Business Description

maintenance products. Our customers use our products and services for both Maintenance, Repair, and Operations ("MRO"), Original Equipment Manufacturing ("OEM"), and new system install applications across a variety of end markets primarily in North America, as well as Australia, New Zealand, and Singapore. Our internet address is www.applied.com. The following documents are available free of charge via hyperlink from the investor relations area of our website: • Applied's Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports, together with Section 16 insider beneficial stock ownership reports - these documents are posted as soon as reasonably practicable after they are electronically filed with, or furnished to, the Securities and Exchange Commission; • Applied's Code of Business Ethics; • Applied's Board of Directors (our "Board" or "Board of Directors") Governance Principles and Practices; • Applied's Director Independence Standards; • Applied's Sustainability Report; and • Charters for the Audit, Corporate Governance & Sustainability, and Executive Organization & Compensation Committees of Applied's Board of Directors. The information available via hyperlink from our website is not incorporated into this Annual Report defined above. GENERAL DEVELOPMENT OF BUSINESS Information regarding current developments in our business can be found in Item 7 of this Annual Report defined above under the caption “Management's Discussion and Analysis of Financial Condition and Results of Operations.” This information is incorporated here by reference. INDUSTRY POSITION AND VALUE PROPOSITION We serve virtually all industrial markets that require technical expertise and service as our products and solutions are directly tied to companies’ production processes, efficiency initiatives, and most critical operating assets. While our business has evolved with a broader portfolio of solutions and entrance into new markets in recent years, our core remains primarily focused on connecting world-class industrial products and technologies from leading suppliers to our customers' most critical operating assets. As such, we are integral to our customers’ supply chains considering the direct exposure our solutions have on our customers’ core production equipment and plant capabilities, where high cost of failure, product specification, and system complexity require premier local service and inventory availability, application expertise, and aftermarket support. While we compete with other distributors and service providers offering products and solutions addressing the industrial supply chain, we believe our industry position and value proposition benefits from relative advantages tied to the following key attributes: 1) Deep technical expertise in providing solutions to critical motion control systems and related service offerings; 2) Leading positions in engineered fluid power and flow control solutions; 3) Advanced capabilities and an established footprint across advanced automation solutions; 4) Broad in-stock product offering, local inventory availability, and repair capabilities; 5) Extensive technical knowledge and domain expertise of our customers' facility and production equipment; 6) Tenured relationships with industrial customers and leading suppliers; 7) Scale and proximity of