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OVERVIEW 
With more than 4,600 associates across North America, Applied 
Industrial Technologies (“App lied,” the “Company,” “We,” “Us” 
or “Our”) is a leading industrial distributor serving MRO and OEM 
customers in virtually every industry.  In addition, Applied 
provides engineering, design and systems integration for 
industrial and fluid power applications, as well as customized 
mechanical, fabricated rubber and fluid power shop services.  
Applied also offers maintenance training  and inventory 
management solutions that provide added value to its customers.  
We have a long tradition of growth dating back to 1923, the year 
our business was founded in Cleveland, Ohio.  At June 30, 2012, 
business was conducted in the United States , Canada, Mexico 
and Puerto Rico from 476 facilities.   
When reviewing the discussion and analysis set forth below, 
please note that the majority of SKUs we se ll in any given year 
were not sold in the prior year, resulting  in the inability to 
quantify certain commonly used comparative me trics analyzing 
sales, such as changes in product mix and volume. 
Our fiscal 2012 sales were $2.4 billion, an increase of $162.6 
million or 7.3% compared to the prior year.  Net sales from 
acquired businesses added $16.6 million or 0.7% to the current 
year.  Gross margin of 27.6% compares to 27.7% in the prior 
year.  Our operating margin increased to 7.1% compared to the 
prior year’s 6.8%.  Our earnings per share was $2 .54 versus $2.24 
in fiscal year 2011, an increase of 13.4%. 
Our consolidated balance sheet remains strong.  Shareholders’ 
equity is $672.1 million, up from $633.6 million at June 30, 2011.  
Working capital increased $31.4 million from June 30, 2011 to 
$435.6 million at June 30, 2012.  Our current ratio remains strong 
at 2.9 to 1, consistent with the June 30, 2011 level. 
Applied monitors several economic indices that have been key 
indicators for industrial economic activity in the United States.  
These include the Indu strial Production and Manufacturing 
Capacity Utilization (MCU) indices published by the Federal 
Reserve Board and the Purchasing Managers Index (PMI) 
published by the Institute for S upply 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 ou t machinery and require 
replacement parts.  Our sales tend to lag the MCU by up  
to six months. 
Industrial production increased 0.4% in June after having declined 
0.2% in May.  In the manufacturing sector, outputs advanced 
0.7% in June, reversing a decline of 0.7% in May and increased at 
an annual rate of 1.4% in the second quarter.  In June, capacity 
utilization for manufacturing moved up 0.4% to 77.7%, a rate 
13.9 percentage points above its trough in June of 2009 and was 
still 1.1 percentage points below its long-run  average. The ISM PMI 
registered 49.7 in June, the first time this indicator dropped below 
50 (its expansionary threshold) since July 2009.  We remain 
optimistic about the U.S. industrial economy for our fiscal 2013. 
YEAR ENDED JUNE 30, 2012 vs. 2011 
The following table is included to aid in review of Applied’s 
statements of consolidated income. 
  
Year Ended June 30,           
As a % of Net Sales 
Change in 
$'s Versus 
Prior Period 
  2012  2011 %  Increase 
Net Sales  100.0 %  100.0 % 7. 3 % 
Gross Profit  27.6 %  27.7 % 6. 7 % 
Selling, Distribution & Administrative  20.5 %  20.9 % 5. 1 % 
Operating Income  7.1 %  6.8 % 11.7 % 
Net Income  4.6 %  4.4 % 12.4 % 
Net sales in fiscal 2012 were $2.4 billion, which was $162.6 million 
or 7.3% above the prior year, driven by improvements in the 
industrial economy as well as a continued focus on profitable sales 
growth.  Incremental net sales from companies acquired since the