Parker Reports Fiscal 2013 Fourth Quarter and Year End Results - Fiscal 2013 Fourth Quarter Sales a Record at $3.43 Billion - Achieves Fiscal 2013 Full Year Diluted Earnings per Share of $6.26 - Issues Guidance for Fiscal 2014 Full Year Earnings PR Newswire CLEVELAND, Aug. 6, 2013 CLEVELAND, Aug. 6, 2013 /PRNewswire/-- Parker Hannifin Corporation (NYSE: PH), the global leader in motion and control technologies, today reported results for the fiscal 2013 fourth quarter and year ended June 30, 2013. Fiscal 2013 sales were $13.0 billion, compared with $13.1 billion in fiscal 2012. Net income for the year was $948.8 million, compared with $1,155.5 million in fiscal 2012. Fiscal 2013 earnings per diluted share were $6.26, compared with $7.45 in the previous year, and included an increase in domestic qualified pension expense of approximately $0.35 per diluted share due to accounting regulations which required the use of a lower discount rate due to market conditions. Cash flow from operations for fiscal 2013 was $1.2 billion, or 9.1 percent of sales, compared with cash flow from operations of $1.5 billion, or 11.6 percent of sales, in the prior year. Cash flow from operations in fiscal 2013 included a $225.6 million discretionary contribution to the company's pension plan. Excluding this contribution, cash flow from operations as a percent of sales was 10.9 percent for fiscal 2013. (Logo: http://photos.prnewswire.com/prnh/19990816/PHLOGO) Fiscal 2013 fourth quarter sales were a record at $3.43 billion compared with $3.41 billion in the same quarter a year ago. Net income for the fiscal 2013 fourth quarter was $271.1 million, compared with $302.3 million in the fourth quarter of fiscal 2012. Earnings per diluted share for the fiscal 2013 fourth quarter were $1.78, compared with $1.96 in last year's fourth quarter. Earnings per diluted share wereless than expected due toreduced volumesandgreater than anticipated inventory, acquisition, integration and related expenses. "Our performance in fiscal year 2013 largely reflects challenging global macro-economic conditions and integration and acquisition related costs," said Chairman, CEO and President, Don Washkewicz. "As the year progressed, we continued to adapt to weak conditions and drive stronger operational performance finishing positively with record fourth quarter sales and our highest quarterly segment operating margin for the fiscal year at 14.5 percent. For the year, we were able to deliver high levels of segment operating margin and operating cash flows." Fourth Quarter Segment Results In Industrial North America, fiscal 2013 fourth quarter sales decreased 2.6 percent to $1.3 billion, and operating income was $225.1 million compared with $249.1 million in the same period a year ago. In Industrial International, fourth quarter sales increased 3.3 percent to $1.28 billion, and operating income was $156.2 million compared with $163.9 million in the same period a year ago. In Aerospace, fourth quarter sales increased 9.5 percent to $620.0 million, and operating income was $86.1 million compared with $85.3 million in the same period a year ago. In Climate and Industrial Controls, fourth quarter sales decreased 16.3 percent to $224.6 million, and operating income was $31.1 million compared with $31.5 million in the same period a year ago. These results reflect the impact of business divestitures completed in fiscal 2013. Orders Parker reported orders that were flat for the quarter ended June 30, 2013, compared with the same quarter a year ago. The company reported the following orders: oOrders decreased 5 percent in Industrial North America, compared with the same quarter a year ago. oOrders increased 3 percent in Industrial International, compared with the same quarter a year ago. oOrders increased 3 percent in Aerospace on a rolling 12-month average basis. oOrders were flat in Climate and Industrial Controls, compared with the same quarter a year ago. Fiscal 2014 Outlook For fiscal 2014, the company has issued guidance for earnings from continuing operations in the range of $7.35 to $8.15 per diluted share. Fiscal 2014 guidance includes an expected gain of approximately $1.50 per diluted share associated with a previously announced joint venture agreement between Parker Aerospace and GE Aviation and expenses related to possible restructuring of approximately $100 million. Washkewicz added, "Our current outlook is that throughout fiscal 2014, global macro-economic conditions will remain relatively flat. As a result, we plan to spend approximately $100 million to right size our global operations, which we believe is prudent given these conditions. We will continue to manage our business accordingly while executing the Win Strategy by investing in new product development, expansion in emerging markets, and acquisitions to strengthen our portfolio. These operational actions, combined with our dividend, are expected to deliver strong returns for our shareholders." NOTICE OF CONFERENCE CALL: Parker Hannifin's conference call and slide presentation to discuss its fiscal 2013 fourth quarter and full year results are available to all interested parties via live webcast today at 11:00 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 of $13 billion in fiscal year 2013, 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 49 countries around the world. Parker has increased its annual dividends paid to shareholders for 57 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 and similar transactions, including the anticipated closing of the previously announced joint venture with GE Aviation; the determination to undertake business realignment activities and the expected costs thereof and, if undertaken, the ability to complete such activities and realize the anticipated cost savings from such activities; ability to realize anticipated benefits from the consolidation of the Climate and Industrial Controls Group;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. PARKER HANNIFIN CORPORATION - JUNE 30, 2013 CONSOLIDATED STATEMENT OF INCOME Three Months Ended June Year Ended June 30, 30, (Dollars in thousands except 2013 2012 2013 2012 per share amounts) Net sales $ 3,428,233 $ $ 13,015,704 $ 13,145,942 3,411,666 Cost of sales 2,618,067 2,572,258 10,086,675 9,958,337 Gross profit 810,166 839,408 2,929,029 3,187,605 Selling, general and administrative 413,061 386,681 1,554,973 1,519,316 expenses Interest expense 20,777 23,487 91,552 92,790 Other expense 2,565 3,901 (28,497) (1,199) (income), net Income before 373,763 425,339 1,311,001 1,576,698 income taxes Income taxes 102,633 123,037 362,217 421,206 Net income 271,130 302,302 948,784 1,155,492 Less: Noncontrolling (34) 337 357 3,669 interests Net income attributable to $ $ $ $ common 271,164 301,965 948,427 1,151,823 shareholders Earnings per share attributable to common shareholders: Basic earnings $ $ $ $ per share 1.82 2.01 6.36 7.62 Diluted $ $ $ $ earnings per share 1.78 1.96 6.26 7.45 Average shares outstanding during 149,298,277 150,470,993 149,218,257 151,222,033 period - Basic Average shares outstanding during 152,115,402 154,155,617 151,588,031 154,664,510 period - Diluted Cash dividends per $ $ $ $ common share .45 .41 1.70 1.54 BUSINESS SEGMENT INFORMATION BY INDUSTRY Three Months Ended June Year Ended June 30, 30, (Dollars in 2013 2012 2013 2012 thousands) Net sales Industrial: North $ 1,303,203 $ $ $ America 1,337,580 5,050,604 5,041,106 1,280,443 1,239,571 4,867,758 5,034,249 International Aerospace 619,950 565,990 2,267,715 2,102,747 Climate & Industrial 224,637 268,525 829,627 967,840 Controls Total $ 3,428,233 $ $ 13,015,704 $ 3,411,666 13,145,942 Segment operating income Industrial: North $ $ $ $ America 225,071 249,059 845,225 895,010 156,233 163,899 583,747 733,123 International Aerospace 86,136 85,311 280,286 290,135 Climate & Industrial 31,063 31,456 82,227 84,274 Controls Total segment 498,503 529,725 1,791,485 2,002,542 operating income Corporate general and administrative 59,189 50,838 185,767 193,367 expenses Income before interest and 439,314 478,887 1,605,718 1,809,175 other Interest expense 20,777 23,487 91,552 92,790 Other expense 44,774 30,061 203,165 139,687 Income before $ $ $ $ income taxes 373,763 425,339 1,311,001 1,576,698 CONSOLIDATED BALANCE SHEET June 30, June, 30 (Dollars in 2013 2012 thousands) Assets Current assets: Cash and cash $ 1,781,412 $ equivalents 838,317 Accounts 2,062,745 1,992,284 receivable, net Inventories 1,377,405 1,400,732 Prepaid expenses 182,669 137,429 Deferred income 126,955 129,352 taxes Total current 5,531,186 4,498,114 assets Plant and 1,808,240 1,719,968 equipment, net Goodwill 3,223,515 2,925,856 Intangible assets, 1,290,499 1,095,218 net Other assets 687,458 931,126 Total assets $ 12,540,898 $ 11,170,282 Liabilities and equity Current liabilities: Notes payable $ 1,333,826 $ 225,589 Accounts payable 1,156,002 1,194,684 Accrued 894,296 911,931 liabilities Accrued domestic 136,079 153,809 and foreign taxes Total current 3,520,203 2,486,013 liabilities Long-term debt 1,495,960 1,503,946 Pensions and other postretirement 1,372,437 1,909,755 benefits Deferred income 102,920 88,091 taxes Other liabilities 307,897 276,747 Shareholders' 5,738,426 4,896,515 equity Noncontrolling 3,055 9,215 interests Total liabilities $ 12,540,898 $ and equity 11,170,282 CONSOLIDATED STATEMENT OF CASH FLOWS Year Ended June 30, (Dollars in 2013 2012 thousands) Cash flows from operating activities: Net income $ $ 948,784 1,155,492 Depreciation and 335,624 321,929 amortization Stock incentive 84,996 80,935 plan compensation Net change in receivables, 11,230 (59,732) inventories, and trade payables Net change in other assets and (195,938) 86,407 liabilities Other, net 6,239 (54,646) Net cash provided by operating 1,190,935 1,530,385 activities Cash flows from investing activities: Acquisitions (net of cash of $33,932 (621,144) (156,256) in 2013 and $19,161 in 2012) Capital (265,896) (218,817) expenditures Proceeds from sale of plant and 25,047 20,404 equipment Proceeds from sale 73,515 - of businesses Other, net (21,367) (21,099) Net cash (used in) investing (809,845) (375,768) activities Cash flows from financing activities: Net payments for common stock (159,773) (430,263) activity Acquisition of noncontrolling (1,091) (147,441) interests Net proceeds from (payments for) 992,047 (5,162) debt Dividends (255,009) (240,654) Net cash provided by (used in) 576,174 (823,520) financing activities Effect of exchange rate changes on (14,169) (150,246) cash Net increase in cash and cash 943,095 180,851 equivalents Cash and cash equivalents at 838,317 657,466 beginning of period Cash and cash $ equivalents at end $ 1,781,412 838,317 of period SOURCE Parker Hannifin Corporation Website: http://www.phstock.com Contact: Media - Aidan Gormley, Director, Corporate Communications, 216/896-3258, firstname.lastname@example.org; Financial Analysts - Pamela Huggins, Vice President - Treasurer, 216/896-2240, email@example.com
Parker Reports Fiscal 2013 Fourth Quarter and Year End Results
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