Exhibit 99.1    
For Release:    Immediately                    

Contact:
Media -
 
 
Aidan Gormley -Director, Global Communications and Branding
216-896-3258
 
aidan.gormley@parker.com
 
 
Financial Analysts -
 
 
Robin J. Davenport, Vice President, Corporate Finance
216-896-2265
 
rjdavenport@parker.com
 
 
 
 
Stock symbol:
PH - NYSE
 


Parker Reports Record Fiscal 2015 Second Quarter Sales and Earnings per Share

Record second quarter sales increased 1% to $3.13 billion; organic sales increased 4%
Record earnings per share of $1.80 increased 8%
Segment operating margins increased 150 basis points to 13.7%
Positive order growth continues
Company increases fiscal 2015 full year guidance

CLEVELAND, January 27, 2015 -- Parker Hannifin Corporation (NYSE: PH), the global leader in motion and control technologies, today reported results for the fiscal 2015 second quarter ended December 31, 2014. Fiscal 2015 second quarter sales were $3.13 billion, a second quarter record, compared with $3.11 billion in the prior year quarter. Net income was $267.3 million, a 6 percent increase compared with $253.4 million in the second quarter of fiscal 2014. Fiscal 2015 second quarter earnings per share were $1.80, a second quarter record and an increase of 8 percent, compared with $1.66 in the prior year quarter. Adjusted earnings per share for the second quarter of fiscal 2015 were $1.84, compared with $1.30 in the prior year quarter. A reconciliation of reported to adjusted earnings per share is included with the financial tables accompanying this news release. Cash flow from operations was $538.5 million or 8.4 percent of sales for the first six months of fiscal 2015 compared with $540.1 million in the prior year period.






“This was a record quarter for Parker as we continue to execute very well in fiscal 2015,” said Chairman, CEO and President, Don Washkewicz. “While currency headwinds were significant, this was offset by solid organic growth of 4%. Our year-over-year segment operating margins improved by 150 basis points, primarily reflecting strength in our Diversified Industrial North America businesses and improvement in our Aerospace Systems segment.”

Segment Results
Diversified Industrial Segment: North American second quarter sales increased 5 percent to $1.4 billion, and operating income was $226.9 million compared with $200.6 million in the same period a year ago. International second quarter sales decreased 7 percent to $1.2 billion, and operating income was $136.5 million compared with $134.2 million in the same period a year ago.

Aerospace Systems Segment: Second quarter sales increased 11 percent to $558.4 million, and operating income was $66.8 million compared with $45.0 million in the same period a year ago.

Orders
Parker reported an increase of 4 percent in orders for the quarter ending December 31, 2014, compared with the same quarter a year ago. The company reported the following orders by business:
Orders increased 4 percent in the Diversified Industrial North America businesses compared with the same quarter a year ago.
Orders increased 1 percent in the Diversified Industrial International businesses compared with the same quarter a year ago.
Orders increased 9 percent in the Aerospace Systems segment on a rolling 12-month average basis.

Share Repurchases
During the second quarter of fiscal year 2015, the company completed share repurchases of $817 million.






Outlook
For the fiscal year ending June 30, 2015, the company has increased guidance for earnings from continuing operations to the range of $7.70 to $8.10 per share, or $7.90 to $8.30 per share on an adjusted basis. Fiscal year 2015 guidance is adjusted for expected restructuring expenses of approximately $0.20 per share.

Washkewicz added, “We are increasing our fiscal 2015 full year guidance to primarily reflect strong first half performance and the impact of our share repurchase program. We expect currency headwinds into the future. Despite these conditions, Parker remains on track to deliver a record year.”

NOTICE OF CONFERENCE CALL: Parker Hannifin's conference call and slide presentation to discuss its fiscal 2015 second 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 exceeding $13 billion in fiscal year 2014, 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 57,500 people in 50 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) earnings per diluted share without the effect of restructuring expenses, the effects of a joint venture and the effects of asset write downs; and (b) the effect of restructuring expenses on forecasted earnings from continuing operations per diluted share. The effects of restructuring expenses, the effects of a joint venture and the effects of asset write downs are removed to allow investors and the company to meaningfully evaluate changes in earnings per diluted share and segment operating margins 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; ability to implement successfully the Company’s capital allocation initiatives, including timing, price and execution of share repurchases; 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 - DECEMBER 31, 2014
 
 
 
 
 
Exhibit 99.1

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

 
2013

 
2014

 
2013

 
 
 
 
 
 
 
 
 
Net sales
 
$
3,134,993

 
$
3,106,006

 
$
6,404,925

 
$
6,332,150

Cost of sales
 
2,401,584

 
2,419,971

 
4,861,449

 
4,896,380

Gross profit
 
733,409

 
686,035

 
1,543,476

 
1,435,770

Selling, general and administrative expenses
379,804

 
398,636

 
780,644

 
805,566

Goodwill and intangible asset impairment

 
188,870

 

 
188,870

Interest expense
 
27,645

 
20,851

 
48,606

 
41,809

Other (income), net
 
(17,306
)
 
(417,638
)
 
(25,675
)
 
(419,881
)
Income before income taxes
 
343,266

 
495,316

 
739,901

 
819,406

Income taxes
 
75,931

 
241,912

 
192,395

 
321,682

Net income
 
267,335

 
253,404

 
547,506

 
497,724

Less: Noncontrolling interests
 
83

 
116

 
165

 
120

Net income attributable to common shareholders
$
267,252

 
$
253,288

 
$
547,341

 
$
497,604

 
 
 
 
 
 
 
 
 
Earnings per share attributable to common shareholders:
 
 
 
 
 
 
 
   Basic earnings per share
 
$
1.84

 
$
1.70

 
$
3.72

 
$
3.34

   Diluted earnings per share
 
$
1.80

 
$
1.66

 
$
3.66

 
$
3.28

 
 
 
 
 
 
 
 
 
Average shares outstanding during period - Basic
145,493,247

 
149,153,599

 
147,116,038

 
149,195,452

Average shares outstanding during period - Diluted
148,182,777

 
152,151,024

 
149,463,280

 
151,743,389

 
 
 
 
 
 
 
 
 
Cash dividends per common share
$
0.63

 
$
0.45

 
$
1.11

 
$
0.90

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

Net income
$
267,335

 
$
253,404

 
$
547,506

 
$
497,724

Adjustments:
 
 
 
 
 
 
 
  Restructuring charges
6,450

 
9,565

 
11,962

 
18,134

  Asset writedowns

 
192,188

 

 
192,188

  Gain related to joint venture agreement

 
(255,652
)
 

 
(255,652
)
Adjusted net income
$
273,785

 
$
199,505

 
$
559,468

 
$
452,394

 
 
 
 
 
 
 
 
 
Earnings per diluted share
$
1.80

 
$
1.66

 
$
3.66

 
$
3.28

Adjustments:
 
 
 
 
 
 
 
  Restructuring charges
0.04

 
0.06

 
0.08

 
0.12

  Asset writedowns

 
1.26

 

 
1.26

  Gain related to joint venture agreement

 
(1.68
)
 

 
(1.68
)
Adjusted earnings per diluted share
$
1.84

 
$
1.30

 
$
3.74

 
$
2.98







PARKER HANNIFIN CORPORATION - DECEMBER 31, 2014
 
 
 
 
 
Exhibit 99.1

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

 
2013

 
2014

 
2013

Net sales
 
 
 
 
 
 
 
 
    Diversified Industrial:
 
 
 
 
 
 
 
 
       North America
 
$
1,389,207

 
$
1,325,402

 
$
2,861,019

 
$
2,713,277

       International
 
1,187,400

 
1,276,851

 
2,450,897

 
2,547,646

    Aerospace Systems
 
558,386

 
503,753

 
1,093,009

 
1,071,227

Total net sales
 
$
3,134,993

 
$
3,106,006

 
$
6,404,925

 
$
6,332,150

Segment operating income
 
 
 
 
 
 
 
 
    Diversified Industrial:
 
 
 
 
 
 
 
 
       North America
 
$
226,888

 
$
200,628

 
$
491,124

 
$
434,826

       International
 
136,525

 
134,198

 
326,330

 
307,608

    Aerospace Systems
 
66,817

 
45,034

 
132,166

 
102,332

Total segment operating income
430,230

 
379,860

 
949,620

 
844,766

Corporate general and administrative expenses
51,360

 
46,819

 
106,804

 
94,029

Income before interest expense and other expense
378,870

 
333,041

 
842,816

 
750,737

Interest expense
 
27,645

 
20,851

 
48,606

 
41,809

Other expense (income)
 
7,959

 
(183,126
)
 
54,309

 
(110,478
)
Income before income taxes
 
$
343,266

 
$
495,316

 
$
739,901

 
$
819,406







 
 
 
 
Exhibit 99.1
 
PARKER HANNIFIN CORPORATION - DECEMBER 31, 2014
 
 
 
 
 
CONSOLIDATED BALANCE SHEET
 
 
 
 
 
 
(Unaudited)
 
December 31,

 
June 30,

 
December 31,

(Dollars in thousands)
 
2014

 
2014

 
2013

Assets
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
Cash and cash equivalents
 
$
1,075,307

 
$
1,613,555

 
$
2,139,522

Marketable securities and other investments
 
886,879

 
573,701

 

Trade accounts receivable, net
 
1,572,864

 
1,858,176

 
1,625,782

Non-trade and notes receivable
 
428,090

 
388,437

 
236,067

Inventories
 
1,453,996

 
1,371,681

 
1,448,628

Prepaid expenses
 
160,335

 
129,837

 
169,262

Deferred income taxes
 
150,301

 
136,193

 
125,612

Total current assets
 
5,727,772

 
6,071,580

 
5,744,873

Plant and equipment, net
 
1,716,489

 
1,824,294

 
1,820,312

Goodwill
 
3,011,894

 
3,171,425

 
3,161,699

Intangible assets, net
 
1,090,972

 
1,188,282

 
1,220,547

Other assets
 
1,021,272

 
1,018,781

 
916,505

Total assets
 
$
12,568,399

 
$
13,274,362

 
$
12,863,936

 
 
 
 
 
 
 
Liabilities and equity
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
Notes payable
 
$
242,043

 
$
816,622

 
$
1,217,292

Accounts payable
 
1,145,202

 
1,252,040

 
1,074,512

Accrued liabilities
 
817,152

 
960,523

 
839,095

Accrued domestic and foreign taxes
 
134,754

 
223,611

 
172,204

Total current liabilities
 
2,339,151

 
3,252,796

 
3,303,103

Long-term debt
 
2,725,510

 
1,508,142

 
1,507,019

Pensions and other postretirement benefits
 
1,309,477

 
1,346,224

 
1,303,527

Deferred income taxes
 
86,606

 
94,819

 
112,561

Other liabilities
 
347,514

 
409,573

 
339,440

Shareholders' equity
 
5,756,749

 
6,659,428

 
6,295,226

Noncontrolling interests
 
3,392

 
3,380

 
3,060

Total liabilities and equity
 
$
12,568,399

 
$
13,274,362

 
$
12,863,936






 
 
 
 
Exhibit 99.1

PARKER HANNIFIN CORPORATION - DECEMBER 31, 2014
 
 
 
 
CONSOLIDATED STATEMENT OF CASH FLOWS
 
 
 
 
(Unaudited)
 
Six Months Ended December 31,
(Dollars in thousands)
 
2014

 
2013

 
 
 
 
 
Cash flows from operating activities:
 
 
 
 
Net income
 
$
547,506

 
$
497,724

Depreciation and amortization
 
160,625

 
170,090

Stock incentive plan compensation
 
52,217

 
75,370

Goodwill and intangible asset impairment
 

 
188,870

Gain on sale of deconsolidation of subsidiary
 

 
(412,612
)
Gain on sale of businesses
 
(5,791
)
 

Net change in receivables, inventories, and trade payables
 
2,205

 
53,841

Net change in other assets and liabilities
 
(167,918
)
 
(80,362
)
Other, net
 
(50,347
)
 
47,188

Net cash provided by operating activities
 
538,497

 
540,109

Cash flows from investing activities:
 
 
 
 
Acquisitions (net of cash of $3,979 in 2014)
 
(18,640
)
 
728

Capital expenditures
 
(109,781
)
 
(111,847
)
Proceeds from sale of plant and equipment
 
3,902

 
8,790

Proceeds from sale of businesses
 
22,779

 

Proceeds from deconsolidation of subsidiary
 

 
202,498

Purchases of marketable securities and other investments
 
(971,606
)
 

Maturities and sales of marketable securities and other investments
 
475,851

 

Other, net
 
(43,239
)
 
(728
)
Net cash (used in) provided by investing activities
 
(640,734
)
 
99,441

Cash flows from financing activities:
 
 
 
 
Net payments for common stock activity
 
(852,524
)
 
(81,784
)
Net proceeds from (payments for) debt
 
669,975

 
(116,834
)
Dividends
 
(164,758
)
 
(134,718
)
Net cash (used in) financing activities
 
(347,307
)
 
(333,336
)
Effect of exchange rate changes on cash
 
(88,704
)
 
51,896

Net (decrease) increase in cash and cash equivalents
 
(538,248
)
 
358,110

Cash and cash equivalents at beginning of period
 
1,613,555

 
1,781,412

Cash and cash equivalents at end of period
 
$
1,075,307

 
$
2,139,522






 
 
 
 
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 2015
 
 
Forecasted earnings per diluted share
$7.70 to $8.10
 
 
Adjustments:
 
 
 
  Restructuring
0.20
 
 
Adjusted forecasted earnings per diluted share
$7.90 to $8.30