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Item 1. Business

2025-08-15 compared with 2024-08-16 · 112 added, 100 removed, 93 unchanged (70% of the section changed)

In this annual report on Form 10-K, “Applied” refers to Applied Industrial Technologies, Inc., an Ohio corporation.

In this Annual Report on Form 10-K for the fiscal year ended June 30, 2025 (this "Annual Report"), “Applied” refers to Applied Industrial Technologies, Inc., an Ohio corporation.

References to “we,” “us,” “our,” and “the Company” refer to Applied and its subsidiaries.

We are a leading distributor and solutions provider of industrial motion, power, control, and automation technologies.

Through our comprehensive network of approximately 6,500 employee associates and approximately 590 facilities including service center, fluid power, flow control, and automation operations, as well as repair shops and distribution centers, we offer a selection of more than 9.1 million stock keeping units with a focus on industrial bearings, power transmission products, fluid power components and systems, specialty flow control, and advanced factory automation solutions.

We market our products with a set of service solutions including inventory management, engineering, design, assembly, repair, and systems integration, as well as customized mechanical, fabricated rubber, and shop services.

Our customers use our products and services for both MRO (maintenance, repair, and operating) and OEM (original equipment manufacturing) applications across a variety of end markets primarily in North America, as well as Australia, New Zealand, Singapore, and Costa Rica.

Headquartered in Cleveland, Ohio, Applied and its predecessor companies have engaged in business since 1923.

The fiscal year end for Applied is June 30, 2025.

We are a leading distributor and technical solutions provider of industrial motion, power, control, and automation technologies.

Through our comprehensive network of approximately 6,800 employee associates and approximately 600 facilities including service center, fluid power, flow control, and automation operations, as well as repair shops and distribution centers, we offer a selection of more than 9.2 million stock keeping units with a focus on industrial bearings, power transmission products, fluid power components and systems, specialty flow control, and advanced factory automation solutions, as well as general maintenance products.

Our customers use our products and services for both MRO (maintenance, repair, and operating), OEM (original equipment manufacturing), and new system install applications across a variety of end markets primarily in North America, as well as Australia, New Zealand, and Singapore.

Our internet address is www.applied.com.

The following documents are available via hyperlink from the investor relations area of our website:

The following documents are available free of charge via hyperlink from the investor relations area of our website:

• Applied's Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports, together with Section 16 insider beneficial stock ownership reports - these documents are posted as soon as reasonably practicable after they are electronically filed with, or furnished to, the Securities and Exchange Commission

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GENERAL DEVELOPMENT OF BUSINESS

Information regarding developments in our business can be found in Item 7 under the caption “Management's Discussion and Analysis of Financial Condition and Results of Operations.” This information is incorporated here by reference.

VALUE PROPOSITION

We serve a segment of the industrial market that requires technical expertise and service given that our products and solutions are directly tied to companies’ production process, efficiency initiatives, and most critical operating assets.

As such, we believe we are integral to our customers’ supply chains considering the critical nature and direct exposure that our solutions have on our customers’ core production equipment and plant capabilities.

While we compete with other distributors and service providers offering products and solutions addressing this area of the industrial supply chain, we believe our industry position and value proposition benefits from relative advantages tied to the following key attributes:

1) Technical expertise in motion control technologies and related service offerings

2) Extensive knowledge of customer's facility and production equipment

3) Broad in-stock product offering, inventory availability, and repair capabilities

4) Tenured relationships with industrial customers and leading suppliers

5) Scale and proximity of our service center network relative to customer facilities

Information regarding current developments in our business can be found in Item 7 of this Annual Report under the caption “Management's Discussion and Analysis of Financial Condition and Results of Operations.” This information is incorporated here by reference.

INDUSTRY POSITION AND VALUE PROPOSITION

We serve a segment of the industrial market that requires technical expertise and service as our products and solutions are directly tied to companies’ production process, efficiency initiatives, and most critical operating assets.

While our business has evolved with a broader portfolio of solutions and entrance into new markets in recent years, our core remains primarily focused on connecting world-class industrial products and technologies from leading suppliers to our customers' most critical operating assets.

As such, we are integral to our customers’ supply chains considering the direct exposure our solutions have on our customers’ core production equipment and plant capabilities, where high cost of failure, product specification, and system complexity require premier local service and inventory availability, application expertise, and aftermarket support.

While we compete with other distributors and service providers offering products and solutions addressing the industrial supply chain, we believe our industry position and value proposition benefits from relative advantages tied to the following key attributes:

1) Deep technical expertise in providing solutions to critical motion control systems and related service offerings

2) Leading positions in engineered fluid power and flow control solutions

7) Advanced capabilities in automation solutions and smart technologies

8) Talent acquisition and development of technically-oriented sales associates, engineers, and service personnel

9) Business systems and distribution capabilities

3) Advanced capabilities and an established footprint across advanced automation solutions

4) Broad in-stock product offering, local inventory availability, and repair capabilities

5) Extensive technical knowledge and domain expertise of our customers' facility and production equipment

6) Tenured relationships with industrial customers and leading suppliers

7) Scale and proximity of our operations relative to customer facilities

8) Local entrepreneurial culture and continuous improvement focus

9) Complementary offerings including indirect consumable supply inventory management

We focus on helping customers minimize their production downtime, improve machine performance, and reduce overall procurement and maintenance costs, as well as optimize the efficiency and safety of their facilities and equipment.

A primary focus for our service center network is responding to a critical “break-fix” situation, which

requires knowledge of a customer’s facility, localized inventory, timely delivery capabilities, service execution, and accountability.

In addition, our fluid power, flow control, and automation operations design, engineer, and integrate solutions focused on making a customer’s operations and equipment more productive, cost and energy-efficient, and automated.

We believe our products and solutions are increasingly critical within the industrial supply chain given increased manufacturing activity in the U.S., reshoring or localization of supply chains across North America, a greater focus on supply chain resiliency following the pandemic, an aging and tighter customer labor force, more sophisticated production equipment and processes, a greater focus on plant floor optimization, and compliance and regulatory requirements.

10) Talent acquisition and development of technical sales associates, engineers, and service personnel

11) Business systems and distribution capabilities

12) Strong financial liquidity and access to capital

Across our Company, we focus on helping customers minimize their production downtime, improve machine performance, and reduce overall procurement and maintenance costs, as well as optimize the efficiency and safety of their facilities, equipment, and production processes.

Within our Service Center segment, we focus on responding to critical “break-fix” situations, which requires knowledge of a customer’s facility, localized inventory, timely delivery capabilities, service execution, and accountability.

In our Engineered Solutions segment, we design, engineer, and integrate solutions focused on making a customer’s operations and equipment more productive, cost and energy-efficient, and automated.

We believe our products and solutions are increasingly critical within the industrial supply chain given increased manufacturing activity in the United States, reshoring or localization of supply chains across North America, a greater focus on supply chain resiliency, required maintenance and modernization on aged industrial equipment, technical labor constraints across customers' operations, more sophisticated production equipment and processes, a greater focus on plant floor optimization, and compliance and regulatory requirements.

INDUSTRY AND COMPETITION

We primarily compete within North America which we believe offers significant growth potential given our industry position, established distribution and sales network, market fragmentation, and customer technical requirements, as well as opportunities tied to greater demand for automation and smart technologies across the industrial sector.

In addition, we believe reshoring and localization of supply chains, required infrastructure investments, and a greater focus on energy efficiency will be meaningful growth catalysts in years to come.

We primarily compete within North America which we believe offers significant growth potential given our industry position, established distribution and sales network, market fragmentation, and customer technical requirements, as well as various secular and structural growth tailwinds developing across the industrial sector.

Growth within our industry is influenced by broader industrial production and capacity utilization, as well as inflation, labor dynamics, capital spending, geopolitical events, factory optimization initiatives, changes in industrial equipment technologies, and supply chain requirements.

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STRATEGIC GROWTH AND OPERATIONAL OPPORTUNITIES

• Optimize operations and capture market share across our core service center network .

• Exposure to Industrial Mega Trends.

We are favorably positioned to benefit from various secular tailwinds developing across the North American industrial market.

This includes localizing and reshoring supply chains to North America, required infrastructure investments, greater equipment maintenance and system modernization on aged industrial assets, and the build-out and maintenance of systems used for decarbonization.

In addition, sustainability initiatives and dynamic energy costs are driving a focus on optimizing equipment efficiency through greater technical maintenance and component upgrades, while our expertise and access to fluid conveyance and robotic solutions are providing new growth opportunities in areas such as datacenter infrastructure and semiconductor manufacturing.

We believe our North America focus and comprehensive portfolio of technical solutions including motion control, fluid power, specialty flow control, and automation solutions will play a critical role in supporting these growth tailwinds.

• Service Center Initiatives .

Our network of service centers located close to industrial companies allows us to respond quickly and effectively to critical MRO situations involving direct production infrastructure and industrial equipment.

We believe our technical domain expertise and access to core industrial equipment across our customers' facilities puts us in a leading position to support their technical MRO and production requirements.

These requirements are elevated industry-wide given aged industrial production assets, increased focus on energy efficient equipment, more sophisticated industrial production processes, customer labor constraints, and increased manufacturing activity across North America.

In addition, we continue to deploy initiatives to further enhance our capabilities across our service center network and gain market share.

These include investments in analytics, strategic account penetration, sales process optimization, greater shop and conveyance capabilities, talent development, and digital channel solutions, as well as fully leveraging and cross-selling our expanded product and engineered solutions across fluid power, flow control, automation, and consumables solutions.

• Extend our leading fluid power and flow control position as demand for comprehensive solutions grows .

This position is strengthening as we fully leverage and cross-sell our expanded portfolio of fluid power, flow control, automation, and consumables solutions.

In addition, investments in technology, predictive analytics, talent, and shared service functions have streamlined operating processes while enhancing our business intelligence and sales force productivity.

We are also augmenting our local technical service through greater shop and conveyance capabilities, as well as investing in our digital and e-commerce channel.

• Leading Fluid Power and Flow Control Position .

We provide innovative fluid power and flow control solutions including systems design and engineering, electronic control integration, software programming, valve actuation, compliance consulting, fabrication and assembly, and dedicated service and repair.

Demand for these solutions is increasing across a variety of industrial, off-highway mobile, technology, and process related applications given a greater focus on power consumption, plant efficiency and automation, emissions control, electrification, remote monitoring, advancements in machining, regulatory and compliance standards, and data analytics.

In addition, our flow control operations are benefiting from our customers' decarbonization and energy transition efforts in which we see a notable and sustainable long-term opportunity.

This includes technical support for the configuration, assembly, and testing of process systems used for carbon capture utilization and storage, as well as producing alternative fuel sources.

Further, we believe our service and engineering capabilities, shop network, and supplier relationships, combined with our software coding and smart technology application knowledge, are key competitive advantages.

We see opportunities to leverage these advantages across new and underserved geographies, as well as through new commercial solutions that could drive a greater share gain of this market opportunity in coming years.

• Expand automation platform and continue to grow around emerging industrial technologies .

We are expanding our position and capabilities focused on advanced factory automation and smart technologies that optimize and connect customers’ industrial supply chains.

We believe we have a favorable position to capture

this addressable market given our technical product focus, service capabilities, embedded customer relationships and knowledge across direct production infrastructure and equipment, and existing supplier relationships.

Following several business acquisitions made in recent years, we now offer products and solutions focused on the design, assembly, integration, and distribution of machine vision, robotics, digital networking, and motion control technologies.

Our emerging growth across these areas is diversifying our end-market exposure with greater penetration into technology, life sciences, logistics, and food and beverage industries.

We expect to continue to expand our automation footprint and capabilities in coming years, as well as pursue opportunities tied to the Industrial Internet of Things (IIoT).

We believe this market potential could be meaningful as technology continues to converge within traditional industrial supply chains and end-markets.

• Leverage portfolio breadth to cross-sell and capture new growth opportunities.

Demand for these solutions is increasing across a variety of industrial, off-highway mobile, technology, and process

related applications as a result of greater focus on power consumption, plant efficiency and automation, emissions control, remote monitoring, advancements in machining, regulatory and compliance standards, and data analytics.

Of note, we expect to play a significant role in helping our OEM customers transition to electric-powered machinery given our leading engineering capabilities and supplier relationships.

In addition, the ongoing build out of datacenter and semiconductor infrastructure is expanding the addressable market for fluid conveyance products and solutions, while demand for flow control solutions is benefiting from customers' decarbonization and energy transition efforts.

Our strategy and teams are aligned to serve the rapid pace of innovation and investment developing across fluid power systems and process infrastructure in the coming years.

• Automation Expansion Potential .

We have worked extensively in recent years to expand our Automation position through various acquisitions and organic growth initiatives.

Combined with our legacy capabilities in pneumatic and control applications, today our automation solutions represent a more meaningful part of our sales and growth centered on the design, assembly, integration, and distribution of machine vision, robotics, digital networking, and motion control technologies.

We see significant potential to further scale our automation operations in coming years given our internal initiatives, M&A pipeline, a growing addressable market, cross-selling opportunities, and a developing long-term aftermarket.

We expect various secular tailwinds to positively influence demand including structural labor constraints, a heightened focus on safety and quality, and North American reshoring activity.

We believe these dynamics will accelerate the adoption of collaborative and mobile robots, machine vision, and Internet of Things solutions, as well as require strong application and engineering support that aligns well with our market approach and value proposition.

• Cross-Selling Opportunity.

Through various acquisitions and internal initiatives, we have expanded the breadth of technical products and solutions we offer to customers.

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We believe our expanded solutions portfolio, scale, and technical expertise is enhancing our cross-selling opportunity and share gain potential as customers continue to consolidate their spend with more capable distributors.

Considering the embedded customer base across our legacy service center network, and addressable market of approximately $80 billion and growing, we believe our cross-selling initiative represents a significant long-term growth opportunity.

Considering the embedded customer base across our legacy service center network, and an addressable market of approximately $80 billion and growing, we believe our cross-selling initiative represents a significant long-term growth opportunity.

This includes accelerating our ability to expand with strategic accounts and penetrate faster growing market verticals such as food & beverage, semiconductor, datacenters, life sciences, pharmaceutical, power generation, and alternative energy.

• Execute ongoing operational initiatives supporting margin expansion .

• Margin Expansion Focus .

We have a number of initiatives focused on driving operational improvements throughout the organization.

Systems investments in recent years including common enterprise resource planning platforms are supporting opportunities in leveraging shared services, refining our sales management process, and standardizing pricing and sourcing functions, while we continue to optimize our shop and distribution network and analytics.

We also remain focused on achieving margin synergies across our operations following expansion into flow control and automation.

This includes enhanced pricing functions, leveraging vendor procurement, freight savings, and refined cost management.

In addition, as our growth profile and operating efficiencies have strengthened, we are seeing a greater level of operating leverage through a cycle.

Combined with growth in more profitable areas of our business and our history of cost accountability, we see ongoing opportunity to optimize our margin profile and cash generation in coming years.

• Pursue value-creating acquisitions to supplement growth and strengthen industry position .

We expect to pursue additional acquisitions aligned with our growth strategy and long-term financial targets.

We view acquisitions as an important growth opportunity given high fragmentation, greater operational and technical requirements, and supplier authorizations within the markets we serve.

We believe our sourcing strategy, cash generation capabilities, industry relationships, and operational discipline are key to our acquisition success.

In addition, dedicated corporate teams and related support functions provide strategic oversight of critical work streams and integration execution, which we believe enhances our ability to capture synergistic value.

Over the near to intermediate-term, our acquisition priorities are focused on continuing to expand our current offerings including the ongoing expansion of our Engineered Solutions segment, while further enhancing our technical differentiation and value-added service capabilities.

Our distribution and sales network consists of approximately 440 locations in our Service Center Based Distribution segment and approximately 150 locations in our Engineered Solutions segment.

We also see sustainable mix tailwinds driving margin expansion as we continue to grow our higher-margin Engineered Solutions segment, which today contributes over 40% of our consolidated EBITDA.

In addition, as our growth profile and operating efficiencies have strengthened, we are experiencing a greater level of operating leverage.

Combined with our history of cost accountability and our continuous improvement culture, we see an ongoing opportunity to optimize our margin profile and cash generation in coming years.

• Industry Consolidation and Acquisition Opportunities .

Our customers’ supply chain focus is intensifying as they manage increasingly complex service requirements.

This includes technology advancements, structurally higher inflation, geopolitics, an increased focus on supply chain and operational continuity, and greater U.S.

manufacturing activity.

We believe these considerations are accelerating consolidation across our sector both organically and through acquisitions as customers increase business with larger, more capable distributors while smaller providers face rising operational requirements.

We are favorably positioned to benefit from industry consolidation in the coming years considering technical requirements associated with our industry segment, combined with our balance sheet capacity, acquisition experience, and service capabilities Of note, we expect acquisitions to remain an important element of our growth potential moving forward given high industry fragmentation, greater operational and technical requirements, and supplier authorizations within the markets we serve.

We believe our sourcing strategy, industry relationships, and operational discipline are key to our acquisition success.

Over the near to intermediate-term, our acquisition priorities are primarily focused on our current offerings including the ongoing expansion of our Engineered Solutions segment, as well as opportunistic acquisitions across our Service Center segment that further enhance our organic growth profile, margin improvement, and value-added service capabilities.

Our distribution and sales network consists of approximately 430 facilities in our Service Center segment and approximately 170 facilities in our Engineered Solutions segment.

This includes service centers, distribution centers, and facilities tied to our fluid power, flow control, and automation operations.

Our service centers resemble local inventory hubs located in close proximity to our customers and focused primarily on technical MRO related fulfillment and service needs.

Our fluid power, flow control, and automation locations support technical and shop-oriented services integral to the more specialized and integrated nature of the products and solutions they provide.

Our fluid power, flow control, and automation facilities support technical and shop-oriented services integral to the more specialized and integrated nature of the products and solutions we provide.

Other operations and channels through which we market include inventory management services for indirect consumable supplies and digital solutions including our Applied.com website, electronic data interchange (EDI) and other electronic interfaces with customers' technology platforms and plant maintenance systems.

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An efficient supply chain and timely delivery of our products is vital to our value proposition particularly when customers require products for emergency repairs.

We utilize dedicated third-party transportation providers and our own delivery vehicles, as well as surface and air common

carrier and courier services.

We utilize dedicated third-party transportation providers and our own delivery vehicles, as well as surface and air common carrier and courier services.

Customers may also pick up items at our service centers.

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These inventories consist of standard items as well as other items specific to local customer demand.

Our operations are primarily based in the U.S.

where 88% of our fiscal 2024 sales were generated.

Our operations are primarily based in the United States where 88% of our fiscal 2025 sales were generated.

We also have international operations, the largest of which is in Canada (6% of fiscal 2025 sales) with the balance (6% of fiscal 2025 sales) in Mexico, Australia, New Zealand, Singapore, and Costa Rica.

We are a leading distributor of products including bearings, power transmission products, engineered fluid power components and systems, specialty flow control solutions, advanced automation products, industrial rubber products, linear motion components, tools, safety products, and other industrial and maintenance supplies.

These products are generally supplied to us by manufacturers whom we serve as a non-exclusive distributor.

Products we distribute are generally supplied to us by manufacturers whom we serve as a non-exclusive distributor.

The suppliers also may provide us product training, as well as sales and marketing support.

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The suppliers generally do not sell maintenance and repair products directly to the customer, but instead refer the customer to us or another distributor.

We purchase from thousands of product manufacturers and resell the products to thousands of customers in a wide variety of industries, including food processing, cement, chemicals and petrochemicals, fabricated metals, forest products, industrial machinery and equipment, life sciences, mining, oil and gas, primary metals, technology, transportation, and utilities, as well as to government entities.

Customers range from very large businesses, with which we may have multiple-location relationships, to very small ones.

MARKETS SERVED

We purchase from thousands of product manufacturers and resell the products to thousands of customers in a wide variety of industries, including food processing, aggregates, chemicals and petrochemicals, fabricated metals, forest products, industrial machinery and equipment, life sciences, mining, oil and gas, primary metals, technology, transportation, and utilities, as well as to government entities.

Customers range from very large businesses, with which we may have multiple-location relationships, to small local businesses.

We are not significantly dependent on a single customer or group of customers, the loss of which would have a material adverse effect on our business as a whole, and no single customer accounts for more than 5% of our fiscal 2025 sales.

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We report results of operations in two segments:

1) Service Center Based Distribution, and 2) Engineered Solutions.

In fiscal 2024, our Service Center Based Distribution segment represented 68% of our total sales, while our Engineered Solutions segment represented 32% of our total sales.

Service Center Based Distribution .

Our Service Center Based Distribution segment includes our MRO distribution operations across North America, Australia, and New Zealand.

This business 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.

1) Service Center (formerly Service Center Based Distribution), and 2) Engineered Solutions.

The Company changed the name of the Service Center Based Distribution reportable segment to Service Center in the fourth quarter of fiscal 2025.

There was no change in the composition of either reportable segment.

In fiscal 2025, our Service Center segment represented 66% of our total sales, while our Engineered Solutions segment represented 34% of our total sales.

Service Center .

Our Service Center segment includes our MRO-focused distribution operations across North America, Australia, and New Zealand.

This business operates through local service centers and distribution centers with a focus on providing products and services addressing the maintenance and repair of production equipment and motion control infrastructure.

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.

Service center locations are stocked with product inventory tailored to each local market and staffed with customer sales and service representatives, and account managers, as well as product and industry specialists.

Service center facilities are stocked with product inventory tailored to each local market and staffed with customer sales and service representatives, and account managers, as well as product and industry specialists.

Customer sales and service representatives receive, process, and expedite customer orders, provide product information, and assist account managers in serving customers.

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Engineered Solutions .

Our Engineered Solutions 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.

We believe we are the largest distributor and solutions provider of fluid power and industrial flow control products and solutions in the U.S.

The segment also includes our operations that focus on advanced automation solutions, including machine vision, robotics, motion control, and smart technologies.

Our fluid power operations offer products and services primarily used within industrial, off-highway mobile, and technology applications.

Within the United States, we believe we are the largest distributor and solutions provider of fluid power and industrial flow control products, as well as one of the largest distributors and solutions providers of advanced automation technologies.

Our fluid power operations offer products and services primarily used within industrial, mobile, and technology applications.

Fluid power products include hydraulic and pneumatic technologies using liquids and gases to transmit power, typically in smaller spaces than other forms of power transmission.

Hydraulic products offer high power to weight ratios, high torque at low speeds, and power reliability, while pneumatic products are focused on lightweight applications in need of speed and precision.

Our fluid power products and solutions are commonly used for off-highway equipment, heavy industrial equipment and machines at factories, marine and offshore equipment, factory automation, food processing equipment, packaging operations, and downstream energy process systems.

Operations are supported by a team of certified fluid power specialists, mechanics, technicians, and engineers that provide technical services ranging from system design and integration, electronic control integration, hydraulic assemblies, repair and rebuild, manifold design and assembly, customized filtration solutions, software programming and repair, hydraulic system retrofits, and integration of autonomous and electrification features.

Our fluid power products and solutions are commonly used for off-highway mobile equipment, stationary industrial equipment and machines at factories, marine and offshore equipment, factory automation, food processing equipment, packaging operations, and downstream energy process systems.

Operations are supported by a team of certified fluid power specialists, mechanics, technicians, and engineers that provide technical services ranging from system design and integration, electronic control integration, hydraulic assemblies, repair and rebuild, manifold design and assembly, cylinder rebuilds, hose assembly, customized filtration solutions, software programming and repair, hydraulic system retrofits, and integration of autonomous and electrification features.

Our specialty flow control operations provide highly engineered process flow control products, solutions, and services.

Products include pumps, valves, fittings, hoses, process instrumentation, actuators, and filtration supplies which are used to control the flow of liquids and gases in mission-critical industrial applications.

Products include pumps, valves, fittings, hoses, process instrumentation, actuators, motors, and filtration supplies which are used to control the flow of liquids and gases in mission-critical industrial applications.

Process flow control systems are highly complex given the specified nature of applications in harsh industrial or high-purity operating environments.

Our flow control products and services are focused on MRO related applications;

and engineering, procurement, and construction (EPC) firms across a variety of industries including chemicals, steel, power, oil and gas, pulp and paper, life sciences, pharmaceuticals, food and beverage, and general industrials.

Similar to our fluid power operations, our flow control offering includes technical service capabilities such as flow control systems integration, repair services, valve actuation, process instrumentation, pipe and hose fabrication, and compliance consulting.

Similar to our fluid power operations, our flow control offering includes technical service capabilities such as flow control systems integration, pump repair services, valve actuation, skid-mounted assembly, kitting, process instrumentation, parts fabrication, and compliance consulting.

Our flow control solutions are increasingly used in applications tied to required infrastructure for decarbonization initiatives, including providing technical support for the configuration, assembly, and testing of process systems.

Our advanced automation operations provide solutions focused on the design, assembly, integration, and distribution of machine vision, collaborative robots, mobile robots, RFID, industrial networking, and machine learning technologies for OEMs, machine builders, integrators, and other industrial and technology end users.

Products and solutions are marketed across a variety of industries including technology, medical, life sciences, biotechnology, data centers, food and beverage, logistics, consumer, and general industrial.

Our advanced automation operations provide solutions focused on the design, engineering, assembly, integration, and distribution of machine vision, collaborative robots, mobile robots, RFID (radio-frequency identification), industrial networking, motion control, and machine learning technologies for OEMs, machine builders, integrators, and other industrial and technology end users.

Products and solutions are marketed across a variety of industries including technology, medical, life sciences, biotechnology, automotive, data centers, food and beverage, logistics, consumer packaging, metalworking, and general industrial.

Our automation business helps customers develop, produce, and integrate machine and facility automation solutions using comprehensive technology and application knowledge.

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United States

4,950 Service Center Based Distribution

5,250 Service Center

650 Engineered Solutions

Other Countries

Associate Development .

We strive to attract, retain, and develop a diverse group of high-performing associates, empowering them to achieve their potential and providing them opportunities to test their skills, increase their responsibilities, and advance their careers.

Applied’s commitment to associate development is reflected in our investments in a learning management system (offering a wide array of internal facilitated training courses, supplier product training, and other third-party courses), a modern social learning platform, and in-person training through which associates can continually expand their knowledge base and position themselves to achieve their professional goals.

During fiscal 2024, we also expanded our efforts to provide managers with the tools they need to help identify and provide resources on associate mental health needs.

Compensation and Benefits .

We seek to provide competitive compensation and benefits in order to help attract and retain high quality associates.

In the U.S., Applied offers comprehensive benefits with choices to fit our associates’ varied needs, including the following:

Associate Recruitment, Development, and Retention .

We strive to attract, develop, and retain high-performing associates with unique skills, ideas, capabilities, and experiences, to empower them to achieve their potential, and provide them opportunities to increase their skills and responsibilities and advance their careers.

Applied’s commitment to its associates is reflected in our investments in both development and talent management.

All associates are encouraged to participate in training to improve existing and learn new skills to further their professional development and achieve their own goals.

Training opportunities include a wide array of internally facilitated training courses (both skilled and competency based), supplier product training, and other third-party courses.

Training is delivered through a modern social learning platform and in-person training.

In addition to a formal annual performance review process, Applied leaders are encouraged to provide frequent, timely, and meaningful feedback to each associate, and we solicit feedback from our associates through various engagement surveys and other tools to obtain valuable insights into workplace culture and identify strengths and uncover areas for improvement.

Compensation, Benefits, and Well-being Support .

We seek to provide competitive compensation and benefits in order to attract and retain high quality associates.

In the United States, Applied offers comprehensive benefits with choices to fit our associates’ varied needs, including the following:

medical, dental, vision, and prescription drug insurance;

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life insurance plans;

a Section 401(k) retirement savings plan with company match;

Section 401(k) retirement savings plan with company match;

paid vacations and holidays;

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and an educational reimbursement program.

Diversity and Inclusion .

We are committed to a diverse and inclusive workplace that is respectful to all associates and believe this serves as a cornerstone for a strong company.

We employ multiple initiatives to recruit, train, and advance diverse associates.

In addition to providing tools to our managers to help identify and provide resources on associate mental health needs, we continue our efforts to meet employees on their well-being journey through the implementation of our Healthy You!

program, which encourages associates to focus on their physical and mental well-being.

Workplace Culture .

We are committed to fostering a workplace where all our associates can thrive.

Our policies and practices promote equitable hiring, opportunities, and advancement and a workplace free from discrimination and harassment.

We believe that a workplace that is respectful to all associates and that includes and fosters a wide range of skills, ideas, capabilities, and experiences serves as a cornerstone for a strong and resilient company.

Health and Safety .

Applied is also committed to the safety and well-being of our associates.

In the U.S., all associates are required to complete specific assigned online training courses annually, which include offerings on workplace safety hazards and vehicle safety.

In the United States, all associates are required to complete specific assigned online training courses annually, which include offerings on workplace safety hazards and vehicle safety.

In addition, role-specific training is assigned based on the types of hazards associates may face while carrying out their job function, such as training modules on operating in confined spaces, forklift operation, and lockout/tagout procedures.

associates completed almost 5,000 safety training courses during the fiscal year, helping to raise awareness of workplace risks.

Our business has exhibited minor seasonality.

In particular, sales per day during the first half of our fiscal year have historically been slightly lower than the second half due, in part, to the impact of customer plant shutdowns, summer vacations and holidays.

associates completed approximately 4,600 safety training courses during the fiscal year, helping to raise awareness of workplace risks.

Our business exhibits minor seasonality.

Sales per day during the first half of our fiscal year are historically slightly lower than in the second half due, in part, to the impact of customer plant shutdowns, summer vacations and holidays.

PATENTS, TRADEMARKS, TRADE NAMES, AND LICENSES

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business