Shareholders don't just own stocks. We invest in businesses. Every share we buy purchases a stake in a company -- a sliver of a living, breathing enterprise run by a management team that ultimately determines the fate of the money we invest.

That's why The Motley Fool regularly contacts public companies and executives on our community's behalf, asking them the questions shareholders would find relevant. Because while quantitative measures are important, it's also crucial for investors to assess the less tangible aspects of the businesses they own (or are thinking of owning).

We recently surveyed select companies to gain insights into their business. Today we highlight Applied Industrial Technologies (NYSE:AIT):

Headquarters

Cleveland, Ohio

Market Cap

$900 million

Industry

Industrial equipment

Related Companies

Genuine Parts (NYSE:GPC), W.W. Grainger (NYSE:GWW), Kaman (NASDAQ:KAMN)

Here are Applied Industrial Technologies' answers to our email query about the business:

What steps have you taken to navigate your business through the economic turmoil of the past 12 months?
2009 was a tough year for industrial distributors as their main customer group, North American manufacturing, saw a tremendous drop in demand. Applied Industrial Technologies reacted early to the slowing economy as we made significant adjustments to balance our operating costs against declining sales revenues.

Throughout 2009 we prudently managed our expense structure by way of tight oversight of all expense categories including incentive, compensation, and benefits adjustments; consolidation of locations; and workforce reductions where appropriate to remain competitive in this tough environment. Our efforts have also included a heavy focus on pricing discipline and managing our gross margins.

Product additions have helped to distinguish our capabilities and to diversify our product portfolio as we deal with the changes in more mature industries. We've also worked to expand our presence in growing industries such as the mining, wastewater and water treatment industries. And, we've continued to press onward with increasing our sales to government entities as we see these as large opportunities to grow our business. We have also made complementary investments in sales training, making sure our associates have the ability to expand our business with existing customers and to introduce Applied to new customers.

Overall, our goal in this recessionary period continues to be the dynamic management of our business -- focusing on what is directly before us while keeping an eye on the future. There are many moving targets in this challenging climate, as customers, suppliers, and competitors alike are in transition. Reading the markets daily, responding quickly and aggressively, and staying streamlined and nimble are vital management traits in an economy like this.

What are the top two or three metrics to which your business pays the closest attention?
Creating shareholder value is a primary goal at Applied and, therefore, we pay close attention to driving earnings. Our closest proxy to total shareholder return is earnings per share (EPS metric).

In addition to quality earnings, we seek to provide strong cash generation, and a fair cash dividend. To that end, we've communicated to our associates the importance of making wise choices in the allocation of resources -- making sure that all of our assets are working properly for us. That focus requires close attention to our ROA (Return on Assets) and ROIC (Return on Invested Capital) metrics.

Now that the first decade of the new century is drawing to a close, we'd like to take a moment to reflect on what lies ahead. What excites you most about your business?
We continue to keep a pulse on the manufacturing base we support and the suppliers we represent, as well as the consolidation of industries. We strive to stay in step with emerging needs in the marketplace, such as those related to energy efficiency and to "green" products, for example. With an eye on continuous improvement, we constantly look for ways to improve the way we do business, which can provide for some exciting business transformations.

Our ongoing push into government business still has a tremendous upside, as does our expanding line of products and services, and potential strategic acquisitions that expand our North American footprint and boost sales opportunities.

And because ours is still a "people" business, we remain passionate and excited about providing training and technology to meet the up-and-coming needs of our associates and our business. We need to continue to do the right things to not only assure ourselves of a future steady base of employees, but to retain and develop that talent for future benefit.

Applied Industrial Technologies is rated four stars (out of a possible five) by our Motley Fool CAPS community. Do agree with our community's bullish assessment? Click here to rate the stock and cast your opinion.

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