
<PAGE>   1
                                   FORM 10 - Q
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


[X]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
        SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended         SEPTEMBER 30, 1999               .
                               -----------------------------------------

                                                        OR

[ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934

For the transition period from   ___________ to  ____________

                          Commission File Number   1-2299
                                                ----------


                      APPLIED INDUSTRIAL TECHNOLOGIES, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)



                     Ohio                                    34-0117420
--------------------------------------------------------------------------------
          (State or other jurisdiction of                  (I.R.S. Employer
           incorporation or organization)               Identification Number)


          One Applied Plaza, Cleveland, Ohio                         44115
--------------------------------------------------------------------------------
      (Address of principal executive offices)                    (Zip Code)


       Registrant's telephone number, including area code: (216) 426-4000
                                                          ----------------

--------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
 report)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes  [ X  ]         No

Shares of common stock outstanding on   October 31, 1999             20,939,360
                                     -------------------------------------------
                                                                  (No par value)

<PAGE>   2


             APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES
                                      INDEX




--------------------------------------------------------------------------
                                                                        Page No.
 Part I:    FINANCIAL INFORMATION

          Item 1:     Financial Statements

                      Statements of Consolidated Income -                    2
                      Three Months Ended September 30, 1999 and  1998

                      Consolidated Balance Sheets -                          3
                      September 30, 1999 and June 30, 1999

                      Statements of Consolidated Cash Flows                  4
                      Three Months Ended September 30, 1999 and 1998

                      Statements of Consolidated Shareholders' Equity -      5
                      Three Months Ended September 30, 1999 and
                      Year Ended June 30, 1999

                      Notes to Consolidated Financial Statements           6 - 7


          Item 2:     Management's Discussion and Analysis of             8 - 13
                      Financial Condition and Results of Operations


 Part II:    OTHER INFORMATION

          Item 1:    Legal Proceedings                                       14

          Item 5:    Other Information                                       14
          Item 6:    Exhibits and Reports on  Form 8-K                       16


 Signatures                                                                  17





<PAGE>   3


PART I:                   FINANCIAL INFORMATION
ITEM I:                   Financial Statements
<TABLE>
<CAPTION>

                                                 APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES
                                                            STATEMENTS OF CONSOLIDATED INCOME
                                                            ---------------------------------
                                                                       (Unaudited)
                                                          (Thousands, except per share amounts)


-------------------------------------------------------------------------------------------------------------------------------


                                                                            Three Months Ended
                                                                                September 30
                                                                     1999                       1998
                                                                 --------------------------------------


<S>                                                              <C>                          <C>
Net Sales                                                        $ 380,671                    $ 379,174
                                                                 ---------                    ---------

Cost and Expenses
  Cost of sales                                                    286,906                      288,538
  Selling, distribution and
    administrative                                                  81,680                       85,864

                                                                 ---------                    ---------
                                                                   368,586                      374,402
                                                                 ---------                    ---------
Operating Income                                                    12,085                        4,772
                                                                 ---------                    ---------

Interest
  Interest expense                                                   2,255                        2,658
  Interest income                                                      (20)                        (186)
                                                                 ---------                    ---------
                                                                     2,235                        2,472
                                                                 ---------                    ---------

Income Before Income Taxes                                           9,850                        2,300
                                                                 ---------                    ---------

Income Taxes
  Federal                                                            3,600                          854
  State and local                                                      388                           88
                                                                 ---------                    ---------
                                                                     3,988                          942
                                                                 ---------                    ---------

Net Income                                                       $   5,862                    $   1,358
                                                                 =========                    =========

Net Income Per Share - Basic                                     $    0.28                    $    0.06
                                                                 =========                    =========

Net Income Per Share - Diluted                                   $    0.28                    $    0.06
                                                                 =========                    =========

Cash dividends per common
  share                                                          $    0.12                    $    0.12
                                                                 =========                    =========

</TABLE>

See notes to consolidated financial statements.




                                       2

<PAGE>   4

<TABLE>
<CAPTION>



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

----------------------------------------------------------------------------------------------------------------------------
                                                                                            September 30            June 30
                                                                                                1999                  1999
                                                                                             ---------             ---------
                                                                                           (Unaudited)
                                          Assets
<S>                                                                                          <C>                   <C>
 Current assets
    Cash and temporary investments                                                           $  15,254             $  19,186
    Accounts receivable, less allowance
     of $3,690 and $3,515                                                                      194,617               195,736
    Inventories  (at LIFO)                                                                     158,329               169,689
    Other current assets                                                                         6,045                 6,235
                                                                                             ---------             ---------
Total current assets                                                                           374,245               390,846
                                                                                             ---------             ---------
Property - at cost
    Land                                                                                        12,293                12,316
    Buildings                                                                                   66,884                69,329
    Equipment                                                                                   96,910                96,011
                                                                                             ---------             ---------
                                                                                               176,087               177,656
    Less accumulated depreciation                                                               72,330                70,417
                                                                                             ---------             ---------
Property - net                                                                                 103,757               107,239
                                                                                             ---------             ---------
Goodwill                                                                                        61,332                62,351
Other assets                                                                                    13,840                13,913
                                                                                             ---------             ---------

  TOTAL ASSETS                                                                               $ 553,174             $ 574,349
                                                                                             =========             =========

                          Liabilities and Shareholders' Equity
Current liabilities
    Accounts payable                                                                         $  74,265             $  78,836
    Compensation and related benefits                                                           25,632                19,692
    Other accrued liabilities                                                                   35,001                33,588
                                                                                             ---------             ---------
Total current liabilities                                                                      134,898               132,116
Long-term debt                                                                                 100,500               126,000
Other liabilities                                                                               22,479                22,647
                                                                                             ---------             ---------
  TOTAL LIABILITIES                                                                            257,877               280,763
                                                                                             ---------             ---------

 Shareholders' Equity
 Preferred stock - no par value;
     2,500 shares authorized; none issued or
     outstanding
 Common stock - no par value; 50,000
     shares authorized; 24,095 shares issued                                                    10,000                10,000
 Additional paid-in capital                                                                     82,726                82,599
 Income retained for use in the business                                                       249,360               246,026
 Less 3,113 and 2,994 treasury shares -
     at cost                                                                                   (42,188)              (40,140)
 Less unearned restricted common
     stock compensation                                                                         (4,601)               (4,899)
                                                                                             ---------             ---------
   TOTAL SHAREHOLDERS' EQUITY                                                                  295,297               293,586
                                                                                             ---------             ---------

   TOTAL LIABILITIES AND
       SHAREHOLDERS' EQUITY                                                                  $ 553,174             $ 574,349
                                                                                             =========             =========
</TABLE>

See notes to consolidated financial statements.


                                       3




<PAGE>   5

<TABLE>
<CAPTION>



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


                                                                                                       Three Months Ended
                                                                                                           September 30
                                                                                    --------------------------------------------

                                                                                                   1999                  1998
--------------------------------------------------------------------------------------------------------------------------------

<S>                                                                                       <C>                   <C>
Cash Flows from Operating Activities
    Net income                                                                            $         5,862       $         1,358
    Adjustments to reconcile net income to cash provided by
       operating activities:
       Depreciation                                                                                 4,562                 3,967
       Amortization of goodwill and restricted common
           stock compensation                                                                       1,320                 1,178
       Provision for losses on accounts receivable                                                    568                   554
       Gain on sale of property                                                                      (481)                  (96)
       Treasury shares contributed to employee
           benefit plans                                                                            1,009                 1,283
       Changes in current assets and liabilities, net of
         effects from acquisition of businesses:
           Accounts receivable                                                                        551                10,385
           Inventories                                                                             11,360               (10,237)
           Other current assets                                                                       190                (2,967)
           Accounts payable and accrued expenses                                                    2,610                 9,431
       Other - net                                                                                     96                   117
--------------------------------------------------------------------------------------------------------------------------------
Net Cash provided by Operating Activities                                                          27,647                14,973
--------------------------------------------------------------------------------------------------------------------------------
Cash Flows from Investing Activities
    Property purchases                                                                             (2,801)               (3,967)
    Proceeds from property sales                                                                    2,201                 1,217
    Net cash paid for acquisition of businesses                                                                          (7,200)
    Deposits and other                                                                                 70                 9,820
--------------------------------------------------------------------------------------------------------------------------------
Net Cash used in Investing Activities                                                                (530)                 (130)
--------------------------------------------------------------------------------------------------------------------------------
Cash Flows from Financing Activities
    Net borrowings under line-of-credit agreements                                                                        6,722
    Repayments under revolving credit agreements - net                                            (25,500)
    Dividends paid                                                                                 (2,528)               (2,658)
    Purchase of treasury shares                                                                    (3,061)               (8,595)
    Exercise of stock options                                                                          40                    34
--------------------------------------------------------------------------------------------------------------------------------
Net Cash used in Financing Activities                                                             (31,049)               (4,497)
--------------------------------------------------------------------------------------------------------------------------------
Increase (decrease ) in cash and temporary
    investments                                                                                    (3,932)               10,346
Cash and temporary investments
    at beginning of period                                                                         19,186                 9,344
--------------------------------------------------------------------------------------------------------------------------------
Cash and Temporary Investments
    at End of Period                                                                      $        15,254       $        19,690
================================================================================================================================

Supplemental Cash Flow Information
Cash paid during the period for:
     Income taxes                                                                         $         2,882       $           392
     Interest                                                                             $         1,945       $         2,553
</TABLE>


See notes to consolidated financial statements.




                                       4

<PAGE>   6


<TABLE>
<CAPTION>


                                        APPLIED INDUSTIAL TECHNOLOGIES, INC. AND SUBSIDIARIES
                                        -----------------------------------------------------
                                           STATEMENTS OF CONSOLIDATED SHAREHOLDERS' EQUITY
                                      For the Three Months Ended September 30, 1999 (Unaudited)
                                                    and Year Ended June 30, 1999
                                               (Thousands, except per share amounts )



                                                                                 Income                     Unearned
                                           Shares of              Additional   Retained      Treasury     Restricted       Total
                                         Common Stock    Common    Paid-in    for Use in      Shares     Common Stock  Shareholders'
                                          Outstanding    Stock     Capital    the Business  - at Cost    Compensation      Equity
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>       <C>         <C>         <C>           <C>          <C>           <C>
Balance at July 1, 1998                      22,102    $ 10,000    $ 82,713    $ 236,109     $ (24,391)   $ (4,929)     $ 299,502
    Net income                                                                    19,933                                   19,933
    Cash dividends - $.48 per share                                              (10,397)                                 (10,397)
    Purchase of common stock
      for treasury                           (1,450)                                           (21,746)                   (21,746)
    Treasury shares issued for:
      Retirement Savings Plan contributions     220                     337                      2,980                      3,317
      Exercise of stock options                 109                    (281)                     1,442                      1,161
      Deferred compensation plans                24                      55                        309                        364
      Restricted common stock awards             96                     (86)                     1,266      (1,180)
    Amortization of restricted common
      stock compensation                                                 28                                  1,210          1,238
    Other                                                              (167)         381                                      214
----------------------------------------------------------------------------------------------------------------------------------
Balance at June 30, 1999                     21,101      10,000      82,599      246,026       (40,140)     (4,899)       293,586
    Net income                                                                     5,862                                    5,862
    Cash dividends - $.12 per share                                               (2,528)                                  (2,528)
    Purchase of common stock
      for treasury                             (193)                                            (3,061)                    (3,061)
    Treasury shares issued for:
      Retirement Savings Plan contributions      65                     110                        899                      1,009
      Exercise of stock options                   3                       2                         38                         40
      Deferred compensation plans                 6                      20                         76                         96
    Amortization of restricted common
      stock compensation                                                                                       298            298
    Other                                                                (5)                                                   (5)
----------------------------------------------------------------------------------------------------------------------------------
Balance at September 30, 1999                20,982    $ 10,000    $ 82,726    $ 249,360     $ (42,188)   $ (4,601)     $ 295,297
==================================================================================================================================

</TABLE>






See notes to consolidated financial statements.


<PAGE>   7


             APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES
             ------------------------------------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
          (Amounts in thousands, except per share amounts) (Unaudited)

--------------------------------------------------------------------------------

1.       BASIS OF PRESENTATION

         In the opinion of the Company, the accompanying unaudited consolidated
         financial statements contain all adjustments (consisting of only normal
         recurring adjustments) necessary to present fairly the financial
         position as of September 30, 1999 and June 30, 1999, and the results of
         operations and cash flows for the three months ended September 30, 1999
         and 1998.

         The results of operations for the three month period ended September
         30, 1999 are not necessarily indicative of the results to be expected
         for the fiscal year.

         Cost of sales for interim financial statements are computed using
         estimated gross profit percentages which are adjusted throughout the
         year based upon available information. Adjustments to actual cost are
         made based on the annual physical inventory and the effect of year-end
         inventory quantities on LIFO costs.

         Certain reclassifications have been made to the prior year consolidated
         financial statements in order to be consistent with the presentation
         for the current year.

2.       NET INCOME PER SHARE

         The following is a computation of the basic and diluted earnings per
         share:



<TABLE>
<CAPTION>

                                                                         Three Months Ended
                                                                            September 30
                                                                     1999                   1998
                                                                --------------------------------------
<S>                                                                 <C>                    <C>
Net Income
----------
Net income as reported in statements of
consolidated income                                                 $ 5,862                $ 1,358
                                                                  ====================================

Average Shares Outstanding
--------------------------
Weighted average common shares outstanding for basic
computation                                                          20,798                 21,832
Dilutive effect of:
              Stock options                                             133                    172
              Performance Accelerated
                 Restricted Stock (PARS)                                 51                      5
                                                                --------------------------------------
Adjusted average common shares outstanding for
diluted computation                                                  20,982                 22,009
                                                                  ====================================

Net Income Per Share
--------------------
Net income per common share - basic                                 $  0.28                $  0.06
                                                                  ====================================
Net income per common share - diluted                               $  0.28                $  0.06
                                                                  ====================================
</TABLE>





                                       6
<PAGE>   8


             APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES
             ------------------------------------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
          (Amounts in thousands, except per share amounts) (Unaudited)

--------------------------------------------------------------------------------

3.       SEGMENT INFORMATION

          The Company has identified one reportable segment: Service Center
          Based Distribution. The Service Center Based Distribution segment
          provides customers with solutions to their immediate maintenance
          repairs and original equipment manufacturing needs through the
          distribution of bearings, power transmission products and systems,
          industrial rubber products, linear motion products, fluid power
          components, general maintenance products and related specialty items.
          The Company also offers various levels of technical application
          support for these products and provides creative solutions to help
          customers minimize downtime and reduce overall procurement costs. The
          "Other" column consists of the aggregation of all other non-service
          center based distribution operations that sell directly to customers,
          including fluid power, electrical shop and fabricated rubber
          businesses and various electronic commerce businesses.

          The segments were established in fiscal 1999 primarily due to the
          acquisitions outside our core business segment and the related growth
          in these areas. The accounting policies of the segments are the same
          as those described in Note 1. Intersegment sales are not significant.
          All current segment operations are in the United States and Puerto
          Rico. The segment operations in Puerto Rico are not significant.

SEGMENT FINANCIAL INFORMATION:
<TABLE>
<CAPTION>

                                                                    THREE MONTHS ENDED SEPTEMBER 30
                                      -------------------------------------------------------------------------------
                                                                    Service Center Based
                                                Total                   Distribution                   Other
                                      -------------------------    ----------------------    ------------------------
                                         1999          1998          1999          1998          1999           1998
                                       --------      --------      --------      --------      --------      --------
<S>                                    <C>           <C>           <C>           <C>           <C>           <C>
Total net sales                        $380,671      $379,174      $366,000      $365,123      $ 14,671      $ 14,051
                                       ----------------------      ----------------------      ----------------------

Segment operating profit               $ 17,366      $ 16,651      $ 16,802      $ 16,179      $    564      $    472
                                                                   ======================      ======================
Goodwill amortization                     1,022           955
Corporate/Unallocated expense, net        4,259        10,924
                                       ----------------------
Total operating profit                   12,085         4,772
Interest expense, net                     2,235         2,472
                                       ----------------------
Income before taxes                    $  9,850      $  2,300
                                       ======================

Assets used in the business            $553,174      $615,034      $515,903      $588,685      $ 37,271      $ 35,725
                                       ======================      ======================      ======================

Depreciation                           $  4,562      $  3,967      $  4,407      $  3,854      $    155      $    113
                                       ======================      ======================      ======================

Capital Expenditures                   $  2,801      $  3,967      $  2,771      $  3,967      $     30
                                       ======================      ======================      ========      ========
<CAPTION>

Sales By Product Category:              Three Months Ended
                                              September 30
                                       ----------------------
                                         1999          1998
                                       --------      ---------

<S>                                    <C>           <C>
Industrial Products                    $267,946      $268,056
Engineered Systems Products              57,130        57,303
Fluid Power Products                     37,851        35,643
Fabricated Rubber Products               17,744        18,172
                                       ========      ========
                                       $380,671      $379,174
                                       ========      ========
</TABLE>




                                       7

<PAGE>   9


             APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES
             ------------------------------------------------------
            ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

--------------------------------------------------------------------------------

The following is Management's Discussion and Analysis of certain significant
factors which have affected the Company's: (1) financial condition at September
30, 1999 and June 30, 1999, and (2) results of operations and cash flows during
the periods included in the accompanying Statements of Consolidated Income and
Consolidated Cash Flows.

FINANCIAL CONDITION

Liquidity and Working Capital
-----------------------------
Cash provided by operating activities was $27.6 million in the three months
ended September 30, 1999. This compares to $15.0 million provided by operating
activities in the same period a year ago.

Cash flow from operations depends primarily upon generating operating income,
controlling the investment in inventories and receivables, and managing the
timing of payments to suppliers. The Company has continuing programs to monitor
and control these investments. During the three month period ended September 30,
1999, inventories decreased approximately $11.4 million due to Company efforts
to reduce inventory levels, while accounts receivable remained relatively
stable.

Net cash used in investing activities was $0.5 million in the three months ended
September 30, 1999 from property purchases net of disposals.

Net cash used in financing activities totaled $31.0 million in the three months
ended September 30, 1999 as compared to $4.5 million for the period ended
September 30, 1998. Cash provided from operations was used for net repayments
under the Company's revolving credit agreements of $25.5 million.

Working capital at September 30, 1999 was $239.3 million compared to $258.7
million at June 30, 1999. This decrease is primarily due to the decrease in
inventory due to Company efforts to reduce inventory levels.

Capital Resources
-----------------
Capital resources are obtained from income retained in the business, borrowings
under the Company's credit facilities, and operating lease arrangements. Average
combined borrowings were $104.3 million and $156.8 million for the three months
ended September 30, 1999 and 1998, respectively. The weighted average interest
rate on borrowings under revolving credit facilities for the three months ended
September 30, 1999 decreased to 5.6% from an average rate of 5.9% for the three
months ended September 30, 1998. The weighted average interest on




                                       8
<PAGE>   10


             APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES
             ------------------------------------------------------
            ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

--------------------------------------------------------------------------------

borrowing under other long-term debt agreements for the three months ended
September 30, 1999 and 1998 was 7.1%.

The Company has a committed revolving credit agreement with a five year term
with a group of lending institutions. This agreement provides for unsecured
borrowings of up to $150.0 million. The Company had $10.5 million of borrowings
outstanding under this facility at September 30, 1999. Unused lines under this
facility totaling $130.9 million are available to fund future acquisitions or
other capital and operating requirements. The Company also has a $15.0 million
short-term uncommitted line of credit with a commercial bank. The Company had no
borrowings outstanding under this facility at September 30, 1999. Unused lines
under this facility totaling $15.0 million are available to fund future
acquisitions or other capital and operating requirements.

The Board of Directors has authorized an ongoing program to purchase shares of
the Company's common stock to fund employee benefit programs, stock option and
award programs, and future acquisitions. These purchases are made in open market
and negotiated transactions, from time to time, depending upon market
conditions. The Company acquired 193,000 shares of its common stock for $3.1
million during the three months ended September 30, 1999. The Company has
remaining authorization to repurchase 685,000 shares as of September 30, 1999.

Management expects that capital resources provided from operations, available
lines of credit, unused amounts under the committed revolving credit facility
and operating leases will be sufficient to finance normal working capital needs,
business acquisitions, enhancement of facilities and equipment, and the purchase
of additional Company common stock. Management also believes that additional
long-term debt and line of credit financing could be obtained if desired.

Year 2000 Readiness Disclosure
------------------------------
The Company's progress in completing its Year 2000 activities is overseen by an
executive task force made up of representatives from all key management areas.
The task force in turn reports to the audit committee of the Board of Directors.
Additionally, the Company has retained an outside Year 2000 consultant to
provide an independent assessment of the Company's Year 2000 compliance and
contingency planning efforts.

The Company's plan for assessment, remediation, replacement and testing of those
of its internal computer systems affected by the Year 2000 issue is proceeding
on schedule. For business reasons, the Company's financial information systems
have been replaced with a new Year 2000-compliant system, which is fully
operational. In addition, all of the Company's critical computer systems,
including the OMNEX(R) inventory and sales information system, customer billing
system, and corporate information system, have been remediated and tested, and
are now Year 2000 compliant.





                                       9
<PAGE>   11


             APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES
             ------------------------------------------------------
            ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

--------------------------------------------------------------------------------

The Year 2000 issue also effects certain of the Company's non-critical computer
systems and equipment containing embedded technology. The Company has largely
completed its assessment, remediation and testing of these non-critical systems,
with remaining work scheduled to be completed by various dates before the end of
calendar year 1999.

To date, following contacts with product suppliers, the Company has not
identified any products regularly sold by the Company that are susceptible to
the Year 2000 issue.

The Company has sought written assurances from key product and service suppliers
as to their Year 2000 compliance plans. Follow-up interviews are being conducted
with those suppliers with whom the Company has the most significant
relationships. The Company will consider appropriate measures, including
substitution of suppliers, in the event that a supplier provides an inadequate
response.

If the Company's suppliers or customers fail to achieve Year 2000 compliance in
a timely manner, then the Year 2000 issue could have a material adverse effect
on the Company. For example, suppliers' failures to deliver products to the
Company due to the Year 2000 issue could render the Company unable to fulfill
commitments to customers unless those products or adequate substitutes can be
secured elsewhere. Customers affected by the Year 2000 issue could reduce their
volume of purchases from the Company or slow their payments for products already
delivered.

To reduce the risk of business interruption due to the Year 2000 issue, the
Company is preparing contingency plans to address situations that may result
from the failure of the Company or certain third parties (including utilities)
to complete efforts necessary to achieve Year 2000 compliance on a timely basis.
These plans are scheduled to be completed by various dates before the end of
calendar year 1999.

Despite its efforts, the Company will not be able to analyze fully the scope or
nature of the risk represented by the failure of third parties, including
suppliers and customers, to attain Year 2000 compliance. The Company expects,
however, that the actions described in this section will significantly reduce
the likelihood that the Year 2000 issue would have a material adverse effect on
the Company's business, financial condition, results of operations, or cash
flows.

Based on currently available information, the total cost of the Company's year
2000 activities is expected to be under $5 million, with approximately
four-fifths of the total cost already incurred through September 30, 1999. The
total amount spent to date includes a capital expenditure of approximately $1.6
million for the new Year 2000-compliant financial information system, which
would have been acquired in the ordinary course, but whose acquisition was
accelerated to ensure compliance by the end of calendar 1999. The effort to
bring the Company's internal computer systems into compliance has largely been
accomplished by redirecting internal programming




                                       10
<PAGE>   12


             APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES
             ------------------------------------------------------
            ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

--------------------------------------------------------------------------------

resources, with costs expensed as incurred. These costs, too, are included in
the total cost estimate. Estimates of the Year 2000-related costs are based on
numerous assumptions and there is no certainty that actual costs will not be
significantly different from the estimates.

To date, the costs of addressing the Year 2000 issue are not considered material
to the Company's financial condition, results of operations or cash flows, and
future costs are not expected to be material in such respects. The Company
further anticipates that its current resources and sources of liquidity will be
adequate to address the capital needs arising from its specific Year 2000
issues.

RESULTS OF OPERATIONS
---------------------

A summary of the period-to-period changes in principal items included in the
statements of consolidated income follows:
<TABLE>
<CAPTION>

                                                          Increase (Decrease)
                                          (Dollars in Thousands, Except per Share Amounts)

                                                           Three Months Ended
                                                              September 30
                                                              1999 and 1998

                                                           Amount         Change
                                                           ------         ------
<S>                                                        <C>           <C>
Net sales                                                  $1,497          0.4%

Cost of sales                                              (1,632)        (0.6)%

Selling, distribution and
administrative expenses                                    (4,184)        (4.9)%

Operating income                                            7,313        153.2%

Interest expense - net                                       (237)        (9.6)%

Income before income taxes                                  7,550        328.3%

Income taxes                                                3,046        323.4%

Net income                                                  4,504        331.7%

Net income per share - diluted                                .22        366.7%
</TABLE>



                                       11


<PAGE>   13


             APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES
             ------------------------------------------------------
            ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

--------------------------------------------------------------------------------

Three Months Ended September 30, 1999 and 1998

Net sales increased slightly from the prior year primarily due to acquisitions
during fiscal 1999. Gross profit as a percentage of sales increased to 24.6%
from 23.9%. This increase primarily is due to a change in product mix and higher
discounts and allowances from suppliers.

Selling, distribution and administrative expenses as a percent of sales,
decreased to 21.5% from 22.6%. This change primarily relates to pretax
restructuring and other special charges being recorded in the September 30, 1998
quarter of $5.4 million for costs of consolidation and workforce reductions.
This charge decreased the September 30, 1998 net income by $3.2 million, or $.14
per share.

Interest expense-net for the quarter decreased by 9.6% as compared to the prior
year primarily as a result of a decrease in average borrowings.

Income tax expense as a percentage of income before taxes was 40.5% for the
quarter ended September 30, 1999 and 41.0% for the quarter ended September 30,
1998. This decrease is due to tax savings from lower effective state and local
tax rates.

As a result of the above factors, net income increased by 331.7% compared to the
same quarter of last year. As a result of the impact of continued stock
repurchases, net income per share - diluted increased $.22, or 366.7%.

CAUTIONARY STATEMENT UNDER PRIVATE SECURITIES LITIGATION REFORM ACT
-------------------------------------------------------------------

Management's Discussion and Analysis contains statements that are
forward-looking, as that term is defined by the Private Securities Litigation
Reform Act of 1995 or by the Securities and Exchange Commission in its rules,
regulations and releases. The Company 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.
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 in the statements will be achieved.

Important risk factors include, but are not limited to, the following: changes
in the economy or in specific customer industry sectors; changes in customer
procurement policies and practices; changes in product manufacturer sales
policies and practices; the availability of product and labor; changes in
operating expenses; the effect of price increases or decreases; the variability
and timing of business opportunities including acquisitions, alliances, customer
agreements and supplier authorizations; the Company's ability to realize the
anticipated benefits of the acquisitions and other business strategies,
including electronic commerce initiatives; the





                                       12
<PAGE>   14


             APPLIED INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARIES
             ------------------------------------------------------
            ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

-------------------------------------------------------------------------------

incurrence of additional debt and contingent liabilities in connection with
acquisitions; changes in accounting policies and practices; the effect of
organizational changes within the Company; the emergence of new competitors,
including firms with greater financial resources than the Company; adverse
effects of the Year 2000 issue on businesses of the Company and its suppliers
and customers; adverse results in significant litigation matters; adverse state
and federal regulation and legislation; and the occurrence of extraordinary
events (including prolonged labor disputes, natural events and acts of God,
fires, floods and accidents).





                                       13
<PAGE>   15






PART II. OTHER INFORMATION

ITEM 1.  Legal Proceedings.
         -----------------

Applied Industrial Technologies, Inc. and/or one of its subsidiaries is a
defendant in various product- and employment-related lawsuits. Based on
circumstances presently known, the Company believes that these cases are not
material to its business or financial condition.

ITEM 5.  Other Information.
         -----------------

(a)  Submission of Matters to a Vote of Security Holders.
     ----------------------------------------------------

     At the Annual Meeting of Shareholders of the Company held on October
     19, 1999, there were 20,993,104 shares of common stock entitled to
     vote. The Shareholders voted on the matters submitted to the meeting as
     follows:

            1.    Election of three persons to be directors of Class III for a
                  term of three years:

                                                     For             Withheld
                                                     ---             --------

                        William E. Butler         18,441,739         812,216
                        Russell R. Gifford        18,454,755         799,198
                        L. Thomas Hiltz           18,623,349         630,604

                  Directors of Class I, consisting of Thomas A. Commes, John C.
                  Dannemiller, J. Michael Moore, and Jerry Sue Thornton, serve
                  until the expiration of their term of office in 2000 and
                  Directors of Class II, consisting of William G. Bares, Roger
                  D. Blackwell, Russel B. Every, and John J. Kahl, serve until
                  the expiration of their term of office in 2001.

            2.    Amendment of the Company's Code of Regulations to increase the
                  maximum size of the Board of Directors from 12 to 14
                  directors.

                               For                 Withheld         Abstain
                               ---                 --------         -------

                            18,503,875              409,019          260,060

            3.    Ratification of management's appointment of Deloitte & Touche
                  LLP as the Company's independent auditors for the fiscal year
                  ending June 30, 2000.




                                       14
<PAGE>   16




                                 For               Withheld         Abstain
                                 ---               --------         -------

                              19,234,114             9,751          10,090

                  Discretionary voting was authorized as to the three matters
                  submitted. There were no broker non-votes.

  (b)    Election of Officers.
         ---------------------

         At its Organizational Meeting held on October 19, 1999, the Board of
         Directors elected the following officers of the Company:
<TABLE>
              <S>                        <C>
               John C. Dannemiller       Chairman & Chief Executive Officer
               David L. Pugh             President & Chief Operating Officer
               Todd A. Barlett           Vice President-Alliance Systems
               Donald L. Chargin         Vice President-Sales & Field Operations
               Mark O. Eisele            Vice President & Controller
               James T. Hopper           Vice President-Information Systems
               Justin M. Jacobi          Vice President-Marketing & Strategic Planning
               Bill L. Purser            Vice President-Chief Marketing Officer
               Jeffrey A. Ramras         Vice President-Logistics
               Richard C. Shaw           Vice President-Communications,
                                              Organizational Learning &
                                              Quality Standards
               Robert C. Stinson         Vice President-Chief Administrative Officer,
                                              General Counsel & Secretary
               John R. Whitten           Vice President-Chief Financial Officer &
                                              Treasurer
               Fred D. Bauer             Assistant Secretary
               Jody A. Chabowski         Assistant Controller
               Michael L. Coticchia      Assistant Secretary
               Alan M. Krupa             Assistant Treasurer
</TABLE>



                                       15


<PAGE>   17




ITEM 6.    Exhibits and Reports on Form 8-K.
           ---------------------------------

(a)      Exhibits.
         ---------

                  Exhibit No.               Description
                  -----------               -------------

                     3(a)                   Amended and Restated Articles of
                                            Incorporation of Applied Industrial
                                            Technologies, Inc., as amended on
                                            October 8, 1998 (filed as Exhibit
                                            3(a) to the Company's Form 10-Q for
                                            the quarter ended September 30,
                                            1998, SEC File No. 1-2299, and
                                            incorporated here by reference).

                     3(b)                   Code of Regulations of Applied
                                            Industrial Technologies, Inc., as
                                            amended on October 19, 1999.

                     4(a)                   Certificate of Merger of Bearings,
                                            Inc. (Ohio) and Bearings, Inc.
                                            (Delaware) filed with the Ohio
                                            Secretary of State on October 18,
                                            1988, including an Agreement and
                                            Plan of Reorganization dated
                                            September 6, 1988 (filed as Exhibit
                                            4(a) to the Company's Registration
                                            Statement on Form S-4 filed May 23,
                                            1997, Registration No. 333-27801,
                                            and incorporated here by reference).

                     4(b)                   $80,000,000 Maximum Aggregate
                                            Principal Amount Note Purchase and
                                            Private Shelf Facility dated October
                                            31, 1992 between the Company and The
                                            Prudential Insurance Company of
                                            America (filed as Exhibit 4(b) to
                                            the Company's Registration Statement
                                            on Form S-4 filed May 23, 1997,
                                            Registration No. 333-27801, and
                                            incorporated here by reference).

                    4(c)                    Amendment to $80,000,000 Maximum
                                            Aggregate Principal Amount Note
                                            Purchase and Private Shelf Facility
                                            dated October 31, 1992 between the
                                            Company and The Prudential Insurance
                                            Company of America (filed as Exhibit
                                            4(g) to the Company's Form 10-Q for
                                            the quarter ended March 31, 1996,
                                            SEC File No. 1-2299, and
                                            incorporated here by reference).

                     4(d)                   $50,000,000 Private Shelf Agreement
                                            dated as of November 27, 1996, as
                                            amended on January 30, 1998, between
                                            the Company and The Prudential
                                            Insurance Company of America (filed
                                            as Exhibit 4(f) to the Company's
                                            Form 10-Q for the quarter ended
                                            March 31, 1998, SEC File No. 1-2299,
                                            and incorporated here by reference).


                                       16
<PAGE>   18

                     4(e)                   $150,000,000 Credit Agreement dated
                                            as of November 5, 1998 among the
                                            Company, KeyBank National
                                            Association as Agent, and various
                                            financial institutions (filed as
                                            Exhibit 4(e) to the Company's Form
                                            10-Q for the quarter ended September
                                            30, 1998, SEC File No. 1-2299, and
                                            incorporated here by reference).

                     4(f)                   Rights Agreement, dated as of
                                            February 2, 1998, between the
                                            Company and Harris Trust and Savings
                                            Bank, as Rights Agent, which
                                            includes as Exhibit B thereto the
                                            Form of Rights Certificate (filed as
                                            Exhibit No. 1 to the Company's
                                            Registration Statement on Form 8-A
                                            filed July 20, 1998, SEC File No.
                                            1-2299, and incorporated here by
                                            reference).

                     27                     Financial Data Schedule.

(b)      The Company did not file, nor was it required to file, a Report on Form
         8-K with the Securities and Exchange Commission during the quarter
         ended September 30, 1999.


                                   SIGNATURES
                                   ----------

                  Pursuant to the requirements of the Securities Exchange Act of
1934, the Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                   APPLIED INDUSTRIAL TECHNOLOGIES, INC.
                                   (Company)


Date:  November 15, 1999           By:    /s/ David L. Pugh
                                      ------------------------------------------
                                          David L. Pugh
                                          President & Chief Operating Officer


Date:  November 15, 1999           By:    /s/ Mark O. Eisele
                                      ------------------------------------------
                                          Mark O. Eisele
                                          Vice President & Controller





                                       17
<PAGE>   19







                      APPLIED INDUSTRIAL TECHNOLOGIES, INC.

                                  EXHIBIT INDEX
              TO FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1999

           EXHIBIT NO.            DESCRIPTION                          PAGE

           3(a)     Amended and Restated Articles of
                    Incorporation of Applied Industrial
                    Technologies, Inc., as amended on October
                    8, 1998. (filed as Exhibit 3(a) to the
                    Company's Form 10-Q for the quarter ended
                    September 30, 1998, SEC File No. 1-2299,
                    and incorporated here by reference).

           3(b)     Code of Regulations of Applied Industrial        Attached
                    Technologies, Inc., as amended October 19,
                    1999.

           4(a)     Certificate of Merger of Bearings, Inc.
                    (Ohio) and Bearings, Inc. (Delaware) filed
                    with the Ohio Secretary of State on October
                    18, 1988, including an Agreement and Plan
                    of Reorganization dated September 6, 1988
                    (filed as Exhibit 4(a) to the Company's
                    Registration Statement on Form S-4 filed
                    May 23, 1997, Registration No. 333-27801,
                    and incorporated here by reference).

           4(b)     $80,000,000 Maximum Aggregate Principal
                    Amount Note Purchase and Private Shelf
                    Facility dated October 31, 1992 between the
                    Company and The Prudential Insurance
                    Company of America (filed as Exhibit 4(b)
                    to the Company's Registration Statement on
                    Form S-4 filed May 23, 1997, Registration
                    No. 333-27801, and incorporated here by
                    reference).

           4(c)     Amendment to $80,000,000 Maximum Aggregate
                    Principal Amount Note Purchase and Private
                    Shelf Facility dated October 31, 1992
                    between the Company and The Prudential
                    Insurance Company of America (filed as
                    Exhibit 4(g) to the Company's Form 10-Q for
                    the quarter ended March 31, 1996, SEC File
                    No. 1-2299, and incorporated here by
                    reference).

           4(d)     $50,000,000 Private Shelf Agreement dated
                    as of November 27, 1996, as amended on
                    January 30, 1998, between the Company and
                    The Prudential


<PAGE>   20

                    Insurance Company of America (filed as Exhibit
                    4(f) to the Company's Form 10-Q for the quarter
                    ended March 31, 1998, SEC File No. 1-2299, and
                    incorporated here by reference).

           4(e)     $50,000,000 Credit Agreement dated as of
                    November 5, 1998 among Applied, KeyBank National
                    Association as Agent, and various financial
                    institutions (filed as Exhibit 4(e) to the
                    Company's Form 10-Q for the quarter ended
                    September 30, 1998, SEC file No. 1-2299, and
                    incorporated here by reference).

           4(f)     Rights Agreement, dated as of February 2, 1998,
                    between the Company and Harris Trust and Savings
                    Bank, as Rights Agent, which includes as Exhibit
                    B thereto the Form of Rights Certificate (filed
                    as Exhibit No. 1 to the Company's Registration
                    Statement on Form 8-A filed July 20, 1998, SEC
                    File No. 1-2299, and incorporated here by
                    reference).

           27      Financial Data Schedule.                           Attached


