CLEVELAND, July 31 /PRNewswire/ -- Parker Hannifin Corporation (NYSE: PH) today reported record fourth-quarter and full-year results for the fiscal year ended June 30, with an 18.6-percent increase in annual net income of $368.2 million, or $3.31 per diluted share. Revenues for the year were $5.36 billion, up eight percent from last year's sales record. In fiscal 1999, the company earned $310.5 million in net income, or $2.83 per diluted share, on sales of $4.96 billion.
The full-year results reflect a good balance of internal and external growth, including 10-percent core sales growth in the company's North American industrial segment, where acquisitions completed in the second half of the year contributed another 4.4 percent. Acquisitions accounted for the 2.7 percent sales growth in Parker's International Industrial business, as weak first-half demand and currency translations negatively affected sales. Aerospace reported a drop in sales as anticipated, although the one-percent decline was certainly better than expected, as slowing large aircraft sales were offset by strengthening demand for maintenance, repair and overhaul equipment and solid growth in original-equipment system sales for regional and business jets.
Parker's North American industrial segment led the earnings improvement posting a 27-percent gain in operating income for the year. Operating income in the International Industrial and Aerospace businesses were relatively flat as a result of the lower sales and business realignment charges recorded in the first half of the fiscal year.
"We entered into this year making alignments where we needed to in our business, and the past two quarters have been our most profitable ever," said Chairman and CEO Duane Collins. "Parker employees turned out a good year of performance, with consistency and discipline through the cycle that positioned us to finish the year very well."
The company generated a record $538 million in cash from operations during the year, up 17 percent from last year's record. This cash was utilized for several acquisitions completed during the fiscal year, leaving borrowing capacity available to finance additional acquisitions, including the Wynn's International deal completed just over a week ago.
Quarterly Results
Fourth-quarter net income was $113 million, or 99 cents per diluted share, on sales of $1.48 billion, compared with $92.3 million, or 84 cents per diluted share, earned on sales of $1.29 billion last year.
Across-the-board growth in the domestic and International Industrial businesses contributed to double-digit increases in sales and income during the quarter, while Aerospace posted higher income on sales 3.8- percent lower than last year, when aircraft builds reached their peak.
Outlook
Collins said the company's fourth-quarter performance and continuing strong order trends provide a good foundation for it to meet or exceed accelerated growth targets the company recently adopted, including 10-percent sales growth. "We've added significant growth capacity with acquisitions we made during the past year, and we know what we've got to do to integrate these businesses and deliver on our objectives. Our Hydraulics and Filtration Groups are right on track in the integration of their new businesses, and our Seal Group has plans in place to successfully integrate Wynn's."
In addition to integrating acquisitions, Collins said the company will continue to implement profitability improvements in Europe, expanding low-cost production capacity and reducing selling, general and administrative expenses.
"We recently adopted our strategic plan, and have everything in place to grow market share and achieve returns at a consistent premium among competitors and peers. Our focus remains on premier customer service, financial performance and profitable growth, and we have the organization and financial means to achieve much more as both the premier systems supplier and consolidator of choice."
With annual sales of $6 billion (with recent acquisitions), Parker Hannifin Corporation is the world's leading diversified manufacturer of motion and control technologies and systems, providing precision-engineered solutions for a wide variety of commercial, mobile, industrial and aerospace markets. The company employs more than 40,000 people in 40 countries around the world. For more information, visit the company's web site at www.parker.com , or its investor information site at www.phstock.com .
Forward-Looking Statements:
Forward-looking statements contained in this and other written and oral reports are made based on known events and circumstances at the time of release, and as such, are subject in the future to unforeseen uncertainties and risks. All statements regarding future performance, events or developments are forward-looking statements. It is possible that the company's future performance may differ materially from current expectations expressed in these forward-looking statements, due to a variety of factors such as changes in: business relationships with and purchases by or from major customers or suppliers; competitive market conditions and resulting effects on sales and pricing; increases in raw-material costs which cannot be recovered in product pricing; and global economic factors, including currency exchange rates and difficulties entering new markets.
PARKER HANNIFIN CORPORATION - JUNE 30, 2000
CONSOLIDATED STATEMENT OF INCOME
Unaudited Three Months Year Ended June 30,
Ended June 30,
(Dollars in thousands
except per share
amounts) 2000 1999 2000 1999
Net sales $1,480,178 $ 1,285,266 $5,355,337 $4,958,800
Cost of sales 1,134,517 989,759 4,156,569 3,869,370
Gross profit 345,661 295,507 1,198,768 1,089,430
Selling, general
and administrative
expenses 156,347 138,875 575,906 550,681
Income from operations 189,314 156,632 622,862 538,749
Other income
(deductions):
Interest expense (16,041) (14,647) (59,183) (63,697)
Interest and other
income, net (796) 78 (1,492) 2,642
Total (16,837) (14,569) (60,675) (61,055)
Income before income
taxes 172,477 142,063 562,187 477,694
Income taxes 59,505 49,722 193,955 167,193
Net income $112,972 $92,341 $368,232 $310,501
Earnings per share:
Basic earnings
per share $.99 $.84 $3.34 $2.85
Diluted earnings
per share $.99 $.84 $3.31 $2.83
Average shares
outstanding
during period -
Basic 113,691,025 108,788,284 110,330,711 108,799,974
Average shares
outstanding
during period -
Diluted 114,481,201 109,829,144 111,244,632 109,678,959
Cash dividends per
common share $.17 $.17 $.68 $.64
BUSINESS SEGMENT INFORMATION BY INDUSTRY
Unaudited Three Months Year Ended June 30,
Ended June 30,
(Dollars in thousands) 2000 1999 2000 1999
Net sales
Industrial:
North America $841,855 $679,317 $2,942,419 $2,565,154
International 341,105 296,958 1,274,590 1,241,256
Aerospace 297,218 308,991 1,138,328 1,152,390
Total $1,480,178 $ 1,285,266 $5,355,337 $4,958,800
Segment operating income
Industrial:
North America $130,624 $99,709 $426,630 $335,259
International 22,008 14,348 84,022 82,245
Aerospace 54,597 48,111 175,710 177,213
Total segment
operating income 207,229 162,168 686,362 594,717
Corporate general and
administrative
expenses 16,075 11,936 58,210 54,176
Income from operations
before interest
expense and other 191,154 150,232 628,152 540,541
Interest expense 16,041 14,647 59,183 63,697
Other 2,636 (6,478) 6,782 (850)
Income before
income taxes $172,477 $142,063 $562,187 $477,694
PARKER HANNIFIN CORPORATION - JUNE 30, 2000
CONSOLIDATED BALANCE SHEET
(Dollars in thousands) June 30, 2000 1999
Assets
Current assets:
Cash and cash equivalents $ 68,460 $ 33,277
Accounts receivable, net 840,040 738,773
Inventories 974,196 915,130
Prepaid expenses 32,706 22,928
Deferred income taxes 73,711 64,576
Assets held for sale 164,000 --
Total current assets 2,153,113 1,774,684
Plant and equipment, net 1,340,915 1,200,869
Other assets 1,152,271 730,335
Total assets $4,646,299 $3,705,888
Liabilities and shareholders' equity
Current liabilities:
Notes payable $335,298 $ 60,609
Accounts payable 372,666 313,173
Accrued liabilities 394,131 328,147
Accrued domestic and foreign taxes 84,208 52,584
Total current liabilities 1,186,303 754,513
Long-term debt 701,762 724,757
Pensions and other postretirement benefits 299,741 276,637
Deferred income taxes 77,939 30,800
Other liabilities 71,096 65,319
Shareholders' equity 2,309,458 1,853,862
Total liabilities and shareholders' equity $4,646,299 $3,705,888
CONSOLIDATED STATEMENT OF CASH FLOWS
Year ended June 30,
(Dollars in thousands) 2000 1999
Cash flows from operating activities:
Net income $368,232 $310,501
Depreciation and amortization 206,408 202,046
Net change in receivables, inventories,
and trade payables (3,346) (33,865)
Net change in other assets and liabilities (21,181) (24,694)
Other, net (12,073) 5,109
Net cash provided by operating activities 538,040 459,097
Cash flows from investing activities:
Acquisitions (less cash acquired of $1,158
and $2,609 in 2000 and 1999) (351,011) (89,865)
Capital expenditures (230,482) (230,122)
Other, net 1,784 6,930
Net cash used in investing activities (579,709) (313,057)
Cash flows from financing activities:
Net proceeds from common share activity 1,202 74,076
Net proceeds from (payments for) debt 154,621 (148,407)
Dividends (74,963) (69,461)
Net cash provided by (used in)
financing activities 80,860 (143,792)
Effect of exchange rate changes on cash (4,008) 541
Net increase in cash and cash equivalents 35,183 2,789
Cash and cash equivalents at
beginning of period 33,277 30,488
Cash and cash equivalents at end of period $ 68,460 $ 33,277
SOURCE Parker Hannifin Corporation
CONTACT: Media, Lorrie Paul Crum, VP - Corp. Communications, 216-896-2750, or Financial Analysts, Timothy K. Pistell, Treasurer, 216-896-2130, both of Parker Hannifin Corporation/
