Exhibit 99.1    
For Release:    Immediately                    

Contact:
Media -
 
 
Aidan Gormley -Director, Corporate Communications
216-896-3258
 
aidan.gormley@parker.com
 
 
Financial Analysts -
 
 
Pamela Huggins, Vice President - Treasurer
216-896-2240
 
phuggins@parker.com
 
 
 
 
Stock symbol:
PH - NYSE
 

Parker Reports Fiscal 2014 Third Quarter Sales, Net Income and Earnings per Share

Strong operational quarter, restructuring proceeding ahead of plan
Higher than anticipated restructuring expenses of $0.28 per diluted share in the quarter
Earnings per diluted share were $1.60, or $1.88 excluding restructuring expenses
Positive order growth continues with 7 percent increase
Company increases full year adjusted earnings guidance midpoint to $6.50 per diluted share

CLEVELAND, April 29, 2014 -- Parker Hannifin Corporation (NYSE: PH), the global leader in motion and control technologies, today reported results for the fiscal 2014 third quarter ended March 31, 2014. Fiscal 2014 third quarter sales increased 2 percent to $3.36 billion compared with $3.31 billion in the same quarter a year ago. Adjusting for a previously announced joint venture, fiscal 2014 third quarter sales increased 3 percent. Fiscal 2014 third quarter net income was $242.5 million, or $1.60 earnings per diluted share and when adjusted for restructuring expenses, was $285.0 million, or $1.88 earnings per diluted share. Net income in the prior year quarter was $256.6 million or $1.68 earnings per diluted share. A reconciliation of as reported to adjusted sales, net income and earnings per diluted share is included with the financial tables accompanying this news release.







Cash flow from operations for the first nine months of fiscal 2014 was $817.5 million or 8.4 percent of sales compared with $718.8 million or 7.5 percent of sales in the prior year period. Excluding a discretionary contribution to the company’s pension plan of $75 million and the impact of restructuring initiatives of $15 million in fiscal 2014, cash flow from operations was 9.4 percent of sales.
 
“We are pleased to have delivered strong operating margins in the third quarter, particularly in our Diversified Industrial International businesses,” said Chairman, CEO and President, Don Washkewicz. “Our previously announced restructuring initiatives are proceeding ahead of plan, with $86 million in pretax expenses incurred fiscal year-to-date. In addition, the improved order growth trend is an encouraging sign for the remainder of this fiscal year.”

Segment Results
Diversified Industrial Segment: North American third quarter sales increased 1.9 percent to $1.46 billion, and operating income was $243.0 million compared with $224.5 million in the same period a year ago. International third quarter sales increased 4.4 percent to $1.36 billion, and operating income was $126.9 million compared with $158.2 million in the same period a year ago. International operating income in the third quarter adjusted for the impact of restructuring expenses was $186.4 million.

Aerospace Systems Segment: Compared to the same period a year ago, third quarter sales decreased 5.6 percent to $545.7 million, but increased 2 percent adjusting for the impact of the previously announced joint venture between Parker Aerospace and GE Aviation. Operating income was $64.0 million compared with $80.1 million in the same period a year ago, largely reflecting an unfavorable product mix.










Orders
Parker reported an increase of 7 percent in orders for the quarter ending March 31, 2014, compared with the same quarter a year ago. The company reported the following orders by business:
Orders increased 6 percent in the Diversified Industrial North America businesses;
Orders increased 5 percent in the Diversified Industrial International businesses; and
Orders increased 16 percent in the Aerospace Systems segment on a rolling 12-month average basis.

Outlook
For the fiscal year ending June 30, 2014, the company has increased guidance for adjusted earnings per diluted share to the range of $6.40 to $6.60, or $6.50 at the midpoint. Fiscal 2014 adjusted earnings guidance includes increased restructuring expenses which are anticipated to be approximately $0.55 per diluted share, but does not include the gain associated with the previously announced joint venture and asset write downs recorded in the quarter ended December 31, 2013. Restructuring expenses were $0.28 per diluted share in the third quarter of fiscal 2014 and $0.40 per diluted share fiscal year-to-date.

Washkewicz added, “We have increased the midpoint of our guidance for fiscal year 2014 to reflect the impact of improved operating margins and positive order trends. Considering the progress we have made, we expect to close the year strong and be well positioned going into fiscal year 2015.”















NOTICE OF CONFERENCE CALL: Parker Hannifin's conference call and slide presentation to discuss its fiscal 2014 third quarter results are available to all interested parties via live webcast today at 11:00 a.m. ET, on the company's investor information web site at www.phstock.com. To access the call, click on the "Live Webcast" link. From this link, users also may complete a pre-call system test and register for e-mail notification of future events and information available from Parker. A replay of the conference call will also be available at www.phstock.com for one year after the call.


With annual sales of $13 billion in fiscal year 2013, Parker Hannifin is the world's leading diversified manufacturer of motion and control technologies and systems, providing precision-engineered solutions for a wide variety of mobile, industrial and aerospace markets. The company employs approximately 58,000 people in 49 countries around the world. Parker has increased its annual dividends paid to shareholders for 58 consecutive fiscal years, among the top five longest-running dividend-increase records in the S&P 500 index. For more information, visit the company's website at www.parker.com, or its investor information website at www.phstock.com.

Note on Orders
Orders provide near-term perspective on the company's outlook, particularly when viewed in the context of prior and future quarterly order rates. However, orders are not in themselves an indication of future performance. All comparisons are at constant currency exchange rates, with the prior year restated to the current-year rates. All exclude acquisitions until they can be reflected in both the numerator and denominator. Aerospace comparisons are rolling 12-month average computations. The total Parker orders number is derived from a weighted average of the year-over-year quarterly percent change in orders for Diversified Industrial North America and Diversified Industrial International, and the year-over-year 12-month rolling average of orders for the Aerospace Systems segment.

Note on Non-GAAP Numbers
This press release contains references to (a) sales growth excluding the effects of the joint venture, (b) operating income, net income and earnings per diluted share without the effect of restructuring expenses, (c) forecasted earnings per diluted share without the effect of a gain associated with a joint venture and asset write downs, and (d) cash flow excluding discretionary contributions to the company’s pension plan and the impact of restructuring. The effects of a joint venture, asset write downs, restructuring expenses and pension plan contributions are removed to allow investors and the company to meaningfully evaluate changes in sales, operating income, net income, earnings per diluted share, and cash flow on a comparable basis from period to period.

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, earnings projections, events or developments are forward-looking statements. It is possible that the future performance and earnings projections of the company, including its individual segments, may differ materially from current expectations, depending on economic conditions within its mobile, industrial and aerospace markets, and the company's ability to maintain and achieve anticipated benefits associated with announced realignment activities, strategic initiatives to improve operating margins, actions taken to combat the effects of the current economic environment, and growth, innovation and global diversification initiatives.





A change in the economic conditions in individual markets may have a particularly volatile effect on segment performance. Among other factors which may affect future performance are: changes in business relationships with and purchases by or from major customers, suppliers or distributors, including delays or cancellations in shipments, disputes regarding contract terms or significant changes in financial condition, changes in contract cost and revenue estimates for new development programs and changes in product mix; ability to identify acceptable strategic acquisition targets; uncertainties surrounding timing, successful completion or integration of acquisitions and similar transactions; the ability to successfully divest businesses planned for divestiture and realize the anticipated benefits of such divestitures; the determination to undertake business realignment activities and the expected costs thereof and, if undertaken, the ability to complete such activities and realize the anticipated cost savings from such activities; the ability to realize anticipated benefits of the consolidation of the Climate and Industrial Controls Group; threats associated with and efforts to combat terrorism; uncertainties surrounding the ultimate resolution of outstanding legal proceedings, including the outcome of any appeals; competitive market conditions and resulting effects on sales and pricing; increases in raw material costs that cannot be recovered in product pricing; the company's ability to manage costs related to insurance and employee retirement and health care benefits; and global economic factors, including manufacturing activity, air travel trends, currency exchange rates, difficulties entering new markets and general economic conditions such as inflation, deflation, interest rates and credit availability. The company makes these statements as of the date of this disclosure, and undertakes no obligation to update them unless otherwise required by law.



###























 
PARKER HANNIFIN CORPORATION - MARCH 31, 2014
 
 
 
 
 
Exhibit 99.1

CONSOLIDATED STATEMENT OF INCOME
 
 
 
 
 
 
 
(Unaudited)
 
Three Months Ended March 31,
 
Nine Months Ended March 31,
(Dollars in thousands except per share amounts)
2014

 
2013

 
2014

 
2013

 
 
 
 
 
 
 
 
 
Net sales
 
$
3,358,406

 
$
3,307,041

 
$
9,690,556

 
$
9,587,471

Cost of sales
 
2,605,893

 
2,569,189

 
7,502,273

 
7,468,608

Gross profit
 
752,513

 
737,852

 
2,188,283

 
2,118,863

Selling, general and administrative expenses
407,241

 
379,690

 
1,212,807

 
1,141,912

Goodwill and intangible asset impairment

 

 
188,870

 

Interest expense
 
20,594

 
23,050

 
62,403

 
70,775

Other (income), net
 
(4,812
)
 
(3,439
)
 
(424,693
)
 
(31,062
)
Income before income taxes
 
329,490

 
338,551

 
1,148,896

 
937,238

Income taxes
 
86,972

 
81,959

 
408,654

 
259,584

Net income
 
242,518

 
256,592

 
740,242

 
677,654

Less: Noncontrolling interests
 
112

 
32

 
232

 
391

Net income attributable to common shareholders
$
242,406

 
$
256,560

 
$
740,010

 
$
677,263

 
 
 
 
 
 
 
 
 
Earnings per share attributable to common shareholders:
 
 
 
 
 
 
 
   Basic earnings per share
 
$
1.63

 
$
1.72

 
$
4.96

 
$
4.54

   Diluted earnings per share
 
$
1.60

 
$
1.68

 
$
4.88

 
$
4.46

 
 
 
 
 
 
 
 
 
Average shares outstanding during period - Basic
149,039,529

 
149,287,628

 
149,143,478

 
149,191,583

Average shares outstanding during period - Diluted
151,739,617

 
152,360,612

 
151,562,276

 
151,853,522

 
 
 
 
 
 
 
 
 
Cash dividends per common share
$
0.48

 
$
0.43

 
$
1.38

 
$
1.25

 
 
 
 
 
 
 
 
 
RECONCILIATION OF NET INCOME AND EARNINGS PER DILUTED SHARE TO ADJUSTED NET INCOME AND EARNINGS PER DILUTED SHARE

Net income
$
242,518

 
$
256,592

 
$
740,242

 
$
677,654

Adjustments:
 
 
 
 
 
 
 
  Restructuring charges
42,516

 
1,205

 
60,830

 
5,791

Adjusted net income
$
285,034

 
$
257,797

 
$
801,072

 
$
683,445

 
 
 
 
 
 
 
 
 
Earnings per diluted share
$
1.60

 
$
1.68

 
$
4.88

 
$
4.46

Adjustments:
 
 
 
 
 
 
 
  Restructuring charges
0.28

 
0.01

 
0.40

 
0.04

Adjusted earnings per diluted share
$
1.88

 
$
1.69

 
$
5.28

 
$
4.50







PARKER HANNIFIN CORPORATION - MARCH 31, 2014
 
 
 
 
 
Exhibit 99.1

BUSINESS SEGMENT INFORMATION BY INDUSTRY
 
 
 
 
 
 
 
(Unaudited)
 
Three Months Ended March 31,
 
Nine Months Ended March 31,
(Dollars in thousands)
 
2014

 
2013

 
2014

 
2013

Net sales
 
 
 
 
 
 
 
 
    Diversified Industrial:
 
 
 
 
 
 
 
 
       North America
 
$
1,455,212

 
$
1,428,430

 
$
4,168,489

 
$
4,171,089

       International
 
1,357,513

 
1,300,585

 
3,905,159

 
3,768,617

    Aerospace Systems
 
545,681

 
578,026

 
1,616,908

 
1,647,765

Total
 
$
3,358,406

 
$
3,307,041

 
$
9,690,556

 
$
9,587,471

Segment operating income
 
 
 
 
 
 
 
 
    Diversified Industrial:
 
 
 
 
 
 
 
 
       North America
 
$
242,998

 
$
224,487

 
$
677,824

 
$
658,993

       International
 
126,933

 
158,194

 
434,541

 
439,839

    Aerospace Systems
 
63,974

 
80,080

 
166,306

 
194,150

Total segment operating income
433,905

 
462,761

 
1,278,671

 
1,292,982

Corporate general and administrative expenses
38,377

 
41,410

 
132,406

 
126,578

Income before interest expense and other expense
395,528

 
421,351

 
1,146,265

 
1,166,404

Interest expense
 
20,594

 
23,050

 
62,403

 
70,775

Other expense (income)
 
45,444

 
59,750

 
(65,034
)
 
158,391

Income before income taxes
 
$
329,490

 
$
338,551

 
$
1,148,896

 
$
937,238

 
 
 
 
 
 
 
 
 
RECONCILIATION OF NET SALES TO ADJUSTED NET SALES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended March 31,
 
%
 
 
 
 
2014

 
2013

 
Change
 
 
Total net sales
 
$
3,358,406

 
$
3,307,041

 
1.6
 %
 
 
Adjustments:
 
 
 
 
 
 
 
 
 Sales related to GE joint venture

 
43,731

 
 
 
 
Adjusted total net sales
 
$
3,358,406

 
$
3,263,310

 
2.9
 %
 
 
 
 
 
 
 
 
 
 
 
Aerospace Systems net sales
$
545,681

 
$
578,026

 
(5.6
)%
 
 
Adjustments:
 
 
 
 
 
 
 
 
 Sales related to GE joint venture

 
43,731

 
 
 
 
Adjusted Aerospace Systems net sales
$
545,681

 
$
534,295

 
2.1
 %
 
 






 
 
 
 
Exhibit 99.1
 
PARKER HANNIFIN CORPORATION - MARCH 31, 2014
 
 
 
 
 
CONSOLIDATED BALANCE SHEET
 
 
 
 
 
 
(Unaudited)
 
March 31,

 
June 30,

 
March 31,

(Dollars in thousands)
 
2014

 
2013

 
2013

Assets
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
Cash and cash equivalents
 
$
2,095,989

 
$
1,781,412

 
$
1,677,319

Accounts receivable, net
 
2,098,063

 
2,062,745

 
2,017,126

Inventories
 
1,448,989

 
1,377,405

 
1,473,072

Prepaid expenses
 
183,119

 
182,669

 
136,268

Deferred income taxes
 
122,840

 
126,955

 
134,724

Total current assets
 
5,949,000

 
5,531,186

 
5,438,509

Plant and equipment, net
 
1,827,980

 
1,808,240

 
1,829,715

Goodwill
 
3,164,175

 
3,223,515

 
3,229,827

Intangible assets, net
 
1,210,967

 
1,290,499

 
1,313,990

Other assets
 
950,236

 
687,458

 
859,731

Total assets
 
$
13,102,358

 
$
12,540,898

 
$
12,671,772

 
 
 
 
 
 
 
Liabilities and equity
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
Notes payable
 
$
1,078,846

 
$
1,333,826

 
$
1,527,696

Accounts payable
 
1,200,466

 
1,156,002

 
1,162,125

Accrued liabilities
 
933,077

 
894,296

 
838,376

Accrued domestic and foreign taxes
 
154,792

 
136,079

 
120,352

Total current liabilities
 
3,367,181

 
3,520,203

 
3,648,549

Long-term debt
 
1,508,611

 
1,495,960

 
1,496,026

Pensions and other postretirement benefits
 
1,306,667

 
1,372,437

 
1,693,048

Deferred income taxes
 
111,508

 
102,920

 
127,159

Other liabilities
 
354,158

 
307,897

 
294,582

Shareholders' equity
 
6,450,996

 
5,738,426

 
5,409,058

Noncontrolling interests
 
3,237

 
3,055

 
3,350

Total liabilities and equity
 
$
13,102,358

 
$
12,540,898

 
$
12,671,772






 
 
 
 
Exhibit 99.1

PARKER HANNIFIN CORPORATION - MARCH 31, 2014
 
 
 
 
CONSOLIDATED STATEMENT OF CASH FLOWS
 
 
 
 
(Unaudited)
 
Nine Months Ended March 31,
(Dollars in thousands)
 
2014

 
2013

 
 
 
 
 
Cash flows from operating activities:
 
 
 
 
Net income
 
$
740,242

 
$
677,654

Depreciation and amortization
 
253,150

 
250,574

Stock incentive plan compensation
 
84,647

 
65,516

Goodwill and intangible asset impairment
 
188,870

 

Gain on sale of deconsolidation of subsidiary
 
(412,612
)
 

Gain on sale of businesses
 

 
(13,313
)
Net change in receivables, inventories, and trade payables
 
(52,953
)
 
(13,743
)
Net change in other assets and liabilities
 
9,263

 
(258,332
)
Other, net
 
6,864

 
10,443

Net cash provided by operating activities
 
817,471

 
718,799

Cash flows from investing activities:
 
 
 
 
Acquisitions (net of cash of $33,932 in 2013)
 
(14,272
)
 
(620,647
)
Capital expenditures
 
(167,371
)
 
(214,061
)
Proceeds from sale of plant and equipment
 
10,785

 
24,321

Proceeds from sale of businesses
 

 
72,190

Proceeds from deconsolidation of subsidiary
 
202,498

 

Other, net
 
(3,382
)
 
(9,375
)
Net cash provided by (used in) investing activities
 
28,258

 
(747,572
)
Cash flows from financing activities:
 
 
 
 
Net payments for common stock activity
 
(120,890
)
 
(125,325
)
Acquisition of noncontrolling interests
 

 
(1,072
)
Net (payments for) proceeds from debt
 
(255,319
)
 
1,186,679

Dividends
 
(206,516
)
 
(187,705
)
Net cash (used in) provided by financing activities
 
(582,725
)
 
872,577

Effect of exchange rate changes on cash
 
51,573

 
(4,802
)
Net increase in cash and cash equivalents
 
314,577

 
839,002

Cash and cash equivalents at beginning of period
 
1,781,412

 
838,317

Cash and cash equivalents at end of period
 
$
2,095,989

 
$
1,677,319






 
 
 
 
Exhibit 99.1
PARKER HANNIFIN CORPORATION
 
 
 
 
RECONCILIATION OF FORECASTED EARNINGS PER DILUTED SHARE TO ADJUSTED FORECASTED EARNINGS PER DILUTED SHARE
(Unaudited)
 
 
 
 
(Amounts in dollars)
 
 
 
 
 
 
Fiscal Year 2014
 
 
Forecasted earnings per diluted share
$6.82 to $7.02
 
 
Adjustments:
 
 
 
  Asset writedowns
$1.26
 
 
  Gain related to joint venture agreement
$(1.68)
 
 
Adjusted forecasted earnings per diluted share
$6.40 to $6.60