Applied Industrial Reports Full-Year Sales Growth Despite Organic Decline

Applied Industrial Technologies on Thursday posted a nearly 2% increase in sales in its recently completed fiscal year despite a decline in organic sales.

Recent acquisitions, meanwhile, fueled a 5.5% increase in sales in the final quarter of the year.

The Cleveland-based distributor — no. 8 on ID’s most recent Big 50 — reported $4.56 billion in net sales for the year ending June 30, up 1.9% from the previous 12-month window. Full-year organic sales were off by 2.3% on a daily average basis, while the company’s annual gross profit and net income rose from $1.34 billion and $385.8 million, respectively, in the previous year up to $1.38 billion and $393 million.

For the fourth quarter, Applied’s net sales climbed from $1.16 billion up to $1.22 billion. Company officials said that acquisitions bolstered its total sales by 6.5% in the quarter while organic sales edged up by just 0.2%; currency effects and fewer selling days affected the total by a combined 1.2%.

Q4 gross profit rose from $356.2 million to $374.7 million, and net income increased from $103.5 million to $107.8 million year-over-year.

“We ended fiscal 2025 on an encouraging note with fourth quarter sales and EPS exceeding our expectations,” Applied President and CEO Neil Schrimsher said in a statement. “Sales returned to positive organic growth with underlying trends improving as the quarter progressed.”

Schrimsher attributed the results to “stronger than expected” growth in its Engineered Solutions segment, which was up 1.8% year-over-year and offset a 0.4% decline in the Service Center division. The contribution from acquisitions, he added, was helped by “solid progress continuing to develop at Hydradyne,” which Applied officially purchased at the end of the 2024 calendar year.

Schrimsher said that the company’s organic sales in the first weeks of the new quarter were up by about 4%, and that the company is “constructive on our set-up moving forward” despite the potential of “ongoing trade and interest rate uncertainty” to affect the demand environment and customer spending decisions.

Applied’s initial outlook for the new year anticipates full-year sales growth of 4% to 7% — including 1% to 4% organic growth — along with earnings per share between $10 and $10.75 and EBITDA margins of 12.2% to 12.5%.

“We are in a strong position to manage through various macro and trade scenarios as they develop,” Schrimsher said.