LOGO

   Exhibit 99.1

 

For Release:    Immediately   
Contact:   

Media –

Christopher M. Farage - Vice President, Communications & External Affairs

cfarage@parker.com

   216/896-2750
  

Financial Analysts –

Pamela Huggins, Vice President - Treasurer

phuggins@parker.com

   216/896-2240
Stock Symbol:    PH – NYSE   

Parker Reports Year End Results with All-Time Record Sales, Net Income and Earnings per Share

- Fiscal 2011 Full Year Sales Reach All-Time Record of $12.3 billion

- Fiscal 2011 Full Year Diluted Earnings Per Share Reaches a Record $6.37

- Company Maintains Strong Cash Flow and Balance Sheet

- Issues Guidance for Record Earnings in Fiscal 2012

CLEVELAND, August 2, 2011—Parker Hannifin Corporation (NYSE: PH), the global leader in motion and control technologies, today reported all-time record results for the fiscal 2011 fourth quarter and year ended June 30, 2011. Fiscal 2011 sales were $12.3 billion, an increase of 23.5 percent from $10.0 billion in the prior year and surpassing the previous record achieved in fiscal 2008. Net income for the year was a record $1.1 billion, an increase of 90.0 percent compared with $556.4 million in fiscal 2010. Fiscal 2011 earnings per diluted share were a record at $6.37 compared with $3.40 in the previous year. Cash flow from operations for fiscal 2011 was $1.2 billion, or 9.5 percent of sales, compared with cash flow from operations of $1.2 billion, or 12.2 percent of sales in the prior year period. Cash flow from operations included discretionary contributions to the company’s pension plan of $400 million in fiscal 2011 and $100 million in fiscal 2010. Excluding these discretionary contributions, cash flow as a percent of sales in fiscal 2011 and fiscal 2010, was 12.7 percent and 13.2 percent, respectively.

Fiscal 2011 fourth quarter sales were a record $3.4 billion, an increase of 22.4 percent from $2.8 billion in the same quarter a year ago. Net income for the fourth quarter was also a record at $294.7 million, a 32.1 percent increase compared with $223.1 million in the fourth quarter of fiscal 2010. Earnings per diluted share for the quarter were a record $1.79, compared with $1.35 in last year’s

 

1


fourth quarter. Cash flow from operations for fiscal 2011 fourth quarter was $367 million, or 10.8 percent of sales, compared with cash flow from operations of $377 million, or 13.5 percent of sales in the prior year period. Fiscal 2011 fourth quarter cash flow from operations included a $200 million discretionary contribution to the company’s pension plan. Excluding this discretionary contribution, cash flow as a percent of sales was 16.6 percent for the fiscal 2011 fourth quarter.

“Achieving record performance this year is a remarkable accomplishment,” said Chairman, CEO and President, Don Washkewicz. “I am especially proud of our global team that delivered this performance. We will continue the focus on executing Parker’s Win Strategy and build on this success.”

Parker also achieved all-time record sales and earnings per share in the fourth quarter and strong segment operating margin performance. Total sales for the quarter increased 22 percent as organic sales increased 15 percent, acquisitions contributed 1 percent and foreign currency translation was a positive 6 percent. Profitability in the quarter was strongest in the Industrial segment. Industrial North America segment operating margin reached 16.9 percent and Industrial International segment operating margin was 14.7 percent.

Segment Results

In the Industrial North America segment, fourth quarter sales increased 18.6 percent to $1.2 billion, and operating income was $207.3 million compared with $162.9 million in the same period a year ago.

In the Industrial International segment, fourth quarter sales increased 33.8 percent to $1.4 billion, and operating income was $202.8 million compared with $140.3 million in the same period a year ago.

In the Aerospace segment, fourth quarter sales increased 9.3 percent to $521.9 million, and operating income was $70.7 million compared with $64.1 million in the same period a year ago.

In the Climate and Industrial Controls segment, fourth quarter sales increased 15.2 percent to $276.8 million, and operating income was $22.5 million compared with $20.5 million in the same period a year ago.

 

2


Orders

Parker reported an increase of 15 percent in orders for the quarter ending June 30, 2011, compared with the same quarter a year ago. The company reported the following orders by operating segment:

 

   

Orders increased 11 percent in the Industrial North America segment, compared with the same quarter a year ago.

 

   

Orders increased 18 percent in the Industrial International segment, compared with the same quarter a year ago.

 

   

Orders increased 27 percent in the Aerospace segment on a rolling 12-month average basis.

 

   

Orders increased 1 percent in the Climate and Industrial Controls segment, compared with the same quarter a year ago.

Outlook

For fiscal 2012, the company has issued guidance for earnings from continuing operations in the range of $6.70 to $7.50 per diluted share.

Washkewicz added, “Our earnings range for fiscal 2012 anticipates another record year for Parker. We will continue in fiscal 2012 with a strong focus on the fundamentals defined by the Win Strategy. We will continue to invest in profitable growth through new product and systems innovation, strategic acquisitions, and expansion of our distribution network.”

NOTICE OF CONFERENCE CALL: Parker Hannifin’s conference call and slide presentation to discuss its fiscal 2011 fourth quarter and full year results are available to all interested parties via live webcast today at 10:00 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.

 

3


With annual sales exceeding $12 billion in fiscal year 2011, 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 47 countries around the world. Parker has increased its annual dividends paid to shareholders for 55 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 web site at www.parker.com, or its investor information web site at www.phstock.com.

Notes 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 the Industrial North America, Industrial International, and Climate and Industrial Controls segments, and the year-over-year 12-month rolling average of orders for the Aerospace segment.

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 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; uncertainties surrounding timing, successful completion or integration of acquisitions; ability to realize anticipated costs savings from business realignment activities; 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.

###

 

4


PARKER HANNIFIN CORPORATION—JUNE 30, 2011

CONSOLIDATED STATEMENT OF INCOME

 

    

Three Months Ended June 30,

    

Twelve Months Ended June 30,

 

(Dollars in thousands except per share amounts)

   2011     2010      2011     2010  

Net sales

   $ 3,409,830      $ 2,786,470       $ 12,345,870      $ 9,993,166   

Cost of sales

     2,590,772        2,114,190         9,387,457        7,847,067   
  

 

 

   

 

 

    

 

 

   

 

 

 

Gross profit

     819,058        672,280         2,958,413        2,146,099   

Selling, general and administrative expenses

     413,441        349,328         1,467,773        1,277,080   

Interest expense

     24,821        26,896         99,704        103,599   

Other (income) expense, net

     (594     3,896         (22,785     10,603   
  

 

 

   

 

 

    

 

 

   

 

 

 

Income before income taxes

     381,390        292,160         1,413,721        754,817   

Income taxes

     86,736        69,108         356,571        198,452   
  

 

 

   

 

 

    

 

 

   

 

 

 

Net income

     294,654        223,052         1,057,150        556,365   

Less: Noncontrolling interests

     2,464        889         8,020        2,300   
  

 

 

   

 

 

    

 

 

   

 

 

 

Net income attributable to common shareholders

   $ 292,190      $ 222,163       $ 1,049,130      $ 554,065   
  

 

 

   

 

 

    

 

 

   

 

 

 

Earnings per share attributable to common shareholders:

         

Basic earnings per share

   $ 1.83      $ 1.38       $ 6.51      $ 3.44   
  

 

 

   

 

 

    

 

 

   

 

 

 

Diluted earnings per share

   $ 1.79      $ 1.35       $ 6.37      $ 3.40   
  

 

 

   

 

 

    

 

 

   

 

 

 

Average shares outstanding during period—Basic

     159,369,296        161,310,414         161,125,869        160,909,655   

Average shares outstanding during period—Diluted

     163,688,610        163,997,297         164,798,221        162,901,717   
  

 

 

   

 

 

    

 

 

   

 

 

 

Cash dividends per common share

   $ .37      $ .26       $ 1.25      $ 1.01   
  

 

 

   

 

 

    

 

 

   

 

 

 
BUSINESS SEGMENT INFORMATION BY INDUSTRY          
     Three Months Ended June 30,      Twelve Months Ended June 30,  

(Dollars in thousands)

   2011     2010      2011     2010  

Net sales

         

Industrial:

         

North America

   $ 1,227,412      $ 1,034,573       $ 4,516,510      $ 3,623,460   

International

     1,383,748        1,033,971         4,917,007        3,811,464   

Aerospace

     521,868        477,629         1,921,984        1,744,283   

Climate & Industrial Controls

     276,802        240,297         990,369        813,959   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total

   $ 3,409,830      $ 2,786,470       $ 12,345,870      $ 9,993,166   
  

 

 

   

 

 

    

 

 

   

 

 

 

Segment operating income

         

Industrial:

         

North America

   $ 207,290      $ 162,933       $ 745,544      $ 487,137   

International

     202,848        140,295         754,222        394,089   

Aerospace

     70,722        64,052         247,126        208,002   

Climate & Industrial Controls

     22,504        20,513         76,134        53,452   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total segment operating income

     503,364        387,793         1,823,026        1,142,680   

Corporate general and administrative expenses

     51,187        54,911         163,868        153,965   
  

 

 

   

 

 

    

 

 

   

 

 

 

Income from operations before interest expense and other

     452,177        332,882         1,659,158        988,715   

Interest expense

     24,821        26,896         99,704        103,599   

Other expense

     45,966        13,826         145,733        130,299   
  

 

 

   

 

 

    

 

 

   

 

 

 

Income before income taxes

   $ 381,390      $ 292,160       $ 1,413,721      $ 754,817   
  

 

 

   

 

 

    

 

 

   

 

 

 

 

5


PARKER HANNIFIN CORPORATION—JUNE 30, 2011

CONSOLIDATED BALANCE SHEET

 

(Dollars in thousands) June 30,

   2011     2010  

Assets

    

Current assets:

    

Cash and cash equivalents

   $ 657,466      $ 575,526   

Accounts receivable, net

     1,977,856        1,599,941   

Inventories

     1,412,153        1,171,655   

Prepaid expenses

     111,934        111,545   

Deferred income taxes

     145,847        130,129   
  

 

 

   

 

 

 

Total current assets

     4,305,256        3,588,796   

Plant and equipment, net

     1,797,179        1,697,881   

Goodwill

     3,009,116        2,786,334   

Intangible assets, net

     1,177,722        1,150,051   

Other assets

     597,532        687,320   
  

 

 

   

 

 

 

Total assets

   $ 10,886,805      $ 9,910,382   
  

 

 

   

 

 

 

Liabilities and equity

    

Current liabilities:

    

Notes payable

   $ 75,271      $ 363,272   

Accounts payable

     1,173,851        888,743   

Accrued liabilities

     909,147        776,527   

Accrued domestic and foreign taxes

     232,774        176,349   
  

 

 

   

 

 

 

Total current liabilities

     2,391,043        2,204,891   

Long-term debt

     1,691,086        1,413,634   

Pensions and other postretirement benefits

     862,938        1,500,928   

Deferred income taxes

     160,035        135,321   

Other liabilities

     293,367        196,208   

Shareholders’ equity

     5,383,854        4,367,965   

Noncontrolling interests

     104,482        91,435   
  

 

 

   

 

 

 

Total liabilities and equity

   $ 10,886,805      $ 9,910,382   
  

 

 

   

 

 

 
CONSOLIDATED STATEMENT OF CASH FLOWS     
     Twelve Months Ended June 30,  

(Dollars in thousands)

   2011     2010  

Cash flows from operating activities:

    

Net income

   $ 1,057,150      $ 556,365   

Depreciation and amortization

     339,800        362,509   

Stock incentive plan compensation

     73,238        59,318   

Net change in receivables, inventories, and trade payables

     (170,650     92,949   

Net change in other assets and liabilities

     (156,080     155,991   

Other, net

     23,475        (8,310
  

 

 

   

 

 

 

Net cash provided by operating activities

     1,166,933        1,218,822   
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Acquisitions (net of cash of $385 in 2011)

     (60,227     (5,451

Capital expenditures

     (207,294     (129,222

Proceeds from sale of plant and equipment

     32,289        11,929   

Other, net

     (9,706     (23,429
  

 

 

   

 

 

 

Net cash (used in) investing activities

     (244,938     (146,173
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Net (payments for) common stock activity

     (624,411     (994

Net (payments for) debt

     (85,283     (486,263

Dividends

     (206,084     (162,739
  

 

 

   

 

 

 

Net cash (used in) financing activities

     (915,778     (649,996
  

 

 

   

 

 

 

Effect of exchange rate changes on cash

     75,723        (34,738
  

 

 

   

 

 

 

Net increase in cash and cash equivalents

     81,940        387,915   

Cash and cash equivalents at beginning of period

     575,526        187,611   
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 657,466      $ 575,526   
  

 

 

   

 

 

 

 

6