Applied Industrial Technologies, Inc. (NYSE:AIT) Q4 2023 Earnings Conference Call August 10, 2023 10:00 AM ET Company Participants Ryan Cieslak - Director, Investor Relations Neil Schrimsher - President & Chief Executive Officer Dave Wells - Chief Financial Officer Conference Call Participants David Manthey - Baird Ken Newman - KeyBanc Capital Markets Chris Dankert - Loop Capital Operator Welcome to the fiscal 2023 Fourth Quarter Earnings Call for Applied Industrial Technologies. My name is Frank and I'll b ...

Table of Contents 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 MARCH 31, 2023 OR 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) (State ...

Applied Industrial Technologies Inc. (NYSE:AIT) Q3 2023 Results Conference Call April 27, 2023 10:00 AM ET Company Participants Ryan Cieslak - Director, Investor Relations, and Treasury Neil Schrimsher - President and Chief Executive Officer David Wells - Vice President, Chief Financial Officer, and Treasurer Conference Call Participants Chris Dankert - Loop Capital David Manthey - Baird Ken Newman - KeyBanc Capital Markets Operator Welcome to the Fiscal 2023 Third Quarter Earnings Call for Applied Industri ...

Table of Contents 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 DECEMBER 31, 2022 OR 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) (St ...

Applied Industrial Technologies, Inc. (NYSE:AIT) Q2 2023 Earnings Conference Call January 26, 2023 10:00 AM ET Company Participants Ryan Cieslak – Director, Investor Relations and Treasury Neil Schrimsher - President and Chief Executive Officer David Wells - Vice President, Chief Financial Officer and Treasurer Conference Call Participants Ken Newman - KeyBanc Capital Markets Chris Dankert - Loop Capital David Manthey - Baird Operator Greetings and welcome to the Fiscal 2023 Second Quarter Earnings Call for ...

Financial Data and Key Metrics Changes - The company reported record first-quarter sales, EBITDA, and EPS, with respective growth of 19%, 34%, and 45% year-over-year [6][21] - Consolidated sales increased by 19.1% compared to the prior year quarter, with organic sales growth of 19.4% [16] - EBITDA grew by 34.2% year-over-year, with EBITDA margin increasing to 11.2%, up 125 basis points [21] Business Line Data and Key Metrics Changes - Service Center segment organic sales growth was above 20% for the second consecutive quarter, following a 16% growth in the prior year [9][17] - Engineered Solutions segment, previously Fluid Power & Flow Control, saw organic sales growth of 18%, up from 14% in the previous quarter [11][18] Market Data and Key Metrics Changes - Demand remained strong across diversified end markets, with notable growth in food and beverage, mining, metals, and energy sectors [17][18] - The company reported that organic sales in October were approximately 20% higher than the prior year, indicating continued strong demand [8] Company Strategy and Development Direction - The company is focused on optimizing its growth and margin profile through strategic actions and initiatives, including cross-selling and pricing actions [10][27] - There is an emphasis on automation and next-generation solutions to address labor constraints and evolving production needs in the post-pandemic economy [13][42] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertain economic backdrop, including potential impacts from higher interest rates, but remains optimistic about the company's ability to outperform the market [29] - The company raised its full-year fiscal 2023 guidance, projecting EPS in the range of $6.90 to $7.55 per share, reflecting strong first-quarter performance [24][25] Other Important Information - The company ended the quarter with approximately $148 million in cash and a net leverage ratio of 1.1x EBITDA, indicating a strong balance sheet [23] - Cash generated from operating activities was $25.9 million, with free cash flow totaling $20.4 million [22] Q&A Session Summary Question: Guidance and Organic Growth - The midpoint of the guidance implies flat to modestly up organic growth in the second half of the year due to macroeconomic uncertainties [32] Question: SG&A and EBITDA Margin Trends - The first quarter's EBITDA margin is expected to be consistent with the second quarter, with ongoing LIFO headwinds impacting margins [34][36] Question: Demand Pull from Infrastructure Spending - There is no unique demand pull from infrastructure spending; growth is attributed to expanding solutions and capabilities in the Fluid Power and off-highway mobile segments [40] Question: Automation Business Performance - The automation segment is experiencing mid-single-digit organic growth, with strong order rates and backlog despite some component delays [49][50] Question: Industry Consolidation Expectations - The company expects mid-single-digit growth in industrial production for the first half, with potential declines in the second half, but remains well-positioned to outperform [45] Question: M&A Pipeline and Capital Deployment - The company is focused on organic investments and is actively pursuing M&A opportunities, maintaining a strong financial position [52]

Financial Data and Key Metrics Changes - The company achieved record performance in Q4 2022, with EBITDA growing by 27% and EPS increasing by 34% on a 19% sales growth [5][22] - EBITDA margins expanded to new highs above 11% for the second consecutive quarter despite inflationary pressures [5][15] - Consolidated sales increased by 18.5% year-over-year, with organic sales growth of 18.7% [18][22] Business Line Data and Key Metrics Changes - Sales in the Service Center segment increased by 21% organically year-over-year, driven by strong demand in various industries [19][22] - The Fluid Power & Flow Control segment saw a 15% increase in sales year-over-year, with organic growth of 14% [19][22] - The automation business experienced mid-single-digit growth, with a backlog expanding despite supply chain constraints [56] Market Data and Key Metrics Changes - Underlying demand remained strong across key industry verticals, particularly in metals, aggregates, mining, and chemicals [6][11] - U.S. manufacturing capacity utilization is near a 20-year high, leading to increased maintenance and repair activity [10] - The company is capturing growth opportunities from its industry position and service capabilities, with mid-teens year-over-year sales growth sustained into early fiscal 2023 [7][11] Company Strategy and Development Direction - The company is focused on continuous improvement actions, growth investments, and debt reduction to reinforce its balance sheet [5][15] - There is an emphasis on expanding automation and engineered solutions to enhance market position and growth trajectory [27][29] - The company aims to achieve sales over $5 billion and EBITDA margins over 12% within the next five years [29] Management's Comments on Operating Environment and Future Outlook - Management remains constructive about company-specific growth opportunities despite broader economic uncertainties [24][28] - The guidance for fiscal 2023 reflects a balanced approach, anticipating decelerating sales growth trends as the year progresses [24][25] - The company is closely monitoring macroeconomic conditions and is prepared to adapt its strategies accordingly [28] Other Important Information - The company ended fiscal 2022 with a healthy balance sheet, net leverage at 1.2x, and over $1 billion in balance sheet capacity [15][23] - A new share repurchase program for 1.5 million shares was approved to enhance shareholder value [16] Q&A Session Summary Question: Balancing optimistic comments with guidance - Management clarified that the guidance reflects a conservative approach due to tougher comparisons in the upcoming quarters [32][34] Question: Pricing cadence in guidance - Management indicated that price contributions for fiscal 2023 could be similar to fiscal 2022, with expectations of higher contributions in the first half [37][38] Question: EBITDA margin outlook - Management views the 12% EBITDA margin target as a cross-cycle number, with growth expected from acquisitions and gross margin expansion [40][41] Question: Corporate expenses for the year - Management confirmed that corporate expenses are expected to be near $100 million, consistent with historical levels [44] Question: Automation business performance - The automation segment saw mid-single-digit growth, with strong order rates and backlog despite supply chain issues [56][57] Question: Capital deployment priorities - Management emphasized that growth through organic investments and M&A remains the top priority, along with dividends and share repurchases [62]

Applied Industrial Technologies, Inc. (NYSE:AIT) Q3 2022 Earnings Conference Call April 28, 2022 10:00 AM ET Company Participants Ryan Cieslak - Director, Investor Relations and Treasury Neil Schrimsher - President & Chief Executive Officer Dave Wells - Chief Financial Officer Conference Call Participants Chris Dankert - Loop Capital Michael McGinn - Wells Fargo David Manthey - Baird Ken Newman - KeyBanc Capital Markets Barry Haimes - Sage Asset Management Operator Welcome to the Fiscal 2022 Third Quarter E ...