ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
☒ | Accelerated filer | ☐ | |||||||||
Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
Emerging growth company |
Page | ||||||||
PART I | ||||||||
Business | ||||||||
Risk Factors | ||||||||
Unresolved Staff Comments | ||||||||
Properties | ||||||||
Legal Proceedings | ||||||||
Mine Safety Disclosures | ||||||||
PART II | ||||||||
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | ||||||||
Selected Financial Data | ||||||||
Management's Discussion and Analysis of Financial Condition and Results of Operations | ||||||||
Quantitative and Qualitative Disclosures about Market Risk | ||||||||
Financial Statements and Supplementary Data | ||||||||
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | ||||||||
Controls and Procedures | ||||||||
Other Information | ||||||||
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | ||||||||
PART III | ||||||||
Directors, Executive Officers and Corporate Governance | ||||||||
Executive Compensation | ||||||||
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | ||||||||
Certain Relationships and Related Transactions, and Director Independence | ||||||||
Principal Accountant Fees and Services | ||||||||
PART IV | ||||||||
Exhibits and Financial Statement Schedules | ||||||||
Form 10-K Summary | ||||||||
Country | Associates | Segment | Associates | |||||||||||
United States | 4,700 | Service Center Based Distribution | 3,900 | |||||||||||
Canada | 700 | Fluid Power & Flow Control | 1,800 | |||||||||||
Other Countries | 700 | Other | 400 |
Location of Principal Owned Real Property | Type of Facility | ||||
Cleveland, Ohio | Corporate headquarters | ||||
Atlanta, Georgia | Distribution center, service center, hose shop | ||||
Florence, Kentucky | Distribution center | ||||
Baldwinsville, New York | Offices, warehouse, and fluid power shop | ||||
Carlisle, Pennsylvania | Distribution center | ||||
Fort Worth, Texas | Distribution center and rubber shop |
Location of Principal Leased Real Property | Type of Facility | ||||
Fontana, California | Distribution center, rubber shop, fluid power shop, and service center | ||||
Newark, California | Fluid power shop | ||||
Midland, Michigan | Flow control shop | ||||
Strongsville, Ohio | Offices and warehouse | ||||
Portland, Oregon | Distribution center | ||||
Stafford, Texas | Offices, warehouse, and flow control shop | ||||
Longview, Washington | Service center, rubber shop, and fluid power shop | ||||
Nisku, Alberta | Offices, service center, and shops | ||||
Saskatoon, Saskatchewan | Service center and shop |
Name | Positions and Experience | Age | ||||||
Neil A. Schrimsher | President since 2013 and Chief Executive Officer since 2011. | 58 | ||||||
Fred D. Bauer | Vice President-General Counsel since 2002 and Secretary since 2001. | 56 | ||||||
Warren E. Hoffner | Vice President, General Manager-Fluid Power & Flow Control since October 2018. He served as Vice President, General Manager-Fluid Power from 2003 to October 2018. The Board of Directors designated Mr. Hoffner an executive officer in 2015. | 62 | ||||||
Kurt W. Loring | Vice President-Chief Human Resources Officer since 2014. | 53 | ||||||
Jason W. Vasquez | Vice President-Sales & Marketing, U.S. Service Centers since June 2017. The Board of Directors designated Mr. Vasquez an executive officer in September 2021. | 46 | ||||||
David K. Wells | Vice President-Chief Financial Officer & Treasurer since September 2017. He served as Vice President-Finance from May 2017 through August 2017. Prior to joining Applied, Mr. Wells was Vice President & Chief Financial Officer of ESAB, a manufacturer of welding and material cutting products and a division of Colfax Corporation (NYSE: CFX). | 59 |
Period | (a) Total Number of Shares | (b) Average Price Paid per Share ($) | (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | (d) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1) | |||||||||||||||||||
April 1, 2022 to April 30, 2022 | — | — | — | 317,960 | |||||||||||||||||||
May 1, 2022 to May 31, 2022 | — | — | — | 317,960 | |||||||||||||||||||
June 1, 2022 to June 30, 2022 | 2,000 | 89.87 | 2,000 | 315,960 | |||||||||||||||||||
Total | 2,000 | 89.87 | 2,000 | 315,960 |
(In thousands, except per share amounts and statistical data) | 2022 | 2021 | 2020 | 2019 | 2018(d) | |||||||||||||||||||||||||||
Consolidated Operations — Year Ended June 30 | ||||||||||||||||||||||||||||||||
Net sales | $ | 3,810,676 | $ | 3,235,919 | $ | 3,245,652 | $ | 3,472,739 | $ | 3,073,274 | ||||||||||||||||||||||
Depreciation and amortization of property | 21,676 | 20,780 | 21,196 | 20,236 | 17,798 | |||||||||||||||||||||||||||
Amortization: | ||||||||||||||||||||||||||||||||
Intangible assets | 31,879 | 34,365 | 41,553 | 41,883 | 32,065 | |||||||||||||||||||||||||||
SARs and stock options | 3,284 | 2,526 | 2,954 | 2,437 | 1,961 | |||||||||||||||||||||||||||
Operating income (a) (b) (c) | 357,858 | 205,454 | 88,989 | 233,788 | 225,827 | |||||||||||||||||||||||||||
Net income (a) (b) (c) | 257,414 | 144,757 | 24,042 | 143,993 | 141,625 | |||||||||||||||||||||||||||
Per share data: | ||||||||||||||||||||||||||||||||
Net income: | ||||||||||||||||||||||||||||||||
Basic | 6.69 | 3.73 | 0.62 | 3.72 | 3.65 | |||||||||||||||||||||||||||
Diluted (a) (b) (c) | 6.58 | 3.68 | 0.62 | 3.68 | 3.61 | |||||||||||||||||||||||||||
Cash dividend | 1.34 | 1.30 | 1.26 | 1.22 | 1.18 | |||||||||||||||||||||||||||
Year-End Position — June 30 | ||||||||||||||||||||||||||||||||
Working capital | $ | 859,902 | $ | 768,875 | $ | 733,686 | $ | 724,344 | $ | 625,469 | ||||||||||||||||||||||
Long-term debt (including portion classified as current) | 689,495 | 829,396 | 935,276 | 959,829 | 966,063 | |||||||||||||||||||||||||||
Total assets | 2,452,588 | 2,271,807 | 2,283,551 | 2,331,697 | 2,285,741 | |||||||||||||||||||||||||||
Shareholders’ equity | 1,149,355 | 932,546 | 843,542 | 897,034 | 814,963 | |||||||||||||||||||||||||||
Year-End Statistics — June 30 | ||||||||||||||||||||||||||||||||
Current ratio | 2.7 | 2.8 | 2.7 | 2.7 | 2.4 | |||||||||||||||||||||||||||
Operating facilities | 568 | 568 | 580 | 600 | 610 | |||||||||||||||||||||||||||
Shareholders of record | 3,344 | 3,535 | 3,772 | 4,165 | 4,323 | |||||||||||||||||||||||||||
Return on assets (a) (b) (c) (e) | 11.1 | % | 6.4 | % | 1.0 | % | 6.3 | % | 8.0 | % | ||||||||||||||||||||||
Return on equity (a) (b) (c) (f) | 24.7 | % | 16.3 | % | 2.8 | % | 16.8 | % | 18.2 | % | ||||||||||||||||||||||
Capital expenditures | $ | 18,124 | $ | 15,852 | $ | 20,115 | $ | 18,970 | $ | 23,230 | ||||||||||||||||||||||
Cash Returned to Shareholders During the Year | ||||||||||||||||||||||||||||||||
Dividends paid | $ | 51,805 | $ | 50,664 | $ | 48,873 | $ | 47,266 | $ | 45,858 | ||||||||||||||||||||||
Purchases of treasury shares | 13,784 | 40,089 | — | 11,158 | 22,778 | |||||||||||||||||||||||||||
Total | $ | 65,589 | $ | 90,753 | $ | 48,873 | $ | 58,424 | $ | 68,636 |
Index Reading | |||||||||||
Month | MCU | PMI | IP | ||||||||
June 2022 | 80.0 | 53.0 | 101.6 | ||||||||
May 2022 | 80.3 | 56.1 | 102.2 | ||||||||
April 2022 | 80.4 | 55.4 | 102.7 | ||||||||
March 2022 | 79.9 | 57.1 | 102.1 | ||||||||
December 2021 | 78.7 | 58.8 | 100.3 | ||||||||
September 2021 | 77.4 | 60.5 | 98.2 | ||||||||
June 2021 | 77.7 | 60.9 | 98.1 |
Year Ended June 30, As a % of Net Sales | Change in $'s Versus Prior Period | ||||||||||||||||
2022 | 2021 | % Change | |||||||||||||||
Net Sales | 100.0 | % | 100.0 | % | 17.8 | % | |||||||||||
Gross Profit Margin | 29.0 | % | 28.9 | % | 18.3 | % | |||||||||||
Selling, Distribution & Administrative Expense | 19.7 | % | 21.0 | % | 10.1 | % | |||||||||||
Operating Income | 9.4 | % | 6.3 | % | 74.2 | % | |||||||||||
Net Income | 6.8 | % | 4.5 | % | 77.8 | % |
Amounts in millions | Amount of change due to | |||||||||||||||||||
Year ended June 30, | Sales Increase | Acquisitions | Foreign Currency | Organic Change | ||||||||||||||||
Sales by Reportable Segment | 2022 | 2021 | ||||||||||||||||||
Service Center Based Distribution | $ | 2,565.6 | $ | 2,199.5 | $ | 366.1 | $ | — | $ | 2.4 | $ | 363.7 | ||||||||
Fluid Power & Flow Control | 1,245.1 | 1,036.4 | 208.7 | 34.1 | — | 174.6 | ||||||||||||||
Total | $ | 3,810.7 | $ | 3,235.9 | $ | 574.8 | $ | 34.1 | $ | 2.4 | $ | 538.3 |
Amounts in millions | Amount of change due to | |||||||||||||||||||
Year ended June 30, | Sales Increase | Acquisitions | Foreign Currency | Organic Change | ||||||||||||||||
Sales by Geographic Area | 2022 | 2021 | ||||||||||||||||||
United States | $ | 3,299.8 | $ | 2,782.9 | $ | 516.9 | $ | 34.1 | $ | — | $ | 482.8 | ||||||||
Canada | 291.5 | 255.4 | 36.2 | — | 2.8 | 33.4 | ||||||||||||||
Other Countries | 219.4 | 197.7 | 21.7 | — | (0.4) | 22.1 | ||||||||||||||
Total | $ | 3,810.7 | $ | 3,235.9 | $ | 574.8 | $ | 34.1 | $ | 2.4 | $ | 538.3 |
Amounts in millions | Amount of change due to | |||||||||||||||||||
Year ended June 30, | SD&A Increase | Acquisitions | Foreign Currency | Organic Change | ||||||||||||||||
2022 | 2021 | |||||||||||||||||||
SD&A | $ | 749.1 | $ | 680.5 | $ | 68.5 | $ | 9.3 | $ | 0.5 | $ | 58.7 |
Amounts in thousands | Year Ended June 30, | ||||||||||
2022 | 2021 | ||||||||||
Net Cash Provided by (Used in): | |||||||||||
Operating Activities | $ | 187,570 | $ | 241,697 | |||||||
Investing Activities | (35,658) | (44,930) | |||||||||
Financing Activities | (223,029) | (213,037) | |||||||||
Exchange Rate Effect | (2,154) | 5,464 | |||||||||
(Decrease) Increase in Cash and Cash Equivalents | $ | (73,271) | $ | (10,806) |
Accounts receivable | $ | (86,400) | |||
Inventory | $ | (133,743) | |||
Accounts payable | $ | 42,678 |
June 30, | 2022 | 2021 | |||||||||
Revolving credit facility | $ | 410,592 | $ | — | |||||||
Term Loan | — | 550,250 | |||||||||
Trade receivable securitization facility | 188,300 | 188,300 | |||||||||
Series C Notes | 40,000 | 40,000 | |||||||||
Series D Notes | 25,000 | 25,000 | |||||||||
Series E Notes | 25,000 | 25,000 | |||||||||
Other | 603 | 846 | |||||||||
Total debt | $ | 689,495 | $ | 829,396 | |||||||
Less: unamortized debt issuance costs | 171 | 1,016 | |||||||||
$ | 689,324 | $ | 828,380 |
June 30, | 2022 | 2021 | |||||||||
Accounts receivable, gross | $ | 673,951 | $ | 532,777 | |||||||
Allowance for doubtful accounts | 17,522 | 16,455 | |||||||||
Accounts receivable, net | $ | 656,429 | $ | 516,322 | |||||||
Allowance for doubtful accounts, % of gross receivables | 2.6 | % | 3.1 | % | |||||||
Year Ended June 30, | 2022 | 2021 | |||||||||
Provision for losses on accounts receivable | $ | 3,193 | $ | 6,540 | |||||||
Provision as a % of net sales | 0.08 | % | 0.20 | % |
Total | Period Less Than 1 yr | Period 2-3 yrs | Period 4-5 yrs | Period Over 5 yrs | Other | ||||||||||||||||||||||||||||||
Operating leases | $ | 119,834 | $ | 32,759 | $ | 46,514 | $ | 23,807 | $ | 16,754 | — | ||||||||||||||||||||||||
Planned funding of post-retirement obligations | 8,830 | 900 | 500 | 530 | 6,900 | — | |||||||||||||||||||||||||||||
Unrecognized income tax benefit liabilities, including interest and penalties | 5,800 | — | — | — | — | 5,800 | |||||||||||||||||||||||||||||
Long-term debt obligations | 689,495 | 40,247 | 238,656 | 410,592 | — | — | |||||||||||||||||||||||||||||
Interest on long-term debt obligations (1) | 74,300 | 19,700 | 32,800 | 21,800 | — | — | |||||||||||||||||||||||||||||
Acquisition holdback payments | 1,969 | 1,469 | 500 | — | — | — | |||||||||||||||||||||||||||||
Total Contractual Cash Obligations | $ | 900,228 | $ | 95,075 | $ | 318,970 | $ | 456,729 | $ | 23,654 | $ | 5,800 |
Year Ended June 30, | 2022 | 2021 | 2020 | |||||||||||||||||
Net sales | $ | $ | $ | |||||||||||||||||
Cost of sales | ||||||||||||||||||||
Gross profit | ||||||||||||||||||||
Selling, distribution and administrative expense, including depreciation | ||||||||||||||||||||
Impairment expense | ||||||||||||||||||||
Operating income | ||||||||||||||||||||
Interest expense | ||||||||||||||||||||
Interest income | ( | ( | ( | |||||||||||||||||
Other expense (income), net | ( | ( | ||||||||||||||||||
Income before income taxes | ||||||||||||||||||||
Income tax expense | ||||||||||||||||||||
Net income | $ | $ | $ | |||||||||||||||||
Net income per share — basic | $ | $ | $ | |||||||||||||||||
Net income per share — diluted | $ | $ | $ |
Year Ended June 30, | 2022 | 2021 | 2020 | |||||||||||||||||
Net income per the statements of consolidated income | $ | $ | $ | |||||||||||||||||
Other comprehensive income (loss), before tax: | ||||||||||||||||||||
Foreign currency translation adjustments | ( | ( | ||||||||||||||||||
Post-employment benefits: | ||||||||||||||||||||
Actuarial gain (loss) on re-measurement | ( | |||||||||||||||||||
Reclassification of actuarial losses (gains) and prior service cost into other expense (income), net and included in net periodic pension costs | ( | |||||||||||||||||||
Unrealized gain (loss) on cash flow hedge | ( | |||||||||||||||||||
Reclassification of interest from cash flow hedge into interest expense | ||||||||||||||||||||
Total other comprehensive income (loss), before tax | ( | |||||||||||||||||||
Income tax expense (benefit) related to items of other comprehensive loss | ( | |||||||||||||||||||
Other comprehensive income (loss), net of tax | ( | |||||||||||||||||||
Comprehensive income (loss) | $ | $ | $ | ( |
June 30, | 2022 | 2021 | ||||||||||||
Assets | ||||||||||||||
Current assets | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Accounts receivable, net | ||||||||||||||
Inventories | ||||||||||||||
Other current assets | ||||||||||||||
Total current assets | ||||||||||||||
Property — at cost | ||||||||||||||
Land | ||||||||||||||
Buildings | ||||||||||||||
Equipment, including computers and software | ||||||||||||||
Total property — at cost | ||||||||||||||
Less accumulated depreciation | ||||||||||||||
Property — net | ||||||||||||||
Operating lease assets, net | ||||||||||||||
Identifiable intangibles, net | ||||||||||||||
Goodwill | ||||||||||||||
Other assets | ||||||||||||||
Total Assets | $ | $ | ||||||||||||
Liabilities | ||||||||||||||
Current liabilities | ||||||||||||||
Accounts payable | $ | $ | ||||||||||||
Current portion of long-term debt | ||||||||||||||
Compensation and related benefits | ||||||||||||||
Other current liabilities | ||||||||||||||
Total current liabilities | ||||||||||||||
Long-term debt | ||||||||||||||
Other liabilities | ||||||||||||||
Total Liabilities | ||||||||||||||
Shareholders’ Equity | ||||||||||||||
Preferred stock — no par value; | ||||||||||||||
Common stock — no par value; | ||||||||||||||
Additional paid-in capital | ||||||||||||||
Retained earnings | ||||||||||||||
Treasury shares — at cost ( | ( | ( | ||||||||||||
Accumulated other comprehensive loss | ( | ( | ||||||||||||
Total Shareholders’ Equity | ||||||||||||||
Total Liabilities and Shareholders’ Equity | $ | $ |
Year Ended June 30, | 2022 | 2021 | 2020 | |||||||||||||||||
Cash Flows from Operating Activities | ||||||||||||||||||||
Net income | $ | $ | $ | |||||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||||||
Impairment Expense | ||||||||||||||||||||
Depreciation and amortization of property | ||||||||||||||||||||
Amortization of intangibles | ||||||||||||||||||||
Amortization of stock appreciation rights and options | ||||||||||||||||||||
Deferred income taxes | ( | ( | ||||||||||||||||||
Provision for losses on accounts receivable | ||||||||||||||||||||
Other share-based compensation expense | ||||||||||||||||||||
Other | ( | ( | ||||||||||||||||||
Changes in operating assets and liabilities, net of acquisitions: | ||||||||||||||||||||
Accounts receivable | ( | ( | ||||||||||||||||||
Inventories | ( | |||||||||||||||||||
Other operating assets | ( | ( | ( | |||||||||||||||||
Accounts payable | ( | |||||||||||||||||||
Other operating liabilities | ||||||||||||||||||||
Cash provided by Operating Activities | ||||||||||||||||||||
Cash Flows from Investing Activities | ||||||||||||||||||||
Cash paid for acquisition of businesses, net of cash acquired | ( | ( | ( | |||||||||||||||||
Capital expenditures | ( | ( | ( | |||||||||||||||||
Proceeds from property sales | ||||||||||||||||||||
Life insurance proceeds | ||||||||||||||||||||
Cash payments for loans on company-owned life insurance | ( | |||||||||||||||||||
Cash used in Investing Activities | ( | ( | ( | |||||||||||||||||
Cash Flows from Financing Activities | ||||||||||||||||||||
Net borrowings under revolving credit facility | ||||||||||||||||||||
Borrowings under long-term debt facilities | ||||||||||||||||||||
Long-term debt repayments | ( | ( | ( | |||||||||||||||||
Interest rate swap settlement payments | ( | ( | ||||||||||||||||||
Payment of debt issuance costs | ( | ( | ( | |||||||||||||||||
Purchases of treasury shares | ( | ( | ||||||||||||||||||
Dividends paid | ( | ( | ( | |||||||||||||||||
Acquisition holdback payments | ( | ( | ( | |||||||||||||||||
Exercise of stock appreciation rights and options | ||||||||||||||||||||
Taxes paid for shares withheld | ( | ( | ( | |||||||||||||||||
Cash used in Financing Activities | ( | ( | ( | |||||||||||||||||
Effect of exchange rate changes on cash | ( | ( | ||||||||||||||||||
(Decrease) increase in cash and cash equivalents | ( | ( | ||||||||||||||||||
Cash and cash equivalents at beginning of year | ||||||||||||||||||||
Cash and Cash Equivalents at End of Year | $ | $ | $ | |||||||||||||||||
Supplemental Cash Flow Information | ||||||||||||||||||||
Cash paid during the year for: | ||||||||||||||||||||
Income taxes | $ | $ | $ | |||||||||||||||||
Interest | $ | $ | $ |
For the Years Ended June 30, 2022, 2021 and 2020 | Shares of Common Stock Outstanding | Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Shares- at Cost | Accumulated Other Comprehensive Loss | Total Shareholders' Equity | |||||||||||||||||||||||||||||||||||||
Balance at June 30, 2019 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Net income | ||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Cumulative effect of adopting accounting standards | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Cash dividends — $ | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Treasury shares issued for: | ||||||||||||||||||||||||||||||||||||||||||||
Exercise of stock appreciation rights and options | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Performance share awards | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Restricted stock units | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Compensation expense — stock appreciation rights and options | ||||||||||||||||||||||||||||||||||||||||||||
Other share-based compensation expense | ||||||||||||||||||||||||||||||||||||||||||||
Other | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2020 | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Net income | ||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | ||||||||||||||||||||||||||||||||||||||||||||
Cash dividends — $ | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Purchases of common stock for treasury | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
Treasury shares issued for: | ||||||||||||||||||||||||||||||||||||||||||||
Exercise of stock appreciation rights and options | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
Performance share awards | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
Restricted stock units | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Compensation expense — stock appreciation rights and options | ||||||||||||||||||||||||||||||||||||||||||||
Other share-based compensation expense | ||||||||||||||||||||||||||||||||||||||||||||
Other | ( | |||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2021 | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Net income | ||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | ||||||||||||||||||||||||||||||||||||||||||||
Cash dividends — $ | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Purchases of common stock for treasury | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
Treasury shares issued for: | ||||||||||||||||||||||||||||||||||||||||||||
Exercise of stock appreciation rights and options | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
Performance share awards | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
Restricted stock units | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
Compensation expense — stock appreciation rights and options | ||||||||||||||||||||||||||||||||||||||||||||
Other share-based compensation expense | ||||||||||||||||||||||||||||||||||||||||||||
Other | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2022 | $ | $ | $ | $ | ( | $ | ( | $ |
Year Ended June 30, 2022 | |||||||||||
Service Center Based Distribution | Fluid Power & Flow Control | Total | |||||||||
Geographic Areas: | |||||||||||
United States | $ | $ | $ | ||||||||
Canada | |||||||||||
Other Countries | |||||||||||
Total | $ | $ | $ |
Year Ended June 30, 2021 | |||||||||||
Service Center Based Distribution | Fluid Power & Flow Control | Total | |||||||||
Geographic Areas: | |||||||||||
United States | $ | $ | $ | ||||||||
Canada | |||||||||||
Other Countries | |||||||||||
Total | $ | $ | $ |
Year Ended June 30, 2020 | |||||||||||
Service Center Based Distribution | Fluid Power & Flow Control | Total | |||||||||
Geographic Areas: | |||||||||||
United States | $ | $ | $ | ||||||||
Canada | |||||||||||
Other Countries | |||||||||||
Total | $ | $ | $ |
Year Ended June 30, 2022 | |||||||||||||||||
Service Center Based Distribution | Fluid Power & Flow Control | Total | |||||||||||||||
General Industry | % | % | % | ||||||||||||||
Industrial Machinery | % | % | % | ||||||||||||||
Metals | % | % | % | ||||||||||||||
Food | % | % | % | ||||||||||||||
Forest Products | % | % | % | ||||||||||||||
Chem/Petrochem | % | % | % | ||||||||||||||
Cement & Aggregate | % | % | % | ||||||||||||||
Oil & Gas | % | % | % | ||||||||||||||
Transportation | % | % | % | ||||||||||||||
Total | % | % | % |
Year Ended June 30, 2021 | |||||||||||||||||
Service Center Based Distribution | Fluid Power & Flow Control | Total | |||||||||||||||
General Industry | % | % | % | ||||||||||||||
Industrial Machinery | % | % | % | ||||||||||||||
Metals | % | % | % | ||||||||||||||
Food | % | % | % | ||||||||||||||
Forest Products | % | % | % | ||||||||||||||
Chem/Petrochem | % | % | % | ||||||||||||||
Cement & Aggregate | % | % | % | ||||||||||||||
Oil & Gas | % | % | % | ||||||||||||||
Transportation | % | % | % | ||||||||||||||
Total | % | % | % |
Year Ended June 30, 2020 | |||||||||||||||||
Service Center Based Distribution | Fluid Power & Flow Control | Total | |||||||||||||||
General Industry | % | % | % | ||||||||||||||
Industrial Machinery | % | % | % | ||||||||||||||
Metals | % | % | % | ||||||||||||||
Food | % | % | % | ||||||||||||||
Forest Products | % | % | % | ||||||||||||||
Chem/Petrochem | % | % | % | ||||||||||||||
Cement & Aggregate | % | % | % | ||||||||||||||
Oil & Gas | % | % | % | ||||||||||||||
Transportation | % | % | % | ||||||||||||||
Total | % | % | % |
Year Ended June 30, 2022 | |||||||||||||||||
Service Center Based Distribution | Fluid Power & Flow Control | Total | |||||||||||||||
Power Transmission | % | % | % | ||||||||||||||
Fluid Power | % | % | % | ||||||||||||||
General Maintenance; Hose Products | % | % | % | ||||||||||||||
Bearings, Linear & Seals | % | % | % | ||||||||||||||
Specialty Flow Control | % | % | % | ||||||||||||||
Total | % | % | % |
Year Ended June 30, 2021 | |||||||||||||||||
Service Center Based Distribution | Fluid Power & Flow Control | Total | |||||||||||||||
Power Transmission | % | % | % | ||||||||||||||
Fluid Power | % | % | % | ||||||||||||||
General Maintenance; Hose Products | % | % | % | ||||||||||||||
Bearings, Linear & Seals | % | % | % | ||||||||||||||
Specialty Flow Control | % | % | % | ||||||||||||||
Total | % | % | % |
Year Ended June 30, 2020 | |||||||||||||||||
Service Center Based Distribution | Fluid Power & Flow Control | Total | |||||||||||||||
Power Transmission | % | % | % | ||||||||||||||
Fluid Power | % | % | % | ||||||||||||||
General Maintenance; Hose Products | % | % | % | ||||||||||||||
Bearings, Linear & Seals | % | % | % | ||||||||||||||
Specialty Flow Control | % | % | % | ||||||||||||||
Total | % | % | % |
June 30, 2022 | June 30, 2021 | $ Change | % Change | |||||||||||
Contract assets | $ | $ | $ | % |
June 30, | 2022 | 2021 | ||||||||||||
U.S. inventories at average cost | $ | $ | ||||||||||||
Foreign inventories at average cost | ||||||||||||||
Less: Excess of average cost over LIFO cost for U.S. inventories | ||||||||||||||
Inventories on consolidated balance sheets | $ | $ |
Service Center Based Distribution | Fluid Power & Flow Control | Total | |||||||||||||||
Balance at July 1, 2020 | $ | $ | $ | ||||||||||||||
Goodwill acquired during the year | |||||||||||||||||
Other, primarily currency translation | |||||||||||||||||
Balance at June 30, 2021 | |||||||||||||||||
Goodwill acquired during the year | |||||||||||||||||
Other, primarily currency translation | ( | ( | |||||||||||||||
Balance at June 30, 2022 | $ | $ | $ |
June 30, 2022 | Amount | Accumulated Amortization | Net Book Value | ||||||||||||||
Finite-Lived Intangibles: | |||||||||||||||||
Customer relationships | $ | $ | $ | ||||||||||||||
Trade names | |||||||||||||||||
Vendor relationships | |||||||||||||||||
Other | |||||||||||||||||
Total Intangibles | $ | $ | $ |
June 30, 2021 | Amount | Accumulated Amortization | Net Book Value | ||||||||||||||
Finite-Lived Intangibles: | |||||||||||||||||
Customer relationships | $ | $ | $ | ||||||||||||||
Trade names | |||||||||||||||||
Vendor relationships | |||||||||||||||||
Other | |||||||||||||||||
Total Intangibles | $ | $ | $ |
Acquisition Cost Allocation | Weighted-Average Life | ||||||||||
Customer relationships | $ | ||||||||||
Trade names | |||||||||||
Other | |||||||||||
Total Intangibles Acquired | $ |
June 30, | 2022 | 2021 | |||||||||
Revolving credit facility | $ | $ | |||||||||
Term Loan | |||||||||||
Trade receivable securitization facility | |||||||||||
Series C Notes | |||||||||||
Series D Notes | |||||||||||
Series E Notes | |||||||||||
Other | |||||||||||
Total debt | $ | $ | |||||||||
Less: unamortized debt issuance costs | |||||||||||
$ | $ |
Fiscal Year | Aggregate Maturity | ||||
2023 | $ | ||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 | |||||
Year Ended June 30, | 2022 | 2021 | 2020 | ||||||||||||||
U.S. | $ | $ | $ | ||||||||||||||
Foreign | |||||||||||||||||
Income before income taxes | $ | $ | $ |
Year Ended June 30, | 2022 | 2021 | 2020 | ||||||||||||||
Current: | |||||||||||||||||
Federal | $ | $ | $ | ||||||||||||||
State and local | |||||||||||||||||
Foreign | |||||||||||||||||
Total current | |||||||||||||||||
Deferred: | |||||||||||||||||
Federal | ( | ( | |||||||||||||||
State and local | ( | ( | |||||||||||||||
Foreign | ( | ( | |||||||||||||||
Total deferred | ( | ( | |||||||||||||||
Total | $ | $ | $ |
Year Ended June 30, | 2022 | 2021 | 2020 | ||||||||||||||
Statutory income tax rate | % | % | % | ||||||||||||||
Effects of: | |||||||||||||||||
State and local taxes | |||||||||||||||||
U.S. federal tax reform/CARES Act NOL carryback | ( | ||||||||||||||||
Goodwill impairment | |||||||||||||||||
Stock compensation | ( | ( | ( | ||||||||||||||
GILTI/FDII | |||||||||||||||||
R & D credit | ( | ( | ( | ||||||||||||||
U.S. tax on foreign income, net | ( | ( | ( | ||||||||||||||
Impact of foreign operations | |||||||||||||||||
Non-deductibles/Deductible dividend | |||||||||||||||||
Interest deduction | ( | ( | ( | ||||||||||||||
Valuation allowance | ( | ||||||||||||||||
Other, net | ( | ||||||||||||||||
Effective income tax rate | % | % | % |
June 30, | 2022 | 2021 | |||||||||
Deferred tax assets: | |||||||||||
Compensation liabilities not currently deductible | $ | $ | |||||||||
Other expenses and reserves not currently deductible | |||||||||||
Leases | |||||||||||
Net operating loss carryforwards | |||||||||||
Hedging instrument | |||||||||||
Other | |||||||||||
Total deferred tax assets | $ | $ | |||||||||
Less: Valuation allowance | ( | ( | |||||||||
Deferred tax assets, net of valuation allowance | $ | $ | |||||||||
Deferred tax liabilities: | |||||||||||
Inventories | $ | ( | $ | ( | |||||||
Goodwill and intangibles | ( | ( | |||||||||
Leases | ( | ( | |||||||||
Hedging instrument | ( | ||||||||||
Depreciation and differences in property bases | ( | ( | |||||||||
Total deferred tax liabilities | ( | ( | |||||||||
Net deferred tax liabilities | $ | ( | $ | ( | |||||||
Net deferred tax liabilities are classified as follows: | |||||||||||
Other assets | $ | $ | |||||||||
Other liabilities | ( | ( | |||||||||
Net deferred tax liabilities | $ | ( | $ | ( |
Year Ended June 30, | 2022 | 2021 | 2020 | ||||||||||||||
Unrecognized Income Tax Benefits at beginning of the year | $ | $ | $ | ||||||||||||||
Current year tax positions | |||||||||||||||||
Prior year tax positions | ( | ||||||||||||||||
Expirations of statutes of limitations | ( | ( | ( | ||||||||||||||
Unrecognized Income Tax Benefits at end of year | $ | $ | $ |
Foreign currency translation adjustment | Post-employment benefits | Cash flow hedge | Total accumulated other comprehensive loss | ||||||||||||||||||||
Balance at July 1, 2019 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other comprehensive loss | ( | ( | ( | ( | |||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss | ( | ||||||||||||||||||||||
Net current-period other comprehensive loss | ( | ( | ( | ( | |||||||||||||||||||
Balance at June 30, 2020 | ( | ( | ( | ( | |||||||||||||||||||
Other comprehensive income | |||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss | |||||||||||||||||||||||
Net current-period other comprehensive income | |||||||||||||||||||||||
Balance at June 30, 2021 | ( | ( | ( | ( | |||||||||||||||||||
Other comprehensive (loss) income | ( | ||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss | |||||||||||||||||||||||
Net current-period other comprehensive (loss) income | ( | ||||||||||||||||||||||
Balance at June 30, 2022 | $ | ( | $ | ( | $ | $ | ( |
Year Ended June 30, | 2022 | 2021 | 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pre-Tax Amount | Tax Expense | Net Amount | Pre-Tax Amount | Tax Expense | Net Amount | Pre-Tax Amount | Tax Expense (Benefit) | Net Amount | |||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | $ | ( | $ | $ | ( | $ | $ | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||||||||||||||
Post-employment benefits: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Actuarial gain (loss) on re-measurement | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Reclassification of actuarial losses (gains) and prior service cost into other expense (income), net and included in net periodic pension costs | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized gain (loss) on cash flow hedge | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Reclassification of interest from cash flow hedge into interest expense | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | $ | $ | $ | $ | $ | $ | $ | ( | $ | ( | $ | ( |
Year Ended June 30, | 2022 | 2021 | 2020 | ||||||||||||||
Net Income | $ | $ | $ | ||||||||||||||
Average Shares Outstanding: | |||||||||||||||||
Weighted-average common shares outstanding for basic computation | |||||||||||||||||
Dilutive effect of potential common shares | |||||||||||||||||
Weighted-average common shares outstanding for dilutive computation | |||||||||||||||||
Net Income Per Share — Basic | $ | $ | $ | ||||||||||||||
Net Income Per Share — Diluted | $ | $ | $ |
Year Ended June 30, | 2022 | 2021 | 2020 | ||||||||||||||
SARs | $ | $ | $ | ||||||||||||||
Performance shares | |||||||||||||||||
Restricted stock and RSUs | |||||||||||||||||
Total compensation costs under award programs | $ | $ | $ |
June 30, | 2022 | Average Expected Period of Expected Recognition (Years) | |||||||||
SARs | $ | ||||||||||
Performance shares | |||||||||||
Restricted stock and RSUs | |||||||||||
Total unrecognized compensation costs under award programs | $ |
2022 | 2021 | 2020 | |||||||||||||||
Expected life, in years | |||||||||||||||||
Risk free interest rate | % | % | % | ||||||||||||||
Dividend yield | % | % | % | ||||||||||||||
Volatility | % | % | % | ||||||||||||||
Per share fair value of SARs granted during the year | $ | $ | $ |
Shares | Weighted-Average Exercise Price | ||||||||||
Year Ended June 30, 2022 | |||||||||||
(Shares in thousands) | |||||||||||
Outstanding, beginning of year | $ | ||||||||||
Granted | |||||||||||
Exercised | ( | ||||||||||
Forfeited | ( | ||||||||||
Outstanding, end of year | $ | ||||||||||
Exercisable at end of year | $ | ||||||||||
Expected to vest at end of year | $ |
Shares | Weighted-Average Grant-Date Fair Value | ||||||||||
Year Ended June 30, 2022 | |||||||||||
(Shares in thousands) | |||||||||||
Non-vested, beginning of year | $ | ||||||||||
Awarded | |||||||||||
Vested | ( | ||||||||||
Non-vested, end of year | $ |
Shares | Weighted-Average Grant-Date Fair Value | ||||||||||
Year Ended June 30, 2022 | |||||||||||
(Share amounts in thousands) | |||||||||||
Non-vested, beginning of year | $ | ||||||||||
Granted | |||||||||||
Forfeitures | ( | ||||||||||
Vested | ( | ||||||||||
Non-vested, end of year | $ |
June 30, | 2022 | 2021 | ||||||||||||
Operating lease assets, net | $ | $ | ||||||||||||
Operating lease liabilities | ||||||||||||||
Other current liabilities | $ | $ | ||||||||||||
Other liabilities | ||||||||||||||
Total operating lease liabilities | $ | $ |
June 30, | 2022 | 2021 | ||||||||||||
Weighted average remaining lease term (years) | ||||||||||||||
Weighted average incremental borrowing rate | % | % |
Year Ended June 30, | 2022 | 2021 | ||||||||||||
Cash paid for operating leases | $ | $ | ||||||||||||
Right of use assets obtained in exchange for new operating lease liabilities | $ | $ |
Fiscal Year | Maturity of Operating Lease Liabilities | ||||
2023 | $ | ||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 | |||||
Thereafter | |||||
Total lease payments | |||||
Less interest | |||||
Present value of lease liabilities | $ |
Service Center Based Distribution | Fluid Power & Flow Control | Total | |||||||||||||||
Year Ended June 30, 2022 | |||||||||||||||||
Net sales | $ | $ | $ | ||||||||||||||
Operating income for reportable segments | |||||||||||||||||
Assets used in the business | |||||||||||||||||
Depreciation and amortization of property | |||||||||||||||||
Capital expenditures | |||||||||||||||||
Year Ended June 30, 2021 | |||||||||||||||||
Net sales | $ | $ | $ | ||||||||||||||
Operating income for reportable segments | |||||||||||||||||
Assets used in the business | |||||||||||||||||
Depreciation and amortization of property | |||||||||||||||||
Capital expenditures | |||||||||||||||||
Year Ended June 30, 2020 | |||||||||||||||||
Net sales | $ | $ | $ | ||||||||||||||
Operating income for reportable segments | |||||||||||||||||
Assets used in the business | |||||||||||||||||
Depreciation and amortization of property | |||||||||||||||||
Capital expenditures |
Year Ended June 30, | 2022 | 2021 | 2020 | ||||||||||||||
Operating income for reportable segments | $ | $ | $ | ||||||||||||||
Adjustments for: | |||||||||||||||||
Intangible amortization — Service Center Based Distribution | |||||||||||||||||
Intangible amortization — Fluid Power & Flow Control | |||||||||||||||||
Impairment — Service Center Based Distribution | |||||||||||||||||
Impairment — Fluid Power & Flow Control | |||||||||||||||||
Corporate and other expense, net | |||||||||||||||||
Total operating income | |||||||||||||||||
Interest expense, net | |||||||||||||||||
Other expense (income), net | ( | ( | |||||||||||||||
Income before income taxes | $ | $ | $ |
June 30, | 2022 | 2021 | 2020 | ||||||||||||||
Long-Lived Assets: | |||||||||||||||||
United States | $ | $ | $ | ||||||||||||||
Canada | |||||||||||||||||
Other Countries | |||||||||||||||||
Total | $ | $ | $ |
Year Ended June 30, | 2022 | 2021 | 2020 | ||||||||||||||
Unrealized loss (gain) on assets held in rabbi trust for a non-qualified deferred compensation plan | $ | $ | ( | $ | ( | ||||||||||||
Foreign currency transaction (gains) losses | ( | ( | |||||||||||||||
Net other periodic post-employment costs (benefits) | ( | ||||||||||||||||
Life insurance (income) expense, net | ( | ( | |||||||||||||||
Other, net | ( | ||||||||||||||||
Total other expense (income), net | $ | $ | ( | $ | ( |
/s/ Neil A. Schrimsher | /s/ David K. Wells | |||||||
President & Chief Executive Officer | Vice President - Chief Financial Officer & Treasurer |
Plan Category | Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights | Weighted- Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans | |||||||||||||||||||||||
Equity compensation plans approved by security holders | 960,083 | $61.77 | * | |||||||||||||||||||||||
Equity compensation plans not approved by security holders | — | — | — | |||||||||||||||||||||||
Total | 960,083 | $61.77 | * |
• | Report of Independent Registered Public Accounting Firm | |||||||
• | Statements of Consolidated Income for the Years Ended June 30, 2022, 2021, and 2020 | |||||||
• | Statements of Consolidated Comprehensive Income for the Years Ended June 30, 2022, 2021, and 2020 | |||||||
• | Consolidated Balance Sheets at June 30, 2022 and 2021 | |||||||
• | Statements of Consolidated Cash Flows for the Years Ended June 30, 2022, 2021, and 2020 | |||||||
• | Statements of Consolidated Shareholders' Equity For the Years Ended June 30, 2022, 2021, and 2020 | |||||||
• | Notes to Consolidated Financial Statements for the Years Ended June 30, 2022, 2021, and 2020 | |||||||
• | Supplementary Data: |
Page No. | ||||||||
Schedule II - Valuation and Qualifying Accounts: Pg. 69 |
* Asterisk indicates an executive compensation plan or arrangement. | |||||||||||
Exhibit No. | Description | ||||||||||
3.1 | |||||||||||
3.2 | |||||||||||
4.1 | |||||||||||
4.2 | |||||||||||
4.3 | |||||||||||
4.4 | |||||||||||
4.5 | |||||||||||
4.6 | |||||||||||
4.7 | |||||||||||
4.8 | |||||||||||
4.9 | |||||||||||
4.10 | Amendment No. 1 to Purchase and Sale Agreement dated as of November 19, 2018 among Applied Industrial Technologies, Inc. and various of its affiliates, as originators, Applied Industrial Technologies, Inc., as servicer, and AIT Receivables LLC, as buyer(filed as Exhibit 4.10 to Applied's Form 10-Q for the quarter ended March 31, 2021, SEC File No. 1-2299, and incorporated here by reference). | ||||||||||
4.11 | |||||||||||
4.12 | |||||||||||
*10.1 | A written description of Applied's director compensation program is incorporated by reference to Applied’s proxy statement for the annual meeting of shareholders to be held October 25, 2022 under the caption “Director Compensation.” | ||||||||||
*10.2 | |||||||||||
*10.3 | |||||||||||
*10.4 | |||||||||||
*10.5 | |||||||||||
*10.6 | |||||||||||
*10.7 | |||||||||||
*10.8 | |||||||||||
*10.9 | |||||||||||
*10.10 | |||||||||||
*10.11 |
*10.12 | |||||||||||
*10.13 | |||||||||||
*10.14 | |||||||||||
*10.15 | |||||||||||
*10.16 | |||||||||||
*10.17 | |||||||||||
*10.18 | |||||||||||
*10.19 | |||||||||||
*10.20 | |||||||||||
*10.21 | |||||||||||
*10.22 | |||||||||||
*10.23 | |||||||||||
*10.24 | |||||||||||
*10.25 | |||||||||||
*10.26 | |||||||||||
*10.27 | |||||||||||
*10.28 | |||||||||||
*10.29 | |||||||||||
*10.30 | |||||||||||
*10.31 | |||||||||||
21 | |||||||||||
23 | |||||||||||
24 | |||||||||||
31 | |||||||||||
32 | |||||||||||
95 | |||||||||||
101 | The following financial information from Applied Industrial Technologies, Inc.'s Annual Report on Form 10-K for the year ended June 30, 2022, formatted in Inline XBRL (Extensible Business Reporting Language) includes: (i) the Statements of Consolidated Income, (ii) the Statements of Consolidated Comprehensive Income, (iii) the Consolidated Balance Sheets, (iv) the Statements of Consolidated Cash Flows, (v) the Statements of Consolidated Shareholders' Equity, and (vi) the Notes to the Consolidated Financial Statements. | ||||||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
COLUMN A | COLUMN B | COLUMN C | COLUMN D | COLUMN E | ||||||||||||||||||||||||||||||||||
DESCRIPTION | Balance at Beginning of Period | Additions Charged to Cost and Expenses | Additions (Deductions) Charged to Other Accounts | Deductions from Reserve | Balance at End of Period | |||||||||||||||||||||||||||||||||
Year Ended June 30, 2022 | ||||||||||||||||||||||||||||||||||||||
Reserve deducted from assets to which it applies — | ||||||||||||||||||||||||||||||||||||||
Accounts receivable: | ||||||||||||||||||||||||||||||||||||||
Allowance for doubtful accounts | $ | $ | $ | $ | (B) | $ | ||||||||||||||||||||||||||||||||
Returns reserve | (A) | |||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Year Ended June 30, 2021 | ||||||||||||||||||||||||||||||||||||||
Reserve deducted from assets to which it applies — | ||||||||||||||||||||||||||||||||||||||
Accounts receivable: | ||||||||||||||||||||||||||||||||||||||
Allowance for doubtful accounts | $ | $ | $ | $ | (B) | $ | ||||||||||||||||||||||||||||||||
Returns reserve | ( | (A) | ||||||||||||||||||||||||||||||||||||
$ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||
Year Ended June 30, 2020 | ||||||||||||||||||||||||||||||||||||||
Reserve deducted from assets to which it applies — | ||||||||||||||||||||||||||||||||||||||
Accounts receivable: | ||||||||||||||||||||||||||||||||||||||
Allowance for doubtful accounts | $ | $ | $ | $ | (B) | $ | ||||||||||||||||||||||||||||||||
Returns reserve | (A) | |||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ |
/s/ Neil A. Schrimsher | /s/ David K. Wells | |||||||
Neil A. Schrimsher President & Chief Executive Officer | David K. Wells Vice President-Chief Financial Officer & Treasurer | |||||||
/s/ Christopher Macey | ||||||||
Christopher Macey Corporate Controller (Principal Accounting Officer) |
* | ||||||||
Madhuri A. Andrews, Director | Shelly M. Chadwick, Director | |||||||
* | * | |||||||
Mary Dean Hall, Director | Dan P. Komnenovich, Director | |||||||
* | * | |||||||
Robert J. Pagano, Jr., Director | Vincent K. Petrella, Director | |||||||
* | /s/ Neil A. Schrimsher | |||||||
Joe A. Raver, Director | Neil A. Schrimsher, President & Chief Executive Officer and Director | |||||||
* | ||||||||
Peter C. Wallace, Director and Chairman |
/s/ Fred D. Bauer | ||
Fred D. Bauer, as attorney in fact | ||
for persons indicated by “*” |
Name | Jurisdiction of Incorporation or Organization | |||||||
* Air Draulics Engineering Co. | Tennessee | |||||||
AIT Canada, ULC | Nova Scotia | |||||||
AIT Holding Corp. | Alberta | |||||||
AIT International Inc. | Ohio | |||||||
AIT Receivables LLC | Delaware | |||||||
* Advanced Control Solutions & Automation, Inc. | Ohio | |||||||
Applied Australia Holdings Pty Ltd. | Australia | |||||||
Applied Canada Holdings, ULC | Nova Scotia | |||||||
* Applied Fluid Power Holdings, LLC | Ohio | |||||||
Applied Industrial Technologies - CA LLC | Delaware | |||||||
Applied Industrial Technologies - Capital, Inc. | Delaware | |||||||
Applied Industrial Technologies - Dixie, Inc. | Tennessee | |||||||
Applied Industrial Technologies, LP | Ontario | |||||||
Applied Industrial Technologies Limited | New Zealand | |||||||
Applied Industrial Technologies - PA LLC | Pennsylvania | |||||||
Applied Industrial Technologies - PACIFIC LLC | Delaware | |||||||
Applied Industrial Technologies Canada, ULC | Nova Scotia | |||||||
Applied Industrial Technologies Pty Ltd. | Australia | |||||||
* Applied Maintenance Supplies & Solutions, LLC | Ohio | |||||||
* Applied México, S.A. de C.V. (97%-owned by subsidiaries of Applied Industrial Technologies, Inc.) | Mexico | |||||||
Applied Mexico Holdings, S.A. de C.V. | Mexico | |||||||
Applied Northern Holdings, ULC | Nova Scotia | |||||||
Applied Nova Scotia Company | Nova Scotia | |||||||
Applied US, L.P. | Delaware | |||||||
* Applied US Energy, Inc. | Ohio | |||||||
* Applied US Energy-Oklahoma, LLC | Ohio | |||||||
* Atlantic Fasteners Co., LLC | Ohio | |||||||
BER International, Inc. | Barbados | |||||||
* Baro Controls, Inc. | Texas | |||||||
* Baro Process Products, Inc. | Texas | |||||||
* Basin Engine & Pump, Inc. | Texas | |||||||
* Bay Advanced Technologies, LLC | Ohio | |||||||
* Bay Advanced Technologies Singapore Pte. Ltd. | Singapore | |||||||
Bearing Sales & Services Inc. | Washington | |||||||
Bearings Pan American, Inc. | Ohio | |||||||
* Carolina Fluid Components, LLC | Ohio | |||||||
* Corrosion Fluid Products Corp. | Michigan | |||||||
* DTS Fluid Power, LLC | Ohio | |||||||
* Disenos Construcciones y Fabricaciones Hispanoamericanas, S.A. | Mexico | |||||||
* Eads Distribution, LLC | Delaware | |||||||
* ESI Acquisition Corporation (d/b/a Engineered Sales, Inc., ESI Power Hydraulics, and Applied Engineered Systems) | Ohio | |||||||
* FCX Performance, Inc. | Ohio | |||||||
* Fluid Power Sales, LLC | Ohio | |||||||
* FluidTech, LLC | Ohio | |||||||
* Gibson Engineering Company, Inc. | Massachusetts | |||||||
* HUB Industrial Supply, LLC | Ohio | |||||||
* Hughes Machinery Company | Missouri | |||||||
* HydroAir Hughes, LLC | Ohio | |||||||
* HyQuip, LLC | Ohio | |||||||
* Olympus Controls Corp. | Oregon | |||||||
* Power Systems AHS, LLC | Ohio | |||||||
* Pump Energy, Inc. | Delaware | |||||||
* Pump Pros, Inc. | Ohio | |||||||
* R. L. Stone Company, Inc. | New York | |||||||
* R. R. Floody Company, Inc. | Ohio | |||||||
* Rafael Benitez Carrillo Inc. | Puerto Rico | |||||||
* Rodensa Mexico S.A. de C.V. | Mexico | |||||||
* S. G. Morris Co., LLC | Ohio | |||||||
* Seals Unlimited Holding Co., Inc. | Ontario | |||||||
* Seals Unlimited (1976) Incorporated | Ontario | |||||||
* Sentinel Fluid Controls, LLC | Ohio | |||||||
* Spencer Fluid Power, Inc. | Ohio | |||||||
* Texas Oilpatch Services, LLC | Ohio | |||||||
* VYCMEX Mexico, S.A. de C.V. | Mexico | |||||||
* Operating companies that do not conduct business under Applied Industrial Technologies trade name |
Date: 8/11/2022 | By: /s/ Madhuri A. Andrews |
Date: 8/08/2022 | By: /s/ Mary Dean Hall |
Date: 8/08/2022 | By: /s/ D. P. Komnenovich |
Date: 8/08/2022 | By: /s/ Robert J. Pagano, Jr. |
Date: 8/11/2022 | By: /s/ Vincent K. Petrella |
Date: 8/08/2022 | By: /s/ Joe A. Raver |
Date: 8/08/2022 | By: /s/ Peter C. Wallace |
1 | I have reviewed this annual report on Form 10-K of Applied Industrial Technologies, Inc.; | |||||||
2 | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |||||||
3 | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |||||||
4 | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | |||||||
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |||||||
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |||||||
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |||||||
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and | |||||||
5 | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function): | |||||||
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and | |||||||
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: August 12, 2022 | /s/ Neil A. Schrimsher | |||||||
Neil A. Schrimsher | ||||||||
President & Chief Executive Officer |
1 | I have reviewed this annual report on Form 10-K of Applied Industrial Technologies, Inc.; | |||||||
2 | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |||||||
3 | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |||||||
4 | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | |||||||
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |||||||
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |||||||
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |||||||
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and | |||||||
5 | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function): | |||||||
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and | |||||||
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: August 12, 2022 | /s/ David K. Wells | |||||||
David K. Wells | ||||||||
Vice President-Chief Financial Officer & Treasurer |
/s/ Neil A. Schrimsher | /s/ David K. Wells | |||||||
Neil A. Schrimsher President & Chief Executive Officer | David K. Wells Vice President-Chief Financial Officer & Treasurer | |||||||
Dated: August 12, 2022 |
Mine or Operating Name / MSHA Identification Number | (#) Section 104 S&S Citations | (#) Section 104(b) Orders | (#) Section 104(d) Citations and Orders | (#) Section 110(b)(2) Violations | (#) Section 107(a) Orders | ($) Total Dollar Value of MSHA Assessments Proposed | (#) Total Number of Mining Related Fatalities | (yes/no) Received Notice of Pattern of Violations Under Section 104(e) | (yes/no) Received Notice of Potential to Have Pattern Under Section 104(e) | (#) Legal Actions Pending as of 6/30/2020 | (#) Legal Actions Initiated During Period | (#) Legal Actions Resolved During the Period | ||||||||||||||||||||||||||
(1) | (2) | (3) | (4) | (5) | (6) | |||||||||||||||||||||||||||||||||
TXI Mill Creek Quarry #3401859 | 1 | — | — | — | — | 774 | — | No | No | — | — | — |
(1) | United States mines. | ||||
(2) | Total number of citations received from MSHA under section 104 of the Mine Act for health or safety standards that could significantly and substantially contribute to a serious injury if left unabated. | ||||
(3) | Total number of orders under section 104(b) of the Mine Act, which represents a failure to abate a citation under section 104(a) within the period of time prescribed by MSHA. | ||||
(4) | Total number of citations and orders for unwarrantable failure to comply with mandatory health or safety standards under section 104(d) of the Mine Act. | ||||
(5) | Total number of flagrant violations under section 110(b)(2) of the Mine Act. | ||||
(6) | Total number of imminent danger orders issued under section 107(a) of the Mine Act. |
Commitments and Contingencies |
12 Months Ended |
---|---|
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIESThe Company is a party to various pending judicial and administrative proceedings. Based on circumstances currently known, the Company does not expect that the ultimate resolution of any of these matters will have, either individually or in the aggregate, a material adverse effect on the Company’s consolidated financial position, results of operations, or cash flows. |
Statements of Consolidated Income - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Income Statement [Abstract] | |||
Net sales | $ 3,810,676 | $ 3,235,919 | $ 3,245,652 |
Cost of sales | 2,703,760 | 2,300,395 | 2,307,916 |
Gross profit | 1,106,916 | 935,524 | 937,736 |
Selling, distribution and administrative expense, including depreciation | 749,058 | 680,542 | 717,747 |
Impairment expense | 0 | 49,528 | 131,000 |
Operating income | 357,858 | 205,454 | 88,989 |
Interest expense | 26,785 | 30,807 | 37,264 |
Interest income | (522) | (215) | (729) |
Other expense (income), net | 1,805 | (2,200) | (2,782) |
Income before income taxes | 329,790 | 177,062 | 55,236 |
Income tax expense | 72,376 | 32,305 | 31,194 |
Net income | $ 257,414 | $ 144,757 | $ 24,042 |
Net income per share — basic | $ 6.69 | $ 3.73 | $ 0.62 |
Net income per share — diluted | $ 6.58 | $ 3.68 | $ 0.62 |
Business and Accounting Policies |
12 Months Ended |
---|---|
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Business Description and Accounting Policies | BUSINESS AND ACCOUNTING POLICIES Business Applied Industrial Technologies, Inc. and subsidiaries (the “Company” or “Applied”) is a leading value-added distributor and technical solutions provider of industrial motion, fluid power, flow control, automation technologies, and related maintenance supplies. Our leading brands, specialized services, and comprehensive knowledge serve MRO (Maintenance, Repair & Operations) and OEM (Original Equipment Manufacturer) end users in virtually all industrial markets through our multi-channel capabilities that provide choice, convenience, and expertise. Although the Company does not generally manufacture the products it sells, it does assemble and repair certain products and systems. Consolidation The consolidated financial statements include the accounts of Applied Industrial Technologies, Inc. and its subsidiaries. Intercompany transactions and balances have been eliminated in consolidation. Foreign Currency The financial statements of the Company’s Canadian, Mexican, Australian and New Zealand subsidiaries are measured using local currencies as their functional currencies. Assets and liabilities are translated into U.S. dollars at current exchange rates, while income and expenses are translated at average exchange rates. Translation gains and losses are reported in other comprehensive income (loss) in the statements of consolidated comprehensive income. Gains and losses resulting from transactions denominated in foreign currencies are included in the statements of consolidated income as a component of other expense (income), net. Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the period. Actual results may differ from the estimates and assumptions used in preparing the consolidated financial statements. Cash and Cash Equivalents The Company considers all short-term, highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents. Cash and cash equivalents are carried at cost, which approximates fair value. Marketable Securities The primary marketable security investments of the Company include money market and mutual funds held in a rabbi trust for a non-qualified deferred compensation plan. These are included in other assets in the consolidated balance sheets, are classified as trading securities, and are reported at fair value based on quoted market prices. Changes in the fair value of the investments during the period are recorded in other expense (income), net in the statements of consolidated income. Concentration of Credit Risk The Company has a broad customer base representing many diverse industries across North America, Australia, New Zealand, and Singapore. As such, the Company does not believe that a significant concentration of credit risk exists in its accounts receivable. The Company’s cash and cash equivalents consist of deposits with commercial banks and regulated non-bank subsidiaries. While the Company monitors the creditworthiness of these institutions, a crisis in the financial systems could limit access to funds and/or result in the loss of principal. The terms of these deposits and investments provide that all monies are available to the Company upon demand. Accounts Receivable Accounts receivable are stated at their estimated net realizable value and consist of amounts billed or billable and currently due from customers. Allowances for Doubtful Accounts The Company maintains an allowance for doubtful accounts, which reflects management’s best estimate of probable losses based on an analysis of customer accounts, known troubled accounts, historical experience with write-offs, and other currently available evidence. Initially, the Company estimates an allowance for doubtful accounts as a percentage of net sales based on historical bad debt experience. This initial estimate is adjusted based on recent trends of customers and industries estimated to be greater credit risks, trends within the entire customer pool, and changes in the overall aging of accounts receivable. Accounts are written off against the allowance when it becomes evident collection will not occur. While the Company has a large customer base that is geographically dispersed, a general economic downturn in any of the industry segments in which the Company operates could result in higher than expected defaults, and therefore, the need to revise estimates for bad debts. The allowance for doubtful accounts was $17,522 and $16,455 at June 30, 2022 and June 30, 2021, respectively. Inventories Inventories are valued at average cost, using the last-in, first-out (LIFO) method for U.S. inventories and the average cost method for foreign inventories. The Company adopted the link chain dollar value LIFO method of accounting for U.S. inventories in fiscal 1974. At June 30, 2022, approximately 15.7% of the Company’s domestic inventory dollars relate to LIFO layers added in the 1970s. The Company maintains five LIFO pools based on the following product groupings: bearings, power transmission products, rubber products, fluid power products and other products. LIFO layers and/or liquidations are determined consistently year-to-year. The Company evaluates the recoverability of its slow moving and inactive inventories at least quarterly. The Company estimates the recoverable cost of such inventory by product type while considering factors such as its age, historic and current demand trends, the physical condition of the inventory, as well as assumptions regarding future demand. The Company’s ability to recover its cost for slow moving or obsolete inventory can be affected by such factors as general market conditions, future customer demand, and relationships with suppliers. Historically, the Company’s inventories have demonstrated long shelf lives, are not highly susceptible to obsolescence, and, in certain instances, can be eligible for return under supplier return programs. Supplier Purchasing Programs The Company enters into agreements with certain suppliers providing inventory purchase incentives. The Company’s inventory purchase incentive arrangements are unique to each supplier and are generally annual programs ending at either the Company’s fiscal year end or the supplier’s year end; however, program length and ending dates can vary. Incentives are received in the form of cash or credits against purchases upon attainment of specified purchase volumes and are received either monthly, quarterly or annually. The incentives are generally a specified percentage of the Company’s net purchases based upon achieving specific purchasing volume levels. These percentages can increase or decrease based on changes in the volume of purchases. The Company accrues for the receipt of these inventory purchase incentives based upon cumulative purchases of inventory. The percentage level utilized is based upon the estimated total volume of purchases expected during the life of the program. Supplier programs are analyzed each quarter to determine the appropriateness of the amount of purchase incentives accrued. Upon program completion, differences between estimates and actual incentives subsequently received have not been material. Benefits under these supplier purchasing programs are recognized under the Company’s inventory accounting methods as a reduction of cost of sales when the inventories representing these purchases are recorded as cost of sales. Accrued incentives expected to be settled as a credit against future purchases are reported on the consolidated balance sheets as an offset to amounts due to the related supplier. Property and Related Depreciation and Amortization Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets and is included in selling, distribution and administrative expense in the accompanying statements of consolidated income. Buildings, building improvements and leasehold improvements are depreciated over to thirty years or the life of the lease if a shorter period, and equipment is depreciated over to ten years. The Company capitalizes internal use software development costs in accordance with guidance on accounting for costs of computer software developed or obtained for internal use. Amortization of software begins when it is ready for its intended use, and is computed on a straight-line basis over the estimated useful life of the software, generally not to exceed twelve years. Capitalized software and hardware costs are classified as property on the consolidated balance sheets. The carrying values of property and equipment are reviewed for impairment when events or changes in circumstances indicate that the asset group's recorded value cannot be recovered from undiscounted future cash flows. Impairment losses, if any, would be measured based upon the difference between the carrying amount of an asset group and its fair value. Goodwill and Intangible Assets Goodwill is recognized as the excess cost of an acquired entity over the net amount assigned to assets acquired and liabilities assumed. Goodwill is not amortized. Goodwill is reviewed for impairment annually as of January 1 or whenever changes in conditions indicate an evaluation should be completed. These conditions could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit. The Company utilizes the income and market approaches to determine the fair value of reporting units. Evaluating impairment requires significant judgment by management, including estimated future operating results, estimated future cash flows, the long-term rate of growth of the business, and determination of an appropriate discount rate. While the Company uses available information to prepare the estimates and evaluations, actual results could differ significantly. The Company recognizes acquired identifiable intangible assets such as customer relationships, trade names, vendor relationships, and non-competition agreements apart from goodwill. Customer relationship identifiable intangibles are amortized using the sum-of-the-years-digits method or the expected cash flow method over estimated useful lives consistent with assumptions used in the determination of their value. Amortization of all other finite-lived identifiable intangible assets is computed using the straight-line method over the estimated period of benefit. Amortization of identifiable intangible assets is included in selling, distribution and administrative expense in the accompanying statements of consolidated income. Identifiable intangible assets with finite lives are reviewed for impairment when changes in conditions indicate carrying value may not be recoverable. If circumstances require a finite-lived intangible asset be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by the asset to the carrying value of the asset. If the carrying value of the finite-lived intangible asset is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent that the carrying value exceeds its fair value determined through a discounted cash flow model. Identifiable intangible assets with indefinite lives are reviewed for impairment on an annual basis or whenever changes in conditions indicate an evaluation should be completed. The Company does not currently have any indefinite-lived identifiable intangible assets. Self-Insurance Liabilities The Company maintains business insurance programs with significant self-insured retention covering workers’ compensation, business, automobile, general product liability and other claims. The Company accrues estimated losses including those incurred but not reported using actuarial calculations, models and assumptions based on historical loss experience. The Company also maintains a self-insured health benefits plan which provides medical benefits to U.S. based employees electing coverage under the plan. The Company estimates its reserve for all unpaid medical claims, including those incurred but not reported, based on historical experience, adjusted as necessary based upon management’s reasoned judgment. Revenue Recognition The Company primarily sells purchased products distributed through its network of service centers and recognizes revenue at a point in time when control of the product transfers to the customer, typically upon shipment from an Applied facility or directly from a supplier. For products that ship directly from suppliers to customers, Applied generally acts as the principal in the transaction and recognizes revenue on a gross basis. Revenue recognized over time is not significant. Revenue is measured as the amount of consideration expected to be received in exchange for the products and services provided, net of allowances for product returns, variable consideration, and any taxes collected from customers that will be remitted to governmental authorities. Shipping and handling costs are recognized in net sales when they are billed to the customer. The Company has elected to account for shipping and handling activities as fulfillment costs. There are no significant costs associated with obtaining customer contracts. Payment terms with customers vary by the type and location of the customer and the products or services offered. The Company does not adjust the promised amount of consideration for the effects of significant financing components based on the expectation that the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Arrangements with customers that include payment terms extending beyond one year are not significant. The Company’s products are generally sold with a right of return and may include variable consideration in the form of incentives, discounts, credits or rebates. Product returns are estimated based on historical return rates. The returns reserve was $10,522 and $9,772 at June 30, 2022 and June 30, 2021, respectively. The Company estimates and recognizes variable consideration based on historical experience to determine the expected amount to which the Company will be entitled in exchange for transferring the promised goods or services to a customer. The Company records variable consideration as an adjustment to the transaction price in the period it is incurred. The realization of variable consideration occurs within a short period of time from product delivery; therefore, the time value of money effect is not significant. Shipping and Handling Costs The Company records freight payments to third parties in cost of sales and internal delivery costs in selling, distribution and administrative expense in the accompanying statements of consolidated income. Internal delivery costs in selling, distribution and administrative expense were approximately $17,890, $15,970 and $19,620 for the fiscal years ended June 30, 2022, 2021 and 2020, respectively. Income Taxes Income taxes are determined based upon income and expenses recorded for financial reporting purposes. Deferred income taxes are recorded for estimated future tax effects of differences between the bases of assets and liabilities for financial reporting and income tax purposes, giving consideration to enacted tax laws. Uncertain tax positions meeting a more-likely-than-not recognition threshold are recognized in accordance with Accounting Standards Codification (ASC) Topic 740 - Income Taxes. The Company recognizes accrued interest and penalties related to unrecognized income tax benefits in the provision for income taxes. Share-Based Compensation Share-based compensation represents the cost related to share-based awards granted to employees under the 2019 Long-Term Performance Plan, the 2015 Long-Term Performance Plan, or the 2011 Long-Term Performance Plan. The Company measures share-based compensation cost at the grant date, based on the estimated fair value of the award and recognizes the cost over the requisite service period. Non-qualified stock appreciation rights (SARs) and stock options are granted with an exercise price equal to the closing market price of the Company’s common stock at the date of grant and the fair values are determined using a Black-Scholes option pricing model, which incorporates assumptions regarding the expected volatility, the expected option life, the risk-free interest rate and the expected dividend yield. SARs and stock option awards generally vest over four years of continuous service and have ten-year contractual terms. The fair value of restricted stock awards, restricted stock units (RSUs), and performance shares are based on the closing market price of Company common stock on the grant date. Treasury Shares Shares of common stock repurchased by the Company are recorded at cost as treasury shares and result in a reduction of shareholders’ equity in the consolidated balance sheets. The Company uses the weighted-average cost method for determining the cost of shares reissued. The difference between the cost of the shares and the reissuance price is added to or deducted from additional paid-in capital. Derivatives The Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting, and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain risks, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. In accordance with the FASB’s fair value measurement guidance, the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio. Retirement Savings Plan Substantially all U.S. employees participate in the Applied Industrial Technologies, Inc. Retirement Savings Plan. Participants may elect 401(k) contributions of up to 50% of their compensation, subject to Internal Revenue Code maximums. The Company partially matches 401(k) contributions by participants. The Company suspended the 401(k) match starting in the fourth quarter of 2020 and restored it in the third quarter of fiscal 2021. The Company’s expense for matching of employees’ 401(k) contributions was $9,149, $3,945 and $5,959 during 2022, 2021 and 2020, respectively. Deferred Compensation Plans The Company has deferred compensation plans that enable certain employees of the Company to defer receipt of a portion of their compensation. Assets held in these rabbi trusts consist of investments in money market and mutual funds and Company common stock. Post-employment Benefit Plans The Company provides the following post-employment benefits which, except for the Qualified Defined Benefit Retirement Plan and Key Executive Restoration Plan, are unfunded: Supplemental Executive Retirement Benefits Plan The Company has a non-qualified pension plan to provide supplemental retirement benefits to certain officers. Benefits are payable and determinable at retirement based upon a percentage of the participant’s historical compensation. The Executive Organization and Compensation Committee of the Board of Directors froze participant benefits (credited service and final average earnings) and entry into the Supplemental Executive Retirement Benefits Plan (SERP) effective December 31, 2011. The Company recorded net periodic benefit costs associated with the SERP of $450, $401, and $317 in fiscal 2022, 2021, and 2020, respectively. The Company expects to make payments of approximately $800 under the SERP in fiscal 2023 and approximately $200 in fiscal 2024. Key Executive Restoration Plan In fiscal 2012, the Company adopted the Key Executive Restoration Plan (KERP), a funded, non-qualified deferred compensation plan, to replace the SERP. The Company recorded $514, $334, and $189 of expense associated with this plan in fiscal 2022, 2021, and 2020, respectively. Qualified Defined Benefit Retirement Plan The Company has a qualified defined benefit retirement plan that provides benefits to certain hourly employees at retirement. These employees did not participate in the Retirement Savings Plan. The benefits are based on length of service and date of retirement. The plan accruals were frozen as of April 16, 2018, and employees are permitted to participate in the Retirement Savings Plan, following that date. The Company recorded net periodic cost (benefits) associated with this plan of $282, $46, and $(116) in fiscal 2022, 2021, and 2020, respectively. Retiree Health Care Benefits The Company provides health care benefits, through third-party policies, to eligible retired employees who pay a specified monthly premium. Premium payments are based upon current insurance rates for the type of coverage provided and are adjusted annually. Certain monthly health care premium payments are partially subsidized by the Company. Additionally, in conjunction with a fiscal 1998 acquisition, the Company assumed the obligation for a post-retirement medical benefit plan which provides health care benefits to eligible retired employees at no cost to the individual. The Company recorded net periodic benefits associated with these plans of $123, $161, and $257 in fiscal 2022, 2021, and 2020, respectively. The Company has determined that the related disclosures under ASC Topic 715 - Compensation, Retirement Benefits, for these post-employment benefit plans are not material to the consolidated financial statements. Leases The Company leases facilities for certain service centers, warehouses, distribution centers and office space. The Company also leases office equipment and vehicles. All leases are classified as operating. The Company’s leases expire at various dates through 2032, with terms ranging from 1 year to 15 years. Many of the Company’s real estate leases contain renewal provisions to extend lease terms up to 5 years. The exercise of renewal options is solely at the Company’s discretion. The Company’s lease agreements do not contain material variable lease payments, residual value guarantees or restrictive covenants. The Company does not recognize right-of-use assets or lease liabilities for short-term leases with initial terms of 12 months or less. Leased vehicles comprise the majority of the Company’s short-term leases. All other leases are recorded on the balance sheet with right-of-use assets representing the right to use the underlying asset for the lease term and lease liabilities representing lease payment obligations. The Company’s leases do not provide implicit rates; therefore the Company uses its incremental borrowing rate as the discount rate for measuring lease liabilities. Non-lease components are accounted for separately from lease components. The Company’s operating lease expense is recognized on a straight-line basis over the lease term and is recorded in selling, distribution and administrative expense on the statements of consolidated income.
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Revenue Recognition Revenue Recognition |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Text Block] | REVENUE RECOGNITION Disaggregation of Revenues The following tables present the Company's net sales by reportable segment and by geographic areas based on the location of the facility shipping the product for the years ended June 30, 2022, 2021 and 2020. Other countries consist of Mexico, Australia, New Zealand, and Singapore.
The following tables present the Company’s percentage of revenue by reportable segment and major customer industry for the years ended June 30, 2022, 2021, and 2020:
The following tables present the Company’s percentage of revenue by reportable segment and product line for the years ended June 30, 2022, 2021, and 2020:
Contract Assets The Company’s contract assets consist of un-billed amounts resulting from contracts for which revenue is recognized over time using the cost-to-cost method, and for which revenue recognized exceeds the amount billed to the customer. Activity related to contract assets, which are included in other current assets on the consolidated balance sheet, is as follows:
The difference between the opening and closing balances of the Company's contract assets primarily results from the timing difference between the Company's performance and when the customer is billed.
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Business Combinations |
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Jun. 30, 2022 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS The operating results of all acquired entities are included within the consolidated operating results of the Company from the date of each respective acquisition. Fiscal 2022 Acquisitions On August 18, 2021, the Company acquired substantially all of the net assets of R.R. Floody Company (Floody), a Rockford, Illinois provider of high technology solutions for advanced factory automation. Floody is included in the Fluid Power & Flow Control segment. The purchase price for the acquisition was $8,038, net tangible assets acquired were $1,040, and intangible assets including goodwill were $6,998 based upon estimated fair values at the acquisition date. The purchase price includes $1,000 of acquisition holdback payments, which are included in other current liabilities and other liabilities on the consolidated balance sheet as of June 30, 2022, and which will be paid on the first and second anniversaries of the acquisition date with interest at a fixed rate of 2.0% per annum. The Company funded this acquisition using available cash. The acquisition price and the results of operations for the acquired entity are not material in relation to the Company's consolidated financial statements. Fiscal 2021 Acquisitions On December 31, 2020, the Company acquired 100% of the outstanding shares of Gibson Engineering (Gibson), a Norwood, Massachusetts provider of automation products, services, and engineered solutions focused on machine vision, motion control, mobile and collaborative robotic solutions, intelligent sensors, and other related equipment. Gibson is included in the Fluid Power & Flow Control segment. The purchase price for the acquisition was $15,341, net tangible assets acquired were $955, and intangible assets including goodwill were $14,386 based upon estimated fair values at the acquisition date. The purchase price includes $1,904 of acquisition holdback payments, of which $935 was paid during the year-ended June 30, 2022. The remaining balance of $969 is included in other current liabilities on the consolidated balance sheet as of June 30, 2022, and will be paid on the second anniversary of the acquisition date with interest at a fixed rate of 1.0% per annum. The Company funded this acquisition using available cash. The acquisition price and the results of operations for the acquired entity are not material in relation to the Company's consolidated financial statements. On October 5, 2020, the Company acquired substantially all of the net assets of Advanced Control Solutions (ACS), which operates four locations in Georgia, Tennessee and Alabama. ACS is a provider of automation products, services, and engineered solutions focused on machine vision equipment and software, mobile and collaborative robotic solutions, intelligent sensors, logic controllers, and other related equipment. ACS is included in the Fluid Power & Flow Control segment. The purchase price for the acquisition was $17,867, net tangible assets acquired were $1,210, and intangible assets including goodwill were $16,657 based upon estimated fair values at the acquisition date. The Company funded this acquisition using available cash. The acquisition price and the results of operations for the acquired entity are not material in relation to the Company's consolidated financial statements. Fiscal 2020 Acquisitions On August 21, 2019, the Company acquired 100% of the outstanding shares of Olympus Controls (Olympus), a Portland, Oregon automation solutions provider - including design, assembly, integration, and distribution - of motion control, machine vision, and robotic technologies. Olympus is included in the Fluid Power & Flow Control segment. The purchase price for the acquisition was $36,642, net tangible assets acquired were $9,540, and intangible assets including goodwill were $27,102 based upon estimated fair values at the acquisition date. The Company funded this acquisition using available cash. The acquisition price and the results of operations for the acquired entity are not material in relation to the Company's consolidated financial statements. Holdback Liabilities for Acquisitions Acquisition holdback payments of approximately $1,469 and $500 will be made in fiscal 2023 and 2024, respectively. The related liabilities for these payments are recorded in the consolidated balance sheets in other current liabilities for the amounts due in fiscal year 2023 and other liabilities for the amounts due in fiscal year 2024.
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Inventories |
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Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVENTORIES | INVENTORIES Inventories consist of the following:
The overall impact of LIFO layer liquidations increased gross profit by $501, $3,895, and $1,990 in fiscal 2022, fiscal 2021, and fiscal 2020, respectively.
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Goodwill and Intangibles |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND INTANGIBLES | GOODWILL AND INTANGIBLES The changes in the carrying amount of goodwill for both the Service Center Based Distribution segment and the Fluid Power & Flow Control segment for the years ended June 30, 2022 and 2021 are as follows:
The Company has eight (8) reporting units for which an annual goodwill impairment assessment was performed as of January 1, 2022. The Company concluded that all of the reporting units’ fair values exceeded their carrying amounts by at least 25% as of January 1, 2022. The fair values of the reporting units in accordance with the goodwill impairment test were determined using the income and market approaches. The income approach employs the discounted cash flow method reflecting projected cash flows expected to be generated by market participants and then adjusted for time value of money factors, and requires management to make significant estimates and assumptions related to forecasts of future revenues, earnings before interest, taxes, depreciation, and amortization (EBITDA), and discount rates. The market approach utilizes an analysis of comparable publicly traded companies and requires management to make significant estimates and assumptions related to the forecasts of future revenues, EBITDA, and multiples that are applied to management’s forecasted revenues and EBITDA estimates. The techniques used in the Company's impairment test have incorporated a number of assumptions that the Company believes to be reasonable and to reflect known market conditions at the measurement date. Assumptions in estimating future cash flows are subject to a degree of judgment. The Company makes all efforts to forecast future cash flows as accurately as possible with the information available at the measurement date. The Company evaluates the appropriateness of its assumptions and overall forecasts by comparing projected results of upcoming years with actual results of preceding years. Key assumptions (Level 3 in the fair value hierarchy) relate to pricing trends, inventory costs, customer demand, and revenue growth. A number of benchmarks from independent industry and other economic publications were also used. Changes in future results, assumptions, and estimates after the measurement date may lead to an outcome where additional impairment charges would be required in future periods. Specifically, actual results may vary from the Company’s forecasts and such variations may be material and unfavorable, thereby triggering the need for future impairment tests where the conclusions may differ in reflection of prevailing market conditions. Further, continued adverse market conditions could result in the recognition of additional impairment if the Company determines that the fair values of its reporting units have fallen below their carrying values. Certain events or circumstances that could reasonably be expected to negatively affect the underlying key assumptions and ultimately impact the estimated fair value of the Company’s reporting units may include such items as: (i) a decrease in expected future cash flows, specifically, a decrease in sales volume driven by a prolonged weakness in customer demand or other pressures adversely affecting our long-term sales trends; (ii) inability to achieve the sales from our strategic growth initiatives. At June 30, 2022 and 2021, accumulated goodwill impairment losses subsequent to fiscal year 2002 totaled $64,794 related to the Service Center Based Distribution segment and $167,605 related to the Fluid Power & Flow Control segment. The Company's identifiable intangible assets resulting from business combinations are amortized over their estimated period of benefit and consist of the following:
Amounts include the impact of foreign currency translation. Fully amortized amounts are written off. During fiscal 2022, the Company acquired identifiable intangible assets with an acquisition cost allocation and weighted-average life as follows:
Identifiable intangible assets with finite lives are reviewed for impairment when changes in conditions indicate carrying value may not be recoverable. The Company has three asset groups that have significant exposure to oil and gas end markets. Due to the economic downturn in these end markets, the Company determined during the second quarter of fiscal 2021 that certain carrying values may not be recoverable. The Company determined that an impairment existed in two of the three asset groups as the asset groups' carrying values exceeded the sum of the undiscounted cash flows. The fair values of the long-lived assets were then determined using the income approach, and the analyses resulted in the measurement of an intangible asset impairment loss of $45,033, which was recorded during the second quarter of fiscal 2021, as the fair value of the intangible assets was determined to be zero. The income approach employs the discounted cash flow method reflecting projected cash flows expected to be generated by market participants and then adjusted for time value of money factors, and requires management to make significant estimates and assumptions related to forecasts of future revenues, EBITDA, and discount rates. Key assumptions (Level 3 in the fair value hierarchy) relate to pricing trends, inventory costs, customer demand, and revenue growth. A number of benchmarks from independent industry and other economic publications were also used. The analyses of these asset groups also resulted in a fixed asset impairment loss and leased asset impairment loss of $1,983 and $2,512, respectively, which were recorded during the second quarter of fiscal 2021. Sustained significant softness in certain end market concentrations could result in impairment of certain intangible assets in future periods. Amortization of identifiable intangibles totaled $31,879, $34,365 and $41,553 in fiscal 2022, 2021 and 2020, respectively, and is included in selling, distribution and administrative expense in the statements of consolidated income. Future amortization expense based on the Company’s identifiable intangible assets as of June 30, 2022 is estimated to be $30,000 for 2023, $26,300 for 2024, $24,100 for 2025, $22,300 for 2026 and $20,600 for 2027.
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEBT | DEBT A summary of long-term debt, including the current portion, follows:
Revolving Credit Facility & Term Loan In December 2021, the Company entered into a new five-year revolving credit facility with a group of banks to refinance the existing credit facility as well as provide funds for ongoing working capital and other general corporate purposes. This agreement provides a $900,000 unsecured revolving credit facility and an uncommitted accordion feature which allows the Company to request an increase in the borrowing commitments, or incremental term loans, under the credit facility in aggregate principal amounts of up to $500,000. Borrowings under this agreement bear interest, at the Company's election, at either the base rate plus a margin that ranges from 0 to 55 basis points based on net leverage ratio or LIBOR plus a margin that ranges from 80 to 155 basis points based on the net leverage ratio. Unused lines under this facility, net of outstanding letters of credit of $200 to secure certain insurance obligations, totaled $489,208 at June 30, 2022, and were available to fund future acquisitions or other capital and operating requirements. The interest rate on the revolving credit facility was 2.81% as of June 30, 2022. The new credit facility replaced the Company's previous credit facility agreement. The Company used its initial borrowings on the new revolving credit facility along with cash on hand of $98,206 to extinguish the term loan balance outstanding under the previous credit facility of $540,500. The Company had no amount outstanding under the revolver at June 30, 2021. Unused lines under the previous facility, net of outstanding letters of credit of $200 to secure certain insurance obligations, totaled $249,800 at June 30, 2021. The interest rate on the term loan was 1.88% as of June 30, 2021. The Company paid $1,956 of debt issuance costs related to the new revolving credit facility in the year ended June 30, 2022, which are included in other current assets and other assets on the consolidated balance sheet as of June 30, 2022 and will be amortized over the five-year term of the new credit facility. The Company analyzed the unamortized debt issuance costs related to the previous credit facility under Accounting Standards Codification (ASC) Topic 470 - Debt. As a result of this analysis, $118 of unamortized debt issuance costs were expensed and included within interest expense on the statements of consolidated income for the year ended June 30, 2022, and $540 of unamortized debt issuance costs were rolled forward into the new credit facility and were reclassified from the current portion of long-term debt and long-term debt into other current assets and other assets on the consolidated balance sheet as of June 30, 2022, and will be amortized over the five-year term of the new credit facility. Additionally, the Company had letters of credit outstanding not associated with the revolving credit agreement, in the amount of $4,735 and $4,540 as of June 30, 2022 and June 30, 2021, respectively, in order to secure certain insurance obligations. Trade Receivable Securitization Facility In August 2018, the Company established a trade receivable securitization facility (the “AR Securitization Facility”) with a termination date of August 31, 2021. On March 26, 2021, the Company amended the AR Securitization Facility to expand the eligible receivables, which increased the maximum availability to $250,000 and increased the drawn fees on the AR Securitization Facility to 0.98% per year. Availability is further subject to changes in the credit ratings of our customers, customer concentration levels or certain characteristics of the accounts receivable being transferred and, therefore, at certain times, we may not be able to fully access the $250,000 of funding available under the AR Securitization Facility. The AR Securitization Facility effectively increases the Company’s borrowing capacity by collateralizing a portion of the amount of the U.S. operations’ trade accounts receivable. The Company uses the proceeds from the AR Securitization Facility as an alternative to other forms of debt, effectively reducing borrowing costs. Borrowings under this facility carry variable interest rates tied to LIBOR. The interest rate on the AR Securitization Facility as of June 30, 2022 and June 30, 2021 was 2.60% and 1.20%, respectively. The new termination date of the AR Securitization Facility is March 26, 2024. Unsecured Shelf Facility At June 30, 2022 and June 30, 2021, the Company had borrowings outstanding under its unsecured shelf facility agreement with Prudential Investment Management of $90,000. Fees on this facility range from 0.25% to 1.25% per year based on the Company's leverage ratio at each quarter end. The "Series C" notes carry a fixed interest rate of 3.19%, and the remaining balance of $40,000 was paid in July 2022. The "Series D" notes have a remaining principal amount of $25,000, carry a fixed interest rate of 3.21%, and are due in October 2023. The "Series E" notes have a principal amount of $25,000, carry a fixed interest rate of 3.08%, and are due in October 2024. Other Long-Term Borrowing In 2014, the Company assumed $2,359 of debt as a part of the headquarters facility acquisition. The 1.50% fixed interest rate note is held by the State of Ohio Development Services Agency and matures in November 2024. The table below summarizes the aggregate maturities of amounts outstanding under long-term borrowing arrangements for each of the next five years:
Covenants The credit facility and the unsecured shelf facility contain restrictive covenants regarding liquidity, net worth, financial ratios, and other covenants. At June 30, 2022, the most restrictive of these covenants required that the Company have net indebtedness less than 3.75 times consolidated income before interest, taxes, depreciation and amortization (as defined). At June 30, 2022, the Company's net indebtedness was less than 1.3 times consolidated income before interest, taxes, depreciation and amortization (as defined). The Company was in compliance with all financial covenants at June 30, 2022.
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Derivatives Derivatives |
12 Months Ended |
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Jun. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities Disclosure [Text Block] | DERIVATIVES Risk Management Objective of Using Derivatives The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s borrowings. Cash Flow Hedges of Interest Rate Risk The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in accumulated other comprehensive loss and subsequently reclassified into interest expense in the same period(s) during which the hedged transaction affects earnings. Amounts reported in accumulated other comprehensive loss related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. In January 2019, the Company entered into an interest rate swap to mitigate variability in forecasted interest payments on $463,000 of the Company’s U.S. dollar-denominated unsecured variable rate debt. The interest rate swap effectively converts a portion of the floating rate interest payment into a fixed rate interest payment. The Company designated the interest rate swap as a pay-fixed, receive-floating interest rate swap instrument and is accounting for this derivative as a cash flow hedge. During the quarter ended December 31, 2020, the Company completed a transaction to amend and extend the interest rate swap agreement which resulted in an extension of the maturity date by an additional three years and a decrease of the weighted average fixed pay rate from 2.61% to 1.63%. The pay-fixed interest rate swap is considered a hybrid instrument with a financing component and an embedded at-market derivative that was designated as a cash flow hedge. The interest rate swap converts $409,000 of variable rate debt to a rate of 2.75% as of June 30, 2022. The interest rate swap converted $420,000 of variable rate debt to a rate of 3.38% as of June 30, 2021. The fair value (Level 2 in the fair value hierarchy) of the interest rate cash flow hedge was $17,827 as of June 30, 2022, which is included in other current assets and other assets in the consolidated balance sheet. The fair value (Level 2 in the fair value hierarchy) of the interest rate cash flow hedge was $14,346 as of June 30, 2021, which is included in other current liabilities and other liabilities in the consolidated balance sheet. Amounts reclassified from other comprehensive income (loss), before tax to interest expense totaled $11,361 and $11,553 for the years ended June 30, 2022 and 2021, respectively.
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Fair Value Measurements |
12 Months Ended |
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Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Marketable securities measured at fair value at June 30, 2022 and June 30, 2021 totaled $15,317 and $16,844, respectively. The majority of these marketable securities are held in a rabbi trust for a non-qualified deferred compensation plan. The marketable securities are included in other assets on the consolidated balance sheets and their fair values were valued using quoted market prices (Level 1 in the fair value hierarchy). As of June 30, 2022, the carrying value of the Company's fixed interest rate debt outstanding under its unsecured shelf facility agreement with Prudential Investment Management approximates fair value (Level 2 in the fair value hierarchy). The revolving credit facility contains variable interest rates and its carrying value approximates fair value (Level 2 in the fair value hierarchy).
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Income Taxes |
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INCOME TAXES | INCOME TAXES Income Before Income Taxes The components of income before income taxes are as follows:
Provision The provision for income taxes consists of:
During the third quarter of fiscal 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was enacted in the U.S. As a result of the CARES Act, the Company recorded a $1,000 tax benefit related to the carryback of a tax net operating loss incurred in a year in which the U.S. federal corporate income tax rate was 21% to a year in which the U.S. federal corporate income tax rate was higher. Effective Tax Rates The following reconciles the U.S. federal statutory income tax rate to the Company’s effective income tax rate:
Consolidated Balance Sheets Significant components of the Company’s deferred tax assets and liabilities are as follows:
As of June 30, 2022 and 2021, the Company had foreign net operating loss carryforwards of approximately $32,018 and $35,415, respectively, the tax benefit of which is approximately $6,677 and $8,445, respectively. These loss carryforwards will expire at various dates beginning in 2033. Also, as of June 30, 2022 and 2021, the Company had state net operating loss carryforwards, the tax benefit of which is approximately $878 and $1,034 respectively, which will expire at various dates beginning in 2027. Valuation allowances are provided against deferred tax assets where it is considered more-likely-than-not that the Company will not realize the benefit of such assets. The remaining net deferred tax asset is the amount management believes is more-likely-than-not of being realized. The realization of these deferred tax assets can be impacted by changes to tax laws, statutory tax rates and future income levels. The Company evaluates the realization of its deferred tax assets each quarter throughout the year. During the years ended June 30, 2022 and 2021, the Company released a valuation allowance of $2,270 and recorded a valuation allowance of $267, respectively, related to certain deferred tax assets in Canada. The total valuation allowance provided against the deferred tax assets in Canada is $6,228 and $8,498 as of June 30, 2022 and 2021, respectively. As of June 30, 2022, the Company had accumulated undistributed earnings of non-U.S. subsidiaries of approximately $146,154. The vast majority of such earnings have previously been subjected to the one-time transition tax or the Global Intangible Low Taxed Income ("GILTI") inclusion. Therefore, any additional taxes due with respect to such earnings or the excess of the amount for financial reporting over the tax basis of our foreign investments would generally be limited to foreign withholding and state income taxes. In addition, we expect foreign tax credits would be available to either offset or partially reduce the tax cost in the event of a distribution. We intend, however, to indefinitely reinvest these earnings and expect future U.S. cash generation to be sufficient to meet future U.S. cash needs. Unrecognized Income Tax Benefits The Company and its subsidiaries file income tax returns in U.S. federal, various state, local and foreign jurisdictions. The following table sets forth the changes in the amount of unrecognized tax benefits for the years ended June 30, 2022, 2021, and 2020:
The Company recognizes interest and penalties related to uncertain tax positions in the provision for income taxes. During 2022, 2021, and 2020, the Company recognized $(362), $144, and $256 of (income) expense, respectively, for interest and penalties related to unrecognized income tax benefits in its statements of consolidated income. The Company had a liability for penalties and interest of $876, $1,238, and $1,094 as of June 30, 2022, 2021, and 2020, respectively. The Company does not anticipate a significant change to the total amount of unrecognized income tax benefits within the next twelve months. Included in the balance of unrecognized income tax benefits at June 30, 2022, 2021, and 2020 are $4,813, $4,986, and $4,708 respectively, of income tax benefits that, if recognized, would affect the effective income tax rate. The Company is subject to U.S. federal income tax examinations for the tax years 2019 through 2022 and to state and local income tax examinations for the tax years 2016 through 2022. In addition, the Company is subject to foreign income tax examinations for the tax years 2015 through 2022. The Company’s unrecognized income tax benefits are included in other liabilities in the consolidated balance sheets since payment of cash is not expected within one year, or as a reduction of a deferred tax asset.
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Shareholders' Equity |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHAREHOLDERS' EQUITY | SHAREHOLDERS’ EQUITY Treasury Shares At June 30, 2022, 128 shares of the Company’s common stock held as treasury shares were restricted as collateral under escrow arrangements relating to change in control and director and officer indemnification agreements. Accumulated Other Comprehensive Loss Changes in the accumulated other comprehensive loss for the years ended June 30, 2022, 2021, and 2020, are comprised of the following amounts, shown net of taxes:
Other Comprehensive Income (Loss) Details of other comprehensive income (loss) are as follows:
Net Income Per Share Basic net income per share is based on the weighted-average number of common shares outstanding. Diluted net income per share includes the dilutive effect of potential common shares outstanding. Under the two-class method of computing net income per share, non-vested share-based payment awards that contain rights to receive non-forfeitable dividends are considered participating securities. The Company’s participating securities include Restricted Stock Units ("RSUs") and restricted stock awards. The Company calculated basic and diluted net income per share under both the treasury stock method and the two-class method. For the years presented there were no material differences in the net income per share amounts calculated using the two methods. Accordingly, the treasury stock method is disclosed below. The following table presents amounts used in computing net income per share and the effect on the weighted-average number of shares of dilutive potential common shares:
Stock awards relating to 106, 234 and 726 shares of common stock were outstanding at June 30, 2022, 2021 and 2020, respectively, but were not included in the computation of diluted earnings per share for the fiscal years then ended as they were anti-dilutive.
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Share - Based Compensation |
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Share-based Payment Arrangement, Noncash Expense [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION Share-Based Incentive Plans Following approval by the Company's shareholders in October 2019, the 2019 Long-Term Performance Plan (the "2019 Plan") replaced the 2015 Long-Term Performance Plan. The 2019 Plan, which expires in 2024, provides for granting of SARs, stock options, stock awards, cash awards, and such other awards or combination thereof as the Executive Organization and Compensation Committee or, in the case of director awards, the Corporate Governance & Sustainability Committee of the Board of Directors (together referred to as the Committee) may determine to officers, other key employees and members of the Board of Directors. Grants are generally made at regularly scheduled committee meetings. Compensation costs charged to expense under award programs paid (or to be paid) with shares (including SARs, performance shares, restricted stock, and RSUs) are summarized in the table below:
Such amounts are included in selling, distribution and administrative expense in the accompanying statements of consolidated income. The total income tax benefit recognized in the statements of consolidated income for share-based compensation plans was $5,105, $6,649, and $2,189 for fiscal years 2022, 2021, and 2020, respectively. It has been the practice of the Company to issue shares from treasury to satisfy requirements of awards paid with shares. The aggregate unrecognized compensation cost for share-based award programs with the potential to be paid at June 30, 2022 is summarized in the table below:
Cost of these programs will be recognized as expense over the weighted-average remaining vesting period of 2.0 years. The aggregate number of shares of common stock which may be awarded under the 2019 Plan is 2,250; shares available for future grants at June 30, 2022 were 1,826. Stock Appreciation Rights and Stock Options The weighted-average assumptions used for SARs grants issued in fiscal 2022, 2021 and 2020 are:
The expected life is based upon historical exercise experience of the officers, other key employees and members of the Board of Directors. The risk free interest rate is based upon U.S. Treasury zero-coupon bonds with remaining terms equal to the expected life of the SARs. The assumed dividend yield has been estimated based upon the Company’s historical results and expectations for changes in dividends and stock prices. The volatility assumption is calculated based upon historical daily price observations of the Company’s common stock for a period equal to the expected life. SARs are redeemable solely in Company common stock. The exercise price of stock option awards may be settled by the holder with cash or by tendering Company common stock. A summary of SARs and stock options activity is presented below:
The weighted-average remaining contractual terms for SARs and stock options outstanding, exercisable, and expected to vest at June 30, 2022 were 6.2, 5.4, and 6.2 years, respectively. The aggregate intrinsic values of SARs and stock options outstanding, exercisable, and expected to vest at June 30, 2022 were $33,121 $24,144, and $33,029, respectively. The aggregate intrinsic value of the SARs and stock options exercised during fiscal 2022, 2021, and 2020 was $17,015, $21,189, and $3,460, respectively. The total fair value of shares vested during fiscal 2022, 2021, and 2020 was $2,341, $2,880, and $2,285, respectively. Performance Shares Performance shares are paid in shares of Applied stock at the end of a three-year period provided the Company achieves goals established by the Committee. The number of Applied shares payable will vary depending on the level of the goals achieved. A summary of non-vested performance shares activity at June 30, 2022 is presented below:
The Committee set three one-year goals for each of the 2022, 2021, and 2020 grants. Each fiscal year during the three-year term has its own separate goals, tied to the Company’s earnings before interest, tax, depreciation, and amortization (EBITDA) and after-tax return on assets (ROA). Achievement during any particular fiscal year is awarded and “banked” for payout at the end of the three-year term. For the outstanding grants as of June 30, 2022, the maximum number of shares that could be earned in future periods was 78. Restricted Stock and Restricted Stock Units Under the 2019 Plan, restricted stock award recipients have voting rights with respect to their shares, but are restricted from selling or transferring the shares prior to vesting; dividends are accrued and paid upon vesting. Restricted stock awards vest over periods of one to four years. RSUs are grants valued in shares of Applied stock, but shares are not issued until the grants vest three to five years from the award date, assuming continued employment with Applied; dividend equivalents on RSUs are accrued and paid upon vesting. A summary of the status of the Company’s non-vested restricted stock and RSUs at June 30, 2022 is presented below:
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lessee, Operating Leases | LEASES The Company’s operating lease expense is recognized on a straight-line basis over the lease term and is recorded in selling, distribution and administrative expense on the statements of consolidated income. Operating lease costs and short-term lease costs were $34,144 and $7,501, respectively, for the year ended June 30, 2022 and $31,778 and $9,929,respectively, for the year ended June 30, 2021. Variable lease costs and sublease income were not material. Information related to operating leases is as follows:
The table below summarizes the aggregate maturities of liabilities pertaining to operating leases with terms greater than one year for each of the next five years:
The Company maintains lease agreements for many of the operating facilities of businesses it acquires from previous owners. In many cases, the previous owners of the business acquired become employees of Applied and occupy management positions within those businesses. The payments under lease agreements of this nature totaled $2,100 in 2022, $2,100 in 2021, and $2,500 in 2020.
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Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT INFORMATION | SEGMENT INFORMATION The Company's reportable segments are: Service Center Based Distribution and Fluid Power & Flow Control. These reportable segments contain the Company's various operating segments which have been aggregated based upon similar economic and operating characteristics. The Service Center Based Distribution segment operates through local service centers and distribution centers with a focus on providing products and services addressing the maintenance and repair of motion control infrastructure and production equipment. Products primarily include industrial bearings, motors, belting, drives, couplings, pumps, linear motion products, hydraulic and pneumatic components, filtration supplies, and hoses, as well as other related supplies for general operational needs of customers’ machinery and equipment. The Fluid Power & Flow Control segment includes our operations that specialize in distributing, engineering, designing, integrating, and repairing hydraulic and pneumatic fluid power technologies, and engineered flow control products and services. This segment also includes our operations that focus on advanced automation solutions including machine vision, robotics, motion control, and smart technologies. The accounting policies of the Company’s reportable segments are generally the same as those described in note 1. Intercompany sales, primarily from the Fluid Power & Flow Control segment to the Service Center Based Distribution segment of $37,163, $31,615, and $29,582, in 2022, 2021, and 2020, respectively, have been eliminated in the following table. Segment Financial Information
A reconciliation of operating income for reportable segments to the consolidated income before income taxes is as follows:
Fluctuations in corporate and other expense, net, are due to changes in corporate expenses, as well as in the amounts and levels of certain expenses being allocated to the segments. The expenses being allocated include corporate charges for working capital, logistics support and other items. Geographic Information Long-lived assets are based on physical locations and are comprised of the net book value of property and right of use assets. Information by geographic area is as follows:
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Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER EXPENSE (INCOME), NET | OTHER EXPENSE (INCOME), NET Other expense (income), net, consists of the following:
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Subsequent Events Subsequent Events |
12 Months Ended |
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Jun. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | SUBSEQUENT EVENTSWe have evaluated events and transactions occurring subsequent to June 30, 2022 through the date the financial statements were issued. |
Schedule II - Valuation and Qualifying Accounts |
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SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
VALUATION AND QUALIFYING ACCOUNTS | APPLIED INDUSTRIAL TECHNOLOGIES, INC. & SUBSIDIARIES SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS YEARS ENDED JUNE 30, 2022, 2021, AND 2020 (in thousands)
(A)Amounts in the years ending June 30, 2022, 2021 and 2020 represent reserves recorded for the return of merchandise by customers. The Company adopted ASC 606 - Revenue from Contracts with Customers effective July 1, 2018 which requires the Company's sales returns reserve to be established at the gross sales value with an asset established for the value of the expected product to be returned. (B)Amounts represent uncollectible accounts charged off.
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Business and Accounting Policies (Policies) |
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Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Business | Business Applied Industrial Technologies, Inc. and subsidiaries (the “Company” or “Applied”) is a leading value-added distributor and technical solutions provider of industrial motion, fluid power, flow control, automation technologies, and related maintenance supplies. Our leading brands, specialized services, and comprehensive knowledge serve MRO (Maintenance, Repair & Operations) and OEM (Original Equipment Manufacturer) end users in virtually all industrial markets through our multi-channel capabilities that provide choice, convenience, and expertise. Although the Company does not generally manufacture the products it sells, it does assemble and repair certain products and systems.
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Consolidation | ConsolidationThe consolidated financial statements include the accounts of Applied Industrial Technologies, Inc. and its subsidiaries. Intercompany transactions and balances have been eliminated in consolidation. |
Foreign Currency | Foreign Currency The financial statements of the Company’s Canadian, Mexican, Australian and New Zealand subsidiaries are measured using local currencies as their functional currencies. Assets and liabilities are translated into U.S. dollars at current exchange rates, while income and expenses are translated at average exchange rates. Translation gains and losses are reported in other comprehensive income (loss) in the statements of consolidated comprehensive income. Gains and losses resulting from transactions denominated in foreign currencies are included in the statements of consolidated income as a component of other expense (income), net.
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Estimates | Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the period. Actual results may differ from the estimates and assumptions used in preparing the consolidated financial statements.
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Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all short-term, highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents. Cash and cash equivalents are carried at cost, which approximates fair value.
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Marketable Securities | Marketable Securities The primary marketable security investments of the Company include money market and mutual funds held in a rabbi trust for a non-qualified deferred compensation plan. These are included in other assets in the consolidated balance sheets, are classified as trading securities, and are reported at fair value based on quoted market prices. Changes in the fair value of the investments during the period are recorded in other expense (income), net in the statements of consolidated income.
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Concentration Risk, Credit Risk, Policy | Concentration of Credit Risk The Company has a broad customer base representing many diverse industries across North America, Australia, New Zealand, and Singapore. As such, the Company does not believe that a significant concentration of credit risk exists in its accounts receivable. The Company’s cash and cash equivalents consist of deposits with commercial banks and regulated non-bank subsidiaries. While the Company monitors the creditworthiness of these institutions, a crisis in the financial systems could limit access to funds and/or result in the loss of principal. The terms of these deposits and investments provide that all monies are available to the Company upon demand.
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Accounts Receivable | Accounts ReceivableAccounts receivable are stated at their estimated net realizable value and consist of amounts billed or billable and currently due from customers. |
Allowances for Doubtful Accounts | Allowances for Doubtful Accounts The Company maintains an allowance for doubtful accounts, which reflects management’s best estimate of probable losses based on an analysis of customer accounts, known troubled accounts, historical experience with write-offs, and other currently available evidence. Initially, the Company estimates an allowance for doubtful accounts as a percentage of net sales based on historical bad debt experience. This initial estimate is adjusted based on recent trends of customers and industries estimated to be greater credit risks, trends within the entire customer pool, and changes in the overall aging of accounts receivable. Accounts are written off against the allowance when it becomes evident collection will not occur. While the Company has a large customer base that is geographically dispersed, a general economic downturn in any of the industry segments in which the Company operates could result in higher than expected defaults, and therefore, the need to revise estimates for bad debts. The allowance for doubtful accounts was $17,522 and $16,455 at June 30, 2022 and June 30, 2021, respectively.
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Inventories | Inventories Inventories are valued at average cost, using the last-in, first-out (LIFO) method for U.S. inventories and the average cost method for foreign inventories. The Company adopted the link chain dollar value LIFO method of accounting for U.S. inventories in fiscal 1974. At June 30, 2022, approximately 15.7% of the Company’s domestic inventory dollars relate to LIFO layers added in the 1970s. The Company maintains five LIFO pools based on the following product groupings: bearings, power transmission products, rubber products, fluid power products and other products. LIFO layers and/or liquidations are determined consistently year-to-year. The Company evaluates the recoverability of its slow moving and inactive inventories at least quarterly. The Company estimates the recoverable cost of such inventory by product type while considering factors such as its age, historic and current demand trends, the physical condition of the inventory, as well as assumptions regarding future demand. The Company’s ability to recover its cost for slow moving or obsolete inventory can be affected by such factors as general market conditions, future customer demand, and relationships with suppliers. Historically, the Company’s inventories have demonstrated long shelf lives, are not highly susceptible to obsolescence, and, in certain instances, can be eligible for return under supplier return programs.
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Supplier Purchasing Programs | Supplier Purchasing Programs The Company enters into agreements with certain suppliers providing inventory purchase incentives. The Company’s inventory purchase incentive arrangements are unique to each supplier and are generally annual programs ending at either the Company’s fiscal year end or the supplier’s year end; however, program length and ending dates can vary. Incentives are received in the form of cash or credits against purchases upon attainment of specified purchase volumes and are received either monthly, quarterly or annually. The incentives are generally a specified percentage of the Company’s net purchases based upon achieving specific purchasing volume levels. These percentages can increase or decrease based on changes in the volume of purchases. The Company accrues for the receipt of these inventory purchase incentives based upon cumulative purchases of inventory. The percentage level utilized is based upon the estimated total volume of purchases expected during the life of the program. Supplier programs are analyzed each quarter to determine the appropriateness of the amount of purchase incentives accrued. Upon program completion, differences between estimates and actual incentives subsequently received have not been material. Benefits under these supplier purchasing programs are recognized under the Company’s inventory accounting methods as a reduction of cost of sales when the inventories representing these purchases are recorded as cost of sales. Accrued incentives expected to be settled as a credit against future purchases are reported on the consolidated balance sheets as an offset to amounts due to the related supplier.
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Property and related Depreciation and Amortization | Property and Related Depreciation and Amortization Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets and is included in selling, distribution and administrative expense in the accompanying statements of consolidated income. Buildings, building improvements and leasehold improvements are depreciated over to thirty years or the life of the lease if a shorter period, and equipment is depreciated over to ten years. The Company capitalizes internal use software development costs in accordance with guidance on accounting for costs of computer software developed or obtained for internal use. Amortization of software begins when it is ready for its intended use, and is computed on a straight-line basis over the estimated useful life of the software, generally not to exceed twelve years. Capitalized software and hardware costs are classified as property on the consolidated balance sheets. The carrying values of property and equipment are reviewed for impairment when events or changes in circumstances indicate that the asset group's recorded value cannot be recovered from undiscounted future cash flows. Impairment losses, if any, would be measured based upon the difference between the carrying amount of an asset group and its fair value.
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Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill is recognized as the excess cost of an acquired entity over the net amount assigned to assets acquired and liabilities assumed. Goodwill is not amortized. Goodwill is reviewed for impairment annually as of January 1 or whenever changes in conditions indicate an evaluation should be completed. These conditions could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit. The Company utilizes the income and market approaches to determine the fair value of reporting units. Evaluating impairment requires significant judgment by management, including estimated future operating results, estimated future cash flows, the long-term rate of growth of the business, and determination of an appropriate discount rate. While the Company uses available information to prepare the estimates and evaluations, actual results could differ significantly. The Company recognizes acquired identifiable intangible assets such as customer relationships, trade names, vendor relationships, and non-competition agreements apart from goodwill. Customer relationship identifiable intangibles are amortized using the sum-of-the-years-digits method or the expected cash flow method over estimated useful lives consistent with assumptions used in the determination of their value. Amortization of all other finite-lived identifiable intangible assets is computed using the straight-line method over the estimated period of benefit. Amortization of identifiable intangible assets is included in selling, distribution and administrative expense in the accompanying statements of consolidated income. Identifiable intangible assets with finite lives are reviewed for impairment when changes in conditions indicate carrying value may not be recoverable. If circumstances require a finite-lived intangible asset be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by the asset to the carrying value of the asset. If the carrying value of the finite-lived intangible asset is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent that the carrying value exceeds its fair value determined through a discounted cash flow model. Identifiable intangible assets with indefinite lives are reviewed for impairment on an annual basis or whenever changes in conditions indicate an evaluation should be completed. The Company does not currently have any indefinite-lived identifiable intangible assets.
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Self-Insurance Liabilities | Self-Insurance Liabilities The Company maintains business insurance programs with significant self-insured retention covering workers’ compensation, business, automobile, general product liability and other claims. The Company accrues estimated losses including those incurred but not reported using actuarial calculations, models and assumptions based on historical loss experience. The Company also maintains a self-insured health benefits plan which provides medical benefits to U.S. based employees electing coverage under the plan. The Company estimates its reserve for all unpaid medical claims, including those incurred but not reported, based on historical experience, adjusted as necessary based upon management’s reasoned judgment.
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Revenue Recognition | Revenue Recognition The Company primarily sells purchased products distributed through its network of service centers and recognizes revenue at a point in time when control of the product transfers to the customer, typically upon shipment from an Applied facility or directly from a supplier. For products that ship directly from suppliers to customers, Applied generally acts as the principal in the transaction and recognizes revenue on a gross basis. Revenue recognized over time is not significant. Revenue is measured as the amount of consideration expected to be received in exchange for the products and services provided, net of allowances for product returns, variable consideration, and any taxes collected from customers that will be remitted to governmental authorities. Shipping and handling costs are recognized in net sales when they are billed to the customer. The Company has elected to account for shipping and handling activities as fulfillment costs. There are no significant costs associated with obtaining customer contracts. Payment terms with customers vary by the type and location of the customer and the products or services offered. The Company does not adjust the promised amount of consideration for the effects of significant financing components based on the expectation that the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Arrangements with customers that include payment terms extending beyond one year are not significant. The Company’s products are generally sold with a right of return and may include variable consideration in the form of incentives, discounts, credits or rebates. Product returns are estimated based on historical return rates. The returns reserve was $10,522 and $9,772 at June 30, 2022 and June 30, 2021, respectively. The Company estimates and recognizes variable consideration based on historical experience to determine the expected amount to which the Company will be entitled in exchange for transferring the promised goods or services to a customer. The Company records variable consideration as an adjustment to the transaction price in the period it is incurred. The realization of variable consideration occurs within a short period of time from product delivery; therefore, the time value of money effect is not significant. Shipping and Handling Costs The Company records freight payments to third parties in cost of sales and internal delivery costs in selling, distribution and administrative expense in the accompanying statements of consolidated income. Internal delivery costs in selling, distribution and administrative expense were approximately $17,890, $15,970 and $19,620 for the fiscal years ended June 30, 2022, 2021 and 2020, respectively.
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Income Taxes | Income Taxes Income taxes are determined based upon income and expenses recorded for financial reporting purposes. Deferred income taxes are recorded for estimated future tax effects of differences between the bases of assets and liabilities for financial reporting and income tax purposes, giving consideration to enacted tax laws. Uncertain tax positions meeting a more-likely-than-not recognition threshold are recognized in accordance with Accounting Standards Codification (ASC) Topic 740 - Income Taxes. The Company recognizes accrued interest and penalties related to unrecognized income tax benefits in the provision for income taxes.
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Share-Based Compensation | Share-Based Compensation Share-based compensation represents the cost related to share-based awards granted to employees under the 2019 Long-Term Performance Plan, the 2015 Long-Term Performance Plan, or the 2011 Long-Term Performance Plan. The Company measures share-based compensation cost at the grant date, based on the estimated fair value of the award and recognizes the cost over the requisite service period. Non-qualified stock appreciation rights (SARs) and stock options are granted with an exercise price equal to the closing market price of the Company’s common stock at the date of grant and the fair values are determined using a Black-Scholes option pricing model, which incorporates assumptions regarding the expected volatility, the expected option life, the risk-free interest rate and the expected dividend yield. SARs and stock option awards generally vest over four years of continuous service and have ten-year contractual terms. The fair value of restricted stock awards, restricted stock units (RSUs), and performance shares are based on the closing market price of Company common stock on the grant date.
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Treasury Shares | Treasury Shares Shares of common stock repurchased by the Company are recorded at cost as treasury shares and result in a reduction of shareholders’ equity in the consolidated balance sheets. The Company uses the weighted-average cost method for determining the cost of shares reissued. The difference between the cost of the shares and the reissuance price is added to or deducted from additional paid-in capital.
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Derivatives | Derivatives The Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting, and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain risks, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. In accordance with the FASB’s fair value measurement guidance, the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.
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Retirement Savings Plan, Deferred Compensation Plans, and Post-employment Benefit Plans | Retirement Savings Plan Substantially all U.S. employees participate in the Applied Industrial Technologies, Inc. Retirement Savings Plan. Participants may elect 401(k) contributions of up to 50% of their compensation, subject to Internal Revenue Code maximums. The Company partially matches 401(k) contributions by participants. The Company suspended the 401(k) match starting in the fourth quarter of 2020 and restored it in the third quarter of fiscal 2021. The Company’s expense for matching of employees’ 401(k) contributions was $9,149, $3,945 and $5,959 during 2022, 2021 and 2020, respectively. Deferred Compensation Plans The Company has deferred compensation plans that enable certain employees of the Company to defer receipt of a portion of their compensation. Assets held in these rabbi trusts consist of investments in money market and mutual funds and Company common stock. Post-employment Benefit Plans The Company provides the following post-employment benefits which, except for the Qualified Defined Benefit Retirement Plan and Key Executive Restoration Plan, are unfunded: Supplemental Executive Retirement Benefits Plan The Company has a non-qualified pension plan to provide supplemental retirement benefits to certain officers. Benefits are payable and determinable at retirement based upon a percentage of the participant’s historical compensation. The Executive Organization and Compensation Committee of the Board of Directors froze participant benefits (credited service and final average earnings) and entry into the Supplemental Executive Retirement Benefits Plan (SERP) effective December 31, 2011. The Company recorded net periodic benefit costs associated with the SERP of $450, $401, and $317 in fiscal 2022, 2021, and 2020, respectively. The Company expects to make payments of approximately $800 under the SERP in fiscal 2023 and approximately $200 in fiscal 2024. Key Executive Restoration Plan In fiscal 2012, the Company adopted the Key Executive Restoration Plan (KERP), a funded, non-qualified deferred compensation plan, to replace the SERP. The Company recorded $514, $334, and $189 of expense associated with this plan in fiscal 2022, 2021, and 2020, respectively. Qualified Defined Benefit Retirement Plan The Company has a qualified defined benefit retirement plan that provides benefits to certain hourly employees at retirement. These employees did not participate in the Retirement Savings Plan. The benefits are based on length of service and date of retirement. The plan accruals were frozen as of April 16, 2018, and employees are permitted to participate in the Retirement Savings Plan, following that date. The Company recorded net periodic cost (benefits) associated with this plan of $282, $46, and $(116) in fiscal 2022, 2021, and 2020, respectively. Retiree Health Care Benefits The Company provides health care benefits, through third-party policies, to eligible retired employees who pay a specified monthly premium. Premium payments are based upon current insurance rates for the type of coverage provided and are adjusted annually. Certain monthly health care premium payments are partially subsidized by the Company. Additionally, in conjunction with a fiscal 1998 acquisition, the Company assumed the obligation for a post-retirement medical benefit plan which provides health care benefits to eligible retired employees at no cost to the individual. The Company recorded net periodic benefits associated with these plans of $123, $161, and $257 in fiscal 2022, 2021, and 2020, respectively. The Company has determined that the related disclosures under ASC Topic 715 - Compensation, Retirement Benefits, for these post-employment benefit plans are not material to the consolidated financial statements.
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Leases | Leases The Company leases facilities for certain service centers, warehouses, distribution centers and office space. The Company also leases office equipment and vehicles. All leases are classified as operating. The Company’s leases expire at various dates through 2032, with terms ranging from 1 year to 15 years. Many of the Company’s real estate leases contain renewal provisions to extend lease terms up to 5 years. The exercise of renewal options is solely at the Company’s discretion. The Company’s lease agreements do not contain material variable lease payments, residual value guarantees or restrictive covenants. The Company does not recognize right-of-use assets or lease liabilities for short-term leases with initial terms of 12 months or less. Leased vehicles comprise the majority of the Company’s short-term leases. All other leases are recorded on the balance sheet with right-of-use assets representing the right to use the underlying asset for the lease term and lease liabilities representing lease payment obligations. The Company’s leases do not provide implicit rates; therefore the Company uses its incremental borrowing rate as the discount rate for measuring lease liabilities. Non-lease components are accounted for separately from lease components. The Company’s operating lease expense is recognized on a straight-line basis over the lease term and is recorded in selling, distribution and administrative expense on the statements of consolidated income.
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Revenue Recognition Revenue Recognition (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from External Customers by Geographic Areas [Table Text Block] | Disaggregation of Revenues The following tables present the Company's net sales by reportable segment and by geographic areas based on the location of the facility shipping the product for the years ended June 30, 2022, 2021 and 2020. Other countries consist of Mexico, Australia, New Zealand, and Singapore.
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Disaggregation of Revenue [Table Text Block] | The following tables present the Company’s percentage of revenue by reportable segment and major customer industry for the years ended June 30, 2022, 2021, and 2020:
The following tables present the Company’s percentage of revenue by reportable segment and product line for the years ended June 30, 2022, 2021, and 2020:
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Contract with Customer, Asset and Liability [Table Text Block] | Contract Assets The Company’s contract assets consist of un-billed amounts resulting from contracts for which revenue is recognized over time using the cost-to-cost method, and for which revenue recognized exceeds the amount billed to the customer. Activity related to contract assets, which are included in other current assets on the consolidated balance sheet, is as follows:
The difference between the opening and closing balances of the Company's contract assets primarily results from the timing difference between the Company's performance and when the customer is billed.
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Inventories (Tables) |
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Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Items of Inventories | Inventories consist of the following:
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Goodwill and Intangibles (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill [Table Text Block] | The changes in the carrying amount of goodwill for both the Service Center Based Distribution segment and the Fluid Power & Flow Control segment for the years ended June 30, 2022 and 2021 are as follows:
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Schedule of Finite-Lived Intangible Assets [Table Text Block] | The Company's identifiable intangible assets resulting from business combinations are amortized over their estimated period of benefit and consist of the following:
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Schedule of Acquired Finite-Lived Intangible Assets by Major Class [Table Text Block] | During fiscal 2022, the Company acquired identifiable intangible assets with an acquisition cost allocation and weighted-average life as follows:
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Debt Debt (Tables) |
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Schedule of Debt | A summary of long-term debt, including the current portion, follows:
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Schedule of Maturities of Long-term Debt [Table Text Block] | The table below summarizes the aggregate maturities of amounts outstanding under long-term borrowing arrangements for each of the next five years:
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Income Taxes (Tables) |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of income before income taxes | The components of income before income taxes are as follows:
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Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | The provision for income taxes consists of:
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Reconciliations of federal statutory income tax rate and Company's effective income tax rate | The following reconciles the U.S. federal statutory income tax rate to the Company’s effective income tax rate:
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Components of the Company's net deferred tax assets | Significant components of the Company’s deferred tax assets and liabilities are as follows:
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Reconciliation of the Company's total gross unrecognized income tax benefits | The Company and its subsidiaries file income tax returns in U.S. federal, various state, local and foreign jurisdictions. The following table sets forth the changes in the amount of unrecognized tax benefits for the years ended June 30, 2022, 2021, and 2020:
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Shareholders' Equity (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reclassification out of Accumulated Other Comprehensive Income [Table Text Block] | Changes in the accumulated other comprehensive loss for the years ended June 30, 2022, 2021, and 2020, are comprised of the following amounts, shown net of taxes:
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Schedule of Comprehensive Income (Loss) | Details of other comprehensive income (loss) are as follows:
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Computation of basic and diluted earnings per share |
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Share - Based Compensation (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of share based compensation expense | Following approval by the Company's shareholders in October 2019, the 2019 Long-Term Performance Plan (the "2019 Plan") replaced the 2015 Long-Term Performance Plan. The 2019 Plan, which expires in 2024, provides for granting of SARs, stock options, stock awards, cash awards, and such other awards or combination thereof as the Executive Organization and Compensation Committee or, in the case of director awards, the Corporate Governance & Sustainability Committee of the Board of Directors (together referred to as the Committee) may determine to officers, other key employees and members of the Board of Directors. Grants are generally made at regularly scheduled committee meetings. Compensation costs charged to expense under award programs paid (or to be paid) with shares (including SARs, performance shares, restricted stock, and RSUs) are summarized in the table below:
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Schedule of Unrecognized Compensation Cost, Nonvested Awards [Table Text Block] | The aggregate unrecognized compensation cost for share-based award programs with the potential to be paid at June 30, 2022 is summarized in the table below:
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Weighted-average assumptions used for SARs and stock option grants issued | The weighted-average assumptions used for SARs grants issued in fiscal 2022, 2021 and 2020 are:
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Summary of SARs and stock option activity | A summary of SARs and stock options activity is presented below:
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Performance Shares [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of the performance shares and restricted stock activity | A summary of non-vested performance shares activity at June 30, 2022 is presented below:
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Restricted stock and Restricted Stock units [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of the performance shares and restricted stock activity | A summary of the status of the Company’s non-vested restricted stock and RSUs at June 30, 2022 is presented below:
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Leases (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease, Cost | Information related to operating leases is as follows:
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Lessee, Operating Lease, Liability, Maturity | The table below summarizes the aggregate maturities of liabilities pertaining to operating leases with terms greater than one year for each of the next five years:
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Segment Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment financial information | Segment Financial Information
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Reconciliation of operating income for reportable segments to the consolidated income before income taxes | A reconciliation of operating income for reportable segments to the consolidated income before income taxes is as follows:
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Information by geographic area |
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Other Income, Net (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Expense (Income), net | Other expense (income), net, consists of the following:
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Revenue Recognition Revenue Recognition (Details 4) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
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Revenue from Contract with Customer [Abstract] | ||
Contract assets | $ 18,050 | $ 15,178 |
Contract Assets Period $ Change | $ 2,872 | |
Contract Assets Period % Change | 18.90% |
Inventories (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Jun. 30, 2021 |
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Inventory [Line Items] | ||
U.S. inventories at average cost | $ 487,555 | $ 387,456 |
Foreign inventories at average cost | 141,176 | 126,945 |
Inventory, Gross, Total | 628,731 | 514,401 |
Less: Excess of average cost over LIFO cost for U.S. inventories | 178,910 | 151,854 |
Inventories on consolidated balance sheets | $ 449,821 | $ 362,547 |
Inventories Inventories Textuals (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
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Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2020 |
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Inventory Disclosure [Abstract] | |||
Effect of LIFO Inventory Liquidation on Income | $ 501 | $ 3,895 | $ 1,990 |
Goodwill and Intangibles (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
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Changes in the carrying amount of goodwill by reportable segment | ||
Goodwill, beginning balance | $ 560,077 | $ 540,594 |
Goodwill acquired during the year | 3,984 | 15,757 |
Other, primarily currency translation | (856) | 3,726 |
Goodwill, ending balance | 563,205 | 560,077 |
Service Center Based Distribution Segment [Member] | ||
Changes in the carrying amount of goodwill by reportable segment | ||
Goodwill, beginning balance | 212,296 | 208,570 |
Goodwill acquired during the year | 0 | 0 |
Other, primarily currency translation | (1,286) | 3,726 |
Goodwill, ending balance | 211,010 | 212,296 |
Fluid Power & Flow Control Segment [Member] | ||
Changes in the carrying amount of goodwill by reportable segment | ||
Goodwill, beginning balance | 347,781 | 332,024 |
Goodwill acquired during the year | 3,984 | 15,757 |
Other, primarily currency translation | 430 | 0 |
Goodwill, ending balance | $ 352,195 | $ 347,781 |
Goodwill and Intangibles (Details 1) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Jun. 30, 2021 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Amount | $ 473,106 | $ 471,347 |
Accumulated Amortization | 222,516 | 191,719 |
Net Book Value | 250,590 | 279,628 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amount | 353,836 | 353,028 |
Accumulated Amortization | 166,623 | 143,862 |
Net Book Value | 187,213 | 209,166 |
Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amount | 105,629 | 104,780 |
Accumulated Amortization | 44,637 | 37,626 |
Net Book Value | 60,992 | 67,154 |
Vendor Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amount | 11,320 | 11,469 |
Accumulated Amortization | 10,533 | 9,859 |
Net Book Value | 787 | 1,610 |
Other Intangible Assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amount | 2,321 | 2,070 |
Accumulated Amortization | 723 | 372 |
Net Book Value | $ 1,598 | $ 1,698 |
Goodwill and Intangibles (Details 2) $ in Thousands |
12 Months Ended |
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Jun. 30, 2022
USD ($)
| |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived Intangible Assets Acquired | $ 3,014 |
Weighted-Average Life (in years) | 17 years 4 months 24 days |
Customer Relationships [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived Intangible Assets Acquired | $ 1,884 |
Weighted-Average Life (in years) | 20 years |
Trade Names [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived Intangible Assets Acquired | $ 879 |
Weighted-Average Life (in years) | 15 years |
Other Intangible Assets | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived Intangible Assets Acquired | $ 251 |
Weighted-Average Life (in years) | 6 years 6 months |
Debt Debt (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Jun. 30, 2021 |
---|---|---|
Debt Instrument [Line Items] | ||
Revolving credit facility | $ 410,592 | $ 0 |
Total debt | 689,495 | 829,396 |
Less: unamortized debt issuance costs | 171 | 1,016 |
Debt, Long-term and Short-term, Combined Amount | 689,324 | 828,380 |
Long-term Debt [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | 0 | 550,250 |
Asset-backed Securities, Securitized Loans and Receivables [Member] | ||
Debt Instrument [Line Items] | ||
Trade receivable securitization facility | 188,300 | 188,300 |
Prudential Facility - Series C [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | 40,000 | 40,000 |
Prudential Facility - Series D [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | 25,000 | 25,000 |
Prudential Facility - Series E | ||
Debt Instrument [Line Items] | ||
Long-term Debt | 25,000 | 25,000 |
State of Ohio Assumed Debt [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | $ 603 | $ 846 |
Debt (Details 1) $ in Thousands |
Jun. 30, 2022
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
2023 | $ 40,247 |
2024 | 213,551 |
2025 | 25,105 |
2026 | 0 |
2027 | $ 410,592 |
Derivatives Derivatives Textuals (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
Derivative, Amount of Hedged Item | $ 409,000 | $ 420,000 | $ 463,000 |
Derivative, Fixed Interest Rate | 1.63% | 2.61% | |
Derivative, Variable Interest Rate | 2.75% | 3.38% | |
Interest Rate Cash Flow Hedge Asset at Fair Value | $ 17,827 | ||
Interest Rate Cash Flow Hedge Liability at Fair Value | $ 14,346 | ||
Reclassification of interest from cash flow hedge into interest expense | $ 11,361 | $ 11,553 | $ 4,638 |
Fair Value Measurements (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Jun. 30, 2021 |
---|---|---|
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Financial Statement Captions [Line Items] | ||
Marketable securities | $ 15,317 | $ 16,844 |
Income Taxes (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Components of income before income taxes | |||
U.S. | $ 287,367 | $ 152,202 | $ 36,161 |
Foreign | 42,423 | 24,860 | 19,075 |
Income before income taxes | $ 329,790 | $ 177,062 | $ 55,236 |
Income Taxes (Details 1) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Current: | |||
Federal | $ 40,608 | $ 46,685 | $ 31,149 |
State and local | 10,188 | 11,035 | 7,580 |
Foreign | 6,404 | 5,665 | 5,757 |
Total current | 57,200 | 63,385 | 44,486 |
Deferred: | |||
Federal | 12,467 | (24,168) | (8,594) |
State and local | 2,659 | (4,740) | (3,098) |
Foreign | 50 | (2,172) | (1,600) |
Total deferred | 15,176 | (31,080) | (13,292) |
Total | $ 72,376 | $ 32,305 | $ 31,194 |
Income Taxes (Details 2) |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Reconciliations of federal statutory income tax rate and Company's effective income tax rate: | |||
Statutory income tax rate | 21.00% | 21.00% | 21.00% |
State and local taxes | 3.30% | 3.20% | 6.40% |
U.S. federal tax reform/CARES Act NOL carryback | 0 | 0 | (0.018) |
Goodwill impairment | 0.00% | 0.00% | 31.40% |
Stock compensation | 1.50% | 2.50% | 1.30% |
GILTI/FDII | 0.20% | 0.10% | 3.60% |
R & D credit | (0.40%) | (1.50%) | (1.20%) |
U.S. tax on foreign income, net | (0.40%) | (0.50%) | (3.10%) |
Impact of foreign operations | 0.40% | 0.00% | 1.60% |
Non-deductibles/Deductible dividend | 0.20% | 0.00% | 0.60% |
Interest deduction | (0.60%) | (1.10%) | (4.00%) |
Valuation allowance | (0.60%) | 0.10% | 2.60% |
Other, net | 0.30% | (0.60%) | 0.70% |
Effective income tax rate | 21.90% | 18.20% | 56.50% |
Income Taxes (Details 4) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Reconciliation of the Company's total gross unrecognized income tax benefits | |||
Unrecognized Income Tax Benefits at beginning of the year | $ 5,230 | $ 4,955 | $ 4,979 |
Current year tax positions | 505 | 285 | 105 |
Prior year tax positions | (83) | ||
Prior year tax positions | 620 | 177 | |
Expirations of statutes of limitations | (726) | (630) | (306) |
Unrecognized Income Tax Benefits at end of year | $ 4,926 | $ 5,230 | $ 4,955 |
Shareholders' Equity Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Earnings Per Share [Abstract] | |||
Net income | $ 257,414 | $ 144,757 | $ 24,042 |
Average Shares Outstanding: | |||
Weighted-average common shares outstanding for basic computation | 38,471 | 38,758 | 38,658 |
Dilutive effect of potential common shares | 634 | 538 | 341 |
Weighted-average common shares outstanding for dilutive computation | 39,105 | 39,296 | 38,999 |
Net income per share — basic | $ 6.69 | $ 3.73 | $ 0.62 |
Net income per share — diluted | $ 6.58 | $ 3.68 | $ 0.62 |
Shareholders' Equity Textuals (Details) - shares shares in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Stockholders' Equity Note [Abstract] | |||
Common stock held as treasury shares restricted as (in shares) | 128 | ||
Antidilutive Stock options and appreciation rights relating to the acquisition of shares of common stock not included in the computation of diluted earnings per share (in shares) | 106 | 234 | 726 |
Share - Based Compensation (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Compensation costs charged to expense under award programs | |||
Total compensation costs under award programs | $ 11,842 | $ 8,980 | $ 6,954 |
Stock Options and Stock Appreciation Rights [ Member] | |||
Compensation costs charged to expense under award programs | |||
Total compensation costs under award programs | 3,284 | 2,526 | 2,954 |
Performance Shares [Member] | |||
Compensation costs charged to expense under award programs | |||
Total compensation costs under award programs | 4,549 | 2,494 | 854 |
Restricted stock and Restricted Stock units [Member] | |||
Compensation costs charged to expense under award programs | |||
Total compensation costs under award programs | $ 4,009 | $ 3,960 | $ 3,146 |
Share - Based Compensation (Details 2) - Stock Options and Stock Appreciation Rights [ Member] - $ / shares |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Weighted-average assumptions used for SARs and stock option grants issued | |||
Expected life, in years | 6 years 4 months 24 days | 7 years | 6 years 2 months 12 days |
Risk free interest rate | 1.00% | 0.50% | 1.60% |
Dividend yield | 1.50% | 1.90% | 2.30% |
Volatility | 34.30% | 32.00% | 23.70% |
Per share fair value of SAR's and stock options granted during the year | $ 26.18 | $ 17.97 | $ 10.12 |
Share - Based Compensation (Details 4) - Performance shares [Member] shares in Thousands |
12 Months Ended |
---|---|
Jun. 30, 2022
$ / shares
shares
| |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Beginning Balance, Shares | shares | 65 |
Granted, shares | shares | 74 |
Vested, Shares | shares | (8) |
Ending Balance, Shares | shares | 131 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |
Beginning Balance, Weighted-Average Grant-Date Fair Value | $ / shares | $ 55.64 |
Granted, Weighted-Average Grant-Date Fair Value | $ / shares | 61.85 |
Vested, Weighted-Average Grant- Date Fair Value | $ / shares | 71.11 |
Ending Balance, Weighted-Average Grant-Date Fair Value | $ / shares | $ 58.27 |
Share - Based Compensation (Details 5) - Restricted stock and Restricted Stock units [Member] shares in Thousands |
12 Months Ended |
---|---|
Jun. 30, 2022
$ / shares
shares
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Beginning Balance, Shares | shares | 177 |
Beginning Balance, Weighted-Average Grant-Date Fair Value | $ / shares | $ 65.57 |
Granted, shares | shares | 41 |
Granted, Weighted-Average Exercise Price | $ / shares | $ 91.89 |
Forfeited, Shares | shares | (7) |
Forfeitures, Weighted-Average Grant-Date Fair Value | $ / shares | $ 73.96 |
Vested, Shares | shares | (34) |
Vested, Weighted-Average Grant- Date Fair Value | $ / shares | $ 76.36 |
Ending Balance, Shares | shares | 177 |
Ending Balance, Weighted-Average Grant-Date Fair Value | $ / shares | $ 69.23 |
Leases (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Operating Leased Assets [Line Items] | ||
Operating lease assets, net | $ 108,052 | $ 87,111 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Other Liabilities, Current | Other Liabilities, Current |
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Other Liabilities | Other Liabilities |
Total Operating Lease Liabilities | $ 110,921 | |
Weighted average remaining lease term (years) | 5 years 6 months | 5 years 7 months 6 days |
Weighted average incremental borrowing rate | 2.92% | 3.26% |
Cash paid for operating leases | $ 35,313 | $ 33,695 |
Right of use assets obtained in exchange for new operating lease liabilities | 50,743 | 25,556 |
Other Current Liabilities [Member] | ||
Operating Leased Assets [Line Items] | ||
Total Operating Lease Liabilities | $ 110,921 | $ 91,607 |
Leases (Details 1) $ in Thousands |
Jun. 30, 2022
USD ($)
|
---|---|
Lessee, Operating Lease, Liability, Payment, Due | |
2023 | $ 32,759 |
2024 | 27,688 |
2025 | 18,826 |
2026 | 14,084 |
2027 | 9,723 |
Thereafter | 16,754 |
Total lease payments | 119,834 |
Less interest | 8,913 |
Present value of lease liabilities | $ 110,921 |
Leases Leases Textuals (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Leases [Abstract] | |||
Operating Lease, Cost | $ 34,144 | $ 31,778 | |
Short-term Lease, Cost | 7,501 | 9,929 | |
Related Party Transaction, Expenses from Transactions with Related Party | $ 2,100 | $ 2,100 | $ 2,500 |
Segment Information (Details 2) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2020 |
---|---|---|---|
Revenues From External Customers and Long Lived Assets [Line Items] | |||
Long-Lived Assets | $ 219,948 | $ 202,700 | $ 212,537 |
United States [Member] | |||
Revenues From External Customers and Long Lived Assets [Line Items] | |||
Long-Lived Assets | 178,522 | 173,335 | 185,475 |
Canada [Member] | |||
Revenues From External Customers and Long Lived Assets [Line Items] | |||
Long-Lived Assets | 31,728 | 21,458 | 20,575 |
Other Countries [Member] | |||
Revenues From External Customers and Long Lived Assets [Line Items] | |||
Long-Lived Assets | $ 9,698 | $ 7,907 | $ 6,487 |
Segment Information Textuals (Details 3) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Segment Reporting Information [Line Items] | |||
Net sales | $ 3,810,676 | $ 3,235,919 | $ 3,245,652 |
Intersegment Eliminations [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | $ 37,163 | $ 31,615 | $ 29,582 |
Other Income, Net (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Unrealized loss (gain) on assets held in rabbi trust for a non-qualified deferred compensation plan | $ 2,612 | $ (4,048) | $ (458) |
Foreign currency transaction (gains) losses | (65) | 2,091 | (2,463) |
Net other periodic post-employment costs (benefits) | 610 | 283 | (120) |
Life insurance (income) expense, net | (1,374) | (296) | 233 |
Other, net | 22 | 26 | |
Other, net | (230) | ||
Total other expense (income), net | $ 1,805 | $ (2,200) | $ (2,782) |
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands |
12 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|||||
SEC Schedule, 12-09, Allowance, Credit Loss [Member] | |||||||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||||||
Balance at beginning of period | $ 26,227 | $ 23,544 | $ 17,763 | ||||
Additions charged to costs and expenses | 3,193 | 6,540 | 14,055 | ||||
Additions (Deductions) Charged to Other Accounts | 750 | (111) | 2,618 | ||||
Deductions from reserves | 2,126 | 3,746 | 10,892 | ||||
Balance at end of period | 28,044 | 26,227 | 23,544 | ||||
Allowance for Doubtful Account [Member] | |||||||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||||||
Balance at beginning of period | 16,455 | 13,661 | 10,498 | ||||
Additions charged to costs and expenses | 3,193 | 6,540 | 14,055 | ||||
Additions (Deductions) Charged to Other Accounts | 0 | 0 | 0 | ||||
Deductions from reserves | 2,126 | 3,746 | 10,892 | ||||
Balance at end of period | 17,522 | 16,455 | 13,661 | ||||
Sales Returns and Allowances [Member] | |||||||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||||||
Balance at beginning of period | 9,772 | 9,883 | 7,265 | ||||
Additions charged to costs and expenses | 0 | 0 | 0 | ||||
Additions (Deductions) Charged to Other Accounts | [1] | 750 | (111) | 2,618 | |||
Deductions from reserves | [2] | 0 | 0 | 0 | |||
Balance at end of period | $ 10,522 | $ 9,772 | $ 9,883 | ||||
|
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