currency translation	303		—		303
Balance at December 31, 2025	$	222,516	$	478,906	$	701,422

The Company has eight (8) reporting units for which an annual goodwill impairment assessment was performed as of January 1, 2025. Based on the assessment performed, the Company concluded that the fair value of all of the reporting units exceeded their carrying amount as of January 1, 2025, therefore no impairment exists.

At ~~September~~December 3031, 2025 and June 30, 2025, accumulated goodwill impairment losses subsequent to fiscal 2002 totaled $64,794 related to the Service Center segment and $167,605 related to the Engineered Solutions segment.

The Company’s identifiable intangible assets resulting from business combinations are amortized over their estimated period of benefit and consist of the following:

September 30, 2025

Amount

AccumulatedAmortization

Net BookValue

December 31, 2025

Amount

AccumulatedAmortization

Net BookValue

Finite-Lived Identifiable Intangibles:

Customer relationships

511,~~125~~352

~~241~~249,~~320~~594

~~269~~261,~~805~~758

Trade names

108,~~349~~353

4345,~~430~~274

6463,~~919~~079

Other

6,902

2,~~731~~952

43,~~171~~950

Total Identifiable Intangibles

626,~~376~~607

~~287~~297,~~481~~820

~~338~~328,~~895~~787


June 30, 2025	Amount		Accumulated Amortization		Net Book Value
Finite-Lived Identifiable Intangibles:
Customer relationships	$	510,834	$	233,392	$	277,442
Trade names	108,344		41,585		66,759
Other	6,902		2,503		4,399
Total Identifiable Intangibles	$	626,080	$	277,480	$	348,600

Amounts include the impact of foreign currency translation. Fully amortized finite-lived identifiable intangible assets are written off in the period when they become fully amortized.

11During the six-month period ended December 31, 2025, the Company acquired identifiable intangible assets with a preliminary acquisition cost allocation and weighted-average life as follows:


	Acquisition Cost Allocation		Weighted-Average life
Customer relationships	$	515	20.0

Identifiable intangible assets with finite lives are reviewed for impairment when changes in conditions indicate carrying value may not be recoverable.

Estimated future amortization expense by fiscal year (based on the Company’s identifiable intangible assets as of December 31, 2025) for the next five years is as follows: $19,300 for the remainder of 2026, $37,000 for 2027, $34,600 for 2028, $32,500 for 2029, $30,500 for 2030 and $28,500 for 2031.

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APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except per share amounts) (Unaudited)

During the three month period ended September 30, 2025, the Company acquired identifiable intangible assets with a preliminary acquisition cost allocation and weighted-average life as follows:

						Acquisition Cost Allocation						Weighted-Average life
Customer relationships						$	507					20.0

Identifiable intangible assets with finite lives are reviewed for impairment when changes in conditions indicate carrying value may not be recoverable.

Estimated future amortization expense by fiscal year (based on the Company’s identifiable intangible assets as of September 30, 2025) for the next five years is as follows: $29,500 for the remainder of 2026, $37,000 for 2027, $34,600 for 2028, $32,500 for 2029, $30,500 for 2030 and $28,400 for 2031.

5. DEBT

A summary of long-term debt, including the current portion, follows:

	September 30, 2025		June 30, 2025
	December 31, 2025		June 30, 2025
Revolving credit facility	$	384,000	$	384,000
Trade receivable securitization facility	188,300		188,300
Total debt	$	572,300	$	572,300

Revolving Credit Facility ~~& Term Loan~~

In ~~December~~October ~~2021~~2025, the Company entered into a new five-year revolving credit facility with a group of banks to refinance the existing credit facility as well as provide funds for future acquisitions, ongoing working capital and other general corporate purposes. The revolving credit facility provides a $900,000 unsecured revolving credit facility and an uncommitted accordion feature which allows the Company to request an increase in the borrowing commitments, or incremental term loans, under the credit facility in aggregate principal amounts of up to $~~500~~800,000. The new revolving credit facility also provides for a $25,000 sublimit for swing line loans and a $50,000 sublimit for letters of credit. Borrowings under this agreement bear interest, at the Company's election, at either the base rate plus a margin that ranges from 0 to 55 basis points based on the Company's net leverage ratio or Secured Overnight Financing Rate (SOFR) plus a margin that ranges from 80 to 155 basis points based on the Company's net leverage ratio. Borrowing capacity under this facility, without exercising the accordion feature, totaled $515,748 ~~and $515,791~~ at ~~September~~December 3031, 2025 and ~~June 30, 2025, respectively, and~~ is available to fund future acquisitions or other capital and operating requirements. ~~These~~This ~~amounts~~amount ~~are~~is net of outstanding letters of credit of $252 ~~and $209~~ at ~~September~~December 3031, 2025 ~~and June 30, 2025, respectively,~~ to secure certain insurance obligations. The interest rate on the revolving credit facility was 54.0652% ~~and 5.23%~~ as of ~~September~~December 3031, 2025 ~~and June 30, 2025, respectively~~.

~~Additionally,~~The ~~the~~new ~~Company~~credit ~~had~~facility ~~letters~~replaced ofthe Company's previous credit ~~outstanding~~facility ~~not~~agreement. Unused ~~associated~~lines ~~with~~under the ~~revolving~~previous ~~credit agreement~~facility, innet ~~the~~of ~~amount~~outstanding letters of credit of $~~5,336~~209 asto ofsecure ~~September 30~~certain insurance obligations, ~~2025~~totaled ~~and~~$515,791 at June 30, 2025, and were available to ~~secure~~fund ~~certain~~future ~~insurance~~acquisitions ~~obligations~~or other capital and operating requirements. The interest rate on the revolving credit facility was 5.23% as of June 30, 2025.

OnThe ~~October~~Company ~~24,~~paid ~~2025~~$1,611 ~~the~~of ~~Company~~debt ~~entered~~issuance ~~into~~costs arelated ~~new~~to ~~five-year~~the new revolving credit facility ~~with~~in athe ~~group~~three ofmonths ~~banks~~ended toDecember ~~refinance~~31, 2025, which are included in other current assets and other assets on the ~~existing~~condensed ~~credit~~consolidated ~~facility~~balance sheet as ~~well~~of asDecember ~~provide~~31, ~~funds~~2025 ~~for~~and ~~ongoing~~will ~~working~~be ~~capital~~amortized ~~and~~over ~~other~~the ~~general~~five-year ~~corporate~~term ~~purposes.~~of ~~The~~the new ~~revolving~~ credit facility. ~~provides~~The aCompany ~~$900,000~~analyzed ~~unsecured~~the ~~revolving~~unamortized debt issuance costs related to the previous credit facility ~~and~~under anASC ~~uncommitted~~Topic ~~accordion~~470 ~~feature~~- ~~which~~Debt. ~~allows~~As ~~the~~a ~~Company~~result toof ~~request~~this ananalysis, ~~increase~~$47 inof ~~the~~unamortized ~~borrowing~~debt ~~commitments,~~issuance orcosts ~~incremental~~were ~~term~~expensed ~~loans~~and included within interest expense, ~~under~~net on the ~~credit~~condensed ~~facility~~statements of consolidated income in ~~aggregate~~the ~~principal~~three ~~amounts~~months ofended upDecember to31, ~~$800~~2025,~~000. The~~ ~~new~~and ~~revolving~~$804 ~~credit~~of ~~facility~~unamortized ~~also~~debt ~~provides~~issuance ~~for~~costs awere ~~$25,000~~rolled ~~sublimit~~forward ~~for~~into ~~swing~~the ~~line~~new ~~loans~~credit facility and awill ~~$50,000~~be ~~sublimit~~amortized ~~for~~over ~~letters~~the five-year term of the new credit facility.

Additionally, the Company had letters of credit outstanding not associated with the revolving credit agreement, in the amount of $5,336 as of December 31, 2025 and June 30, 2025, to secure certain insurance obligations.

Trade Receivable Securitization Facility

In August 2018, the Company established a trade receivable securitization facility (the “"AR Securitization Facility”"). The AR Securitization Facility effectively increases the Company’s borrowing capacity by collateralizing a portion of the amount of the U.S. operations’ trade accounts receivable. The Company uses the proceeds from the AR Securitization Facility as an alternative to other forms of debt. The AR Securitization Facility's maximum borrowing capacity is $250,000 and fees on amounts borrowed are 0.90% per year. Borrowing capacity is further subject to changes in the credit ratings of our customers, customer concentration levels or certain characteristics of the accounts receivable portfolio and, therefore, at certain times, we may not be able to fully access the $250,000 of borrowing capacity available under the AR Securitization Facility. Borrowings under the AR Securitization Facility carry variable interest rates tied to SOFR. The interest rate on the AR Securitization Facility as of ~~September~~December 3031, 2025 and June 30, 2025 was 54.0663% and 5.32%, respectively. On July 10, 2025, the Company amended the AR Securitization Facility and extended the term to July 10, 2028, with no substantial changes in other terms.

126. DERIVATIVES

Risk Management Objective of Using Derivatives

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(Amounts in thousands, except per share amounts) (Unaudited)

6. DERIVATIVES

Risk Management Objective of Using Derivatives

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s borrowings.

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in accumulated other comprehensive loss and subsequently reclassified into interest expense in the same period(s) during which the hedged transaction affects earnings. Amounts reported in accumulated other comprehensive loss related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt.

In January 2019, the Company entered into an interest rate swap to mitigate variability in forecasted interest payments on $463,000 of the Company’s U.S. dollar-denominated unsecured variable rate debt. The notional amount declined over time to $384,000 as principal payments were made. The interest rate swap effectively converts a portion of the floating rate interest payment into a fixed rate interest payment. The Company designated the interest rate swap as a pay-fixed, receive-floating interest rate swap instrument and is accounting for this derivative as a cash flow hedge. During fiscal 2021, the Company completed a transaction to amend and extend the interest rate swap agreement which resulted in an extension of the maturity date to January 31, 2026. The pay-fixed interest rate swap is considered a hybrid instrument with a financing component and an embedded at-market derivative that was designated as a cash flow hedge. The weighted average fixed pay rate is 1.58% and the interest rate swap is indexed to SOFR. The Company made various accounting elections related to changes in critical terms of the hedging relationship due to reference rate reform to preserve the hedging relationship.

The interest rate swap converted $384,000 of variable rate debt to a rate of 2.4838% as of ~~September~~December 3031, 2025 and to a rate of 2.48% as of June 30, 2025. The fair value (Level 2 in the fair value hierarchy) of the interest rate cash flow hedge was $~~2,974~~657 and $5,503 as of ~~September~~December 3031, 2025 and June 30, 2025, respectively, which is included in other current assets and other assets in the condensed consolidated balance sheet. Amounts reclassified from other comprehensive loss, before tax, to interest (income) expense, net was income of $3,~~734~~419 and $4,~~691~~091 for the three months ended ~~September~~December 3031, 2025 and 2024, respectively, and $7,153 and $8,782 for the six months ended December 31, 2025 and 2024, respectively.

137. FAIR VALUE MEASUREMENTS

Marketable securities measured at fair value at December 31, 2025 and June 30, 2025 totaled $28,400 and $25,628, respectively. The majority of these marketable securities are held in a rabbi trust for a non-qualified deferred compensation plan. The marketable securities are included in other assets on the accompanying condensed consolidated balance sheets and their fair values were determined using quoted market prices (Level 1 in the fair value hierarchy). In addition, the Company holds Corporate-Owned Life Insurance (COLI) policies on certain retired employees, which are valued at the cash surrender value of the policies (Level 3 in the fair value hierarchy). The fair value of the COLI policies totaled $21,078 and $20,817, at December 31, 2025 and June 30, 2025, respectively, and are included in other assets on the condensed consolidated balance sheets.

As of December 31, 2025 and June 30, 2025, the Company had no fixed interest rate debt outstanding.

The revolving credit facility and the AR Securitization Facility contain variable interest rates and their carrying values approximate fair value (Level 2 in the fair value hierarchy). The carrying value of our cash and cash equivalents, trade accounts receivable, and accounts payable, approximate fair value because of the short-term maturity of these financial instruments.

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7. FAIR VALUE MEASUREMENTS

Marketable securities measured at fair value at September 30, 2025 and June 30, 2025 totaled $27,620 and $25,628, respectively. The majority of these marketable securities are held in a rabbi trust for a non-qualified deferred compensation plan. The marketable securities are included in other assets on the accompanying condensed consolidated balance sheets and their fair values were determined using quoted market prices (Level 1 in the fair value hierarchy). In addition, the Company holds Corporate-Owned Life Insurance (COLI) policies on certain retired employees, which are valued at the cash surrender value of the policies (Level 3 in the fair value hierarchy). The fair value of the COLI policies totaled $20,947 and $20,817, at September 30, 2025 and June 30, 2025, respectively, and are included in other assets on the condensed consolidated balance sheets.

As of September 30, 2025 and June 30, 2025, the Company had no fixed interest rate debt outstanding.

8. SHAREHOLDERS' EQUITY

Accumulated Other Comprehensive Loss

Changes in the accumulated other comprehensive loss are comprised of the following amounts, shown net of taxes:

	Three Months Ended September 30, 2025
	Three Months Ended December 31, 2025
	Foreign currency translation adjustment		Post-employment benefits		Cash flow hedge		Total ~~accumulated~~Accumulated other comprehensive loss
Balance at June 30, 2025	$	(97,216)	$	(438)	$	5,968	$	(91,686)
Balance at September 30, 2025	$	(96,418)	$	(437)	$	3,280	$	(93,575)
Other comprehensive income	~~809~~3,776		—		~~142~~56		~~951~~3,832
Amounts reclassified from accumulated other comprehensive (loss) income	(11)		1		(2,830)		(2,840)
Amounts reclassified from accumulated other comprehensive income (loss)	—		2		(2,590)		(2,588)
Net current-period other comprehensive income (loss)	~~798~~3,776		12		(2,~~688~~534)		(1,~~889)~~244
Balance at September 30, 2025	$	(96,418)	$	(437)	$	3,280	$	(93,575)
Balance at December 31, 2025	$	(92,642)	$	(435)	$	746	$	(92,331)

	Three Months Ended September 30, 2024
	Three Months Ended December 31, 2024
	Foreign currency translation adjustment		Post-employment benefits		Cash flow hedge		Total ~~accumulated~~Accumulated other comprehensive loss
Balance at June 30, 2024	$	(95,566)	$	(391)	$	18,391	$	(77,566)
Other comprehensive loss	(2,256)		—		(3,141)		(5,397)
Amounts reclassified from accumulated other comprehensive loss	—		(3)		(3,542)		(3,545)
Net current-period other comprehensive loss	(2,256)		(3)		(6,683)		(8,942)
Balance at September 30, 2024	$	(97,822)	$	(394)	$	11,708	$	(86,508)
Other comprehensive (loss) income	(18,639)		—		2,407		(16,232)
Amounts reclassified from accumulated other comprehensive loss	—		(5)		(3,089)		(3,094)
Net current-period other comprehensive loss	(18,639)		(5)		(682)		(19,326)
Balance at December 31, 2024	$	(116,461)	$	(399)	$	11,026	$	(105,834)


	Six Months Ended December 31, 2025
	Foreign currency translation adjustment		Post-employment benefits		Cash flow hedge		Total Accumulated other comprehensive loss
Balance at June 30, 2025	$	(97,216)	$	(438)	$	5,968	$	(91,686)
Other comprehensive income	4,585		—		198		4,783
Amounts reclassified from accumulated other comprehensive (loss) income	(11)		3		(5,420)		(5,428)

Net current-period other comprehensive income (loss)	4,574		3		(5,222)		(645)
Balance at December 31, 2025	$	(92,642)	$	(435)	$	746	$	(92,331)

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Other Comprehensive Loss


	Six Months Ended December 31, 2024
	Foreign currency translation adjustment		Post-employment benefits		Cash flow hedge		Total Accumulated other comprehensive loss
Balance at June 30, 2024	$	(95,566)	$	(391)	$	18,391	$	(77,566)
Other comprehensive loss	(20,895)		—		(734)		(21,629)
Amounts reclassified from accumulated other comprehensive loss	—		(8)		(6,631)		(6,639)

Net current-period other comprehensive loss	(20,895)		(8)		(7,365)		(28,268)
Balance at December 31, 2024	$	(116,461)	$	(399)	$	11,026	$	(105,834)

~~Details of other comprehensive loss are as follows:~~18

	Three Months Ended September 30,
	2025						2024
	Pre-Tax Amount		Tax Expense (Benefit)		Net Amount		Pre-Tax Amount		Tax (Benefit) Expense		Net Amount
Foreign currency translation adjustments	$	809	$	11	$	798	$	(2,266)	$	(10)	$	(2,256)
Post-employment benefits:
Reclassification of net actuarial gains and prior service cost into other income, net and included in net periodic pension costs	4		3		1		(5)		(2)		(3)
Unrealized gain (loss) on cash flow hedge	188		46		142		(4,159)		(1,018)		(3,141)
Reclassification of interest from cash flow hedge into interest (income) expense, net	(3,734)		(904)		(2,830)		(4,691)		(1,149)		(3,542)
Other comprehensive loss	$	(2,733)	$	(844)	$	(1,889)	$	(11,121)	$	(2,179)	$	(8,942)

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Other Comprehensive (Loss) Income

Details of other comprehensive (loss) income are as follows:


	Three Months Ended December 31,
	2025						2024
	Pre-Tax Amount		Tax Expense (Benefit)		Net Amount		Pre-Tax Amount		Tax Expense (Benefit)		Net Amount
Foreign currency translation adjustments	$	3,777	$	1	$	3,776	$	(18,594)	$	45	$	(18,639)
Post-employment benefits:
Reclassification of net actuarial gains and prior service cost into other expense (income), net and included in net periodic pension costs	2		—		2		(8)		(3)		(5)

Unrealized gain on cash flow hedge	74		18		56		3,188		781		2,407
Reclassification of interest from cash flow hedge into interest income, net	(3,419)		(829)		(2,590)		(4,091)		(1,002)		(3,089)


Other comprehensive income (loss)	$	434	$	(810)	$	1,244	$	(19,505)	$	(179)	$	(19,326)


	Six Months Ended December 31,
	2025						2024
	Pre-Tax Amount		Tax Expense (Benefit)		Net Amount		Pre-Tax Amount		Tax Expense (Benefit)		Net Amount
Foreign currency translation adjustments	$	4,586	$	12	$	4,574	$	(20,860)	$	35	$	(20,895)
Post-employment benefits:
Reclassification of net actuarial gains and prior service cost into other expense (income), net and included in net periodic pension costs	6		3		3		(13)		(5)		(8)


Unrealized gain (loss) on cash flow hedge	262		64		198		(971)		(237)		(734)
Reclassification of interest from cash flow hedge into interest income, net	(7,153)		(1,733)		(5,420)		(8,782)		(2,151)		(6,631)
Other comprehensive loss	$	(2,299)	$	(1,654)	$	(645)	$	(30,626)	$	(2,358)	$	(28,268)

Anti-dilutive Common Stock Equivalents

In the three month periods ended ~~September~~December 3031, 2025 and ~~September~~2024, stock options and stock appreciation rights related to 68 and 82 shares of common stock, respectively, were not included in the computation of diluted earnings per share for the periods then ended as they were anti-dilutive. In the six month periods ended December 3031, 2025 and 2024, stock options and stock appreciation rights related to 7768 and 87 shares of common stock, respectively, were not included in the computation of diluted earnings per share for the periods then ended as they were anti-dilutive.

9. SEGMENT INFORMATION

The Company's reportable segments are: Service Center and Engineered Solutions. These reportable segments contain the Company's various operating segments which have been aggregated based upon similar economic and operating characteristics. The Service Center segment operates through local service centers and distribution centers with a focus on providing products and services addressing the maintenance and repair of production equipment and motion control infrastructure. Products primarily include industrial bearings, motors, belting, drives, couplings, pumps, linear motion products, hydraulic and pneumatic components, filtration supplies, and hoses, as well as other related supplies for general operational needs of customers’ machinery and equipment. The Engineered Solutions segment includes our operations that specialize in distributing, engineering, designing, integrating, and repairing hydraulic and pneumatic fluid power technologies, engineered flow control products and services, and automation technologies. The accounting policies of the Company’s reportable segments are as described in Note 1.

The Company's chief operating decision maker (CODM) is the chief executive officer. The CODM uses Segment Operating Income as the measure of segment profit and loss in measuring segment performance, determining how to allocate the Company's assets, evaluating performance in periodic reviews, and during the development of the annual budget and the regular forecasting process. The chief operating decision maker considers budget-to-actual variances on a quarterly basis, as well as segment-specific forecasting, when making decisions about the allocation of operating and capital resources to each segment. The CODM also uses the segment's net sales in measuring segment performance.

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allocate the Company's assets, evaluating performance in periodic reviews, and during the development of the annual budget and the regular forecasting process. The chief operating decision maker considers budget-to-actual variances on a quarterly basis, as well as segment-specific forecasting, when making decisions about the allocation of operating and capital resources to each segment. The CODM also uses the segment's net sales in measuring segment performance.

In addition to the two reportable segments, there is a category of certain business activities and expenses, referred to as corporate & other, that does not constitute an operating segment. Corporate & other expense, net includes the cost of our corporate headquarters and corporate functions, primarily compensation and benefits, and related administrative expenses and other expenses not directly associated with any reportable segment. These corporate and other expenses reconcile segment operating income to total consolidated income before income taxes.


Three Months Ended December 31, 2025	Service Center		Engineered Solutions		Total
Total sales	$	748,322	$	433,138	$	1,181,460
Less: Inter-segment sales¹	999		17,438		18,437
Net sales	$	747,323	$	415,700	$	1,163,023
Less segment expenses:
Cost of sales	529,832		279,857
Selling, distribution, and administrative expense, including depreciation²	123,221		87,962
Segment operating income	$	94,270	$	47,881	$	142,151
Corporate & other expense, net					18,942
Interest expense, net					942
Other income, net					(505)
Income before income taxes					$	122,772

Three Months Ended December 31, 2024	Service Center		Engineered Solutions		Total
Total sales	$	724,450	$	363,005	$	1,087,455
Less: Inter-segment sales¹	623		13,831		14,454
Net sales	$	723,827	$	349,174	$	1,073,001
Less segment expenses:
Cost of sales	511,210		233,741
Selling, distribution, and administrative expense, including depreciation²	120,645		66,654
Segment operating income	$	91,972	$	48,779	$	140,751
Corporate & other expense, net					19,881
Interest expense, net					(936)
Other income, net					(755)
Income before income taxes					$	122,561

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(Amounts in thousands, except per share amounts) (Unaudited)

Three Months Ended September 30, 2025

Service Center

Engineered Solutions

Total

Six Months Ended December 31, 2025

Service Center

Engineered Solutions

Total

Total sales

~~783~~1,~~848~~532,170

~~433~~866,~~573~~711

12,~~217~~398,~~421~~881

Less: Inter-segment sales¹

12,~~374~~373

1633,~~524~~962

1736,~~898~~335

Net sales

~~782~~1,~~474~~529,797

~~417~~832,~~049~~749

12,~~199~~362,~~523~~546

Less segment expenses:

Cost of sales

~~556~~1,~~201~~086,033

~~281~~561,~~893~~750

Selling, distribution, and administrative expense, including depreciation²

~~122~~245,~~220~~441

89177,~~296~~258

Segment operating income

~~104~~198,~~053~~323

4593,~~860~~741

~~149~~292,~~913~~064

Corporate & other expense, net

2039,~~883~~825

Interest expense, net

~~993~~1,935

Other income, net

(~~548~~1,053)

Income before income taxes

~~128~~251,~~585~~357

Three Months Ended September 30, 2024

Service Center

Engineered Solutions

Total

Six Months Ended December 31, 2024

Service Center

Engineered Solutions

Total

Total sales

~~750~~1,~~345~~474,796

~~361~~724,~~898~~902

12,~~112~~199,~~243~~698

Less: Inter-segment sales¹

~~606~~1,230

1226,~~693~~523

1327,~~299~~753

Net sales

~~749~~1,~~739~~473,566

~~349~~698,~~205~~379

12,~~098~~171,~~944~~945

Less segment expenses:

Cost of sales

~~536~~1,~~073~~047,283

~~237~~471,~~789~~530

Selling, distribution, and administrative expense, including depreciation²

~~119~~240,~~840~~485

70136,~~070~~724

Segment operating income

93185,~~826~~798

4190,~~346~~125

~~135~~275,~~172~~923

Corporate & other expense, net

2241,~~000~~881

Interest expense, net

(~~627~~1,563)

Other income, net

(23,~~281~~036)

Income before income taxes

~~116~~238,~~080~~641

¹The Company accounts for inter-segment sales using market rates.

²Amortization of intangibles is recorded within selling, distribution, and administrative expense, and therefore included in segment operating income for all periods presented.

1621

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(Amounts in thousands, except per share amounts) (Unaudited)

A reconciliation of supplemental segment financial information is as follows:

Three Months Ended	Service Center		Engineered Solutions		Total
September 30, 2025
December 31, 2025
Assets used in the business	$	1,785,052	$	1,400,422	$	3,185,474
Depreciation and amortization of property	$	4,306	$	2,284	$	6,590
Depreciation and amortization of property	4,235		2,251		6,486
Amortization of intangibles	713		9,413		10,126
Amortization of intangibles	730		9,473		10,203
Capital expenditures	4,391		1,886		6,277
Capital expenditures	6,328		973		7,301
December 31, 2024
September 30, 2024
Depreciation and amortization of property	$	4,383	$	1,543	$	5,926
Assets used in the business	$	1,894,467	$	1,108,744	$	3,003,211
Amortization of intangibles	812		6,755		7,567
Depreciation and amortization of property	4,419		1,505		5,924
Capital expenditures	4,644		553		5,197
Amortization of intangibles	802		6,798		7,600
Capital expenditures	4,435		1,114		5,549


Six Months Ended	Service Center		Engineered Solutions		Total
December 31, 2025
Assets used in the business	$	1,781,661	$	1,377,661	$	3,159,322
Depreciation and amortization of property	8,541		4,535		13,076
Amortization of intangibles	1,443		18,886		20,329
Capital expenditures	10,719		2,859		13,578

December 31, 2024
Assets used in the business	$	1,588,471	$	1,456,170	$	3,044,641
Depreciation and amortization of property	8,802		3,048		11,850
Amortization of intangibles	1,614		13,553		15,167
Capital expenditures	9,079		1,667		10,746

10. OTHER (INCOME) EXPENSE, NET

Other (income) expense, net consists of the following:

	Three Months Ended				Six Months Ended
	September 30,
	December 31,				December 31,
	2025		2024		2025		2024
Unrealized (gain) loss on assets held in rabbi trust for a non-qualifieddeferred compensation plan	$	(1,450)	$	(1,207)
Unrealized gain on assets held in rabbi trust for a non-qualified deferred compensation plan	$	(492)	$	(249)	$	(1,942)	$	(1,456)
Foreign currency transaction losses (gains)	1,019		(886)
Foreign currency transactions losses (gains)	163		(346)		1,182		(1,232)
Net other periodic post-employment costs	26		36		52		72
Life insurance income, net	(~~130~~152)		(~~119~~121)		(282)		(240)
Other, net	(1350)		(~~105~~75)		(63)		(180)
Total other income, net	$	(~~548~~505)	$	(~~2,281~~755)	$	(1,053)	$	(3,036)

11. SUBSEQUENT EVENTS

We have evaluated events and transactions occurring subsequent to ~~September~~December 3031, 2025 through the date the financial statements were issued. See Note 53 - ~~Debt~~Business Combinations for subsequent events ~~disclosures~~disclosure.

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ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Applied Industrial Technologies (“Applied,” the “Company,” “We,” “Us” or “Our”) 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 & Operations) and OEM (Original Equipment Manufacturer) end users in virtually all industrial markets through our multi-channel capabilities that provide choice, convenience, and expertise. We have a long tradition of growth dating back to 1923, the year our business was founded in Cleveland, Ohio. During the ~~first~~second quarter of fiscal 2026, business was conducted in the United States, Puerto Rico, Canada, Mexico, Australia, New Zealand, Singapore, and Costa Rica from ~~594~~591 facilities.

The following is Management's Discussion and Analysis of significant factors which have affected our financial condition, results of operations and cash flows during the periods included in the accompanying condensed consolidated balance sheets, statements of consolidated income, consolidated comprehensive income and consolidated cash flows. When reviewing the discussion and analysis set forth below, please note that the ~~stock~~SKUs ~~keeping~~(Stock ~~units~~Keeping ~~("SKUs"~~Units) we sell in any given period ~~may~~are not necessarily be sold in the comparable period of the prior year, resulting in the inability to quantify certain commonly used comparative metrics analyzing sales, such as changes in product mix and volume.

Overview

Consolidated sales for the quarter ended ~~September~~December 3031, 2025 increased $~~100~~90.60 million or 98.24% compared to the prior year quarter, with acquisitions ~~increasing~~contributing to sales growth by $6964.79 million or 6.30%, ~~and~~including ~~unfavorable~~favorable foreign currency translation of $02.92 million ~~reducing~~or ~~sales by~~ 0.12%. ~~Operating~~The Company had operating income of $123.2 million, or operating margin ~~was~~of 10.86% of sales for the quarter ended ~~September~~December 3031, 2025 compared to 10an operating income of $120.9 million, or operating margin of 11.3% of sales for the same quarter in the prior year. Net income of $~~100~~95.83 million increased 92.52% compared to the prior year quarter.

Applied monitors several economic indices that ~~have~~are ~~been~~ key indicators for industrial economic activity in the United States. These include the ~~manufacturing~~ Industrial Production (IP) and Manufacturing Capacity Utilization (MCU) indices published by the Federal Reserve Board and the Purchasing Managers Index (PMI) published by the Institute for Supply Management (ISM). Historically, our performance correlates well with the MCU, which measures productivity and calculates a ratio of actual manufacturing output versus potential full capacity output. When manufacturing plants are running at a high rate of capacity, they tend to wear out machinery more frequently and require replacement parts.

Through ~~August~~December 2025, both the MCU ~~index~~and IP indices declined slightly since ~~June~~September 2025. ~~while~~The ~~the~~MCU IPfor ~~index~~December ~~increased~~2025 ~~slightly~~was ~~since~~75.6, which is down from the September and June 2025 readings of 75. 9 and 76.8, respectively. The ISM PMI registered 4947.19 in ~~September~~December 2025, updown ~~slightly~~ from the September and June 2025 ~~reading~~readings of 49.1 and 49.0, respectively. The indices ~~available~~ for the months during the current quarter, along with the indices for the prior fiscal year end and prior quarter end, were as follows:

	Index Reading
Month	MCU	PMI	IP
September 2025¹	—	49.1	—
December 2025	75.6	47.9	97.4
August 2025	76.8	48.7	100.3
November 2025	75.6	48.2	97.2
July 2025	76.7	48.0	100.0
October 2025	75.4	48.7	96.9
September 2025	75.9	49.1	97.5
June 2025	76.8	49.0	100.1
¹Due to the U.S. government shutdown, the September MCU and IP indices were not available.

The number of Company employees was 6,794 at ~~September~~December 3031, 2025, 6,837 at June 30, 2025, and 6,~~549~~916 at ~~September~~December 3031, 2024. The number of operating facilities totaled ~~594~~591 at ~~September~~December 3031, 2025, 596 at June 30, 2025, and ~~593~~624 at ~~September~~December 3031, 2024.

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ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Results of Operations

Three Months Ended ~~September~~December 3031, 2025 and 2024

The following table is included to aid in review of Applied's condensed statements of consolidated income.

	Three Months Ended September 30,				Change in $'s Versus Prior Period -% Increase
	Three Months Ended December 31,				Change in $'s Versus Prior Period -% Increase
	As a Percent of Net Sales
	2025		2024
Net sales	100.0	%	100.0	%	98.24	%
Gross profit	30.14	%	2930.6	%	117.27	%
Selling, distribution & administrative expense	19.48	%	19.3	%	911.71	%
Operating income	10.86	%	1011.3	%	141.09	%
Net income	8.42	%	8.47	%	92.52	%

During the quarter ended ~~September~~December 3031, 2025, sales increased $~~100~~90.60 million or 98.24% compared to the prior year quarter, with sales from acquisitions adding $6964.79 million or 6.30%, and ~~unfavorable~~favorable foreign currency translation ~~accounting~~increasing ~~for~~sales aby ~~decrease of~~ $02.92 million or 0.12%. There were 6462 selling days in both the ~~quarter~~quarters ended ~~September~~December 3031, 2025 and ~~September~~December 3031, 2024. Excluding the impact of businesses acquired and foreign currency translation, sales ~~were~~increased up $3122.89 million or 32.02% during the quarter ~~due~~primarily toreflecting ~~higher~~price ~~demand~~contribution and modest volume growth in the Service Center segment ~~due to firming technical MRO demand and stronger price contribution~~.

The following table shows changes in sales by reportable segment (amounts in millions).

Sales by Reportable Segment	Three Months ~~EndedSeptember~~EndedDecember 3031,				Sales (Decrease) Increase		Amount of change due to
									Foreign Currency		Organic Change
	2025		2024				Acquisitions
Service Center	$	~~782~~747.43	$	~~749~~723.78	$	3223.75	$	~~0.5~~—	$	(02.9)2	$	3321.13
Engineered Solutions	~~417~~415.17		349.2		6766.95		6964.29		—		(1.3)6
Total	$	1,~~199~~163.50	$	1,~~098~~073.90	$	~~100~~90.60	$	6964.79	$	(02.9)2	$	3122.89

Sales from our Service Center segment, which operates primarily in MRO markets, increased $3223.~~7 million or 4.4%. Acquisitions within this segment increased sales by $0.~~5 million or 03.12%. ~~Unfavorable~~Favorable foreign currency translation ~~reduced~~increased sales by $02.92 million or 0.13%. Excluding the impact of businesses acquired and foreign currency translation, sales increased $3321.13 million or 42.49%, primarily ~~driven~~reflecting byprice ~~firming~~contribution, ~~technical~~as ~~MRO~~well as a modest increase in volumes tied to internal growth initiatives and firming demand.

Sales from our Engineered Solutions segment increased $6766.95 million or 19.41%. Acquisitions within this segment increased sales by $6964.29 million or 1918.86%. Excluding the impact of businesses acquired, sales ~~decreased~~increased $1.36 million, or 0.45%, ~~driven~~ primarily ~~due~~reflecting toprice ~~the~~contribution, ~~timing~~as ofwell ~~project-related~~as ~~shipments~~modest volume growth across fluid power mobile and industrial OEM customers, partially offset by lower flow control sales.

The following table shows changes in sales by geographic area. Other countries includes Mexico, Australia, New Zealand, Singapore, and Costa Rica (amounts in millions).


	Three Months Ended December 31,				Sales Increase (Decrease)		Amount of change due to
	Three Months Ended December 31,								Foreign Currency		Organic Change
Sales by Geographic Area	2025		2024				Acquisitions		Foreign Currency		Organic Change
United States	$	1,024.1	$	929.5	$	94.6	$	64.9	$	—	$	29.7
Canada	74.5		77.8		(3.3)		—		0.2		(3.5)
Other countries	64.4		65.7		(1.3)		—		2.0		(3.3)
Total	$	1,163.0	$	1,073.0	$	90.0	$	64.9	$	2.2	$	22.9

Sales in our U.S. operations increased $94.6 million or 10.2%, as acquisitions added $64.9 million or 7.0%. Excluding the impact of businesses acquired, sales in the United States increased $29.7 million or 3.2% due primarily to stronger price contribution and modest volume growth in the Service Center segment. Sales from our Canadian operations decreased $3.3 million or 4.2%. Favorable foreign currency translation increased Canadian sales by $0.2 million or 0.3%. Excluding the

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ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

~~The~~impact ~~following~~of ~~table~~foreign ~~shows~~currency ~~changes~~translation, Canadian sales decreased $3.5 million or 4.5% due to softer end-market demand in the Service Center segment. Sales in other countries decreased $1.3 million or 1.9%. Favorable foreign currency translation increased sales by$2.0 ~~geographic~~million ~~area~~or 3.1%. ~~Other~~Excluding ~~countries~~the ~~includes~~impact ~~Mexico,~~of ~~Australia,~~foreign ~~New~~currency ~~Zealand~~translation, ~~Singapore,~~sales ~~and~~in ~~Costa~~other ~~Rica~~countries ~~(amounts~~decreased $3.3 million or 4.9% due primarily to lower demand in ~~millions)~~Mexico.

	Three Months EndedSeptember 30,				Sales Increase (Decrease)		Amount of change due to
									Foreign Currency		Organic Change
Sales by Geographic Area	2025		2024				Acquisitions
United States	$	1,056.5	$	957.2	$	99.3	$	69.7	$	—	$	29.6
Canada	75.3		71.5		3.8		—		(0.7)		4.5
Other countries	67.7		70.2		(2.5)		—		(0.2)		(2.3)
Total	$	1,199.5	$	1,098.9	$	100.6	$	69.7	$	(0.9)	$	31.8

Our gross profit margin was 30.4% in the quarter ended December 31, 2025 compared to 30.6% in the prior year quarter. The gross profit margin for the current year quarter was negatively impacted by a $6.3 million increase in LIFO expense as compared to the prior year quarter, offset by positive mix from recent acquisitions as well as solid channel execution.

Sales in our U.S. operations increased $99.3 million or 10.4%, as acquisitions added $69.7 million or 7.3%. Excluding the impact of businesses acquired, sales in the United States were up $29.6 million or 3.1% due to higher demand in the Service Center segment. Sales in Canada increased $3.8 million or 5.4%. Unfavorable foreign currency translation decreased Canadian sales by $0.7 million or 0.9%. Excluding the impact of foreign currency translation, Canadian sales were up $4.5 million or 6.3% due to higher demand in the Service Center segment. Sales in other countries decreased $2.5 million or 3.6% from the prior year quarter. Unfavorable foreign currency translation of $0.3 million or 0.4%. Excluding the impact of foreign currency translation, sales in other countries were down $2.3 million or 3.2% due primarily to lower demand in Mexico.

Our gross profit margin was 30.1% in the quarter ended September 30, 2025 compared to 29.6% in the prior period. The gross profit margin for the current year period was positively impacted by 34 basis points from recent acquisitions and solid channel execution.

The following table shows the changes in selling, distribution and administrative expense (SD&A) (amounts in millions).

	Three Months EndedSeptember 30,				SD&A Increase		Amount of change due to
	Three Months EndedDecember 31,				SD&A Increase		Amount of change due to
									Foreign Currency		Organic Change
	2025		2024				Acquisitions
SD&A	$	~~232~~230.41	$	~~211~~207.92	$	2022.59	$	19.37	$	(0.2)4	$	12.48

SD&A consists of associate compensation, benefits and other expenses associated with selling, purchasing, warehousing, supply chain management and providing marketing and distribution of the Company's products, as well as costs associated with a variety of administrative functions such as human resources, information technology, treasury, accounting, insurance, legal, and facility related expenses ~~and expenses incurred in acquiring businesses~~. SD&A was 19.48% of sales in the quarter ended ~~September~~December 3031, 2025 compared to 19.3% in the prior year quarter, an increase of $2022.59 million or 911.71% compared to the prior year quarter. SD&A from businesses acquired added $19.37 million or 9.15% of SD&A expenses, including $3.1 million of intangibles amortization related to these acquisitions. Changes in foreign currency exchange rates ~~had~~increased ~~the effect of decreasing~~ SD&A during the quarter ended ~~September~~December 3031, 2025 by $0.24 million or 0.12% compared to the prior year quarter. Excluding the impact of businesses acquired and the favorable currency translation impact, SD&A increased $12.48 million or 01.74% during the quarter ended ~~September~~December 3031, 2025 compared to the prior year quarter primarily due to higher compensation costs.

Operating income increased $152.93 million or 141.09%, to $~~129~~123.02 million in the current year quarter from $~~113~~120.29 million during the prior year quarter, and as a percent of sales ~~increased~~decreased to 10.86% from 1011.3% during the prior year quarter.

Operating income, as a percentage of sales for the Service Center segment, ~~increased~~decreased to 1312.36% in the current year quarter from 12.57% in the prior year quarter. Operating income, as a percentage of sales for the Engineered Solutions segment, decreased to 11.05% in the current year quarter from 1114.80% in the prior year quarter., due to recent acquisitions.

The Company had net interest expense in the current year ~~quarter~~period of $1.0.9 million compared to net interest income of $0.69 million in the prior year ~~quarter.~~period primarily reflecting lower interest income on lower cash balances as compared to the prior year period.

Other income, net, which represents certain non-operating items of income and expense, was income of $0.5 million in the current year quarter compared to income of $20.38 million in the prior year quarter. Current quarter income primarily consists of unrealized gains on investments held by non-qualified deferred compensation trusts of $10.5 million~~, offset by foreign currency transaction losses of $1~~.0 ~~million.~~ Other income, net in the prior ~~year~~ quarter consisted primarily of unrealized gains on investments held by non-qualified deferred compensation trusts of $10.2 million and foreign currency transaction gains of $0.93 million.

20The effective income tax rate was 22.3% for the quarter ended December 31, 2025 compared to 23.9% for the quarter ended December 31, 2024. The decrease in the effective tax rate is primarily due to the reversal of a tax valuation allowance related to

Mexico during the quarter ended December 31, 2025.

As a result of the factors addressed above, net income for the quarter ended December 31, 2025 increased $2.1 million or 2.2% compared to the prior year quarter. Diluted net income per share was $2.51 per share for the quarter ended December 31, 2025 compared to $2.39 per share in the prior year quarter, an increase of 5.0%.

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ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

~~The~~Results ~~effective~~of income tax rate was 21.6% for the quarter ended September 30, 2025 compared to 20.7% for the quarter ended September 30, 2024. The increase in the effective tax rate over the prior year is primarily due to a decrease in compensation-related deductions during the quarter ended September 30, 2025 compared to the quarter ended September 30, 2024. We expect our full year tax rate for fiscal 2026 to be in the 23.0% to 24.0% range.Operations

AsSix aMonths ~~result~~Ended ~~of the factors addressed above, net income for the quarter ended September~~December 3031, 2025 ~~increased~~and ~~$8.7~~2024 million or 9.5% compared to the prior year quarter. Diluted net income per share was $2.63 per share for the quarter ended September 30, 2025 compared to $2.36 per share in the prior year quarter, an increase of 11.4%.

The following table is included to aid in review of Applied's condensed statements of consolidated income.


	Six Months Ended December 31,				Change in $'s Versus Prior Period - % Increase
	As a Percent of Net Sales
	2025		2024
Net sales	100.0	%	100.0	%	8.8	%
Gross profit	30.3	%	30.1	%	9.4	%
Selling, distribution & administrative expense	19.6	%	19.3	%	10.4	%
Operating income	10.7	%	10.8	%	7.8	%
Net income	8.3	%	8.5	%	5.8	%

During the six months ended December 31, 2025, sales increased $190.6 million or 8.8% compared to the prior year period, with sales from acquisitions adding $133.0 million or 6.1% and favorable foreign currency translation accounting for an increase of $1.4 million or 0.1%. There were 126 selling days in both the six months ended December 31, 2025 and December 31, 2024. Excluding the impact of businesses acquired and foreign currency translation, sales increased $56.2 million or 2.6%, primarily reflecting price contribution and volume growth in the Service Center segment.

The following table shows changes in sales by reportable segment (amounts in millions).


Sales by Reportable Segment	Six Months Ended December 31,				Sales (Decrease) Increase		Amount of change due to
	Six Months Ended December 31,								Foreign Currency		Organic Change
	2025		2024				Acquisitions		Foreign Currency		Organic Change
Service Center	$	1,529.8	$	1,473.6	$	56.2	$	0.5	$	1.4	$	54.3
Engineered Solutions	832.7		698.4		134.4		132.5		—		1.9
Total	$	2,362.5	$	2,172.0	$	190.6	$	133.0	$	1.4	$	56.2

Sales from our Service Center segment increased $56.2 million, or 3.8%. Acquisitions within this segment increased sales by $0.5 million or less than 0.1% and favorable foreign currency translation increased sales by $1.4 million or 0.1%. Excluding the impact of businesses acquired and foreign currency translation, sales increased $54.3 million or 3.7%, primarily reflecting price contribution, as well as an increase in volumes tied to internal growth initiatives and firming demand.

Sales from our Engineered Solutions segment increased $134.4 million or 19.2%. Acquisitions within this segment increased sales by $132.5 million or 19.0%. Excluding the impact of businesses acquired, sales increased $1.9 million or 0.2%, primarily reflecting price contribution, offset by lower flow control sales.

The following table shows changes in sales by geographic area. Other countries includes Mexico, Australia, New Zealand, Singapore, and Costa Rica (amounts in millions).


	Six Months Ended December 31,				Sales (Decrease) Increase		Amount of change due to
	Six Months Ended December 31,								Foreign Currency		Organic Change
Sales by Geographic Area	2025		2024				Acquisitions		Foreign Currency		Organic Change
United States	$	2,080.5	$	1,886.8	$	193.9	$	133.0	$	—	$	60.9
Canada	149.8		149.3		0.5		—		(0.4)		0.9
Other countries	132.2		135.9		(3.8)		—		1.8		(5.6)
Total	$	2,362.5	$	2,172.0	$	190.6	$	133.0	$	1.4	$	56.2

Sales in our U.S. operations increased $193.9 million or 10.3%, as acquisitions added $133.0 million or 7.0%. Excluding the impact of businesses acquired, sales in the United States increased $60.9 million or 3.3%, reflecting price contribution and volume growth in the Service Center segment. Sales from our Canadian operations increased $0.5 million or 0.4%. Unfavorable foreign currency translation decreased Canadian sales by $0.4 million or 0.3%. Excluding the impact of foreign

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AND RESULTS OF OPERATIONS

currency translation, Canadian sales were up $0.9 million or 0.7% primarily reflecting price contribution and modest volume growth. Sales in other countries decreased $3.8 million or 2.8%. Favorable foreign currency translation increased sales $1.8 million or 1.3%. Excluding the impact of foreign currency translation, sales in other countries decreased $5.6 million or 4.1% due primarily to lower demand in Mexico.

Our gross profit margin was 30.3% in the six months ended December 31, 2025 compared to 30.1% in the prior year period. The gross profit margin for the current year period was positively impacted by favorable acquisition mix and solid channel execution, partially offset by a $6.9 million increase in LIFO expense as compared to the prior year period.

The following table shows the changes in selling, distribution and administrative expense (SD&A) (amounts in millions).


	Six Months Ended December 31,				SD&A Increase		Amount of change due to
	Six Months Ended December 31,								Foreign Currency		Organic Change
	2025		2024				Acquisitions		Foreign Currency		Organic Change
SD&A	$	462.5	$	419.1	$	43.4	$	38.9	$	0.2	$	4.3

SD&A consists of associate compensation, benefits and other expenses associated with selling, purchasing, warehousing, supply chain management and providing marketing and distribution of the Company's products, as well as costs associated with a variety of administrative functions such as human resources, information technology, treasury, accounting, insurance, legal, and facility related expenses. SD&A was 19.6% of sales in the six months ended December 31, 2025 compared to 19.3% in the prior year period, an increase of $43.4 million or 10.4% compared to the prior year period. SD&A from businesses acquired added $38.9 million or 9.3% of SD&A expenses, including $6.1 million of intangibles amortization related to acquisitions. Changes in foreign currency exchange rates increased SD&A during the six months ended December 31, 2025 by $0.2 million or 0.1% compared to the prior year period. Excluding the impact of businesses acquired and the unfavorable currency translation impact, SD&A increased $4.3 million or 1.0% during the six months ended December 31, 2025 compared to the prior year period primarily due to higher compensation costs.

Operating income increased $18.2 million, or 7.8%, to $252.2 million in the current year period from $234.0 million during the prior year period, and as a percentage of sales decreased to 10.7% from 10.8% during the prior year period.

Operating income, as a percentage of sales for the Service Center segment, increased to 13.0% in the current year period from 12.6% in the prior year period. Operating income, as a percentage of sales for the Engineered Solutions segment, decreased to 11.3% in the current year period from 12.9% prior year periods, due to recent acquisitions.

The Company had net interest expense in the current year period of $1.9 million compared to net interest income of $1.6 million in the prior year period primarily reflecting lower interest income on lower cash balances as compared to the prior year period.

Other expense (income), net was income of $1.1 million for the six months ended December 31, 2025, which included unrealized gains on investments held by non-qualified deferred compensation trusts of $1.9 million and $0.4 million of other income offset by foreign currency transaction losses of $1.2 million. During the prior year period, other expense (income), net was income of $3.0 million, which primarily consisted of unrealized gains on investments held by non-qualified deferred compensation trusts of $1.5 million and foreign currency transaction gains of $1.2 million.

The effective income tax rate was 22.0% for the six months ended December 31, 2025 compared to 22.3% for the six months ended December 31, 2024. We expect our full year tax rate for fiscal 2026 to be in the 23.0% to 24.0% range.

As a result of the factors addressed above, net income for the six months ended December 31, 2025 increased $10.8 million or 5.8% compared to the prior year period. Diluted net income per share was $5.14 per share for the six months ended December 31, 2025 compared to $4.76 per share in the prior year period, an increase of 8.0%.

Recent Developments

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted into law. The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act of 2017, as amended, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. ASC 740, “Income Taxes”, requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted. Consequently, during the ~~three~~six months ended ~~September~~December 3031, 2025, the Company evaluated all deferred tax balances under the newly enacted tax law and identified any other changes required to its financial statements as a result of the OBBBA. The provisions of the OBBBA did not have a material impact to our income tax expense or effective tax rate. We expect the provisions of the OBBBA to result in a reduction ~~to our cash tax payments for our fiscal year ended June 30, 2026. The Company will continue to evaluate the impact of the OBBBA as additional guidance becomes available.~~

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AND RESULTS OF OPERATIONS

to our cash tax payments for our fiscal year ended June 30, 2026. The Company will continue to evaluate the impact of the OBBBA as additional guidance becomes available.

Liquidity and Capital Resources

Our primary source of capital is cash flow from operations, supplemented as necessary by bank borrowings or other sources of debt. We had total debt obligations outstanding of $572.3 million at both ~~September~~December 3031, 2025 and June 30, 2025. Management expects that our existing cash, cash equivalents, funds available under the revolving credit facility, and cash provided from operations will be sufficient to finance normal working capital needs in each of the countries in which we operate, payment of dividends, acquisitions, investments in properties, facilities and equipment, debt service, and the purchase of additional Company common stock. Management also believes that additional long-term debt and line of credit financing could be obtained based on the Company's credit standing and financial strength.

The Company's working capital at ~~September~~December 3031, 2025 was $1,~~267~~273.50 million, compared to $1,221.3 million at June 30, 2025. The current ratio was 3.57 to 1 at ~~September~~December 3031, 2025 and 3.3 to 1 at June 30, 2025.

Net Cash Flows

The following table is included to aid in review of Applied's condensed statements of consolidated cash flows (amounts in thousands).

	Three Months Ended September 30,
	Six Months Ended December 31,
Net Cash Provided by (Used in):	2025		2024
Operating Activities	$	~~119~~218,~~317~~976	$	~~127~~222,~~747~~884
Investing Activities	(915,~~546~~361)		(15282,~~216~~966)
Financing Activities	(78187,~~565~~054)		(3491,~~047~~109)
Exchange Rate Effect	~~(907)~~1,008		(~~581~~5,985)
Increase in Cash and Cash Equivalents	$	30,299	$	77,903
(Decrease) Increase in Cash and Cash Equivalents	$	17,569	$	(157,176)

The decrease in cash provided by operating activities during the ~~three~~six months ended ~~September~~December 3031, 2025 from the prior period is ~~driven~~due byto achanges ~~reduction~~ in ~~cash flows generated from~~ working capital offor ~~$17.2 million, offset by improved operating results. The change in working capital year over year reflects modest increase in working capital in~~ the ~~current~~period ~~year quarter~~ of $027.67 million asprimarily ~~compared~~driven toby ~~working~~(amounts ~~capital improvements generated~~ in ~~the prior year quarter of $16.6 million.~~thousands):

Net cash used in investing activities during the three months ended September 30, 2025 decreased from the prior period primarily due to $2.3 million used for acquisitions in the current year quarter compared to $10.5 million used for acquisitions in the prior year quarter.


	Six Months Ended December 31,
	2025		2024
Accounts receivable	$	63,701	$	64,260
Inventories	(21,096)		530
Accounts payable	(21,841)		(34,617)
Other operating assets	(38,518)		(13,315)

Net cash used in ~~financing~~investing activities during the ~~three~~six months ended ~~September~~December 3031, 2025 ~~increased~~decreased from the prior ~~quarter~~period primarily due to $~~53.~~2.4 million used tofor ~~repurchase~~acquisitions ~~204,136 shares of common stock~~ in the ~~current~~six ~~year~~months ~~quarter~~ended December 31, 2025 compared to $10273.01 million used tofor ~~repurchase~~acquisitions ~~52,000 shares of common stock~~ in the prior year ~~quarter~~period.

Net cash used in financing activities during the six months ended December 31, 2025 increased from the prior year period primarily due to $143.4 million of cash used to repurchase 550,636 shares of common stock during the six months ended December 31, 2025 compared to $30.1 million used to repurchase 127,376 shares of common stock in the prior year period. This was partially offset by lower long-term debt repayments in the current year period of $25.1 million.

Share Repurchases

21The Board of Directors authorized the repurchase of shares of the Company's common stock. These purchases may be made in open market and negotiated transactions, from time to time, depending upon market conditions. At December 31, 2025, we had authorization to repurchase 749,364 shares. During the three months ended December 31, 2025, the Company acquired 346,500 shares of the Company's common stock on the open market for $89.0 million. During the six months ended December 31, 2025, the Company acquired 550,636 shares of the Company's common stock on the open market for $143.4 million. During the three months ended December 31, 2024, the Company acquired 75,376 shares of treasury stock on the open market for $20.0 million. During the six months ended December 31, 2024, the Company acquired 127,376 shares of treasury stock on the open market for $30.0 million.

Borrowing Arrangements

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APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

The Board of Directors has authorized the repurchase of shares of the Company's common stock. These purchases may be made in open market and negotiated transactions, from time to time, depending upon market conditions. At September 30, 2025, we had authorization to repurchase 1,095,864 shares. During the three months ended September 30, 2025, we purchased 204,136 shares of the Company's common stock on the open market at an average price per share of $260.49. During the three months ended September 30, 2024, we purchased 52,000 shares of the Company's common stock on the open market at an average price per share of $191.92.

Borrowing Arrangements

A summary of long-term debt, including the current portion, follows (amounts in thousands):

	September 30, 2025		June 30, 2025
	December 31, 2025		June 30, 2025
Revolving credit facility	$	384,000	$	384,000
Trade receivable securitization facility	188,300		188,300
Total debt	$	572,300	$	572,300

Revolving Credit Facility ~~& Term Loan~~

In ~~December~~October ~~2021~~2025, the Company entered into a new five-year revolving credit facility with a group of banks to refinance the existing credit facility as well as provide funds for ongoing working capital and other general corporate purposes. The revolving credit facility provides a $900.0 million unsecured revolving credit facility and an uncommitted accordion feature which allows the Company to request an increase in the borrowing commitments, or incremental term loans, under the credit facility in aggregate principal amounts of up to $~~500~~800.0 million. The new revolving credit facility also provides for a $25.0 million sublimit for swing line loans and a $50.0 million sublimit for letters of credit. Borrowings under this agreement bear interest, at the Company's election, at either the base rate plus a margin that ranges from 0 to 55 basis points based on the Company's net leverage ratio or Secured Overnight Financing Rate (SOFR) plus a margin that ranges from 80 to 155 basis points based on the Company's net leverage ratio. Borrowing capacity under this facility, without exercising the accordion feature, totaled $515.7 million ~~and $515.8 million~~ at ~~September~~December 3031, 2025 and ~~June 30, 2025, respectively, and~~ is available to fund future acquisitions or other capital and operating requirements. ~~These~~This ~~amounts~~amount ~~are~~is net of outstanding letters of credit of $0.3 million ~~and $0.2 million~~ at ~~September~~December 3031, 2025 ~~and June 30, 2025, respectively,~~ to secure certain insurance obligations. The interest rate on the revolving credit facility was 54.0652% ~~and 5.23%~~ as of ~~September~~December 3031, 2025 ~~and June 30, 2025, respectively~~.

~~Additionally,~~The ~~the~~new ~~Company~~credit ~~had~~facility ~~letters~~replaced ofthe Company's previous credit ~~outstanding~~facility ~~not~~agreement. Unused ~~associated~~lines ~~with~~under the ~~revolving~~previous ~~credit agreement~~facility, innet ~~the~~of ~~amount~~outstanding letters of credit of $50.32 million asto ofsecure ~~September 30~~certain insurance obligations, ~~2025~~totaled ~~and~~$515.7 million at June 30, 2025, and were available to ~~secure~~fund ~~certain~~future ~~insurance~~acquisitions ~~obligations~~or other capital and operating requirements. The interest rate on the term loan was 5.23% as of June 30, 2025.

OnThe ~~October~~Company ~~24,~~paid ~~2025,~~$1.6 ~~the~~million ~~Company~~of ~~entered~~debt ~~into~~issuance acosts ~~new~~related ~~five-year~~to the new revolving credit facility ~~with~~in athe ~~group~~three ofmonths ~~banks~~ended toDecember ~~refinance~~31, 2025, which are included in other current assets and other assets on the ~~existing~~condensed ~~credit~~consolidated ~~facility~~balance sheet as ~~well~~of asDecember ~~provide~~31, ~~funds~~2025 ~~for~~and ~~ongoing~~will ~~working~~be ~~capital~~amortized ~~and~~over ~~other~~the ~~general~~five-year ~~corporate~~term ~~purposes.~~of ~~The~~the new ~~revolving~~ credit facility. ~~provides~~The aCompany ~~$900.0~~analyzed ~~million~~the ~~unsecured~~unamortized ~~revolving~~debt issuance costs related to the previous credit facility ~~and~~under anASC ~~uncommitted~~Topic ~~accordion~~470 ~~feature~~- ~~which~~Debt. ~~allows~~As ~~the~~a ~~Company~~result toof ~~request~~this ananalysis, ~~increase~~less inthan ~~the~~$0.1 ~~borrowing~~million ~~commitments,~~of orunamortized ~~incremental~~debt ~~term~~issuance ~~loans~~costs were expensed and included within interest expense, ~~under~~net on the ~~credit~~condensed ~~facility~~statements of consolidated income in ~~aggregate~~the ~~principal~~three ~~amounts~~months ofended upDecember to31, 2025, and $~~800.~~0.8 million~~. The~~ ~~new~~of ~~revolving~~unamortized ~~credit~~debt ~~facility~~issuance ~~also~~costs ~~provides~~were ~~for~~rolled aforward ~~$25.0~~into ~~million~~the ~~sublimit~~new ~~for~~credit ~~swing~~facility ~~line loans~~ and awill ~~$50.0~~be ~~million~~amortized ~~sublimit~~over ~~for~~the ~~letters~~five-year term of the new credit facility.

Additionally, the Company had letters of credit outstanding not associated with the revolving credit agreement, in the amount of $5.3 million as of December 31, 2025 and June 30, 2025, to secure certain insurance obligations.

Trade Receivable Securitization Facility

In August 2018, the Company established a trade receivable securitization facility (~~the “~~AR Securitization Facility”). The AR Securitization Facility effectively increases the Company’s borrowing capacity by collateralizing a portion of the amount of the U.S. operations’ trade accounts receivable. The Company uses the proceeds from the AR Securitization Facility as an alternative to other forms of debt, effectively reducing borrowing costs. The AR Securitization Facility's maximum borrowing capacity is $250.0 million, ~~and~~ fees on amounts borrowed are 0.90% per year, and the facility terminates on August 4, 2026. Borrowing capacity is further subject to changes in the credit ratings of our customers, customer concentration levels or certain characteristics of the accounts receivable portfolio and, therefore, at certain times, we may not be able to fully access the $250.0 million of borrowing capacity available under the AR Securitization Facility. Borrowings under the AR Securitization Facility carry variable interest rates tied to SOFR. The interest rate on the AR Securitization Facility as of ~~September~~December 3031, 2025 and June 30, 2025 was 54.0663% and 5.32%, respectively. On July 10, 2025, the Company amended the AR Securitization Facility and extended the term to July 10, 2028., with no substantial changes in other terms.

InThe ~~2019,~~credit ~~the~~facility ~~Company~~and ~~entered~~the ~~into~~unsecured anshelf ~~interest~~facility ~~rate~~contain ~~swap~~restrictive ~~that~~covenants ~~expires~~regarding inliquidity, ~~January~~net ~~2026~~worth, ~~which~~financial ~~mitigates~~ratios, ~~variability~~and inother ~~forecasted~~covenants. At ~~interest~~December 31, ~~payments~~2025, onthe ~~$384.0~~most ~~million~~restrictive of these covenants required that the Company’s ~~U.S.~~have ~~dollar-denominated~~net ~~unsecured~~indebtedness ~~variable~~less ~~rate~~than ~~debt~~3. ~~For~~75 ~~more~~times ~~information,~~consolidated ~~see~~income ~~Note~~before 6interest, ~~Derivatives~~taxes, todepreciation and amortization (as defined in these agreements). At December 31, 2025, the ~~condensed~~Company's net indebtedness was less than 0.3 times consolidated ~~financial~~income ~~statements~~before interest, ~~included~~taxes, depreciation and amortization (as defined in ~~Item~~these 1agreements). The ~~under~~Company ~~the~~was ~~caption~~in ~~“Notes~~compliance towith ~~Condensed~~all ~~Consolidated~~financial ~~Financial~~covenants ~~Statements~~at December 31, 2025.”

The credit facility and the unsecured shelf facility contain restrictive covenants regarding liquidity, net worth, financial ratios, and other covenants. At September 30, 2025, the most restrictive of these covenants required that the Company have net indebtedness less than 3.75 times consolidated income before interest, taxes, depreciation and amortization (as defined in these 29

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APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

~~agreements).~~Cash AtFlow ~~September 30,~~Hedge 2025, the Company's net indebtedness was less than 0.4 times consolidated income before interest, taxes, depreciation and amortization (as defined in these agreements). The Company was in compliance with all financial covenants at September 30, 2025.Maturity

As disclosed in Footnote 6 to this Form 10-Q, the interest rate swap the Company entered into in January 2019 matures on January 31, 2026. As a result of the maturity of this agreement, we estimate future interest expense could increase by approximately $3.5 million on a quarterly basis, based on current market rates, and outstanding borrowings as of December 31, 2025. The Company may use available cash to reduce outstanding borrowings under its revolving credit facility to mitigate the impact of higher interest costs.

Accounts Receivable Analysis

The following table is included to aid in analysis of accounts receivable and the associated provision for losses on accounts receivable (amounts in thousands):

The following table is included to aid in analysis of accounts receivable and the associated provision for losses on accounts receivable (all dollar amounts in thousands):


							December 31,			June 30,
							2025			2025
Accounts receivable, gross							$	721,480		$	786,161
Allowance for doubtful accounts							14,578			16,462
Accounts receivable, net							$	706,902		$	769,699
Allowance for doubtful accounts, % of gross receivables							2.0		%	2.1		%

	Three Months Ended December 31,						Six Months Ended December 31,
	2025			2024			2025			2024
Provision for (recovery of) losses on accounts receivable	$	1,431		$	2,549		$	(240)		$	3,605
Provision as a % of net sales	0.12		%	0.24		%	(0.01)		%	0.17		%

	September 30,			June 30,
	2025			2025
Accounts receivable, gross	$	767,243		$	786,161
Less: allowance for doubtful accounts	13,800			16,462
Accounts receivable, net	$	753,443		$	769,699
Allowance for doubtful accounts, % of gross receivables	1.8		%	2.1		%
	Three Months Ended September 30,
	2025			2024
(Recovery of) provision for losses on accounts receivable	$	(1,671)		$	1,056
Provision as a % of net sales	(0.14)		%	0.10		%

Accounts receivable are reported at net realizable value and consist of trade receivables from customers. Management monitors accounts receivable by reviewing Days Sales Outstanding (DSO) and the aging of receivables for each of the Company's locations.

~~Accounts~~On ~~receivable~~a ~~are~~consolidated ~~reported~~basis, DSO was 54.7 at ~~net~~December 31, ~~realizable~~2025 ~~value~~compared ~~and~~to ~~consist~~56.2 June 30, 2025. As of ~~trade~~December 31, ~~receivables~~2025, ~~from~~approximately ~~customers~~3. ~~Management~~5% ~~monitors~~of our accounts receivable bybalances ~~reviewing~~are ~~Days~~more ~~Sales~~than ~~Outstanding~~90 ~~(DSO)~~days ~~and~~past ~~the~~due, ~~aging~~compared ofto 2.1% at June 30, 2025. On an overall basis, we generated net recoveries on previously provisions losses on uncollected receivables representing 0.01% of sales for ~~each~~the six months ended December 31, 2025 compared to provision for losses of 0.17% of sales for the ~~Company's~~six months ended December 31, 2024. This change is primarily in the U.S. operations of the Service Center segment. Historically, this percentage is between 0.10% to 0.15%. Management believes the overall receivables aging and provision for losses on accounts receivable are at reasonable levels.

On a consolidated basis, DSO was 56.5 at September 30, 2025 compared to 56.6 at June 30, 2025. As of September 30, 2025, 1.7% of our accounts receivable balances are more than 90 days past due, compared to 2.1% at June 30, 2025. On an overall basis, we generated net recoveries on previously provisioned losses on uncollected receivables representing (0.14)% of our sales in the three months ended September 30, 2025, compared to provision for losses of 0.10% of sales for the three months ended September 30, 2024. This change is primarily in the U.S. operations of the Service Center segment. Historically, this percentage is around 0.10% to 0.15%. Management believes the overall receivables aging and provision for losses on uncollected receivables are at reasonable levels.

Inventory Analysis

Inventories are valued using the last-in, first-out (LIFO) method for U.S. inventories and the average cost method for foreign inventories. Management uses an inventory turnover ratio to monitor and evaluate inventory. Management calculates this ratio on an annual as well as a quarterly basis, and believes that using average costs to determine the inventory turnover ratio instead of LIFO costs provides a more useful analysis. The annualized inventory turnover based on average costs was 4.34 for both the ~~period~~periods ended ~~September~~December 3031, 2025 and ~~4.4 for the period ended~~ June 30, 2025.

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APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Cautionary Statement Under Private Securities Litigation Reform Act

Management’s Discussion and Analysis contains statements that are forward-looking based on management’s current expectations about the future. Forward-looking statements are often identified by qualifiers, such as “guidance”, “expect”, “believe”, “plan”, “intend”, “will”, “should”, “could”, “would”, “anticipate”, “estimate”, “forecast”, “may”, "optimistic" and derivative or similar words or expressions. Similarly, descriptions of objectives, strategies, plans, or goals are also forward-looking statements. These statements may discuss, among other things, expected growth, future sales, future cash flows, future capital expenditures, future performance, and the anticipation and expectations of the Company and its management as to future occurrences and trends. The Company intends that the forward-looking statements be subject to the safe harbors established in the Private Securities Litigation Reform Act of 1995, as amended, and by the Securities and Exchange Commission in its rules, regulations and releases.

Readers are cautioned not to place undue reliance on any forward-looking statements. All forward-looking statements are based on current expectations regarding important risk factors, many of which are outside the Company’s control. Accordingly, actual results may differ materially from those expressed in the forward-looking statements, and the making of those statements should not be regarded as a representation by the Company or any other person that the results expressed in the statements will be achieved. In addition, the Company assumes no obligation to update or revise any forward-looking statements, whether because of new information or events, or otherwise, except as may be required by law.

Important risk factors include, but are not limited to, the following: risks relating to the operations levels of our customers and the economic factors that affect them; the impact that widespread illness, health epidemics, or general health concerns could have; inflationary or deflationary trends in the cost of products, energy, labor and other operating costs including tariffs, and changes in the prices for products and services relative to the cost of providing them; reduction in supplier inventory purchase incentives; loss of key supplier authorizations, lack of product availability (such as due to supply chain strains), changes in supplier distribution programs, inability of suppliers to perform, and transportation disruptions; changes in customer preferences for products and services of the nature and brands sold by us; changes in customer procurement policies and practices; competitive pressures; our reliance on information systems and risks relating to their proper functioning, the security of those systems, and the data stored in or transmitted through them; the impact of economic conditions on the collectability of trade receivables; reduced demand for our products in targeted markets due to reasons including consolidation in customer industries; our ability to retain and attract qualified sales and customer service personnel and other skilled executives, managers and professionals; our ability to identify and complete acquisitions, integrate them effectively, and realize their anticipated benefits; the variability, timing and nature of new business opportunities including acquisitions, alliances, customer relationships, and supplier authorizations; the incurrence of debt and contingent liabilities in connection with acquisitions; our ability to access capital markets as needed on reasonable terms; disruption of operations at our headquarters or distribution centers; risks and uncertainties associated with our foreign operations, including volatile economic conditions, political instability, cultural and legal differences, and currency exchange fluctuations; the potential for goodwill and intangible asset impairment; changes in accounting policies and practices; our ability to maintain effective internal control over financial reporting; organizational changes within the Company; risks related to legal proceedings to which we are a party; potentially adverse government regulation, legislation, or policies, both enacted and under consideration, including with respect to federal tax policy, international trade, data privacy and security, and government contracting; and the occurrence of extraordinary events (including prolonged labor disputes, power outages, telecommunication outages, terrorist acts, war, public health emergency, earthquakes, extreme weather events, other natural disasters, fires, floods, and accidents). Other factors and unanticipated events could also adversely affect our business, financial condition, or results of operations. Risks can also change over time. Further, the disclosure of a risk should not be interpreted to imply that the risk has not already materialized.

We discuss certain of these matters and other risk factors more fully throughout this Form 10-Q as well as other of our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended June 30, 2025.

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ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For quantitative and qualitative disclosures about market risk, see Item 7A "Quantitative and Qualitative Disclosures About Market Risk" in our Annual Report on Form 10-K for the year ended June 30, 2025.

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APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

ITEM 4: CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

On December 31, 2024, the Company completed the acquisition of Hydradyne, LLC (Hydradyne). As permitted by SEC guidance, the scope of management’s evaluation of internal control over financing reporting as of ~~September 30~~December 31, 2025 did not include the internal control over financial reporting of Hydradyne. However, we are extending our oversight and monitoring processes that support our internal control over financial reporting to include Hydradyne's operations.

The Company's management, under the supervision and with the participation of the Chief Executive Officer (CEO) and Chief Financial Officer (CFO), evaluated the effectiveness of the Company's disclosure controls and procedures, as defined in Exchange Act Rule 13a-15(e), as of the end of the period covered by this report. Based on that evaluation, the CEO and CFO ~~have~~ concluded that the Company's disclosure controls and procedures are effective.

Changes in Internal Control Over Financial Reporting

There have not been any changes in internal control over financial reporting during the three months ended ~~September~~December 3031, 2025 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings

~~From~~The ~~time~~Company tois ~~time, Applied and/or one of its subsidiaries may be~~ a party to pending legal proceedings with respect to various product liability, commercial, personal injury, employment, and other ~~routine litigation~~ matters ~~incidental to its business~~. Although it is not possible to predict the outcome of these proceedings or the range of reasonably possible loss ~~associated with any of them~~, wethe doCompany does not expect, based on circumstances currently known, that the ultimate resolution of any of these proceedings will have, either individually or in the aggregate, a material adverse effect on ~~Applied~~the Company's consolidated financial position, results of operations, or cash flows.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

~~The~~Repurchases ~~following table summarizes Applied's repurchases~~ of ~~its~~ common stock in the ~~fiscal~~ quarter ended ~~September~~December 3031, 2025. were as follows:

Period	(a) Total Number of Shares	(b) Average Price Paid per Share ($)	(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1) ~~(2)~~
July 1, 2025 to July 31, 2025	110,000	$256.78	110,000	1,190,000
October 1, 2025 to October 31, 2025	9,000	$258.00	9,000	1,086,864
August 1, 2025 to August 31, 2025	90,401	$264.86	90,401	1,099,599
November 1, 2025 to November 30, 2025	171,000	$252.86	171,000	915,864
September 1, 2025 to September 30, 2025	3,735	$263.87	3,735	1,095,864
December 1, 2025 to December 31, 2025	166,500	$260.67	166,500	749,364
Total	~~204~~346,~~136~~500	$~~260~~256.4974	~~204~~346,~~136~~500	1749,~~095,864~~364

(1)~~During~~On April 29, 2025, the ~~quarter~~Board of Directors authorized the ~~Company~~repurchase ~~purchased~~of ~~532~~up to 1.5 million shares of the Company's common stock. Purchases can be made in ~~connection~~the ~~with~~open market or in privately negotiated transactions. The authorization is in effect until all shares are purchased, or the ~~Deferred~~Board ~~Compensation~~revokes ~~Plan~~or amends the authorization.

(2)On April 29, 2025, the Board of Directors authorized the repurchase of up to 1.5 million shares of the Company's common stock, replacing the August 9, 2022 authorization. Applied publicly announced the new authorization on May 1, 2025. Purchases can be made in the open market or in privately negotiated transactions. The authorization is in effect until all shares are purchased, or the Board revokes or amends the authorization.

ITEM 5. Other Information

Rule 10b5-1 Trading Plans and Non-Rule 10b5-1 Trading Arrangements

During the quarter ended ~~September~~December 3031, 2025, nonone ~~director~~of the Company’s directors or ~~officer~~officers of(as ~~the~~defined ~~Company~~in Rule 16a-1(f)) adopted, ~~modified~~or terminated any contract, instruction or ~~terminated~~written aplan "for the purchase or sale of Company securities that (i) was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) ~~trading~~or ~~arrangement"~~(ii) orthat constituted a "“non-Rule 10b5-1 trading arrangement"” ~~(in each case,~~ as defined in ~~Item 408 of~~ Regulation S-K 408(c) of the Securities Exchange Act of 1934, as amended.

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ITEM 6. Exhibits

* Asterisk indicates an executive compensation plan or arrangement.

Exhibit No.						Description
3.1						Amended and Restated Articles of Incorporation of Applied Industrial Technologies, Inc., as amended on October 25, 2005 (filed as Exhibit 3(a) to the Company’s Form 10-Q for the quarter ended December 31, 2005, SEC File No. 1-2299, and incorporated here by reference).
3.2						Code of Regulations of Applied Industrial Technologies, Inc., as amended on October 19, 1999 (filed as Exhibit 3(b) to the Company’s Form 10-Q for the quarter ended September 30, 1999, SEC File No. 1-2299, and incorporated here by reference).
4.1						Certificate of Merger of Bearings, Inc. (Ohio) (now named Applied Industrial Technologies, Inc.) and Bearings, Inc. (Delaware) filed with the Ohio Secretary of State on October 18, 1988, including an Agreement and Plan of Reorganization dated September 6, 1988 (filed as Exhibit 4(a) to the Company’s Registration Statement on Form S-4 filed May 23, 1997, Registration No. 333-27801, and incorporated here by reference).
4.2						Amended and Restated Note Purchase and Private Shelf Agreement dated as of October 30, 2019, between Applied Industrial Technologies, Inc.and PGIM, Inc. (formerly known as Prudential Investment Management, Inc.), and certain of its affiliates (filed as Exhibit 10.1 to the Company's Form 8-K filed November 5, 2019, SEC File No. 1-2299, and incorporated here by reference).
4.3						Amendment No. 1 to Amended and Restated Note Purchase and Private Shelf Agreement dated as of March 26, 2021 between Applied Industrial Technologies, Inc. and PGIM, Inc. (formerly known as Prudential Investment Management, Inc.), and certain of its affiliates, (filed as Exhibit 4.3 to the Company’s Form 10-Q for the quarter ended March 31, 2021, SEC File No. 1-2299, and incorporated here by reference).
4.4						Amendment No. 2 to Amended and Restated Note Purchase and Private Shelf Agreement, dated as of December 9, 2021, between Applied and PGIM, Inc., (filed as Exhibit 10.2 to the Company's Form 8-K filed December 14, 2021, SEC File No. 1-2299, and incorporated here by reference).
4.5						Amendment No. 3 to Amended and Restated Note Purchase and Private Shelf Agreement, dated as of October 28, 2022, between Applied and PGIM, Inc. (filed as Exhibit 10.1 to the Company's Form 8-K filed November 1, 2022, SEC File No. 1-2299, as incorporated here by reference).
4.6						Credit Agreement dated as of December 9, 2021, among Applied Industrial Technologies, Inc., KeyBank National Association as Agent, and various financial institutions, (filed as Exhibit 10.1 to the Company's Form 8-K filed December 14, 2021, SEC File No. 1-2299, and incorporated here by reference).
4.7						First Amendment Agreement, dated as of May 12, 2023, among Applied Industrial Technologies, Inc., KeyBank National Association as Agent, and the Lenders set forth therein (filed as Exhibit 4.7 to Applied’s Form 10-K for the fiscal year ended June 30, 2023, SEC File No. 1-2299, and incorporated here by reference).
4.8						Guaranty of Payment Joinder, dated as of January 16, 2025, among Applied Bearing Distributors, LLC, Cangro Industries, LLC, Itech Automation Solutions, LLC, KeyBank National Association as Agent, and various financial institutions (filed as Exhibit 4.8 to Applied's Form 10-Q for the quarter ended March 31, 2025, SEC File No. 1-2299, and incorporated here by reference).
4.9						Guaranty of Payment Joinder, dated as of March 14, 2025, among Stanley M. Proctor Company, LLC, KeyBank National Association as Agent, and various financial institutions (filed as Exhibit 4.9 to Applied's 10-Q for the quarter ended March 31, 2025, SEC File No. 1-299, and incorporated here by reference).
4.10						Guaranty of Payment Joinder, dated as of March 14, 2025, among Hydradyne, LLC., KeyBank National Association as Agent, and various financial institutions (filed as Exhibit 4.10 to Applied's Form 10-Q for the quarter ended March 31, 2025, SEC File No. 1-2299, and incorporated here by reference).
4.11						Guaranty of Payment Joinder, dated as of June 19, 2025, among Iris Custom Solutions, LLC, KeyBank National Association as Agent, and various financial institutions (filed as Exhibit 4.11 to Applied's Form 10-K for the fiscal year ended June 30, 2025, SEC File No. 1-2299, and incorporated here by reference).
4.12						Receivables Financing Agreement dated as of August 31, 2018 among AIT Receivables LLC, as borrower, PNC Bank, National Association, as administrative agent, Applied Industrial Technologies, Inc., as initial servicer, PNC Capital Markets LLC, as structuring agent and the additional persons from time to time party thereto, as lenders (filed as Exhibit 10.1 to the Company's Form 8-K filed September 6, 2018, SEC File No. 1-2299, and incorporated here by reference).
4.13						Amendment No. 1 to Receivables Financing Agreement and Reaffirmation of Performance Guaranty dated as of March 26, 2021 among AIT Receivables LLC, as borrower, PNC Bank, National Association, as administrative agent, Applied Industrial Technologies, Inc., as initial servicer, PNC Capital Markets LLC, as structuring agent and the additional persons from time to time party thereto, as lenders (filed as Exhibit 10.2 to the Company's Form 8-K filed March 29, 2021, SEC File No. 1-2299, and incorporated here by reference).

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4.2						Amended and Restated Note Purchase and Private Shelf Agreement dated as of October 30, 2019, between Applied and PGIM, Inc. (formerly known as Prudential Investment Management, Inc.), and certain of its affiliates (filed as Exhibit 10.1 to the Company's Form 8-K filed November 5, 2019, SEC File No. 1-2299, and incorporated here by reference).
4.14						Amendment No. 2 to Receivables Financing Agreement and Reaffirmation of Performance Guaranty, dated as of May 12, 2023, by and among AIT Receivables, LLC, Applied Industrial Technologies, Inc., PNC Bank, National Association, Regions Bank, and PNC Capital Markets LLC (filed as Exhibit 4.10 to Applied’s Form 10-K for the fiscal year ended June 30, 2023, SEC File No. 1-2299, and incorporated here by reference).
4.3						Amendment No. 1 to Amended and Restated Note Purchase and Private Shelf Agreement dated as of March 26, 2021 between Applied Industrial Technologies, Inc. and PGIM, Inc. (formerly known as Prudential Investment Management, Inc.), and certain of its affiliates (filed as Exhibit 4.3 to Applied's Form 10-Q for the quarter ended March 31, 2021, SEC File No. 1-2299, and incorporated here by reference).
4.15						Purchase and Sale Agreement dated as of August 31, 2018 among various entities listed on Schedule I thereto (including Applied Industrial Technologies, Inc.), as originators, Applied Industrial Technologies, Inc., as servicer, and AIT Receivables LLC, as buyer (filed as Exhibit 10.2 to Applied's Form 8-K filed September 6, 2018, SEC File No. 1-2299, and incorporated here by reference).
4.4						Amendment No. 2 to Amended and Restated Note Purchase and Private Shelf Agreement, dated as of December 9, 2021, between Applied and PGIM, Inc., (filed as Exhibit 10.2 to the Company's Form 8-K filed December 14, 2021, SEC File No. 1-2299, and incorporated here by reference).
4.16						Amendment No. 1 to Purchase and Sale Agreement dated as of November 19, 2018 among Applied Industrial Technologies, Inc. and various of its affiliates, as originators, Applied Industrial Technologies, Inc., as servicer, and AIT Receivables LLC, as buyer, (filed as Exhibit 4.10 to Applied's Form 10-Q for the quarter ended March 31, 2021, SEC File No. 1-2299, and incorporated here by reference).
4.5						Amendment No. 3 to Amended and Restated Note Purchase and Private Shelf Agreement, dated October 28, 2022, between Applied and PGIM, Inc., (filed as Exhibit 10.1 to the Company's Form 8-K filed November 1, 2022, SEC File No. 1-2299, and incorporated here by reference).
4.17						Amendment No. 2 to Purchase and Sale Agreement dated as of March 26, 2021 among various entities listed on Schedule 1 thereto (including Applied Industrial Technologies, Inc.), as originators, Applied Industrial Technologies, Inc., as servicer, and AIT Receivables LLC, as buyer (filed as Exhibit 10.2 to Applied's Form 8-K filed March 29, 2021, SEC File No. 1-2299, and incorporated here by reference).
4.6						Credit Agreement dated as of December 9, 2021, among Applied Industrial Technologies, Inc., KeyBank National Association as Agent, and various financial institutions, (filed as Exhibit 10.1 to the Company's Form 8-K filed December 14, 2021, SEC File No. 1-2299, and incorporated here by reference).
4.18						Amendment No. 3 to Receivables Financing Agreement and Reaffirmation of Performance Guaranty dated as of August 4, 2023 among AIT Receivables LLC, as borrower, PNC Bank, National Association, as administrative agent, Applied Industrial Technologies, Inc., as initial servicer, PNC Capital Markets LLC, as structuring agent, and the additional persons from time to time party thereto, as lenders (filed as Exhibit 10.1 to Applied’s Form 8-K filed August 9, 2023, SEC File No. 1-2299, and incorporated here by reference).
4.7						First Amendment Agreement, dated as of May 12, 2023, among Applied Industrial Technologies, Inc., KeyBank National Association as Agent, and the Lenders set forth therein (filed as Exhibit 4.7 to Applied’s Form 10-K for the fiscal year ended June 30, 2023, SEC File No. 1-2299, and incorporated here by reference).
4.19						Amendment No. 3 to Purchase and Sale Agreement dated as of August 4, 2023 among various entities listed on Schedule I thereto (including Applied Industrial Technologies, Inc.), as originators, Applied Industrial Technologies, Inc., as servicer, and AIT Receivables LLC, as buyer (filed as Exhibit 10.2 to Applied’s Form 8-K filed August 9, 2023, SEC File No. 1-2299, and incorporated here by reference).
4.8						Guaranty of Payment Joinder, dated as of January 16, 2025, among Applied Bearing Distributors, LLC, Cangro Industries, LLC, Itech Automation Solutions, LLC, KeyBank National Association as Agent, and various financial institutions (filed as Exhibit 4.8 to Applied's Form 10-Q for the quarter ended March 31, 2025, SEC File No. 1-2299, and incorporated here by reference).
4.20						Amendment No. 4 to Receivables Financing Agreement and Reaffirmation of Performance Guaranty dated as of July 10, 2025 among AIT Receivables LLC, as Borrower, PNC Bank, National Association, as administrative agent, Applied Industrial Technologies, Inc., as initial servicer, PNC Capital Markets LLC, as structuring agent, and the additional person from time to time party thereto, as lenders (filed as Exhibit 10.1 to Applied’s Form 8-K filed July 11, 2025, SEC File No. 1-2299, and incorporated here by reference).
4.9						Guaranty of Payment Joinder, dated as of March 14, 2025, among Stanley M. Proctor Company, LLC, KeyBank National Association as Agent, and various financial institutions (filed as Exhibit 4.9 to Applied's Form 10-Q for the quarter ended March 31, 2025, SEC File No. 1-2299, and incorporated here by reference).
4.21						Amendment No. 4 to Purchase and Sale Agreement dated as of July 10, 2025 among various entities listed on Schedule I thereto (including Applied Industrial Technologies, Inc.), as originators, Applied Industrial Technologies, Inc., as servicer, and AIT Receivables LLC, as buyer (filed as Exhibit 10.2 to Applied’s Form 8-K filed July 11, 2025, SEC File No. 1-2299, and incorporated here by reference).
4.10						Guaranty of Payment Joinder, dated as of March 14, 2025, among Hydradyne, LLC., KeyBank National Association as Agent, and various financial institutions (filed as Exhibit 4.10 to Applied's Form 10-Q for the quarter ended March 31, 2025, SEC File No. 1-2299, and incorporated here by reference).
4.22						Credit Agreement dated as of October 24, 2025, among Applied Industrial Technologies, Inc., KeyBank National Association as Agent, and various financial institutions (filed as Exhibit 10.1 to the Company’s Form 8-K filed October 24, 2025, SEC File No. 1-2299, and incorporated here by reference).
4.11						Guaranty of Payment Joinder, dated as of June 19, 2025, among Iris Custom Solutions, LLC, KeyBank National Association as Agent, and various financial institutions.
31						Rule 13a-14(a)/15d-14(a) certifications
4.12						Receivables Financing Agreement dated as of August 31, 2018 among AIT Receivables LLC, as borrower, PNC Bank, National Association, as administrative agent, Applied Industrial Technologies, Inc., as initial servicer, PNC Capital Markets LLC, as structuring agent and the additional persons from time to time party thereto, as lenders (filed as Exhibit 10.1 to the Company's Form 8-K filed September 6, 2018, SEC File No. 1-2299, and incorporated here by reference).
32						Section 1350 certifications
4.13						Amendment No. 1 to Receivables Financing Agreement and Reaffirmation of Performance Guaranty dated as of March 26, 2021 among AIT Receivables LLC, as borrower, PNC Bank, National Association, as administrative agent, Applied Industrial Technologies, Inc., as initial servicer, PNC Capital Markets LLC, as structuring agent and the additional persons from time to time party thereto, as lenders (filed as Exhibit 10.2 to Applied's Form 8-K filed March 29, 2021, SEC File No. 1-2299, and incorporated here by reference).
101						The following financial information from Applied Industrial Technologies Inc.'s Quarterly Report on Form 10-Q for the quarter ended December 31, 2025 formatted in Inline XBRL (Extensible Business Reporting Language) includes: (i) the Condensed Statements of Consolidated Income, (ii) the Condensed Statements of Consolidated Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Statements of Consolidated Cash Flows, (v) the Condensed Statements of Shareholders' Equity, and (vi) the Notes to Condensed Consolidated Financial Statements.
4.14						Amendment No. 2 to Receivables Financing Agreement and Reaffirmation of Performance Guaranty, dated as of May 12, 2023, by and among AIT Receivables, LLC, Applied Industrial Technologies, Inc., PNC Bank, National Association, Regions Bank, and PNC Capital Markets LLC (filed as Exhibit 4.10 to Applied’s Form 10-K for the fiscal year ended June 30, 2023, SEC File No. 1-2299, and incorporated here by reference).
104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
4.15						Purchase and Sale Agreement dated as of August 31, 2018 among various entities listed on Schedule I thereto (including Applied Industrial Technologies, Inc.), as originators, Applied Industrial Technologies, Inc., as servicer, and AIT Receivables LLC, as buyer (filed as Exhibit 10.2 to Applied's Form 8-K filed September 6, 2018, SEC File No. 1-2299, and incorporated here by reference).
4.16						Amendment No. 1 to Purchase and Sale Agreement dated as of November 19, 2018 among Applied Industrial Technologies, Inc. and various of its affiliates, as originators, Applied Industrial Technologies, Inc., as servicer, and AIT Receivables LLC, as buyer (filed as Exhibit 4.10 to Applied's Form 10-Q for the quarter ended March 31, 2021, SEC File No. 1-2299, and incorporated here by reference).
4.17						Amendment No. 2 to Purchase and Sale Agreement dated as of March 26, 2021, among various entities listed on Schedule 1 thereto (including Applied Industrial Technologies, Inc.), as originators, Applied Industrial Technologies, Inc, as servicer, and AIT Receivables LLC, as buyer (filed as Exhibit 10.2 to Applied's Form 8-K filed March 29, 2021, SEC File No. 1-2299, and incorporated here by reference).

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4.18						Amendment No. 3 to Receivables Financing Agreement and Reaffirmation of Performance Guaranty dated as of August 4, 2023 among AIT Receivables LLC, as borrower, PNC Bank, National Association, as administrative agent, Applied Industrial Technologies, Inc., as initial servicer, PNC Capital Markets LLC, as structuring agent, and the additional persons from time to time party thereto, as lenders (filed as Exhibit 10.1 to Applied’s Form 8-K filed August 9, 2023, SEC File No. 1-2299, and incorporated here by reference).
4.19						Amendment No. 3 to Purchase and Sale Agreement dated as of August 4, 2023 among various entities listed on Schedule I thereto (including Applied Industrial Technologies, Inc.), as originators, Applied Industrial Technologies, Inc., as servicer, and AIT Receivables LLC, as buyer (filed as Exhibit 10.2 to Applied’s Form 8-K filed August 9, 2023, SEC File No. 1-2299, and incorporated here by reference).
4.20						Amendment No. 4 to Receivables Financing Agreement and Reaffirmation of Performance Guaranty dated as of July 10, 2025 among AIT Receivables LLC, as Borrower, PNC Bank, National Association, as administrative agent, Applied Industrial Technologies, Inc., as initial servicer, PNC Capital Markets LLC, as structuring agent, and the additional person from time to time party thereto, as lenders (filed as Exhibit 10.1 to Applied’s Form 8-K filed July 11, 2025, SEC File No. 1-2299, and incorporated here by reference).
4.21						Amendment No. 4 to Purchase and Sale Agreement dated as of July 10, 2025 among various entities listed on Schedule I thereto (including Applied Industrial Technologies, Inc.), as originators, Applied Industrial Technologies, Inc., as servicer, and AIT Receivables LLC, as buyer (filed as Exhibit 10.2 to Applied’s Form 8-K filed July 11, 2025, SEC File No. 1-2299, and incorporated here by reference).
4.22						Credit Agreement dated as of October 24, 2025, among Applied Industrial Technologies, Inc., KeyBank National Association as Agent, and various financial institutions (filed as Exhibit 10.1 to the Company’s Form 8-K filed October 24, 2025, SEC File No. 1-2299, and incorporated here by reference).
*10.1						Restricted Stock Units Terms and Conditions (August 2024 revision) (filed as Exhibit 10.18 to Applied's Form 10-K filed August 16, 2024, SEC File No. 1-2299, and incorporated here by reference).
*10.2						Performance Shares Terms and Conditions (August 2024 revision) (filed as Exhibit 10.19 to Applied's Form 10-K filed August 16, 2024, SEC File No. 1-2299, and incorporated here by reference).
*10.3						Stock Appreciation Rights Award Terms and Conditions (August 2024 revision) (filed as Exhibit 10.20 to Applied's Form 10-K filed August 16, 2024, SEC File No. 1-2299, and incorporated here by reference).
31						Rule 13a-14(a)/15d-14(a) certifications
32						Section 1350 certifications
101						The following financial information from Applied Industrial Technologies Inc.'s Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 formatted in Inline XBRL (Extensible Business Reporting Language) includes: (i) the Condensed Statements of Consolidated Income, (ii) the Condensed Statements of Consolidated Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Statements of Consolidated Cash Flows, (v) the Condensed Statements of Shareholders' Equity, and (vi) the Notes to Condensed Consolidated Financial Statements.
104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

The Company will furnish a copy of any exhibit described above and not contained herein upon payment of a specified reasonable fee which shall be limited to the Company’s reasonable expenses in furnishing the exhibit.

Certain instruments with respect to long-term debt have not been filed as exhibits because the total amount of securities authorized under any one of the instruments does not exceed 10 percent of the total assets of the Company and its subsidiaries on a consolidated basis. The Company agrees to furnish to the Securities and Exchange Commission, upon request, a copy of each such instrument.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


		APPLIED INDUSTRIAL TECHNOLOGIES, INC.
		(Company)

Date:	January 27, 2026	By: /s/ Neil A. Schrimsher
		Neil A. Schrimsher
		President & Chief Executive Officer


Date:	January 27, 2026	By: /s/ David K. Wells
		David K. Wells
		Vice President-Chief Financial Officer & Treasurer

~~Table of Contents~~37

		APPLIED INDUSTRIAL TECHNOLOGIES, INC.
		(Company)
Date:	October 28, 2025	By: /s/ Neil A. Schrimsher
		Neil A. Schrimsher
		President & Chief Executive Officer
Date:	October 28, 2025	By: /s/ David K. Wells
		David K. Wells
		Vice President-Chief Financial Officer & Treasurer

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