8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): October 25, 2011

APPLIED INDUSTRIAL TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

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

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

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

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

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

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

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

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

ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On October 25, 2011, Applied Industrial Technologies, Inc. (“Applied”) issued an earnings release related to its first quarter ended September 30, 2011. The earnings release is attached as Exhibit 99.1 to this Report on Form 8-K.

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

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits.

Exhibit 99.1 – Earnings release of Applied Industrial Technologies, Inc. dated October 25, 2011.

SIGNATURE

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

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

Date: October 25, 2011

EXHIBIT INDEX

Exhibit No.	Description
99.1	The following exhibit is furnished with this Report on Form 8-K: Earnings release of Applied Industrial Technologies, Inc. dated October 25, 2011.

EX-99.1

Exhibit 99.1

Applied Industrial Technologies Reports Record Results

For Fiscal 2012 First Quarter

27% Increase in Net Income

10% Increase in Sales

CLEVELAND, Ohio, October 25, 2011 – Applied Industrial Technologies (NYSE: AIT) today reported first quarter fiscal 2012 sales and earnings for the three months ended September 30, 2011.

Net sales for the first quarter increased 9.9% to a record $579,574,000 from $527,501,000 in the comparable period a year ago. Net income for the quarter increased 27.1% to $26,382,000 or $0.61 per share compared to $20,755,000 or $0.48 per share last year.

Commenting on the Company’s performance, Applied’s Chairman & Chief Executive Officer David L. Pugh said, “We are pleased to report a solid start to the fiscal year with continued growth and profitability for the quarter. Our sales growth combined with a continuing emphasis on managing the operating fundamentals allowed us to post strong earnings.

“Of notable significance, we generated a first quarter operating margin of 7.5%, up from 6.6% a year ago. Our strong performance is a result of numerous ongoing strategic initiatives, including a continuing focus on cost control and asset management, that serve to increase our efficiency and productivity.

“As we look ahead, we see an industrial market that is experiencing real growth and offers continued opportunities for expansion,” stated Benjamin J. Mondics, President and Chief Operating Officer for Applied. “Based on the current state of the industrial economy, we are maintaining our full fiscal 2012 guidance for earnings per share between $2.40 and $2.55, on expected sales of $2.35 billion to $2.45 billion.”

During the first quarter of fiscal 2012, the company purchased 640,000 shares of its common stock in open market transactions for $18.2 million.

On October 17, 2011, Applied announced that Neil A. Schrimsher, age 47, would succeed David L. Pugh as the Company’s CEO. Mr. Pugh is retiring effective today after nearly 13 years of service to Applied. Mr. Schrimsher, formerly Executive Vice President of Cooper Industries, will assume those duties following today’s annual shareholder meeting.

The Company will host its quarterly conference call for investors and analysts at 4 p.m. ET on October 25, 2011. To join the call, dial 1-800-774-6070 or 1-630-691-2753 (for International callers) using passcode 6908413. A live audio webcast can be accessed online at www.Applied.com. A replay of the call will be available for two weeks by dialing 1-888-843-7419 or 1-630-652-3042 (International) using passcode 6908413.

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With approximately 470 facilities and 4,600 employee associates across North America, Applied Industrial Technologies is an industrial distributor that offers more than 4 million parts critical to the operations of MRO and OEM customers in virtually every industry. In addition, Applied provides engineering, design and systems integration for industrial and fluid power applications, as well as customized mechanical, fabricated rubber and fluid power shop services. Applied also offers maintenance training, plus solutions to meet inventory and storeroom management needs that help provide enhanced value to its customers. For its fiscal year ended June 30, 2011, Applied posted sales of $2.2 billion. Applied can be visited on the Internet at http://www.applied.com.

This press release contains statements that are forward-looking, as that term is defined by the Securities and Exchange Commission in its rules, regulations and releases. Forward-looking statements are often identified by qualifiers such as “see,” “expect,” “will,” “guidance,” and similar expressions. Applied intends that such forward-looking statements be subject to the safe harbors created thereby. All forward-looking statements are based on current expectations regarding important risk factors including trends in the industrial sector of the economy, and other risk factors identified in Applied’s most recent periodic report and other filings made with the Securities and Exchange Commission. Accordingly, actual results may differ materially from those expressed in the forward-looking statements, and the making of such statements should not be regarded as a representation by the Company or any other person that the results expressed therein will be achieved. Applied assumes no obligation to update publicly or revise any forward-looking statements, whether due to new information, or events, or otherwise, except as required by law.

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For investor relations information, contact Mark O. Eisele, Vice President – Chief Financial Officer, at 216-426-4417. For corporate information, contact Richard C. Shaw, Vice President – Communications, at 216-426-4343.

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APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED STATEMENTS OF CONSOLIDATED INCOME

(In thousands, except per share data)

	Three Months Ended September 30,
	2011		2010
Net Sales	$	579,574	$	527,501
Cost of sales		420,870		384,381
Gross Profit		158,704		143,120
Selling, distribution and administrative, including depreciation		115,437		108,229
Operating Income		43,267		34,891
Interest expense, net		47		1,124
Other expense (income), net		1,932		(343	)
Income Before Income Taxes		41,288		34,110
Income Tax Expense		14,906		13,355
Net Income	$	26,382	$	20,755
Net Income Per Share—Basic	$	0.62	$	0.49
Net Income Per Share—Diluted	$	0.61	$	0.48
Average Shares Outstanding—Basic		42,397		42,370
Average Shares Outstanding—Diluted		42,961		43,086

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

There were no LIFO layer liquidation benefits recognized for the quarter ended September 30, 2011, nor are any expected to be realized for the year ending June 30, 2012. We recorded $301 of LIFO layer liquidation benefits in the quarter ended September 30, 2010.

APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

	September 30, 2011		June 30, 2011
Assets
Cash and cash equivalents	$	73,218	$	91,092
Accounts receivable, net of allowances of $7,428 and $7,016		289,450		290,751
Inventories		215,013		204,066
Other current assets		27,532		33,005
Total current assets		605,213		618,914
Property, net		73,079		69,014
Intangibles, net		86,661		89,551
Goodwill		76,783		76,981
Other assets		58,491		60,471
Total Assets	$	900,227	$	914,931
Liabilities
Accounts payable	$	109,928	$	108,509
Other accrued liabilities		97,025		106,179
Total current liabilities		206,953		214,688
Other liabilities		60,460		66,680
Total Liabilities		267,413		281,368
Shareholders' Equity		632,814		633,563
Total Liabilities and Shareholders' Equity	$	900,227	$	914,931

APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS

(In thousands)

	Three Months Ended September 30,
	2011			2010
Cash Flows from Operating Activities
Net income	$	26,382		$	20,755
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property		2,818			2,713
Amortization of intangibles		2,809			2,787
Amortization of stock options and appreciation rights		633			1,259
Gain on sale of property		(386	)		(10	)
Other share-based compensation expense		1,260			996
Changes in assets and liabilities, net of acquisitions		(17,371	)		(24,301	)
Other, net		256			317
Net Cash provided by Operating Activities		16,401			4,516
Cash Flows from Investing Activities
Property purchases		(7,142	)		(873	)
Proceeds from property sales		637			41
Net cash paid for acquisition of businesses, net of cash acquired		(1,241	)		(27,697	)
Net Cash used in Investing Activities		(7,746	)		(28,529	)
Cash Flows from Financing Activities
Repayments under revolving credit facility					(50,000	)
Purchases of treasury shares		(18,178	)
Dividends paid		(8,099	)		(7,206	)
Excess tax benefits from share-based compensation		149			392
Exercise of stock options and appreciation rights		84			143
Net Cash used in Financing Activities		(26,044	)		(56,671	)
Effect of Exchange Rate Changes on Cash		(485	)		(500	)
Decrease in cash and cash equivalents		(17,874	)		(81,184	)
Cash and cash equivalents at beginning of period		91,092			175,777
Cash and Cash Equivalents at End of Period	$	73,218		$	94,593
Non-cash Investing Activities:
Property purchases, unpaid at September 30				$	10,000