3 
 
YEAR ENDED JUNE 30, 2011 vs. 2010 
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 
  2011  2010 %  Increase 
Net Sales  100.0 %  100.0 % 16.9 % 
Gross Profit  27.7 %  27.2 % 18.9 % 
Selling, Distribution & Administrative  20.9 %  21.4 % 14.0 % 
Operating Income  6.8 %  5.8 % 37.0 % 
Net Income  4.4 %  3.5 % 46.8 % 
Net sales in fiscal 2011 were $2.2 billion, which was 
$319.6 million or 16.9% above the prior year driven by 
improvements in the industrial economy.  Incremental net sales 
from companies acquired in fiscal 2011 contributed 
approximately $40.8 million or 1.8%.  Currency translation 
increased fiscal year 2012 sales by approximately $16.3 m illion or 
0.7%.  In local currency, net sales from our Canadian operations 
were up 23.1% from fiscal 2010, including 8.4% from 
acquisitions.  In local currency , net sales from our Mexican 
operations were up 17.9%.  The number of selling days in fiscal 
2011 was the same as in fiscal 2010. 
Net sales of our Service Center Based Distribution segment 
increased $234.3 million, or 15.2%, compared to fiscal year 2010 
led by improvements in the i ndustrial economy, with acquisitions 
adding $40.8 million or 2.7%.  Net sales of our Fluid Power 
Businesses segment increased $85.4 million or 23.9%, driven by 
improvements in the industrial economy. 
The sales produ ct mix for fiscal 2011 was 70.5% industrial 
products and 29.5% fluid power products compared to 71.7% 
industrial and 28.3% fluid power in the prior year. 
At June 30, 2011, we had a total of 474 operating facilities in the 
U.S., Canada and Mexico versus 455 at June 30, 2010.  The 
increase in operating facilities represented 11 new locations due 
to acquisitions, the opening of 2 new locations, the impact of 
redefining certain shop operations which added 11 locations, and 
the merger of 5 loca tions with other locations. 
Our gross profit margin increased to 27.7% in fiscal 2011 from 
27.2% in fiscal 2010.  LIFO benefits had a negative 1.0% impact 
on gross profit margin in fiscal 2011 versus fiscal 2010.  LIFO 
benefits recorded during fiscal year 2011 totaled $5.3 million 
which provided an overa ll benefit in our gross profit percent of 
0.2%.  This compares to a LIFO benefit of $23.5 million in fiscal 
2010 which added 1.2% to gross  profit.  Our focused efforts on 
selling products at a higher gross profit margin led to an 
approximate 0.9% improvem ent in gross profit margins.  Other 
positive impacts on margins were an increase of approximately 
0.4% from businesses acquired during the fiscal year and an 
increase of approximately 0.2% due to lower scrap expense.   
SD&A increased $56.7 million or 14.0% during fiscal 2011 
compared to fiscal year 2010, and as a percent of sales decreased 
to 20.9% fr om 21.4% in fiscal 2010.  Associate compensation 
and benefits, including amounts tied to financial performance, 
increased $27.4 million.  Acquisitions added $18.4 million of 
SD&A compared to fiscal year 2010, including additional 
amortization expense of $1.4 million. Incremental expenses 
associated with the development of a new ERP platform totaled 
$8.6 million.  Foreign currency translation had an unfavorable 
impact of $3.1 million in fiscal 2011. 
Operating income increased 37.0% to $150.8 milli on during 
fiscal 2011 from $110.1 million during 2010.  As a percent of 
sales, operating income increased to 6.8% in fiscal 2011 from 
5.8% in 2010.  The $40.7 million increase in operating income 
during fiscal 2011 primarily reflects higher sales levels, improved 
gross profit margins and the impact of leverage on increased 
sales as we kept our SD&A to 20.9% of sales in 2011 versus 
21.4% in fiscal 2010.  
Operating income as a percentage of sales for the Service Center 
Based Distribution  segment increased to 6.5% in fiscal 2011 from