Applied Industrial Technologies (NYSE: AIT), Cleveland, Ohio, on Wednesday reported fiscal first-quarter sales of $747.8 million, down 12.7% compared to a year ago.

The change includes a 1.1% increase from acquisitions, partially offset by a 0.4% negative impact from foreign currency translation. Excluding these factors, sales decreased 13.4% on an organic basis reflecting a 14.4% decline in the service center segment and a 11.2% decline in the fluid power and flow control segment. Net income for the quarter was $34.8 million, down 10.3% from the prior-year period.

“While demand remains below prior year levels, customer activity appears to be firming, which combined with our internal initiatives drove sequential improvement in underlying sales trends and earnings performance through our fiscal first quarter,” said Neil A. Schrimsher, Applied’s president CEO. “Customers are gradually increasing facility utilization and production levels, as evidenced by initial recovery in our local account sales. This is a positive sign for the industrial economy. We are also benefiting from our technical solution capabilities and a more diversified end-market mix. That said, the pace of end-market improvement remains gradual and at times inconsistent. Additionally, visibility remains limited entering the seasonally slower winter months as customers continue to manage through an uncertain macro outlook.”