Attached files
| file | filename |
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| 8-K - 8-K COVER PAGE - PARKER HANNIFIN CORP | form8-k.htm |
| EX-99.2 - ANAYLST SLIDES - PARKER HANNIFIN CORP | exhibit992final.htm |
Exhibit 99.1
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 Fiscal 2013 Second Quarter Sales, Net Income and Earnings per Share
• | Diluted earnings per share reach $1.19 |
• | Company maintains fiscal 2013 earnings outlook |
CLEVELAND, January 18, 2013 -- Parker Hannifin Corporation (NYSE: PH), the global leader in motion and control technologies, today reported results for the fiscal 2013 second quarter ended December 31, 2012. Fiscal 2013 second quarter sales of $3.07 billion were essentially flat compared with $3.11 billion in the prior year quarter. Acquisitions contributed 4 percent to sales which was largely offset by a reduction in organic sales, particularly internationally. Net income was $181.1 million compared with $242.3 million in the second quarter of fiscal 2012, primarily reflecting reduced organic sales volume. Fiscal 2013 second quarter earnings per diluted share were $1.19 compared with $1.56 in the prior year quarter. Cash flow from operations for the first six months of fiscal 2013 was $347.3 million, or 5.5 percent of sales, compared with $563.4 million, or 8.9 percent of sales for the first six months of fiscal 2012. Cash flow from operations for the first six months of fiscal 2013 included a $225.6 million discretionary contribution to the company's pension plan. Excluding this discretionary contribution, cash flow from operations as a percent of sales was 9.1 percent for the first six months of fiscal 2013.
“We performed well in the second quarter considering continued economic weakness across all the regions we operate in,” said Chairman, CEO and President, Don Washkewicz. “Although economic conditions may improve, we continued to take prudent actions to strengthen profitability and cash flow as we enter the second half of the year, including cost reduction initiatives and adjustments to planned capital expenditures.”
Segment Results
In Industrial North America, second quarter sales increased 1.2 percent to $1.2 billion, and operating income was $183.9 million compared with $195.7 million in the same period a year ago.
In Industrial International, second quarter sales decreased 4.1 percent to $1.17 billion, and operating income was $123.4 million compared with $165.9 million in the same period a year ago.
In Aerospace, second quarter sales increased 6.5 percent to $528.7 million, and operating income was $52.2 million compared with $70.3 million in the same period a year ago.
In Climate and Industrial Controls, second quarter sales decreased 18.3 percent to $170.2 million, reflecting the impact of a business divestiture, and operating income was $8.1 million compared with $9.8 million in the same period a year ago.
Orders
Parker reported a decrease of 2 percent in orders for the quarter ending December 31, 2012, compared with the same quarter a year ago. The company reported the following orders:
• | Orders declined 6 percent in Industrial North America compared with the same quarter a year ago. |
• | Orders declined 5 percent in Industrial International compared with the same quarter a year ago. |
• | Orders increased 14 percent in Aerospace on a rolling 12-month average basis. |
• | Orders increased 1 percent in Climate and Industrial Controls compared with the same quarter a year ago. |
Outlook
For the fiscal year ending June 30, 2013, the company has maintained guidance for earnings from continuing operations in the range of $6.15 to $6.75 per diluted share. Fiscal 2013 guidance includes an expected year-over-year increase in domestic qualified pension expense of approximately $0.35 per diluted share due to accounting regulations which require the use of a lower discount rate based on current market conditions.
Washkewicz added, “Following the natural, annual cycle of our business, we anticipate that the second half of our fiscal year will be stronger than the first half. In addition, ongoing actions to reduce costs and maintain cash flow should position us for a strong finish to fiscal year 2013.”
NOTICE OF CONFERENCE CALL: Parker Hannifin's conference call and slide presentation to discuss its fiscal 2013 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 $13 billion in fiscal year 2012, 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 60,000 people in 48 countries around the world. Parker has increased its annual dividends paid to shareholders for 56 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 Industrial North America, Industrial International, and Climate and Industrial Controls, and the year-over-year 12-month rolling average of orders for Aerospace.
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.
Exhibit 99.1 | ||||||||||||||||
PARKER HANNIFIN CORPORATION - DECEMBER 31, 2012 | ||||||||||||||||
CONSOLIDATED STATEMENT OF INCOME | ||||||||||||||||
(Unaudited) | Three Months Ended December 31, | Six Months Ended December 31, | ||||||||||||||
(Dollars in thousands except per share amounts) | 2012 | 2011 | 2012 | 2011 | ||||||||||||
Net sales | $ | 3,065,495 | $ | 3,106,832 | $ | 6,280,430 | $ | 6,340,713 | ||||||||
Cost of sales | 2,421,972 | 2,381,322 | 4,899,419 | 4,795,764 | ||||||||||||
Gross profit | 643,523 | 725,510 | 1,381,011 | 1,544,949 | ||||||||||||
Selling, general and administrative expenses | 381,100 | 368,690 | 762,222 | 755,156 | ||||||||||||
Interest expense | 24,216 | 23,769 | 47,725 | 46,990 | ||||||||||||
Other (income), net | (24,422 | ) | (5,896 | ) | (27,623 | ) | (7,729 | ) | ||||||||
Income before income taxes | 262,629 | 338,947 | 598,687 | 750,532 | ||||||||||||
Income taxes | 81,515 | 96,604 | 177,625 | 210,031 | ||||||||||||
Net income | 181,114 | 242,343 | 421,062 | 540,501 | ||||||||||||
Less: Noncontrolling interests | 152 | 1,577 | 359 | 2,717 | ||||||||||||
Net income attributable to common shareholders | $ | 180,962 | $ | 240,766 | $ | 420,703 | $ | 537,784 | ||||||||
Earnings per share attributable to common shareholders: | ||||||||||||||||
Basic earnings per share | $ | 1.21 | $ | 1.59 | $ | 2.82 | $ | 3.55 | ||||||||
Diluted earnings per share | $ | 1.19 | $ | 1.56 | $ | 2.77 | $ | 3.47 | ||||||||
Average shares outstanding during period - Basic | 149,001,273 | 150,960,202 | 149,143,561 | 151,699,614 | ||||||||||||
Average shares outstanding during period - Diluted | 152,198,704 | 154,717,211 | 152,018,025 | 155,024,479 | ||||||||||||
Cash dividends per common share | $ | 0.41 | $ | 0.37 | $ | 0.82 | $ | 0.74 | ||||||||
BUSINESS SEGMENT INFORMATION BY INDUSTRY | ||||||||||||||||
(Unaudited) | Three Months Ended December 31, | Six Months Ended December 31, | ||||||||||||||
(Dollars in thousands) | 2012 | 2011 | 2012 | 2011 | ||||||||||||
Net sales | ||||||||||||||||
Industrial: | ||||||||||||||||
North America | $ | 1,197,705 | $ | 1,183,352 | $ | 2,463,752 | $ | 2,388,169 | ||||||||
International | 1,168,961 | 1,218,812 | 2,345,851 | 2,507,927 | ||||||||||||
Aerospace | 528,656 | 496,505 | 1,069,739 | 993,997 | ||||||||||||
Climate & Industrial Controls | 170,173 | 208,163 | 401,088 | 450,620 | ||||||||||||
Total | $ | 3,065,495 | $ | 3,106,832 | $ | 6,280,430 | $ | 6,340,713 | ||||||||
Segment operating income | ||||||||||||||||
Industrial: | ||||||||||||||||
North America | $ | 183,914 | $ | 195,738 | $ | 411,106 | $ | 418,965 | ||||||||
International | 123,434 | 165,940 | 275,205 | 374,159 | ||||||||||||
Aerospace | 52,172 | 70,262 | 114,070 | 138,899 | ||||||||||||
Climate & Industrial Controls | 8,130 | 9,823 | 29,840 | 29,615 | ||||||||||||
Total segment operating income | 367,650 | 441,763 | 830,221 | 961,638 | ||||||||||||
Corporate general and administrative expenses | 45,401 | 46,136 | 85,168 | 104,152 | ||||||||||||
Income before interest expense and other expense | 322,249 | 395,627 | 745,053 | 857,486 | ||||||||||||
Interest expense | 24,216 | 23,769 | 47,725 | 46,990 | ||||||||||||
Other expense | 35,404 | 32,911 | 98,641 | 59,964 | ||||||||||||
Income before income taxes | $ | 262,629 | $ | 338,947 | $ | 598,687 | $ | 750,532 | ||||||||
Exhibit 99.1 | ||||||||||||
PARKER HANNIFIN CORPORATION - DECEMBER 31, 2012 | ||||||||||||
CONSOLIDATED BALANCE SHEET | ||||||||||||
(Unaudited) | December 31, | June 30, | December 31, | |||||||||
(Dollars in thousands) | 2012 | 2012 | 2011 | |||||||||
Assets | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | $ | 497,635 | $ | 838,317 | $ | 487,984 | ||||||
Accounts receivable, net | 1,802,405 | 1,992,284 | 1,828,117 | |||||||||
Inventories | 1,515,325 | 1,400,732 | 1,452,664 | |||||||||
Prepaid expenses | 152,477 | 137,429 | 129,439 | |||||||||
Deferred income taxes | 127,905 | 129,352 | 144,819 | |||||||||
Total current assets | 4,095,747 | 4,498,114 | 4,043,023 | |||||||||
Plant and equipment, net | 1,844,643 | 1,719,968 | 1,691,162 | |||||||||
Goodwill | 3,295,141 | 2,925,856 | 2,879,169 | |||||||||
Intangible assets, net | 1,367,978 | 1,095,218 | 1,101,020 | |||||||||
Other assets | 857,852 | 931,126 | 613,210 | |||||||||
Total assets | $ | 11,461,361 | $ | 11,170,282 | $ | 10,327,584 | ||||||
Liabilities and equity | ||||||||||||
Current liabilities: | ||||||||||||
Notes payable | $ | 510,006 | $ | 225,589 | $ | 78,375 | ||||||
Accounts payable | 1,073,233 | 1,194,684 | 1,069,503 | |||||||||
Accrued liabilities | 810,546 | 911,931 | 821,335 | |||||||||
Accrued domestic and foreign taxes | 94,475 | 153,809 | 150,896 | |||||||||
Total current liabilities | 2,488,260 | 2,486,013 | 2,120,109 | |||||||||
Long-term debt | 1,509,238 | 1,503,946 | 1,659,434 | |||||||||
Pensions and other postretirement benefits | 1,704,349 | 1,909,755 | 838,644 | |||||||||
Deferred income taxes | 128,892 | 88,091 | 147,123 | |||||||||
Other liabilities | 301,633 | 276,747 | 306,371 | |||||||||
Shareholders' equity | 5,325,717 | 4,896,515 | 5,158,126 | |||||||||
Noncontrolling interests | 3,272 | 9,215 | 97,777 | |||||||||
Total liabilities and equity | $ | 11,461,361 | $ | 11,170,282 | $ | 10,327,584 | ||||||
Exhibit 99.1 | |||||||||
PARKER HANNIFIN CORPORATION - DECEMBER 31, 2012 | |||||||||
CONSOLIDATED STATEMENT OF CASH FLOWS | |||||||||
(Unaudited) | Six Months Ended December 31, | ||||||||
(Dollars in thousands) | 2012 | 2011 | |||||||
Cash flows from operating activities: | |||||||||
Net income | $ | 421,062 | $ | 540,501 | |||||
Depreciation and amortization | 163,827 | 164,131 | |||||||
Stock incentive plan compensation | 46,527 | 44,462 | |||||||
Net change in receivables, inventories, and trade payables | 102,612 | (94,532 | ) | ||||||
Net change in other assets and liabilities | (408,895 | ) | (75,129 | ) | |||||
Other, net | 22,205 | (16,017 | ) | ||||||
Net cash provided by operating activities | 347,338 | 563,416 | |||||||
Cash flows from investing activities: | |||||||||
Acquisitions (net of cash of $33,160 in 2012 and $6,802 in 2011) | (621,716 | ) | (13,652 | ) | |||||
Capital expenditures | (140,221 | ) | (96,897 | ) | |||||
Proceeds from sale of plant and equipment | 14,173 | 11,179 | |||||||
Proceeds from sale of business | 68,569 | — | |||||||
Other, net | (7,765 | ) | (14,498 | ) | |||||
Net cash (used in) investing activities | (686,960 | ) | (113,868 | ) | |||||
Cash flows from financing activities: | |||||||||
Net payments for common stock activity | (101,160 | ) | (308,747 | ) | |||||
Acquisition of noncontrolling interests | (1,072 | ) | (76,893 | ) | |||||
Net proceeds from (payments for) debt | 168,712 | (1,089 | ) | ||||||
Dividends | (123,328 | ) | (119,031 | ) | |||||
Net cash (used in) financing activities | (56,848 | ) | (505,760 | ) | |||||
Effect of exchange rate changes on cash | 55,788 | (113,270 | ) | ||||||
Net decrease in cash and cash equivalents | (340,682 | ) | (169,482 | ) | |||||
Cash and cash equivalents at beginning of period | 838,317 | 657,466 | |||||||
Cash and cash equivalents at end of period | $ | 497,635 | $ | 487,984 | |||||