Exhibit 99.1

[GRAPHIC]

 

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 Record Fiscal 2012 First Quarter Sales, Net Income and Earnings per Share

 

   

Sales Increased 14%, Reaching a First Quarter Record of $3.2 billion

 

   

Earnings Per Diluted Share Increased 26% to an All-Time Record of $1.91

 

   

Total Segment Operating Margins Reached an All-Time Record of 16.1%

CLEVELAND, October 18, 2011 – Parker Hannifin Corporation (NYSE: PH), the global leader in motion and control technologies, today reported results for the fiscal 2012 first quarter ended September 30, 2011. Fiscal 2012 first quarter sales were a record at $3.2 billion, an increase of 14.3 percent from $2.8 billion in the prior year quarter. Net income was an all-time record at $298.1 million, an increase of 19.7 percent compared with $249.0 million in the first quarter of fiscal 2011. Fiscal 2012 first quarter earnings per diluted share were also an all-time record at $1.91 compared with $1.51 in the prior year quarter.

Cash flow from operations for the fiscal 2012 first quarter was $309.5 million, or 9.6 percent of sales. During the quarter, the company repurchased approximately 4.4 million of its outstanding common shares for $292 million.

“I am pleased we delivered a very strong first quarter performance as we target another record year for Parker,” said Chairman, CEO and President, Don Washkewicz. “Record first quarter sales were driven by strong organic sales growth of 10 percent, while foreign currency translation contributed 3 percent and acquisitions contributed 1 percent. I am particularly pleased that we generated an all-time quarterly record for total segment

 

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operating margins of 16.1 percent reflecting our focus on driving operational excellence across the organization. Segment operating margins were particularly strong in our North America Industrial segment at 18.5 percent, while our Aerospace segment demonstrated the strongest year-over-year improvement in operating margins.”

Segment Results

In the Industrial North America segment, first quarter sales increased 13.1 percent to $1.2 billion, and operating income was $223.2 million compared with $189.4 million in the same period a year ago.

In the Industrial International segment, first quarter sales increased 17.9 percent to $1.3 billion, and operating income was $208.2 million compared with $183.8 million in the same period a year ago.

In the Aerospace segment, first quarter sales increased 13.9 percent to $497.5 million, and operating income was $68.6 million compared with $43.8 million in the same period a year ago.

In the Climate and Industrial Controls segment, first quarter sales increased 3.3 percent to $242.5 million, and operating income was $19.8 million compared with $21.6 million in the same period a year ago.

Orders

Parker reported an increase of 9 percent in orders for the quarter ending September 30, 2011, compared with the same quarter a year ago. The company reported the following orders by operating segment:

 

   

Orders increased 16 percent in the Industrial North America segment, compared with the same quarter a year ago.

 

   

Orders increased 4 percent in the Industrial International segment, compared with the same quarter a year ago.

 

   

Orders increased 14 percent in the Aerospace segment on a rolling 12-month average basis.

 

   

Orders declined 4 percent in the Climate and Industrial Controls segment, compared with the same quarter

 

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a year ago.

Outlook

For fiscal 2012, the company has increased guidance for earnings from continuing operations to the range of $7.25 to $7.85 per diluted share.

Washkewicz added, “We are off to a strong start in fiscal 2012 and anticipate another record year for Parker. We are increasing diluted earnings per share guidance for the year largely based upon our strong first quarter performance, a lower share count and growth in order entry.”

NOTICE OF CONFERENCE CALL: Parker Hannifin’s conference call and slide presentation to discuss its fiscal 2012 first quarter 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.

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

 

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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.

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PARKER HANNIFIN CORPORATION - SEPTEMBER 30, 2011

CONSOLIDATED STATEMENT OF INCOME

(Unaudited)

 

     Three Months Ended September 30,  

(Dollars in thousands except per share amounts)

   2011     2010  

Net sales

   $ 3,233,881      $ 2,829,273   

Cost of sales

     2,414,442        2,137,874   
  

 

 

   

 

 

 

Gross profit

     819,439        691,399   

Selling, general and administrative expenses

     386,466        333,584   

Interest expense

     23,221        24,633   

Other (income), net

     (1,833     (3,182
  

 

 

   

 

 

 

Income before income taxes

     411,585        336,364   

Income taxes

     113,427        87,334   
  

 

 

   

 

 

 

Net income

     298,158        249,030   

Less: Noncontrolling interests

     1,140        1,859   
  

 

 

   

 

 

 

Net income attributable to common shareholders

   $ 297,018      $ 247,171   
  

 

 

   

 

 

 

Earnings per share attributable to common shareholders:

    

Basic earnings per share

   $ 1.95      $ 1.53   
  

 

 

   

 

 

 

Diluted earnings per share

   $ 1.91      $ 1.51   
  

 

 

   

 

 

 

Average shares outstanding during period - Basic

     152,439,026        161,272,536   

Average shares outstanding during period - Diluted

     155,429,408        164,107,220   
  

 

 

   

 

 

 

Cash dividends per common share

   $ .37      $ .27   
  

 

 

   

 

 

 

BUSINESS SEGMENT INFORMATION BY INDUSTRY

(Unaudited)

    
    

Three Months Ended September 30,

 

(Dollars in thousands)

   2011     2010  

Net sales

    

Industrial:

    

North America

   $ 1,204,817      $ 1,064,915   

International

     1,289,115        1,092,981   

Aerospace

     497,492        436,680   

Climate & Industrial Controls

     242,457        234,697   
  

 

 

   

 

 

 

Total

   $ 3,233,881      $ 2,829,273   
  

 

 

   

 

 

 

Segment operating income

    

Industrial:

    

North America

   $ 223,227      $ 189,362   

International

     208,219        183,800   

Aerospace

     68,637        43,776   

Climate & Industrial Controls

     19,792        21,552   
  

 

 

   

 

 

 

Total segment operating income

     519,875        438,490   

Corporate general and administrative expenses

     58,016        33,354   
  

 

 

   

 

 

 

Income before interest expense and other

     461,859        405,136   

Interest expense

     23,221        24,633   

Other expense

     27,053        44,139   
  

 

 

   

 

 

 

Income before income taxes

   $ 411,585      $ 336,364   
  

 

 

   

 

 

 


PARKER HANNIFIN CORPORATION - SEPTEMBER 30, 2011

CONSOLIDATED BALANCE SHEET

(Unaudited)

 

(Dollars in thousands)

   September 30,
2011
     June, 30
2011
     September 30,
2010
 

Assets

        

Current assets:

        

Cash and cash equivalents

   $ 424,354       $ 657,466       $ 923,836   

Accounts receivable, net

     1,881,303         1,977,856         1,694,313   

Inventories

     1,456,078         1,412,153         1,295,137   

Prepaid expenses

     93,597         111,934         104,216   

Deferred income taxes

     144,002         145,847         130,094   
  

 

 

    

 

 

    

 

 

 

Total current assets

     3,999,334         4,305,256         4,147,596   

Plant and equipment, net

     1,712,870         1,797,179         1,770,983   

Goodwill

     2,904,201         3,009,116         2,915,602   

Intangible assets, net

     1,115,900         1,177,722         1,180,021   

Other assets

     589,285         597,532         695,519   
  

 

 

    

 

 

    

 

 

 

Total assets

   $ 10,321,590       $ 10,886,805       $ 10,709,721   
  

 

 

    

 

 

    

 

 

 

Liabilities and equity

        

Current liabilities:

        

Notes payable

   $ 78,547       $ 75,271       $ 391,303   

Accounts payable

     1,120,339         1,173,851         953,259   

Accrued liabilities

     803,158         909,147         742,087   

Accrued domestic and foreign taxes

     233,665         232,774         195,455   
  

 

 

    

 

 

    

 

 

 

Total current liabilities

     2,235,709         2,391,043         2,282,104   

Long-term debt

     1,668,600         1,691,086         1,745,812   

Pensions and other postretirement benefits

     845,576         862,938         1,327,195   

Deferred income taxes

     149,022         160,035         149,701   

Other liabilities

     309,195         293,367         212,332   

Shareholders’ equity

     5,017,264         5,383,854         4,894,945   

Noncontrolling interests

     96,224         104,482         97,632   
  

 

 

    

 

 

    

 

 

 

Total liabilities and equity

   $ 10,321,590       $ 10,886,805       $ 10,709,721   
  

 

 

    

 

 

    

 

 

 

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

 

      Three Months Ended September 30,  

(Dollars in thousands)

   2011     2010  

Cash flows from operating activities:

    

Net income

   $ 298,158      $ 249,030   

Depreciation and amortization

     84,832        84,986   

Stock incentive plan compensation

     27,898        29,242   

Net change in receivables, inventories, and trade payables

     (83,758     (54,956

Net change in other assets and liabilities

     (11,761     (224,180

Other, net

     (5,873     38,758   
  

 

 

   

 

 

 

Net cash provided by operating activities

     309,496        122,880   
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Acquisitions (net of cash of $5,899 in 2011 and $1 in 2010)

     (87,299     (8,129

Capital expenditures

     (43,989     (52,690

Proceeds from sale of plant and equipment

     5,660        2,169   

Other, net

     181        (318
  

 

 

   

 

 

 

Net cash (used in) investing activities

     (125,447     (58,968
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Net (payments for) common stock activity

     (290,940     (3,305

Net (payments for) proceeds from debt

     (203     293,952   

Dividends

     (63,004     (43,648
  

 

 

   

 

 

 

Net cash (used in) provided by financing activities

     (354,147     246,999   
  

 

 

   

 

 

 

Effect of exchange rate changes on cash

     (63,014     37,399   
  

 

 

   

 

 

 

Net (decrease) increase in cash and cash equivalents

     (233,112     348,310   

Cash and cash equivalents at beginning of period

     657,466        575,526   
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 424,354      $ 923,836