Attached files
| file | filename |
|---|---|
| 8-K - 4Q FY12 8K - PARKER HANNIFIN CORP | a8k4qfy12.htm |
| EX-99.2 - ANALYST SLIDES - PARKER HANNIFIN CORP | exhibit992.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 Year End Results with Record Sales, Net Income and EPS
• | Fiscal 2012 Full Year Sales Reach Record of $13.1 billion |
• | Fiscal 2012 Full Year Diluted Earnings per Share a Record at $7.45 |
• | Company Generates Strong Annual Operating Cash Flow of $1.5 billion |
• | Issues Guidance for Record Full Year Earnings in Fiscal 2013, Including Increased Pension Expense of Approximately $0.35 per Diluted Share |
CLEVELAND, August 2, 2012 -- Parker Hannifin Corporation (NYSE: PH), the global leader in motion and control technologies, today reported results for the fiscal 2012 fourth quarter and year ended June 30, 2012. Fiscal 2012 sales were a record at $13.1 billion, an increase of 6.5 percent from $12.3 billion in the prior year. Net income for the year was also a record at $1.2 billion, an increase of 9.3 percent compared with $1.1 billion in fiscal 2011. Fiscal 2012 earnings per diluted share were a record at $7.45, an increase of 17.0 percent compared with $6.37 in the previous year. Cash flow from operations for fiscal 2012 was $1.5 billion, or 11.6 percent of sales, compared with cash flow from operations of $1.2 billion, or 9.5 percent of sales, in the prior year period. Cash flow from operations in fiscal 2011 included a discretionary contribution to the company’s pension plan of $400 million.
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Fiscal 2012 fourth quarter sales of $3.4 billion were equivalent to the same quarter a year ago and included a negative 4 percent impact from foreign currency translation. Net income for the fiscal 2012 fourth quarter was $302.3 million, an increase of 2.6 percent compared with $294.7 million in the fourth quarter of fiscal 2011. Earnings per diluted share for the fiscal 2012 fourth quarter were $1.96, an increase of 9.5 percent compared with $1.79 in last year’s fourth quarter. Cash flow from operations for the fiscal 2012 fourth quarter was $523.9 million, or 15.4 percent of sales, compared with cash flow from operations of $367.0 million, or 10.8 percent of sales, in the prior year period. Cash flow from operations in the fiscal 2011 fourth quarter included a discretionary contribution to the company’s pension plan of $200 million.
“I am very pleased that we were able to achieve record performance in fiscal year 2012, despite moderate growth in the global economy,” said Chairman, CEO and President, Don Washkewicz. “Of particular note, we surpassed 15 percent annual total segment operating margin for the first time in our history, which is a target we set when we initiated the Win Strategy. This year’s performance confirms Parker’s operational transformation into a fundamentally stronger company and reflects the contribution of our global team.
“Our fourth quarter performance exceeded expectations largely on the strength of our business in North America, as International markets remain soft. Total sales this quarter were essentially unchanged compared with the prior year quarter as organic growth of 3 percent and acquisition growth of 1 percent were offset by negative foreign currency translation of 4 percent. We experienced strong growth in our Industrial North America and Aerospace segments, which was offset by a decline in the Industrial International segment. We were particularly pleased that we achieved total segment operating margin of 15.5 percent, a 70 basis point improvement over the prior year quarter, despite a moderate demand environment.”
Fourth Quarter Segment Results
In the Industrial North America segment, fiscal 2012 fourth quarter sales increased 9.0 percent to $1.34 billion, and operating income was $249.1 million compared with $207.3 million in the same period a year ago.
In the Industrial International segment, fourth quarter sales decreased 10.4 percent to $1.24 billion, and operating income was $163.9 million compared with $202.8 million in the same period a year ago.
In the Aerospace segment, fourth quarter sales increased 8.5 percent to $566.0 million, and operating income was $85.3 million compared with $70.7 million in the same period a year ago.
In the Climate and Industrial Controls segment, fourth quarter sales decreased 3.0 percent to $268.5 million, and operating income was $31.5 million compared with $22.5 million in the same period a year ago.
Orders
Parker reported a decrease of 1 percent in orders for the quarter ended June 30, 2012, compared with the same quarter a year ago. The company reported the following orders by operating segment:
• | Orders increased 4 percent in the Industrial North America segment, compared with the same quarter a year ago. |
• | Orders decreased 9 percent in the Industrial International segment, compared with the same quarter a year ago. |
• | Orders increased 7 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. |
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Fiscal 2013 Outlook
For fiscal 2013, the company has issued guidance for earnings from continuing operations in the range of $7.10 to $7.90 per diluted share. Fiscal 2013 guidance includes an expected 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, “Our earnings guidance for fiscal 2013 anticipates another record year for Parker at the midpoint of our guidance range and continued stronger operational performance, despite an expected increase in pension expense. We will continue to stay the course with a strong focus on the fundamentals of the Win Strategy, which will allow us to deliver another strong year of performance as we continue to invest in profitable growth through new product and systems innovation, strategic acquisitions, and continued expansion of our distribution network.”
Washkewicz added, “Our earnings guidance for fiscal 2013 anticipates another record year for Parker at the midpoint of our guidance range and continued stronger operational performance, despite an expected increase in pension expense. We will continue to stay the course with a strong focus on the fundamentals of the Win Strategy, which will allow us to deliver another strong year of performance as we continue to invest in profitable growth through new product and systems innovation, strategic acquisitions, and continued expansion of our distribution network.”
NOTICE OF CONFERENCE CALL: Parker Hannifin's conference call and slide presentation to discuss its fiscal 2012 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.
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 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 - JUNE 30, 2012 | ||||||||||||||||
CONSOLIDATED STATEMENT OF INCOME | ||||||||||||||||
Three Months Ended June 30, | Twelve Months Ended June 30, | |||||||||||||||
(Dollars in thousands except per share amounts) | 2012 | 2011 | 2012 | 2011 | ||||||||||||
Net sales | $ | 3,411,666 | $ | 3,409,830 | $ | 13,145,942 | $ | 12,345,870 | ||||||||
Cost of sales | 2,572,258 | 2,590,772 | 9,958,337 | 9,387,457 | ||||||||||||
Gross profit | 839,408 | 819,058 | 3,187,605 | 2,958,413 | ||||||||||||
Selling, general and administrative expenses | 386,681 | 413,441 | 1,519,316 | 1,467,773 | ||||||||||||
Interest expense | 23,487 | 24,821 | 92,790 | 99,704 | ||||||||||||
Other expense (income), net | 3,901 | (594 | ) | (1,199 | ) | (22,785 | ) | |||||||||
Income before income taxes | 425,339 | 381,390 | 1,576,698 | 1,413,721 | ||||||||||||
Income taxes | 123,037 | 86,736 | 421,206 | 356,571 | ||||||||||||
Net income | 302,302 | 294,654 | 1,155,492 | 1,057,150 | ||||||||||||
Less: Noncontrolling interests | 337 | 2,464 | 3,669 | 8,020 | ||||||||||||
Net income attributable to common shareholders | $ | 301,965 | $ | 292,190 | $ | 1,151,823 | $ | 1,049,130 | ||||||||
Earnings per share attributable to common shareholders: | ||||||||||||||||
Basic earnings per share | $ | 2.01 | $ | 1.83 | $ | 7.62 | $ | 6.51 | ||||||||
Diluted earnings per share | $ | 1.96 | $ | 1.79 | $ | 7.45 | $ | 6.37 | ||||||||
Average shares outstanding during period - Basic | 150,470,993 | 159,369,296 | 151,222,033 | 161,125,869 | ||||||||||||
Average shares outstanding during period - Diluted | 154,155,617 | 163,688,610 | 154,664,510 | 164,798,221 | ||||||||||||
Cash dividends per common share | $ | 0.41 | $ | 0.37 | $ | 1.54 | $ | 1.25 | ||||||||
BUSINESS SEGMENT INFORMATION BY INDUSTRY | ||||||||||||||||
Three Months Ended June 30, | Twelve Months Ended June 30, | |||||||||||||||
(Dollars in thousands) | 2012 | 2011 | 2012 | 2011 | ||||||||||||
Net sales | ||||||||||||||||
Industrial: | ||||||||||||||||
North America | $ | 1,337,580 | $ | 1,227,412 | $ | 5,041,106 | $ | 4,516,510 | ||||||||
International | 1,239,571 | 1,383,748 | 5,034,249 | 4,917,007 | ||||||||||||
Aerospace | 565,990 | 521,868 | 2,102,747 | 1,921,984 | ||||||||||||
Climate & Industrial Controls | 268,525 | 276,802 | 967,840 | 990,369 | ||||||||||||
Total | $ | 3,411,666 | $ | 3,409,830 | $ | 13,145,942 | $ | 12,345,870 | ||||||||
Segment operating income | ||||||||||||||||
Industrial: | ||||||||||||||||
North America | $ | 249,059 | $ | 207,290 | $ | 895,010 | $ | 745,544 | ||||||||
International | 163,899 | 202,848 | 733,123 | 754,222 | ||||||||||||
Aerospace | 85,311 | 70,722 | 290,135 | 247,126 | ||||||||||||
Climate & Industrial Controls | 31,456 | 22,504 | 84,274 | 76,134 | ||||||||||||
Total segment operating income | 529,725 | 503,364 | 2,002,542 | 1,823,026 | ||||||||||||
Corporate general and administrative expenses | 50,838 | 51,187 | 193,367 | 163,868 | ||||||||||||
Income before interest and other | 478,887 | 452,177 | 1,809,175 | 1,659,158 | ||||||||||||
Interest expense | 23,487 | 24,821 | 92,790 | 99,704 | ||||||||||||
Other expense | 30,061 | 45,966 | 139,687 | 145,733 | ||||||||||||
Income before income taxes | $ | 425,339 | $ | 381,390 | $ | 1,576,698 | $ | 1,413,721 | ||||||||
PARKER HANNIFIN CORPORATION - JUNE 30, 2012 | ||||||||||
CONSOLIDATED BALANCE SHEET | ||||||||||
June 30, | June, 30 | |||||||||
(Dollars in thousands) | 2012 | 2011 | ||||||||
Assets | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 838,317 | $ | 657,466 | ||||||
Accounts receivable, net | 1,992,284 | 1,977,856 | ||||||||
Inventories | 1,400,732 | 1,412,153 | ||||||||
Prepaid expenses | 137,429 | 111,934 | ||||||||
Deferred income taxes | 129,352 | 145,847 | ||||||||
Total current assets | 4,498,114 | 4,305,256 | ||||||||
Plant and equipment, net | 1,719,968 | 1,797,179 | ||||||||
Goodwill | 2,925,856 | 3,009,116 | ||||||||
Intangible assets, net | 1,095,218 | 1,177,722 | ||||||||
Other assets | 931,126 | 597,532 | ||||||||
Total assets | $ | 11,170,282 | $ | 10,886,805 | ||||||
Liabilities and equity | ||||||||||
Current liabilities: | ||||||||||
Notes payable | $ | 225,589 | $ | 75,271 | ||||||
Accounts payable | 1,194,684 | 1,173,851 | ||||||||
Accrued liabilities | 911,931 | 909,147 | ||||||||
Accrued domestic and foreign taxes | 153,809 | 232,774 | ||||||||
Total current liabilities | 2,486,013 | 2,391,043 | ||||||||
Long-term debt | 1,503,946 | 1,691,086 | ||||||||
Pensions and other postretirement benefits | 1,909,755 | 862,938 | ||||||||
Deferred income taxes | 88,091 | 160,035 | ||||||||
Other liabilities | 276,747 | 293,367 | ||||||||
Shareholders' equity | 4,896,515 | 5,383,854 | ||||||||
Noncontrolling interests | 9,215 | 104,482 | ||||||||
Total liabilities and equity | $ | 11,170,282 | $ | 10,886,805 | ||||||
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PARKER HANNIFIN CORPORATION - JUNE 30, 2012 | |||||||||
CONSOLIDATED STATEMENT OF CASH FLOWS | |||||||||
Twelve Months Ended June 30, | |||||||||
(Dollars in thousands) | 2012 | 2011 | |||||||
Cash flows from operating activities: | |||||||||
Net income | $ | 1,155,492 | $ | 1,057,150 | |||||
Depreciation and amortization | 321,929 | 339,800 | |||||||
Stock incentive plan compensation | 80,935 | 73,238 | |||||||
Net change in receivables, inventories, and trade payables | (59,732 | ) | (170,650 | ) | |||||
Net change in other assets and liabilities | 86,407 | (156,080 | ) | ||||||
Other, net | (54,646 | ) | 23,475 | ||||||
Net cash provided by operating activities | 1,530,385 | 1,166,933 | |||||||
Cash flows from investing activities: | |||||||||
Acquisitions (net of cash of $19,161 in 2012 and $385 in 2011) | (156,256 | ) | (60,227 | ) | |||||
Capital expenditures | (218,817 | ) | (207,294 | ) | |||||
Proceeds from sale of plant and equipment | 20,404 | 32,289 | |||||||
Other, net | (21,099 | ) | (9,706 | ) | |||||
Net cash (used in) investing activities | (375,768 | ) | (244,938 | ) | |||||
Cash flows from financing activities: | |||||||||
Net (payments for) common stock activity | (430,263 | ) | (624,411 | ) | |||||
Acquisition of noncontrolling interests | (147,441 | ) | — | ||||||
Net (payments for) debt | (5,162 | ) | (85,283 | ) | |||||
Dividends | (240,654 | ) | (206,084 | ) | |||||
Net cash (used in) financing activities | (823,520 | ) | (915,778 | ) | |||||
Effect of exchange rate changes on cash | (150,246 | ) | 75,723 | ||||||
Net increase in cash and cash equivalents | 180,851 | 81,940 | |||||||
Cash and cash equivalents at beginning of period | 657,466 | 575,526 | |||||||
Cash and cash equivalents at end of period | $ | 838,317 | $ | 657,466 | |||||