Applied Industrial Technologies, Inc. · NYSE:AIT
Applied Industrial Technologies — Q1 2026 Earnings Presentation
18 slides from Applied Industrial Technologies's earnings presentation, Oct 28, 2025
Slide 1: Fiscal Q1 2026 Recap
Fiscal Q1 2026 Recap October 28, 2025 - 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 FY26 with 1Q EBITDA and EPS growth accelerating and above expectations on solid Service Center segment performance and operational execution within an ongoing mixed end-market backdrop. • EBITDA +13% (organic +6%) & EBITDA margins up ~50 bps Yo
Slide 4: Fiscal Q1 2026 Key Financial Highlights
Fiscal Q1 2026 Key Financial Highlights • Sales up 9.2% YoY Sales, $ in millions o Up 3.0% on an organic basis $1,200 9.2% o Acquisitions +6.3%, currency -0.1% 3.0% Organic $1,099 • Net Income of $100.8M and EPS of $2.63 o EPS up 11.4% YoY Q1 2025 Q1 2026 o Includes $2.6M pre-tax ($0.05/sh) of LIFO
Slide 5: Organic Sales Growth Trend and Investor Discussion Points
Organic Sales Growth Trend and Investor Discussion Points Year-over-Year Organic % Change in Sales Per Day F1Q26 Sales Growth Detail Fiscal Quarters • Up 3.0% YoY on an organic basis vs. 0.2% YoY in F4Q25; strongest organic growth in two years 21.1% 19.4% • 2-year stack trend improved 180 bps vs. F4
Slide 6: Investor Topic Update & Details
Other Investor Discussion Points Investor Topic Update & Details End-market demand remains choppy and bifurcated given ongoing macro/tariff uncertainty though Underlying Demand customer sentiment and demand indications continue to gradually improve Price contribution was ~200 bps in F1Q26, up from F
Slide 7: Fiscal Q1 2026 Margin and Expense Highlights
Fiscal Q1 2026 Margin and Expense Highlights Gross Profit, SD&A, and EBITDA Metrics • Gross margin up 55 bps YoY Chg LIFO $ in millions Q1 26 Q1 25 YoY o Includes an unfavorable 5 bps YoY impact from higher LIFO expense Impact YoY o YoY improvement excluding LIFO impact primarily reflects positive a
Slide 8: Segment Results – Service Center
Segment Results – Service Center Segment Overview: Representing 66% of fiscal 2025 sales - the segment Service Center Segment Sales, in Millions includes our core distribution operations including ~400 local service centers across North America, Australia, and New Zealand, primarily focused on our t
Slide 9: Segment Results – Engineered Solutions
Segment Results – Engineered Solutions Segment Overview: Representing 34% of fiscal 2025 sales - the segment Engineered Solutions Segment Sales, in Millions 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 • F1Q26 cash from operations of $119.3M; free cash of $112.0M $122.2 o Free cash at 111.1% of net income in F1Q26 $112.0 o Free cash down slightly YoY reflecting greater working capital investment compared to the prior year,
Slide 11: Capital Allocation ~$1.1 Billion
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 2026 Guidance and Outlook Assumptions
Fiscal 2026 Guidance and Outlook Assumptions Fiscal 2026 Guidance Updated Considerations: Prior Current • No change to sales and EBITDA margin outlook for FY26 (8/14/25) (10/28/25) • Increasing EPS by $0.10 to primarily reflect F1Q26 performance and a lower diluted share count assumption Total Sales
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 2024 63.0 61.0 63.5 64.0 251.5 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 13
Slide 14: 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 FY25 Q1 FY26 Service Center Segment: Net sales $ 749,739 $ 782,474 Operating income 93,826 104,053 Depreciation and amortization of property 4,419 4,235 Amortization of
Slide 15: Appendix: Reconciliation of EBITDA
Appendix: Reconciliation of EBITDA Three Months Ended Sep 30 (dollar amount in thousands) Q1 FY25 Q1 FY26 Net Income $ 92,063 $ 100,807 Interest (income) expense, net (627) 993 Income tax expense 24,017 27,778 Depreciation and amortization of property 5,924 6,486 Amortization of intangibles 7,600 10
Slide 16: Appendix: Reconciliation of EBITDA Margin
Appendix: Reconciliation of EBITDA Margin Three Months Ended Sep 30 (dollar amount in thousands) Q1 FY25 Q1 FY26 Net Sales $ 1,098,944 $ 1,199,523 EBITDA 128,977 146,267 EBITDA Margin 11.7% 12.2% 16
Slide 17: Appendix: Reconciliation of Free Cash Flow
Appendix: Reconciliation of Free Cash Flow Three Months Ended September 30 (dollar amount in thousands) Q1 FY20 Q1 FY21 Q1 FY22 Q1 FY23 Q1 FY24 Q1 FY25 Q1 FY26 Cash provided by Operating Activities $ 50,018 $ 81,842 $ 48,642 $ 25,943 $ 66,209 $ 127,747 $ 119,317 Capital Expenditures (4,946) (3,597)
Slide 18: Appendix: Reconciliation of Net Leverage Ratio
Appendix: Reconciliation of Net Leverage Ratio (dollar amount in thousands) Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Q2 FY25 Q3 FY25 Q4 FY25 Q1 FY26 Net Income $ 93,826 $ 91,228 $ 97,217 $ 103,491 $ 92,063 $ 93,290 $ 99,799 $ 107,836 $ 100,807 Interest expense (income), net 1,320 1,917 265 (671) (627
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