Applied Industrial Hits Record Sales, Net Income in FY25

Ticker: AIT · Form: DEF 14A · Filed: Sep 10, 2025 · CIK: 109563

Sentiment: bullish

Topics: Industrial Distribution, Proxy Statement, Corporate Governance, Executive Compensation, Shareholder Meeting, Financial Performance, Dividend

Related Tickers: AIT, NGVT, KWR, HI, MCHP

TL;DR

**AIT is firing on all cylinders with record sales and profits, making it a solid buy for long-term growth.**

AI Summary

APPLIED INDUSTRIAL TECHNOLOGIES INC (AIT) achieved record-breaking financial performance in fiscal year 2025, reporting net sales of $4.6 billion, net income of $393.0 million, and cash provided by operating activities totaling $492.4 million. This growth was fueled by internal initiatives, significant M&A activity, strong cost control, and the durability of its operating model. The company returned $216.5 million to shareholders through dividends and share repurchases. Executive compensation for fiscal year 2025 saw named executive officers earn annual incentive pay at an average of 106.2% of their target values, while achievements under three-year performance share programs averaged 93.6% of target shares. The Board of Directors, which includes four Audit Committee financial experts, maintains a strong independent structure with an independent Chairman and all committees composed solely of independent directors. Shareholders will vote on the election of three directors, an advisory resolution on executive compensation, and the ratification of Deloitte & Touche LLP as independent auditors for fiscal year 2026.

Why It Matters

This DEF 14A filing from APPLIED INDUSTRIAL TECHNOLOGIES INC (AIT) signals robust financial health and strategic execution, which is crucial for investors seeking stable growth. The record sales and net income demonstrate effective management and a resilient business model in a competitive industrial distribution market. For employees, strong performance often translates to job security and potential for growth, while customers benefit from a stable, well-capitalized supplier. The company's commitment to returning $216.5 million to shareholders underscores its investor-friendly approach, potentially attracting more capital and strengthening its market position against rivals.

Risk Assessment

Risk Level: low — The risk level is low due to the company's record-breaking financial performance in fiscal year 2025, including $4.6 billion in net sales and $393.0 million in net income. Additionally, the Board's strong corporate governance, with an independent Chairman and all key committees composed solely of independent directors, mitigates governance risks.

Analyst Insight

Investors should consider AIT a strong candidate for a long-term portfolio, given its consistent financial performance and robust governance. The company's ability to generate significant cash flow ($492.4 million from operations) and return capital to shareholders ($216.5 million) indicates financial stability and a commitment to shareholder value.

Financial Highlights

revenue
$4.6B
net Income
$393.0M

Executive Compensation

NameTitleTotal Compensation
Neil A. SchrimsherChief Executive Officer

Key Numbers

Key Players & Entities

FAQ

What were APPLIED INDUSTRIAL TECHNOLOGIES INC's key financial achievements in fiscal year 2025?

APPLIED INDUSTRIAL TECHNOLOGIES INC achieved record net sales of $4.6 billion, net income of $393.0 million, and cash provided by operating activities of $492.4 million in fiscal year 2025. These figures represent new company records.

Who are the director nominees for election at the APPLIED INDUSTRIAL TECHNOLOGIES INC 2025 Annual Meeting?

The Board has nominated three incumbents for election as directors with terms expiring in 2028: Mary Dean Hall, Joe A. Raver, and Richard J. Simoncic. Mary Dean Hall and Joe A. Raver were last elected in 2022, while Richard J. Simoncic was appointed to the Board on August 13, 2024.

What is the Board's recommendation for the advisory vote on executive compensation at APPLIED INDUSTRIAL TECHNOLOGIES INC?

The Board of Directors recommends a 'FOR' vote on the advisory (nonbinding) proposal to approve the compensation of APPLIED INDUSTRIAL TECHNOLOGIES INC's named executive officers as disclosed in the proxy statement.

How does APPLIED INDUSTRIAL TECHNOLOGIES INC's Board oversee risk management?

APPLIED INDUSTRIAL TECHNOLOGIES INC's Board, both as a whole and through its committees, oversees and monitors risk management. The Board is responsible for ensuring that the risk management processes designed and implemented by management are adequate and functioning as designed, and it includes four Audit Committee financial experts.

What are the stock ownership guidelines for APPLIED INDUSTRIAL TECHNOLOGIES INC's non-employee directors?

Each non-employee director at APPLIED INDUSTRIAL TECHNOLOGIES INC is expected to own, within five years after joining the Board, company shares valued at a minimum of 5x their annual retainer fees.

What was the average annual incentive pay for APPLIED INDUSTRIAL TECHNOLOGIES INC's named executive officers in fiscal year 2025?

In fiscal year 2025, APPLIED INDUSTRIAL TECHNOLOGIES INC's named executive officers earned annual incentive pay at an average of 106.2% of their individual target values, reflecting performance generally consistent with pre-established goals.

When and where will the APPLIED INDUSTRIAL TECHNOLOGIES INC 2025 Annual Meeting of Shareholders be held?

The APPLIED INDUSTRIAL TECHNOLOGIES INC 2025 Annual Meeting of Shareholders will be held on Tuesday, October 21, 2025, at 9:00 a.m. Eastern Time, at the company's headquarters located at 1 Applied Plaza, East 36th Street and Euclid Avenue, Cleveland, Ohio, 44115.

Who has APPLIED INDUSTRIAL TECHNOLOGIES INC appointed as its independent auditors for fiscal year 2026?

Subject to shareholder ratification, APPLIED INDUSTRIAL TECHNOLOGIES INC's Audit Committee has appointed Deloitte & Touche LLP to serve as independent auditors for the fiscal year ending June 30, 2026, following an evaluation of their performance.

How can APPLIED INDUSTRIAL TECHNOLOGIES INC shareholders vote at the 2025 Annual Meeting?

Shareholders of APPLIED INDUSTRIAL TECHNOLOGIES INC can vote via the Internet, by phone, or by mailing their signed proxy card. Those holding shares in the Retirement Savings Plan have specific deadlines, and in-person voting is also an option at the meeting.

What is APPLIED INDUSTRIAL TECHNOLOGIES INC's policy if a director nominee receives less than a majority of votes in an uncontested election?

If an APPLIED INDUSTRIAL TECHNOLOGIES INC nominee receives more 'withheld' votes than 'for' votes, the nominee must submit a written resignation to the Board's Chairman. The Corporate Governance & Sustainability Committee will then recommend whether the nominee should serve, with the Board acting on this recommendation within 90 days.

Industry Context

Applied Industrial Technologies operates in the industrial distribution sector, providing a wide range of products and services to manufacturing and other industrial customers. The sector is characterized by a fragmented market with numerous players, requiring strong supply chain management and customer relationships for success. Trends include digitalization, automation, and a focus on sustainability, influencing product demand and operational efficiency.

Regulatory Implications

As a publicly traded company, Applied Industrial Technologies is subject to SEC regulations, including timely and accurate financial reporting and disclosure requirements as outlined in this DEF 14A filing. Compliance with these regulations is crucial to maintain investor confidence and avoid penalties.

What Investors Should Do

  1. Review the election of directors.
  2. Vote on the advisory resolution for executive compensation.
  3. Ratify the appointment of Deloitte & Touche LLP as independent auditors.

Key Dates

Glossary

DEF 14A
A proxy statement filing required by the SEC for companies holding annual meetings of shareholders. (This document contains information about the company's governance, executive compensation, and matters to be voted on by shareholders.)
Named Executive Officers (NEOs)
The top executive officers of a company whose compensation is disclosed in detail in proxy statements. (Their compensation is subject to shareholder advisory votes and is a key focus of this filing.)
Proxy Card
A document that shareholders use to vote their shares by mail or electronically, authorizing someone to vote on their behalf. (Used by shareholders to cast their votes on the proposals presented in the proxy statement.)
Audit Committee
A committee of the Board of Directors responsible for overseeing financial reporting and internal controls. (This committee appointed the independent auditors and its report is included in the filing.)

Year-Over-Year Comparison

The company reported record-breaking financial performance in fiscal year 2025, with net sales of $4.6 billion and net income of $393.0 million, indicating significant growth compared to the previous year. Executive officers received an average of 106.2% of their target annual incentive pay, suggesting strong performance-based payouts. The filing also highlights the company's robust cash generation, with $492.4 million provided by operating activities, and substantial returns to shareholders totaling $216.5 million.

Filing Stats: 4,426 words · 18 min read · ~15 pages · Grade level 12.6 · Accepted 2025-09-10 16:05:51

Key Financial Figures

Filing Documents

Executive Compensation

Executive Compensation 23 Compensation Discussion and Analysis 43 Summary Compensation Table 45 Grants of Plan-Based Awards Table — Fiscal Year 2025 46 Outstanding Equity Awards at Fiscal 2025 Year-End Table 48 Option Exercises and Stock Vested — Fiscal Year 2025 48 2025 Policies and Practices Related to the Grant of Certain Equity Awards 49 Nonqualified Deferred Compensation — Fiscal Year 2025 50 Potential Payments upon Termination or Change in Control 56 CEO Pay Ratio Disclosure 57 Pay Versus Performance Disclosure 62 Compensation Committee Report 62 Compensation Committee Interlocks and Insider Participation 63 ITEM2: Advisory (Nonbinding) Vote to Approve Executive Compensation 66 ITEM3: Vote to Ratify Appointment of Independent Auditors 67 Equity Compensation Plan Information 68 Audit Committee Report 68 Delinquent Section 16(a) Reports 68 Shareholder Proposals and Nominee Submissions for 2026 Annual Meeting 69 Householding Information 69 Other Matters Applied Industrial Technologies 2025 Proxy Statement 1 Table of Contents Proxy Statement Highlights PROXY STATEMENT HIGHLIGHTS This proxy statement, the accompanying proxy card, and our Annual Report on Form 10-K are being sent to shareholders beginning on or about September 10, 2025. The highlights below include information that you will find elsewhere in this proxy statement. The highlights do not contain all the information that you should consider, and you should read the entire proxy statement carefully before voting. Information regarding the logistics of the 2025 annual meeting of shareholders (the "Annual Meeting") begins on page 5. Proposals and Board Recommendations Applied's Board of Directors (the "Board") makes the following voting recommendations to shareholders for the Annual Meeting: Proposal Board's Voting Recommendation Page Item1: Election of Directors FOR each Company Director Nominee 8 I

Executive Compensation Highlights

Executive Compensation Highlights Our executive pay is targeted to be competitive with market medians for similar positions in peer distribution industry companies. Actual pay depends in large part on performance relative to goals and how our stock price performs in response. The chart below shows the mix of targeted opportunities provided in fiscal year 2025 to our Chief Executive Officer, Neil A. Schrimsher, in the forms of base salary, annual incentive pay, and long-term incentive pay (awarded in equity-based instruments). In line with results that were generally consistent with pre-established annual target incentive goals, the named executive officers earned annual incentive pay at an average of 106.2% of their individual target values. Fiscal year 2025 achievements under the three-year performance share programs averaged 93.6% of target shares. For a detailed review of our executive compensation, see the Executive Compensation section of this proxy statement beginning on page 23. Approval of the Compensation of the Named Executive Officers Annually we provide shareholders the opportunity to approve, through a nonbinding, advisory vote, the compensation of our named executive officers as disclosed in our proxy statement, including, among other things, our executive compensation objectives, policies, and practices. The proposal is described on pages 63-65. Ratification of Appointment of Independent Auditors 4 Applied Industrial Technologies 2025 Proxy Statement Table of Contents Introduction and Voting Information INTRODUCTION AND VOTING INFORMATION In this statement, "we," "our," "us," and

: ELECTION OF DIRECTORS

ITEM 1: ELECTION OF DIRECTORS Applied's Code of Regulations divides our Board into three classes. The directors in each class are elected for three-year terms so that the term of one class expires at each annual meeting. At the Annual Meeting, the shareholders will elect directors for a three-year term expiring in 2028 or until their successors have been elected and qualified. Pursuant to Ohio law, the properly nominated candidates receiving the greatest number of votes will be elected. The Corporate Governance & Sustainability Committee have recommended, and the Board has nominated, three incumbents for election as directors: Mary Dean Hall, Joe A. Raver, and Richard J. Simoncic. The shareholders most recently elected Mary Dean Hall and Joe A. Raver at the 2022 annual meeting. Richard J. Simoncic was appointed to the Board on August 13, 2024. Their terms expire this year, and the Board renominated each of them following the Corporate Governance & Sustainability Committee's review and evaluation of each of their respective performances. Directors serving terms expiring in 2026 and 2027 will continue in office. The proxies named on the proxy card accompanying the materials sent to shareholders of record intend to vote for the three nominees unless authority is withheld. In this uncontested election, a withhold vote will not affect the outcome. If a nominee becomes unavailable to serve, the proxies will have authority to vote for any other person or persons who may be properly nominated and/or to reduce the number of directors. We are not aware of an existing circumstance that would cause a nominee to be unavailable to serve. The Board of Directors recommends you vote FOR each of the director nominees. Background information follows about each of the nominees and continuing directors. Unless otherwise stated, the individuals have held the positions indicated for at least the last five years. We also include a summary of reasons our Board concluded that the

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