Applied Industrial (AIT) 8-K Applied Industrial Technologies Reports 21% Earnings Increase on 4% Sales Gain in Fiscal 2007 Second Quarter

EXHIBIT 99

Applied Industrial Technologies Reports 21% Earnings
Increase on 4% Sales Gain in Fiscal 2007 Second Quarter

CLEVELAND, Ohio, January 18, 2007– Applied Industrial Technologies (NYSE: AIT) today reported record sales and earnings for the fiscal 2007 second quarter ended December 31, 2006.

Net sales for the second quarter increased 4% to $472,365,000 from $456,180,000 in the comparable period a year ago. Net income for the quarter increased 21% to $18,568,000, or $0.42 per share, compared to $15,294,000, or $0.33 per share last year. This 27% increase in earnings per share represents the seventeenth consecutive quarter of year-over-year increases of at least 20 percent.

(Note: all per-share amounts have been adjusted to reflect a 3-for-2 stock split paid June 15, 2006.)

For the six months ended December 31, 2006, sales increased 7% to $964,955,000 from $899,385,000 in the same period last year. Net income increased 23% to $39,685,000, or $0.89 per share versus $32,144,000, or $0.69 per share, last year.

Commenting on the company’s performance, Applied Chairman & Chief Executive Officer David L. Pugh said, “We are pleased with our overall performance this quarter, particularly the improvement in our operating margins. Although our sales growth was softer than we expected, we believe the economic outlook suggests continued growth through our fiscal year. We are actively managing our business and are working to keep costs in line with the slower pace of the economy.

“Based on the current state of the industrial economy, and with six months of results under our belt, we now expect our year-end sales to be in the range of $2.01 to $2.04 billion and we are narrowing our guidance range for earnings to between $1.80 and $1.85 per share.”

Applied will host its second quarter conference call for investors and analysts at 11 a.m. ET today (Thursday, January 18th). To join in the call, dial 1-800-818-5264. The call will be conducted by Chairman & CEO David L. Pugh, President & COO Bill L. Purser and CFO Mark O. Eisele. The call will also be webcast and can be accessed live online atwww.applied.com and will be archived there for 14 days. A replay of the teleconference will be available for two weeks at 1-888-203-1112 (passcode 9458809).

Applied anticipates its quarterly dividend announcement to be made on or about January 24, 2007, which coincides with its regularly scheduled Board of Directors meeting.

With more than 440 facilities and 4,600 employee-associates across North America, Applied Industrial Technologies is an industrial distributor that offers more than 2 million parts critical to the operations of 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. For its fiscal year ended June 30, 2006, Applied posted sales of $1.9 billion. Applied can be visited on the Internet athttp://www.applied.com.

This press release contains statements that are forward-looking, as that term is defined by the Securities and Exchange Commission in its rules, regulations and releases. Applied intends that such forward-looking statements be subject to the safe harbors created thereby. Forward-looking statements are often identified by qualifiers such as “believe,” “expect,” “guidance,” and similar expressions. All forward-looking statements are based on current expectations regarding important risk factors including trends in the industrial sector of the economy, and other risk factors identified in Applied’s most recent periodic report and other filings made with the Securities and Exchange Commission. Accordingly, actual results may differ materially from those expressed in the forward-looking statements, and the making of such statements should not be regarded as a representation by Applied or any other person that the results expressed therein will be achieved. Applied assumes no obligation to update publicly or revise any forward-looking statements, whether due to new information, or events, or otherwise.

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For investor relations information contact Mark O. Eisele, Vice President – Chief Financial Officer, at 216-426-4417. For corporate information, contact Richard C. Shaw, Vice President – Communications, at 216-426-4343.

APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CONSOLIDATED INCOME
(Amounts in Thousands, except per share data)

	Three Months Ended						Six Months Ended
	December 31,						December 31,
	2006			2005			2006			2005
Net Sales	$	472,365		$	456,180		$	964,955		$	899,385
Cost of sales		342,214			334,783			699,670			655,684
		130,151			121,397			265,285			243,701
Selling, distribution and administrative expenses		101,222			96,183			202,979			190,685
Operating Income		28,929			25,214			62,306			53,016
Interest expense, net		610			964			1,257			1,736
Other (income) expense, net		(720	)		(314	)		(789	)		(164	)
Income Before Income Taxes		29,039			24,564			61,838			51,444
Income Tax Expense		10,471			9,270			22,153			19,300
Net Income	$	18,568		$	15,294		$	39,685		$	32,144
Net Income Per Share — Basic	$	0.43		$	0.34		$	0.91		$	0.72
Net Income Per Share — Diluted	$	0.42		$	0.33		$	0.89		$	0.69
Average Shares Outstanding — Basic		43,684			44,493			43,811			44,729
Average Shares Outstanding — Diluted		44,630			46,017			44,733			46,317

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(1) Cost of sales for interim financial statements is computed using estimated gross profit percentages which are adjusted throughout the year based upon available information. Adjustments to actual cost are primarily made based on periodic physical inventories and the effect of year-end inventory quantities on LIFO costs.

(2) All share and per share data have been restated to reflect a 3 for 2 stock split effective June 15, 2006.

(3) The Company’s $50 million in senior unsecured term notes mature in December 2007 and have been classified as a current liability as of December 31, 2006.

APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands)

	December 31,		June 30,
	2006		2006
Assets
Cash and cash equivalents	$	84,410	$	106,428
Accounts receivable, net of allowances of $6,146 and $6,000		220,460		231,524
Inventories		215,208		190,537
Other current assets		31,402		29,955
Total current assets		551,480		558,444
Property — net		69,121		70,794
Goodwill		56,966		57,222
Other assets		46,805		44,211
Total Assets	$	724,372	$	730,671
Liabilities
Accounts payable	$	91,377	$	109,440
Current portion of long-term debt		50,791
Other accrued liabilities		67,244		78,991
Total current liabilities		209,412		188,431
Long-term debt		25,000		76,186
Other liabilities		53,033		51,232
Total Liabilities		287,445		315,849
Shareholders’ Equity		436,927		414,822
Total Liabilities and Shareholders’ Equity	$	724,372	$	730,671

APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS
(In Thousands)

	Six Months Ended December 31,
	2006			2005
Cash Flows from Operating Activities
Net income	$	39,685		$	32,144
Adjustments to reconcile net income to cash provided by (used in) operating activities:
Depreciation		6,607			6,624
Share-based compensation and amortization of intangibles and other assets		2,606			1,505
Gain on sale of property		(246	)		(60	)
Treasury shares contributed to employee benefit and deferred compensation plans		1,530			4,435
Changes in operating assets and liabilities, net of effects from acquisition of business		(46,425	)		(65,213	)
Other		132			1,448
Net Cash provided by (used in) Operating Activities		3,889			(19,117	)
Cash Flows from Investing Activities
Property purchases		(5,357	)		(4,189	)
Proceeds from property sales		394			145
Net cash paid for acquisition of businesses, net of cash acquired					(16,298	)
Deposits and other		(1,526	)		(195	)
Net Cash used in Investing Activities		(6,489	)		(20,537	)
Cash Flows from Financing Activities
Purchase of treasury shares		(12,409	)		(28,096	)
Dividends paid		(10,555	)		(8,084	)
Excess tax benefits from share-based compensation		2,130			1,807
Exercise of stock options		1,950			1,165
Net Cash used in Financing Activities		(18,884	)		(33,208	)
Effect of Exchange Rate Changes on Cash		(534	)		836
Decrease in cash and cash equivalents		(22,018	)		(72,026	)
Cash and cash equivalents at beginning of period		106,428			127,136
Cash and Cash Equivalents at End of Period	$	84,410		$	55,110