APPLIED INDUSTRIAL TECHNOLOGIES INC

Previous wording

With more than 6,300 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 second quarter of fiscal 2024, business was conducted in the United States, Puerto Rico, Canada, Mexico, Australia, New Zealand, and Singapore from 585 facilities.

Current wording

With more than 6,300 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 2024, business was conducted in the United States, Puerto Rico, Canada, Mexico, Australia, New Zealand, and Singapore from 586 facilities.

Previous wording

Consolidated sales for the quarter ended December 31, 2023 increased $16.9 million or 1.6% compared to the prior year quarter, with acquisitions increasing sales by $14.4 million or 1.4% and favorable foreign currency translation of $3.0 million increasing sales by 0.3%. The Company had operating income of $114.6 million, or operating margin of 10.6% of sales for the quarter ended December 31, 2023 compared to an operating income of $112.9 million, or operating margin of 10.6% of sales for the same quarter in the prior year. The quarter ended December 31, 2023 had net income of $91.2 million compared to net income of $80.5 million in the prior year quarter. The current ratio was 3.7 to 1 at December 31, 2023 and 3.0 to 1 at June 30, 2023.

Current wording

Consolidated sales for the quarter ended March 31, 2024 increased $14.4 million or 1.3% compared to the prior year quarter, with acquisitions increasing sales by $13.1 million or 1.2% and favorable foreign currency translation of $2.5 million increasing sales by 0.2%. The Company had operating income of $121.2 million, or operating margin of 10.6% of sales for the quarter ended March 31, 2024 compared to an operating income of $126.9 million, or operating margin of 11.2% of sales for the same quarter in the prior year. The Company had net income of $97.2 million for both the quarter ended March 31, 2024 and in the prior year. The current ratio was 3.8 to 1 at March 31, 2024 and 3.0 to 1 at June 30, 2023.

Previous wording

The MCU (total industry) and IP indices have decreased since September 2023. The MCU for December 2023 was 78.6, which is down from the September and June revised readings of 79.5 and 78.9, respectively. The ISM PMI registered 47.4 in December, down from the September 2023 reading of 49.0 and up from the June 2023 reading of 46.0. The indices for the months during the current quarter, along with the indices for the prior fiscal year end and prior quarter end, were as follows:

Current wording

The MCU (total industry) index decreased since December 2023, while the IP index increased since December 2023. The MCU for March 2024 was 78.4, which is down from the December and June 2023 revised readingsof 78.7 and 78.9, respectively. The ISM PMI registered 50.3 in March, up from both the December 2023 reading of 47.1 and the June 2023 reading of 46.4. The indices for the months during the current quarter, along with the indices for the prior fiscal year end and prior quarter end, were as follows:

Previous wording

The number of Company employees was 6,365 at December 31, 2023, 6,223 at June 30, 2023, and 6,157 at December 31, 2022. The number of operating facilities totaled 585 at December 31, 2023, 577 at June 30, 2023, and 567 at December 31, 2022.

Current wording

The number of Company employees was 6,350 at March 31, 2024, 6,223 at June 30, 2023, and 6,184 at March 31, 2023. Thenumber of operating facilities totaled 586 at March 31, 2024, 577 at June 30, 2023, and 567 at March 31, 2023.

Previous wording

During the quarter ended December 31, 2023, sales increased $16.9 million or 1.6% compared to the prior year quarter, with sales from acquisitions adding $14.4 million or 1.4%, and favorable foreign currency translation accounting for a increase of $3.0 million or 0.3%. There were 61 selling days in the quarters ended December 31, 2023 and December 31, 2022. Excluding the impact of businesses acquired and foreign currency translation, sales were down $0.5 million or 0.1% during the quarter, holding relatively steady despite headwinds from the technology sector.

Current wording

During the quarter ended March 31, 2024, sales increased $14.4 million or 1.3% compared to the prior year quarter, with sales from acquisitions adding $13.1 million or 1.2%, and favorable foreign currency translation accounting for a increase of $2.5 million or 0.2%. There were 63.5 selling days in the quarter ended March 31, 2024 and 64 selling days in the quarter ended March 31, 2023. Excluding the impact of businesses acquired and foreign currency translation, sales were down $1.2 million or 0.1% during the quarter, reflecting an increase from operations of 0.7% led by growth in our core Service Center operations as our technical industry position and internal initiatives are augmenting steady break-fix demand, offset by a 0.8% decrease due to the change in sales days.

Previous wording

Sales from our Service Center Based Distribution segment, which operates primarily in MRO markets, increased $23.9 million or 3.4%. Acquisitions within this segment increased sales by $11.0 million or 1.6% and favorable foreign currency translation increased sales by $3.0 million or 0.4%. Excluding the impact of businesses acquired and foreign currency translation, sales increased $9.9 million or 1.4%, due to benefits from sales process initiatives as well as solid growth across national accounts and fluid power MRO in the U.S.

Current wording

Sales from our Service Center Based Distribution segment, which operates primarily in MRO markets, increased $27.8 million or 3.6%. Acquisitions within this segment increased sales by $11.7 million or 1.5% and favorable foreign currency translation increased sales by $2.5 million or 0.3%. Excluding the impact of businesses acquired and foreign currency translation, sales increased $13.6 million or 1.8%, driven by an increase of 2.6% from operations due to benefits from market position, sales process initiatives, and firm demand for technical MRO support across the U.S. manufacturing sector, offset by a 0.8% decrease due to the change in sales days.

Previous wording

Sales from our Engineered Solutions segment decreased $7.0 million or 2.0%. Acquisitions within this segment increased sales by $3.4 million or 1.0%. Excluding the impact of businesses acquired, sales decreased $10.4 million or 3.0%, driven by reduced activity across the technology sector. The decrease in sales was moderated by sustained growth across core industrial & mobile fluid power, and flow control markets.

Current wording

Sales from our Engineered Solutions segment decreased $13.4 million or 3.6%. Acquisitions within this segment increased sales by $1.4 million or 0.4%. Excluding the impact of businesses acquired, sales decreased $14.8 million or 4.0%, driven by a decrease of 3.2% from operations primarily as a result of ongoing declines within automation operations and lower fluid power sales, in addition to a 0.8% decrease due to the change in sales days. The decrease in sales was moderated by stronger growth across process flow control markets.

Previous wording

Our gross profit margin was 29.4% in the quarter ended December 31, 2023 compared to 29.1% in the prior year quarter. The gross profit margin for the current year quarter was positively impacted by 51 basis points due to a $5.5 million decrease in LIFO.

Current wording

Our gross profit margin was 29.5% in the quarter ended March 31, 2024 compared to 29.4% in the prior year quarter. The gross profit margin for the current year quarter was positively impacted by 30 basis points due to a $3.4 million decrease in LIFO expense.

Previous wording

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 18.8% of sales in the quarter ended December 31, 2023 compared to 18.4% in the prior year quarter. SD&A increased $6.9 million or 3.5% compared to the prior year quarter. Changes in foreign currency exchange rates had the effect of increasing SD&A during the quarter ended December 31, 2023 by $0.3 million or 0.2% compared to the prior year quarter. SD&A from businesses acquired added $4.1 million or 2.1% of SD&A expenses, including $0.4 million of intangibles amortization related to acquisitions. Excluding the impact of businesses acquired and the favorable currency translation impact, SD&A increased $2.5 million or 1.2% during the quarter ended December 31, 2023 compared to the prior year quarter.

Current wording

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 18.9% of sales in the quarter ended March 31, 2024 compared to 18.2% in the prior year quarter. SD&A increased $10.8 million or 5.3% 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, 2024 by $0.4 million or 0.2% compared to the prior year quarter. SD&A from businesses acquired added $3.5 million or 1.7% of SD&A expenses, including $0.3 million of intangibles amortization related to acquisitions. Excluding the impact of businesses acquired and the unfavorable currency translation impact, SD&A increased $6.9 million or 3.4% during the quarter ended March 31, 2024 compared to the prior year quarter. Bad debt expense increased $4.9 million in the current quarter, primarily tied to income in the prior year quarter due to collection of past due receivables. All other expenses within SD&A were up $2.0 million.

Previous wording

Operating income increased $1.7 million, and as a percent of sales, was 10.6% for both the quarter ended December 31, 2023 and the prior year quarter.

Current wording

Operating income decreased $5.7 million, and as a percent of sales, decreased to 10.6% from 11.2% during the prior year quarter.

Previous wording

Operating income, as a percentage of sales for the Service Center Based Distribution segment increased to 12.5% in the current year quarter from 12.3% in the prior year quarter. Operating income, as a percentage of sales for the Engineered Solutions segment increased to 14.7% in the current year quarter from 14.5% in the prior year quarter.

Current wording

Operating income, as a percentage of sales for the Service Center Based Distribution segment decreased to 12.7% in the current year quarter from 13.5% in the prior year quarter. Operating income, as a percentage of sales for the Engineered Solutions segment decreased to 13.9% in the current year quarter from 14.0% in the prior year quarter.

Previous wording

Interest expense, net decreased$4.3 million from the prior year quarter primarily due to reduced debt levels and greater interest income from higher cash balances and investment yields.

Current wording

Interest expense, net decreased $4.5 million from the prior year quarter primarily due to reduced debt levels and greater interest income from higher cash balances and investment yields.

Previous wording

Other (income) expense, net was income of $2.9 million for the current year quarter, which included unrealized gains on investments held by non-qualified deferred compensation trusts of $1.9 million, net favorable foreign currency transaction gains of $0.8 million, and $0.2 million of other income. During the prior year quarter, other (income) expense, net was expense of $0.8 million, which included net other periodic benefit costs primarily related to the termination of thequalified defined benefit retirement plan of $1.2 million and net unfavorable foreign currency transaction losses of $0.7 million, offset by unrealized gains on investments held by non-qualified deferred compensation trusts of $1.1 million.

Current wording

Other (income) expense, net was income of $1.7 million for the current year quarter, which included unrealized gains on investments held by non-qualified deferred compensation trusts of $1.6 million and life insurance income of $0.5 million, offset by unfavorable foreign currency transaction losses of $0.4 million. During the prior year quarter, other (income) expense, net was income of $0.1 million, which included unrealized gains on investments held by non-qualified deferred compensation trusts of $1.0 million and life insurance income of $0.4 million, offset by unfavorable foreign currency transaction losses of $1.3 million.

Previous wording

The effective income tax rate was 21.1% for the quarter ended December 31, 2023 compared to 24.1% for the quarter ended December 31, 2022. The decrease in the effective tax rate is primarily due to the reversal of a tax valuation allowance related to Mexico during the quarter ended December 31, 2023.

Current wording

The effective income tax rate was 20.7% for the quarter ended March 31, 2024 compared to 20.5% for the quarter ended March 31, 2023.

Previous wording

As a result of the factors addressed above, net income for the quarter ended December 31, 2023 increased$10.8 million compared to the prior year quarter. Net income per share was $2.32 per share for the quarter ended December 31, 2023 compared to $2.05 per share in the prior year quarter.

Current wording

Net income was$97.2 million for both the quarter ended March 31, 2024 and in the prior year quarter. Net income per share was $2.48 per share for the quarter ended March 31, 2024 compared to $2.47 per share in the prior year quarter.

Previous wording

During thesix months ended December 31, 2023, sales increased $49.7 million or 2.3% compared to the prior year period, with sales from acquisitions adding $26.0 million or 1.2% and favorable foreign currency translation of $5.4 million of increasing sales by 0.3%. There were 124 selling days in the six months ended December 31, 2023 and 125 selling days in the six months ended December 31, 2022. Excluding the impact of businesses acquiredand foreign currency translation, sales were up $18.3 million or 0.8% during the period, driven by an increase of 1.6% from operations reflecting support from secular tailwinds and internal sales initiatives, despite headwinds from the technology sector, offset by a 0.8% headwind due to one less sales day.

Current wording

During thenine months ended March 31, 2024, sales increased $64.0 million or 2.0% compared to the prior year period, with sales from acquisitions adding $39.1 million or 1.2% and favorable foreign currency translation of $7.8 million increasing sales by 0.2%. There were 187.5 selling days in the nine months ended March 31, 2024 and 189 selling days in the nine months ended March 31, 2023. Excluding the impact of businesses acquiredand foreign currency translation, sales were up $17.1 million or 0.6% during the period, driven by an increase of 1.4% from operationsled by growth in our core Service Center operations as our technical industry position and internal initiatives are augmenting steady break-fix demand, offset by a 0.8% decrease due to the change in sales days.

Previous wording

Sales from our Service Center Based Distribution segment, which operates primarily in MRO markets, increased $52.4 million or 3.7%. Acquisitions within this segment increased sales by$14.9 million or 1.1% and favorable foreign currency translation increased sales by$5.4 million or 0.4%. Excluding the impact of businesses acquired and foreign currency translation, sales increased $32.1 million or 2.2%, driven by an increase of 3.0% from operations due to benefits from sales process initiatives as well as solid growth across national accounts and fluid power MRO in the U.S., offset by a 0.8% headwind due to one less sales day.

Current wording

Sales from our Service Center Based Distribution segment, which operates primarily in MRO markets, increased $80.2 million or 3.7%. Acquisitions within this segment increased sales by$26.7 million or 1.2% and favorable foreign currency translation increased sales by$7.8 million or 0.4%. Excluding the impact of businesses acquired and foreign currency translation, sales increased $45.7 million or 2.1%, driven by an increase of 2.9% from operations due to benefits from market position, sales process initiatives, and firm demand for technical MRO support across the U.S. manufacturing sector, offset by a 0.8% decrease due to the change in sales days.

Previous wording

Sales from our Engineered Solutions segment decreased $2.7 million or 0.4%. Acquisitions within this segment increased sales by $11.1 million or 1.6%. Excluding the impact of businesses acquired, sales decreased $13.8 million or 2.0%, driven by a decrease of 1.2% from operations primarily as a result of reduced activity across the technology sector, in addition to a decrease of 0.8% due to one less sales day. The decrease in sales was moderated by sustained growth across core industrial & mobile fluid power, and flow control markets.

Current wording

Sales from our Engineered Solutions segment decreased $16.2 million or 1.5%. Acquisitions within this segment increased sales by $12.4 million or 1.2%. Excluding the impact of businesses acquired, sales decreased $28.6 million or 2.7%, driven by a decrease of 1.9% from operations primarily as a result of ongoing declines within automation operations and lower fluid power sales, in addition to a decrease of 0.8% due to the change in sales days. The decrease in sales was moderated by stronger growth across process flow control markets.

Previous wording

Sales in our U.S. operations were up $53.3 million or 2.9%, as acquisitions added $26.0 million or 1.4%. Excluding the impact of businesses acquired, U.S. sales were up $27.3 million or 1.5%, driven by an increase of 2.3% from operations offset by 0.8% due to one less sales day. Sales from our Canadian operations decreased $2.0 million or 1.3%. Unfavorable foreign currency translation decreased Canadian sales by $2.4 million or 1.5%. Excluding the impact of foreign currency translation, Canadian sales were up $0.4 million or 0.2%, driven by an increase of 1.0% from operations, offset by 0.8% due to one less sales day. Consolidated sales from our other country operations, which include Mexico, Australia, New Zealand, and Singapore, decreased $1.6 million or 1.4% from the prior year. Favorable foreign currency translation increased other country sales by $7.8 million or 6.6%. Excluding the impact of currency translation, other country sales were down $9.4 million, or 8.0%, during the period.

Current wording

Sales in our U.S. operations were up $77.7 million or 2.7%, as acquisitions added $39.1 million or 1.4%. Excluding the impact of businesses acquired, U.S. sales were up $38.6 million or 1.3%, driven by an increase of 2.1% from operations offset by a 0.8% decrease due to the change in sales days. Sales from our Canadian operations decreased $8.7 million or 3.7%. Unfavorable foreign currency translation decreased Canadian sales by $2.0 million or 0.9%. Excluding the impact of foreign currency translation, Canadian sales were down $6.7 million or 2.8%, driven by a decrease of 1.7% from operations and by a 0.8% decrease due to the change in sales days. Consolidated sales from our other country operations, which include Mexico, Australia, New Zealand, and Singapore, decreased $5.0 million or 2.8% from the prior year. Favorable foreign currency translation increased other country sales by $9.8 million or 5.6%. Excluding the impact of currency translation, other country sales were down $14.8 million, or 8.4%, during the period.

Previous wording

Our gross profit margin was 29.6% in the six months ended December 31, 2023 compared to 29.0% in the prior year period. The gross profit margin for the current year period was positively impacted by 46 basis points due to a $9.9 million decrease in LIFO expense.

Current wording

Our gross profit margin was 29.5% in the nine months ended March 31, 2024 compared to 29.1% in the prior year period. The gross profit margin for the current year period was positively impacted by 40 basis points due to a $13.4 million decrease in LIFO expense.

Previous wording

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 18.7% of sales in the six months ended December 31, 2023 compared to 18.6% in the prior year period. SD&A increased $11.0 million or 2.8% compared to the prior year period. Changes in foreign currency exchange rates had the effect of increasing SD&A during the six months ended December 31, 2023 by $0.5 million or 0.1% compared to the prior year period. SD&A from businesses acquired added $7.4 million or 1.9% of SD&A expenses, including $0.8 million of intangibles amortization related to acquisitions. Excluding the impact of businesses acquired and the unfavorable currency translation impact, SD&A increased $3.1 million or 0.8% during the six months ended December 31, 2023 compared to the prior year period.

Current wording

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 18.8% of sales in the nine months ended March 31, 2024 compared to 18.5% in the prior year period. SD&A increased $21.9 million or 3.6% 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, 2024 by $0.9 million or 0.2% compared to the prior year period. SD&A from businesses acquired added $10.8 million or 1.8% of SD&A expenses, including $1.1 million of intangibles amortization related to acquisitions. Excluding the impact of businesses acquired and the unfavorable currency translation impact, SD&A increased $10.2 million or 1.6% during the nine months ended March 31, 2024 compared to the prior year period. Excluding the impact of acquisitions, total compensation increased $6.1 million during the nine months ended March 31, 2024 primarily due to annual calendar year merit increases. All other expenses within SD&A were up $4.1 million.

Previous wording

Operating income increased$15.8 million, and as a percent of sales increased to 10.8% from 10.3% during the prior year period.

Current wording

Operating income increased$10.1 million, and as a percent of sales increased to 10.7% from 10.6% during the prior year period.

Previous wording

Operating income, as a percentage of sales for the Service Center Based Distribution segment increased to 12.8% in the current year period from 12.3% in the prior year period. Operating income, as a percentage of sales for the Engineered Solutions segment increased to 14.5% in the current year period from 13.9% in the prior year period.

Current wording

Operating income, as a percentage of sales for the Service Center Based Distribution segment was 12.7% in both the current year and prior year period. Operating income, as a percentage of sales for the Engineered Solutions segment increased to 14.3% in the current year period from 13.9% in the prior year period.

Previous wording

Interest expense, net decreased $9.4 million from the prior year period primarily due to reduced debt levels and greater interest income from higher cash balances and investment yields.

Current wording

Interest expense, net decreased $13.9 million from the prior year period primarily due to reduced debt levels and greater interest income from higher cash balances and investment yields.

Previous wording

Other (income) expense, net was income of $2.5 million for the six months ended December 31, 2023, which included unrealized gains on investments held by non-qualified deferred compensation trusts of $1.4 million, net favorable foreign currency transaction gains of $0.9 million, and $0.2 million of other income. During the prior year period, other (income) expense, net was expense of $1.8 million, which included net other periodic benefit costs primarily related to the termination of thequalified defined benefit retirement planof $1.3 million and net unfavorable foreign currency transaction losses of $0.9 million, offset by unrealized gains on investments held by non-qualified deferred compensation trusts of $0.2 million and $0.2 million of other income.

Current wording

Other (income) expense, net was income of $4.2 million for the nine months ended March 31, 2024, which included unrealized gains on investments held by non-qualified deferred compensation trusts of $3.0 million, net favorable foreign currency transaction gains of $0.5 million, and life insurance income of $0.8 million, offset by $0.1 million of other expense. During the prior year period, other (income) expense, net was expense of $1.6 million, which included foreign currency transaction losses of $2.2 million and other periodic post-employment of $1.4 million, primarily offset by unrealized gains on investments held by non-qualified deferred compensation trusts of $1.2 million and life insurance income of $0.6 million.

Previous wording

The effective income tax rate was 21.1% for the six months ended December 31, 2023 compared to 23.2% for the six months ended December 31, 2022. The decrease in the effective tax rate is primarily due to the reversal of a tax valuation allowance related to Mexico during the six months ended December 31, 2023, as well as compensation-related deductions during the six months ended December 31, 2023. We expect our full year tax rate for fiscal 2024 to be in the 23.0% to 24.0% range.

Current wording

The effective income tax rate was 21.0% for the nine months ended March 31, 2024 compared to 22.2% for the nine months ended March 31, 2023. The decrease in the effective tax rate is primarily due to the reversal of a tax valuation allowance related to Mexico during the nine months ended March 31, 2024, as well as compensation-related deductions during the nine months ended March 31, 2024. We expect our full year tax rate for fiscal 2024 to be in the 22.0% to 23.0% range.

Previous wording

As a result of the factors addressed above, net income for the six months ended December 31, 2023 increased $27.7 million compared to the prior year period. Net income was $4.71 per share for the six months ended December 31, 2023 compared to $4.02 per share in the prior year period.

Current wording

As a result of the factors addressed above, net income for the nine months ended March 31, 2024 increased $27.7 million compared to the prior year period. Net income was $7.18 per share for the nine months ended March 31, 2024 compared to $6.49 per share in the prior year period.

Previous wording

The Company's working capital at December 31, 2023 was $1,232.9 million, compared to $1,106.5 million at June 30, 2023. The current ratio was 3.7 to 1 at December 31, 2023 and 3.0 to 1 at June 30, 2023.

Current wording

The Company's working capital at March 31, 2024 was $1,299.3 million, compared to $1,106.5 million at June 30, 2023. The current ratio was 3.8 to 1 at March 31, 2024 and 3.0 to 1 at June 30, 2023.

Previous wording

The increase in cash provided by operating activities during the six months ended December 31, 2023 is driven by increased operating results and by changes in working capital during the period. Changes in working capital between periods caused a $63.7 million increase in cash provided by operating activities, driven by (amounts in thousands):

Current wording

The increase in cash provided by operating activities during the nine months ended March 31, 2024 is driven by increased operating results and by changes in working capital during the period. Changes in working capital between periods caused a$64.7 million increase in cash provided by operating activities, driven by (amounts in thousands):

Previous wording

Net cash used in investing activities during the six months ended December 31, 2023 decreased from the prior period primarily due to $21.4 million used for the acquisition of Cangro Industries, Inc. and Bearing Distributors, Inc. in the current year compared to $25.5 million used for the acquisition of Automation, Inc., in the prior year period.

Current wording

Net cash used in investing activities during the nine months ended March 31, 2024 decreased from the prior period primarily due to $21.4 million used for the acquisitions of Cangro Industries, Inc. and Bearing Distributors, Inc. in the current year compared to $35.7 million used for the acquisitions of Automation, Inc. and Advanced Motion Systems Inc., in the prior year period.

Previous wording

Net cash used in financing activities during the six months ended December 31, 2023 increased from the prior year period primarily due to $10.7 million of cash being used for the purchase of treasury shares during the six months ended December 31, 2023 compared to $0.7 million used in the prior year period and $12.9 million of cash being used for taxes paid for shares withheld for equity awards in the six months ended December 31, 2023 compared to $3.3 million used in the period year period. This was offset by a change in net debt activity, as there were $25.1 million of debt payments in the current year compared to $40.1 million in the prior year period.

Current wording

Net cash used in financing activities during the nine months ended March 31, 2024 decreased from the prior year period primarily due to a change in net debt activity, as there were $25.2 million of debt payments in the current year compared to $67.2 million in the prior year period. This was offset by $28.9 million of cash being used for the purchase of treasury shares during the nine months ended March 31, 2024 compared to $0.7 million used in the prior year period.

Previous wording

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 three and six months ended December 31, 2023, the Company acquired 62,947 shares of treasury stock on the open market for $10.7 million. During the three months ended December 31, 2022, the Company did not acquire any shares of treasury stock on the open market. During the six months ended December 31, 2022, the Company acquired 8,000 shares of treasury stock for $0.7 million. At December 31, 2023, we had authorization to repurchase 1,437,053 shares.

Current wording

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 three months ended March 31, 2024, the Company acquired 100,053 shares of treasury stock on the open market for $18.2 million. During the nine months ended March 31, 2024, the Company acquired 163,000 shares of treasury stock on the open market for $28.9 million. During the three months ended March 31, 2023, the Company did not acquire any shares of treasury stock on the open market. During the nine months ended March 31, 2023, the Company acquired 8,000 shares of treasury stock for $0.7 million. At March 31, 2024, we had authorization to repurchase 1,337,000 additional shares.

Previous wording

In December 2021, the Company entered into a new revolving credit facility with a group of banks to refinance the existing credit facility as well as provide funds for ongoing working capital and other general corporate purposes. The revolving credit facility provides a $900.0 million unsecured revolving credit facility and an uncommitted accordion feature which allows the Company to request an increase in the borrowing commitments, or incremental term loans, under the credit facility in aggregate principal amounts of up to $500.0 million. In May 2023, the Company and the administrative agent entered into an amendment to the credit facility to replace LIBOR as a reference rate available for use in the computation of interest and replace it with SOFR. Borrowings under this agreement bear interest, at the Company's election, at either the base rate plus a margin that ranges from 0 to 55 basis points based on net leverage ratio or SOFR plus a margin that ranges from 80 to 155 basis points based on the net leverage ratio. Unused lines under this facility, net of outstanding letters of credit of $0.2 million to secure certain insurance obligations, totaled $516.2 million at December 31, 2023 and June 30, 2023, and were available to fund future acquisitions or other capital and operating requirements. The interest rate on the revolving credit facility was 6.26% and 6.11% as of December 31, 2023 and June 30, 2023, respectively.

Current wording

In December 2021, the Company entered into a new revolving credit facility with a group of banks to refinance the existing credit facility as well as provide funds for ongoing working capital and other general corporate purposes. The revolving credit facility provides a $900.0 million unsecured revolving credit facility and an uncommitted accordion feature which allows the Company to request an increase in the borrowing commitments, or incremental term loans, under the credit facility in aggregate principal amounts of up to $500.0 million. In May 2023, the Company and the administrative agent entered into an amendment to the credit facility to replace LIBOR as a reference rate available for use in the computation of interest and replace it with SOFR. Borrowings under this agreement bear interest, at the Company's election, at either the base rate plus a margin that ranges from 0 to 55 basis points based on net leverage ratio or SOFR plus a margin that ranges from 80 to 155 basis points based on the net leverage ratio. Unused lines under this facility, net of outstanding letters of credit of $0.2 million to secure certain insurance obligations, totaled $516.2 million at March 31, 2024 and June 30, 2023, and were available to fund future acquisitions or other capital and operating requirements. The interest rate on the revolving credit facility was 6.23% and 6.11% as of March 31, 2024 and June 30, 2023, respectively.

Previous wording

In August 2018, the Company established a trade receivable securitization facility (the “AR Securitization Facility”). 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. On August 4, 2023, the Company amended the AR Securitization Facility, extended the term to August 4, 2026, and reduced the drawn fees to 0.90% 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. In May 2023, the Company entered into an amendment to the AR Securitization Facility to replace LIBOR as a reference rate available for use in the computation of interest and replace it with SOFR, therefore borrowings under this facility carry variable interest rates tied to SOFR. The interest rate on the AR Securitization Facility as of December 31, 2023 and June 30, 2023 was 6.36% and 6.16%, respectively.

Current wording

In August 2018, the Company established a trade receivable securitization facility (the “AR Securitization Facility”). 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. On August 4, 2023, the Company amended the AR Securitization Facility, extended the term to August 4, 2026, and reduced the drawn fees to 0.90% 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. In May 2023, the Company entered into an amendment to the AR Securitization Facility to replace LIBOR as a reference rate available for use in the computation of interest and replace it with SOFR, therefore borrowings under this facility carry variable interest rates tied to SOFR. The interest rate on the AR Securitization Facility as of March 31, 2024 and June 30, 2023 was 6.33% and 6.16%, respectively.

Previous wording

The credit facility and the unsecured shelf facility contain restrictive covenants regarding liquidity, net worth, financial ratios, and other covenants. At December 31, 2023, 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 December 31, 2023, the Company's net indebtedness was 0.4 times consolidated income before interest, taxes, depreciation and amortization (as defined). The Company was in compliance with all financial covenants at December 31, 2023.

Current wording

The credit facility and the unsecured shelf facility contain restrictive covenants regarding liquidity, net worth, financial ratios, and other covenants. At March 31, 2024, 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, 2024, the Company's net indebtedness was less than 0.4 times consolidated income before interest, taxes, depreciation and amortization (as defined). The Company was in compliance with all financial covenants at March 31, 2024.

Previous wording

On a consolidated basis, DSO was 55.1 at December 31, 2023 and June 30, 2023, respectively.

Current wording

On a consolidated basis, DSO was 55.8 at March 31, 2024 compared to 55.1 June 30, 2023.

Previous wording

As of December 31, 2023, approximately 1.9% of our accounts receivable balances are more than 90 days past due, compared to 2.5% at June 30, 2023. On an overall basis, our provision for losses on accounts receivable represents 0.01% of our sales in the three months ended December 31, 2023, compared to 0.53% of sales for the three months ended December 31, 2022, and 0.05% of sales for the six months ended December 31, 2023 compared to 0.45% of sales for the six months ended December 31, 2022. The decrease primarily relates 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, as well as improved collections performance. 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.

Current wording

As of March 31, 2024, approximately 1.8% of our accounts receivable balances are more than 90 days past due, compared to 2.5% at June 30, 2023. On an overall basis, our provision for losses on accounts receivable represents 0.03% of sales for the nine months ended March 31, 2024 compared to 0.14% of sales for the nine months ended March 31, 2023. The decrease primarily relates 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, as well as improved collections performance. 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.