Exhibit 99.1

LOGO

 

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 Second Quarter Sales, Net Income and Earnings per Share

 

   

Sales Increased 8 percent, Reaching a Second Quarter Record of $3.1 billion

 

   

Earnings Per Diluted Share Increased 12 percent to a Second Quarter Record of $1.56

 

   

Company Adjusts Outlook for Full Year Earnings; Continues to Anticipate Record Year

CLEVELAND, January 20, 2012 – Parker Hannifin Corporation (NYSE: PH), the global leader in motion and control technologies, today reported results for the fiscal 2012 second quarter ended December 31, 2011. Fiscal 2012 second quarter sales were $3.1 billion, a second quarter record and an increase of 8.4 percent from $2.9 billion in the prior year quarter. Net income was also a second quarter record at $242.3 million, an increase of 4.5 percent compared with $231.8 million in the second quarter of fiscal 2011. Fiscal 2012 second quarter earnings per diluted share were a second quarter record at $1.56, an increase of 12.2 percent compared with $1.39 in the prior year quarter. Cash flow from operations for the first six months of fiscal 2012 was $563.4 million, or 8.9 percent of sales, compared with $408.2 million, or 7.2 percent of sales, for the first six months of fiscal 2011.

“We are pleased to deliver strong organic growth and second quarter record sales, net income and earnings,” said Chairman, CEO and President, Don Washkewicz. “We generated 8 percent sales growth in the quarter, substantially all of which was organic, led by double-digit revenue growth in our Industrial North America business segment. Internationally, we are seeing some softening in business conditions consistent with global

 

1


macro-economic indicators, which moderated our year over year revenue growth and affected segment operating margin performance. However, strong operating margin performance in the Industrial North America segment contributed to an overall increase in total segment operating margins, which reached 14.2 percent for the quarter and exceeded 15 percent year to date.”

Segment Results

In the Industrial North America segment, second quarter sales increased 13.2 percent to $1.2 billion, and operating income was $195.7 million compared with $159.4 million in the same period a year ago.

In the Industrial International segment, second quarter sales increased 6.2 percent to $1.2 billion, and operating income was $165.9 million compared with $167.8 million in the same period a year ago.

In the Aerospace segment, second quarter sales increased 8.0 percent to $496.5 million, and operating income was $70.3 million compared with $63.6 million in the same period a year ago.

In the Climate and Industrial Controls segment, second quarter sales declined 2.9 percent to $208.2 million, and operating income was $9.8 million compared with $9.5 million in the same period a year ago.

Orders

Parker reported an increase of 3 percent in orders for the quarter ending December 31, 2011, compared with the same quarter a year ago. The company reported the following orders by operating segment:

 

   

Orders increased 8 percent in the Industrial North America segment, compared with the same quarter a year ago.

 

   

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

 

   

Orders remained unchanged in the Aerospace segment on a rolling 12-month average basis.

 

   

Orders declined 5 percent in the Climate and Industrial Controls segment, compared with the same quarter a year ago.

 

2


Outlook

For fiscal 2012, the company has adjusted its guidance for earnings from continuing operations to the range of $6.90 to $7.30 per diluted share.

Washkewicz added, “We have made an adjustment in our earnings range to reflect business conditions internationally, while continued strength in North America will allow Parker to deliver an all-time record fiscal year in diluted earnings per share.”

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

 

3


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 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; ability to realize anticipated cost 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 - DECEMBER 31, 2011

CONSOLIDATED STATEMENT OF INCOME

(Unaudited)

 

      Three Months Ended December 31,     Six Months Ended December 31,  

(Dollars in thousands except per share amounts)

   2011     2010     2011     2010  

Net sales

   $ 3,106,832      $ 2,866,664      $ 6,340,713      $ 5,695,937   

Cost of sales

     2,381,322        2,195,728        4,795,764        4,333,602   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     725,510        670,936        1,544,949        1,362,335   

Selling, general and administrative expenses

     368,690        345,679        755,156        679,263   

Interest expense

     23,769        25,631        46,990        50,264   

Other (income), net

     (5,896     (6,624     (7,729     (9,806
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     338,947        306,250        750,532        642,614   

Income taxes

     96,604        74,432        210,031        161,766   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     242,343        231,818        540,501        480,848   

Less: Noncontrolling interests

     1,577        1,638        2,717        3,497   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to common shareholders

   $ 240,766      $ 230,180      $ 537,784      $ 477,351   
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share attributable to common shareholders:

        
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic earnings per share

   $ 1.59      $ 1.42      $ 3.55      $ 2.96   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings per share

   $ 1.56      $ 1.39      $ 3.47      $ 2.90   
  

 

 

   

 

 

   

 

 

   

 

 

 

Average shares outstanding during period - Basic

     150,960,202        161,701,219        151,699,614        161,486,878   

Average shares outstanding during period - Diluted

     154,717,211        166,101,535        155,024,479        164,790,789   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash dividends per common share

   $ .37      $ .29      $ .74      $ .56   
  

 

 

   

 

 

   

 

 

   

 

 

 

BUSINESS SEGMENT INFORMATION BY INDUSTRY

(Unaudited)

 

     Three Months Ended December 31,      Six Months Ended December 31,  

(Dollars in thousands)

   2011      2010      2011      2010  

Net sales

           

Industrial:

           

North America

   $ 1,183,352       $  1,045,469       $ 2,388,169       $ 2,110,384   

International

     1,218,812         1,147,231         2,507,927         2,240,212   

Aerospace

     496,505         459,630         993,997         896,310   

Climate & Industrial Controls

     208,163         214,334         450,620         449,031   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 3,106,832       $ 2,866,664       $ 6,340,713       $ 5,695,937   
  

 

 

    

 

 

    

 

 

    

 

 

 

Segment operating income

           

Industrial:

           

North America

   $ 195,738       $ 159,429       $ 418,965       $ 348,791   

International

     165,940         167,776         374,159         351,576   

Aerospace

     70,262         63,644         138,899         107,420   

Climate & Industrial Controls

     9,823         9,501         29,615         31,053   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total segment operating income

     441,763         400,350         961,638         838,840   

Corporate general and administrative expenses

     46,136         37,593         104,152         70,947   
  

 

 

    

 

 

    

 

 

    

 

 

 

Income before interest and other

     395,627         362,757         857,486         767,893   

Interest expense

     23,769         25,631         46,990         50,264   

Other expense

     32,911         30,876         59,964         75,015   
  

 

 

    

 

 

    

 

 

    

 

 

 

Income before income taxes

   $ 338,947       $ 306,250       $ 750,532       $ 642,614   
  

 

 

    

 

 

    

 

 

    

 

 

 


PARKER HANNIFIN CORPORATION - DECEMBER 31, 2011

CONSOLIDATED BALANCE SHEET

(Unaudited)

 

(Dollars in thousands)

   December 31,
2011
     June, 30
2011
     December 31,
2010
 

Assets

        

Current assets:

        

Cash and cash equivalents

   $ 487,984       $ 657,466       $ 808,736   

Accounts receivable, net

     1,828,117         1,977,856         1,636,905   

Inventories

     1,452,664         1,412,153         1,361,457   

Prepaid expenses

     129,439         111,934         106,416   

Deferred income taxes

     144,819         145,847         130,426   
  

 

 

    

 

 

    

 

 

 

Total current assets

     4,043,023         4,305,256         4,043,940   

Plant and equipment, net

     1,691,162         1,797,179         1,764,558   

Goodwill

     2,879,169         3,009,116         2,910,729   

Intangible assets, net

     1,101,020         1,177,722         1,178,912   

Other assets

     613,210         597,532         720,705   
  

 

 

    

 

 

    

 

 

 

Total assets

   $ 10,327,584       $ 10,886,805       $ 10,618,844   
  

 

 

    

 

 

    

 

 

 

Liabilities and equity

        

Current liabilities:

        

Notes payable

   $ 78,375       $ 75,271       $ 101,293   

Accounts payable

     1,069,503         1,173,851         960,567   

Accrued liabilities

     821,335         909,147         730,011   

Accrued domestic and foreign taxes

     150,896         232,774         148,997   
  

 

 

    

 

 

    

 

 

 

Total current liabilities

     2,120,109         2,391,043         1,940,868   

Long-term debt

     1,659,434         1,691,086         1,742,464   

Pensions and other postretirement benefits

     838,644         862,938         1,328,893   

Deferred income taxes

     147,123         160,035         150,069   

Other liabilities

     306,371         293,367         241,957   

Shareholders’ equity

     5,158,126         5,383,854         5,113,261   

Noncontrolling interests

     97,777         104,482         101,332   
  

 

 

    

 

 

    

 

 

 

Total liabilities and equity

   $ 10,327,584       $  10,886,805       $ 10,618,844   
  

 

 

    

 

 

    

 

 

 

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

 

     Six Months Ended December 31,  

(Dollars in thousands)

   2011     2010  

Cash flows from operating activities:

    

Net income

   $ 540,501      $ 480,848   

Depreciation and amortization

     164,131        170,293   

Stock incentive plan compensation

     44,462        41,331   

Net change in receivables, inventories, and trade payables

     (94,532     (62,540

Net change in other assets and liabilities

     (75,129     (257,071

Other, net

     (16,017     35,296   
  

 

 

   

 

 

 

Net cash provided by operating activities

     563,416        408,157   
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Acquisitions (net of cash of $6,802 in 2011 and $1 in 2010)

     (90,545     (43,359

Capital expenditures

     (96,897     (109,795

Proceeds from sale of plant and equipment

     11,179        17,243   

Other, net

     (14,498     (9,369
  

 

 

   

 

 

 

Net cash (used in) investing activities

     (190,761     (145,280
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Net (payments for) proceeds from common stock activity

     (308,747     4,863   

Net (payments for) proceeds from debt

     (1,089     19,673   

Dividends

     (119,031     (90,907
  

 

 

   

 

 

 

Net cash (used in) financing activities

     (428,867     (66,371
  

 

 

   

 

 

 

Effect of exchange rate changes on cash

     (113,270     36,704   
  

 

 

   

 

 

 

Net (decrease) increase in cash and cash equivalents

     (169,482     233,210   

Cash and cash equivalents at beginning of period

     657,466        575,526   
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 487,984      $ 808,736