Exhibit 99.1

 

LOGO

 

For Release:    Immediately   
Contact:    Media –   
   Christopher M. Farage - Vice President, Communications & External Affairs    216/896-2750
   cfarage@parker.com   
   Financial Analysts –   
   Pamela Huggins, Vice President - Treasurer    216/896-2240
   phuggins@parker.com   

Stock Symbol:

   PH – NYSE   

Parker Reports Record Sales, Net Income and Earnings per Share for the Fiscal 2012 Third Quarter

 

   

Sales Reached a Third Quarter Record of $3.4 billion

 

   

Earnings Per Diluted Share Increased 20 percent to All-Time Quarterly Record of $2.01

 

   

Operating Cash Flow Year-to-Date Exceeded $1 billion

 

   

Company Exceeds Guidance and Increases Outlook for Full Year Earnings

CLEVELAND, April 24, 2012 – Parker Hannifin Corporation (NYSE: PH), the global leader in motion and control technologies, today reported results for the fiscal 2012 third quarter ended March 31, 2012. Fiscal 2012 third quarter sales were $3.4 billion, a third quarter record and an increase of 4.7 percent from $3.2 billion in the prior year quarter. Net income was an all-time quarterly record at $312.7 million, an increase of 11.0 percent compared with $281.6 million in the third quarter of fiscal 2011. Fiscal 2012 third quarter earnings per diluted share were an all-time quarterly record at $2.01, an increase of 19.6 percent compared with $1.68 in the prior year quarter. Cash flow from operations for the first nine months of fiscal 2012 was $1,006.5 million, or 10.3 percent of sales, compared with $799.9 million, or 9.0 percent of sales, for the first nine months of fiscal 2011.

“This quarter’s results benefitted, in part, from the favorable resolution of prior year tax filings, however, all-time record quarterly earnings were largely achieved as a result of strong operating performance in North America,” said Chairman, CEO and President, Don Washkewicz. “Our organic sales growth was 6 percent, led by a double-digit increase in the North America Industrial segment, while currency translation negatively affected sales by 1

 

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percent. Internationally, results outpaced expectations for the quarter and market conditions remain stable. Total company segment operating margin remained strong and represented a third quarter record at 15.1 percent, primarily driven by record third quarter operating margins in the Industrial North America segment. Year-to-date, operating cash flow is very strong at 10.3 percent of sales and we continue to invest for growth including our recently completed acquisition of Snap-tite Incorporated to expand our presence in fluid power and process control markets.”

Segment Results

In the Industrial North America segment, third quarter sales increased 11.6 percent to $1.3 billion, and operating income was $227.0 million compared with $189.5 million in the same period a year ago.

In the Industrial International segment, third quarter sales declined 0.5 percent to $1.3 billion, and operating income was $195.1 million compared with $199.8 million in the same period a year ago.

In the Aerospace segment, third quarter sales increased 7.7 percent to $542.8 million, and operating income was $65.9 million compared with $69.0 million in the same period a year ago.

In the Climate and Industrial Controls segment, third quarter sales declined 6.0 percent to $248.7 million, and operating income was $23.2 million compared with $22.6 million in the same period a year ago.

Orders

Parker reported an increase of 2 percent in orders for the quarter ending March 31, 2012, compared with the same quarter a year ago. The company reported the following orders by operating segment:

 

   

Orders increased 7 percent in the Industrial North America segment, compared with the same quarter a year ago.

 

   

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

 

   

Orders increased 4 percent in the Aerospace segment on a rolling 12-month average basis.

 

   

Orders declined 6 percent in the Climate and Industrial Controls segment, compared with the same quarter a year ago.

 

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Outlook

For fiscal 2012, the company has increased its guidance for earnings from continuing operations to the range of $7.30 to $7.50 per diluted share.

Washkewicz added, “Reflecting our strong outperformance relative to guidance, Parker is increasing our earnings outlook for the year. The Company remains on pace to deliver an all-time record year in fiscal 2012.”

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

 

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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 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.

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PARKER HANNIFIN CORPORATION - MARCH 31, 2012

CONSOLIDATED STATEMENT OF INCOME

(Unaudited)

 

      Three Months Ended March 31,     Nine Months Ended March 31,  

(Dollars in thousands except per share amounts)

   2012      2011     2012     2011  

Net sales

   $ 3,393,563       $ 3,240,103      $ 9,734,276      $ 8,936,040   

Cost of sales

     2,590,315         2,463,083        7,386,079        6,796,685   
  

 

 

    

 

 

   

 

 

   

 

 

 

Gross profit

     803,248         777,020        2,348,197        2,139,355   

Selling, general and administrative expenses

     377,479         375,069        1,132,635        1,054,332   

Interest expense

     22,313         24,619        69,303        74,883   

Other expense (income), net

     2,629         (12,385     (5,100     (22,191
  

 

 

    

 

 

   

 

 

   

 

 

 

Income before income taxes

     400,827         389,717        1,151,359        1,032,331   

Income taxes

     88,138         108,069        298,169        269,835   
  

 

 

    

 

 

   

 

 

   

 

 

 

Net income

     312,689         281,648        853,190        762,496   

Less: Noncontrolling interests

     615         2,059        3,332        5,556   
  

 

 

    

 

 

   

 

 

   

 

 

 

Net income attributable to common shareholders

   $ 312,074       $ 279,589      $ 849,858      $ 756,940   
  

 

 

    

 

 

   

 

 

   

 

 

 

Earnings per share attributable to common shareholders:

         
  

 

 

    

 

 

   

 

 

   

 

 

 

Basic earnings per share

   $ 2.07       $ 1.72      $ 5.61      $ 4.68   
  

 

 

    

 

 

   

 

 

   

 

 

 

Diluted earnings per share

   $ 2.01       $ 1.68      $ 5.49      $ 4.58   
  

 

 

    

 

 

   

 

 

   

 

 

 

Average shares outstanding during period - Basic

     151,017,910         162,160,426        151,472,380        161,711,394   

Average shares outstanding during period - Diluted

     154,944,246         166,690,347        154,904,549        165,270,482   
  

 

 

    

 

 

   

 

 

   

 

 

 

Cash dividends per common share

   $ .39       $ .32      $ 1.13      $ .88   
  

 

 

    

 

 

   

 

 

   

 

 

 

BUSINESS SEGMENT INFORMATION BY INDUSTRY

(Unaudited)

 

     Three Months Ended March 31,      Nine Months Ended March 31,  

(Dollars in thousands)

   2012      2011      2012      2011  

Net sales

           

Industrial:

           

North America

   $ 1,315,357       $ 1,178,714       $ 3,703,526       $ 3,289,098   

International

     1,286,751         1,293,047         3,794,678         3,533,259   

Aerospace

     542,760         503,806         1,536,757         1,400,116   

Climate & Industrial Controls

     248,695         264,536         699,315         713,567   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 3,393,563       $ 3,240,103       $ 9,734,276       $ 8,936,040   
  

 

 

    

 

 

    

 

 

    

 

 

 

Segment operating income

           

Industrial:

           

North America

   $ 226,986       $ 189,463       $ 645,951       $ 538,254   

International

     195,065         199,798         569,224         551,374   

Aerospace

     65,925         68,984         204,824         176,404   

Climate & Industrial Controls

     23,203         22,577         52,818         53,630   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total segment operating income

     511,179         480,822         1,472,817         1,319,662   

Corporate general and administrative expenses

     38,377         41,734         142,529         112,681   
  

 

 

    

 

 

    

 

 

    

 

 

 

Income before interest and other

     472,802         439,088         1,330,288         1,206,981   

Interest expense

     22,313         24,619         69,303         74,883   

Other expense

     49,662         24,752         109,626         99,767   
  

 

 

    

 

 

    

 

 

    

 

 

 

Income before income taxes

   $ 400,827       $ 389,717       $ 1,151,359       $ 1,032,331   
  

 

 

    

 

 

    

 

 

    

 

 

 


CONSOLIDATED BALANCE SHEET

(Unaudited)

 

(Dollars in thousands)

   March 31,
2012
     June, 30
2011
     March 31,
2011
 

Assets

        

Current assets:

        

Cash and cash equivalents

   $ 773,459       $ 657,466       $ 1,107,955   

Accounts receivable, net

     2,061,501         1,977,856         1,950,980   

Inventories

     1,429,014         1,412,153         1,390,862   

Prepaid expenses

     100,336         111,934         89,692   

Deferred income taxes

     132,991         145,847         151,840   
  

 

 

    

 

 

    

 

 

 

Total current assets

     4,497,301         4,305,256         4,691,329   

Plant and equipment, net

     1,721,970         1,797,179         1,788,377   

Goodwill

     2,926,311         3,009,116         2,976,232   

Intangible assets, net

     1,096,306         1,177,722         1,191,072   

Other assets

     647,236         597,532         729,852   
  

 

 

    

 

 

    

 

 

 

Total assets

   $ 10,889,124       $ 10,886,805       $ 11,376,862   
  

 

 

    

 

 

    

 

 

 

Liabilities and equity

        

Current liabilities:

        

Notes payable

   $ 273,907       $ 75,271       $ 173,233   

Accounts payable

     1,148,939         1,173,851         1,085,126   

Accrued liabilities

     872,547         909,147         844,852   

Accrued domestic and foreign taxes

     193,907         232,774         237,209   
  

 

 

    

 

 

    

 

 

 

Total current liabilities

     2,489,300         2,391,043         2,340,420   

Long-term debt

     1,515,217         1,691,086         1,683,731   

Pensions and other postretirement benefits

     848,521         862,938         1,341,920   

Deferred income taxes

     141,467         160,035         159,777   

Other liabilities

     308,151         293,367         267,285   

Shareholders’ equity

     5,577,592         5,383,854         5,481,908   

Noncontrolling interests

     8,876         104,482         101,821   
  

 

 

    

 

 

    

 

 

 

Total liabilities and equity

   $ 10,889,124       $ 10,886,805       $ 11,376,862   
  

 

 

    

 

 

    

 

 

 

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

 

     Nine Months Ended March 31,  

(Dollars in thousands)

   2012     2011  

Cash flows from operating activities:

    

Net income

   $ 853,190      $ 762,496   

Depreciation and amortization

     244,403        254,125   

Stock incentive plan compensation

     64,102        56,792   

Net change in receivables, inventories, and trade payables

     (191,071     (239,968

Net change in other assets and liabilities

     85,060        (35,202

Other, net

     (49,223     1,690   
  

 

 

   

 

 

 

Net cash provided by operating activities

     1,006,461        799,933   
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Acquisitions (net of cash of $6,802 in 2012 and $385 in 2011)

     (31,004     (60,227

Capital expenditures

     (154,097     (158,455

Proceeds from sale of plant and equipment

     15,560        23,818   

Other, net

     (16,381     (8,251
  

 

 

   

 

 

 

Net cash (used in) investing activities

     (185,922     (203,115
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Net (payments for) proceeds from common stock activity

     (312,545     4,198   

Acquisition of noncontrolling interests

     (147,441     —     

Net proceeds from debt

     47,763        15,035   

Dividends

     (178,606     (142,906
  

 

 

   

 

 

 

Net cash (used in) financing activities

     (590,829     (123,673
  

 

 

   

 

 

 

Effect of exchange rate changes on cash

     (113,717     59,284   
  

 

 

   

 

 

 

Net increase in cash and cash equivalents

     115,993        532,429   

Cash and cash equivalents at beginning of period

     657,466        575,526   
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 773,459      $ 1,107,955