Applied Industrial Technologies reported higher second-quarter sales and profit as recent acquisitions and steady customer demand helped offset a choppy industrial market late in the year.
For the quarter ending Dec. 31, the Cleveland-based distributor posted sales of $1.16 billion, up 8.4% from $1.07 billion a year earlier. Most of the increase came from companies Applied acquired over the past year, while sales at existing operations rose modestly.
Profits for the quarter rose to $95.3 million, or $2.51 per share, compared with $93.3 million, or $2.39 per share, a year earlier.
For the first six months of its fiscal year, Applied recorded sales of $2.36 billion, up 8.8% from $2.17 billion in the same period last year. Profits for the six-month period increased to $196.2 million from $185.4 million.
CEO Neil Schrimsher said business slowed in December but began to improve in January, with orders picking up across both company’s main operating groups.
“As we enter the second half of fiscal 2026, we remain constructive on our setup given the potential for accelerating sales and earnings growth,” Schrimsher said, pointing to improving customer activity and a growing pipeline of work.
Applied raised its outlook for the year, saying it now expects overall sales to increase between 5.5% and 7%, with growth at existing operations of 2.5% to 4%. The company said higher inventory costs will weigh on profit this year, but that improving demand could support stronger results in the months ahead.
The company also announced the acquisition of Thompson Industrial Supply Inc., a Los Angeles distributor of bearings, power transmission, hydraulics and belting products serving food and beverage, pharmaceutical and other industrial customers. Thompson has about 40 employees and is expected to add $20 million in annual sales.
During the first half of the year, Applied generated strong cash flow and repurchased $143 million of its own shares. The company ended the quarter with $406 million in cash and $572 million in long-term debt.
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