Applied Industrial Technologies Reports Fiscal 2026 Second Quarter Results

Core Viewpoint - Applied Industrial Technologies reported a strong second quarter for fiscal 2026, with net sales of $1.2 billion, reflecting an 8.4% increase year-over-year, driven by acquisitions and organic growth in key segments [2][3]. Financial Performance - Net sales for the quarter reached $1.2 billion, an increase of 8.4% compared to the previous year, with a 6.0% contribution from acquisitions and a 0.2% positive impact from foreign currency translation [2]. - Organic sales growth was 2.2%, with a 2.9% increase in the Service Center segment and a 0.5% increase in the Engineered Solutions segment [2]. - The company reported net income of $95.3 million, or $2.51 per share, and EBITDA of $140.4 million [2][3]. Management Commentary - The CEO highlighted effective management through a mixed end-market backdrop and expressed optimism for stronger growth in the second half of the fiscal year, with early signs of sales momentum [3]. - The company is focusing on internal initiatives and channel execution to drive gross and EBITDA margin performance, despite challenges from LIFO expenses and prior-year comparisons [3]. Fiscal 2026 Guidance - The company adjusted its fiscal 2026 EPS guidance to a range of $10.45 to $10.75, reflecting a more optimistic outlook for sales growth of 5.5% to 7.0% [4]. - Updated guidance includes an organic sales growth expectation of 2.5% to 4.0% and an EBITDA margin of 12.2% to 12.4% [4]. Acquisition Activity - Applied Industrial Technologies announced the acquisition of Thompson Industrial Supply Inc., expected to generate annual sales of approximately $20 million in the first year [5][6]. - This acquisition is aimed at enhancing the company's service center capabilities and expanding its footprint in the industrial market [6]. Dividend Announcement - The Board of Directors approved an 11% increase in the quarterly cash dividend to $0.51 per common share, marking the 17th dividend increase since 2010 [7].