Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended JUNE 30, 2025 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 Ohio 34-0117420 (I.R.S. Employer Identification No.) (State or other jurisdiction of incorporation or organi ...

Core Insights - Applied Industrial Technologies (AIT) reported fourth-quarter fiscal 2025 earnings of $2.80 per share, exceeding the Zacks Consensus Estimate of $2.60, marking a year-over-year increase of 5.9% [1][10] - Net revenues for the quarter reached $1.22 billion, surpassing the consensus estimate of $1.18 billion, with a year-over-year growth of 5.5% [2][10] - For fiscal 2025, AIT's total net revenues were $4.6 billion, reflecting a 1.9% increase year over year, while adjusted earnings were $10.12 per share, up 3.8% [2] Revenue Breakdown - The Service Center-Based Distribution segment generated revenues of $779.2 million, contributing 66% to net revenues, but saw a year-over-year decline of 1.5% [3] - The Engineered Solutions segment, which accounted for 34% of net revenues, reported revenues of $445.5 million, a significant year-over-year increase of 20.7% [4] - Acquisitions positively impacted the top line by 19.7%, while organic sales increased by 1.8% due to strong demand in key growth areas [5] Margin and Cost Analysis - AIT's cost of sales rose by 5.7% year over year to $850 million, with gross profit increasing by 5.2% to $374.7 million, resulting in a slight decrease in gross margin to 30.6% [6] - Selling, distribution, and administrative expenses increased by 10.5% year over year to $239.7 million, while EBITDA was reported at $153 million, reflecting a decrease of 0.3% [6] Balance Sheet and Cash Flow - At the end of fiscal 2025, AIT had cash and cash equivalents of $388.4 million, down from $460.6 million at the end of fiscal 2024, with long-term debt remaining stable at $572.3 million [7] - The company generated net cash of $492.4 million from operating activities, a 32.6% increase year over year, and free cash flow rose by 34.2% to $465.2 million [8] Future Guidance - For fiscal 2026, AIT anticipates adjusted earnings in the range of $10-$10.75 per share, with sales growth projected between 4-7% year over year [10][11] - The company expects EBITDA margin to be in the range of 12.2-12.5% for fiscal 2026 [11]

Financial Data and Key Metrics Changes - The company achieved record sales, EBITDA, and EPS in fiscal 2025, with full-year EPS growth of 4% exceeding initial guidance [6][7] - Gross margins expanded nearly 50 basis points, surpassing 30% for the first time in history [6][7] - Free cash flow reached over $465 million, up 34% year-over-year, marking a new record [18][19] Business Line Data and Key Metrics Changes - The Engineered Solutions segment saw a 2% organic daily sales increase, marking the first year-over-year growth in seven quarters [10][11] - The Service Center segment experienced a 0.4% organic sales decline year-over-year, but showed improvement from a 1.6% decline in the previous quarter [37][38] - Overall, the Engineered Solutions segment's sales increased by 20.7% year-over-year, with acquisitions contributing significantly to this growth [40][41] Market Data and Key Metrics Changes - Year-over-year trends across the top 30 end markets remained mixed, with 15 markets showing positive sales growth [11][12] - Declines were noted in machinery, primary metals, utility and energy, aggregates, and chemicals, while demand was solid in technology, pulp and paper, and food and beverage sectors [12][13] - Orders in the Engineered Solutions segment increased by a high single-digit percentage year-over-year, indicating a positive trend [13] Company Strategy and Development Direction - The company is focused on accelerating growth while being mindful of ongoing trade and interest rate policy uncertainties [22][24] - There is an emphasis on increasing growth with local customers through ancillary products and comprehensive service solutions [26][28] - The company plans to remain active in M&A, with a developing pipeline for fiscal 2026 [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to execute amid evolving tariff backdrops and inflationary pressures [20][21] - The outlook for fiscal 2026 includes expectations for organic sales growth of 1% to 4% and EBITDA margins of 12.2% to 12.5% [45][46] - Management noted that recent U.S. trade agreements and tax reforms could positively impact business sentiment and capital investment [23][24] Other Important Information - The company repurchased 656,000 shares for $153 million and increased its quarterly dividend by 24% [19] - The Hydrodyne acquisition is expected to contribute positively to EPS and EBITDA, with synergy realization ahead of schedule [87][88] Q&A Session Summary Question: Hydrodyne's sequential sales growth and EBITDA contribution - Management indicated that the stronger margin performance was due to leverage from SG&A falling through to EBITDA and quicker realization of synergy benefits [53][54] Question: Break fix MRO market trends - Management noted positive trends in local accounts and indicated that there are signs of firming demand [56][57] Question: Pricing contributions in guidance - Management expects pricing contributions to be similar to the previous quarter, with potential increases as the year progresses [62] Question: Engineered Solutions segment growth drivers - Management highlighted growth in data centers and semiconductor manufacturing as key components of the technology vertical [63][64] Question: LIFO and AR provisioning impacts - Management clarified that the majority of AR provisioning impacts were skewed towards the Service Center segment, with expectations for normalization moving forward [75][76]

Financial Data and Key Metrics Changes - The company achieved record sales, EBITDA, and EPS in fiscal 2025, with full-year EPS growth of 4% exceeding initial guidance [6][7] - Gross margins expanded nearly 50 basis points, surpassing 30% for the first time in history [6][7] - Free cash flow reached over $465 million, up 34% year-over-year, marking a new record [17][18] Business Line Data and Key Metrics Changes - Engineered Solutions segment sales grew organically year-over-year for the first time in seven quarters, with a 2% organic daily sales increase [9][11] - Service Center segment trends improved, returning to positive organic growth in June, with average daily sales increasing 1.5% sequentially [11][37] - The Engineered Solutions segment saw a 20.7% increase in sales year-over-year, with acquisitions contributing 19.7 points to this increase [39] Market Data and Key Metrics Changes - Year-over-year trends across the top 30 end markets remained mixed, with 15 markets generating positive sales growth [11] - Declines were noted in machinery, primary metals, utility and energy, aggregates, and chemicals, while technology verticals showed solid demand [12][13] - Orders in the Engineered Solutions segment increased by a high single-digit percentage year-over-year, indicating a positive inflection [13] Company Strategy and Development Direction - The company is focused on accelerating growth while being mindful of ongoing trade and interest rate policy uncertainties [21][24] - There is an emphasis on increasing growth with local customers through greater sales of ancillary products and comprehensive service solutions [25][28] - The company plans to remain active in M&A, with a developing pipeline for fiscal 2026 [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to execute amid evolving tariff backdrops and inflationary pressures [19][20] - The outlook for fiscal 2026 includes expectations for organic sales growth of 1% to 4% and EBITDA margins of 12.2% to 12.5% [44][45] - Management noted that recent U.S. trade agreements and tax reforms could positively impact business sentiment and capital investment [22][24] Other Important Information - The company closed four acquisitions in fiscal 2025, including Hydrodyne, which contributed over 400 basis points of inorganic growth [18][39] - The company repurchased 656,000 shares for $153 million and increased its quarterly dividend by 24% [18] Q&A Session Summary Question: Hydrodyne's sequential sales growth and EBITDA performance - Management indicated that the improvement in Hydrodyne's performance was due to stronger margin performance and quicker realization of synergy benefits [52][53] Question: Break fix MRO market trends - Management noted positive trends in local accounts and national accounts, indicating potential firming in the market [54][55] Question: Pricing contributions to guidance - Management expects pricing contributions to remain similar in the first quarter, with potential increases as the year progresses [61][62] Question: Market softness in international operations - Management identified Canada as experiencing more softness due to tariff impacts, but noted improvements as the quarter progressed [97] Question: Hydrodyne's contribution to EBITDA - Hydrodyne contributed just over $7 million to EBITDA in Q4, aligning with initial expectations for the first twelve months [87][88]

Financial Performance - Q4 2025 sales increased by 5.5% year-over-year, reaching $1.225 billion compared to $1.161 billion in Q4 2024[8] - Organic daily sales saw a positive year-over-year growth of 0.2% for the first time in over a year[8] - Earnings per share (EPS) increased by 5.9% year-over-year, from $2.64 in Q4 2024 to $2.80 in Q4 2025[8] - EBITDA decreased slightly by 0.3% year-over-year, from $153.5 million in Q4 2024 to $153.0 million in Q4 2025[8] - Free cash flow for fiscal year 2025 was $465.2 million, up 34% year-over-year[33] Segment Performance - Engineered Solutions (ES) segment sales increased by 20.7% year-over-year in Q4 2025, with organic growth of 1.8%[31] - Service Center segment sales decreased by 1.5% year-over-year in Q4 2025[23] Fiscal Year 2026 Guidance - Total sales are projected to increase by 4% to 7% year-over-year[46] - Organic sales are expected to grow by 1% to 4% year-over-year[46] - EBITDA margin is guided to be between 12.2% and 12.5%[46] - Diluted EPS is projected to be in the range of $10.00 to $10.75[46]

[Financial Highlights & Performance Summary](index=1&type=section&id=Financial%20Highlights%20%26%20Performance%20Summary) This section summarizes Applied Industrial Technologies' financial performance for Q4 and full-year fiscal 2025, detailing key sales, income, and EPS metrics [Q4 Fiscal 2025 Performance](index=1&type=section&id=Q4%20Fiscal%202025%20Performance) Q4 fiscal 2025 saw net sales increase by 5.5% to $1.2 billion, driven by acquisitions, with net income rising to $107.8 million and diluted EPS to $2.80 Q4 Fiscal 2025 Key Financial Metrics (vs. Q4 FY2024) | Metric | Q4 FY2025 | Q4 FY2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $1.2 Billion | $1.16 Billion | +5.5% | | Net Income | $107.8 Million | $103.5 Million | +4.2% | | Diluted EPS | $2.80 | $2.64 | +6.1% | | EBITDA | $153.0 Million | $153.5 Million | -0.3% | - The **5.5% sales growth** was primarily driven by a **6.5% increase from acquisitions**, while organic daily sales grew by **0.2%**, partially offset by negative selling day and foreign currency impacts[4](index=4&type=chunk) - Pre-tax results included a LIFO expense of **$2.9 million**, significantly higher than the **$0.3 million** LIFO expense in the prior-year period[4](index=4&type=chunk) [Full-Year Fiscal 2025 Performance](index=1&type=section&id=Full-Year%20Fiscal%202025%20Performance) For fiscal year 2025, sales increased by 1.9% to $4.6 billion, with net income reaching $393.0 million and diluted EPS at $10.12, while organic daily sales declined Full-Year Fiscal 2025 Key Financial Metrics (vs. FY2024) | Metric | FY 2025 | FY 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $4.6 Billion | $4.48 Billion | +1.9% | | Net Income | $393.0 Million | $385.8 Million | +1.9% | | Diluted EPS | $10.12 | $9.83 | +2.9% | | EBITDA | $562.1 Million | $553.3 Million | +1.6% | - On an organic daily basis, full-year sales declined by **2.3%**[5](index=5&type=chunk) - Full-year pre-tax results included a LIFO expense of **$7.7 million**, compared to **$13.0 million** in the prior year[5](index=5&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management provides insights into fiscal 2025 performance, highlighting Q4's positive organic growth and record free cash flow, alongside the strategic outlook for fiscal 2026 [Performance Review and Business Environment](index=1&type=section&id=Performance%20Review%20and%20Business%20Environment) Management expressed satisfaction with fiscal 2025 results, noting Q4 sales and EPS exceeded expectations with a return to positive organic growth and record free cash flow generation - Q4 sales and EPS exceeded expectations, with a return to positive organic growth as underlying trends improved throughout the quarter[6](index=6&type=chunk) - The Engineered Solutions segment performed exceptionally well, capitalizing on recent order strength and firming demand[6](index=6&type=chunk) - The company generated record free cash flow in fiscal 2025, enabling meaningful capital deployment throughout the year[6](index=6&type=chunk) [Outlook and Strategic Focus](index=1&type=section&id=Outlook%20and%20Strategic%20Focus) Management is focused on accelerating growth in fiscal 2026, with positive sales momentum continuing into Q1, while maintaining a prudent outlook due to economic uncertainties - Positive momentum has sustained into the first quarter of fiscal 2026, with organic sales up an estimated **4%** year-over-year to date[6](index=6&type=chunk) - Ongoing trade and interest rate uncertainty continue to impact broader demand visibility and customer capital expenditure decisions, leading to a prudent initial outlook for FY2026[6](index=6&type=chunk)[9](index=9&type=chunk) - The company highlighted its strong five-year track record, including compounded annual growth for EBITDA and EPS of **14%** and **22%**, respectively, and significant margin expansion[9](index=9&type=chunk) [Fiscal 2026 Guidance](index=1&type=section&id=Fiscal%202026%20Guidance) This section outlines Applied Industrial Technologies' fiscal 2026 guidance, including projected sales growth, EPS, and EBITDA margins, along with key underlying assumptions [Guidance Overview](index=1&type=section&id=Guidance%20Overview) Applied Industrial Technologies projects fiscal 2026 total sales growth of 4% to 7%, with EPS between $10.00 and $10.75, and EBITDA margins of 12.2% to 12.5% Fiscal 2026 Guidance | Metric | Guidance Range | | :--- | :--- | | Total Sales Growth | +4% to +7% | | Organic Sales Growth | +1% to +4% | | EPS | $10.00 to $10.75 | | EBITDA Margins | 12.2% to 12.5% | [Key Assumptions](index=2&type=section&id=Key%20Assumptions) The fiscal 2026 guidance assumes continued economic, interest rate, and tariff-related uncertainties impacting demand through the first half, incorporating pricing and inflationary pressures but excluding future acquisitions or buybacks - Guidance assumes that ongoing economic uncertainty related to interest rates and tariffs will continue to impact demand through the first half of fiscal 2026[8](index=8&type=chunk) - The outlook incorporates expected incremental sales from pricing, as well as ongoing inflationary headwinds and investments in growth[8](index=8&type=chunk) - The guidance explicitly excludes any potential contribution from future acquisitions or share repurchases[8](index=8&type=chunk) [Consolidated Financial Statements](index=3&type=section&id=Consolidated%20Financial%20Statements) This section presents the company's condensed consolidated income statements, balance sheets, and cash flow statements for the reported fiscal periods [Condensed Statements of Consolidated Income](index=3&type=section&id=Condensed%20Statements%20of%20Consolidated%20Income) For fiscal year 2025, net sales grew to $4.56 billion, gross profit increased to $1.38 billion, and net income rose to $393.0 million, resulting in a diluted EPS of $10.12 Full-Year Income Statement Highlights (in thousands) | Account | Year Ended June 30, 2025 | Year Ended June 30, 2024 | | :--- | :--- | :--- | | Net Sales | $4,563,424 | $4,479,406 | | Gross Profit | $1,383,159 | $1,336,653 | | Operating Income | $498,529 | $495,823 | | Net Income | $392,988 | $385,762 | | Diluted EPS | $10.12 | $9.83 | [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to $3.18 billion, driven by acquisitions, while total liabilities rose to $1.33 billion and shareholders' equity expanded to $1.84 billion Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $388,417 | $460,617 | | Total current assets | $1,747,473 | $1,769,901 | | Total Assets | $3,175,544 | $2,951,910 | | Total Liabilities | $1,331,024 | $1,263,129 | | Shareholders' Equity | $1,844,520 | $1,688,781 | [Condensed Statements of Consolidated Cash Flows](index=5&type=section&id=Condensed%20Statements%20of%20Consolidated%20Cash%20Flows) Net cash from operating activities significantly increased to $492.4 million in fiscal 2025, while cash used in investing activities rose to $318.8 million, primarily due to acquisitions, resulting in an overall cash decrease Cash Flow Highlights (in thousands) | Account | Year Ended June 30, 2025 | Year Ended June 30, 2024 | | :--- | :--- | :--- | | Net Cash provided by Operating Activities | $492,385 | $371,393 | | Net Cash used in Investing Activities | ($318,752) | ($95,407) | | Net Cash used in Financing Activities | ($245,607) | ($156,468) | | (Decrease) Increase in cash | ($72,200) | $116,581 | - Cash used for acquisitions increased significantly to **$293.4 million** in FY2025 from **$72.1 million** in FY2024[20](index=20&type=chunk) - The company more than doubled its spending on treasury share purchases, from **$73.4 million** in FY2024 to **$152.8 million** in FY2025[20](index=20&type=chunk) [Reconciliation of GAAP to Non-GAAP Financial Measures](index=6&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) This section reconciles key non-GAAP metrics like EBITDA and Free Cash Flow to their GAAP equivalents, providing a clearer view of underlying business performance [EBITDA Reconciliation](index=6&type=section&id=EBITDA%20Reconciliation) The company reconciles Net Income to EBITDA, showing full-year fiscal 2025 EBITDA increased to $562.1 million, while Q4 fiscal 2025 EBITDA slightly decreased to $153.0 million EBITDA Reconciliation (in thousands) | Period | Net Income | EBITDA | | :--- | :--- | :--- | | Q4 FY2025 | $107,836 | $153,028 | | Q4 FY2024 | $103,491 | $153,450 | | Full-Year FY2025 | $392,988 | $562,059 | | Full-Year FY2024 | $385,762 | $553,315 | [Free Cash Flow Reconciliation](index=6&type=section&id=Free%20Cash%20Flow%20Reconciliation) Free Cash Flow, calculated as net cash from operating activities less capital expenditures, reached a record **$465.2 million** for full fiscal year 2025, a substantial increase from the prior year Free Cash Flow Reconciliation (in thousands) | Period | Net Cash from Operating Activities | Free Cash Flow | | :--- | :--- | :--- | | Q4 FY2025 | $147,048 | $138,156 | | Q4 FY2024 | $119,234 | $111,724 | | Full-Year FY2025 | $492,385 | $465,198 | | Full-Year FY2024 | $371,393 | $346,529 | [Adjusted Net Income Reconciliation (FY2024)](index=6&type=section&id=Adjusted%20Net%20Income%20Reconciliation%20(FY2024)) For fiscal year 2024, GAAP Net Income of $385.8 million was adjusted for a tax valuation allowance, resulting in a non-GAAP Adjusted Net Income of $382.7 million, or $9.75 per share - For fiscal year 2024, GAAP Net Income of **$385.8 million** was adjusted for a tax valuation allowance, resulting in a non-GAAP Adjusted Net Income of **$382.7 million**, or **$9.75 per share**[22](index=22&type=chunk)

Core Insights - Applied Industrial Technologies (AIT) reported quarterly earnings of $2.8 per share, exceeding the Zacks Consensus Estimate of $2.6 per share, and showing an increase from $2.64 per share a year ago, resulting in an earnings surprise of +7.69% [1] - The company achieved revenues of $1.22 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 3.74% and up from $1.16 billion year-over-year [2] - AIT's shares have increased approximately 15.1% since the beginning of the year, outperforming the S&P 500's gain of 10% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $2.52 on revenues of $1.16 billion, while for the current fiscal year, the estimate is $10.52 on revenues of $4.77 billion [7] - The estimate revisions trend for AIT was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Manufacturing - General Industrial industry, to which AIT belongs, is currently ranked in the top 14% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Core Insights - Applied Industrial Technologies, Inc. (AIT) is set to release its fourth-quarter fiscal 2025 results on August 14, with a history of beating earnings estimates in the past four quarters, averaging a surprise of 6.2% [1][10] Revenue and Earnings Estimates - The consensus estimate for revenues is $1.18 billion, reflecting a 1.7% increase from the same quarter last year [2] - The adjusted earnings estimate is $2.60 per share, indicating a 1.5% decrease from the year-ago quarter [2] Segment Performance - The Engineered Solutions segment is expected to show solid momentum, with revenues projected at $382.1 million, a 3.5% increase year-over-year, driven by favorable order trends in automation and technology [3] - The Service Center Based Distribution segment is anticipated to perform weakly due to reduced maintenance, repair, and operations (MRO) spending, as well as prolonged customer plant shutdowns [6] Strategic Initiatives - The company’s focus on enhancing its product line and value-added services, along with investments in automation and digital offerings, is expected to positively impact its top line [4] - The acquisition of Grupo Kopar in May 2024 is anticipated to contribute to revenue growth by expanding AIT's automation platform into Mexico [5] Margin and Expense Outlook - Rising selling, distribution, and administrative expenses are likely to pressure AIT's margins, with a projected gross margin of 30.4%, down 30 basis points year-over-year [7] Earnings Prediction - The current Earnings ESP for AIT is 0.00%, indicating no clear prediction for an earnings beat, with both the Most Accurate Estimate and the Zacks Consensus Estimate at $2.60 [9]

Core Insights - Wall Street analysts expect Applied Industrial Technologies (AIT) to report quarterly earnings of $2.60 per share, reflecting a year-over-year decline of 1.5% [1] - Revenue is anticipated to be $1.18 billion, which indicates a 1.7% increase from the same quarter last year [1] Earnings Estimates - The consensus EPS estimate has been revised upward by 0.1% in the past 30 days, indicating a reassessment by covering analysts [2] - Changes in earnings estimates are crucial for predicting investor reactions to the stock [3] Key Metrics Projections - Analysts project 'Net Sales- Engineered Solutions' to be $399.68 million, representing an 8.2% increase year-over-year [5] - The estimate for 'Net Sales- Service Center Based Distribution' is $780.86 million, suggesting a decline of 1.3% from the previous year [5] - 'Operating income- Service Center Based Distribution' is expected to reach $108.41 million, down from $111.39 million reported in the same quarter last year [6] - 'Operating income- Engineered Solutions' is projected at $57.14 million, slightly up from $56.57 million reported in the same quarter last year [6] Stock Performance - AIT shares have increased by 3.6% over the past month, outperforming the Zacks S&P 500 composite, which rose by 2.7% [7] - AIT holds a Zacks Rank 3 (Hold), indicating it is expected to closely follow overall market performance in the near term [7]

Core Insights - Applied Industrial Technologies, Inc. (AIT) is experiencing growth in its technology, food & beverage, pulp & paper, and transportation markets, with the Engineered Solutions segment's revenues increasing by 13.5% year over year in Q3 of fiscal 2025 [1] Group 1: Market Performance - The Engineered Solutions segment is benefiting from strong demand in technology-related fluid power, automation, and industrial verticals, contributing to revenue growth [1] - AIT's stock has gained 31.5% over the past year, outperforming the industry growth of 9.7% [8] Group 2: Acquisitions and Growth - The company made strategic acquisitions, including IRIS Factory Automation, which is expected to enhance its automation offerings and contribute positively to sales [2] - The acquisition of Hydradyne is anticipated to boost fluid power offerings and create cross-selling opportunities, adding $260 million in sales and $30 million in EBITDA [3] Group 3: Financial Returns to Shareholders - AIT has been committed to returning value to shareholders, paying out $46.2 million in dividends in the first nine months of fiscal 2025, marking an 11.2% increase year over year [4] - The company increased its quarterly dividend rate by 24% in January 2025 and authorized a new share buyback program to repurchase up to 1.5 million shares [5] Group 4: Challenges - Despite the growth in certain segments, AIT is facing challenges in its Service Center Based Distribution segment due to reduced spending on maintenance and operations, which has negatively impacted performance [9] - The company's SG&A expenses increased by 4.1% year over year, with a rise in operating costs affecting overall profitability [10]