Applied Industrial Technologies said Thursday that its sales and earnings reached record levels in a better-than-expected fiscal fourth quarter.
The Cleveland-based distributor — no. 8 on ID’s latest Big 50 list — reported net sales of $1.35 billion in the three months ending June 30, an increase of 10.4% compared to the same period last year. Net sales were up 9.7% on an organic basis, and the company indicated that sales rose by 7.9% in its Service Center segment and 12.9% in the Engineering Solutions division.
Applied leaders pointed to “elevated technical MRO spending and internal sales initiatives” in the Service Center unit, while Engineering Solutions saw strong demand and exposure to “faster growing verticals.” EBITDA margin increased in both divisions, the company reported.
Applied posted $411.2 million in gross profit and $159.3 million in operating income, up from $374.7 million and $135.1 million, respectively, in the previous Q4. EBITDA rose 16.1% to $177.6 million, and net income climbed 13.2% to $118.6 million.
Applied President and CEO Neil Schrimsher said that the company’s quarterly sales, EBITDA and earnings per share reached record levels, “exceeding our expectations.”
“Organic sales growth of 10% was the strongest in more than three years with trends strengthening across both segments,” Schrimsher said in a statement. “The growth momentum building across the business reflects our differentiated technical position and ongoing sales initiatives, which are intensifying within an increasingly favorable end-market backdrop.”
For its full fiscal year, Applied reported net sales of $4.97 billion, an increase of 8.8% over fiscal 2025. Annual organic sales were up 5.4%, and full-year net income climbed 8.2% to $414.5 million.
The company’s initial forecast for its 2027 fiscal year anticipated annual sales growth of 4% to 6.5%, earnings of between $11.65 and $12.15 per share, and EBITDA margins of 12.5% to 12.8%. Applied also set new “intermediate” financial targets of $7 billion in sales and 14% in EBITDA margin over the next five years.
Schrimsher said that organic sales in the current quarter are up by about 7% to date. He noted that although the company is “mindful” of economic uncertainty, inflation and potentially difficult year-over-year comparisons, the recovery in demand “appears durable and increasingly influenced by structural and secular tailwinds.”
“Given our performance in recent years and the meaningful growth opportunity we have moving forward, we believe now is an opportune time to update our intermediate financial objectives,” Schrimsher said. “Our ongoing evolution has positioned Applied at the intersection of exciting and powerful growth trends.”
