Page 1

APPLIED Industrial Technologies® NEWS RELEASE Applied Industrial Technologies Reports Fiscal 2021 Second Quarter Results 1/28/2021 Net Sales of $ 751.3 Million Down 9.9 % YoY ; Down 10.5 % on an Organic Basis • Net Loss of $ 5.3 Million , or $ 0.14 Per Share • Adjusted Net Income of $ 38.4 Million , or $ 0.98 Per Share ; Adjusted EBITDA of $ 68.3 Million • Operating Cash Flow of $ 77.5 Million ; Free Cash Flow of $ 72.7 Million • Quarterly Dividend Increased to $ 0.33 Per Share CLEVELAND -- ( BUSINESS WIRE ) -- Applied Industrial Technologies ( NYSE : AIT ) , a leading value - added distributor and technical solutions provider of industrial motion , fluid power , flow control , automation technologies , and related maintenance supplies , today reported results for its fiscal 2021 second quarter ended December 31 , 2020 . Net sales for the quarter decreased 9.9 % to $ 751.3 million from $ 833.4 million in the prior year . The change includes a 0.5 % increase from acquisitions and a 0.1 % increase from foreign currency translation . Excluding these factors , sales decreased 10.5 % on an organic basis reflecting a 10.5 % decline in the Service Center segment and a 10.1 % decline in the Fluid Power & Flow Control segment . The Company reported a net loss of $ 5.3 million , or $ 0.14 per share . Results include a non - cash impairment charge of $ 49.5 million pre - tax and non - routine costs of $ 7.8 million pre - tax . Excluding these items , the Company reported non - GAAP adjusted net income of $ 38.4 million , or $ 0.98 per share , and adjusted EBITDA of $ 68.3 million . Neil A. Schrimsher , Applied's President & Chief Executive Officer , commented " Our fiscal 2021 second quarter reflects solid execution across Applied . We are progressing on our growth initiatives as end - market demand gradually recovers . This drove encouraging order momentum and seasonally strong sequential improvement in daily sales rates during the quarter . Combined with solid cost control and working capital management , decremental margins were better than our expectations and we generated record second quarter cash flow . 1