Applied Industrial Technologies, Inc. · NYSE:AIT
Applied Industrial Technologies — Q1 2027 Earnings Presentation
19 slides from Applied Industrial Technologies's earnings presentation, Oct 27, 2026
Slide 1: Fiscal Q1 2027 Recap
Fiscal Q1 2027 Recap October 27, 2026 - The Premier Provider of Advanced Motion, Power, Control, & Automation Solutions to Critical Industrial Infrastructure -
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains statements that are forward-looking, as that term is defined by the Securities and Exchange Commission in its rules, regulations and releases. Applied intends that such forward-looking statements be subject to the safe harbors created thereby. Forward
Slide 3: Primary Messages from Management
Primary Messages from Management • Encouraging start to FY27 with 1Q EPS growing 13% YoY primarily reflecting a favorable demand backdrop, as well as solid margin performance against ongoing inflationary headwinds. • Sales growth driven by a strong 14% YoY organic increase in the ES segment, reflect
Slide 4: Fiscal Q1 2027 Key Financial Highlights
Fiscal Q1 2027 Key Financial Highlights • Sales up 7.6% YoY Sales, $ in millions o Up 7.1% on an organic basis; acquisitions +0.3%, currency +0.2% +7.6% $1,291 $1,200 7.1% Organic • Net Income of $110.4M and EPS of $2.97 o EPS up 12.7% YoY o Includes $5.6M pre-tax ($0.12/sh) of LIFO expense Q1 2026
Slide 5: Organic Sales Growth Trend
Organic Sales Growth Trend Year-over-Year Organic % Change in Sales Per Day F1Q27 Sales Growth Detail Fiscal Quarters • Up 7.1% YoY on an organic basis and in line with F1Q27 guidance 21.1% of +6% to +8% 19.4% 18.7% 15.0% • 2-Yr YoY STACK of +10.1% up modestly sequentially vs. a seasonally strong F4
Slide 6: Investor Topic Update & Details
Investor Discussion Points Investor Topic Update & Details Trends remain positive with underlying SC segment volumes strengthening including encouraging Underlying Demand local account growth (+HSD% YoY), as well as an expanding ES segment backlog (+17% seq) Price contributed ~200 bps YoY in F1Q27;
Slide 7: Fiscal Q1 2027 Margin and Expense Highlights
Fiscal Q1 2027 Margin and Expense Highlights Gross Profit, SD&A, and EBITDA Metrics • Gross margin up 25 bps YoY Chg LIFO o Includes an unfavorable 23 bps YoY impact from higher LIFO expense $ in millions Q1 27 Q1 26 YoY Impact YoY o Excluding LIFO impact, gross margin expanded nearly 50 bps YoY ref
Slide 8: Segment Results – Service Center
Segment Results – Service Center Service Center Segment Sales, in Millions Segment Overview: Representing 64% of fiscal 2026 sales - the segment includes our core distribution operations including ~400 local service centers across North America, Australia, and New Zealand, primarily focused on our $
Slide 9: Segment Results – Engineered Solutions
Segment Results – Engineered Solutions Engineered Solutions Segment Sales, in Millions Segment Overview: Representing 36% of fiscal 2026 sales - the segment consists of 1) our Fluid Power network specializing in distributing, engineering, designing, integrating, and repairing hydraulic and pneumatic
Slide 10: Cash Flow and Balance Sheet
Cash Flow and Balance Sheet Free Cash Flow (in Millions) - Fiscal 1Q Period • F1Q27 cash from operations of $86.4M; free cash of $73.4M o Free cash at 66.5% of net income $122.2 $112.0 o Free cash down YoY reflecting growth-related working capital investment and higher capex compared to the prior-ye
Slide 11: Capital Allocation
Capital Allocation Capital Allocation Priorities & Strategy Capital Deployed Last 5 Years (Capex, M&A, Share Repurchases, & Dividends) Pursue greenfield expansion while optimizing customer service Organic Growth capabilities and operating efficiencies through technology, working capital, and system
Slide 12: Fiscal 2027 Guidance and Outlook Assumptions
Fiscal 2027 Guidance and Outlook Assumptions Fiscal 2027 Guidance Updated Considerations: • No change to sales and EBITDA margin outlook for FY27 Prior Current (8/13/26) (10/27/26) • Increasing EPS guidance to reflect a lower diluted share count assumption following F1Q27 buybacks Total Sales - YoY
Slide 13: Appendix: Number of Selling Days by Fiscal Quarter and Full Year
Appendix: Number of Selling Days by Fiscal Quarter and Full Year Fiscal Period Q1 Q2 Q3 Q4 Year 2025 64.0 62.0 63.0 63.5 252.5 2026 64.0 62.0 63.0 63.5 252.5 2027 64.0 62.0 62.5 64.0 252.5 2028 64.0 61.0 65.0 63.5 253.5 13
Slide 14: Appendix: F1Q27 Year-over-year Sales Change Summary
Appendix: F1Q27 Year-over-year Sales Change Summary Sales growth for the three months ended September 30, 2026 (Percent change compared to prior-year period) Foreign Reported Selling days Organic constant Acquisitions currency sales impact (1) currency sales exchange Service Center Segment 4.2% -% 0
Slide 15: Appendix: Net Sales, Operating Income, EBITDA, & EBITDA Margin by Segment
Appendix: Net Sales, Operating Income, EBITDA, & EBITDA Margin by Segment Three Months Ended Sep 30 (dollar amount in thousands) Q1 FY26 Q1 FY27 Service Center Segment: Net sales $ 782,474 $ 815,349 Operating income 104,053 105,317 Depreciation and amortization of property 4,235 4,667 Amortization o
Slide 16: Appendix: Reconciliation of EBITDA
Appendix: Reconciliation of EBITDA Three Months Ended Sep 30 (dollar amount in thousands) Q1 FY26 Q1 FY27 Net Income $ 100,807 $ 110,403 Interest expense, net 993 3,087 Income tax expense 27,778 30,538 Depreciation and amortization of property 6,486 6,625 Amortization of intangibles 10,203 9,667 EBI
Slide 17: Appendix: Reconciliation of EBITDA Margin
Appendix: Reconciliation of EBITDA Margin Three Months Ended Sep 30 (dollar amount in thousands) Q1 FY26 Q1 FY27 Net Sales $ 1,199,523 $ 1,291,170 EBITDA 146,267 160,320 EBITDA Margin 12.2% 12.4% 17
Slide 18: Appendix: Reconciliation of Free Cash Flow
Appendix: Reconciliation of Free Cash Flow Three Months Ended September 30 (dollar amount in thousands) Q1 FY21 Q1 FY22 Q1 FY23 Q1 FY24 Q1 FY25 Q1 FY26 Q1 FY27 Cash provided by Operating Activities $ 81,842 $ 48,642 $ 25,943 $ 66,209 $ 127,747 $ 119,317 $ 86,376 Capital Expenditures (3,597) (3,621)
Slide 19: Appendix: Reconciliation of Net Leverage Ratio
Appendix: Reconciliation of Net Leverage Ratio (dollar amount in thousands) Q1 FY25 Q2 FY25 Q3 FY25 Q4 FY25 Q1 FY26 Q2 FY26 Q3 FY26 Q4 FY26 Q1 FY27 Net Income $ 92,063 $ 93,290 $ 99,799 $ 107,836 $ 100,807 $ 95,349 $ 99,769 $ 118,600 $ 110,403 Interest expense (income), net (627) (936) 853 1,322 993
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