Applied Industrial Technologies on Tuesday reported an increase in sales and earnings in its fiscal second quarter, as well as announced its acquisition of a distributor in Southern California.
The Cleveland industrial and fluid power distributor — no. 8 on ID’s 2025 Big 50 — posted net sales of $1.16 billion in the quarter ending Dec. 31, an 8.4% increase compared to its previous Q2. Acquisitions contributed 6% to the overall number, while Applied’s organic sales were up by 2.2% over that span. The latter total, officials said, reflected a 2.9% increase in its service center division and a 0.5% increase in its engineered solutions segment.
Quarterly gross profit rose from $328.1 million to $353.3 million, while operating income climbed from $120.9 million to $123.2 million. Net income edged up from $93.3 million to $95.3 million, translating to earnings of $2.51 per diluted share.
Applied President and CEO Neil Schrimsher said that the company’s sales and EBITDA margins were in line with its expectations for the quarter, and that its underlying gross margin and EBITDA margin performance was “solid” when excluding the impact of greater than expected “last-in, first-out” expenses.
Schrimsher said the company saw “muted” December sales and remains in “an evolving but still mixed end-market backdrop,” although it anticipates an improving environment in the second half of its fiscal year. The company now expects full-year sales growth of between 5.5% and 7% — up from the earlier 4% to 7% projection — and it narrowed its full-year earnings forecast from the earlier $10.10 to $10.85 per share to the current $10.45 to $10.75 per share. EBITDA margin guidance is now 12.2% to 12.4%, down slightly from the previous 12.2% to 12.5%.
“We continued to see encouraging signs on the sales front with order growth continuing to build across both segments,” Schrimsher said in the earnings announcement. “We believe this positive momentum could translate more meaningfully to sales in the second half of our fiscal year.”
Applied also announced Tuesday that it has acquired Thompson Industrial Supply Inc., a provider of industrial bearings, power transmission products, hydraulics, pneumatics, linear motion, lightweight belting and related services with two locations in suburban Los Angeles.
Terms of the deal were not disclosed. Applied expects Thompson’s operations to generate some $20 million in sales in its first year.
Motion had announced an agreement to acquire Thompson in early 2025, but the purchase was never finalized.
“Thompson is a nice bolt-on acquisition that will enhance our footprint in an important industrial market,” Schrimsher said. “They bring strong technical knowledge and aligned supplier relationships, as well as in-house belting and fabrication capabilities that will strengthen our value-added services and competitive position in the region.”
