Applied Industrial (AIT) 8-K Applied Industrial Technologies Reports Fiscal 2009 Third Quarter Results

EXHIBIT 99.1

Applied Industrial Technologies Reports
Fiscal 2009 Third Quarter Results

CLEVELAND, Ohio, April 23, 2009- Applied Industrial Technologies (NYSE: AIT) today reported sales and earnings for its fiscal 2009 third quarter, ended March 31, 2009.

Net sales for the third quarter decreased 14.8% to $451,647,000 compared to $530,156,000 in the same period last year. Net income for the quarter declined 51% to $11,560,000, or $0.27 per share compared to $23,595,000 or $0.55 per share last year.

For the nine months ended March 31, 2009, sales were $1,497,965,000 a decrease of 4% compared to $1,559,711,000 in the same period last year. Net income declined 29.2% to $50,290,000 compared to $71,019,000 last year. Earnings per share declined 27.8% to $1.17 from $1.62 for the nine months last year.

“Our results contained no surprises given the overall economic climate,” said Applied Chairman & Chief Executive Officer David L. Pugh. “Sales generation and margin management will continue to be our greatest challenges for the near term as our customers respond to significant consumer withdrawal and we face increases in the competitive environment as a result.

“In light of this, we have made prudent moves to reduce costs in line with demand with a strong focus on asset management. As a result, our cash generation continues to be strong which puts us in a solid strategic position going forward.

“The future remains difficult to forecast as the economic turmoil continues. At this time, we see no relief in this calendar year. We believe our full-year earnings guidance of $1.30 to $1.70 per share is appropriate. From a sales perspective, we believe we will be at, or close to, the low end of our guidance of $1.95 billion to $2.1 billion.

“The company is stable and our balance sheet is healthy, providing an effective base to weather the current economic challenges. We believe our balanced focus on business fundamentals will protect us in the short term and position us well for the long term.”

Applied will host its conference call for investors and analysts at 4 p.m. ET today, Thursday, April 23. The call will be conducted by Chairman & CEO Dave Pugh, President & COO Ben Mondics and Vice President & CFO Mark Eisele. To join the call, dial 1-800-447-0521 (for US/Canada callers) or 1-847-413-3238 (for International callers) prior to the scheduled start using conference ID 24082132. A live audio webcast can be accessed online atwww.Applied.com. A replay of the teleconference will be available for two weeks by dialing 1-888-843-8996 (US/Canada) or 1-630-652-3044 (International) using conference ID 24082132.

With approximately 470 facilities and 5,000 employee associates across North America, Applied Industrial Technologies is an industrial distributor that offers more than 3 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, 2008, Applied posted sales of $2.1 billion. Applied can be visited on the Internet at http://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. Forward-looking statements are often identified by qualifiers such as “believe,” “guidance,” “see” and similar expressions. Applied intends that such forward-looking statements be subject to the safe harbors created thereby. 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 the Company 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, except as required by law.

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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				Nine Months Ended
	March 31,				March 31,
	2009		2008		2009		2008
Net Sales	$	451,647	$	530,156	$	1,497,965	$	1,559,711
Cost of sales		329,401		385,656		1,094,192		1,133,664
		122,246		144,500		403,773		426,047
Selling, distribution and administrative, including depreciation		101,227		106,815		316,572		311,878
Operating Income		21,019		37,685		87,201		114,169
Interest expense, net		1,183		241		3,170		516
Other expense, net		83		162		3,123		553
Income Before Income Taxes		19,753		37,282		80,908		113,100
Income Tax Expense		8,193		13,687		30,618		42,081
Net Income	$	11,560	$	23,595	$	50,290	$	71,019
Net Income Per Share — Basic	$	0.27	$	0.55	$	1.19	$	1.65
Net Income Per Share — Diluted	$	0.27	$	0.55	$	1.17	$	1.62
Average Shares Outstanding — Basic		42,244		42,558		42,292		42,963
Average Shares Outstanding — Diluted		42,662		43,259		42,800		43,751

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) At the end of August 2008, we completed the acquisition of Fluid Power Resource, LLC, including seven fluid power businesses for a cost of $167.0 million. The results of operations have been included in the condensed statements of consolidated income as of the acquisition date. Preliminary purchase accounting allocations, including amounts for goodwill and intangible assets, have been updated to reflect current information in the condensed consolidated balance sheet as of March 31, 2009.

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

	March 31,		June 30,
	2009		2008
Assets
Cash and cash equivalents	$	48,216	$	101,830
Accounts receivable, net of allowances of $6,956 and $6,119		209,193		245,119
Inventories		249,217		210,723
Other current assets		33,835		48,525
Total current assets		540,461		606,197
Property, net		63,594		64,997
Intangibles, net		97,002		19,164
Goodwill		96,878		64,685
Other assets		49,912		43,728
Total Assets	$	847,847	$	798,771
Liabilities
Accounts payable	$	77,831	$	109,822
Short-term debt		50,000
Other accrued liabilities		73,786		87,189
Total current liabilities		201,617		197,011
Long-term debt		75,000		25,000
Other liabilities		65,912		74,685
Total Liabilities		342,529		296,696
Shareholders’ Equity		505,318		502,075
Total Liabilities and Shareholders’ Equity	$	847,847	$	798,771

APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS
(Amounts in thousands)

	Nine Months Ended March 31,
	2009			2008
Cash Flows from Operating Activities
Net income	$	50,290		$	71,019
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		9,622			9,081
Amortization of intangibles		6,952			1,127
Share-based compensation		3,582			2,722
Gain on sale of property		(215	)		(1,192	)
Treasury shares contributed to employee benefit and deferred compensation plans		336			683
Changes in operating assets and liabilities, net of acquisitions		(14,864	)		(22,117	)
Other, net		(1,204	)		627
Net Cash provided by Operating Activities		54,499			61,950
Cash Flows from Investing Activities
Property purchases		(5,377	)		(6,108	)
Proceeds from property sales		416			1,881
Net cash paid for acquisition of businesses, net of cash acquired		(172,170	)		(11,128	)
Other					(78	)
Net Cash used in Investing Activities		(177,131	)		(15,433	)
Cash Flows from Financing Activities
Net short-term borrowings under revolving credit facility		50,000
Borrowings under revolving credit facility classified as long-term		50,000
Long-term debt repayments					(50,000	)
Purchases of treasury shares		(1,210	)		(33,224	)
Dividends paid		(19,037	)		(19,382	)
Excess tax benefits from share-based compensation		308			3,153
Exercise of stock options		269			1,458
Other		(1,119	)
Net Cash provided by (used in) Financing Activities		79,211			(97,995	)
Effect of Exchange Rate Changes on Cash		(10,193	)		2,393
Decrease in cash and cash equivalents		(53,614	)		(49,085	)
Cash and cash equivalents at beginning of period		101,830			119,665
Cash and Cash Equivalents at End of Period	$	48,216		$	70,580