UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): April 30, 2015


APPLIED INDUSTRIAL TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)



OHIO
1-2299
34-0117420
(State or Other Jurisdiction of
(Commission File
(I.R.S. Employer
Incorporation or Organization)
Number)
Identification No.)



One Applied Plaza, Cleveland, Ohio 44115
(Address of Principal Executive Officers) (Zip Code)

Registrant's Telephone Number, Including Area Code: (216) 426-4000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

q Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)

q Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-
12)

q Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))

q Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))






ITEM 2.02.     RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On April 30, 2015, Applied Industrial Technologies, Inc. (“Applied”) issued a press release related to its third quarter ended March 31, 2015. The press release is attached as Exhibit 99.1 to this Report on Form 8-K.

The information in this Report on Form 8-K, including the Exhibit, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act.

ITEM 9.01.    FINANCIAL STATEMENTS AND EXHIBITS.    

(d)    Exhibits.    
            
Exhibit 99.1 - Press release of Applied Industrial Technologies, Inc. dated April 30, 2015.


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

 
APPLIED INDUSTRIAL TECHNOLOGIES, INC.
 
(Registrant)
 
 
 
 
 
 
 
By: /s/ Fred D. Bauer                        
 
Fred D. Bauer, Vice President-General Counsel & Secretary
Date: April 30, 2015
 





EXHIBIT INDEX


Exhibit No.    Description

99.1
The following exhibit is furnished with this Report on Form 8-K: Press release of Applied Industrial Technologies, Inc. dated April 30, 2015.







EXHIBIT 99.1


Applied Industrial Technologies Reports Fiscal 2015
Third Quarter Results and Declares Dividend
New Share Repurchase Plan Authorized


CLEVELAND, OHIO (April 30, 2015) - Applied Industrial Technologies (NYSE: AIT) today reported third quarter fiscal 2015 sales and earnings for the three months ended March 31, 2015.

Net sales for the quarter were $680.0 million, an increase of 10.0% compared with $618.0 million in the same quarter a year ago. Net income for the quarter was $28.6 million, or $0.70 per share, compared with $30.4 million, or $0.72 per share, in the third quarter of fiscal 2014. Prior year earnings reflect a $0.07 per share benefit from one-time tax benefits and a $0.02 per share benefit from other tax accrual reversals.

For the nine months ended March 31, 2015, sales increased 14.9% to $2.07 billion from $1.81 billion in the same period last year. Net income increased to $87.4 million from $83.1 million, and earnings per share increased 7.7% to $2.11 per share from $1.96 per share last year.

Commenting on the results, Applied’s President & Chief Executive Officer Neil A. Schrimsher said, “The third quarter presented some challenges, including a deceleration of industrial market demand and foreign exchange headwinds. Our overall sales increase for the quarter reflects a 10.6% increase from acquisition related volume coupled with a 1.3% rise in our core underlying operations, offset by a negative 1.9% foreign currency translation impact. We dealt with these challenges and headwinds in our top line growth through effective cost controls within the quarter, and we will take additional actions as we move towards completing our fiscal year.

“We are revising our full-year guidance range for earnings per share to between $2.80 and $2.95 per share, on a sales increase of 11.5% to 13%. Overall, Applied is well-positioned - with a strong foundation, expanding capabilities and a straightforward strategic plan. We are focused on meeting the product, service and solution needs of current and new industrial customers.”

In addition, Mr. Schrimsher announced that the Company's Board of Directors declared a quarterly cash dividend of $0.27 per common share. The dividend is payable on May 29, 2015, to shareholders of record on May 15, 2015.

During the quarter, the Company purchased 870,200 shares of its common stock in open market transactions for $37.3 million. Fiscal year to date, the Company has purchased 1.3 million shares for a total of $59.2 million. On April 28, the Board of Directors approved a new authorization to repurchase up to 1.5 million shares, in open market and negotiated transactions, replacing the existing authorization. 

“We are pleased with the Board’s authorization of a new stock repurchase plan. This action reflects our continued confidence in the Company’s growth opportunities and our ongoing commitment to enhance shareholder value,” added Mr. Schrimsher.

Applied will host its quarterly conference call for investors and analysts at 10 a.m. ET on Thursday, April 30. Neil A. Schrimsher - President & CEO, and Mark O. Eisele - CFO will discuss the Company's performance. To join the call, dial 1-800-755-1805 or 1-212-231-2910 (for International callers). A live audio webcast can be accessed online through the investor relations portion of the Company's website at




www.applied.com. A replay of the call will be available for two weeks by dialing 1-800-633-8284 or 1-402-977-9140 (International) using passcode 21766597.

With more than 570 facilities and 5,900 employee associates, Applied Industrial Technologies is a leading industrial distributor that offers more than five million parts to serve the needs of MRO and OEM customers in virtually every industry. In addition, Applied provides engineering, design and systems integration for industrial and fluid power applications, as well as customized mechanical, fabricated rubber and fluid power shop services. Applied also offers maintenance training and inventory management solutions that provide added value to its customers. Applied can be visited on the Internet at www.applied.com.

This press release 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-looking statements are often identified by qualifiers such as “guidance” and derivative or similar expressions. All forward-looking statements are based on current expectations regarding important risk factors including trends in the industrial sector of the economy, and other risk factors identified in Applied's most recent periodic report and other filings made with the Securities and Exchange Commission. Accordingly, actual results may differ materially from those expressed in the forward-looking statements, and the making of such statements should not be regarded as a representation by Applied or any other person that the results expressed therein will be achieved. Applied assumes no obligation to update publicly or revise any forward-looking statements, whether due to new information, or events, or otherwise.
#####
For investor relations information, contact Mark O. Eisele, Vice President - Chief Financial Officer, at 216-426-4417. For corporate information, contact Julie A. Kho, Manager - Public Relations, at 216-426-4483.






  APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CONSOLIDATED INCOME
(In thousands, except per share data)

 
Three Months Ended March 31,
Nine Months Ended March 31,
 
2015
2014
2015
2014
Net Sales
 $ 679,994
 $ 618,006
 $2,074,021
 $1,805,260
Cost of sales
       492,631
          446,786
   1,496,013
   1,300,862
Gross Profit
       187,363
          171,220
      578,008
      504,398
Selling, distribution and administrative,
 
 
 
 
   including depreciation
       143,591
          131,047
      441,264
      384,849
Operating Income
         43,772
            40,173
      136,744
      119,549
Interest (income) expense, net
           2,121
                 (11)
          5,738
           (102)
Other (income) expense, net
            (887)
                (388)
           (263)
        (1,749)
Income Before Income Taxes
         42,538
            40,572
      131,269
      121,400
Income Tax Expense
         13,928
            10,178
        43,830
        38,253
Net Income
 $ 28,610
 $ 30,394
 $ 87,439
 $ 83,147
Net Income Per Share - Basic
 $ 0.70
 $ 0.73
 $ 2.12
 $ 1.98
Net Income Per Share - Diluted
 $ 0.70
 $ 0.72
 $ 2.11
 $ 1.96
Average Shares Outstanding - Basic
         40,800
            41,880
        41,168
        42,039
Average Shares Outstanding - Diluted
         41,067
            42,242
        41,477
        42,438

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(1) Applied uses the last-in, first-out (LIFO) method of valuing U.S. inventory. An actual valuation of inventory under the LIFO method can only be made at the end of each year based on the inventory levels and costs at that time. Accordingly, interim LIFO calculations are based on management's estimates of expected year-end inventory levels and costs and are subject to the final year-end LIFO inventory determination.

(2) On July 1, 2014, the Company acquired 100% of the outstanding stock of Knox Oil Field Supply Inc. ("Knox"), headquartered in San Angelo, Texas, for a purchase price of $132.5 million.
On July 1, 2014, the Company acquired substantially all of the net assets of Rodamientos y Derivados del Norte S.A de C.V., a Mexican distributor of bearings and power transmission products and related products, and Great Southern Bearings / Northam Bearings, a Western Australia distributor of bearings and power transmission products. On November 3, 2014, the Company acquired Ira Pump and Supply Inc., a Texas distributor of oilfield pumps and supplies. The combined total purchase price of these acquisitions was $54.9 million.
The financial results of the operations acquired have been included in the Service Center Based Distribution Segment as of the acquisition date.

(3) Effective July 1, 2013, the Company aligned the consolidation of the Company's Canadian subsidiaries in the consolidated financial statements which previously included results on a one month reporting lag. The Company has determined that the effect of this change is not material to the financial statements for all periods presented and therefore has not presented retrospective application of this change. The net impact of the lag elimination was $1.2 million of additional income and has been included within "Other (income) expense, net" on the Condensed Statements of Consolidated Income for the nine months ended March 31, 2014.

(4) During the quarter ended March 31, 2014, $2.8 million of tax reserves were reversed which reduced income tax expense by the same amount and resulted in an increase to earnings per share in the quarter of $0.07.






APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)

 
 
 
 
March 31,
 
June 30,
 
 
 
 
2015
 
2014
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
  Cash and cash equivalents
 
 $ 55,165
 
 $ 71,189
  Accounts receivable, less allowances of $10,448 and $10,385
           394,408
 
      375,732
  Inventories
 
 
           381,085
 
      335,747
  Other current assets
 
             55,359
 
        53,480
       Total current assets
 
           886,017
 
      836,148
  Property, net
 
 
           104,680
 
      103,596
  Goodwill
 
 
           252,717
 
      193,494
  Intangibles, net
 
 
           203,978
 
      159,508
  Other assets
 
 
             18,761
 
        41,423
Total Assets
 
 
 $ 1,466,153
 
 $ 1,334,169
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
  Accounts payable
 
 
 $ 143,881
 
 $ 172,401
  Current portion of long-term debt
               2,720
 
          2,720
  Other accrued liabilities
 
           122,466
 
      115,834
       Total current liabilities
 
           269,067
 
      290,955
  Long-term debt
 
 
           386,956
 
      167,992
  Other liabilities
 
 
             73,819
 
        74,914
Total Liabilities
 
 
           729,842
 
      533,861
Shareholders' Equity
 
           736,311
 
      800,308
Total Liabilities and Shareholders' Equity
 $ 1,466,153
 
 $ 1,334,169






APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS
 (In thousands)

 
Nine Months Ended
 
March 31,
 
2015
 
2014
 
 
 
 
Cash Flows from Operating Activities
 
 
 
Net income
 $ 87,439
 
 $ 83,147
Adjustments to reconcile net income to net cash provided
 
 
 
   by operating activities:
 
 
 
   Depreciation and amortization of property
           12,792
 
         10,119
   Amortization of intangibles
           19,412
 
           9,518
   Amortization of stock appreciation rights and options
             1,381
 
           1,703
   Loss on sale of property
                  45
 
                37
   Other share-based compensation expense
             1,123
 
           2,946
   Changes in assets and liabilities, net of acquisitions
          (83,601)
 
        (60,451)
   Other, net
                721
 
          (2,693)
Net Cash provided by Operating Activities
           39,312
 
         44,326
Cash Flows from Investing Activities
 
 
 
   Property purchases
          (11,009)
 
          (6,492)
   Proceeds from property sales
                451
 
              348
   Acquisition of businesses, net of cash acquired
        (166,479)
 
        (17,000)
Net Cash used in Investing Activities
(177,037)
 
(23,144)
Cash Flows from Financing Activities
 
 
 
   Net borrowings under revolving credit facility
51,000
 
30,000
   Long-term debt borrowings
170,238
 
0
   Long-term debt repayments
(2,274)
 
0
   Purchases of treasury shares
(59,235)
 
(23,992)
   Dividends paid
(31,807)
 
(29,961)
   Excess tax benefits from share-based compensation
538
 
2,525
   Acquisition holdback payments
              (995)
 
(1,824)
   Exercise of stock appreciation rights and options
                232
 
                95
Net Cash provided by (used in) Financing Activities
127,697
 
(23,157)
Effect of Exchange Rate Changes on Cash
(5,996)
 
(2,103)
Decrease in cash and cash equivalents
          (16,024)
 
          (4,078)
Cash and cash equivalents at beginning of period
           71,189
 
         73,164
Cash and Cash Equivalents at End of Period
 $ 55,165
 
 $ 69,086



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