10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended MARCH 31, 2021

OR        

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___ to ___

Commission file number 1-2299

APPLIED INDUSTRIAL TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

Ohio			34-0117420
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification Number)
One Applied Plaza	Cleveland	Ohio	44115
(Address of principal executive offices)			(Zip Code)

(216) 426-4000

Registrant's telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, without par value	AIT	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  o 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     Yes  x   No  o 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	x	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).     Yes  ☐     No ☒

There were 38,859,387 (no par value) shares of common stock outstanding on April 16, 2021.

APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

INDEX

			Page No.
Part I:	FINANCIAL INFORMATION
	Item 1:	Financial Statements
		Condensed Statements of Consolidated Income - Three and Nine Months Ended March 31, 2021 and 2020	2
		Condensed Statements of Consolidated Comprehensive Income - Three and Nine Months Ended March 31, 2021 and 2020	3
		Condensed Consolidated Balance Sheets - March 31, 2021 and June 30, 2020	4
		Condensed Statements of Consolidated Cash Flows - Nine Months Ended March 31, 2021 and 2020	5
		Condensed Statements of Shareholders' Equity - Three and Nine Months Ended March 31, 2021 and 2020	6
		Notes to Condensed Consolidated Financial Statements	8
	Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
	Item 3:	Quantitative and Qualitative Disclosures About Market Risk	31
	Item 4:	Controls and Procedures	32
Part II:	OTHER INFORMATION
	Item 1:	Legal Proceedings	33
	Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	33
	Item 6:	Exhibits	33
Signatures			35

1

PART I:     FINANCIAL INFORMATION

ITEM I:    FINANCIAL STATEMENTS

APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED STATEMENTS OF CONSOLIDATED INCOME

(Unaudited)

(In thousands, except per share amounts)

	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2021		2020		2021		2020
Net sales	$	840,937	$	830,797	$	2,340,031	$	2,520,576
Cost of sales	593,712		594,045		1,667,491		1,791,130
Gross profit	247,225		236,752		672,540		729,446
Selling, distribution and administrative expense, including depreciation	172,758		183,702		498,659		556,485
Impairment expense	—		131,000		49,528		131,000
Operating income (loss)	74,467		(77,950)		124,353		41,961
Interest expense, net	7,608		8,805		22,919		28,447
Other income, net	(1,657)		(1,428)		(1,746)		(1,643)
Income (loss) before income taxes	68,516		(85,327)		103,180		15,157
Income tax expense (benefit)	12,453		(2,550)		17,667		21,104
Net income (loss)	$	56,063	$	(82,777)	$	85,513	$	(5,947)
Net income (loss) per share - basic	$	1.44	$	(2.14)	$	2.21	$	(0.15)
Net income (loss) per share - diluted	$	1.42	$	(2.14)	$	2.18	$	(0.15)
Weighted average common shares outstanding for basic computation	38,835		38,682		38,779		38,647
Dilutive effect of potential common shares	577		—		482		—
Weighted average common shares outstanding for diluted computation	39,412		38,682		39,261		38,647

See notes to condensed consolidated financial statements.

2

APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME

(Unaudited)

(In thousands)

	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2021		2020		2021		2020
Net income (loss) per the condensed statements of consolidated income	$	56,063	$	(82,777)	$	85,513	$	(5,947)
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments	(496)		(28,767)		19,529		(27,356)
Post-employment benefits:
Reclassification of net actuarial losses (gains) and prior service cost into other income, net and included in net periodic pension costs	68		(17)		203		(50)
Unrealized gain (loss) on cash flow hedge	8,758		(13,891)		6,017		(14,249)
Reclassification of interest from cash flow hedge into interest expense	2,992		1,017		8,504		2,350
Total other comprehensive income (loss), before tax	11,322		(41,658)		34,253		(39,305)
Income tax expense (benefit) related to items of other comprehensive income	2,829		(3,711)		3,694		(3,684)
Other comprehensive income (loss), net of tax	8,493		(37,947)		30,559		(35,621)
Comprehensive income (loss), net of tax	$	64,556	$	(120,724)	$	116,072	$	(41,568)

See notes to condensed consolidated financial statements.

3

APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)

	March 31, 2021		June 30, 2020
ASSETS
Current assets
Cash and cash equivalents	$	304,016	$	268,551
Accounts receivable, net	510,080		449,998
Inventories	358,237		389,150
Other current assets	54,023		52,070
Total current assets	1,226,356		1,159,769
Property, less accumulated depreciation of $200,039 and $192,054	116,951		121,901
Operating lease assets, net	84,062		90,636
Identifiable intangibles, net	287,686		343,215
Goodwill	559,196		540,594
Other assets	31,137		27,436
TOTAL ASSETS	$	2,305,388	$	2,283,551
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	217,252	$	186,270
Current portion of long-term debt	78,644		78,646
Compensation and related benefits	80,660		61,887
Other current liabilities	89,190		99,280
Total current liabilities	465,746		426,083
Long-term debt	773,404		855,143
Other liabilities	131,331		158,783
TOTAL LIABILITIES	1,370,481		1,440,009
Shareholders’ equity
Preferred stock—no par value; 2,500 shares authorized; none issued or outstanding	—		—
Common stock—no par value; 80,000 shares authorized; 54,213 shares issued	10,000		10,000
Additional paid-in capital	177,231		176,492
Retained earnings	1,260,761		1,200,570
Treasury shares—at cost (15,354 and 15,503 shares, respectively)	(414,214)		(414,090)
Accumulated other comprehensive loss	(98,871)		(129,430)
TOTAL SHAREHOLDERS’ EQUITY	934,907		843,542
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	2,305,388	$	2,283,551

See notes to condensed consolidated financial statements.

4

APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS

(Unaudited)

(In thousands)

	Nine Months Ended
	March 31,
	2021		2020
Cash Flows from Operating Activities
Net income (loss)	$	85,513	$	(5,947)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property	15,641		15,997
Amortization of intangibles	26,238		31,671
Impairment expense	49,528		131,000
Amortization of stock options and appreciation rights	1,930		2,217
Other share-based compensation expense	4,660		2,046
Changes in operating assets and liabilities, net of acquisitions	33,574		1,406
Other, net	(13,675)		(8,766)
Net Cash provided by Operating Activities	203,409		169,624
Cash Flows from Investing Activities
Acquisition of businesses, net of cash acquired	(30,023)		(37,237)
Capital expenditures	(12,177)		(16,223)
Proceeds from property sales	691		1,809
Net Cash used in Investing Activities	(41,509)		(51,651)
Cash Flows from Financing Activities
Long-term debt borrowings	—		25,000
Long-term debt repayments	(82,070)		(39,803)
Interest rate swap settlement payments	(2,122)		—
Payment of debt issuance costs	(399)		(22)
Dividends paid	(37,772)		(36,420)
Acquisition holdback payments	(2,344)		(2,440)
Exercise of stock options and appreciation rights	163		330
Taxes paid for shares withheld for equity awards	(5,990)		(2,604)
Net Cash used in Financing Activities	(130,534)		(55,959)
Effect of Exchange Rate Changes on Cash	4,099		(4,769)
Increase in Cash and Cash Equivalents	35,465		57,245
Cash and Cash Equivalents at Beginning of Period	268,551		108,219
Cash and Cash Equivalents at End of Period	$	304,016	$	165,464

See notes to condensed consolidated financial statements.

5

APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY

(Unaudited)

(In thousands)

For the Period Ended March 31, 2021	Shares of Common Stock Outstanding	Common Stock		Additional Paid-In Capital		Retained Earnings		Treasury Shares- at Cost		Accumulated Other Comprehensive Income (Loss)		Total Shareholders' Equity
Balance at June 30, 2020	38,710	$	10,000	$	176,492	$	1,200,570	$	(414,090)	$	(129,430)	$	843,542
Net income						34,784						34,784
Other comprehensive income										7,509		7,509
Cash dividends — $0.32 per share						(18)						(18)
Treasury shares issued for:
Exercise of stock appreciation rights and options	13			(277)				12				(265)
Performance share awards	22			(985)				(20)				(1,005)
Restricted stock units	15			(593)				96				(497)
Compensation expense — stock appreciation rights and options				693								693
Other share-based compensation expense				677								677
Other						15		(29)				(14)
Balance at September 30, 2020	38,760	$	10,000	$	176,007	$	1,235,351	$	(414,031)	$	(121,921)	$	885,406
Net loss						(5,334)						(5,334)
Other comprehensive income										14,557		14,557
Cash dividends — $0.32 per share						(12,483)						(12,483)
Treasury shares issued for:
Exercise of stock appreciation rights and options	71			(3,116)				(496)				(3,612)
Compensation expense — stock appreciation rights and options				635								635
Other share-based compensation expense				1,490								1,490
Other						48		—				48
Balance at December 31, 2020	38,831	$	10,000	$	175,016	$	1,217,582	$	(414,527)	$	(107,364)	$	880,707
Net income						56,063						56,063
Other comprehensive income										8,493		8,493
Cash dividends — $0.33 per share						(12,878)						(12,878)
Treasury shares issued for:
Exercise of stock appreciation rights and options	11			(379)				(40)				(419)
Restricted stock units	4			(147)				(1)				(148)
Compensation expense — stock appreciation rights and options				602								602
Other share-based compensation expense				2,493								2,493
Other	13			(354)		(6)		354				(6)
Balance at March 31, 2021	38,859	$	10,000	$	177,231	$	1,260,761	$	(414,214)	$	(98,871)	$	934,907

6

APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY

(Unaudited)

(In thousands)

For the Period Ended March 31, 2020	Shares of Common Stock Outstanding	Common Stock		Additional Paid-In Capital		Retained Earnings		Treasury Shares- at Cost		Accumulated Other Comprehensive Income (Loss)		Total Shareholders' Equity
Balance at June 30, 2019	38,597	$	10,000	$	172,931	$	1,229,148	$	(415,159)	$	(99,886)	$	897,034
Net income						38,799						38,799
Other comprehensive loss										(5,247)		(5,247)
Cumulative effect of adopting accounting standards						(3,275)						(3,275)
Cash dividends — $0.31 per share						(20)						(20)
Treasury shares issued for:
Exercise of stock appreciation rights and options	5			(177)				61				(116)
Performance share awards	36			(1,540)				362				(1,178)
Restricted stock units	16			(631)				200				(431)
Compensation expense — stock appreciation rights and options				773								773
Other share-based compensation expense				919								919
Other	2			(52)		(4)		23				(33)
Balance at September 30, 2019	38,656	$	10,000	$	172,223	$	1,264,648	$	(414,513)	$	(105,133)	$	927,225
Net income						38,031						38,031
Other comprehensive income										7,573		7,573
Cash dividends — $0.31 per share						(12,017)						(12,017)
Treasury shares issued for:
Exercise of stock appreciation rights and options	22			(185)				(47)				(232)
Compensation expense — stock appreciation rights and options				721								721
Other share-based compensation expense				918								918
Other						23		(1)				22
Balance at December 31, 2019	38,678	$	10,000	$	173,677	$	1,290,685	$	(414,561)	$	(97,560)	$	962,241
Net income						(82,777)						(82,777)
Other comprehensive loss										(37,947)		(37,947)
Cash dividends — $0.32 per share						(12,423)						(12,423)
Treasury shares issued for:
Exercise of stock appreciation rights and options	14			(378)				(16)				(394)
Compensation expense — stock appreciation rights and options				723								723
Other share-based compensation expense				209								209
Other	15			599		(74)		403				928
Balance at March 31, 2020	38,707	$	10,000	$	174,830	$	1,195,411	$	(414,174)	$	(135,507)	$	830,560

7

APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except per share amounts) (Unaudited)

1.    BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the financial position of Applied Industrial Technologies, Inc. (the “Company”, or “Applied”) as of March 31, 2021, and the results of its operations and its cash flows for the nine month periods ended March 31, 2021 and 2020, have been included. The condensed consolidated balance sheet as of June 30, 2020 has been derived from the audited consolidated financial statements at that date. This Quarterly Report on Form 10-Q should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended June 30, 2020.

Operating results for the nine month period ended March 31, 2021 are not necessarily indicative of the results that may be expected for the remainder of the fiscal year ending June 30, 2021.

Inventory

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

Recently Adopted Accounting Guidance

Accounting for current expected credit losses

In June 2016, the FASB issued its final standard on measurement of credit losses on financial instruments. This standard, issued as ASU 2016-13, requires that an entity measure impairment of certain financial instruments, including trade receivables, based on expected losses rather than incurred losses. This update is effective for annual and interim financial statement periods beginning after December 15, 2019, with early adoption permitted for financial statement periods beginning after December 15, 2018. In November 2018, April 2019, May 2019, November 2019, and February 2020, the FASB issued ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-11 and ASU 2020-02, respectively, which clarify the guidance in ASU 2016-13. The Company adopted the new guidance in the first quarter of fiscal 2021. The adoption of this guidance did not have a material impact on the Company's financial statements or related disclosures.

Recently Issued Accounting Guidance

In December 2019, the FASB issued its final standard on simplifying the accounting for income taxes. This standard, issued as ASU 2019-12, makes a number of changes meant to add or clarify guidance on accounting for income taxes. This update is effective for annual and interim financial statement periods beginning after December 15, 2020, with early adoption permitted in any interim period for which financial statements have not yet been filed. The Company has not yet determined the impact of this pronouncement on its financial statements and related disclosures.

8

APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except per share amounts) (Unaudited)

2.    REVENUE RECOGNITION

Disaggregation of Revenues

The following tables present the Company's net sales by reportable segment and by geographic areas based on the location of the facility shipping the product for the three and nine months ended March 31, 2021 and 2020. Other countries consist of Mexico, Australia, New Zealand, and Singapore.

	Three Months Ended March 31,
	2021						2020
	Service Center Based Distribution		Fluid Power & Flow Control		Total		Service Center Based Distribution		Fluid Power & Flow Control		Total
Geographic Areas:
United States	$	461,945	$	262,672	$	724,617	$	473,069	$	251,913	$	724,982
Canada	66,146		—		66,146		59,912		—		59,912
Other countries	44,801		5,373		50,174		41,387		4,516		45,903
Total	$	572,892	$	268,045	$	840,937	$	574,368	$	256,429	$	830,797

	Nine Months Ended March 31,
	2021						2020
	Service Center Based Distribution		Fluid Power & Flow Control		Total		Service Center Based Distribution		Fluid Power & Flow Control		Total
Geographic Areas:
United States	$	1,294,643	$	721,845	$	2,016,488	$	1,433,133	$	755,175	$	2,188,308
Canada	180,851		—		180,851		193,755		—		193,755
Other countries	126,372		16,320		142,692		126,428		12,085		138,513
Total	$	1,601,866	$	738,165	$	2,340,031	$	1,753,316	$	767,260	$	2,520,576

The following tables present the Company’s percentage of revenue by reportable segment and major customer industry for the three and nine months ended March 31, 2021 and 2020:

	Three Months Ended March 31,
	2021						2020
	Service Center Based Distribution		Fluid Power & Flow Control		Total		Service Center Based Distribution		Fluid Power & Flow Control		Total
General Industry	35.1	%	41.1	%	37.0	%	34.8	%	39.9	%	36.4	%
Industrial Machinery	10.1	%	26.7	%	15.4	%	9.9	%	24.7	%	14.5	%
Food	13.2	%	2.6	%	9.8	%	12.0	%	3.1	%	9.3	%
Metals	10.9	%	6.9	%	9.6	%	11.1	%	6.5	%	9.7	%
Forest Products	10.9	%	2.7	%	8.3	%	9.8	%	5.7	%	8.5	%
Chem/Petrochem	3.2	%	13.5	%	6.5	%	3.3	%	12.8	%	6.2	%
Cement & Aggregate	8.1	%	1.1	%	5.9	%	7.2	%	1.3	%	5.4	%
Transportation	4.7	%	4.3	%	4.6	%	4.6	%	4.7	%	4.6	%
Oil & Gas	3.8	%	1.1	%	2.9	%	7.3	%	1.3	%	5.4	%
Total	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%

9

APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except per share amounts) (Unaudited)

	Nine Months Ended March 31,
	2021						2020
	Service Center Based Distribution		Fluid Power & Flow Control		Total		Service Center Based Distribution		Fluid Power & Flow Control		Total
General Industry	35.6	%	40.1	%	36.9	%	34.6	%	41.6	%	36.7	%
Industrial Machinery	9.6	%	26.6	%	15.0	%	9.7	%	23.7	%	13.9	%
Food	13.8	%	2.9	%	10.3	%	11.6	%	2.9	%	9.0	%
Metals	10.5	%	6.8	%	9.4	%	11.3	%	7.4	%	10.1	%
Forest Products	10.9	%	2.9	%	8.4	%	9.0	%	3.9	%	7.4	%
Chem/Petrochem	3.4	%	13.7	%	6.6	%	3.2	%	13.3	%	6.3	%
Cement & Aggregate	7.8	%	1.1	%	5.7	%	7.2	%	1.1	%	5.4	%
Transportation	4.7	%	4.8	%	4.8	%	4.7	%	4.4	%	4.6	%
Oil & Gas	3.7	%	1.1	%	2.9	%	8.7	%	1.7	%	6.6	%
Total	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%

The following tables present the Company’s percentage of revenue by reportable segment and product line for the three and nine months ended March 31, 2021 and 2020:

	Three Months Ended March 31,
	2021						2020
	Service Center Based Distribution		Fluid Power & Flow Control		Total		Service Center Based Distribution		Fluid Power & Flow Control		Total
Power Transmission	37.2	%	7.7	%	27.8	%	34.8	%	8.5	%	26.6	%
Fluid Power	13.4	%	38.3	%	21.3	%	13.3	%	40.5	%	21.7	%
Bearings, Linear & Seals	28.9	%	0.2	%	19.7	%	27.9	%	0.3	%	19.4	%
General Maintenance; Hose Products	20.5	%	18.8	%	20.0	%	24.0	%	12.2	%	20.4	%
Specialty Flow Control	—	%	35.0	%	11.2	%	—	%	38.5	%	11.9	%
Total	100	%	100	%	100	%	100	%	100	%	100	%

	Nine Months Ended March 31,
	2021						2020
	Service Center Based Distribution		Fluid Power & Flow Control		Total		Service Center Based Distribution		Fluid Power & Flow Control		Total
Power Transmission	37.4	%	7.8	%	28.0	%	34.7	%	9.9	%	27.2	%
Fluid Power	13.3	%	38.2	%	21.1	%	13.3	%	38.4	%	20.9	%
Bearings, Linear & Seals	28.9	%	0.4	%	19.9	%	26.5	%	0.3	%	18.6	%
General Maintenance; Hose Products	20.4	%	16.0	%	19.1	%	25.5	%	11.1	%	21.1	%
Specialty Flow Control	—	%	37.6	%	11.9	%	—	%	40.3	%	12.2	%
Total	100	%	100	%	100	%	100	%	100	%	100	%

Contract Assets

The Company’s contract assets consist of un-billed amounts resulting from contracts for which revenue is recognized over time using the cost-to-cost method, and for which revenue recognized exceeds the amount billed to the customer.

10

APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except per share amounts) (Unaudited)

Activity related to contract assets, which are included in other current assets on the condensed consolidated balance sheet, is as follows:

	March 31, 2021		June 30, 2020		$ Change		% Change
Contract assets	$	11,838	$	8,435	$	3,403	40.3	%

The difference between the opening and closing balances of the Company's contract assets primarily results from the timing difference between the Company's performance and when the customer is billed.

3.    BUSINESS COMBINATIONS

The operating results of all acquired entities are included within the consolidated operating results of the Company from the date of each respective acquisition.

Fiscal 2021 Acquisitions

On December 31, 2020, the Company acquired 100% of the outstanding shares of Gibson Engineering (Gibson), a Norwood, Massachusetts provider of automation products, services, and engineered solutions focused on machine vision, motion control, mobile and collaborative robotic solutions, intelligent sensors, and other related equipment. Gibson is included in the Fluid Power & Flow Control segment. The purchase price for the acquisition was $15,450, net tangible assets acquired were $1,099, and intangible assets including goodwill were $14,351 based upon preliminary estimated fair values at the acquisition date, which are subject to adjustment. The purchase price includes $1,938 of acquisition holdback payments, which are included in other current liabilities and other liabilities on the condensed consolidated balance sheet as of March 31, 2021, and which will be paid on the first and second anniversaries of the acquisition date with interest at a fixed rate of 1.0% per annum. The Company funded this acquisition using available cash. The acquisition price and the results of operations for the acquired entity are not material in relation to the Company's consolidated financial statements.

On October 5, 2020, the Company acquired substantially all of the net assets of Advanced Control Solutions (ACS), which operates four locations in Georgia, Tennessee and Alabama. ACS is a provider of automation products, services, and engineered solutions focused on machine vision equipment and software, mobile and collaborative robotic solutions, intelligent sensors, logic controllers, and other related equipment. ACS is included in the Fluid Power & Flow Control segment. The purchase price for the acquisition was $17,888, net tangible assets acquired were $1,231, and intangible assets including goodwill were $16,657 based upon preliminary estimated fair values at the acquisition date, which are subject to adjustment. The Company funded this acquisition using available cash. The acquisition price and the results of operations for the acquired entity are not material in relation to the Company's consolidated financial statements.

Fiscal 2020 Acquisition

On August 21, 2019, the Company acquired 100% of the outstanding shares of Olympus Controls (Olympus), a Portland, Oregon automation solutions provider - including design, assembly, integration, and distribution - of motion control, machine vision, and robotic technologies. Olympus is included in the Fluid Power & Flow Control segment. The purchase price for the acquisition was $36,642, net tangible assets acquired were $9,540, and intangible assets including goodwill was $27,102 based upon estimated fair values at the acquisition date. The Company funded this acquisition using available cash. The acquisition price and the results of operations for the acquired entity are not material in relation to the Company's consolidated financial statements.

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APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except per share amounts) (Unaudited)

4.    GOODWILL AND INTANGIBLES

The changes in the carrying amount of goodwill for both the Service Center Based Distribution segment and the Fluid Power & Flow Control segment for the fiscal year ended June 30, 2020 and the nine month period ended March 31, 2021 are as follows:

	Service Center Based Distribution		Fluid Power & Flow Control		Total
Balance at June 30, 2019	$	213,634	$	448,357	$	661,991
Goodwill adjusted/acquired during the period	(3,393)		14,667		11,274
Impairment	—		(131,000)		(131,000)
Other, primarily currency translation	(1,671)		—		(1,671)
Balance at June 30, 2020	$	208,570	$	332,024	$	540,594
Goodwill acquired during the period	—		15,688		15,688
Other, primarily currency translation	2,914		—		2,914
Balance at March 31, 2021	$	211,484	$	347,712	$	559,196

The Company has eight (8) reporting units for which an annual goodwill impairment assessment was performed as of January 1, 2021.  The Company concluded that seven (7) of the reporting units’ fair value exceeded their carrying amounts by at least 25% as of January 1, 2021. The fair value of the final reporting unit, which is comprised of the FCX Performance Inc. (FCX) operations, exceeded its carrying value by 14%. The FCX reporting unit has a goodwill balance of $309,012 as of March 31, 2021.

The fair values of the reporting units in accordance with the goodwill impairment test were determined using the income and market approaches.  The income approach employs the discounted cash flow method reflecting projected cash flows expected to be generated by market participants and then adjusted for time value of money factors, and requires management to make significant estimates and assumptions related to forecasts of future revenues, earnings before interest, taxes, depreciation, and amortization (EBITDA), and discount rates. The market approach utilizes an analysis of comparable publicly traded companies and requires management to make significant estimates and assumptions related to the forecasts of future revenues, EBITDA, and multiples that are applied to management’s forecasted revenues and EBITDA estimates.

The techniques used in the Company's impairment test have incorporated a number of assumptions that the Company believes to be reasonable and to reflect known market conditions at the measurement date. Assumptions in estimating future cash flows are subject to a degree of judgment. The Company makes all efforts to forecast future cash flows as accurately as possible with the information available at the measurement date. The Company evaluates the appropriateness of its assumptions and overall forecasts by comparing projected results of upcoming years with actual results of preceding years. Key assumptions (Level 3 in the fair value hierarchy) relate to pricing trends, inventory costs, customer demand, and revenue growth. A number of benchmarks from independent industry and other economic publications were also used.

Changes in future results, assumptions, and estimates after the measurement date may lead to an outcome where additional impairment charges would be required in future periods.  Specifically, actual results may vary from the Company’s forecasts and such variations may be material and unfavorable, thereby triggering the need for future impairment tests where the conclusions may differ in reflection of prevailing market conditions.  Further, continued adverse market conditions could result in the recognition of additional impairment if the Company determines that the fair values of its reporting units have fallen below their carrying values. Certain events or circumstances that could reasonably be expected to negatively affect the underlying key assumptions and ultimately impact the estimated fair value of the Company’s reporting units may include such items as: (i) a decrease in expected future cash flows, specifically, a decrease in sales volume driven by a prolonged weakness in customer demand or other pressures adversely affecting our long-term sales trends; (ii) inability to achieve the sales from our strategic growth initiatives.

At March 31, 2021 and June 30, 2020, accumulated goodwill impairment losses subsequent to fiscal year 2002 totaled $64,794 related to the Service Center Based Distribution segment and $167,605 related to the Fluid Power & Flow Control segment.

12

APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except per share amounts) (Unaudited)

The Company’s identifiable intangible assets resulting from business combinations are amortized over their estimated period of benefit and consist of the following:

March 31, 2021	Amount		Accumulated Amortization		Net Book Value
Finite-Lived Identifiable Intangibles:
Customer relationships	$	352,720	$	137,519	$	215,201
Trade names	105,065		36,172		68,893
Vendor relationships	11,481		9,666		1,815
Other	2,070		293		1,777
Total Identifiable Intangibles	$	471,336	$	183,650	$	287,686

June 30, 2020	Amount		Accumulated Amortization		Net Book Value
Finite-Lived Identifiable Intangibles:
Customer relationships	$	426,017	$	162,965	$	263,052
Trade names	111,453		34,815		76,638
Vendor relationships	11,329		8,934		2,395
Other	2,078		948		1,130
Total Identifiable Intangibles	$	550,877	$	207,662	$	343,215

Amounts include the impact of foreign currency translation. Fully amortized or impaired amounts are written off.

During the nine month period ended March 31, 2021, the Company acquired identifiable intangible assets with a preliminary acquisition cost allocation and weighted-average life as follows:

	Acquisition Cost Allocation		Weighted-Average life
Customer relationships	$	10,390	20.0
Trade names	3,840		15.0
Other	1,090		5.9
Total Identifiable Intangibles	$	15,320	17.7

Identifiable intangible assets with finite lives are reviewed for impairment when changes in conditions indicate carrying value may not be recoverable. Sustained significant weakness in certain end market concentrations could result in impairment of certain intangible assets in future periods.

The Company has three asset groups that have significant exposure to oil and gas end markets. Due to the prolonged economic downturn in these end markets, the Company determined during the second quarter of fiscal 2021 that certain carrying values may not be recoverable. The Company determined that an impairment existed in two of the three asset groups as the asset groups' carrying values exceeded the sum of the undiscounted cash flows. The fair values of the long-lived assets were then determined using the income approach, and the analyses resulted in the measurement of an intangible asset impairment loss of $45,033, which was recorded in the nine months ended March 31, 2021, as the fair value of the intangible assets was determined to be zero. The income approach employs the discounted cash flow method reflecting projected cash flows expected to be generated by market participants and then adjusted for time value of money factors, and requires management to make significant estimates and assumptions related to forecasts of future revenues, earnings before interest, taxes, depreciation, and amortization (EBITDA), and discount rates. Key assumptions (Level 3 in the fair value hierarchy) relate to pricing trends, inventory costs, customer demand, and revenue growth. A number of benchmarks from independent industry and other economic publications were also used. The analyses of these asset groups also resulted in a fixed asset impairment loss and leased asset impairment loss of $1,983 and $2,512, respectively, which were recorded in the nine months ended March 31, 2021.

Estimated future amortization expense by fiscal year (based on the Company’s identifiable intangible assets as of March 31, 2021) for the next five years is as follows: $8,300 for the remainder of 2021, $31,400 for 2022, $29,500 for 2023, $25,800 for 2024, $23,600 for 2025 and $21,900 for 2026.

13

APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except per share amounts) (Unaudited)

5.     DEBT

A summary of long-term debt, including the current portion, follows:

	March 31, 2021		June 30, 2020
Term Loan	$	560,000	$	589,250
Trade receivable securitization facility	162,300		175,000
Series C notes	80,000		120,000
Series D notes	25,000		25,000
Series E notes	25,000		25,000
Other	906		1,026
Total debt	$	853,206	$	935,276
Less: unamortized debt issuance costs	1,158		1,487
	$	852,048	$	933,789

Revolving Credit Facility & Term Loan

In January 2018, the Company refinanced its existing credit facility and entered into a new five-year credit facility with a group of banks expiring in January 2023. This agreement provides for a $780,000 unsecured term loan and a $250,000 unsecured revolving credit facility. Fees on this facility range from 0.10% to 0.20% per year based upon the Company's leverage ratio at each quarter end. Borrowings under this agreement carry variable interest rates tied to either LIBOR or prime at the Company's discretion. The Company had no amount outstanding under the revolver at March 31, 2021 or June 30, 2020. Unused lines under this facility, net of outstanding letters of credit of $200 and $1,873, respectively, to secure certain insurance obligations, totaled $249,800 and $248,127 at March 31, 2021 and June 30, 2020, respectively, and were available to fund future acquisitions or other capital and operating requirements. The interest rate on the term loan was 1.88% as of March 31, 2021 and 1.94% as of June 30, 2020.

Additionally, the Company had letters of credit outstanding with separate banks, not associated with the revolving credit agreement, in the amount of $4,548 and $4,475 as of March 31, 2021 and June 30, 2020, respectively, in order to secure certain insurance obligations.

Trade Receivable Securitization Facility

In August 2018, the Company established a trade receivable securitization facility (the “AR Securitization Facility”) with a termination date of August 31, 2021. On March 26, 2021, the Company amended the AR Securitization Facility to expand the eligible receivables, which increased the maximum availability to $250,000 and increased the fees on the AR Securitization Facility to 0.98% per year. Availability is further subject to changes in the credit ratings of our customers, customer concentration levels or certain characteristics of the accounts receivable being transferred and, therefore, at certain times, we may not be able to fully access the $250,000 of funding available under the AR Securitization Facility. The AR Securitization Facility effectively increases the Company’s borrowing capacity by collateralizing a portion of the amount of the U.S. operations’ trade accounts receivable. The Company uses the proceeds from the AR Securitization Facility as an alternative to other forms of debt, effectively reducing borrowing costs. Borrowings under this facility carry variable interest rates tied to LIBOR. The interest rate on the AR Securitization Facility as of March 31, 2021 and June 30, 2020 was 1.30% and 1.07%, respectively. The termination date of the AR Securitization is now March 26, 2024.

Unsecured Shelf Facility

At March 31, 2021 and June 30, 2020, the Company had borrowings outstanding under its unsecured shelf facility agreement with Prudential Investment Management of $130,000 and $170,000, respectively. Fees on this facility range from 0.25% to 1.25% per year based on the Company's leverage ratio at each quarter end. The "Series C" notes, which had an original principal amount of $120,000, carry a fixed interest rate of 3.19%. A $40,000 principal payment was made on the "Series C" in July 2020, and the remaining principal balance of $80,000 is due in equal payments in July 2021 and 2022. The "Series D" notes have a remaining principal balance of $25,000, carry a fixed interest rate of 3.21%, and are due in October 2023. The “Series E” notes have a principal amount of $25,000, carry a fixed interest rate of 3.08%, and are due in October 2024.

14

APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except per share amounts) (Unaudited)

Other Long-Term Borrowing

In 2014, the Company assumed $2,359 of debt as a part of the headquarters facility acquisition. The 1.50% fixed interest rate note is held by the State of Ohio Development Services Agency, and matures in May 2024.

6.     DERIVATIVES

Risk Management Objective of Using Derivatives

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s borrowings.

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in accumulated other comprehensive loss and subsequently reclassified into interest expense in the same period(s) during which the hedged transaction affects earnings. Amounts reported in accumulated other comprehensive loss related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt.

In January 2019, the Company entered into an interest rate swap to mitigate variability in forecasted interest payments on $463,000 of the Company’s U.S. dollar-denominated unsecured variable rate debt. The interest rate swap effectively converts a portion of the floating rate interest payment into a fixed rate interest payment. The Company designated the interest rate swap as a pay-fixed, receive-floating interest rate swap instrument and is accounting for this derivative as a cash flow hedge. During the quarter ended December 31, 2020, the Company completed a transaction to amend and extend the interest rate swap agreement which resulted in an extension of the maturity date by an additional three years and a decrease of the weighted average fixed pay rate from 2.61% to 1.63%. The new pay-fixed interest rate swap is considered a hybrid instrument with a financing component and an embedded at-market derivative that was designated as a cash flow hedge. The interest rate swap converts $420,000 of variable rate debt to a rate of 3.38% as of March 31, 2021. The interest rate swap converted $431,000 of variable rate debt to a rate of 4.36% as of June 30, 2020. The fair value (Level 2 in the fair value hierarchy) of the interest rate cash flow hedge was $13,157 and $26,179 as of March 31, 2021 and June 30, 2020, respectively, which is included in other current liabilities and other liabilities in the condensed consolidated balance sheet. Amounts reclassified from other comprehensive income (loss), before tax to interest expense, net totaled $2,992 and $1,017 for the three months ended March 31, 2021 and 2020, respectively, and $8,504 and $2,350 for the nine months ended March 31, 2021 and 2020, respectively.

15

APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except per share amounts) (Unaudited)

7.    FAIR VALUE MEASUREMENTS

Marketable securities measured at fair value at March 31, 2021 and June 30, 2020 totaled $15,729 and $12,259, respectively. The majority of these marketable securities are held in a rabbi trust for a non-qualified deferred compensation plan. The marketable securities are included in other assets on the accompanying condensed consolidated balance sheets and their fair values were determined using quoted market prices (Level 1 in the fair value hierarchy).

As of March 31, 2021 and June 30, 2020, the carrying values of the Company's fixed interest rate debt outstanding under its unsecured shelf facility agreement with Prudential Investment Management approximated fair value (Level 2 in the fair value hierarchy).

The revolving credit facility, the term loan and the AR Securitization Facility contain variable interest rates and their carrying values approximate fair value (Level 2 in the fair value hierarchy).

8.    SHAREHOLDERS' EQUITY

Accumulated Other Comprehensive Loss

Changes in the accumulated other comprehensive loss are comprised of the following amounts, shown net of taxes:

	Three Months Ended March 31, 2021
	Foreign currency translation adjustment		Post-employment benefits		Cash flow hedge		Total Accumulated other comprehensive (loss) income
Balance at December 31, 2020	$	(85,222)	$	(4,462)	$	(17,680)	$	(107,364)
Other comprehensive (loss) income	(434)		—		6,615		6,181
Amounts reclassified from accumulated other comprehensive loss	—		52		2,260		2,312
Net current-period other comprehensive (loss) income	(434)		52		8,875		8,493
Balance at March 31, 2021	$	(85,656)	$	(4,410)	$	(8,805)	$	(98,871)

	Three Months Ended March 31, 2020
	Foreign currency translation adjustment		Post-employment benefits		Cash flow hedge		Total Accumulated other comprehensive (loss) income
Balance at December 31, 2019	$	(84,687)	$	(2,877)	$	(9,996)	$	(97,560)
Other comprehensive loss	(28,257)		—		(10,440)		(38,697)
Amounts reclassified from accumulated other comprehensive loss	—		(13)		763		750
Net current-period other comprehensive loss	(28,257)		(13)		(9,677)		(37,947)
Balance at March 31, 2020	$	(112,944)	$	(2,890)	$	(19,673)	$	(135,507)

16

APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except per share amounts) (Unaudited)

	Nine Months Ended March 31, 2021
	Foreign currency translation adjustment		Post-employment benefits		Cash flow hedge		Total Accumulated other comprehensive (loss) income
Balance at June 30, 2020	$	(105,094)	$	(4,564)	$	(19,772)	$	(129,430)
Other comprehensive income	19,438		—		4,544		23,982
Amounts reclassified from accumulated other comprehensive loss	—		154		6,423		6,577
Net current-period other comprehensive income	19,438		154		10,967		30,559
Balance at March 31, 2021	$	(85,656)	$	(4,410)	$	(8,805)	$	(98,871)

	Nine Months Ended March 31, 2020
	Foreign currency translation adjustment		Post-employment benefits		Cash flow hedge		Total Accumulated other comprehensive (loss) income
Balance at June 30, 2019	$	(86,330)	$	(2,852)	$	(10,704)	$	(99,886)
Other comprehensive loss	(26,614)		—		(10,740)		(37,354)
Amounts reclassified from accumulated other comprehensive loss	—		(38)		1,771		1,733
Net current-period other comprehensive loss	(26,614)		(38)		(8,969)		(35,621)
Balance at March 31, 2020	$	(112,944)	$	(2,890)	$	(19,673)	$	(135,507)

Other Comprehensive Income (Loss)

Details of other comprehensive income (loss) are as follows:

	Three Months Ended March 31,
	2021						2020
	Pre-Tax Amount		Tax (Benefit) Expense		Net Amount		Pre-Tax Amount		Tax (Benefit) Expense		Net Amount
Foreign currency translation adjustments	$	(496)	$	(62)	$	(434)	$	(28,767)	$	(510)	$	(28,257)
Post-employment benefits:
Reclassification of net actuarial losses (gains) and prior service cost into other income, net and included in net periodic pension costs	68		16		52		(17)		(4)		(13)
Unrealized gain (loss) on cash flow hedge	8,758		2,143		6,615		(13,891)		(3,451)		(10,440)
Reclassification of interest from cash flow hedge into interest expense	2,992		732		2,260		1,017		254		763
Other comprehensive income (loss)	$	11,322	$	2,829	$	8,493	$	(41,658)	$	(3,711)	$	(37,947)

17

APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except per share amounts) (Unaudited)

	Nine Months Ended March 31,
	2021						2020
	Pre-Tax Amount		Tax Expense		Net Amount		Pre-Tax Amount		Tax (Benefit) Expense		Net Amount
Foreign currency translation adjustments	$	19,529	$	91	$	19,438	$	(27,356)	$	(742)	$	(26,614)
Post-employment benefits:
Reclassification of net actuarial losses (gains) and prior service cost into other income, net and included in net periodic pension costs	203		49		154		(50)		(12)		(38)
Unrealized gain (loss) on cash flow hedge	6,017		1,473		4,544		(14,249)		(3,509)		(10,740)
Reclassification of interest from cash flow hedge into interest expense	8,504		2,081		6,423		2,350		579		1,771
Other comprehensive income (loss)	$	34,253	$	3,694	$	30,559	$	(39,305)	$	(3,684)	$	(35,621)

Anti-dilutive Common Stock Equivalents

In the nine month period ended March 31, 2021, stock options and stock appreciation rights related to 291 shares of common stock were not included in the computation of diluted earnings per share for the period then ended as they were anti-dilutive.

9.    SEGMENT INFORMATION

The accounting policies of the Company’s reportable segments are generally the same as those used to prepare the condensed consolidated financial statements. LIFO expense of $781 and $1,950 in the three months ended March 31, 2021 and 2020, respectively, and $2,777 and $4,237 in the nine months ended March 31, 2021 and 2020, respectively, is recorded in cost of sales in the condensed statements of income, and is included in operating income for the Service Center Based Distribution segment. The Company allocates LIFO expense between the segments in the fourth quarter of its fiscal year. Intercompany sales, primarily from the Fluid Power & Flow Control segment to the Service Center Based Distribution segment, of $8,835 and $7,685, in the three months ended March 31, 2021 and 2020, and $23,773, respectively, and $22,434 in the nine months ended March 31, 2021 and 2020, respectively, have been eliminated in the Segment Financial Information tables below.

Three Months Ended	Service Center Based Distribution		Fluid Power & Flow Control		Total
March 31, 2021
Net sales	$	572,892	$	268,045	$	840,937
Operating income for reportable segments	65,553		30,829		96,382
Depreciation and amortization of property	4,230		850		5,080
Capital expenditures	3,150		578		3,728
March 31, 2020
Net sales	$	574,368	$	256,429	$	830,797
Operating income for reportable segments	53,014		26,449		79,463
Depreciation and amortization of property	4,373		1,007		5,380
Capital expenditures	3,588		670		4,258

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APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except per share amounts) (Unaudited)

Nine Months Ended	Service Center Based Distribution		Fluid Power & Flow Control		Total
March 31, 2021
Net sales	$	1,601,866	$	738,165	$	2,340,031
Operating income for reportable segments	158,108		83,337		241,445
Assets used in business	1,385,648		919,740		2,305,388
Depreciation and amortization of property	12,877		2,764		15,641
Capital expenditures	10,680		1,497		12,177
March 31, 2020
Net sales	$	1,753,316	$	767,260	$	2,520,576
Operating income for reportable segments	167,279		82,755		250,034
Assets used in business	1,310,754		978,775		2,289,529
Depreciation and amortization of property	12,831		3,166		15,997
Capital expenditures	14,022		2,201		16,223

A reconciliation of operating income for reportable segments to the condensed consolidated income before income taxes is as follows:

	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2021		2020		2021		2020
Operating income for reportable segments	$	96,382	$	79,463	$	241,445	$	250,034
Adjustment for:
Intangible amortization—Service Center Based Distribution	944		3,811		4,507		9,697
Intangible amortization—Fluid Power & Flow Control	7,293		7,291		21,731		21,974
Impairment—Service Center Based Distribution	—		—		49,528		—
Goodwill Impairment—Fluid Power & Flow Control	—		131,000		—		131,000
Corporate and other expense, net	13,678		15,311		41,326		45,402
Total operating income (loss)	74,467		(77,950)		124,353		41,961
Interest expense, net	7,608		8,805		22,919		28,447
Other income, net	(1,657)		(1,428)		(1,746)		(1,643)
Income (loss) before income taxes	$	68,516	$	(85,327)	$	103,180	$	15,157

The change in corporate and other expense, net is due to changes in corporate expenses, as well as in the amounts and levels of certain expenses being allocated to the segments. The expenses being allocated include corporate charges for working capital, logistics support, and other items.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except per share amounts) (Unaudited)

10.    OTHER INCOME, NET

Other income, net consists of the following:

	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2021		2020		2021		2020
Unrealized (gain) loss on assets held in rabbi trust for a non-qualified deferred compensation plan	$	(642)	$	2,182	$	(3,104)	$	1,361
Foreign currency transactions (gain) loss	(485)		(3,501)		1,736		(3,167)
Net other periodic post-employment costs (benefits)	71		(30)		213		(90)
Life insurance (income) expense, net	(543)		(194)		(402)		165
Other, net	(58)		115		(189)		88
Total other income, net	$	(1,657)	$	(1,428)	$	(1,746)	$	(1,643)

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ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

With more than 6,000 employees across North America, Australia, New Zealand, and Singapore, Applied Industrial Technologies (“Applied,” the “Company,” “We,” “Us” or “Our”) is a leading value-added distributor and technical solutions provider of industrial motion, fluid power, flow control, automation technologies, and related maintenance supplies. Our leading brands, specialized services, and comprehensive knowledge serve MRO (Maintenance, Repair & Operations) and OEM (Original Equipment Manufacturer) end users in virtually all industrial markets through our multi-channel capabilities that provide choice, convenience, and expertise. We have a long tradition of growth dating back to 1923, the year our business was founded in Cleveland, Ohio. During the third quarter of fiscal 2021, business was conducted in the United States, Puerto Rico, Canada, Mexico, Australia, New Zealand, and Singapore from 571 facilities.

The following is Management's Discussion and Analysis of significant factors which have affected our financial condition, results of operations and cash flows during the periods included in the accompanying condensed consolidated balance sheets, statements of consolidated income, consolidated comprehensive income and consolidated cash flows. When reviewing the discussion and analysis set forth below, please note that the majority of SKUs (Stock Keeping Units) we sell in any given period were not necessarily sold in the comparable period of the prior year, resulting in the inability to quantify certain commonly used comparative metrics analyzing sales, such as changes in product mix and volume.

Overview

Consolidated sales for the quarter ended March 31, 2021 increased $10.1 million or 1.2% compared to the prior year quarter, with acquisitions increasing sales by $15.2 million or 1.8% and favorable foreign currency translation of $5.3 million increasing sales by 0.6%. The Company had operating income of $74.5 million, or operating margin of 8.9% of sales for the quarter ended March 31, 2021 compared to an operating loss of $78.0 million, or negative operating margin of 9.4% of sales for the same quarter in the prior year. The prior year quarter included a $131.0 million non-cash goodwill impairment charge related to the goodwill associated with the Company's FCX Performance Inc. (FCX) operations within the Fluid Power & Flow Control segment. The quarter ended March 31, 2021 had net income of $56.1 million compared to a net loss of $82.8 million in the prior year quarter. The current ratio was 2.6 to 1 at March 31, 2021 and 2.7 to 1 at June 30, 2020.

This quarter's results are due to strengthening end-market demand as the industrial economy improves from the challenges faced during the COVID-19 pandemic. While supplier constraints and inflation are increasing, we expanded gross margins and leveraged a leaner cost structure despite the roll back of various temporary cost actions during the fiscal year. While general economic uncertainty remains, underlying sales growth has continued into April with organic sales month to date up approximately 10 percent year over year. We are continuing to monitor the impact of the COVID-19 pandemic; we are classified as critical infrastructure and our facilities remain open and operational as they adhere to health and safety policies. 

Applied monitors several economic indices that have been key indicators for industrial economic activity in the United States. These include the Industrial Production (IP) and Manufacturing Capacity Utilization (MCU) indices published by the Federal Reserve Board and the Purchasing Managers Index (PMI) published by the Institute for Supply Management (ISM). Historically, our performance correlates well with the MCU, which measures productivity and calculates a ratio of actual manufacturing output versus potential full capacity output. When manufacturing plants are running at a high rate of capacity, they tend to wear out machinery and require replacement parts.

The MCU (total industry) and IP indices have increased since June 2020. The MCU for March 2021 was 74.4, which is down from the December revised reading of 74.7 but up from the June 2020 revised reading of 68.9. The ISM PMI registered 64.7 in March, up from the December and June 2020 revised readings of 60.5 and 52.2, respectively. The indices for the months during the current quarter were as follows:

	Index Reading
Month	MCU	PMI	IP
March 2021	74.4	64.7	102.8
February 2021	73.4	60.8	100.0
January 2021	75.3	58.7	103.9

The number of Company employees was 6,032 at March 31, 2021, 6,289 at June 30, 2020, and 6,471 at March 31, 2020. The number of operating facilities totaled 571 at March 31, 2021, 584 at June 30, 2020 and 599 at March 31, 2020.

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ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Results of Operations

Three Months Ended March 31, 2021 and 2020

The following table is included to aid in review of Applied's condensed statements of consolidated income.

	Three Months Ended March 31,				Change in $'s Versus Prior Period - % Increase (Decrease)
	As a Percent of Net Sales
	2021		2020
Net sales	100.0	%	100.0	%	1.2	%
Gross profit	29.4	%	28.5	%	4.4	%
Selling, distribution & administrative expense	20.5	%	22.1	%	(6.0)	%
Operating income (loss)	8.9	%	(9.4)	%	N/M
Net income (loss)	6.7	%	(10.0)	%	N/M

During the quarter ended March 31, 2021, sales increased $10.1 million or 1.2% compared to the prior year quarter, with sales from acquisitions adding $15.2 million or 1.8% and favorable foreign currency translation accounting for an increase of $5.3 million or 0.6%. There were 63 selling days in the quarter ended March 31, 2021 and 64 selling days in the quarter ended March 31, 2020. Excluding the impact of businesses acquired and foreign currency translation, sales were down $10.4 million or 1.2% during the quarter, driven by a decrease of 1.6% due to one less sales day, offset by a 0.4% increase from operations.

The following table shows changes in sales by reportable segment.

Sales by Reportable Segment	Three Months Ended March 31,				Sales (Decrease) Increase		Amount of change due to
									Foreign Currency		Organic Change
	2021		2020				Acquisitions
Service Center Based Distribution	$	572.9	$	574.4	$	(1.5)	$	—	$	5.3	$	(6.8)
Fluid Power & Flow Control	268.0		256.4		11.6		15.2		—		(3.6)
Total	$	840.9	$	830.8	$	10.1	$	15.2	$	5.3	$	(10.4)

Sales from our Service Center Based Distribution segment, which operates primarily in MRO markets, decreased $1.5 million or 0.3%. Favorable foreign currency translation increased sales by $5.3 million or 0.9%. Excluding the impact of foreign currency translation, sales decreased $6.8 million or 1.2%, driven by a decrease of 1.6% due to one less sales day, offset by a 0.4% increase from operations reflecting ongoing recovery across industrial end markets as customers are gradually increasing production and facility utilization, driving greater break-fix and maintenance activity. The greatest improvement has been from the food and beverage, aggregates, lumber and wood, pulp and paper, and chemical end markets.

Sales from our Fluid Power & Flow Control segment increased $11.6 million or 4.5%. Acquisitions within this segment increased sales by $15.2 million or 5.9%. Excluding the impact of businesses acquired, sales decreased $3.6 million or 1.4%, driven by a decrease of 1.6% due to one less sales day, offset by a 0.2% increase from operations reflecting stronger demand across technology, off-highway mobile, life sciences, and chemical end markets.

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ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

The following table shows changes in sales by geographic area. Other countries includes Mexico, Australia, New Zealand, and Singapore.

	Three Months Ended March 31,				Sales (Decrease) Increase		Amount of change due to
									Foreign Currency		Organic Change
Sales by Geographic Area	2021		2020				Acquisitions
United States	$	724.6	$	725.0	$	(0.4)	$	15.2	$	—	$	(15.6)
Canada	66.1		59.9		6.2		—		3.5		2.7
Other countries	50.2		45.9		4.3		—		1.8		2.5
Total	$	840.9	$	830.8	$	10.1	$	15.2	$	5.3	$	(10.4)

Sales in our U.S. operations were down $0.4 million or 0.1%, as acquisitions added $15.2 million or 2.1%. Excluding the impact of businesses acquired, U.S. sales were down $15.6 million or 2.2%, driven by a decrease of 1.6% due to one less sales day, resulting in a 0.6% decrease from operations. Sales from our Canadian operations increased $6.2 million or 10.4%. Favorable foreign currency translation increased Canadian sales by $3.5 million or 5.8%. Excluding the impact of foreign currency translation, Canadian sales increased $2.8 million or 4.6%, driven by a 6.2% increase from operations, offset by a 1.6% decrease due to one less sales day. Consolidated sales from our other country operations, which include Mexico, Australia, New Zealand, and Singapore, increased $4.3 million or 9.3% from the prior year. Favorable foreign currency translation increased other country sales by $1.8 million or 4.0%. Excluding the impact of currency translation, other country sales were up $2.5 million, or 5.3% during the quarter, driven by a 9.3% increase in operations, offset by a 4.0% decrease due to a decrease in sales days.

Our gross profit margin was 29.4% in the quarter ended March 31, 2021 compared to 28.5% in the prior period. The increase in gross profit margin reflects improving demand and ongoing margin initiatives. The gross profit margin for the current quarter was positively impacted by a $1.2 million decrease in LIFO expense between quarters. The gross profit margin for the prior year quarter was negatively impacted by 47 basis points for $3.9 million of non-routine expense recorded within cost of sales related to inventory reserves for excess and obsolete inventory within the U.S. Service Center Based Distribution segment.

The following table shows the changes in selling, distribution and administrative expense (SD&A).

	Three Months Ended March 31,				SD&A Decrease		Amount of change due to
									Foreign Currency		Organic Change
	2021		2020				Acquisitions
SD&A	$	172.8	$	183.7	$	(10.9)	$	4.0	$	1.7	$	(16.6)

SD&A consists of associate compensation, benefits and other expenses associated with selling, purchasing, warehousing, supply chain management and providing marketing and distribution of the Company's products, as well as costs associated with a variety of administrative functions such as human resources, information technology, treasury, accounting, insurance, legal, and facility related expenses. SD&A was 20.5% of sales in the quarter ended March 31, 2021 compared to 22.1% in the prior year quarter. SD&A decreased $10.9 million or 6.0% compared to the prior year quarter. Changes in foreign currency exchange rates had the effect of increasing SD&A during the quarter ended March 31, 2021 by $1.7 million or 0.9% compared to the prior year quarter. SD&A from businesses acquired added $4.0 million or 2.2% of SD&A expenses, including $0.4 million of intangibles amortization related to acquisitions. Excluding the impact of businesses acquired and the unfavorable currency translation impact, SD&A decreased $16.6 million or 9.1% during the quarter ended March 31, 2021 compared to the prior year quarter. During the prior quarter ended March 31, 2020, the Company incurred $2.1 million of non-routine expenses related to severance and facility consolidation for the U.S. Service Center Based Distribution segment. Excluding the impact of acquisitions and severance, total compensation decreased $1.0 million during the quarter ended March 31, 2021, primarily due to cost reduction actions taken by the Company in response to the COVID-19 pandemic, including headcount reductions, temporary furloughs and pay reductions, and suspension of the 401(k) company match. All of the temporary actions were restored during the current year quarter. Also, travel & entertainment and fleet expenses decreased $3.9 million during the quarter ended March 31, 2021 primarily due to continued reduced travel activity related to COVID-19. In addition, bad debt expense decreased $5.5 million, primarily due to provisions recorded in the prior year for customer credit deterioration and bankruptcies primarily in the U.S. operations of the Service Center Based Distribution segment, offset by strong cash collections and an improvement in the overall credit profile of the accounts receivable portfolio in the current quarter. Further,

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ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

excluding the impact of acquisitions, intangible amortization expense decreased $3.2 million during the quarter ended March 31, 2021 primarily due to the intangible impairment recorded during the second quarter of fiscal 2021. All other expenses within SD&A were down $0.9 million.

During the prior year quarter ended March 31, 2020, the Company performed its annual goodwill impairment test. As a result of this test, the Company recorded a $131.0 million non-cash goodwill impairment charge related to the Company's FCX operations in the Fluid Power & Flow Control segment, primarily due to the overall decline in the industrial economy, specifically slower demand in FCX's end markets. The non-cash goodwill impairment charge decreased net income by $118.8 million and earnings per share by $3.07 per share for the quarter ended March 31, 2020.

The Company had operating income of $74.5 million during the quarter ended March 31, 2021, compared to an operating loss of $78.0 million in the prior year quarter, primarily due to non-cash goodwill impairment charges of $131.0 million in the prior year quarter.

Operating income as a percentage of sales for the Service Center Based Distribution segment increased to 11.4% in the current year quarter from 9.2% in the prior year quarter. Operating income, before impairment, as a percentage of sales for the Fluid Power & Flow Control segment increased to 11.5% in the current year quarter from 10.3% in the prior year quarter.

Other income, net was income of $1.7 million for the quarter, which included unrealized gains on investments held by non-qualified deferred compensation trusts of $0.6 million, net favorable foreign currency transaction gains of $0.5 million, and $0.6 million of income from other items. During the prior year quarter, other income, net was income of $1.4 million, which included unrealized losses on investments held by non-qualified deferred compensation trusts of $2.2 million, offset by net favorable foreign currency transaction gains of $3.5 million, and $0.1 million of income from other items.

The effective income tax rate was 18.2% for the quarter ended March 31, 2021 compared to 3.0% for the quarter ended March 31, 2020. The effective income tax rate for the current year quarter was favorably impacted by income tax return to provision adjustments for fiscal 2020, an increase in R&D tax credits claimed, and stock-based compensation deductions. The goodwill impairment charge taken in the quarter ended March 31, 2020 decreased the effective tax rate by 21.6%.

As a result of the factors addressed above, the Company had net income of $56.1 million during the quarter ended March 31, 2021, compared to a net loss of $82.8 million in the prior year quarter. Net income per share was $1.42 per share for the quarter ended March 31, 2021 compared to net loss per share of $2.14 in the prior year quarter.

Results of Operations

Nine Months Ended March 31, 2021 and 2020

The following table is included to aid in review of Applied's condensed statements of consolidated income.

	Nine Months Ended March 31, 2021				Change in $'s Versus Prior Period - % (Decrease) Increase
	As a Percent of Net Sales
	2021		2020
Net sales	100.0	%	100.0	%	(7.2)	%
Gross profit	28.7	%	28.9	%	(7.8)	%
Selling, distribution & administrative expense	21.3	%	22.1	%	(10.4)	%
Operating income	5.3	%	1.7	%	196.4	%
Net income	3.7	%	(0.2)	%	N/M

During the nine months ended March 31, 2021, sales decreased $180.5 million or 7.2% compared to the prior year period, with sales from acquisitions adding $29.0 million or 1.2% and favorable foreign currency translation accounting for an increase of $3.1 million or 0.1%. There were 189 selling days in the nine months ended March 31, 2021 and 190 selling days in the nine months ended March 31, 2020. Excluding the impact of businesses acquired and foreign currency translation, sales were down $212.6 million or 8.5% during the period, driven by a 8.0% decrease from operations and a 0.5% decrease from one less sales day. The decrease from operations is due to weak demand across key end markets from the impact of the COVID-19 pandemic, although sales have improved as the year progressed.

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ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

The following table shows changes in sales by reportable segment.

Sales by Reportable Segment	Nine Months Ended  March 31,				Sales Decrease		Amount of change due to
									Foreign Currency		Organic Change
	2021		2020				Acquisitions
Service Center Based Distribution	$	1,601.9	$	1,753.3	$	(151.4)	$	—	$	3.1	$	(154.5)
Fluid Power & Flow Control	738.2		767.3		(29.1)		29.0		—		(58.1)
Total	$	2,340.1	$	2,520.6	$	(180.5)	$	29.0	$	3.1	$	(212.6)

Sales from our Service Center Based Distribution segment, which operates primarily in MRO markets, decreased $151.4 million or 8.6%. Favorable foreign currency translation increased sales by $3.1 million or 0.2%. Excluding the impact of foreign currency translation, sales decreased $154.5 million or 8.8%, driven by an 8.3% decrease from operations and a 0.5% decrease due to one less sales day. The decrease from operations is reflecting weaker industrial end-market demand from the impact of the COVID-19 pandemic, although sales improved as the year progressed. The greatest improvement has been from the food and beverage, aggregates, lumber and wood, pulp and paper, and chemical end markets.

Sales from our Fluid Power & Flow Control segment decreased $29.1 million or 3.8%. Acquisitions within this segment increased sales by $29.0 million or 3.8%. Excluding the impact of businesses acquired, sales decreased $58.1 million or 7.6%, driven by a 7.1% decrease from operations and and a 0.5% decrease due to one less sales day. The decrease from operations is due to ongoing soft demand across process-related end markets, offset by stronger demand across technology, off-highway mobile, life sciences, and chemical end markets, as well as automation-related sales.

The following table shows changes in sales by geographic area. Other countries includes Mexico, Australia, New Zealand, and Singapore.

	Nine Months Ended  March 31,				Sales (Decrease) Increase		Amount of change due to
									Foreign Currency		Organic Change
Sales by Geographic Area	2021		2020				Acquisitions
United States	$	2,016.5	$	2,188.3	$	(171.8)	$	29.0	$	—	$	(200.8)
Canada	180.9		193.8		(12.9)		—		4.0		(16.9)
Other countries	142.7		138.5		4.2		—		(0.9)		5.1
Total	$	2,340.1	$	2,520.6	$	(180.5)	$	29.0	$	3.1	$	(212.6)

Sales in our U.S. operations were down $171.8 million or 7.9%, as acquisitions added $29.0 million or 1.3%. Excluding the impact of businesses acquired, U.S. sales were down $200.8 million or 9.2%, driven by a decrease from operations of 8.7% and 0.5% from one less sales day. Sales from our Canadian operations decreased $12.9 million or 6.7%. Favorable foreign currency translation increased Canadian sales by $4.0 million or 2.0%. Excluding the impact of foreign currency translation, Canadian sales were down $16.9 million or 8.7%, driven by a decrease from operations of 8.2% and 0.5% from one less sales day. Consolidated sales from our other country operations, which include Mexico, Australia, New Zealand, and Singapore, increased $4.2 million or 3.0% from the prior year. Unfavorable foreign currency translation decreased other country sales by $0.9 million or 0.6%. Excluding the impact of currency translation, other country sales were up $5.1 million, or 3.6%, during the period, driven by an increase from operations of 5.5% offset by a decrease of 1.9% due to less sales days.

Our gross profit margin was 28.7% in the nine months ended March 31, 2021 compared to 28.9% in the prior year period. The gross profit margin for the nine months ended March 31, 2021 was negatively impacted by 31 basis points due to $7.4 million of non-routine costs from ongoing business alignment initiatives and cost actions recorded in the period. The gross profit margin for the prior year period was negatively impacted by 15 basis points for $3.9 million of non-routine expense recorded within cost of sales related to inventory reserves for excess and obsolete inventory within the U.S. Service Center Based Distribution segment.

The following table shows the changes in selling, distribution and administrative expense (SD&A).

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ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

	Nine Months Ended  March 31,				SD&A Decrease		Amount of change due to
									Foreign Currency		Organic Change
	2021		2020				Acquisitions
SD&A	$	498.7	$	556.5	$	(57.8)	$	7.8	$	1.3	$	(66.9)

SD&A consists of associate compensation, benefits and other expenses associated with selling, purchasing, warehousing, supply chain management and providing marketing and distribution of the Company's products, as well as costs associated with a variety of administrative functions such as human resources, information technology, treasury, accounting, insurance, legal, and facility related expenses. SD&A was 21.3% of sales in the nine months ended March 31, 2021 compared to 22.1% in the prior year period. SD&A decreased $57.8 million or 10.4% compared to the prior year period. Changes in foreign currency exchange rates had the effect of increasing SD&A during the nine months ended March 31, 2021 by $1.3 million or 0.2% compared to the prior year period. SD&A from businesses acquired added $7.8 million or 1.4% of SD&A expenses, including $0.7 million of intangibles amortization related to acquisitions. Excluding the impact of businesses acquired and the unfavorable currency translation impact, SD&A decreased $66.9 million or 12.0% during the nine months ended March 31, 2021 compared to the prior year period. The Company incurred $0.4 million of non-routine expenses related to severance and closed facilities during the nine months ended March 31, 2021 compared to $3.6 million of non-routine expenses related to severance and facility consolidation during during the prior period. Excluding the impact of acquisitions and severance, total compensation decreased $37.8 million during the nine months ended March 31, 2021, primarily due to cost reduction actions taken by the Company in response to the COVID-19 pandemic, including headcount reductions, temporary furloughs and pay reductions, and suspension of the 401(k) company match. All of the temporary cost reductions have been reinstated during the current fiscal year. Also, travel & entertainment and fleet expenses decreased $13.7 million during the nine months ended March 31, 2021 primarily due to continued reduced travel activity related to COVID-19. In addition, bad debt expense decreased $4.4 million, primarily due to provisions recorded in the prior year for customer credit deterioration and bankruptcies primarily in the U.S. operations of the Service Center Based Distribution segment, offset by strong cash collections and an improvement in the overall credit profile of the accounts receivable portfolio in the current year. Further, excluding the impact of acquisitions, intangible amortization expense decreased $6.2 million during the nine months ended March 31, 2021 primarily due to the intangible impairment recorded during the period. All other expenses within SD&A were down $1.6 million.

The Company has three asset groups that have significant exposure to oil and gas end markets. Due to the prolonged economic downturn in these end markets, the Company determined during the second quarter of fiscal 2021 that certain carrying values may not be recoverable. The Company determined that an impairment existed in two of the three asset groups as the asset groups' carrying values exceeded the sum of the undiscounted cash flows. The fair values of the long-lived assets were then determined using the income approach, and the analyses resulted in the measurement of an intangible asset impairment loss of $45.0 million, which was recorded in the nine months ended March 31, 2021, as the fair value of the intangible assets was determined to be zero. The income approach employs the discounted cash flow method reflecting projected cash flows expected to be generated by market participants and then adjusted for time value of money factors, and requires management to make significant estimates and assumptions related to forecasts of future revenues, earnings before interest, taxes, depreciation, and amortization (EBITDA), and discount rates. Key assumptions (Level 3 in the fair value hierarchy) relate to pricing trends, inventory costs, customer demand, and revenue growth. A number of benchmarks from independent industry and other economic publications were also used. The analyses of these asset groups also resulted in a fixed asset impairment loss and leased asset impairment loss of $2.0 million and $2.5 million, respectively, which were recorded in the nine months ended March 31, 2021.

As a result of the Company's annual goodwill impairment test in the prior year period, the Company recorded a $131.0 million non-cash goodwill impairment charge related to the Company's FCX operations in the Fluid Power & Flow Control segment, primarily due to the overall decline in the industrial economy, specifically slower demand in FCX's end markets. The non-cash goodwill impairment charge decreased net income by $118.8 million and earnings per share by $3.07 million for the nine months ended March 31, 2020.

Operating income increased $82.4 million, and as a percent of sales increased to 5.3% from 1.7% during the prior year period, primarily due to non-cash goodwill impairment charges of $131.0 million in the prior year period.

Operating income, before impairment charges, as a percentage of sales for the Service Center Based Distribution segment increased to 9.9% in the current year period from 9.5% in the prior year period. Operating income, before impairment charges, as a percentage of sales for the Fluid Power & Flow Control segment increased to 11.3% in the current year period from 10.8% in the prior year period.

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AND RESULTS OF OPERATIONS

Other income, net was income of $1.7 million for the nine months ended March 31, 2021, which included unrealized gains on investments held by non-qualified deferred compensation trusts of $3.1 million and $0.3 million of income from other items, offset by net unfavorable foreign currency transaction losses of $1.7 million. During the prior year period, other income, net was income of $1.6 million and included net favorable foreign currency transaction gains of $3.2 million, offset by unrealized losses on investments held by non-qualified deferred compensation trusts of $1.4 million and other expense of $0.2 million.

The effective income tax rate was 17.1% for the nine months ended March 31, 2021 compared to 139.2% for the nine months ended March 31, 2020. The effective income tax rate for the current year period was favorably impacted by return to provision adjustments for fiscal 2020, an increase in R&D tax credits claimed, and stock compensation deductions. The goodwill impairment charge in the nine months ended March 31, 2020 increased the effective tax rate by 121.3%. We expect our full year tax rate for fiscal 2021 to be in the 20.0% to 22.0% range.

As a result of the factors addressed above, net income for the nine months ended March 31, 2021 increased $91.5 million compared to the prior year period. Net income was $2.18 per share for the nine months ended March 31, 2021 compared to a net loss of $0.15 per share in the prior year period.

Liquidity and Capital Resources

Our primary source of capital is cash flow from operations, supplemented as necessary by bank borrowings or other sources of debt. At March 31, 2021, we had total debt obligations outstanding of $853.2 million compared to $935.3 million at June 30, 2020. Management expects that our existing cash, cash equivalents, funds available under the revolving credit facility, and cash provided from operations will be sufficient to finance normal working capital needs in each of the countries in which we operate, payment of dividends, acquisitions, investments in properties, facilities and equipment, debt service, and the purchase of additional Company common stock. Management also believes that additional long-term debt and line of credit financing could be obtained based on the Company's credit standing and financial strength.

The Company's working capital at March 31, 2021 was $760.6 million, compared to $733.7 million at June 30, 2020. The current ratio was 2.6 to 1 at March 31, 2021 and 2.7 to 1 at June 30, 2020.

Net Cash Flows

The following table is included to aid in review of Applied's condensed statements of consolidated cash flows; all amounts are in thousands.

	Nine Months Ended March 31,
Net Cash Provided by (Used in):	2021		2020
Operating Activities	$	203,409	$	169,624
Investing Activities	(41,509)		(51,651)
Financing Activities	(130,534)		(55,959)
Exchange Rate Effect	4,099		(4,769)
Increase in Cash and Cash Equivalents	$	35,465	$	57,245

Net cash provided by operating activities was $203.4 million for the nine months ended March 31, 2021 compared to $169.6 million provided by operating activities in the prior period. The increase in cash provided by operating activities during the nine months ended March 31, 2021 is related to working capital improvements.

Net cash used in investing activities during the nine months ended March 31, 2021 decreased from the prior period primarily due to $30.0 million used for the acquisitions of Gibson Engineering and Advanced Control Solutions compared to $37.2 million used for the acquisition of Olympus Controls in the prior year period.

Net cash used in financing activities during the nine months ended March 31, 2021 increased from the prior period primarily due to a change in net debt activity, as there was $82.1 million of debt payments in the current year period compared to $14.8 million of net debt payments in the prior year period.

Share Repurchases

The Board of Directors has authorized the repurchase of shares of the Company's common stock. These purchases may be made in open market and negotiated transactions, from time to time, depending upon market conditions. During the nine months ended March 31, 2021 and 2020, the Company did not acquire any shares of treasury stock on the open market. At March 31, 2021, we had authorization to repurchase 864,618 shares.

Borrowing Arrangements

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ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

A summary of long-term debt, including the current portion, follows (amounts in thousands):

	March 31, 2021		June 30, 2020
Unsecured credit facility	$	560,000	$	589,250
Trade receivable securitization facility	162,300		175,000
Series C notes	80,000		120,000
Series D notes	25,000		25,000
Series E notes	25,000		25,000
Other	906		1,026
Total debt	$	853,206	$	935,276
Less: unamortized debt issuance costs	1,158		1,487
	$	852,048	$	933,789

Revolving Credit Facility & Term Loan

In January 2018, the Company refinanced its existing credit facility and entered into a new five-year credit facility with a group of banks expiring in January 2023. This agreement provides for a $780.0 million unsecured term loan and a $250.0 million unsecured revolving credit facility. Fees on this facility range from 0.10% to 0.20% per year based upon the Company's leverage ratio at each quarter end. Borrowings under this agreement carry variable interest rates tied to either LIBOR or prime at the Company's discretion. The Company had no amount outstanding under the revolver at March 31, 2021 or June 30, 2020. Unused lines under this facility, net of outstanding letters of credit of $0.2 million and $1.9 million, respectively, to secure certain insurance obligations, totaled $249.8 million and $248.1 million at March 31, 2021 and June 30, 2020, respectively, and were available to fund future acquisitions or other capital and operating requirements. The interest rate on the term loan was 1.88% as of March 31, 2021 and 1.94% as of June 30, 2020.

Additionally, the Company had letters of credit outstanding with separate banks, not associated with the revolving credit agreement, in the amount of $4.5 million as of March 31, 2021 and June 30, 2020, in order to secure certain insurance obligations.

Trade Receivable Securitization Facility

In August 2018, the Company established a trade receivable securitization facility (the “AR Securitization Facility”) with a termination date of August 31, 2021. On March 26, 2021, the Company amended the AR Securitization Facility to expand the eligible receivables, which increased the maximum availability to $250.0 million and increased the fees on the AR Securitization Facility to 0.98% per year. Availability is further subject to changes in the credit ratings of our customers, customer concentration levels or certain characteristics of the accounts receivable being transferred and, therefore, at certain times, we may not be able to fully access the $250.0 million of funding available under the AR Securitization Facility. The AR Securitization Facility effectively increases the Company’s borrowing capacity by collateralizing a portion of the amount of the U.S. operations’ trade accounts receivable. The Company uses the proceeds from the AR Securitization Facility as an alternative to other forms of debt, effectively reducing borrowing costs. Borrowings under this facility carry variable interest rates tied to LIBOR. The interest rate on the AR Securitization Facility as of March 31, 2021 and June 30, 2020 was 1.30% and 1.07%, respectively. The termination date of the AR Securitization is now March 26, 2024.

Other Long-Term Borrowings

At March 31, 2021 and June 30, 2020, the Company had borrowings outstanding under its unsecured shelf facility agreement with Prudential Investment Management of $130.0 million and $170.0 million, respectively. Fees on this facility range from 0.25% to 1.25% per year based on the Company's leverage ratio at each quarter end. The "Series C" notes, which had an original principal amount of $120.0 million, carry a fixed interest rate of 3.19%. A $40.0 million principal payment was made on the "Series C" in July 2020, and the remaining principal balance of $80.0 million is due in equal payments in July 2021 and 2022. The "Series D" notes have a remaining principal balance of $25.0 million, carry a fixed interest rate of 3.21%, and are due in October 2023. The “Series E” notes have a principal amount of $25.0 million, carry a fixed interest rate of 3.08%, and are due in October 2024.

The Company entered into an interest rate swap which mitigates variability in forecasted interest payments on $420.0 million of the Company’s U.S. dollar-denominated unsecured variable rate debt. For more information, see note 6, Derivatives, to the

28

APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

consolidated financial statements, included in Item 1 under the caption “Notes to Condensed Consolidated Financial Statements.”

The credit facility and the unsecured shelf facility contain restrictive covenants regarding liquidity, net worth, financial ratios, and other covenants. At March 31, 2021, the most restrictive of these covenants required that the Company have net indebtedness less than 3.75 times consolidated income before interest, taxes, depreciation and amortization (as defined). At March 31, 2021, the Company's net indebtedness was below 2.8 times consolidated income before interest, taxes, depreciation and amortization (as defined). The Company was in compliance with all financial covenants at March 31, 2021.

Accounts Receivable Analysis

The following table is included to aid in analysis of accounts receivable and the associated provision for losses on accounts receivable:

							March 31,			June 30,
							2021			2020
Accounts receivable, gross							$	526,282		$	463,659
Allowance for doubtful accounts							16,202			13,661
Accounts receivable, net							$	510,080		$	449,998
Allowance for doubtful accounts, % of gross receivables							3.1		%	2.9		%
	Three Months Ended March 31,						Nine Months Ended March 31,
	2021			2020			2020			2019
Provision for losses on accounts receivable	$	(200)		$	5,296		$	5,595		$	9,988
Provision as a % of net sales	(0.02)		%	0.64		%	0.24		%	0.40		%

Accounts receivable are reported at net realizable value and consist of trade receivables from customers. Management monitors accounts receivable by reviewing Days Sales Outstanding (DSO) and the aging of receivables for each of the Company's locations.

On a consolidated basis, DSO was 54.6 at March 31, 2021 compared to 55.9 at June 30, 2020.

As of March 31, 2021, approximately 3.9% of our accounts receivable balances are more than 90 days past due, compared to 4.6% at June 30, 2020. On an overall basis, our provision for losses on accounts receivable represents 0.02% of our sales in the three months ended March 31, 2021, compared to 0.64% of sales for the three months ended March 31, 2020, and 0.24% of sales for the nine months ended March 31, 2021 compared to 0.40% of sales for the nine months ended March 31, 2020. The decrease primarily relates to strong cash collections and an improvement in the overall credit profile of the accounts receivable portfolio in the current year, compared to provisions recorded in the prior year for customer credit deterioration and bankruptcies primarily in the U.S. operations of the Service Center Based Distribution segment. Historically, this percentage is around 0.10% to 0.15%. Management believes the overall receivables aging and provision for losses on accounts receivable are at reasonable levels.

Inventory Analysis

Inventories are valued using the last-in, first-out (LIFO) method for U.S. inventories and the average cost method for foreign inventories.  Management uses an inventory turnover ratio to monitor and evaluate inventory.  Management calculates this ratio on an annual as well as a quarterly basis, and believes that using average costs to determine the inventory turnover ratio instead of LIFO costs provides a more useful analysis.  The annualized inventory turnover based on average costs was 4.0 for the period ended March 31, 2021 and 3.8 for the period ended June 30, 2020.  We believe our inventory turnover ratio at the end of the year will be similar or slightly better than the ratio at March 31, 2021.

29

APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Cautionary Statement Under Private Securities Litigation Reform Act

Management’s Discussion and Analysis contains statements that are forward-looking based on management’s current expectations about the future. Forward-looking statements are often identified by qualifiers, such as “guidance”, “expect”, “believe”, “plan”, “intend”, “will”, “should”, “could”, “would”, “anticipate”, “estimate”, “forecast”, “may”, "optimistic" and derivative or similar words or expressions. Similarly, descriptions of objectives, strategies, plans, or goals are also forward-looking statements. These statements may discuss, among other things, expected growth, future sales, future cash flows, future capital expenditures, future performance, and the anticipation and expectations of the Company and its management as to future occurrences and trends. The Company intends that the forward-looking statements be subject to the safe harbors established in the Private Securities Litigation Reform Act of 1995 and by the Securities and Exchange Commission in its rules, regulations and releases.

Readers are cautioned not to place undue reliance on any forward-looking statements. All forward-looking statements are based on current expectations regarding important risk factors, many of which are outside the Company’s control. Accordingly, actual results may differ materially from those expressed in the forward-looking statements, and the making of those statements should not be regarded as a representation by the Company or any other person that the results expressed in the statements will be achieved. In addition, the Company assumes no obligation publicly to update or revise any forward-looking statements, whether because of new information or events, or otherwise, except as may be required by law.

Important risk factors include, but are not limited to, the following: risks relating to the operations levels of our customers and the economic factors that affect them; risks relating to the effects of the COVID-19 pandemic; changes in the prices for products and services relative to the cost of providing them; reduction in supplier inventory purchase incentives; loss of key supplier authorizations, lack of product availability, changes in supplier distribution programs, inability of suppliers to perform, and transportation disruptions; the cost of products and energy and other operating costs; changes in customer preferences for products and services of the nature and brands sold by us; changes in customer procurement policies and practices; competitive pressures; our reliance on information systems and risks relating to their proper functioning, the security of those systems, and the data stored in or transmitted through them; the impact of economic conditions on the collectability of trade receivables; reduced demand for our products in targeted markets due to reasons including consolidation in customer industries; our ability to retain and attract qualified sales and customer service personnel and other skilled executives, managers and professionals; our ability to identify and complete acquisitions, integrate them effectively, and realize their anticipated benefits; the variability, timing and nature of new business opportunities including acquisitions, alliances, customer relationships, and supplier authorizations; the incurrence of debt and contingent liabilities in connection with acquisitions; our ability to access capital markets as needed on reasonable terms; disruption of operations at our headquarters or distribution centers; risks and uncertainties associated with our foreign operations, including volatile economic conditions, political instability, cultural and legal differences, and currency exchange fluctuations; the potential for goodwill and intangible asset impairment; changes in

accounting policies and practices; our ability to maintain effective internal control over financial reporting; organizational changes within the Company; risks related to legal proceedings to which we are a party; potentially adverse government regulation, legislation, or policies, both enacted and under consideration, including with respect to federal tax policy, international trade, data privacy and security, and government contracting; and the occurrence of extraordinary events (including prolonged labor disputes, power outages, telecommunication outages, terrorist acts, public health emergency, earthquakes, extreme weather events, other natural disasters, fires, floods, and accidents). Other factors and unanticipated events could also adversely affect our business, financial condition or results of operations.

We discuss certain of these matters and other risk factors more fully throughout this Form 10-Q as well as other of our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended June 30, 2020.

30

APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For quantitative and qualitative disclosures about market risk, see Item 7A "Quantitative and Qualitative Disclosures About Market Risk" in our Annual Report on Form 10-K for the year ended June 30, 2020.

31

APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

ITEM 4: CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company's management, under the supervision and with the participation of the Chief Executive Officer (CEO) and Chief Financial Officer (CFO), evaluated the effectiveness of the Company's disclosure controls and procedures, as defined in Exchange Act Rule 13a-15(e), as of the end of the period covered by this report. Based on that evaluation, the CEO and CFO have concluded that the Company's disclosure controls and procedures are effective.

Changes in Internal Control Over Financial Reporting

There have not been any changes in internal control over financial reporting during the three months ended March 31, 2021 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

32

PART II.     OTHER INFORMATION

ITEM 1.     Legal Proceedings

The Company is a party to pending legal proceedings with respect to various product liability, commercial, personal injury, employment, and other matters. Although it is not possible to predict the outcome of these proceedings or the range of reasonably possible loss, the Company does not expect, based on circumstances currently known, that the ultimate resolution of any of these proceedings will have, either individually or in the aggregate, a material adverse effect on the Company's consolidated financial position, results of operations, or cash flows.

ITEM 2.     Unregistered Sales of Equity Securities and Use of Proceeds

Repurchases of common stock in the quarter ended March 31, 2021 were as follows:

Period	(a) Total Number of Shares	(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, 2021 to January 31, 2021	0	$0.00	0	864,618
February 1, 2021 to February 28, 2021	0	$0.00	0	864,618
March 1, 2021 to March 31, 2021	0	$0.00	0	864,618
Total	0	$0.00	0	864,618

(1)On October 24, 2016, the Board of Directors authorized the repurchase of up to 1.5 million shares of the Company's common stock, replacing the prior authorization. We publicly announced the new authorization on October 26, 2016. Purchases can be made in the open market or in privately negotiated transactions.

The authorization is in effect until all shares are purchased, or the Board revokes or amends the authorization.

ITEM 6.         Exhibits

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	Amended and Restated Note Purchase and Private Shelf Agreement dated as of October 30, 2019, between Applied Industrial Technologies, Inc.and PGIM, Inc. (formerly known as Prudential Investment Management, Inc.), and certain of its affiliates (filed as Exhibit 10.1 to the Company's Form 8-K filed November 5, 2019, SEC File No. 1-2299, and incorporated here by reference).
4.3	Amendment No. 1 to Amended and Restated Note Purchase and Private Shelf Agreement dated as of March 26, 2021 between Applied Industrial Technologies, Inc. and PGIM, Inc. (formerly known as Prudential Investment Management, Inc.), and certain of its affiliates.

33

4.4	Request for Purchase dated May 30, 2014 and 3.19% Series C Notes dated July 1, 2014, under Amended and Restated Note Purchase and Private Shelf Agreement, between Applied Industrial Technologies, Inc. and PGIM, Inc. (filed as Exhibit 10.1 to the Company's Form 8-K filed July 2, 2014, SEC File No. 1-2299, and incorporated here by reference).
4.5	Credit Agreement dated as of January 31, 2018, among Applied Industrial Technologies, Inc., KeyBank National Association as Agent, and various financial institutions (filed as Exhibit 10.1 to the Company's Form 8-K filed February 6, 2018, SEC File No. 1-2299, and incorporated here by reference).
4.6	First Amendment to Credit Agreement dated as of March 26, 2021 among Applied Industrial Technologies, Inc., Key Bank National Association as Agent, and various financial institutions.
4.7	Receivables Financing Agreement dated as of August 31, 2018 among AIT Receivables LLC, as borrower, PNC Bank, National Association, as administrative agent, Applied Industrial Technologies, Inc., as initial servicer, PNC Capital Markets LLC, as structuring agent and the additional persons from time to time party thereto, as lenders (filed as Exhibit 10.1 to the Company's Form 8-K filed September 6, 2018, SEC File No. 1-2299, and incorporated here by reference).
4.8	Amendment No. 1 to Receivables Financing Agreement and Reaffirmation of Performance Guaranty dated as of March 26, 2021 among AIT Receivables LLC, as borrower, PNC Bank, National Association, as administrative agent, Applied Industrial Technologies, Inc., as initial servicer, PNC Capital Markets LLC, as structuring agent and the additional persons from time to time party thereto, as lenders (filed as Exhibit 10.2 to the Company's Form 8-K filed March 29, 2021, SEC File No. 1-2299, and incorporated here by reference).
4.9	Purchase and Sale Agreement dated as of August 31, 2018 among various entities listed on Schedule I thereto (including Applied Industrial Technologies, Inc.), as originators, Applied Industrial Technologies, Inc., as servicer, and AIT Receivables LLC, as buyer (filed as Exhibit 10.2 to the Company's Form 8-K filed September 6, 2018, SEC File No. 1-2299, and incorporated here by reference).
4.10	Amendment No. 1 to Purchase and Sale Agreement dated as of November 19, 2018 among Applied Industrial Technologies, Inc. and various of its affiliates, as originators, Applied Industrial Technologies, Inc., as servicer, and AIT Receivables LLC, as buyer.
4.11	Amendment No. 2 to Purchase and Sale Agreement dated as of March 26, 2021 among various entities listed on Schedule 1 thereto (including Applied Industrial Technologies, Inc.), as originators, Applied Industrial Technologies, In.c, as servicer, and AIT Receivables LLC, as buyer (filed as Exhibit 10.2 to the Company's Form 8-K filed March 29, 2021, SEC File No. 1-2299, and incorporated here by reference).
31	Rule 13a-14(a)/15d-14(a) certifications
32	Section 1350 certifications
101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

The Company will furnish a copy of any exhibit described above and not contained herein upon payment of a specified reasonable fee which shall be limited to the Company’s reasonable expenses in furnishing the exhibit.

Certain instruments with respect to long-term debt have not been filed as exhibits because the total amount of securities authorized under any one of the instruments does not exceed 10 percent of the total assets of the Company and its subsidiaries on a consolidated basis. The Company agrees to furnish to the Securities and Exchange Commission, upon request, a copy of each such instrument.

34

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		APPLIED INDUSTRIAL TECHNOLOGIES, INC.
		(Company)
Date:	April 30, 2021	By: /s/ Neil A. Schrimsher
		Neil A. Schrimsher
		President & Chief Executive Officer
Date:	April 30, 2021	By: /s/ David K. Wells
		David K. Wells
		Vice President-Chief Financial Officer & Treasurer

35

EX-4.3

Exhibit 4.3

Execution Version

March 26, 2021

Applied Industrial Technologies, Inc.

One Applied Plaza

Cleveland, Ohio 44115

Re:    Amendment No. 1 to Amended and Restated Note Purchase and Private Shelf Agreement

Ladies and Gentlemen:

    Reference is made to the Amended and Restated Note Purchase and Private Shelf Agreement dated as of October 30, 2019 (the “Agreement”) between Applied Industrial Technologies, Inc., an Ohio corporation (the “Company”), on the one hand, and PGIM, Inc. (“Prudential”), the Existing Holders party thereto, the Effective Date Purchasers party thereto and each other Prudential Affiliate which has become or becomes a party thereto, on the other hand. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Agreement.

SECTION 1.    Amendment. From and after the Effective Date (as defined in Section 3 hereof), paragraph 6B(7) of the Agreement is hereby amended by deleting the reference to “$200,000,000” contained therein and inserting “$250,000,000” in lieu thereof.

SECTION 2.    Representations and Warranties. The Company and each Subsidiary party hereto hereby represents and warrants to Prudential and each holder of Notes that: (a) the execution and delivery of this letter has been duly authorized by all necessary corporate or limited liability company, as applicable, action on behalf of the Company and each such Subsidiary and this letter has been duly executed and delivered by a duly authorized officer of the Company and each such Subsidiary, and all necessary or required consents to and approvals of this letter have been obtained and are in full force and effect, (b) each representation and warranty set forth in paragraph 8 of the Agreement and Section 6 of each Guaranty of Payment of Debt is true and correct as of the date of the execution and delivery of this letter by the Company and each such Subsidiary with the same effect as if made on such date (except to the extent such representations and warranties expressly refer to an earlier date, in which case they were true and correct as of such earlier date) and (c) no Default or Event of Default exists under the Agreement as of the date hereof.

SECTION 3.    Conditions Precedent. The amendment described in Section 1 above shall become effective on the date (the “Effective Date”) when each of the following conditions has been satisfied:

3.1    Documents. Prudential and each holder of a Note shall have received original counterparts or, if satisfactory to the Required Holder(s), certified or other copies of all of the following, each duly executed and delivered by the party or parties thereto, in form and

Applied Industrial Technologies, Inc.

March 26, 2021

Page 2

substance satisfactory to the Required Holder(s), dated the date hereof unless otherwise indicated, and on the date hereof in full force and effect:

(i)    counterparts of this letter executed by the Company, each Subsidiary party to a Guaranty of Payment of Debt, Prudential and the Required Holder(s); and

(ii)    an executed copy of an amendment to the Credit Agreement, in form and substance consistent with the terms set forth herein and satisfactory to Prudential and the Required Holder(s).

3.2    Fees and Expenses. The Company shall have paid, to the extent invoiced prior to the Effective Date, the reasonable fees, charges and disbursements of Schiff Hardin LLP, special counsel to Prudential and the holders of the Notes incurred in connection with this letter.

3.3    Proceedings. All corporate and other proceedings taken or to be taken in connection with the transactions contemplated by this letter shall be satisfactory to the Required Holder(s), and the Required Holder(s) shall have received all such counterpart originals or certified or other copies of such documents as they may reasonably request.

    SECTION 4.    Waiver and Release. The Company and each Subsidiary party hereto, by signing below, hereby waives and releases Prudential and each holder of a Note, and their respective directors, officers, employees, attorneys, affiliates and subsidiaries, from any and all claims, offsets, defenses and counterclaims, such waiver and release being with full knowledge and understanding of the circumstances and effect thereof and after having consulted legal counsel with respect thereto.

    SECTION 5.    Reference to and Effect on Note Agreement and Notes; Ratification of Documents. Upon the effectiveness of the amendment in Section 1 of this letter, each reference to the Agreement in any Note, any Guaranty of Payment of Debt or any document relating to the Agreement shall mean and be a reference to the Agreement, as modified by this letter. Except as specifically set forth in Section 1 hereof, the Agreement, the Notes, each Guaranty of Payment of Debt and each other document relating thereto shall remain in full force and effect and are hereby ratified and confirmed in all respects. Except as specifically stated in this letter, the execution, delivery and effectiveness of this letter shall not (a) amend the Agreement, any Note, any Guaranty of Payment of Debt or any other document relating thereto, (b) operate as a waiver of any right, power or remedy of Prudential or any holder of the Notes, or (c) constitute a waiver of, or consent to any departure from, any provision of the Agreement, any Note, any Guaranty of Payment of Debt or any other document relating thereto at any time. Without limiting the foregoing, each party hereto acknowledges and agrees that notwithstanding the execution and delivery of this letter, paragraph 6B(12) of the Agreement applies to all covenants contained in any Material Indebtedness Agreement existing as of the date hereof which are more restrictive than the covenants contained in the Agreement (as amended hereby). The execution, delivery and effectiveness of this letter shall not be construed as a course of dealing or other implication that Prudential or any holder of the Notes has agreed to or is prepared to grant any consents or agree to any amendment to the Agreement in the future, whether or not under similar

Applied Industrial Technologies, Inc.

March 26, 2021

Page 3

circumstances. In the event of a conflict between the terms of the Agreement and this letter, the terms of this letter shall control.

    SECTION 6.    Confirmation of Guarantees. By its signature below, each Subsidiary party to a Guaranty of Payment of Debt agrees and consents to the terms and provisions of this letter and agrees that its Guaranty of Payment of Debt shall remain in full force and effect and is hereby ratified and confirmed in all respects after giving effect to this letter.

SECTION 7.    Governing Law. THIS LETTER SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF ILLINOIS (EXCLUDING ANY CONFLICTS OF LAW RULES WHICH WOULD OTHERWISE CAUSE THIS LETTER TO BE CONSTRUED OR ENFORCED IN ACCORDANCE WITH, OR THE RIGHTS OF THE PARTIES TO BE GOVERNED BY, THE LAWS OF ANY OTHER JURISDICTION).

SECTION 8. Counterparts; Section Titles. This letter may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and the same instrument. The section titles contained in this letter are and shall be without substance, meaning or content of any kind whatsoever and are not a part of the agreement between the parties hereto.

[signature page follows]

Very truly yours,

PGIM, INC.

By:    /s/ Alex Chopp            

    Vice President

PAR U HARTFORD LIFE & ANNUITY

COMFORT TRUST

PAR U HARTFORD LIFE INSURANCE

                         COMFORT TRUST

By:    Prudential Arizona Reinsurance Universal Company (as Grantor)

By:    PGIM, Inc. (as Investment Manager)

By:    _/s/ Alex Chopp__________________

                            Vice President

THE GIBRALTAR LIFE INSURANCE CO.,

LTD.

By:    PGIM Japan Co., Ltd. (as Investment

    Manager)

By:    PGIM, Inc.

(as Sub-Adviser)

By: /s/ Alex Chopp______________________

    Vice President

THE PRUDENTIAL INSURANCE COMPANY

OF AMERICA

By:    PGIM, Inc.

(as Investment Manager)

By: /s/ Alex Chopp______________________

    Vice President

Signature page to Applied Industrial Technologies

Amendment No.1 to Amended and Restated Note Purchase

  and Private Shelf Agreement

WILLIAM PENN LIFE INSURANCE

COMPANY OF NEW YORK

FARMERS NEW WORLD LIFE INSURANCE

COMPANY

GLOBE LIFE AND ACCIDENT INSURANCE

                         COMPANY

LIBERTY NATIONAL LIFE INSURANCE

                         COMPANY

THE LINCOLN NATIONAL LIFE

                   INSURANCE COMPANY

FAMILY HERITAGE LIFE INSURANCE

  COMPANY OF AMERICA

MTL INSURANCE COMPANY

FARMERS INSURANCE EXCHANGE

MID CENTURY INSURANCE COMPANY

By:    PGIM Private Placement Investors,

    L.P. (as Investment Advisor)

By:    PGIM Private Placement Investors, Inc.

    (as its General Partner)

By: _/s/ Alex Chopp_________________

        Vice President

PRIVATE PLACEMENT TRUST

INVESTORS, LLC

By:    PGIM Private Placement Investors,

                            L.P. (as Managing Member)

By:    PGIM Private Placement Investors, Inc.

                            (as its General Partner)

By: __/s/ Alex Chopp________________________

    Vice President

Signature page to Applied Industrial Technologies

Amendment No.1 to Amended and Restated Note Purchase

  and Private Shelf Agreement

PRUDENTIAL RETIREMENT INSURANCE

AND ANNUITY COMPANY

By:    PGIM, Inc.

(as Investment Manager)

By:/s/ Alex Chopp______________________

    Vice President

PRUDENTIAL ANNUITIES LIFE ASSURANCE   CORPORATION

By:    PGIM, Inc.

(as Investment Manager)

By:/s/ Alex Chopp_______________________

    Vice President

Signature page to Applied Industrial Technologies

Amendment No.1 to Amended and Restated Note Purchase

  and Private Shelf Agreement

Agreed and Accepted:

APPLIED INDUSTRIAL TECHNOLOGIES, INC.

By: /s/ David K. Wells

Name: David K. Wells

Title: Vice President – Chief Financial Officer & Treasurer

By: /s/ Fred D. Bauer

Name: Fred D. Bauer

Title: Vice President – General Counsel & Secretary

Signature page to Applied Industrial Technologies

Amendment No.1 to Amended and Restated Note Purchase

  and Private Shelf Agreement

Consented to:

APPLIED INDUSTRIAL TECHNOLOGIES - CA LLC

APPLIED INDUSTRIAL TECHNOLOGIES - DIXIE, INC.

ESI ACQUISITION CORPORATION

BEARINGS PAN AMERICAN, INC.

BEARINGS SALES AND SERVICES INC.

AIR DRAULICS ENGINEERING CO.

APPLIED INDUSTRIAL TECHNOLOGIES - CAPITAL INC.

SPENCER FLUID POWER, INC.

APPLIED FLUID POWER HOLDINGS, LLC

BAY ADVANCED TECHNOLOGIES, LLC

CAROLINA FLUID COMPONENTS, LLC

DTS FLUID POWER, LLC

HYDROAIR HUGHES, LLC

FLUIDTECH, LLC

POWER SYSTEMS, LLC

A&H FLUID TECHNOLOGIES, INC.

AIT INTERNATIONAL, INC.

APPLIED INDUSTRIAL TECHNOLOGIES – PACIFIC LLC

ATLANTIC FASTENERS CO., LLC

S. G. MORRIS CO., LLC

APPLIED MAINTENANCE SUPPLIES & SOLUTIONS, LLC

APPLIED US ENERGY, INC.

HUB INDUSTRIAL SUPPLY, LLC

BARO CONTROLS, INC.

BARO PROCESS PRODUCTS, INC.

BASIN ENGINE & PUMP, INC.

CORROSION FLUID PRODUCTS CORP.

EADS DISTRIBUTION, LLC

FCX PERFORMANCE, INC.

HUGHES MACHINERY COMPANY

PUMP ENERGY, INC.

PUMP PROS, INC.

R.L. STONE COMPANY, INC.

APPLIED US ENERGY–OKLAHOMA, LLC

GIBSON ENGINEERING COMPANY, INC.

ADVANCED CONTROL SOLUTIONS & AUTOMATION, INC.

By: /s/ David K. Wells

Name: David K. Wells

Title: Vice President – Chief Financial Officer & Treasurer

Signature page to Applied Industrial Technologies

Amendment No.1 to Amended and Restated Note Purchase

  and Private Shelf Agreement

EX-4.6

Exhibit 4.6

FIRST AMENDMENT AGREEMENT

This FIRST AMENDMENT AGREEMENT (this “Amendment”) is made as of the 26th day of March, 2021 among:

    (a)    APPLIED INDUSTRIAL TECHNOLOGIES, INC., an Ohio corporation (“Borrower”);

    (b)    the Lenders, as defined in the Credit Agreement, as hereinafter defined; and

(c)    KEYBANK NATIONAL ASSOCIATION, a national banking association, as the administrative agent for the Lenders under the Credit Agreement (the “Administrative Agent”).

    WHEREAS, Borrower, the Administrative Agent and the Lenders are parties to that certain Credit Agreement, dated as of January 31, 2018 (as the same may from time to time be amended, restated or otherwise modified, the “Credit Agreement”);

    WHEREAS, Borrower, the Administrative Agent and the Lenders desire to amend the Credit Agreement to modify certain provisions thereof;

    WHEREAS, each capitalized term used herein and defined in the Credit Agreement, but not otherwise defined herein, shall have the meaning given such term in the Credit Agreement; and

    WHEREAS, unless otherwise specifically provided herein, the provisions of the Credit Agreement revised herein are amended effective as of the date of this Amendment;

    NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Borrower, the Administrative Agent and the Lenders agree as follows:

    1.    Amendment to Borrowing Covenant Provisions. Section 5.8 of the Credit Agreement is hereby amended to delete subsection (b) therefrom and to insert in place thereof the following:

    (b)    the amount of obligations outstanding under asset securitizations that would be characterized as principal if such facility were structured as a secured lending transaction rather than as a purchase, whether such obligations constitute on-balance sheet Indebtedness or an off-balance sheet liability, up to the maximum aggregate amount, for all Companies, of Two Hundred Fifty Million Dollars ($250,000,000) at any time outstanding;

    2.    Closing Deliveries. Concurrently with the execution of this Amendment, Borrower shall:

    (a)    execute and deliver an amendment to that certain Amended and Restated Note Purchase and Private Shelf Agreement, dated as of October 30, 2019, among Borrower and PGIM, Inc. and certain of its affiliates, amending such agreement to conform with the changes made to Section 5.8 of the Credit Agreement pursuant to this Amendment;

    (b)    cause each Guarantor of Payment to execute the attached Guarantor Acknowledgment and Agreement; and

    (c)    pay all legal fees and expenses of the Administrative Agent in connection with this Amendment and any other Loan Documents.

    3.    Representations and Warranties. Borrower hereby represents and warrants to the Administrative Agent and the Lenders that (a) Borrower has the legal power and authority to execute and deliver this Amendment; (b) the officers executing this Amendment have been duly authorized to execute and deliver the same and bind Borrower with respect to the provisions hereof; (c) the execution and delivery hereof by Borrower and the performance and observance by Borrower of the provisions hereof do not violate or conflict with the Organizational Documents of Borrower or any law applicable to Borrower or result in a breach of any provision of or constitute a default under any other material agreement, instrument or document binding upon or enforceable against Borrower; (d) no Default or Event of Default exists, nor will any occur immediately after the execution and delivery of this Amendment or by the performance or observance of any provision hereof; (e) each of the representations and warranties contained in the Loan Documents is true and correct in all material respects as of the date hereof as if made on the date hereof, except to the extent that any such representation or warranty expressly states that it relates to an earlier date (in which case such representation or warranty is true and correct in all material respects as of such earlier date); (f) Borrower is not aware of any claim or offset against, or defense or counterclaim to, Borrower’s obligations or liabilities under the Credit Agreement or any other Related Writing; and (g) this Amendment constitutes a valid and binding obligation of Borrower in every respect, enforceable in accordance with its terms, except as enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally.

    4.    Waiver and Release. Borrower, by signing below, hereby waives and releases the Administrative Agent, and each of the Lenders, and their respective directors, officers, employees, attorneys, affiliates and subsidiaries, from any and all claims, offsets, defenses and counterclaims, such waiver and release being with full knowledge and understanding of the circumstances and effect thereof and after having consulted legal counsel with respect thereto.

    5.     References to Credit Agreement and Ratification. Each reference to the Credit Agreement that is made in the Credit Agreement or any other Related Writing shall hereafter be construed as a reference to the Credit Agreement as amended hereby. Except as otherwise specifically provided herein, all terms and provisions of the Credit Agreement are confirmed and ratified and shall remain in full force and effect and be unaffected hereby. This Amendment is a

2

Loan Document. In the event of a conflict between the terms of the Credit Agreement and this Amendment, the terms of this Amendment shall control.

    6.    Counterparts. This Amendment may be executed in any number of counterparts, by different parties hereto in separate counterparts and by facsimile or other electronic signature, each of which, when so executed and delivered, shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement.

    7.    Headings. The headings, captions and arrangements used in this Amendment are for convenience only and shall not affect the interpretation of this Amendment.

    8.    Severability. Any provision of this Amendment that shall be prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

    9.    Governing Law. The rights and obligations of all parties hereto shall be governed by the laws of the State of Ohio, without regard to principles of conflicts of laws.

[Remainder of page intentionally left blank.]

4813-8589-8974.4

3

JURY TRIAL WAIVER. BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS, TO THE EXTENT PERMITTED BY LAW, EACH HEREBY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS, OR ANY THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AMENDMENT OR ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO.

IN WITNESS WHEREOF, the parties have executed and delivered this Amendment as of the date first set forth above.

APPLIED INDUSTRIAL TECHNOLOGIES, INC.

By:/s/ David K. Wells    

David K. Wells

Vice President – Chief Financial Officer & Treasurer

By:/s/ David K.Wells    

Fred D. Bauer

Vice President – General Counsel & Secretary

KEYBANK NATIONAL ASSOCIATION

   as the Administrative Agent and as a Lender

By:/s/ Brian P. Fox

      Brian P. Fox

    Senior Vice President

Signature Page to

First Amendment Agreement

U.S. BANK NATIONAL ASSOCIATION

By:/s/ Robert M. Helton

Name: Robert M. Helton

Title: Vice President

PNC BANK, NATIONAL ASSOCIATION

By:/s/ Scott A. Nolan    

Name: Scott A. Nolan

Title: Senior Vice President

JPMORGAN CHASE BANK, N.A.

By:/s/ Jonathan Bennett    

Name: Jonathan Bennett Title: Executive Director

TRUIST BANK

By:/s/ Katherine Bass    

Name: Katherine Bass

Title: Director

FIFTH THIRD BANK, NATIONAL ASSOCIATION

By:/s/ Will Batchelor    

Name:Will Batchelor

Title: Vice President

BMO HARRIS BANK, N.A.

By:/s/ Thomas Hasenauer    

Name: Thomas Hasenauer

Title: Managing Director

Signature Page to

First Amendment Agreement

CITIZENS BANK, N.A.

By:/s/ Matt Kuchta    

Name: Matt Kuchta

Title: SVP

WELLS FARGO BANK, NATIONAL ASSOCIATION

By:/s/ Mark H. Halldorson    

Name: Mark H. Halldorson

Title: Director

BANK OF AMERICA, N.A.

By:/s/ Philip P. Whewell    

Name: Philip P. Whewell

Title: Senior Vice President

HSBC BANK USA, NATIONAL ASSOCIATION

By:/s/ Kyle Patterson    

Name: Kyle Patterson

Title: Senior Vice President

REGIONS BANK

By:/s/ Brian Blomeke    

Name: Brian Blomeke

Title:Senior Vice President

BANK OF THE WEST

By:/s/ Philip R. Medsger    

Name: Philip R. Medsger

Title: Director

Signature Page to

First Amendment Agreement

THE HUNTINGTON NATIONAL BANK

By:/s/ Brian H. Gallagher

Name: Brian H. Gallagher

Title: Managing Director

COMERICA BANK

By:/s/ Robert Wilson    

Name: Robert Wilson

Title: Senior Vice President

FIRST NATIONAL BANK OF PENNSYLVANIA

By:/s/ John F. Neuman    

Name: John F. Neuman

Title: Senior Vice President

Signature Page to

First Amendment Agreement

GUARANTOR ACKNOWLEDGMENT AND AGREEMENT

    The undersigned consent and agree to and acknowledge the terms of the foregoing First Amendment Agreement dated as of March 26, 2021. The undersigned further agree that the obligations of the undersigned pursuant to the Guaranty of Payment executed by the undersigned are hereby ratified and shall remain in full force and effect and be unaffected hereby.

    The undersigned hereby waive and release the Administrative Agent and the Lenders and their respective directors, officers, employees, attorneys, affiliates and subsidiaries from any and all claims, offsets, defenses and counterclaims of any kind or nature, absolute and contingent, of which the undersigned are aware or should be aware, such waiver and release being with full knowledge and understanding of the circumstances and effect thereof and after having consulted legal counsel with respect thereto.

JURY TRIAL WAIVER. THE UNDERSIGNED, TO THE EXTENT PERMITTED BY LAW, HEREBY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG BORROWER, THE ADMINISTRATIVE AGENT, THE LENDERS AND THE UNDERSIGNED, OR ANY THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS GUARANTOR ACKNOWLEDGMENT AND AGREEMENT, THE AMENDMENT OR ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO.

APPLIED US, L.P.

By: Applied Canada Holdings, ULC,

    its general partner

By:_/s/ David K. Wells__________

      David K. Wells

                  Vice President – Chief Financial Officer & Treasurer

APPLIED INDUSTRIAL TECHNOLOGIES -- PA LLC

By: Applied Industrial Technologies, Inc.,

    its sole member

By:__/s/ David K. Wells_________

      David K. Wells

                  Vice President – Chief Financial Officer & Treasurer

Signature Page to

Guarantor Acknowledgment and Agreement

APPLIED INDUSTRIAL TECHNOLOGIES - CA LLC

APPLIED INDUSTRIAL TECHNOLOGIES - CAPITAL INC.

APPLIED INDUSTRIAL TECHNOLOGIES - DIXIE, INC.

BEARINGS PAN AMERICAN, INC.

ESI ACQUISITION CORPORATION D/B/A ENGINEERED SALES, INC.

AIR DRAULICS ENGINEERING CO.

A&H FLUID TECHNOLOGIES, INC.

APPLIED FLUID POWER HOLDINGS, LLC

BAY ADVANCED TECHNOLOGIES, LLC

CAROLINA FLUID COMPONENTS, LLC

DTS FLUID POWER, LLC

FLUIDTECH, LLC

HYDROAIR HUGHES, LLC

POWER SYSTEMS, LLC

APPLIED MAINTENANCE SUPPLIES & SOLUTIONS, LLC

AIT INTERNATIONAL INC.

BEARINGS SALES & SERVICES INC.

APPLIED INDUSTRIAL TECHNOLOGIES - PACIFIC LLC

SPENCER FLUID POWER, INC.

ATLANTIC FASTENERS CO., LLC

S. G. MORRIS CO., LLC

APPLIED US ENERGY, INC.

HUB INDUSTRIAL SUPPLY, LLC

BARO CONTROLS, INC.

BARO PROCESS PRODUCTS, INC.

BASIN ENGINE & PUMP, INC.

CORROSION FLUID PRODUCTS CORP.

EADS DISTRIBUTION, LLC

    By:_/s/ David K. Wells_________

      David K. Wells

                  Vice President – Chief Financial Officer & Treasurer

Signature Page to

Guarantor Acknowledgment and Agreement

FCX PERFORMANCE, INC.

HUGHES MACHINERY COMPANY

PUMP ENERGY, INC.

PUMP PRO’S, INC.

R.L. STONE COMPANY, INC.

APPLIED US ENERGY-OKLAHOMA, LLC

OLYMPUS CONTROLS CORP.

ADVANCED CONTROL SOLUTIONS & AUTOMATION, INC.

GIBSON ENGINEERING COMPANY, INC.

APPLIED CANADA HOLDINGS, ULC

APPLIED NOVA SCOTIA COMPANY

APPLIED NORTHERN HOLDINGS, ULC

By:_/s/ David K. Wells__________

      David K. Wells

                  Vice President – Chief Financial Officer & Treasurer    

Signature Page to

Guarantor Acknowledgment and Agreement

EX-4.10

Exhibit 4.10

EXECUTION VERSION

AMENDMENT NO. 1 TO PURCHASE AND SALE AGREEMENT

AND

REAFFIRMATION OF PERFORMANCE GUARANTY

This AMENDMENT NO. 1 TO PURCHASE AND SALE AGREEMENT AND REAFFIRMATION OF PERFORMANCE GUARANTY (this “Amendment”), dated as of November 19, 2018, is entered into by and among AIT RECEIVABLES, LLC (“AIT Receivables”), as borrower under the Receivables Financing Agreement (as defined below) and as buyer under the Purchase and Sale Agreement (as defined below) (in such capacities, together with its successors and permitted assigns in such capacities, the “Borrower” or the “Buyer”, respectively), APPLIED INDUSTRIAL TECHNOLOGIES, INC. (“Applied Industrial”), as initial servicer under the Receivables Financing Agreement and as servicer under the Purchase and Sale Agreement (in such capacities, together with its successors and permitted assigns in such capacities, the “Servicer”) and as an originator under the Purchase and Sale Agreement (in such capacity, together with its successors and permitted assigns in such capacity, an “Originator”), APPLIED INDUSTRIAL TECHNOLOGIES - CA LLC (“Applied - CA”), as an originator under the Purchase and Sale Agreement (in such capacity, together with its successors and permitted assigns in such capacity, an “Originator”), APPLIED INDUSTRIAL TECHNOLOGIES - DIXIE, INC. (“Applied - Dixie”), as an originator under the Purchase and Sale Agreement (in such capacity, together with its successors and permitted assigns in such capacity, an “Originator”), APPLIED INDUSTRIAL TECHNOLOGIES -- PA LLC (“Applied -- PA”), as an originator under the Purchase and Sale Agreement (in such capacity, together with its successors and permitted assigns in such capacity, an “Originator”), and acknowledged and agreed to by PNC Bank, National Association (“PNC”), as administrative agent and as group agent for the PNC Group under the Receivables Financing Agreement (in such capacities, together with its successors and permitted assigns in such capacities, the “Administrative Agent” and a “Group Agent”, respectively) and by REGIONS BANK (“Regions”), as group agent for the Regions Group under the Receivables Financing Agreement (in such capacity, together with its successors and permitted assigns in such capacity, the a “Group Agent”), and is reaffirmed by, with respect to Section 11 hereof, Applied Industrial, as performance guarantor (in such capacity, together with its successors and permitted assigns in such capacity, the “Performance Guarantor”).

BACKGROUND

WHEREAS, the Borrower, the Servicer, the Persons from time to time party thereto as Lenders and as Group Agents, the Administrative Agent, and PNC Capital Markets LLC, as Structuring Agent, entered into the Receivables Financing Agreement as of August 31, 2018 (as may be amended, restated, supplemented or otherwise modified from time to time, the “Receivables Financing Agreement”);

WHEREAS, the Buyer, the Servicer and the Originators entered into the Purchase and Sale Agreement as of August 31, 2018 (the “Original Purchase and Sale Agreement”; as amended, restated, supplemented or otherwise modified through the date hereof, and as may be

1

further amended, restated, supplemented or otherwise modified from time to time, the “Purchase and Sale Agreement”);

WHEREAS, the Performance Guarantor entered into the Performance Guaranty as of August 31, 2018 (as may be further amended, restated, supplemented or otherwise modified from time to time, the “Performance Guaranty”) in favor of, and as accepted by, the Administrative Agent;

WHEREAS, the parties hereto wish to amend the Original Purchase and Sale Agreement pursuant to the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

SECTION 1.Definitions. Capitalized terms used but not defined in this Amendment shall have the meanings assigned to them in the Purchase and Sale Agreement.

SECTION 2.Amendments to Original Purchase and Sale Agreement. Effective as of the date hereof and subject to the satisfaction of the conditions precedent set forth in Section 4 hereof, the Original Purchase and Sale Agreement is hereby amended as follows:

(a)The definition of “FMVD” set forth in the calculation of “Purchase Price” set forth in Section 2.2 of the Original Purchase and Sale Agreement is hereby deleted and replaced in its entirety with the following:

FMVD =    Fair Market Value Discount, as measured on such Payment Date, which is equal to the quotient (expressed as percentage) of (a) one, dividedby (b) the sum of (i) one, plus (ii) the product of (A) the sum of (1) the Prime Rate on such Payment Date, plus (2) one percent (1.00%), times (B) a fraction, the numerator of which is the Days’ Sales Outstanding (calculated as of the last day of the Fiscal Month immediately preceding such Payment Date) and the denominator of which is 365 or 366, as applicable.

(b)Item 2. of Exhibit A to the Original Purchase and Sale Agreement is hereby deleted and replaced in its entirety with the following:

2.    Fair Market Value Discount:    

1⁄{1 + ((Prime Rate + 1.00%) x Days’ Sales Outstanding)}

365

Where:

Prime Rate = __________

Days’ Sales Outstanding = __________

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109525763\V-3    

SECTION 3.Representations, Warranties and Enforceability. Each of the Borrower and the Servicer hereby represents and warrants to the Administrative Agent and the Group Agents and each Originator hereby represents and warrants to the Buyer, as applicable, as of the date hereof with respect to itself, as follows:the representations and warranties of it contained in Section 6.01 and Section 6.02, as applicable, of the Receivables Financing Agreement are true and correct in all material respects (unless such representations and warranties contain a materiality qualification, in which case, such representations and warranties shall be true and correct as made) on and as of the date hereof as though made on and as of such date unless such representations and warranties by their terms refer to an earlier date, in which case they shall be true and correct in all material respects (unless such representations and warranties contain a materiality qualification, in which case such representations and warranties shall be true and correct as made) on and as of such earlier date;

(a)the representations and warranties of it contained in Article V of the Purchase and Sale Agreement are true and correct in all material respects (unless such representations and warranties contain a materiality qualification, in which case, such representations and warranties shall be true and correct as made) on and as of the date hereof as though made on and as of such date unless such representations and warranties by their terms refer to an earlier date, in which case they shall be true and correct in all material respects (unless such representations and warranties contain a materiality qualification, in which case such representations and warranties shall be true and correct as made) on and as of such earlier date;

(b)no event has occurred and is continuing, or would result immediately after giving effect to this Amendment, that constitutes an Event of Default or Unmatured Event of Default, as set forth in Section 9.01 of the Receivables Financing Agreement;

(c)no event has occurred and is continuing, or would result immediately after giving effect to this Amendment, that constitutes a Purchase and Sale Termination Event or Unmatured Purchase and Sale Termination Event, as set forth in Section 8.1 of the Purchase and Sale Agreement; and

(d)(i) the execution and delivery by it of this Amendment, and the performance of its obligations under this Amendment, the Receivables Financing Agreement and the Purchase and Sale Agreement, as amended hereby, are within its organizational powers and have been duly authorized by all necessary action on its part and (ii) this Amendment and the Purchase and Sale Agreement, as amended hereby, are its valid and legally binding obligations, enforceable in accordance with their respective terms.

SECTION 4.Conditions Precedent. The effectiveness of this Amendment is subject to the satisfaction of all of the following conditions precedent:

(a)The Administrative Agent shall have received a fully executed counterpart of this Amendment.

(b)The Administrative Agent shall have received such documents and certificates as the Administrative Agent shall have reasonably requested on or prior to the date hereof.

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109525763\V-3    

(c)PNC, as the Administrative Agent, as a Committed Purchaser and as the Group Agent for the PNC Group under the Receivables Financing Agreement, as applicable, shall have received all fees and other amounts due and payable to it under the Transaction Documents and in connection with this Amendment on or prior to the date hereof, including, to the extent invoiced, payment or reimbursement of all fees and expenses (including reasonable and documented out-of-pocket fees, charges and disbursements of counsel) required to be paid or reimbursed on or prior to the date hereof. To the extent such fees and other amounts have not yet been invoiced, the Buyer agrees to remit payment to the applicable party promptly upon receipt of such invoice.

(d)No Event of Default or Unmatured Event of Default, as set forth in Section 9.01 of the Receivables Financing Agreement, shall have occurred and be continuing.

(e)No Purchase and Sale Termination Event or Unmatured Purchase and Sale Termination Event, as set forth in Section 8.1 of the Purchase and Sale Agreement, shall have occurred and be continuing.

SECTION 5.Amendment. The Buyer, the Servicer and the Originators, and, with respect to Section 11 hereof, the Performance Guarantor, hereby agree that the provisions and effectiveness of this Amendment shall apply to the Purchase and Sale Agreement as of the date hereof. Except as amended by this Amendment, the Purchase and Sale Agreement remains unchanged and in full force and effect. This Amendment is a Transaction Document.

SECTION 6.Counterparts. This Amendment may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement. Delivery of an executed counterpart hereof by facsimile or other electronic means shall be equally effective as delivery of an originally executed counterpart.

SECTION 7.Captions. The headings of the Sections of this Amendment are provided solely for convenience of reference and shall not modify, define, expand or limit any of the terms or provisions of this Amendment.

SECTION 8.Successors and permitted assigns. The terms of this Amendment shall be binding upon, and shall inure to the benefit of, the Buyer, the Servicer, the Originators, the Administrative Agent, the Group Agents, and, with respect to Section 11 hereof, the Performance Guarantor and their respective successors and permitted assigns.

SECTION 9.Severability. Any provision of this Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

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109525763\V-3    

SECTION 10.Governing Law and Jurisdiction. The provisions of the Purchase and Sale Agreement with respect to governing law, jurisdiction, and agent for service of process are incorporated in this Amendment by reference as if such provisions were set forth herein.

SECTION 11.Ratification of Performance Guarantee. After giving effect to this Amendment, all of the provisions of the Performance Guaranty shall remain in full force and effect and the Performance Guarantor hereby ratifies and affirms the Performance Guaranty and acknowledges that the Performance Guaranty has continued and shall continue in full force and effect in accordance with its terms.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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109525763\V-3    

IN WITNESS WHEREOF, the parties hereto have executed this Amendment by their duly authorized officers as of the date first above written.

AIT RECEIVABLES LLC,

as the Borrower and as the Buyer

By:     /s/ David K. Wells            

Name: David K. Wells         

Title:     Vice President - Chief Financial Officer

& Treasurer

APPLIED INDUSTRIAL TECHNOLOGIES, INC.,

as the Servicer and as an Originator

By:     /s/ David K. Wells            

Name: David K. Wells.         

Title:     Vice President - Chief Financial Officer

& Treasurer

By:     /s/ Fred D. Bauer            

Name: Fred D. Bauer             

Title:     Vice President - General Counsel    

& Secretary

APPLIED INDUSTRIAL TECHNOLOGIES - CA LLC,

as an Originator

By:     /s/ David K. Wells            

Name: David K. Wells             

Title:     Vice President - Chief Financial Officer

& Treasurer

APPLIED INDUSTRIAL TECHNOLOGIES - DIXIE, INC.,

as an Originator

By:     /s/ David K. Wells            

Name: David K. Wells             

Title:     Vice President - Chief Financial Officer

& Treasurer

Amendment 1 to PSA (AIT)

S-1

APPLIED INDUSTRIAL TECHNOLOGIES -- PA LLC,

as an Originator

By: Applied Industrial Technologies, Inc., its sole member

By:     /s/ David K. Wells            

Name: David K. Wells            

Title:     Vice President - Chief Financial Officer

& Treasurer

Amendment 1 to PSA (AIT)

S-2

Acknowledged and reaffirmed by, with respect to Section 11 hereof, as of the date first written above:                

APPLIED INDUSTRIAL TECHNOLOGIES, INC.,

as Performance Guarantor

By:     /s/ David K. Wells            

Name: David K. Wells            

Title:     Vice President - Chief Financial Officer

& Treasurer

Amendment 1 to PSA (AIT)

S-3

Acknowledged and agreed to by, as of the date first written above:    

PNC BANK NATIONAL ASSOCIATION,

as Administrative Agent

By:     /s/ Michael Brown            

Name: Michael Brown            

Title:     Senior Vice President            

Amendment 1 to PSA (AIT)

S-4

Acknowledged and agreed to by, as of the date first written above:    

PNC BANK, NATIONAL ASSOCIATION,

as the Group Agent for the PNC Group

By:     /s/ Michael Brown            

Name: Michael Brown            

Title:     Senior Vice President            

Amendment 1 to PSA (AIT)

S-5

Acknowledged and agreed to by, as of the date first written above:    

REGIONS BANK

as the Group Agent for the Regions Group

By:     /s/ Cecil Noble                

Name: Cecil Noble                

Title:     Managing Director            

Amendment 1 to PSA (AIT)

S-6

EX-31

EXHIBIT 31

Certifications of Disclosure in Quarterly Report on Form 10-Q

I, Neil A. Schrimsher, President & Chief Executive Officer, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Applied Industrial Technologies, Inc.;

2.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;

3.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;

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:

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;

b.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;

c.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

d.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

5.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):

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

b.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.

Date: April 30, 2021	By: /s/ Neil A. Schrimsher
	Neil A. Schrimsher
	President & Chief Executive Officer

I, David K. Wells, Vice President-Chief Financial Officer & Treasurer, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Applied Industrial Technologies, Inc.;

2.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;

3.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;

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:

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;

b.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;

c.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

d.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

5.    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):

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

b.    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.

Date: April 30, 2021	By: /s/ David K. Wells
	David K. Wells
	Vice President-Chief Financial Officer & Treasurer

EX-32

EXHIBIT 32

[The following certification accompanies Applied Industrial Technologies'

Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, and is not filed, as provided in applicable SEC releases.]

Certification of Principal Executive Officer and

Principal Financial Officer Pursuant to

18 U.S.C. 1350

In connection with the Form 10-Q (the “Report”) of Applied Industrial Technologies, Inc.    (the “Company”) for the period ending March 31, 2021, we, Neil A. Schrimsher, President & Chief Executive Officer, and David K. Wells, Vice President-Chief Financial Officer & Treasurer of the Company, certify that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Neil A. Schrimsher	/s/ David K. Wells
Neil A. Schrimsher	David K. Wells
President & Chief Executive Officer	Vice President-Chief Financial Officer & Treasurer
Date: April 30, 2021

[A signed original of this written statement required by Section 906 has been provided to Applied Industrial Technologies, Inc. and will be retained by Applied Industrial Technologies, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.]

XML

Document and Entity Information - shares	9 Months Ended
	Mar. 31, 2021	Apr. 16, 2021
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2021
Document Transition Report	false
Entity File Number	1-2299
Entity Registrant Name	APPLIED INDUSTRIAL TECHNOLOGIES, INC.
Entity Incorporation, State or Country Code	OH
Entity Tax Identification Number	34-0117420
Entity Address, Address Line One	One Applied Plaza
Entity Address, City or Town	Cleveland
Entity Address, State or Province	OH
Entity Address, Postal Zip Code	44115
City Area Code	216
Local Phone Number	426-4000
Title of 12(b) Security	Common Stock, without par value
Trading Symbol	AIT
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		38,859,387
Document and Entity Information [Abstract]
Entity Central Index Key	0000109563
Current Fiscal Year End Date	--06-30
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q3
Amendment Flag	false

XML

Condensed Statements of Consolidated Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Income Statement [Abstract]
Net sales	$ 840,937	$ 830,797	$ 2,340,031	$ 2,520,576
Cost of sales	593,712	594,045	1,667,491	1,791,130
Gross profit	247,225	236,752	672,540	729,446
Selling, distribution and administrative expense, including depreciation	172,758	183,702	498,659	556,485
Impairment expense	0	131,000	49,528	131,000
Operating income (loss)	74,467	(77,950)	124,353	41,961
Interest expense, net	7,608	8,805	22,919	28,447
Other income, net	(1,657)	(1,428)	(1,746)	(1,643)
Income (loss) before income taxes	68,516	(85,327)	103,180	15,157
Income tax expense (benefit)	12,453	(2,550)	17,667	21,104
Net income (loss)	$ 56,063	$ (82,777)	$ 85,513	$ (5,947)
Net income (loss) per share - basic	$ 1.44	$ (2.14)	$ 2.21	$ (0.15)
Net income (loss) per share - diluted	$ 1.42	$ (2.14)	$ 2.18	$ (0.15)
Weighted average common shares outstanding for basic computation	38,835	38,682	38,779	38,647
Dilutive effect of potential common shares	577	0	482	0
Weighted average common shares outstanding for diluted computation	39,412	38,682	39,261	38,647

XML

Condensed Statements of Consolidated Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Net income (loss) per the condensed statements of consolidated income	$ 56,063	$ (82,777)	$ 85,513	$ (5,947)
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments	(496)	(28,767)	19,529	(27,356)
Post-employment benefits:
Reclassification of net actuarial losses (gains) and prior service cost into other income, net and included in net periodic pension costs	68	(17)	203	(50)
Unrealized gain (loss) on cash flow hedge	8,758	(13,891)	6,017	(14,249)
Reclassification of interest from cash flow hedge into interest expense	2,992	1,017	8,504	2,350
Total other comprehensive income (loss), before tax	11,322	(41,658)	34,253	(39,305)
Income tax expense (benefit) related to items of other comprehensive income	2,829	(3,711)	3,694	(3,684)
Other comprehensive income (loss), net of tax	8,493	(37,947)	30,559	(35,621)
Comprehensive income (loss), net of tax	$ 64,556	$ (120,724)	$ 116,072	$ (41,568)

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2021	Jun. 30, 2020
Current assets
Cash and cash equivalents	$ 304,016	$ 268,551
Accounts receivable, net	510,080	449,998
Inventories	358,237	389,150
Other current assets	54,023	52,070
Total current assets	1,226,356	1,159,769
Property, less accumulated depreciation of $200,039 and $192,054	116,951	121,901
Operating lease assets, net	84,062	90,636
Identifiable intangibles, net	287,686	343,215
Goodwill	559,196	540,594
Other assets	31,137	27,436
TOTAL ASSETS	2,305,388	2,283,551
Current liabilities
Accounts payable	217,252	186,270
Current portion of long-term debt	78,644	78,646
Compensation and related benefits	80,660	61,887
Other current liabilities	89,190	99,280
Total current liabilities	465,746	426,083
Long-term debt	773,404	855,143
Other liabilities	131,331	158,783
TOTAL LIABILITIES	1,370,481	1,440,009
Shareholders’ Equity
Preferred stock—no par value; 2,500 shares authorized; none issued or outstanding	0	0
Common stock—no par value; 80,000 shares authorized; 54,213 shares issued	10,000	10,000
Additional paid-in capital	177,231	176,492
Retained earnings	1,260,761	1,200,570
Treasury shares—at cost (15,354 and 15,503 shares, respectively)	414,214	414,090
Accumulated other comprehensive loss	(98,871)	(129,430)
TOTAL SHAREHOLDERS’ EQUITY	934,907	843,542
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	2,305,388	2,283,551
Cash, Cash Equivalents, and Short-term Investments	304,016	268,551
Accounts receivable, net	510,080	449,998
Inventory, Net	358,237	389,150
Other Assets, Current	54,023	52,070
Assets, Current	1,226,356	1,159,769
Property, less accumulated depreciation of $200,039 and $192,054	116,951	121,901
Operating lease assets, net	84,062	90,636
Intangible Assets, Net (Excluding Goodwill)	287,686	343,215
Goodwill	559,196	540,594
Other Assets, Noncurrent	$ 31,137	$ 27,436

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Mar. 31, 2021	Jun. 30, 2020
Noncurrent Assets:
Property, less accumulated depreciation	$ 200,039	$ 192,054
Shareholders’ Equity
Preferred stock, shares authorized	2,500
Common stock, shares authorized	80,000
Common stock, shares issued	54,213
Treasury shares	15,354	15,503

XML

Condensed Statements of Consolidated Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Cash Flows from Operating Activities
Net income (loss)	$ 85,513,000	$ (5,947,000)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property	15,641,000	15,997,000
Amortization of intangibles	26,238,000	31,671,000
Amortization of stock options and appreciation rights	1,930,000	2,217,000
Other share-based compensation expense	4,660,000	2,046,000
Changes in operating assets and liabilities, net of acquisitions	33,574,000	1,406,000
Other, net	(13,675,000)	(8,766,000)
Net Cash provided by Operating Activities	203,409,000	169,624,000
Cash Flows from Investing Activities
Acquisition of businesses, net of cash acquired	(30,023,000)	(37,237,000)
Capital expenditures	(12,177,000)	(16,223,000)
Proceeds from property sales	691,000	1,809,000
Net Cash used in Investing Activities	(41,509,000)	(51,651,000)
Cash Flows from Financing Activities
Long-term debt borrowings	0	25,000,000
Long-term debt repayments	82,070,000	39,803,000
Interest rate swap settlement payments	2,122,000	0
Payment of debt issuance costs	(399,000)	(22,000)
Dividends paid	(37,772,000)	(36,420,000)
Acquisition holdback payments	2,344,000	2,440,000
Exercise of stock options and appreciation rights	163,000	330,000
Taxes paid for shares withheld for equity awards	(5,990,000)	(2,604,000)
Net Cash used in Financing Activities	(130,534,000)	(55,959,000)
Effect of Exchange Rate Changes on Cash	4,099,000	(4,769,000)
Increase in Cash and Cash Equivalents	35,465,000	57,245,000
Cash and Cash Equivalents at Beginning of Period	268,551,000	108,219,000
Cash and Cash Equivalents at End of Period	$ 304,016,000	$ 165,464,000

XML

Condensed Statements of Shareholder's Equity Condensed Statements of Shareholders' Equity (Unaudited) - USD ($) shares in Thousands	Total	Common Stock [Member]	Common Stock [Member] Stock Options and Stock Appreciation Rights [ Member]	Common Stock [Member] Performance Shares [Member]	Common Stock [Member] Restricted Stock Units (RSUs) [Member]	Additional Paid-in Capital [Member]	Additional Paid-in Capital [Member] Stock Options and Stock Appreciation Rights [ Member]	Additional Paid-in Capital [Member] Performance Shares [Member]	Additional Paid-in Capital [Member] Restricted Stock Units (RSUs) [Member]	Retained Earnings [Member]	Treasury Stock [Member]	Treasury Stock [Member] Stock Options and Stock Appreciation Rights [ Member]	Treasury Stock [Member] Performance Shares [Member]	Treasury Stock [Member] Restricted Stock Units (RSUs) [Member]	Total Accumulated Other Comprehensive Income (Loss) [Member]	Parent [Member]	Parent [Member] Stock Options and Stock Appreciation Rights [ Member]	Parent [Member] Performance Shares [Member]	Parent [Member] Restricted Stock Units (RSUs) [Member]
Beginning balance, shares at Jun. 30, 2019		38,597
Beginning balance at Jun. 30, 2019		$ 10,000,000				$ 172,931,000				$ 1,229,148,000	$ (415,159,000)				$ (99,886,000)	$ 897,034,000
Net income	$ 38,799,000															38,799,000
Other comprehensive (loss) income															(5,247,000)	(5,247,000)
Cash Dividends per Common Share	$ 0.31
Cash dividends										(20,000)						(20,000)
Exercise of stock appreciation rights and options, shares			5
Performance share awards, shares				36
Restricted stock units, shares					16
Additional Paid in Capital, Exercise of stock appreciation rights and options, Performance share awards, Restricted stock units							$ (177,000)	$ (1,540,000)	$ (631,000)
Exercise of stock appreciation rights and options												$ (61,000)
Performance share awards													$ (362,000)
Restricted stock units														$ 200,000
Total Shareholders' Equity, Exercise of stock appreciation rights and options, Performance share awards, Restricted stock units																	$ (116,000)	$ (1,178,000)	$ (431,000)
Compensation expense						919,000	773,000									919,000	773,000
Stockholders' Equity, Other Shares		2
Other						(52,000)				(4,000)	23,000					(33,000)
Other | Adjustments for New Accounting Pronouncement [Member]										(3,275,000)						(3,275,000)
Ending balance, shares at Sep. 30, 2019		38,656
Ending balance at Sep. 30, 2019		$ 10,000,000				172,223,000				1,264,648,000	(414,513,000)				(105,133,000)	927,225,000
Beginning balance, shares at Jun. 30, 2019		38,597
Beginning balance at Jun. 30, 2019		$ 10,000,000				172,931,000				1,229,148,000	(415,159,000)				(99,886,000)	897,034,000
Net income	$ (5,947,000)
Other comprehensive (loss) income	(35,621,000)														(35,621,000)
Ending balance, shares at Mar. 31, 2020		38,707
Ending balance at Mar. 31, 2020		$ 10,000,000				174,830,000				1,195,411,000	(414,174,000)				(135,507,000)	830,560,000
Beginning balance, shares at Sep. 30, 2019		38,656
Beginning balance at Sep. 30, 2019		$ 10,000,000				172,223,000				1,264,648,000	(414,513,000)				(105,133,000)	927,225,000
Net income	$ 38,031,000															38,031,000
Other comprehensive (loss) income															7,573,000	7,573,000
Cash Dividends per Common Share	$ 0.31
Cash dividends										(12,017,000)						(12,017,000)
Exercise of stock appreciation rights and options, shares			22
Additional Paid in Capital, Exercise of stock appreciation rights and options, Performance share awards, Restricted stock units							(185,000)
Exercise of stock appreciation rights and options												47,000
Total Shareholders' Equity, Exercise of stock appreciation rights and options, Performance share awards, Restricted stock units																	(232,000)
Compensation expense						918,000	721,000									918,000	721,000
Other										23,000	(1,000)					22,000
Ending balance, shares at Dec. 31, 2019		38,678
Ending balance at Dec. 31, 2019		$ 10,000,000				173,677,000				1,290,685,000	(414,561,000)				(97,560,000)	962,241,000
Net income	$ (82,777,000)															(82,777,000)
Other comprehensive (loss) income	$ (37,947,000)														(37,947,000)	(37,947,000)
Cash Dividends per Common Share	$ 0.32
Cash dividends										(12,423,000)						(12,423,000)
Exercise of stock appreciation rights and options, shares			14
Additional Paid in Capital, Exercise of stock appreciation rights and options, Performance share awards, Restricted stock units							(378,000)
Exercise of stock appreciation rights and options												16,000
Total Shareholders' Equity, Exercise of stock appreciation rights and options, Performance share awards, Restricted stock units																	(394,000)
Compensation expense						209,000	723,000									209,000	723,000
Stockholders' Equity, Other Shares		15
Other						599,000				(74,000)	403,000					928,000
Ending balance, shares at Mar. 31, 2020		38,707
Ending balance at Mar. 31, 2020		$ 10,000,000				174,830,000				1,195,411,000	(414,174,000)				(135,507,000)	830,560,000
Beginning balance, shares at Jun. 30, 2020		38,710
Beginning balance at Jun. 30, 2020	$ 843,542,000	$ 10,000,000				176,492,000				1,200,570,000	(414,090,000)				(129,430,000)	843,542,000
Net income	$ 34,784,000															34,784,000
Other comprehensive (loss) income															7,509,000	7,509,000
Cash Dividends per Common Share	$ 0.32
Cash dividends										(18,000)						(18,000)
Exercise of stock appreciation rights and options, shares			13
Performance share awards, shares				22
Restricted stock units, shares					15
Additional Paid in Capital, Exercise of stock appreciation rights and options, Performance share awards, Restricted stock units							(277,000)	$ (985,000)	(593,000)
Exercise of stock appreciation rights and options												(12,000)
Performance share awards													$ (20,000)
Restricted stock units														96,000
Total Shareholders' Equity, Exercise of stock appreciation rights and options, Performance share awards, Restricted stock units																	(265,000)	$ (1,005,000)	(497,000)
Compensation expense						677,000	693,000									677,000	693,000
Other										15,000	(29,000)					(14,000)
Ending balance, shares at Sep. 30, 2020		38,760
Ending balance at Sep. 30, 2020		$ 10,000,000				176,007,000				1,235,351,000	(414,031,000)				(121,921,000)	885,406,000
Beginning balance, shares at Jun. 30, 2020		38,710
Beginning balance at Jun. 30, 2020	$ 843,542,000	$ 10,000,000				176,492,000				1,200,570,000	(414,090,000)				(129,430,000)	843,542,000
Net income	85,513,000
Other comprehensive (loss) income	30,559,000														30,559,000
Ending balance, shares at Mar. 31, 2021		38,859
Ending balance at Mar. 31, 2021	934,907,000	$ 10,000,000				177,231,000				1,260,761,000	(414,214,000)				(98,871,000)	934,907,000
Beginning balance, shares at Sep. 30, 2020		38,760
Beginning balance at Sep. 30, 2020		$ 10,000,000				176,007,000				1,235,351,000	(414,031,000)				(121,921,000)	885,406,000
Net income	$ (5,334,000)															(5,334,000)
Other comprehensive (loss) income															14,557,000	14,557,000
Cash Dividends per Common Share	$ 0.32
Cash dividends										(12,483,000)						(12,483,000)
Exercise of stock appreciation rights and options, shares			71
Additional Paid in Capital, Exercise of stock appreciation rights and options, Performance share awards, Restricted stock units							(3,116,000)
Exercise of stock appreciation rights and options												(496,000)
Total Shareholders' Equity, Exercise of stock appreciation rights and options, Performance share awards, Restricted stock units																	(3,612,000)
Compensation expense						1,490,000	635,000									1,490,000	635,000
Other										48,000	0					48,000
Ending balance, shares at Dec. 31, 2020		38,831
Ending balance at Dec. 31, 2020		$ 10,000,000				175,016,000				1,217,582,000	(414,527,000)				(107,364,000)	880,707,000
Net income	$ 56,063,000															56,063,000
Other comprehensive (loss) income	$ 8,493,000														8,493,000	8,493,000
Cash Dividends per Common Share	$ 0.33
Cash dividends										(12,878,000)						(12,878,000)
Exercise of stock appreciation rights and options, shares		11
Restricted stock units, shares					4
Additional Paid in Capital, Exercise of stock appreciation rights and options, Performance share awards, Restricted stock units							(379,000)		$ (147,000)
Exercise of stock appreciation rights and options												$ (40,000)
Restricted stock units														$ (1,000)
Total Shareholders' Equity, Exercise of stock appreciation rights and options, Performance share awards, Restricted stock units																	(419,000)		$ (148,000)
Compensation expense						2,493,000	$ 602,000									2,493,000	$ 602,000
Stockholders' Equity, Other Shares		13
Other						(354,000)				(6,000)	354,000					(6,000)
Ending balance, shares at Mar. 31, 2021		38,859
Ending balance at Mar. 31, 2021	$ 934,907,000	$ 10,000,000				$ 177,231,000				$ 1,260,761,000	$ (414,214,000)				$ (98,871,000)	$ 934,907,000

XML

Condensed Statements of Shareholder's Equity Condensed Statements of Shareholders' Equity (Unaudited) (Parentheticals) - $ / shares	3 Months Ended
	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019
Cash Dividends per Common Share	$ 0.33	$ 0.32	$ 0.32	$ 0.32	$ 0.31	$ 0.31

XML

Basis of Presentation

9 Months Ended

Mar. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BASIS OF PRESENTATION

BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the financial position of Applied Industrial Technologies, Inc. (the “Company”, or “Applied”) as of March 31, 2021, and the results of its operations and its cash flows for the nine month periods ended March 31, 2021 and 2020, have been included. The condensed consolidated balance sheet as of June 30, 2020 has been derived from the audited consolidated financial statements at that date. This Quarterly Report on Form 10-Q should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended June 30, 2020.

Operating results for the nine month period ended March 31, 2021 are not necessarily indicative of the results that may be expected for the remainder of the fiscal year ending June 30, 2021.

Inventory

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

Recently Adopted Accounting Guidance

Accounting for current expected credit losses

In June 2016, the FASB issued its final standard on measurement of credit losses on financial instruments. This standard, issued as ASU 2016-13, requires that an entity measure impairment of certain financial instruments, including trade receivables, based on expected losses rather than incurred losses. This update is effective for annual and interim financial statement periods beginning after December 15, 2019, with early adoption permitted for financial statement periods beginning after December 15, 2018. In November 2018, April 2019, May 2019, November 2019, and February 2020, the FASB issued ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-11 and ASU 2020-02, respectively, which clarify the guidance in ASU 2016-13. The Company adopted the new guidance in the first quarter of fiscal 2021. The adoption of this guidance did not have a material impact on the Company's financial statements or related disclosures.

Recently Issued Accounting Guidance

In December 2019, the FASB issued its final standard on simplifying the accounting for income taxes. This standard, issued as ASU 2019-12, makes a number of changes meant to add or clarify guidance on accounting for income taxes. This update is effective for annual and interim financial statement periods beginning after December 15, 2020, with early adoption permitted in any interim period for which financial statements have not yet been filed. The Company has not yet determined the impact of this pronouncement on its financial statements and related disclosures.

XML

Revenue Recognition Revenue Recognition

9 Months Ended

Mar. 31, 2021

Revenue from Contract with Customer [Abstract]

Revenue from Contract with Customer [Text Block]

REVENUE RECOGNITION

Disaggregation of Revenues

The following tables present the Company's net sales by reportable segment and by geographic areas based on the location of the facility shipping the product for the three and nine months ended March 31, 2021 and 2020. Other countries consist of Mexico, Australia, New Zealand, and Singapore.

	Three Months Ended March 31,
	2021						2020
	Service Center Based Distribution		Fluid Power & Flow Control		Total		Service Center Based Distribution		Fluid Power & Flow Control		Total
Geographic Areas:
United States	$	461,945	$	262,672	$	724,617	$	473,069	$	251,913	$	724,982
Canada	66,146		—		66,146		59,912		—		59,912
Other countries	44,801		5,373		50,174		41,387		4,516		45,903
Total	$	572,892	$	268,045	$	840,937	$	574,368	$	256,429	$	830,797

	Nine Months Ended March 31,
	2021						2020
	Service Center Based Distribution		Fluid Power & Flow Control		Total		Service Center Based Distribution		Fluid Power & Flow Control		Total
Geographic Areas:
United States	$	1,294,643	$	721,845	$	2,016,488	$	1,433,133	$	755,175	$	2,188,308
Canada	180,851		—		180,851		193,755		—		193,755
Other countries	126,372		16,320		142,692		126,428		12,085		138,513
Total	$	1,601,866	$	738,165	$	2,340,031	$	1,753,316	$	767,260	$	2,520,576

The following tables present the Company’s percentage of revenue by reportable segment and major customer industry for the three and nine months ended March 31, 2021 and 2020:

	Three Months Ended March 31,
	2021						2020
	Service Center Based Distribution		Fluid Power & Flow Control		Total		Service Center Based Distribution		Fluid Power & Flow Control		Total
General Industry	35.1	%	41.1	%	37.0	%	34.8	%	39.9	%	36.4	%
Industrial Machinery	10.1	%	26.7	%	15.4	%	9.9	%	24.7	%	14.5	%
Food	13.2	%	2.6	%	9.8	%	12.0	%	3.1	%	9.3	%
Metals	10.9	%	6.9	%	9.6	%	11.1	%	6.5	%	9.7	%
Forest Products	10.9	%	2.7	%	8.3	%	9.8	%	5.7	%	8.5	%
Chem/Petrochem	3.2	%	13.5	%	6.5	%	3.3	%	12.8	%	6.2	%
Cement & Aggregate	8.1	%	1.1	%	5.9	%	7.2	%	1.3	%	5.4	%
Transportation	4.7	%	4.3	%	4.6	%	4.6	%	4.7	%	4.6	%
Oil & Gas	3.8	%	1.1	%	2.9	%	7.3	%	1.3	%	5.4	%
Total	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%

	Nine Months Ended March 31,
	2021						2020
	Service Center Based Distribution		Fluid Power & Flow Control		Total		Service Center Based Distribution		Fluid Power & Flow Control		Total
General Industry	35.6	%	40.1	%	36.9	%	34.6	%	41.6	%	36.7	%
Industrial Machinery	9.6	%	26.6	%	15.0	%	9.7	%	23.7	%	13.9	%
Food	13.8	%	2.9	%	10.3	%	11.6	%	2.9	%	9.0	%
Metals	10.5	%	6.8	%	9.4	%	11.3	%	7.4	%	10.1	%
Forest Products	10.9	%	2.9	%	8.4	%	9.0	%	3.9	%	7.4	%
Chem/Petrochem	3.4	%	13.7	%	6.6	%	3.2	%	13.3	%	6.3	%
Cement & Aggregate	7.8	%	1.1	%	5.7	%	7.2	%	1.1	%	5.4	%
Transportation	4.7	%	4.8	%	4.8	%	4.7	%	4.4	%	4.6	%
Oil & Gas	3.7	%	1.1	%	2.9	%	8.7	%	1.7	%	6.6	%
Total	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%

The following tables present the Company’s percentage of revenue by reportable segment and product line for the three and nine months ended March 31, 2021 and 2020:

	Three Months Ended March 31,
	2021						2020
	Service Center Based Distribution		Fluid Power & Flow Control		Total		Service Center Based Distribution		Fluid Power & Flow Control		Total
Power Transmission	37.2	%	7.7	%	27.8	%	34.8	%	8.5	%	26.6	%
Fluid Power	13.4	%	38.3	%	21.3	%	13.3	%	40.5	%	21.7	%
Bearings, Linear & Seals	28.9	%	0.2	%	19.7	%	27.9	%	0.3	%	19.4	%
General Maintenance; Hose Products	20.5	%	18.8	%	20.0	%	24.0	%	12.2	%	20.4	%
Specialty Flow Control	—	%	35.0	%	11.2	%	—	%	38.5	%	11.9	%
Total	100	%	100	%	100	%	100	%	100	%	100	%

	Nine Months Ended March 31,
	2021						2020
	Service Center Based Distribution		Fluid Power & Flow Control		Total		Service Center Based Distribution		Fluid Power & Flow Control		Total
Power Transmission	37.4	%	7.8	%	28.0	%	34.7	%	9.9	%	27.2	%
Fluid Power	13.3	%	38.2	%	21.1	%	13.3	%	38.4	%	20.9	%
Bearings, Linear & Seals	28.9	%	0.4	%	19.9	%	26.5	%	0.3	%	18.6	%
General Maintenance; Hose Products	20.4	%	16.0	%	19.1	%	25.5	%	11.1	%	21.1	%
Specialty Flow Control	—	%	37.6	%	11.9	%	—	%	40.3	%	12.2	%
Total	100	%	100	%	100	%	100	%	100	%	100	%

Contract Assets

The Company’s contract assets consist of un-billed amounts resulting from contracts for which revenue is recognized over time using the cost-to-cost method, and for which revenue recognized exceeds the amount billed to the customer.

Activity related to contract assets, which are included in other current assets on the condensed consolidated balance sheet, is as follows:

	March 31, 2021		June 30, 2020		$ Change		% Change
Contract assets	$	11,838	$	8,435	$	3,403	40.3	%

The difference between the opening and closing balances of the Company's contract assets primarily results from the timing difference between the Company's performance and when the customer is billed.

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Business Combinations

9 Months Ended

Mar. 31, 2021

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

BUSINESS COMBINATIONS

The operating results of all acquired entities are included within the consolidated operating results of the Company from the date of each respective acquisition.

Fiscal 2021 Acquisitions

On December 31, 2020, the Company acquired 100% of the outstanding shares of Gibson Engineering (Gibson), a Norwood, Massachusetts provider of automation products, services, and engineered solutions focused on machine vision, motion control, mobile and collaborative robotic solutions, intelligent sensors, and other related equipment. Gibson is included in the Fluid Power & Flow Control segment. The purchase price for the acquisition was $15,450, net tangible assets acquired were $1,099, and intangible assets including goodwill were $14,351 based upon preliminary estimated fair values at the acquisition date, which are subject to adjustment. The purchase price includes $1,938 of acquisition holdback payments, which are included in other current liabilities and other liabilities on the condensed consolidated balance sheet as of March 31, 2021, and which will be paid on the first and second anniversaries of the acquisition date with interest at a fixed rate of 1.0% per annum. The Company funded this acquisition using available cash. The acquisition price and the results of operations for the acquired entity are not material in relation to the Company's consolidated financial statements.

On October 5, 2020, the Company acquired substantially all of the net assets of Advanced Control Solutions (ACS), which operates four locations in Georgia, Tennessee and Alabama. ACS is a provider of automation products, services, and engineered solutions focused on machine vision equipment and software, mobile and collaborative robotic solutions, intelligent sensors, logic controllers, and other related equipment. ACS is included in the Fluid Power & Flow Control segment. The purchase price for the acquisition was $17,888, net tangible assets acquired were $1,231, and intangible assets including goodwill were $16,657 based upon preliminary estimated fair values at the acquisition date, which are subject to adjustment. The Company funded this acquisition using available cash. The acquisition price and the results of operations for the acquired entity are not material in relation to the Company's consolidated financial statements.

Fiscal 2020 Acquisition

On August 21, 2019, the Company acquired 100% of the outstanding shares of Olympus Controls (Olympus), a Portland, Oregon automation solutions provider - including design, assembly, integration, and distribution - of motion control, machine vision, and robotic technologies. Olympus is included in the Fluid Power & Flow Control segment. The purchase price for the acquisition was $36,642, net tangible assets acquired were $9,540, and intangible assets including goodwill was $27,102 based upon estimated fair values at the acquisition date. The Company funded this acquisition using available cash. The acquisition price and the results of operations for the acquired entity are not material in relation to the Company's consolidated financial statements.

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Goodwill and Intangibles

9 Months Ended

Mar. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLES

GOODWILL AND INTANGIBLES

The changes in the carrying amount of goodwill for both the Service Center Based Distribution segment and the Fluid Power & Flow Control segment for the fiscal year ended June 30, 2020 and the nine month period ended March 31, 2021 are as follows:

	Service Center Based Distribution		Fluid Power & Flow Control		Total
Balance at June 30, 2019	$	213,634	$	448,357	$	661,991
Goodwill adjusted/acquired during the period	(3,393)		14,667		11,274
Impairment	—		(131,000)		(131,000)
Other, primarily currency translation	(1,671)		—		(1,671)
Balance at June 30, 2020	$	208,570	$	332,024	$	540,594
Goodwill acquired during the period	—		15,688		15,688
Other, primarily currency translation	2,914		—		2,914
Balance at March 31, 2021	$	211,484	$	347,712	$	559,196

The Company has eight (8) reporting units for which an annual goodwill impairment assessment was performed as of January 1, 2021.  The Company concluded that seven (7) of the reporting units’ fair value exceeded their carrying amounts by at least 25% as of January 1, 2021. The fair value of the final reporting unit, which is comprised of the FCX Performance Inc. (FCX) operations, exceeded its carrying value by 14%. The FCX reporting unit has a goodwill balance of $309,012 as of March 31, 2021.

The fair values of the reporting units in accordance with the goodwill impairment test were determined using the income and market approaches.  The income approach employs the discounted cash flow method reflecting projected cash flows expected to be generated by market participants and then adjusted for time value of money factors, and requires management to make significant estimates and assumptions related to forecasts of future revenues, earnings before interest, taxes, depreciation, and amortization (EBITDA), and discount rates. The market approach utilizes an analysis of comparable publicly traded companies and requires management to make significant estimates and assumptions related to the forecasts of future revenues, EBITDA, and multiples that are applied to management’s forecasted revenues and EBITDA estimates.

The techniques used in the Company's impairment test have incorporated a number of assumptions that the Company believes to be reasonable and to reflect known market conditions at the measurement date. Assumptions in estimating future cash flows are subject to a degree of judgment. The Company makes all efforts to forecast future cash flows as accurately as possible with the information available at the measurement date. The Company evaluates the appropriateness of its assumptions and overall forecasts by comparing projected results of upcoming years with actual results of preceding years. Key assumptions (Level 3 in the fair value hierarchy) relate to pricing trends, inventory costs, customer demand, and revenue growth. A number of benchmarks from independent industry and other economic publications were also used.

Changes in future results, assumptions, and estimates after the measurement date may lead to an outcome where additional impairment charges would be required in future periods.  Specifically, actual results may vary from the Company’s forecasts and such variations may be material and unfavorable, thereby triggering the need for future impairment tests where the conclusions may differ in reflection of prevailing market conditions.  Further, continued adverse market conditions could result in the recognition of additional impairment if the Company determines that the fair values of its reporting units have fallen below their carrying values. Certain events or circumstances that could reasonably be expected to negatively affect the underlying key assumptions and ultimately impact the estimated fair value of the Company’s reporting units may include such items as: (i) a decrease in expected future cash flows, specifically, a decrease in sales volume driven by a prolonged weakness in customer demand or other pressures adversely affecting our long-term sales trends; (ii) inability to achieve the sales from our strategic growth initiatives.

At March 31, 2021 and June 30, 2020, accumulated goodwill impairment losses subsequent to fiscal year 2002 totaled $64,794 related to the Service Center Based Distribution segment and $167,605 related to the Fluid Power & Flow Control segment.

The Company’s identifiable intangible assets resulting from business combinations are amortized over their estimated period of benefit and consist of the following:

March 31, 2021	Amount		Accumulated Amortization		Net Book Value
Finite-Lived Identifiable Intangibles:
Customer relationships	$	352,720	$	137,519	$	215,201
Trade names	105,065		36,172		68,893
Vendor relationships	11,481		9,666		1,815
Other	2,070		293		1,777
Total Identifiable Intangibles	$	471,336	$	183,650	$	287,686

June 30, 2020	Amount		Accumulated Amortization		Net Book Value
Finite-Lived Identifiable Intangibles:
Customer relationships	$	426,017	$	162,965	$	263,052
Trade names	111,453		34,815		76,638
Vendor relationships	11,329		8,934		2,395
Other	2,078		948		1,130
Total Identifiable Intangibles	$	550,877	$	207,662	$	343,215

Amounts include the impact of foreign currency translation. Fully amortized or impaired amounts are written off.

During the nine month period ended March 31, 2021, the Company acquired identifiable intangible assets with a preliminary acquisition cost allocation and weighted-average life as follows:

	Acquisition Cost Allocation		Weighted-Average life
Customer relationships	$	10,390	20.0
Trade names	3,840		15.0
Other	1,090		5.9
Total Identifiable Intangibles	$	15,320	17.7

Identifiable intangible assets with finite lives are reviewed for impairment when changes in conditions indicate carrying value may not be recoverable. Sustained significant weakness in certain end market concentrations could result in impairment of certain intangible assets in future periods.

The Company has three asset groups that have significant exposure to oil and gas end markets. Due to the prolonged economic downturn in these end markets, the Company determined during the second quarter of fiscal 2021 that certain carrying values may not be recoverable. The Company determined that an impairment existed in two of the three asset groups as the asset groups' carrying values exceeded the sum of the undiscounted cash flows. The fair values of the long-lived assets were then determined using the income approach, and the analyses resulted in the measurement of an intangible asset impairment loss of $45,033, which was recorded in the nine months ended March 31, 2021, as the fair value of the intangible assets was determined to be zero. The income approach employs the discounted cash flow method reflecting projected cash flows expected to be generated by market participants and then adjusted for time value of money factors, and requires management to make significant estimates and assumptions related to forecasts of future revenues, earnings before interest, taxes, depreciation, and amortization (EBITDA), and discount rates. Key assumptions (Level 3 in the fair value hierarchy) relate to pricing trends, inventory costs, customer demand, and revenue growth. A number of benchmarks from independent industry and other economic publications were also used. The analyses of these asset groups also resulted in a fixed asset impairment loss and leased asset impairment loss of $1,983 and $2,512, respectively, which were recorded in the nine months ended March 31, 2021.

Estimated future amortization expense by fiscal year (based on the Company’s identifiable intangible assets as of March 31, 2021) for the next five years is as follows: $8,300 for the remainder of 2021, $31,400 for 2022, $29,500 for 2023, $25,800 for 2024, $23,600 for 2025 and $21,900 for 2026.

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Debt

9 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

DEBT

A summary of long-term debt, including the current portion, follows:

	March 31, 2021		June 30, 2020
Term Loan	$	560,000	$	589,250
Trade receivable securitization facility	162,300		175,000
Series C notes	80,000		120,000
Series D notes	25,000		25,000
Series E notes	25,000		25,000
Other	906		1,026
Total debt	$	853,206	$	935,276
Less: unamortized debt issuance costs	1,158		1,487
	$	852,048	$	933,789

Revolving Credit Facility & Term Loan

In January 2018, the Company refinanced its existing credit facility and entered into a new five-year credit facility with a group of banks expiring in January 2023. This agreement provides for a $780,000 unsecured term loan and a $250,000 unsecured revolving credit facility. Fees on this facility range from 0.10% to 0.20% per year based upon the Company's leverage ratio at each quarter end. Borrowings under this agreement carry variable interest rates tied to either LIBOR or prime at the Company's discretion. The Company had no amount outstanding under the revolver at March 31, 2021 or June 30, 2020. Unused lines under this facility, net of outstanding letters of credit of $200 and $1,873, respectively, to secure certain insurance obligations, totaled $249,800 and $248,127 at March 31, 2021 and June 30, 2020, respectively, and were available to fund future acquisitions or other capital and operating requirements. The interest rate on the term loan was 1.88% as of March 31, 2021 and 1.94% as of June 30, 2020.

Additionally, the Company had letters of credit outstanding with separate banks, not associated with the revolving credit agreement, in the amount of $4,548 and $4,475 as of March 31, 2021 and June 30, 2020, respectively, in order to secure certain insurance obligations.

Trade Receivable Securitization Facility

In August 2018, the Company established a trade receivable securitization facility (the “AR Securitization Facility”) with a termination date of August 31, 2021. On March 26, 2021, the Company amended the AR Securitization Facility to expand the eligible receivables, which increased the maximum availability to $250,000 and increased the fees on the AR Securitization Facility to 0.98% per year. Availability is further subject to changes in the credit ratings of our customers, customer concentration levels or certain characteristics of the accounts receivable being transferred and, therefore, at certain times, we may not be able to fully access the $250,000 of funding available under the AR Securitization Facility. The AR Securitization Facility effectively increases the Company’s borrowing capacity by collateralizing a portion of the amount of the U.S. operations’ trade accounts receivable. The Company uses the proceeds from the AR Securitization Facility as an alternative to other forms of debt, effectively reducing borrowing costs. Borrowings under this facility carry variable interest rates tied to LIBOR. The interest rate on the AR Securitization Facility as of March 31, 2021 and June 30, 2020 was 1.30% and 1.07%, respectively. The termination date of the AR Securitization is now March 26, 2024.

Unsecured Shelf Facility

At March 31, 2021 and June 30, 2020, the Company had borrowings outstanding under its unsecured shelf facility agreement with Prudential Investment Management of $130,000 and $170,000, respectively. Fees on this facility range from 0.25% to 1.25% per year based on the Company's leverage ratio at each quarter end. The "Series C" notes, which had an original principal amount of $120,000, carry a fixed interest rate of 3.19%. A $40,000 principal payment was made on the "Series C" in July 2020, and the remaining principal balance of $80,000 is due in equal payments in July 2021 and 2022. The "Series D" notes have a remaining principal balance of $25,000, carry a fixed interest rate of 3.21%, and are due in October 2023. The “Series E” notes have a principal amount of $25,000, carry a fixed interest rate of 3.08%, and are due in October 2024.

Other Long-Term BorrowingIn 2014, the Company assumed $2,359 of debt as a part of the headquarters facility acquisition. The 1.50% fixed interest rate note is held by the State of Ohio Development Services Agency, and matures in May 2024.

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Derivatives Derivatives

9 Months Ended

Mar. 31, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities Disclosure [Text Block]

DERIVATIVES

Risk Management Objective of Using Derivatives

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s borrowings.

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in accumulated other comprehensive loss and subsequently reclassified into interest expense in the same period(s) during which the hedged transaction affects earnings. Amounts reported in accumulated other comprehensive loss related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt.

In January 2019, the Company entered into an interest rate swap to mitigate variability in forecasted interest payments on $463,000 of the Company’s U.S. dollar-denominated unsecured variable rate debt. The interest rate swap effectively converts a portion of the floating rate interest payment into a fixed rate interest payment. The Company designated the interest rate swap as a pay-fixed, receive-floating interest rate swap instrument and is accounting for this derivative as a cash flow hedge. During the quarter ended December 31, 2020, the Company completed a transaction to amend and extend the interest rate swap agreement which resulted in an extension of the maturity date by an additional three years and a decrease of the weighted average fixed pay rate from 2.61% to 1.63%. The new pay-fixed interest rate swap is considered a hybrid instrument with a financing component and an embedded at-market derivative that was designated as a cash flow hedge. The interest rate swap converts $420,000 of variable rate debt to a rate of 3.38% as of March 31, 2021. The interest rate swap converted $431,000 of variable rate debt to a rate of 4.36% as of June 30, 2020. The fair value (Level 2 in the fair value hierarchy) of the interest rate cash flow hedge was $13,157 and $26,179 as of March 31, 2021 and June 30, 2020, respectively, which is included in other current liabilities and other liabilities in the condensed consolidated balance sheet. Amounts reclassified from other comprehensive income (loss), before tax to interest expense, net totaled $2,992 and $1,017 for the three months ended March 31, 2021 and 2020, respectively, and $8,504 and $2,350 for the nine months ended March 31, 2021 and 2020, respectively.

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Fair Value Measurements

9 Months Ended

Mar. 31, 2021

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

Marketable securities measured at fair value at March 31, 2021 and June 30, 2020 totaled $15,729 and $12,259, respectively. The majority of these marketable securities are held in a rabbi trust for a non-qualified deferred compensation plan. The marketable securities are included in other assets on the accompanying condensed consolidated balance sheets and their fair values were determined using quoted market prices (Level 1 in the fair value hierarchy).

As of March 31, 2021 and June 30, 2020, the carrying values of the Company's fixed interest rate debt outstanding under its unsecured shelf facility agreement with Prudential Investment Management approximated fair value (Level 2 in the fair value hierarchy).

The revolving credit facility, the term loan and the AR Securitization Facility contain variable interest rates and their carrying values approximate fair value (Level 2 in the fair value hierarchy).

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Shareholders' Equity

9 Months Ended

Mar. 31, 2021

Stockholders' Equity Note [Abstract]

SHAREHOLDERS' EQUITY

SHAREHOLDERS' EQUITY

Accumulated Other Comprehensive Loss

Changes in the accumulated other comprehensive loss are comprised of the following amounts, shown net of taxes:

	Three Months Ended March 31, 2021
	Foreign currency translation adjustment		Post-employment benefits		Cash flow hedge		Total Accumulated other comprehensive (loss) income
Balance at December 31, 2020	$	(85,222)	$	(4,462)	$	(17,680)	$	(107,364)
Other comprehensive (loss) income	(434)		—		6,615		6,181
Amounts reclassified from accumulated other comprehensive loss	—		52		2,260		2,312
Net current-period other comprehensive (loss) income	(434)		52		8,875		8,493
Balance at March 31, 2021	$	(85,656)	$	(4,410)	$	(8,805)	$	(98,871)

	Three Months Ended March 31, 2020
	Foreign currency translation adjustment		Post-employment benefits		Cash flow hedge		Total Accumulated other comprehensive (loss) income
Balance at December 31, 2019	$	(84,687)	$	(2,877)	$	(9,996)	$	(97,560)
Other comprehensive loss	(28,257)		—		(10,440)		(38,697)
Amounts reclassified from accumulated other comprehensive loss	—		(13)		763		750
Net current-period other comprehensive loss	(28,257)		(13)		(9,677)		(37,947)
Balance at March 31, 2020	$	(112,944)	$	(2,890)	$	(19,673)	$	(135,507)

	Nine Months Ended March 31, 2021
	Foreign currency translation adjustment		Post-employment benefits		Cash flow hedge		Total Accumulated other comprehensive (loss) income
Balance at June 30, 2020	$	(105,094)	$	(4,564)	$	(19,772)	$	(129,430)
Other comprehensive income	19,438		—		4,544		23,982
Amounts reclassified from accumulated other comprehensive loss	—		154		6,423		6,577
Net current-period other comprehensive income	19,438		154		10,967		30,559
Balance at March 31, 2021	$	(85,656)	$	(4,410)	$	(8,805)	$	(98,871)

	Nine Months Ended March 31, 2020
	Foreign currency translation adjustment		Post-employment benefits		Cash flow hedge		Total Accumulated other comprehensive (loss) income
Balance at June 30, 2019	$	(86,330)	$	(2,852)	$	(10,704)	$	(99,886)
Other comprehensive loss	(26,614)		—		(10,740)		(37,354)
Amounts reclassified from accumulated other comprehensive loss	—		(38)		1,771		1,733
Net current-period other comprehensive loss	(26,614)		(38)		(8,969)		(35,621)
Balance at March 31, 2020	$	(112,944)	$	(2,890)	$	(19,673)	$	(135,507)

Other Comprehensive Income (Loss)

Details of other comprehensive income (loss) are as follows:

	Three Months Ended March 31,
	2021						2020
	Pre-Tax Amount		Tax (Benefit) Expense		Net Amount		Pre-Tax Amount		Tax (Benefit) Expense		Net Amount
Foreign currency translation adjustments	$	(496)	$	(62)	$	(434)	$	(28,767)	$	(510)	$	(28,257)
Post-employment benefits:
Reclassification of net actuarial losses (gains) and prior service cost into other income, net and included in net periodic pension costs	68		16		52		(17)		(4)		(13)
Unrealized gain (loss) on cash flow hedge	8,758		2,143		6,615		(13,891)		(3,451)		(10,440)
Reclassification of interest from cash flow hedge into interest expense	2,992		732		2,260		1,017		254		763
Other comprehensive income (loss)	$	11,322	$	2,829	$	8,493	$	(41,658)	$	(3,711)	$	(37,947)

	Nine Months Ended March 31,
	2021						2020
	Pre-Tax Amount		Tax Expense		Net Amount		Pre-Tax Amount		Tax (Benefit) Expense		Net Amount
Foreign currency translation adjustments	$	19,529	$	91	$	19,438	$	(27,356)	$	(742)	$	(26,614)
Post-employment benefits:
Reclassification of net actuarial losses (gains) and prior service cost into other income, net and included in net periodic pension costs	203		49		154		(50)		(12)		(38)
Unrealized gain (loss) on cash flow hedge	6,017		1,473		4,544		(14,249)		(3,509)		(10,740)
Reclassification of interest from cash flow hedge into interest expense	8,504		2,081		6,423		2,350		579		1,771
Other comprehensive income (loss)	$	34,253	$	3,694	$	30,559	$	(39,305)	$	(3,684)	$	(35,621)

Anti-dilutive Common Stock Equivalents

In the nine month period ended March 31, 2021, stock options and stock appreciation rights related to 291 shares of common stock were not included in the computation of diluted earnings per share for the period then ended as they were anti-dilutive.

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Segment Information

9 Months Ended

Mar. 31, 2020

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

The accounting policies of the Company’s reportable segments are generally the same as those used to prepare the condensed consolidated financial statements. LIFO expense of $781 and $1,950 in the three months ended March 31, 2021 and 2020, respectively, and $2,777 and $4,237 in the nine months ended March 31, 2021 and 2020, respectively, is recorded in cost of sales in the condensed statements of income, and is included in operating income for the Service Center Based Distribution segment. The Company allocates LIFO expense between the segments in the fourth quarter of its fiscal year. Intercompany sales, primarily from the Fluid Power & Flow Control segment to the Service Center Based Distribution segment, of $8,835 and $7,685, in the three months ended March 31, 2021 and 2020, and $23,773, respectively, and $22,434 in the nine months ended March 31, 2021 and 2020, respectively, have been eliminated in the Segment Financial Information tables below.

Three Months Ended	Service Center Based Distribution		Fluid Power & Flow Control		Total
March 31, 2021
Net sales	$	572,892	$	268,045	$	840,937
Operating income for reportable segments	65,553		30,829		96,382
Depreciation and amortization of property	4,230		850		5,080
Capital expenditures	3,150		578		3,728
March 31, 2020
Net sales	$	574,368	$	256,429	$	830,797
Operating income for reportable segments	53,014		26,449		79,463
Depreciation and amortization of property	4,373		1,007		5,380
Capital expenditures	3,588		670		4,258

Nine Months Ended	Service Center Based Distribution		Fluid Power & Flow Control		Total
March 31, 2021
Net sales	$	1,601,866	$	738,165	$	2,340,031
Operating income for reportable segments	158,108		83,337		241,445
Assets used in business	1,385,648		919,740		2,305,388
Depreciation and amortization of property	12,877		2,764		15,641
Capital expenditures	10,680		1,497		12,177
March 31, 2020
Net sales	$	1,753,316	$	767,260	$	2,520,576
Operating income for reportable segments	167,279		82,755		250,034
Assets used in business	1,310,754		978,775		2,289,529
Depreciation and amortization of property	12,831		3,166		15,997
Capital expenditures	14,022		2,201		16,223

A reconciliation of operating income for reportable segments to the condensed consolidated income before income taxes is as follows:

	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2021		2020		2021		2020
Operating income for reportable segments	$	96,382	$	79,463	$	241,445	$	250,034
Adjustment for:
Intangible amortization—Service Center Based Distribution	944		3,811		4,507		9,697
Intangible amortization—Fluid Power & Flow Control	7,293		7,291		21,731		21,974
Impairment—Service Center Based Distribution	—		—		49,528		—
Goodwill Impairment—Fluid Power & Flow Control	—		131,000		—		131,000
Corporate and other expense, net	13,678		15,311		41,326		45,402
Total operating income (loss)	74,467		(77,950)		124,353		41,961
Interest expense, net	7,608		8,805		22,919		28,447
Other income, net	(1,657)		(1,428)		(1,746)		(1,643)
Income (loss) before income taxes	$	68,516	$	(85,327)	$	103,180	$	15,157

The change in corporate and other expense, net is due to changes in corporate expenses, as well as in the amounts and levels of certain expenses being allocated to the segments. The expenses being allocated include corporate charges for working capital, logistics support, and other items.

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Other Income, Net

9 Months Ended

Mar. 31, 2021

Other Income and Expenses [Abstract]

OTHER INCOME, NET

OTHER INCOME, NET

Other income, net consists of the following:

	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2021		2020		2021		2020
Unrealized (gain) loss on assets held in rabbi trust for a non-qualified deferred compensation plan	$	(642)	$	2,182	$	(3,104)	$	1,361
Foreign currency transactions (gain) loss	(485)		(3,501)		1,736		(3,167)
Net other periodic post-employment costs (benefits)	71		(30)		213		(90)
Life insurance (income) expense, net	(543)		(194)		(402)		165
Other, net	(58)		115		(189)		88
Total other income, net	$	(1,657)	$	(1,428)	$	(1,746)	$	(1,643)

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Basis of Presentation (Policies)

9 Months Ended

Mar. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Inventory, Policy [Policy Text Block]

Inventory

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

New Accounting Pronouncements, Policy [Policy Text Block]

Recently Adopted Accounting Guidance

Accounting for current expected credit losses

In June 2016, the FASB issued its final standard on measurement of credit losses on financial instruments. This standard, issued as ASU 2016-13, requires that an entity measure impairment of certain financial instruments, including trade receivables, based on expected losses rather than incurred losses. This update is effective for annual and interim financial statement periods beginning after December 15, 2019, with early adoption permitted for financial statement periods beginning after December 15, 2018. In November 2018, April 2019, May 2019, November 2019, and February 2020, the FASB issued ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-11 and ASU 2020-02, respectively, which clarify the guidance in ASU 2016-13. The Company adopted the new guidance in the first quarter of fiscal 2021. The adoption of this guidance did not have a material impact on the Company's financial statements or related disclosures.

Description of New Accounting Pronouncements Not yet Adopted [Text Block]

Recently Issued Accounting Guidance

In December 2019, the FASB issued its final standard on simplifying the accounting for income taxes. This standard, issued as ASU 2019-12, makes a number of changes meant to add or clarify guidance on accounting for income taxes. This update is effective for annual and interim financial statement periods beginning after December 15, 2020, with early adoption permitted in any interim period for which financial statements have not yet been filed. The Company has not yet determined the impact of this pronouncement on its financial statements and related disclosures.

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Revenue Recognition Revenue Recognition (Tables)

9 Months Ended

Mar. 31, 2021

Revenue from Contract with Customer [Abstract]

Revenue from External Customers by Geographic Areas [Table Text Block]

The following tables present the Company's net sales by reportable segment and by geographic areas based on the location of the facility shipping the product for the three and nine months ended March 31, 2021 and 2020. Other countries consist of Mexico, Australia, New Zealand, and Singapore.

	Three Months Ended March 31,
	2021						2020
	Service Center Based Distribution		Fluid Power & Flow Control		Total		Service Center Based Distribution		Fluid Power & Flow Control		Total
Geographic Areas:
United States	$	461,945	$	262,672	$	724,617	$	473,069	$	251,913	$	724,982
Canada	66,146		—		66,146		59,912		—		59,912
Other countries	44,801		5,373		50,174		41,387		4,516		45,903
Total	$	572,892	$	268,045	$	840,937	$	574,368	$	256,429	$	830,797

	Nine Months Ended March 31,
	2021						2020
	Service Center Based Distribution		Fluid Power & Flow Control		Total		Service Center Based Distribution		Fluid Power & Flow Control		Total
Geographic Areas:
United States	$	1,294,643	$	721,845	$	2,016,488	$	1,433,133	$	755,175	$	2,188,308
Canada	180,851		—		180,851		193,755		—		193,755
Other countries	126,372		16,320		142,692		126,428		12,085		138,513
Total	$	1,601,866	$	738,165	$	2,340,031	$	1,753,316	$	767,260	$	2,520,576

Disaggregation of Revenue [Table Text Block]

The following tables present the Company’s percentage of revenue by reportable segment and major customer industry for the three and nine months ended March 31, 2021 and 2020:

	Three Months Ended March 31,
	2021						2020
	Service Center Based Distribution		Fluid Power & Flow Control		Total		Service Center Based Distribution		Fluid Power & Flow Control		Total
General Industry	35.1	%	41.1	%	37.0	%	34.8	%	39.9	%	36.4	%
Industrial Machinery	10.1	%	26.7	%	15.4	%	9.9	%	24.7	%	14.5	%
Food	13.2	%	2.6	%	9.8	%	12.0	%	3.1	%	9.3	%
Metals	10.9	%	6.9	%	9.6	%	11.1	%	6.5	%	9.7	%
Forest Products	10.9	%	2.7	%	8.3	%	9.8	%	5.7	%	8.5	%
Chem/Petrochem	3.2	%	13.5	%	6.5	%	3.3	%	12.8	%	6.2	%
Cement & Aggregate	8.1	%	1.1	%	5.9	%	7.2	%	1.3	%	5.4	%
Transportation	4.7	%	4.3	%	4.6	%	4.6	%	4.7	%	4.6	%
Oil & Gas	3.8	%	1.1	%	2.9	%	7.3	%	1.3	%	5.4	%
Total	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%

	Nine Months Ended March 31,
	2021						2020
	Service Center Based Distribution		Fluid Power & Flow Control		Total		Service Center Based Distribution		Fluid Power & Flow Control		Total
General Industry	35.6	%	40.1	%	36.9	%	34.6	%	41.6	%	36.7	%
Industrial Machinery	9.6	%	26.6	%	15.0	%	9.7	%	23.7	%	13.9	%
Food	13.8	%	2.9	%	10.3	%	11.6	%	2.9	%	9.0	%
Metals	10.5	%	6.8	%	9.4	%	11.3	%	7.4	%	10.1	%
Forest Products	10.9	%	2.9	%	8.4	%	9.0	%	3.9	%	7.4	%
Chem/Petrochem	3.4	%	13.7	%	6.6	%	3.2	%	13.3	%	6.3	%
Cement & Aggregate	7.8	%	1.1	%	5.7	%	7.2	%	1.1	%	5.4	%
Transportation	4.7	%	4.8	%	4.8	%	4.7	%	4.4	%	4.6	%
Oil & Gas	3.7	%	1.1	%	2.9	%	8.7	%	1.7	%	6.6	%
Total	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%

The following tables present the Company’s percentage of revenue by reportable segment and product line for the three and nine months ended March 31, 2021 and 2020:

	Three Months Ended March 31,
	2021						2020
	Service Center Based Distribution		Fluid Power & Flow Control		Total		Service Center Based Distribution		Fluid Power & Flow Control		Total
Power Transmission	37.2	%	7.7	%	27.8	%	34.8	%	8.5	%	26.6	%
Fluid Power	13.4	%	38.3	%	21.3	%	13.3	%	40.5	%	21.7	%
Bearings, Linear & Seals	28.9	%	0.2	%	19.7	%	27.9	%	0.3	%	19.4	%
General Maintenance; Hose Products	20.5	%	18.8	%	20.0	%	24.0	%	12.2	%	20.4	%
Specialty Flow Control	—	%	35.0	%	11.2	%	—	%	38.5	%	11.9	%
Total	100	%	100	%	100	%	100	%	100	%	100	%

	Nine Months Ended March 31,
	2021						2020
	Service Center Based Distribution		Fluid Power & Flow Control		Total		Service Center Based Distribution		Fluid Power & Flow Control		Total
Power Transmission	37.4	%	7.8	%	28.0	%	34.7	%	9.9	%	27.2	%
Fluid Power	13.3	%	38.2	%	21.1	%	13.3	%	38.4	%	20.9	%
Bearings, Linear & Seals	28.9	%	0.4	%	19.9	%	26.5	%	0.3	%	18.6	%
General Maintenance; Hose Products	20.4	%	16.0	%	19.1	%	25.5	%	11.1	%	21.1	%
Specialty Flow Control	—	%	37.6	%	11.9	%	—	%	40.3	%	12.2	%
Total	100	%	100	%	100	%	100	%	100	%	100	%

Contract with Customer, Asset and Liability [Table Text Block]

Contract Assets

The Company’s contract assets consist of un-billed amounts resulting from contracts for which revenue is recognized over time using the cost-to-cost method, and for which revenue recognized exceeds the amount billed to the customer.

Activity related to contract assets, which are included in other current assets on the condensed consolidated balance sheet, is as follows:

	March 31, 2021		June 30, 2020		$ Change		% Change
Contract assets	$	11,838	$	8,435	$	3,403	40.3	%

The difference between the opening and closing balances of the Company's contract assets primarily results from the timing difference between the Company's performance and when the customer is billed.

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Goodwill and Intangibles (Tables)

9 Months Ended

Mar. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Changes in the carrying amount of goodwill by reportable segment

The changes in the carrying amount of goodwill for both the Service Center Based Distribution segment and the Fluid Power & Flow Control segment for the fiscal year ended June 30, 2020 and the nine month period ended March 31, 2021 are as follows:

	Service Center Based Distribution		Fluid Power & Flow Control		Total
Balance at June 30, 2019	$	213,634	$	448,357	$	661,991
Goodwill adjusted/acquired during the period	(3,393)		14,667		11,274
Impairment	—		(131,000)		(131,000)
Other, primarily currency translation	(1,671)		—		(1,671)
Balance at June 30, 2020	$	208,570	$	332,024	$	540,594
Goodwill acquired during the period	—		15,688		15,688
Other, primarily currency translation	2,914		—		2,914
Balance at March 31, 2021	$	211,484	$	347,712	$	559,196

Schedule of Intangible Assets

The Company’s identifiable intangible assets resulting from business combinations are amortized over their estimated period of benefit and consist of the following:

March 31, 2021	Amount		Accumulated Amortization		Net Book Value
Finite-Lived Identifiable Intangibles:
Customer relationships	$	352,720	$	137,519	$	215,201
Trade names	105,065		36,172		68,893
Vendor relationships	11,481		9,666		1,815
Other	2,070		293		1,777
Total Identifiable Intangibles	$	471,336	$	183,650	$	287,686

June 30, 2020	Amount		Accumulated Amortization		Net Book Value
Finite-Lived Identifiable Intangibles:
Customer relationships	$	426,017	$	162,965	$	263,052
Trade names	111,453		34,815		76,638
Vendor relationships	11,329		8,934		2,395
Other	2,078		948		1,130
Total Identifiable Intangibles	$	550,877	$	207,662	$	343,215

Amounts include the impact of foreign currency translation. Fully amortized or impaired amounts are written off.

Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination

During the nine month period ended March 31, 2021, the Company acquired identifiable intangible assets with a preliminary acquisition cost allocation and weighted-average life as follows:

	Acquisition Cost Allocation		Weighted-Average life
Customer relationships	$	10,390	20.0
Trade names	3,840		15.0
Other	1,090		5.9
Total Identifiable Intangibles	$	15,320	17.7

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Debt (Tables)

9 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

Schedule of Debt

A summary of long-term debt, including the current portion, follows:

	March 31, 2021		June 30, 2020
Term Loan	$	560,000	$	589,250
Trade receivable securitization facility	162,300		175,000
Series C notes	80,000		120,000
Series D notes	25,000		25,000
Series E notes	25,000		25,000
Other	906		1,026
Total debt	$	853,206	$	935,276
Less: unamortized debt issuance costs	1,158		1,487
	$	852,048	$	933,789

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Shareholders' Equity (Tables)

9 Months Ended

Mar. 31, 2021

Accumulated Other Comprehensive Income (Loss) [Line Items]

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

Accumulated Other Comprehensive Loss

Changes in the accumulated other comprehensive loss are comprised of the following amounts, shown net of taxes:

	Three Months Ended March 31, 2021
	Foreign currency translation adjustment		Post-employment benefits		Cash flow hedge		Total Accumulated other comprehensive (loss) income
Balance at December 31, 2020	$	(85,222)	$	(4,462)	$	(17,680)	$	(107,364)
Other comprehensive (loss) income	(434)		—		6,615		6,181
Amounts reclassified from accumulated other comprehensive loss	—		52		2,260		2,312
Net current-period other comprehensive (loss) income	(434)		52		8,875		8,493
Balance at March 31, 2021	$	(85,656)	$	(4,410)	$	(8,805)	$	(98,871)

	Three Months Ended March 31, 2020
	Foreign currency translation adjustment		Post-employment benefits		Cash flow hedge		Total Accumulated other comprehensive (loss) income
Balance at December 31, 2019	$	(84,687)	$	(2,877)	$	(9,996)	$	(97,560)
Other comprehensive loss	(28,257)		—		(10,440)		(38,697)
Amounts reclassified from accumulated other comprehensive loss	—		(13)		763		750
Net current-period other comprehensive loss	(28,257)		(13)		(9,677)		(37,947)
Balance at March 31, 2020	$	(112,944)	$	(2,890)	$	(19,673)	$	(135,507)

	Nine Months Ended March 31, 2021
	Foreign currency translation adjustment		Post-employment benefits		Cash flow hedge		Total Accumulated other comprehensive (loss) income
Balance at June 30, 2020	$	(105,094)	$	(4,564)	$	(19,772)	$	(129,430)
Other comprehensive income	19,438		—		4,544		23,982
Amounts reclassified from accumulated other comprehensive loss	—		154		6,423		6,577
Net current-period other comprehensive income	19,438		154		10,967		30,559
Balance at March 31, 2021	$	(85,656)	$	(4,410)	$	(8,805)	$	(98,871)

	Nine Months Ended March 31, 2020
	Foreign currency translation adjustment		Post-employment benefits		Cash flow hedge		Total Accumulated other comprehensive (loss) income
Balance at June 30, 2019	$	(86,330)	$	(2,852)	$	(10,704)	$	(99,886)
Other comprehensive loss	(26,614)		—		(10,740)		(37,354)
Amounts reclassified from accumulated other comprehensive loss	—		(38)		1,771		1,733
Net current-period other comprehensive loss	(26,614)		(38)		(8,969)		(35,621)
Balance at March 31, 2020	$	(112,944)	$	(2,890)	$	(19,673)	$	(135,507)

Schedule of Comprehensive Income (Loss) [Table Text Block]

Other Comprehensive Income (Loss)

Details of other comprehensive income (loss) are as follows:

	Three Months Ended March 31,
	2021						2020
	Pre-Tax Amount		Tax (Benefit) Expense		Net Amount		Pre-Tax Amount		Tax (Benefit) Expense		Net Amount
Foreign currency translation adjustments	$	(496)	$	(62)	$	(434)	$	(28,767)	$	(510)	$	(28,257)
Post-employment benefits:
Reclassification of net actuarial losses (gains) and prior service cost into other income, net and included in net periodic pension costs	68		16		52		(17)		(4)		(13)
Unrealized gain (loss) on cash flow hedge	8,758		2,143		6,615		(13,891)		(3,451)		(10,440)
Reclassification of interest from cash flow hedge into interest expense	2,992		732		2,260		1,017		254		763
Other comprehensive income (loss)	$	11,322	$	2,829	$	8,493	$	(41,658)	$	(3,711)	$	(37,947)

	Nine Months Ended March 31,
	2021						2020
	Pre-Tax Amount		Tax Expense		Net Amount		Pre-Tax Amount		Tax (Benefit) Expense		Net Amount
Foreign currency translation adjustments	$	19,529	$	91	$	19,438	$	(27,356)	$	(742)	$	(26,614)
Post-employment benefits:
Reclassification of net actuarial losses (gains) and prior service cost into other income, net and included in net periodic pension costs	203		49		154		(50)		(12)		(38)
Unrealized gain (loss) on cash flow hedge	6,017		1,473		4,544		(14,249)		(3,509)		(10,740)
Reclassification of interest from cash flow hedge into interest expense	8,504		2,081		6,423		2,350		579		1,771
Other comprehensive income (loss)	$	34,253	$	3,694	$	30,559	$	(39,305)	$	(3,684)	$	(35,621)

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Segment Information (Tables)

9 Months Ended

Mar. 31, 2021

Segment Reporting [Abstract]

Segment financial information

Three Months Ended	Service Center Based Distribution		Fluid Power & Flow Control		Total
March 31, 2021
Net sales	$	572,892	$	268,045	$	840,937
Operating income for reportable segments	65,553		30,829		96,382
Depreciation and amortization of property	4,230		850		5,080
Capital expenditures	3,150		578		3,728
March 31, 2020
Net sales	$	574,368	$	256,429	$	830,797
Operating income for reportable segments	53,014		26,449		79,463
Depreciation and amortization of property	4,373		1,007		5,380
Capital expenditures	3,588		670		4,258

Nine Months Ended	Service Center Based Distribution		Fluid Power & Flow Control		Total
March 31, 2021
Net sales	$	1,601,866	$	738,165	$	2,340,031
Operating income for reportable segments	158,108		83,337		241,445
Assets used in business	1,385,648		919,740		2,305,388
Depreciation and amortization of property	12,877		2,764		15,641
Capital expenditures	10,680		1,497		12,177
March 31, 2020
Net sales	$	1,753,316	$	767,260	$	2,520,576
Operating income for reportable segments	167,279		82,755		250,034
Assets used in business	1,310,754		978,775		2,289,529
Depreciation and amortization of property	12,831		3,166		15,997
Capital expenditures	14,022		2,201		16,223

Reconciliation of operating income for reportable segments to the consolidated income before income taxes

A reconciliation of operating income for reportable segments to the condensed consolidated income before income taxes is as follows:

	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2021		2020		2021		2020
Operating income for reportable segments	$	96,382	$	79,463	$	241,445	$	250,034
Adjustment for:
Intangible amortization—Service Center Based Distribution	944		3,811		4,507		9,697
Intangible amortization—Fluid Power & Flow Control	7,293		7,291		21,731		21,974
Impairment—Service Center Based Distribution	—		—		49,528		—
Goodwill Impairment—Fluid Power & Flow Control	—		131,000		—		131,000
Corporate and other expense, net	13,678		15,311		41,326		45,402
Total operating income (loss)	74,467		(77,950)		124,353		41,961
Interest expense, net	7,608		8,805		22,919		28,447
Other income, net	(1,657)		(1,428)		(1,746)		(1,643)
Income (loss) before income taxes	$	68,516	$	(85,327)	$	103,180	$	15,157

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Other Income, Net (Tables)

9 Months Ended

Mar. 31, 2021

Other Income and Expenses [Abstract]

Other (income) expense, net

Other income, net consists of the following:

	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2021		2020		2021		2020
Unrealized (gain) loss on assets held in rabbi trust for a non-qualified deferred compensation plan	$	(642)	$	2,182	$	(3,104)	$	1,361
Foreign currency transactions (gain) loss	(485)		(3,501)		1,736		(3,167)
Net other periodic post-employment costs (benefits)	71		(30)		213		(90)
Life insurance (income) expense, net	(543)		(194)		(402)		165
Other, net	(58)		115		(189)		88
Total other income, net	$	(1,657)	$	(1,428)	$	(1,746)	$	(1,643)

XML

Revenue Recognition Revenue Recognition (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Disaggregation of Revenue [Line Items]
Net sales	$ 840,937	$ 830,797	$ 2,340,031	$ 2,520,576
UNITED STATES
Disaggregation of Revenue [Line Items]
Net sales	724,617	724,982	2,016,488	2,188,308
CANADA
Disaggregation of Revenue [Line Items]
Net sales	66,146	59,912	180,851	193,755
Other Countries [Member]
Disaggregation of Revenue [Line Items]
Net sales	50,174	45,903	142,692	138,513
Service Center Based Distribution Segment [Member]
Disaggregation of Revenue [Line Items]
Net sales	572,892	574,368	1,601,866	1,753,316
Service Center Based Distribution Segment [Member] | UNITED STATES
Disaggregation of Revenue [Line Items]
Net sales	461,945	473,069	1,294,643	1,433,133
Service Center Based Distribution Segment [Member] | CANADA
Disaggregation of Revenue [Line Items]
Net sales	66,146	59,912	180,851	193,755
Service Center Based Distribution Segment [Member] | Other Countries [Member]
Disaggregation of Revenue [Line Items]
Net sales	44,801	41,387	126,372	126,428
Fluid Power & Flow Control Segment [Member]
Disaggregation of Revenue [Line Items]
Net sales	268,045	256,429	738,165	767,260
Fluid Power & Flow Control Segment [Member] | UNITED STATES
Disaggregation of Revenue [Line Items]
Net sales	262,672	251,913	721,845	755,175
Fluid Power & Flow Control Segment [Member] | CANADA
Disaggregation of Revenue [Line Items]
Net sales	0	0	0	0
Fluid Power & Flow Control Segment [Member] | Other Countries [Member]
Disaggregation of Revenue [Line Items]
Net sales	$ 5,373	$ 4,516	$ 16,320	$ 12,085

XML

Revenue Recognition Revenue Recognition (Details 1)	3 Months Ended		9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
General Industry [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Customer Industry, Percent	37.00%	36.40%	36.90%	36.70%
Industrial Machinery [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Customer Industry, Percent	15.40%	14.50%	15.00%	13.90%
Food [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Customer Industry, Percent	9.80%	9.30%	10.30%	9.00%
Metals [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Customer Industry, Percent	9.60%	9.70%	9.40%	10.10%
Forest Products [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Customer Industry, Percent	8.30%	8.50%	8.40%	7.40%
Chem/Petrochem [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Customer Industry, Percent	6.50%	6.20%	6.60%	6.30%
Cement & Aggregate [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Customer Industry, Percent	5.90%	5.40%	5.70%	5.40%
Transportation [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Customer Industry, Percent	4.60%	4.60%	4.80%	4.60%
Oil & Gas [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Customer Industry, Percent	2.90%	5.40%	2.90%	6.60%
Total
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Customer Industry, Percent	100.00%	100.00%	100.00%	100.00%
Service Center Based Distribution Segment [Member] | General Industry [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Customer Industry, Percent	35.10%	34.80%	35.60%	34.60%
Service Center Based Distribution Segment [Member] | Industrial Machinery [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Customer Industry, Percent	10.10%	9.90%	9.60%	9.70%
Service Center Based Distribution Segment [Member] | Food [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Customer Industry, Percent	13.20%	12.00%	13.80%	11.60%
Service Center Based Distribution Segment [Member] | Metals [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Customer Industry, Percent	10.90%	11.10%	10.50%	11.30%
Service Center Based Distribution Segment [Member] | Forest Products [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Customer Industry, Percent	10.90%	9.80%	10.90%	9.00%
Service Center Based Distribution Segment [Member] | Chem/Petrochem [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Customer Industry, Percent	3.20%	3.30%	3.40%	3.20%
Service Center Based Distribution Segment [Member] | Cement & Aggregate [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Customer Industry, Percent	8.10%	7.20%	7.80%	7.20%
Service Center Based Distribution Segment [Member] | Transportation [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Customer Industry, Percent	4.70%	4.60%	4.70%	4.70%
Service Center Based Distribution Segment [Member] | Oil & Gas [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Customer Industry, Percent	3.80%	7.30%	3.70%	8.70%
Service Center Based Distribution Segment [Member] | Total
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Customer Industry, Percent	100.00%	100.00%	100.00%	100.00%
Fluid Power & Flow Control Segment [Member] | General Industry [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Customer Industry, Percent	41.10%	39.90%	40.10%	41.60%
Fluid Power & Flow Control Segment [Member] | Industrial Machinery [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Customer Industry, Percent	26.70%	24.70%	26.60%	23.70%
Fluid Power & Flow Control Segment [Member] | Food [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Customer Industry, Percent	2.60%	3.10%	2.90%	2.90%
Fluid Power & Flow Control Segment [Member] | Metals [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Customer Industry, Percent	6.90%	6.50%	6.80%	7.40%
Fluid Power & Flow Control Segment [Member] | Forest Products [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Customer Industry, Percent	2.70%	5.70%	2.90%	3.90%
Fluid Power & Flow Control Segment [Member] | Chem/Petrochem [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Customer Industry, Percent	13.50%	12.80%	13.70%	13.30%
Fluid Power & Flow Control Segment [Member] | Cement & Aggregate [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Customer Industry, Percent	1.10%	1.30%	1.10%	1.10%
Fluid Power & Flow Control Segment [Member] | Transportation [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Customer Industry, Percent	4.30%	4.70%	4.80%	4.40%
Fluid Power & Flow Control Segment [Member] | Oil & Gas [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Customer Industry, Percent	1.10%	1.30%	1.10%	1.70%
Fluid Power & Flow Control Segment [Member] | Total
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Customer Industry, Percent	100.00%	100.00%	100.00%	100.00%

XML

Revenue Recognition Revenue Recognition (Details 2)	3 Months Ended		9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Product Line, Percent	100.00%	100.00%	100.00%	100.00%
Power Transmission [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Product Line, Percent	27.80%	26.60%	28.00%	27.20%
Fluid Power [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Product Line, Percent	21.30%	21.70%	21.10%	20.90%
Bearings, Linear & Seals [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Product Line, Percent	19.70%	19.40%	19.90%	18.60%
General Maintenance; Hose Products [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Product Line, Percent	20.00%	20.40%	19.10%	21.10%
Specialty Flow Control [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Product Line, Percent	11.20%	11.90%	11.90%	12.20%
Service Center Based Distribution Segment [Member]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Product Line, Percent	100.00%	100.00%	100.00%	100.00%
Service Center Based Distribution Segment [Member] | Power Transmission [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Product Line, Percent	37.20%	34.80%	37.40%	34.70%
Service Center Based Distribution Segment [Member] | Fluid Power [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Product Line, Percent	13.40%	13.30%	13.30%	13.30%
Service Center Based Distribution Segment [Member] | Bearings, Linear & Seals [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Product Line, Percent	28.90%	27.90%	28.90%	26.50%
Service Center Based Distribution Segment [Member] | General Maintenance; Hose Products [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Product Line, Percent	20.50%	24.00%	20.40%	25.50%
Service Center Based Distribution Segment [Member] | Specialty Flow Control [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Product Line, Percent	0.00%	0.00%	0.00%	0.00%
Fluid Power & Flow Control Segment [Member]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Product Line, Percent	100.00%	100.00%	100.00%	100.00%
Fluid Power & Flow Control Segment [Member] | Power Transmission [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Product Line, Percent	7.70%	8.50%	7.80%	9.90%
Fluid Power & Flow Control Segment [Member] | Fluid Power [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Product Line, Percent	38.30%	40.50%	38.20%	38.40%
Fluid Power & Flow Control Segment [Member] | Bearings, Linear & Seals [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Product Line, Percent	0.20%	0.30%	0.40%	0.30%
Fluid Power & Flow Control Segment [Member] | General Maintenance; Hose Products [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Product Line, Percent	18.80%	12.20%	16.00%	11.10%
Fluid Power & Flow Control Segment [Member] | Specialty Flow Control [Domain]
Disaggregation of Revenue [Line Items]
Disaggregated Revenue by Product Line, Percent	35.00%	38.50%	37.60%	40.30%

XML

Revenue Recognition Revenue Recognition (Details 3) - USD ($) $ in Thousands	9 Months Ended
	Mar. 31, 2021	Jun. 30, 2020
Revenue from Contract with Customer [Abstract]
Contract Assets	$ 11,838	$ 8,435
Contract Assets Period $ Change	$ 3,403
Contract Assets Period % Change	40.30%

XML

Business Combinations Business Combinations Textuals (Details) - USD ($)	3 Months Ended
	Mar. 31, 2021	Dec. 31, 2020	Oct. 05, 2020	Aug. 21, 2019
Gibson Engineering [Domain]
Business Acquisition, Percentage of Voting Interests Acquired		100.00%
Total Consideration	$ 15,450,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net		$ 1,099,000
Intangible Assets, Net (Including Goodwill)		$ 14,351,000
Funding from Holdback Payments	1,938,000
Debt Instrument, Interest Rate, Stated Percentage		1.00%
Advanced Control Solutions [Member]
Total Consideration	17,888,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net			$ 1,231,000
Intangible Assets, Net (Including Goodwill)			$ 16,657,000
Olympus Controls [Member]
Business Acquisition, Percentage of Voting Interests Acquired				100.00%
Total Consideration	$ 36,642,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net				$ 9,540,000
Intangible Assets, Net (Including Goodwill)				$ 27,102,000

XML

Goodwill and Intangibles (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020	Jun. 30, 2020
Changes in the carrying amount of goodwill by reportable segment
Balance at beginning of period			$ 540,594	$ 661,991	$ 661,991
Goodwill acquired during the period			15,688		11,274
Other, primarily currency translation			2,914		(1,671)
Balance at March 31, 2021	$ 559,196		559,196		540,594
FCX Performance, Inc
Changes in the carrying amount of goodwill by reportable segment
Balance at March 31, 2021	309,012		309,012
Service Center Based Distribution Segment [Member]
Changes in the carrying amount of goodwill by reportable segment
Balance at beginning of period			208,570	213,634	213,634
Goodwill adjusted during the period					(3,393)
Goodwill acquired during the period			0
Impairment					0
Other, primarily currency translation			2,914		(1,671)
Balance at March 31, 2021	211,484		211,484		208,570
Fluid Power & Flow Control Segment [Member]
Changes in the carrying amount of goodwill by reportable segment
Balance at beginning of period			332,024	448,357	448,357
Goodwill acquired during the period			15,688		14,667
Impairment	0	$ (131,000)	0	$ (131,000)	(131,000)
Other, primarily currency translation			0		0
Balance at March 31, 2021	$ 347,712		$ 347,712		332,024
Fluid Power & Flow Control Segment [Member] | FCX Performance, Inc
Changes in the carrying amount of goodwill by reportable segment
Impairment					$ (131,000)

XML

Goodwill and Intangibles (Details 1) - USD ($) $ in Thousands	Mar. 31, 2021	Jun. 30, 2020
Amortization details resulting from business combinations
Amount	$ 471,336	$ 550,877
Accumulated Amortization	183,650	207,662
Net Book Value	287,686	343,215
Customer relationships
Amortization details resulting from business combinations
Amount	352,720	426,017
Accumulated Amortization	137,519	162,965
Net Book Value	215,201	263,052
Trade names
Amortization details resulting from business combinations
Amount	105,065	111,453
Accumulated Amortization	36,172	34,815
Net Book Value	68,893	76,638
Vendor relationships
Amortization details resulting from business combinations
Amount	11,481	11,329
Accumulated Amortization	9,666	8,934
Net Book Value	1,815	2,395
Other Intangible Assets
Amortization details resulting from business combinations
Amount	2,070	2,078
Accumulated Amortization	293	948
Net Book Value	$ 1,777	$ 1,130

XML

Goodwill and Intangibles (Details2)	9 Months Ended
	Mar. 31, 2021 USD ($)
Acquired Indefinite-lived Intangible Assets [Line Items]
Finite-lived Intangible Assets Acquired	$ 15,320,000
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	17 years 8 months 12 days
Customer Relationships [Member]
Acquired Indefinite-lived Intangible Assets [Line Items]
Finite-lived Intangible Assets Acquired	$ 10,390,000
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	20 years
Trade Names [Member]
Acquired Indefinite-lived Intangible Assets [Line Items]
Finite-lived Intangible Assets Acquired	$ 3,840,000
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	15 years
Other Intangible Assets [Member]
Acquired Indefinite-lived Intangible Assets [Line Items]
Finite-lived Intangible Assets Acquired	$ 1,090,000
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	5 years 10 months 24 days

XML

Goodwill and Intangibles (Details Textuals) $ in Thousands	3 Months Ended	9 Months Ended
	Mar. 31, 2021 USD ($)	Mar. 31, 2021 USD ($)	Jan. 01, 2021	Jun. 30, 2020 USD ($)	Jun. 30, 2019 USD ($)
Goodwill [Line Items]
Number of Reporting Units	8
Number of Reporting Units with Fair Value Exceeding Carrying Value			7
Reporting Unit, Percentage of Fair Value in Excess of Carrying Amount			25.00%
Goodwill	$ 559,196	$ 559,196		$ 540,594	$ 661,991
Impairment expense		45,033
Tangible Asset Impairment Charges		1,983
Operating Lease, Impairment Loss		2,512
Goodwill and Intangibles (Textuals) [Abstract]
Amortization expense for the remainder of 2021	8,300	8,300
Amortization expense for 2022	31,400	31,400
Amortization expense for 2023	29,500	29,500
Amortization expense for 2024	25,800	25,800
Amortization expense for 2025	23,600	23,600
Amortization expense for 2026	21,900	21,900
Service Center Based Distribution Segment [Member]
Goodwill [Line Items]
Goodwill	211,484	211,484		208,570	213,634
Accumulated goodwill impairment losses	64,794	64,794
Fluid Power & Flow Control Segment [Member]
Goodwill [Line Items]
Goodwill	347,712	347,712		$ 332,024	$ 448,357
Accumulated goodwill impairment losses	167,605	167,605
FCX Performance, Inc
Goodwill [Line Items]
Reporting Unit, Percentage of Fair Value in Excess of Carrying Amount			14.00%
Goodwill	$ 309,012	$ 309,012

XML

Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Jun. 30, 2020
Long-term Debt Instruments [Line Items]
Total debt	$ 853,206	$ 935,276
Less: unamortized debt issuance costs	1,158	1,487
Debt, Long-term and Short-term, Combined Amount	852,048	933,789
Long-term Debt [Member]
Long-term Debt Instruments [Line Items]
Long-term Debt	560,000	589,250
Asset-backed Securities, Securitized Loans and Receivables [Member]
Long-term Debt Instruments [Line Items]
Trade receivable securitization facility	162,300	175,000
Prudential Facility - Series C [Member]
Long-term Debt Instruments [Line Items]
Long-term Debt	80,000
Prudential Facility - Series D [Member]
Long-term Debt Instruments [Line Items]
Long-term Debt	25,000	25,000
Prudential Facility - Series E [Member] [Member]
Long-term Debt Instruments [Line Items]
Long-term Debt	25,000	25,000
State of Ohio Assumed Debt [Member]
Long-term Debt Instruments [Line Items]
Long-term Debt	$ 906	$ 1,026

XML

Debt (Textuals) (Details) - USD ($) $ in Thousands	9 Months Ended
	Mar. 31, 2021	Jun. 30, 2020
Long-term Debt Instruments [Line Items]
Letters of Credit Outstanding, Amount	$ 4,548	$ 4,475
Revolving Credit Facility [Member]
Long-term Debt Instruments [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	250,000
Letters of Credit Outstanding, Amount	200	1,873
Line of Credit Facility, Remaining Borrowing Capacity	$ 249,800	$ 248,127
Revolving Credit Facility [Member] | Minimum [Member]
Long-term Debt Instruments [Line Items]
Line of Credit Facility, Commitment Fee Percentage	0.10%
Revolving Credit Facility [Member] | Maximum [Member]
Long-term Debt Instruments [Line Items]
Line of Credit Facility, Commitment Fee Percentage	0.20%
Long-term Debt [Member]
Long-term Debt Instruments [Line Items]
Debt Instrument, Face Amount	$ 780,000
Long-term Debt, Percentage Bearing Variable Interest, Percentage Rate	1.88%	1.94%
Long-term Debt	$ 560,000	$ 589,250
Asset-backed Securities, Securitized Loans and Receivables [Member]
Long-term Debt Instruments [Line Items]
Debt Instrument, Face Amount	$ 250,000
Long-term Debt, Percentage Bearing Variable Interest, Percentage Rate	1.30%	1.07%
Debt Instrument, Interest Rate, Stated Percentage	0.98%
Prudential Facility [Domain]
Long-term Debt Instruments [Line Items]
Long-term Debt	$ 130,000	$ 170,000
Prudential Facility [Domain] | Minimum [Member]
Long-term Debt Instruments [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	0.25%
Prudential Facility [Domain] | Maximum [Member]
Long-term Debt Instruments [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	1.25%
Prudential Facility - Series C [Member]
Long-term Debt Instruments [Line Items]
Debt Instrument, Face Amount		120,000
Long-term Debt	$ 80,000
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate	3.19%
Repayments of Debt	$ 40,000
Prudential Facility - Series D [Member]
Long-term Debt Instruments [Line Items]
Long-term Debt	$ 25,000	25,000
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate	3.21%
Prudential Facility - Series E [Member] [Member]
Long-term Debt Instruments [Line Items]
Long-term Debt	$ 25,000	25,000
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate	3.08%
State of Ohio Assumed Debt [Member]
Long-term Debt Instruments [Line Items]
Debt Instrument, Face Amount	$ 2,359
Long-term Debt	$ 906	$ 1,026
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate	1.50%

XML

Derivatives Derivatives (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020	Jun. 30, 2020	Jun. 30, 2019
Derivative [Line Items]
Derivative, Amount of Hedged Item	$ 420,000		$ 420,000		$ 431,000	$ 463,000
Derivative, Fixed Interest Rate	1.63%		1.63%		2.61%
Derivative, Variable Interest Rate	3.38%		3.38%		4.36%
Interest Rate Cash Flow Hedge Liability at Fair Value	$ 13,157		$ 13,157		$ 26,179
Reclassification of interest from cash flow hedge into interest expense	$ 2,992	$ 1,017	$ 8,504	$ 2,350

XML

Fair Value Measurements (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Jun. 30, 2020
Level 1 [Member] | Recurring [Member]
Fair Value Measurements (Textuals) [Line Items]
Marketable securities	$ 15,729	$ 12,259

XML

Shareholders' Equity Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Mar. 31, 2021	Mar. 31, 2020
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at beginning of period			$ (129,430)				$ (129,430)
Other comprehensive income (loss), Cash flow hedge	$ 6,615			$ (10,440)			4,544	$ (10,740)
Amounts reclassified from accumulated other comprehensive (loss) income, Cash flow hedge	2,260			763			6,423	1,771
Net current-period other comprehensive income (loss), net of taxes, Foreign Currency Translation Adjustment	(434)			(28,257)			19,438	(26,614)
Net current-period other comprehensive income (loss), net of taxes, Total accumulated other comprehensive income (loss)	8,493			(37,947)			30,559	(35,621)
Balance at end of period	(98,871)						(98,871)
Reclassification out of Accumulated Other Comprehensive Income [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Amounts reclassified from accumulated other comprehensive (loss) income	2,312			750			6,577	1,733
Amounts reclassified from accumulated other comprehensive (loss) income, Postemployment benefits	52			(13)			154	(38)
Amounts reclassified from accumulated other comprehensive (loss) income, Cash flow hedge	2,260			763			6,423	1,771
Accumulated Foreign Currency Adjustment Attributable to Parent [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at beginning of period	(85,222)		(105,094)	(84,687)		$ (86,330)	(105,094)	(86,330)
Other comprehensive income (loss), Foreign Currency Translation Adjustment	(434)			(28,257)			19,438	(26,614)
Amounts reclassified from accumulated other comprehensive (loss) income	0			0			0	0
Net current-period other comprehensive income (loss), net of taxes, Foreign Currency Translation Adjustment	(434)			(28,257)			19,438	(26,614)
Balance at end of period	(85,656)	$ (85,222)		(112,944)	$ (84,687)		(85,656)	(112,944)
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at beginning of period	(4,462)		(4,564)	(2,877)		(2,852)	(4,564)	(2,852)
Other comprehensive income (loss), Postemployment Benefits,	0			0			0	0
Net current-period other comprehensive income (loss), net of taxes, Postemployment benefits	52			(13)			154	(38)
Balance at end of period	(4,410)	(4,462)		(2,890)	(2,877)		(4,410)	(2,890)
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at beginning of period	(17,680)		(19,772)	(9,996)		(10,704)	(19,772)	(10,704)
Other comprehensive income (loss), Cash flow hedge	6,615			(10,440)			4,544	(10,740)
Net current-period other comprehensive income (loss), net of taxes, Cash flow hedge	8,875			(9,677)			10,967	(8,969)
Balance at end of period	(8,805)	(17,680)		(19,673)	(9,996)		(8,805)	(19,673)
AOCI Attributable to Parent [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at beginning of period	(107,364)		(129,430)	(97,560)		(99,886)	(129,430)	(99,886)
Other comprehensive income (loss), Total accumulated other comprehensive income (loss)	6,181			(38,697)			23,982	(37,354)
Net current-period other comprehensive income (loss), net of taxes, Total accumulated other comprehensive income (loss)	8,493	14,557	$ 7,509	(37,947)	7,573	$ (5,247)	30,559	(35,621)
Balance at end of period	$ (98,871)	$ (107,364)		$ (135,507)	$ (97,560)		$ (98,871)	$ (135,507)

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Shareholders' Equity (Details) 1 - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Other comprehensive income (loss):
Foreign currency translation adjustments, before Tax	$ (496)	$ (28,767)	$ 19,529	$ (27,356)
Foreign currency translation adjustments, Tax	(62)	(510)	91	(742)
Foreign currency translation adjustments, Net of Tax	(434)	(28,257)	19,438	(26,614)
Post-employment benefits:
Reclassification of net actuarial losses (gains) and prior service cost into other income, net and included in net periodic pension costs, before Tax	68	(17)	203	(50)
Reclassification of net actuarial losses (gains) and prior service cost into other income, net and included in net periodic pension costs, Tax	16	(4)	49	(12)
Reclassification of net actuarial losses (gains) and prior service cost into other income, net and included in net periodic pension costs, Net of Tax	52	(13)	154	(38)
Unrealized gain (loss) on cash flow hedge, before Tax	8,758	(13,891)	6,017	(14,249)
Unrealized gain (loss) on cash flow hedge, Tax	2,143	(3,451)	1,473	(3,509)
Unrealized gain (loss) on cash flow hedge, Net of Tax	6,615	(10,440)	4,544	(10,740)
Reclassification of interest from cash flow hedge into interest expense	2,992	1,017	8,504	2,350
Reclassification of interest from cash flow hedge into interest expense, Tax	732	254	2,081	579
Reclassification of interest from cash flow hedge into interest expense, Net of Tax	2,260	763	6,423	1,771
Other comprehensive income (loss), before tax	11,322	(41,658)	34,253	(39,305)
Other comprehensive income (loss), tax	2,829	(3,711)	3,694	(3,684)
Other comprehensive income (loss), net of tax	$ 8,493	$ (37,947)	$ 30,559	$ (35,621)

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Shareholders' Equity (Textuals) (Details) shares in Thousands	9 Months Ended
	Mar. 31, 2021 shares
Stockholders' Equity Note [Abstract]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	291

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Segment Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020	Jun. 30, 2020
Segment Reporting Information [Line Items]
Net sales	$ 840,937	$ 830,797	$ 2,340,031	$ 2,520,576
Operating income for reportable segments	74,467	(77,950)	124,353	41,961
Assets used in business	2,305,388	2,289,529	2,305,388	2,289,529	$ 2,283,551
Depreciation and amortization of property	5,080	5,380	15,641	15,997
Capital expenditures	3,728	4,258	12,177	16,223
Service Center Based Distribution Segment [Member]
Segment Reporting Information [Line Items]
Net sales	572,892	574,368	1,601,866	1,753,316
Operating income for reportable segments	65,553	53,014	158,108	167,279
Assets used in business	1,385,648	1,310,754	1,385,648	1,310,754
Depreciation and amortization of property	4,230	4,373	12,877	12,831
Capital expenditures	3,150	3,588	10,680	14,022
Fluid Power & Flow Control Segment [Member]
Segment Reporting Information [Line Items]
Net sales	268,045	256,429	738,165	767,260
Operating income for reportable segments	30,829	26,449	83,337	82,755
Assets used in business	919,740	978,775	919,740	978,775
Depreciation and amortization of property	850	1,007	2,764	3,166
Capital expenditures	578	670	1,497	2,201
Reportable Segments Total
Segment Reporting Information [Line Items]
Operating income for reportable segments	$ 96,382	$ 79,463	$ 241,445	$ 250,034

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Segment Information (Details 1) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020	Jun. 30, 2020
Reconciliation of operating income for reportable segments to the consolidated income before income taxes
Operating income for reportable segments	$ 74,467	$ (77,950)	$ 124,353	$ 41,961
Adjustment for:
Intangible amortization			26,238	31,671
Corporate and other expense, net	13,678	15,311	41,326	45,402
Operating income (loss)	74,467	(77,950)	124,353	41,961
Interest expense, net	7,608	8,805	22,919	28,447
Other income, net	(1,657)	(1,428)	(1,746)	(1,643)
Income (loss) before income taxes	68,516	(85,327)	103,180	15,157
Reportable Segments Total
Reconciliation of operating income for reportable segments to the consolidated income before income taxes
Operating income for reportable segments	96,382	79,463	241,445	250,034
Adjustment for:
Operating income (loss)	96,382	79,463	241,445	250,034
Service Center Based Distribution Segment [Member]
Reconciliation of operating income for reportable segments to the consolidated income before income taxes
Operating income for reportable segments	65,553	53,014	158,108	167,279
Adjustment for:
Intangible amortization	944	3,811	4,507	9,697
Impairment - Service Center Based Distribution	0	0	49,528	0
Goodwill Impairment - Fluid Power & Flow Control					$ 0
Operating income (loss)	65,553	53,014	158,108	167,279
Fluid Power & Flow Control Segment [Member]
Reconciliation of operating income for reportable segments to the consolidated income before income taxes
Operating income for reportable segments	30,829	26,449	83,337	82,755
Adjustment for:
Intangible amortization	7,293	7,291	21,731	21,974
Goodwill Impairment - Fluid Power & Flow Control	0	131,000	0	131,000	$ 131,000
Operating income (loss)	$ 30,829	$ 26,449	$ 83,337	$ 82,755

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Segment Information (Details Textuals) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Segment Reporting Information [Line Items]
Inventory, LIFO Reserve, Period Charge	$ 781	$ 1,950	$ 2,777	$ 4,237
Net sales	840,937	830,797	2,340,031	2,520,576
Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Net sales	$ 8,835	$ 7,685	$ 23,773	$ 22,434

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Other Income, Net (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Other Income and Expenses [Abstract]
Unrealized (gain) loss on assets held in rabbi trust for a non-qualified deferred compensation plan	$ (642)	$ 2,182	$ (3,104)	$ 1,361
Foreign currency transactions (gain) loss	(485)	(3,501)	1,736	(3,167)
Net other periodic post-employment costs (benefits)	71	(30)	213	(90)
Life insurance (income) expense, net	(543)	(194)	(402)	165
Other, net	(58)	115	(189)	88
Total other income, net	$ (1,657)	$ (1,428)	$ (1,746)	$ (1,643)