x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Ohio
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34-0117420
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
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One Applied Plaza, Cleveland, Ohio
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44115
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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x
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Accelerated filer
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o
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Non-accelerated filer
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o
(Do not check if a smaller reporting company)
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Smaller reporting company
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o
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Page
No.
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Part I:
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Item 1:
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Condensed Statements of Consolidated Income—Three and
Nine Months Ended March 31, 2014 and 2013
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Condensed Statements of Consolidated Comprehensive Income—Three and
Nine Months Ended March 31, 2014 and 2013
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Condensed Consolidated Balance Sheets—
March 31, 2014 and June 30, 2013
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Item 2:
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Item 3:
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Item 4:
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Part II:
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Item 1:
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Item 2:
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Item 6:
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PART I:
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FINANCIAL INFORMATION
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ITEM I:
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FINANCIAL STATEMENTS
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Three Months Ended
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Nine Months Ended
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||||||||||||
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March 31,
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March 31,
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||||||||||||
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2014
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2013
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2014
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2013
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||||||||
Net Sales
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$
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618,006
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$
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621,654
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$
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1,805,260
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$
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1,821,690
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Cost of Sales
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446,786
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447,254
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1,300,862
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1,319,838
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Gross Profit
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171,220
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174,400
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504,398
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501,852
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Selling, Distribution and Administrative, including depreciation
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131,047
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130,923
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384,849
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373,488
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||||
Operating Income
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40,173
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43,477
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119,549
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128,364
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||||
Interest (Income) Expense, net
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(11
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)
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107
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(102
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)
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147
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Other (Income) Expense, net
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(388
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)
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(1,027
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)
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(1,749
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)
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(1,913
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)
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Income Before Income Taxes
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40,572
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44,397
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121,400
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130,130
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Income Tax Expense
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10,178
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15,095
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38,253
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44,253
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Net Income
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$
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30,394
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$
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29,302
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$
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83,147
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$
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85,877
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Net Income Per Share - Basic
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$
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0.73
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$
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0.70
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$
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1.98
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$
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2.04
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Net Income Per Share - Diluted
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$
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0.72
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$
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0.69
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$
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1.96
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$
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2.02
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Cash dividends per common share
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$
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0.25
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$
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0.23
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$
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0.71
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$
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0.65
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Weighted average common shares outstanding for basic computation
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41,880
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42,098
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42,039
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42,038
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Dilutive effect of potential common shares
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362
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472
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399
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479
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Weighted average common shares outstanding for diluted computation
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42,242
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42,570
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42,438
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42,517
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Three Months Ended
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Nine Months Ended
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||||||||||||
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March 31,
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March 31,
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||||||||||||
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2014
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2013
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2014
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2013
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Net income per the condensed statements of consolidated income
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$
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30,394
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$
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29,302
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$
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83,147
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$
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85,877
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||||||||
Other comprehensive income (loss), before tax:
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||||||||
Foreign currency translation adjustments
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(3,876
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)
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(5,466
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)
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(10,736
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)
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2,941
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Postemployment benefits:
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||||||||
Reclassification of actuarial losses and prior service cost into SD&A expense and included in net periodic pension costs
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96
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218
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287
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654
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Unrealized gain (loss) on investment securities available for sale
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49
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42
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148
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65
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Total of other comprehensive income (loss), before tax
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(3,731
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)
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(5,206
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)
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(10,301
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)
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3,660
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Income tax expense related to items of other comprehensive income
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53
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99
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162
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278
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Other comprehensive income (loss), net of tax
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(3,784
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)
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(5,305
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)
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(10,463
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)
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3,382
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Comprehensive income, net of tax
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$
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26,610
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$
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23,997
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$
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72,684
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$
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89,259
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March 31,
2014 |
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June 30,
2013 |
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ASSETS
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Current assets
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Cash and cash equivalents
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$
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69,086
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$
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73,164
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Accounts receivable, less allowances of $8,479 and $7,737
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344,096
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329,880
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Inventories
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320,045
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281,417
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Other current assets
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41,284
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52,819
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Total current assets
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774,511
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737,280
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Property, less accumulated depreciation of $157,454 and $157,506
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78,834
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83,243
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Intangibles, net
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88,368
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91,267
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Goodwill
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111,201
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106,849
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Deferred tax assets
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23,792
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21,026
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Other assets
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19,945
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19,041
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TOTAL ASSETS
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$
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1,096,651
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$
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1,058,706
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LIABILITIES AND SHAREHOLDERS’ EQUITY
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Current liabilities
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Accounts payable
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$
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145,352
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$
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136,575
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Short-term debt
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30,000
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—
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Compensation and related benefits
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46,849
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63,899
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Other current liabilities
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46,022
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45,426
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Total current liabilities
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268,223
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245,900
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Postemployment benefits
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25,197
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30,919
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Other liabilities
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22,159
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22,272
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TOTAL LIABILITIES
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315,579
|
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299,091
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Shareholders’ Equity
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||||
Preferred stock—no par value; 2,500 shares authorized; none issued or outstanding
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Common stock—no par value; 80,000 shares authorized; 54,213 shares issued
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10,000
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10,000
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Additional paid-in capital
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156,495
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153,893
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Income retained for use in the business
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877,547
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824,362
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Treasury shares—at cost (12,396 and 12,044 shares)
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(249,086
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)
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(225,219
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)
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Accumulated other comprehensive income (loss)
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(13,884
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)
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(3,421
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)
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TOTAL SHAREHOLDERS’ EQUITY
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781,072
|
|
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759,615
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TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
$
|
1,096,651
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$
|
1,058,706
|
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|
|
Nine Months Ended
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||||||
|
|
March 31,
|
||||||
|
|
2014
|
|
2013
|
||||
Cash Flows from Operating Activities
|
|
|
|
|
||||
Net income
|
|
$
|
83,147
|
|
|
$
|
85,877
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation and amortization of property
|
|
10,119
|
|
|
9,234
|
|
||
Amortization of intangibles
|
|
9,518
|
|
|
9,716
|
|
||
Unrealized foreign exchange transactions loss (gain)
|
|
136
|
|
|
(624
|
)
|
||
Amortization of stock options and appreciation rights
|
|
1,703
|
|
|
1,959
|
|
||
Loss (gain) on sale of property
|
|
37
|
|
|
(223
|
)
|
||
Other share-based compensation expense
|
|
2,946
|
|
|
2,873
|
|
||
Changes in operating assets and liabilities, net of acquisitions
|
|
(60,451
|
)
|
|
(39,787
|
)
|
||
Other, net
|
|
(2,829
|
)
|
|
31
|
|
||
Net Cash provided by Operating Activities
|
|
44,326
|
|
|
69,056
|
|
||
Cash Flows from Investing Activities
|
|
|
|
|
||||
Property purchases
|
|
(6,492
|
)
|
|
(9,836
|
)
|
||
Proceeds from property sales
|
|
348
|
|
|
737
|
|
||
Net cash paid for acquisition of businesses, net of cash acquired
|
|
(17,000
|
)
|
|
(67,591
|
)
|
||
Net Cash used in Investing Activities
|
|
(23,144
|
)
|
|
(76,690
|
)
|
||
Cash Flows from Financing Activities
|
|
|
|
|
||||
Borrowings under revolving credit facility
|
|
30,000
|
|
|
—
|
|
||
Purchases of treasury shares
|
|
(23,992
|
)
|
|
—
|
|
||
Dividends paid
|
|
(29,961
|
)
|
|
(27,468
|
)
|
||
Excess tax benefits from share-based compensation
|
|
2,525
|
|
|
1,718
|
|
||
Acquisition holdback payments
|
|
(1,824
|
)
|
|
(3,576
|
)
|
||
Exercise of stock options and appreciation rights
|
|
95
|
|
|
498
|
|
||
Net Cash used in Financing Activities
|
|
(23,157
|
)
|
|
(28,828
|
)
|
||
Effect of Exchange Rate Changes on Cash
|
|
(2,103
|
)
|
|
1,103
|
|
||
Decrease in Cash and Cash Equivalents
|
|
(4,078
|
)
|
|
(35,359
|
)
|
||
Cash and Cash Equivalents at Beginning of Period
|
|
73,164
|
|
|
78,442
|
|
||
Cash and Cash Equivalents at End of Period
|
|
$
|
69,086
|
|
|
$
|
43,083
|
|
|
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1.
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BASIS OF PRESENTATION
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2.
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BUSINESS COMBINATION
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3.
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GOODWILL AND INTANGIBLES
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Service Centers
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Fluid Power
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|
Total
|
||||||
Balance at July 1, 2013
|
$
|
105,920
|
|
|
$
|
929
|
|
|
$
|
106,849
|
|
Goodwill acquired during the period
|
5,727
|
|
|
|
|
|
5,727
|
|
|||
Other, primarily currency translation
|
(1,375
|
)
|
|
|
|
|
(1,375
|
)
|
|||
Balance at March 31, 2014
|
$
|
110,272
|
|
|
$
|
929
|
|
|
$
|
111,201
|
|
March 31, 2014
|
|
Amount
|
|
Accumulated
Amortization
|
|
Net Book
Value
|
||||||
Finite-Lived Intangibles:
|
|
|
|
|
|
|
||||||
Customer relationships
|
|
$
|
106,173
|
|
|
$
|
44,496
|
|
|
$
|
61,677
|
|
Trade names
|
|
26,314
|
|
|
9,755
|
|
|
16,559
|
|
|||
Vendor relationships
|
|
15,365
|
|
|
6,292
|
|
|
9,073
|
|
|||
Non-competition agreements
|
|
2,204
|
|
|
1,145
|
|
|
1,059
|
|
|||
Total Intangibles
|
|
$
|
150,056
|
|
|
$
|
61,688
|
|
|
$
|
88,368
|
|
June 30, 2013
|
|
Amount
|
|
Accumulated
Amortization
|
|
Net Book
Value
|
||||||
Finite-Lived Intangibles:
|
|
|
|
|
|
|
||||||
Customer relationships
|
|
$
|
100,854
|
|
|
$
|
38,844
|
|
|
$
|
62,010
|
|
Trade names
|
|
26,690
|
|
|
8,643
|
|
|
18,047
|
|
|||
Vendor relationships
|
|
15,433
|
|
|
5,443
|
|
|
9,990
|
|
|||
Non-competition agreements
|
|
4,743
|
|
|
3,523
|
|
|
1,220
|
|
|||
Total Intangibles
|
|
$
|
147,720
|
|
|
$
|
56,453
|
|
|
$
|
91,267
|
|
|
|
Acquisition Cost Allocation
|
|
Weighted-Average Life
|
||
Customer relationships
|
|
$
|
6,940
|
|
|
20 years
|
Trade names
|
|
160
|
|
|
5 years
|
|
Non-competition agreements
|
|
310
|
|
|
5 years
|
|
Total Intangibles Acquired
|
|
$
|
7,410
|
|
|
19 years
|
4.
|
FAIR VALUE MEASUREMENTS
|
5.
|
SHAREHOLDERS' EQUITY
|
|
|
Three Months Ended March 31, 2014
|
||||||||||||||
|
|
Foreign currency translation adjustment
|
|
|
Unrealized gain (loss) on securities available for sale
|
|
|
Postemployment benefits
|
|
|
Total Accumulated other comprehensive income (loss)
|
|
||||
Balance at December 31, 2013
|
|
$
|
(6,500
|
)
|
|
$
|
13
|
|
|
$
|
(3,613
|
)
|
|
$
|
(10,100
|
)
|
Other comprehensive income (loss)
|
|
(3,876
|
)
|
|
33
|
|
|
|
|
|
(3,843
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
|
—
|
|
|
|
|
59
|
|
|
59
|
|
|||||
Net current-period other comprehensive income (loss), net of taxes
|
|
(3,876
|
)
|
|
33
|
|
|
59
|
|
|
(3,784
|
)
|
||||
Balance at March 31, 2014
|
|
$
|
(10,376
|
)
|
|
$
|
46
|
|
|
$
|
(3,554
|
)
|
|
$
|
(13,884
|
)
|
|
|
Nine Months Ended March 31, 2014
|
||||||||||||||
|
|
Foreign currency translation adjustment
|
|
|
Unrealized gain (loss) on securities available for sale
|
|
|
Postemployment benefits
|
|
|
Total Accumulated other comprehensive income (loss)
|
|
||||
Balance at July 1, 2013
|
|
$
|
360
|
|
|
$
|
(52
|
)
|
|
$
|
(3,729
|
)
|
|
$
|
(3,421
|
)
|
Other comprehensive income (loss)
|
|
(10,736
|
)
|
|
98
|
|
|
|
|
|
(10,638
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
|
|
|
|
|
175
|
|
|
175
|
|
||||||
Net current-period other comprehensive income (loss), net of taxes
|
|
(10,736
|
)
|
|
98
|
|
|
175
|
|
|
(10,463
|
)
|
||||
Balance at March 31, 2014
|
|
$
|
(10,376
|
)
|
|
$
|
46
|
|
|
$
|
(3,554
|
)
|
|
$
|
(13,884
|
)
|
|
|
Three Months Ended March 31,
|
||||||||||||||||||||||
|
|
2014
|
|
2013
|
||||||||||||||||||||
|
|
Pre-Tax Amount
|
|
Tax Expense (Benefit)
|
|
Net Amount
|
|
Pre-Tax Amount
|
|
Tax Expense (Benefit)
|
|
Net Amount
|
||||||||||||
Foreign currency translation adjustments
|
|
$
|
(3,876
|
)
|
|
$
|
—
|
|
|
$
|
(3,876
|
)
|
|
$
|
(5,466
|
)
|
|
$
|
—
|
|
|
$
|
(5,466
|
)
|
Postemployment benefits:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Reclassification of actuarial losses and prior service cost into SD&A expense and included in net periodic pension costs
|
|
96
|
|
|
37
|
|
|
59
|
|
|
218
|
|
|
85
|
|
|
133
|
|
||||||
Unrealized gain (loss) on investment securities available for sale
|
|
49
|
|
|
16
|
|
|
33
|
|
|
42
|
|
|
14
|
|
|
28
|
|
||||||
Other comprehensive income (loss)
|
|
$
|
(3,731
|
)
|
|
$
|
53
|
|
|
$
|
(3,784
|
)
|
|
$
|
(5,206
|
)
|
|
$
|
99
|
|
|
$
|
(5,305
|
)
|
|
|
Nine Months Ended March 31,
|
||||||||||||||||||||||
|
|
2014
|
|
2013
|
||||||||||||||||||||
|
|
Pre-Tax Amount
|
|
Tax Expense (Benefit)
|
|
Net Amount
|
|
Pre-Tax Amount
|
|
Tax Expense (Benefit)
|
|
Net Amount
|
||||||||||||
Foreign currency translation adjustments
|
|
$
|
(10,736
|
)
|
|
$
|
—
|
|
|
$
|
(10,736
|
)
|
|
$
|
2,941
|
|
|
$
|
—
|
|
|
$
|
2,941
|
|
Postemployment benefits:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Reclassification of actuarial losses and prior service cost into SD&A expense and included in net periodic pension costs
|
|
287
|
|
|
112
|
|
|
175
|
|
|
654
|
|
|
255
|
|
|
399
|
|
||||||
Unrealized gain (loss) on investment securities available for sale
|
|
148
|
|
|
50
|
|
|
98
|
|
|
65
|
|
|
23
|
|
|
42
|
|
||||||
Other comprehensive income (loss)
|
|
$
|
(10,301
|
)
|
|
$
|
162
|
|
|
$
|
(10,463
|
)
|
|
$
|
3,660
|
|
|
$
|
278
|
|
|
$
|
3,382
|
|
|
|
Pension Benefits
|
|
Retiree Health Care
Benefits
|
||||||||||||
Three Months Ended March 31,
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Components of net periodic cost:
|
|
|
|
|
|
|
|
|
||||||||
Service cost
|
|
$
|
19
|
|
|
$
|
20
|
|
|
$
|
12
|
|
|
$
|
20
|
|
Interest cost
|
|
295
|
|
|
314
|
|
|
35
|
|
|
47
|
|
||||
Expected return on plan assets
|
|
(104
|
)
|
|
(101
|
)
|
|
|
|
|
|
|||||
Recognized net actuarial loss (gain)
|
|
153
|
|
|
184
|
|
|
(9
|
)
|
|
(13
|
)
|
||||
Amortization of prior service cost
|
|
20
|
|
|
21
|
|
|
(68
|
)
|
|
27
|
|
||||
Net periodic cost
|
|
$
|
383
|
|
|
$
|
438
|
|
|
$
|
(30
|
)
|
|
$
|
81
|
|
|
|
Pension Benefits
|
|
Retiree Health Care
Benefits
|
||||||||||||
Nine Months Ended March 31,
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Components of net periodic cost:
|
|
|
|
|
|
|
|
|
||||||||
Service cost
|
|
$
|
57
|
|
|
$
|
60
|
|
|
$
|
36
|
|
|
$
|
60
|
|
Interest cost
|
|
885
|
|
|
945
|
|
|
104
|
|
|
142
|
|
||||
Expected return on plan assets
|
|
(312
|
)
|
|
(303
|
)
|
|
|
|
|
||||||
Recognized net actuarial loss (gain)
|
|
459
|
|
|
551
|
|
|
(28
|
)
|
|
(40
|
)
|
||||
Amortization of prior service cost
|
|
59
|
|
|
62
|
|
|
(203
|
)
|
|
80
|
|
||||
Net periodic cost
|
|
$
|
1,148
|
|
|
$
|
1,315
|
|
|
$
|
(91
|
)
|
|
$
|
242
|
|
7.
|
SEGMENT AND GEOGRAPHIC INFORMATION
|
Three Months Ended
|
|
Service Center Based Distribution
|
|
Fluid Power Businesses
|
|
Total
|
||||||
March 31, 2014
|
|
|
|
|
|
|
||||||
Net sales
|
|
$
|
492,678
|
|
|
$
|
125,328
|
|
|
$
|
618,006
|
|
Operating income for reportable segments
|
|
28,754
|
|
|
13,442
|
|
|
42,196
|
|
|||
Depreciation and amortization of property
|
|
2,964
|
|
|
363
|
|
|
3,327
|
|
|||
Capital expenditures
|
|
2,021
|
|
|
345
|
|
|
2,366
|
|
|||
|
|
|
|
|
|
|
||||||
March 31, 2013
|
|
|
|
|
|
|
||||||
Net sales
|
|
$
|
506,727
|
|
|
$
|
114,927
|
|
|
$
|
621,654
|
|
Operating income for reportable segments
|
|
35,357
|
|
|
9,607
|
|
|
44,964
|
|
|||
Depreciation and amortization of property
|
|
2,735
|
|
|
463
|
|
|
3,198
|
|
|||
Capital expenditures
|
|
2,894
|
|
|
99
|
|
|
2,993
|
|
Nine Months Ended
|
|
Service Center Based Distribution
|
|
Fluid Power Businesses
|
|
Total
|
||||||
March 31, 2014
|
|
|
|
|
|
|
||||||
Net sales
|
|
$
|
1,450,705
|
|
|
$
|
354,555
|
|
|
$
|
1,805,260
|
|
Operating income for reportable segments
|
|
82,695
|
|
|
33,263
|
|
|
115,958
|
|
|||
Assets used in business
|
|
879,349
|
|
|
217,302
|
|
|
1,096,651
|
|
|||
Depreciation and amortization of property
|
|
8,951
|
|
|
1,168
|
|
|
10,119
|
|
|||
Capital expenditures
|
|
5,755
|
|
|
737
|
|
|
6,492
|
|
|||
|
|
|
|
|
|
|
||||||
March 31, 2013
|
|
|
|
|
|
|
||||||
Net sales
|
|
$
|
1,485,029
|
|
|
$
|
336,661
|
|
|
$
|
1,821,690
|
|
Operating income for reportable segments
|
|
97,445
|
|
|
28,758
|
|
|
126,203
|
|
|||
Assets used in business
|
|
833,211
|
|
|
202,726
|
|
|
1,035,937
|
|
|||
Depreciation and amortization of property
|
|
7,864
|
|
|
1,370
|
|
|
9,234
|
|
|||
Capital expenditures
|
|
9,488
|
|
|
348
|
|
|
9,836
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
March 31,
|
|
March 31,
|
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Operating income for reportable segments
|
|
$
|
42,196
|
|
|
$
|
44,964
|
|
|
$
|
115,958
|
|
|
$
|
126,203
|
|
Adjustment for:
|
|
|
|
|
|
|
|
|
||||||||
Intangible amortization—Service Center Based Distribution
|
|
1,102
|
|
|
1,637
|
|
|
4,484
|
|
|
4,164
|
|
||||
Intangible amortization—Fluid Power Businesses
|
|
2,086
|
|
|
1,873
|
|
|
5,034
|
|
|
5,553
|
|
||||
Corporate and other expense (income), net
|
|
(1,165
|
)
|
|
(2,023
|
)
|
|
(13,109
|
)
|
|
(11,878
|
)
|
||||
Total operating income
|
|
40,173
|
|
|
43,477
|
|
|
119,549
|
|
|
128,364
|
|
||||
Interest (income) expense, net
|
|
(11
|
)
|
|
107
|
|
|
(102
|
)
|
|
147
|
|
||||
Other (income) expense, net
|
|
(388
|
)
|
|
(1,027
|
)
|
|
(1,749
|
)
|
|
(1,913
|
)
|
||||
Income before income taxes
|
|
$
|
40,572
|
|
|
$
|
44,397
|
|
|
$
|
121,400
|
|
|
$
|
130,130
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
March 31,
|
|
March 31,
|
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Geographic Areas:
|
|
|
|
|
|
|
|
|
||||||||
United States
|
|
$
|
519,713
|
|
|
$
|
514,941
|
|
|
$
|
1,500,252
|
|
|
$
|
1,492,795
|
|
Canada
|
|
64,922
|
|
|
70,497
|
|
|
202,439
|
|
|
218,848
|
|
||||
Other countries
|
|
33,371
|
|
|
36,216
|
|
|
102,569
|
|
|
110,047
|
|
||||
Total
|
|
$
|
618,006
|
|
|
$
|
621,654
|
|
|
$
|
1,805,260
|
|
|
$
|
1,821,690
|
|
8.
|
OTHER (INCOME) EXPENSE , NET
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
March 31,
|
|
March 31,
|
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Unrealized (gain) loss on assets held in rabbi trust for a nonqualified deferred compensation plan
|
|
$
|
(110
|
)
|
|
$
|
(602
|
)
|
|
$
|
(1,355
|
)
|
|
$
|
(1,183
|
)
|
Elimination of one-month Canadian and Mexican reporting lag, effective July 1, 2013 and January 1, 2014, respectively
|
|
(175
|
)
|
|
—
|
|
|
(1,342
|
)
|
|
—
|
|
||||
Foreign currency transactions (gain) loss
|
|
46
|
|
|
(231
|
)
|
|
953
|
|
|
(656
|
)
|
||||
Other, net
|
|
(149
|
)
|
|
(194
|
)
|
|
(5
|
)
|
|
(74
|
)
|
||||
Total other (income) expense, net
|
|
$
|
(388
|
)
|
|
$
|
(1,027
|
)
|
|
$
|
(1,749
|
)
|
|
$
|
(1,913
|
)
|
/s/ Deloitte & Touche LLP
|
|
Cleveland, Ohio
|
May 5, 2014
|
|
|
Three Months Ended March 31,
|
|
Change in $'s Versus Prior Period - % Increase
|
|||||
|
|
As a Percent of Net Sales
|
|
||||||
|
|
2014
|
|
2013
|
|
||||
Net Sales
|
|
100.0
|
%
|
|
100.0
|
%
|
|
(0.6
|
)%
|
Gross Profit
|
|
27.7
|
%
|
|
28.1
|
%
|
|
(1.8
|
)%
|
Selling, Distribution & Administrative
|
|
21.2
|
%
|
|
21.1
|
%
|
|
0.1
|
%
|
Operating Income
|
|
6.5
|
%
|
|
7.0
|
%
|
|
(7.6
|
)%
|
Net Income
|
|
4.9
|
%
|
|
4.7
|
%
|
|
3.7
|
%
|
|
|
Nine Months Ended March 31,
|
|
Change in $'s Versus Prior Period - % Increase
|
|||||
|
|
As a Percent of Net Sales
|
|
||||||
|
|
2014
|
|
2013
|
|
||||
Net Sales
|
|
100.0
|
%
|
|
100.0
|
%
|
|
(0.9
|
)%
|
Gross Profit
|
|
27.9
|
%
|
|
27.5
|
%
|
|
0.5
|
%
|
Selling, Distribution & Administrative
|
|
21.3
|
%
|
|
20.5
|
%
|
|
3.0
|
%
|
Operating Income
|
|
6.6
|
%
|
|
7.0
|
%
|
|
(6.9
|
)%
|
Net Income
|
|
4.6
|
%
|
|
4.7
|
%
|
|
(3.2
|
)%
|
Country
|
|
Amount
|
||
United States
|
|
$
|
12,839
|
|
Canada
|
|
50,190
|
|
|
Other countries
|
|
6,057
|
|
|
Total
|
|
$
|
69,086
|
|
|
|
Nine Months Ended March 31,
|
||||||
Net Cash Provided by (Used in):
|
|
2014
|
|
2013
|
||||
Operating Activities
|
|
$
|
44,326
|
|
|
$
|
69,056
|
|
Investing Activities
|
|
(23,144
|
)
|
|
(76,690
|
)
|
||
Financing Activities
|
|
(23,157
|
)
|
|
(28,828
|
)
|
||
Exchange Rate Effect
|
|
(2,103
|
)
|
|
1,103
|
|
||
Decrease in Cash and Cash Equivalents
|
|
$
|
(4,078
|
)
|
|
$
|
(35,359
|
)
|
|
March 31,
|
June 30,
|
||||
|
2014
|
2013
|
||||
Accounts receivable, gross
|
$
|
352,575
|
|
$
|
337,617
|
|
Allowance for doubtful accounts
|
8,479
|
|
7,737
|
|
||
Accounts receivable, net
|
$
|
344,096
|
|
$
|
329,880
|
|
Allowance for doubtful accounts, % of gross receivables
|
2.4
|
%
|
2.3
|
%
|
||
|
|
|
||||
|
Nine Months Ended March 31,
|
|||||
|
2014
|
2013
|
||||
Provision for losses on accounts receivable
|
$
|
1,337
|
|
$
|
1,273
|
|
Provision as a % of net sales
|
0.07
|
%
|
0.07
|
%
|
PART II.
|
OTHER INFORMATION
|
ITEM 1.
|
Legal Proceedings
|
ITEM 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
(a) Total Number of Shares (2)
|
(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)
|
January 1, 2014 to January 31, 2014
|
85,539
|
48.03
|
85,500
|
769,200
|
February 1, 2014 to February 28, 2014
|
59,700
|
49.13
|
59,700
|
709,500
|
March 1, 2014 to March 31, 2014
|
63,000
|
49.45
|
63,000
|
646,500
|
Total
|
208,239
|
48.76
|
208,200
|
646,500
|
(1)
|
On October 25, 2011, the Board of Directors authorized the purchase of up to 1.5 million shares of the Company's common stock. The Company publicly announced the authorization that day. Purchases can be made in the open market or in privately negotiated transactions.
|
(2)
|
During the quarter the Company purchased thirty nine shares in connection with the Deferred Compensation Plan.
|
Exhibit No.
|
|
Description
|
3.1
|
|
Amended and Restated Articles of Incorporation of Applied Industrial Technologies, Inc., as amended on October 25, 2005 (filed as Exhibit 3(a) to the Company’s Form 10-Q for the quarter ended December 31, 2005, SEC File No. 1-2299, and incorporated here by reference).
|
|
|
|
3.2
|
|
Code of Regulations of Applied Industrial Technologies, Inc., as amended on October 19, 1999 (filed as Exhibit 3(b) to the Company’s Form 10-Q for the quarter ended September 30, 1999, SEC File No. 1-2299, and incorporated here by reference).
|
|
|
|
4.1
|
|
Certificate of Merger of Bearings, Inc. (Ohio) (now named Applied Industrial Technologies, Inc.) and Bearings, Inc. (Delaware) filed with the Ohio Secretary of State on October 18, 1988, including an Agreement and Plan of Reorganization dated September 6, 1988 (filed as Exhibit 4(a) to the Company’s Registration Statement on Form S-4 filed May 23, 1997, Registration No. 333-27801, and incorporated here by reference).
|
|
|
|
4.2
|
|
Credit Agreement dated as of May 15, 2012, among Applied Industrial Technologies, Inc., KeyBank National Association as Agent, and various financial institutions (filed as Exhibit 4 to the Company's Form 8-K dated May 17, 2012, SEC File No. 1-2299, and incorporated here by reference).
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4.3
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Private Shelf Agreement dated as of November 27, 1996, as most recently amended on February 4, 2013, between the Company and Prudential Investment Management, Inc. (assignee of The Prudential Insurance Company of America), conformed to show all amendments (filed as Exhibit 4.3 to the Company's Form 10-Q for the quarter ended March 31, 2013, SEC File No. 1-2299, and incorporated here by reference).
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10.1
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Second Amendment to the Applied Industrial Technologies, Inc. Deferred Compensation Plan for Non-Employee Directors (Post-2004 Terms)
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15
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Independent Registered Public Accounting Firm’s Awareness Letter.
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18
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Preferability letter from Independent Registered Public Accounting Firm Regarding Change in Accounting Principle.
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31
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Rule 13a-14(a)/15d-14(a) certifications.
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32
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Section 1350 certifications.
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101.INS
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XBRL Instance Document
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101.SCH
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XBRL Taxonomy Extension Schema Document
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document
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APPLIED INDUSTRIAL TECHNOLOGIES, INC.
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(Company)
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Date:
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May 5, 2014
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By:
/s/ Neil A.Schrimsher
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Neil A. Schrimsher
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President & Chief Executive Officer
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Date:
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May 5, 2014
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By:
/s/ Mark O. Eisele
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Mark O. Eisele
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Vice President-Chief Financial Officer & Treasurer
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/s/ Deloitte & Touche LLP
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Cleveland, Ohio
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May 5, 2014
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1.
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I have reviewed this quarterly report on Form 10-Q of Applied Industrial Technologies, Inc.;
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2.
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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;
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3.
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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;
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4.
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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:
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a.
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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;
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b.
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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;
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c.
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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
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d.
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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
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5.
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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):
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a.
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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
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b.
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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.
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Date: May
5
, 2014
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By:
/s/ Neil A. Schrimsher
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Neil A. Schrimsher
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|
President & Chief Executive Officer
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1.
|
I have reviewed this quarterly report on Form 10-Q of Applied Industrial Technologies, Inc.;
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2.
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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;
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3.
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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;
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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:
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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;
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b.
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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;
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c.
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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
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d.
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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
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5.
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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):
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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
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b.
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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.
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Date: May
5
, 2014
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By:
/s/ Mark O. Eisele
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Mark O. Eisele
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|
Vice President-Chief Financial Officer & Treasurer
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|
|
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/s/ Neil A. Schrimsher
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/s/ Mark O. Eisele
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Neil A. Schrimsher
|
|
Mark O. Eisele
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President & Chief Executive Officer
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Vice President-Chief Financial Officer & Treasurer
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|
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Date: May
5
, 2014
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