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Applied Industrial Technologies (AIT) is a leading distributor and solutions provider specializing in industrial motion, power, control, and automation technologies. The company operates a network of facilities and offers over 9.1 million stock keeping units (SKUs), serving Maintenance, Repair & Operations (MRO) and Original Equipment Manufacturer (OEM) customers across diverse industries. AIT's offerings include industrial bearings, power transmission products, fluid power components, specialty flow control, and advanced factory automation solutions.
- Power Transmission - Supplies products such as motors, belting, drives, couplings, and linear motion components for industrial applications.
- Fluid Power - Provides hydraulic and pneumatic components, systems, and advanced automation solutions, including robotics and motion control technologies.
- General Maintenance; Hose Products - Offers hoses, filtration supplies, and other maintenance-related products for industrial operations.
- Bearings, Linear & Seals - Distributes industrial bearings, linear motion products, and seals for machinery and equipment.
- Specialty Flow Control - Delivers engineered flow control products for specialized industrial applications.
| Name | Position | External Roles | Short Bio | |
|---|---|---|---|---|
Neil A. Schrimsher ExecutiveBoard | President & CEO | Board Member at Patterson Companies, Inc. (NASDAQ: PDCO) | Neil A. Schrimsher has been leading AIT since 2011 as CEO and was elected President in 2013. He has extensive experience in worldwide operations, distribution management, and strategic planning. | |
David K. Wells Executive | VP-Chief Financial Officer, Treasurer, and Principal Accounting Officer | None | David K. Wells has been CFO and Treasurer since 2023 and became Principal Accounting Officer on June 28, 2023. He oversees AIT's financial operations and compliance. | |
Jason W. Vasquez Executive | VP-Sales & Marketing, U.S. Service Centers | None | Jason W. Vasquez has been VP-Sales & Marketing, U.S. Service Centers since June 2017. He oversees sales and marketing strategies for AIT's service centers. | |
Jon S. Ploetz Executive | VP-General Counsel & Secretary | None | Jon S. Ploetz joined AIT in March 2023. He previously held senior legal roles at Harsco Corporation and Arch Coal, Inc.. | |
Kurt W. Loring Executive | VP-Chief Human Resources Officer | None | Kurt W. Loring has been with AIT since 2014, serving as VP-Chief Human Resources Officer. He oversees HR functions and organizational development. | |
Richard M. Wagner Executive | Principal Accounting Officer | None | Richard M. Wagner joined AIT in August 2024 as Chief Accounting Officer & Controller and became Principal Accounting Officer in October 2024. He is a CPA with extensive accounting experience. | |
Warren E. Hoffner Executive | VP, General Manager – Engineered Solutions | None | Warren E. Hoffner joined AIT in 1996 and has been VP, General Manager – Engineered Solutions since October 2018. He previously led the Fluid Power segment. | |
Joe A. Raver Board | Director | None | Joe A. Raver has been a Director at AIT since 2017. He is the retired CEO of Hillenbrand, Inc., with extensive leadership experience in global manufacturing. | |
Madhuri A. Andrews Board | Director | EVP and CIO at MKS Instruments, Inc. (NASDAQ: MKSI) | Madhuri A. Andrews has been a Director at AIT since 2019. She is an expert in digital transformation and IT governance and currently serves as EVP and CIO at MKS Instruments. | |
Mary Dean Hall Board | Director | CFO at Ingevity Corporation (NYSE: NGVT) | Mary Dean Hall has been a Director at AIT since 2019. She is the CFO of Ingevity Corporation and has expertise in financial planning, M&A, and enterprise risk management. | |
Peter C. Wallace Board | Chairman of the Board | None | Peter C. Wallace has been a Director since 2005 and Chairman since 2014. He is a retired CEO with extensive experience in industrial manufacturing and distribution. | |
Richard J. Simoncic Board | Director | COO of Microchip Technology Inc. (NASDAQ: MCHP) | Richard J. Simoncic joined AIT's Board in August 2024. He is also the COO of Microchip Technology Inc., with expertise in global operations and manufacturing. | |
Robert J. Pagano, Jr. Board | Director | CEO, President, and Chairperson of Watts Water Technologies, Inc. (NYSE: WTS) | Robert J. Pagano, Jr. has been a Director at AIT since 2017. He is also the CEO and Chairperson of Watts Water Technologies, a global manufacturing company. | |
Shelly M. Chadwick Board | Director | CFO at Materion Corporation (NYSE: MTRN) | Shelly M. Chadwick joined AIT's Board in 2022. She is the CFO of Materion Corporation and has extensive experience in finance and operational leadership. | |
Vincent K. Petrella Board | Director | Director at The Gorman-Rupp Company (NYSE: GRC) and Sotera Health, Inc. (NYSE: SHC) | Vincent K. Petrella has been a Director at AIT since 2012. He is a retired CFO with expertise in finance, accounting, and industrial distribution. |
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Given the expected decline in gross margins to around 30% in the third quarter due to normalized gross margin execution, higher LIFO expense, inflationary headwinds, and integration costs from the Hydradyne acquisition, what specific strategies are you implementing to mitigate these pressures and sustain margin expansion moving forward?
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With January sales currently trending down mid-single digits year-over-year, but showing improvement in the last couple of weeks, how confident are you that this positive trend will continue, and what key factors are influencing your sales outlook for the remainder of the fiscal year given the mixed end-market demand?
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Considering your plans to operate with leverage up to 2x and the recent acquisition of Hydradyne, how are you balancing the risks associated with increased debt levels and integration challenges, and what measures are in place to ensure these acquisitions contribute positively to shareholder value?
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While the Engineered Solutions segment has expanded to nearly 40% of overall sales and shown strong margin growth, how do you plan to address the ongoing sales weaknesses in fluid power and automation, and what initiatives are in place to drive sustained growth in this segment amid current headwinds?
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In light of potential new tariffs and the possibility of inflationary impacts on your products, how are you preparing to manage pricing strategies and supply chain risks to protect your margins and customer relationships, especially considering your low direct import exposure and the absence of heightened pre-buy activity?
Notable M&A activity and strategic investments in the past 3 years.
| Company | Year | Details |
|---|---|---|
Hydradyne, LLC | 2024 | Acquired for $272 million (subject to adjustments) with cash on hand, this deal enhances AIT’s Engineered Solutions through Hydradyne’s expertise in fluid power and motion control, contributing approx $260M in sales and $30M in EBITDA during the first year. |
Total Machine Solutions (TMS) | 2024 | Acquired on August 1, 2024 for $6.5 million using available cash, TMS provides electrical and mechanical power transmission products from Fairfield, New Jersey and is expected to combine with Stanley Proctor to yield roughly $17M in annual sales. |
Stanley Proctor | 2024 | Completed in 2024 with a purchase price updated to $3,998, this acquisition brings in tangible assets worth $548 and intangible assets including goodwill of $3,450, strengthening AIT’s Engineered Solutions segment and fluid power capabilities with a combined annual sales target of about $17M (with TMS). |
Grupo Kopar | 2024 | Completed on May 1, 2024 for $61.2 million (including the assumption of $2.5M in net liabilities and $63.8M in intangible assets) and funded by cash, this acquisition broadens AIT’s automation offerings with robotics, machine vision, and IIoT, expanding its geographic reach across Mexico, Costa Rica, and Texas while adding about 200 associates. |
Bearing Distributors, Inc. (BDI) | 2023 | Acquired on September 1, 2023 for $18 million (including $1.8M in acquisition holdbacks), BDI adds $4.327M in net tangible assets and $13.673M in intangible assets, complementing AIT’s Service Center Based Distribution with its expertise in bearings and power transmission, funded with cash. |
Cangro Industries, Inc. | 2023 | Acquired on August 1, 2023 for $6,219 with $2,175 in net tangible assets and $4,044 in intangible assets (plus $930 in holdback payments), Cangro reinforces the Service Center Based Distribution segment by offering bearings, power transmission, and repair services, funded using available cash. |
Advanced Motion Systems Inc. | 2023 | Purchased on March 31, 2023 for approximately $10,000–$10,118 using available cash, AMS bolsters the Engineered Solutions segment with automation products, machine vision, robotics, and motion control, offering net tangible assets of about $1,768–$1,772 and intangible assets of $8,228–$8,350. |
R.R. Floody Company | 2021 | Acquired on August 18, 2021 for $8,094 (including $1,000 in holdback payments on anniversaries), this acquisition supported via cash funding brings $1,813 in net tangible assets and $6,281 in intangible assets, reinforcing the Fluid Power & Flow Control segment and AIT’s advanced factory automation strategy. |
Recent press releases and 8-K filings for AIT.
- EBITDA exceeded expectations, up 7% YoY with margins expanding by 59bps driven by strong cost controls, enhanced pricing, and robust cash generation .
- Updated fiscal 2025 guidance now projects full-year EPS of $9.85 to $10 and Q4 EPS of $2.52 to $2.67, along with a new 1.5M share repurchase authorization and a $0.46 dividend per share .
- Net sales reached $1.2B (up 1.8% YoY) with net income of $99.8M (or $2.57 EPS) .
- Overall organic sales declined approximately 3% YoY (with a 3.1% drop in daily sales), partially offset by acquisitions delivering over 660 basis points of growth .
- Acquisitions, including the positive contribution from the Hydradyne deal and the announced purchase of IRIS Factory Automation, bolstered performance .
- Segment highlights showed a modest decline for the Service Center unit, while Engineered Solutions achieved 13.5% YoY sales growth through active acquisition integration .