Parker-hannifin Corporation · NYSE:PH
Parker-hannifin — Q4 2005 Earnings Presentation
29 slides from Parker-hannifin's earnings presentation, Jul 28, 2005
Slide 1: Quarterly Earnings Release 4th Quarter FY 2005
PH LISTED NYSE. Exhibit 99.2 Parker Hannifin Corporation Quarterly Earnings Release 4th Quarter FY 2005 July 28, 2005
Slide 2: Forward-Looking Statements
Forward-Looking Statements 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
Slide 3: Non-GAAP Financial Measure
Non-GAAP Financial Measure This presentation reconciles sales amounts reported in accordance with U.S. GAAP to sales amounts adjusted to remove the effects of acquisitions and divestitures made within the prior four quarters as well as the effects of currency exchange rates on sales. The effects of
Slide 4: Discussion Agenda
Discussion Agenda Financial Highlights Influences on Sales & Earnings WIN Strategy Balance Sheet & Cash Flow Trends Outlook Questions & Answers
Slide 5: Financial Highlights: EPS
Financial Highlights EPS* – 4th Quarter and YTD as of June 30, 2005 $5.00 $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 $1.34 $1.02 $4.55 $2.82 4Q FY05 4Q FY04 YTD FY 05 YTD FY 04 * Earnings Per Share From Continuing Operations
Slide 6: Financial Highlights: Sales
Financial Highlights Sales – 4th Quarter and YTD through June 30, 2005 4th Quarter YTD FY05 FY04 FY05 FY04 Sales $2,211 $1,964 $8,215 $6,999 % change 13% 17% Sales from acquisitions & divestitures $103 $5 $404 $34 Sales without acquisitions & divestitures $2,108 $1,959 $7,811 $6,965 % change 8% 12%
Slide 7: Influences on Sales
Influences on Sales Continued Industrial End Market Strength Aerospace Commercial OEM Globalization Trends
Slide 8: Parker New Order Rates: Industrial North America
Parker New Order Rates Industrial North America 30 20 10 0 -10 -20 -30 -40 J O J A J O J A J O J A J O J A J O J A J O J A J O J A J O J A J O J A J O J A 9 9 9 9 0 0 0 0 0 0 6 7 8 9 0 1 2 3 4 5 Current month vs. prior year
Slide 9: Parker New Order Rates: Industrial R.O.W.
Parker New Order Rates Industrial R.O.W. 30 25 20 15 10 5 0 -5 -10 -15 J O J A J O J A J O J A J O J A J O J A J O J A J O J A J O J A J O J A J O J A 9 9 9 9 0 0 0 0 0 0 6 7 8 9 0 1 2 3 4 5 Current month vs. prior year
Slide 10: Parker New Order Rates: Climate & Industrial Controls
Parker New Order Rates Climate & Industrial Controls -4 30 25 20 15 10 5 0 -5 -10 -15 -20 J O J A J O J A J O J A J O J A 0 0 0 0 2 3 4 5 Current month vs. prior year
Slide 11: Parker New Order Rates: Aerospace
Parker New Order Rates Aerospace 30 20 10 0 -10 -20 -30 J A J O J A J O J A J O J A J O J A J O J A J O J A J O J A J O J A J O J A 9 9 9 9 0 0 0 0 0 0 6 7 8 9 0 1 2 3 4 5 Average last 12 months orders to previous 12 months orders
Slide 12: Influences on Earnings
Influences on Earnings Increased Volume Win Strategy Restructuring/Move to Low Cost Countries Sales Mix – Aerospace Inventory Changes
Slide 13: Segment Reporting: Industrial North America
Segment Reporting Industrial North America FY2005 FY2004 4th Qtr YTD 4th Qtr YTD Sales As reported $940 $3,517 $848 $3,017 % change 11% 17% Acquisitions & Divestitures $47 $157 $5 $21 without Acquisitions & Divestitures $893 $3,360 $843 $2,996 % change 6% 12% Currency effects $5 $13 without Acquisit
Slide 14: Segment Reporting: Industrial Rest of World
Segment Reporting Industrial Rest of World FY 2005 FY 2004 4th Qtr YTD 4th Qtr YTD Sales As reported $643 $2,398 $565 $1,970 % change 14% 22% Acquisitions & Divestitures $12 $127 without Acquisitions & Divestitures $631 $2,271 $565 $1,970 % change 12% 15% Currency effects $25 $134 without Acquisitio
Slide 15: Segment Reporting: Aerospace
Segment Reporting Aerospace FY 2005 FY 2004 4th Qtr YTD 4th Qtr YTD Sales As reported $364 $1,359 $327 $1,216 % change 11% 12% Acquisitions & Divestitures without Acquisitions & Divestitures $364 $1,359 $327 $1,216 % change 11% 12% Currency effects $0 $5 without Acquisitions, Currency, & Divestiture
Slide 16: Segment Reporting: Climate & Industrial Controls
Segment Reporting Climate & Industrial Controls FY 2005 FY 2004 4th Qtr YTD 4th Qtr YTD Sales As reported $226 $794 $189 $671 % change 19% 18% Acquisitions & Divestitures $44 $121 without Acquisitions & Divestitures $182 $674 $189 $671 % change -4% 0% Currency effects $3 $13 without Acquisitions, Di
Slide 17: Segment Reporting: Other
Segment Reporting Other FY 2005 FY 2004 4th Qtr YTD 4th Qtr YTD Sales As reported $38 $146 $35 $125 % change 9% 17% Acquisitions & Divestitures $14 without Acquisitions & Divestitures $38 $146 $35 $111 % change 9% 32% Currency effects $2 $11 without Acquisitions, Divestitures & Currency $36 $135 $35
Slide 18: Balance Sheet Summary
Balance Sheet Summary Cash Working Capital Inventory Accounts Receivable PP & E Shareholders Equity
Slide 19: Financial Leverage
Financial Leverage Debt to Debt Equity 38.0% 36.0% 34.0% 32.0% 30.0% 28.0% 26.0% 24.0% 22.0% 20.0% Target 22.5% FY99 FY00 FY01 FY02 FY03 FY04 FY05
Slide 20: Strong Cash Flow
Strong Cash Flow – Cash From Operations FY05 $872 Operating Cash Flow % to Sales FY 99 459 FY 00 538 FY 01 529 FY 02 631 FY 03 558 FY 04 649 FY 05 872 $800 $700 $600 $500 $400 $300 $200 $100 $0 4.0% 6.0% 8.0% 10.0% 12.0%
Slide 21: FY 2006 Earnings Outlook Assumptions: Segment Sales & Operating Income
FY 2006 Earnings Outlook Assumptions Segment Sales & Operating Income FY 2006 Sales Change versus FY 2005 NA Industrial 6.5% - 7.2% Industrial ROW 9.4%-10.4% Aerospace 6.0% - 7.8% CIC 11.4% - 13.0% FY 2006 Operating Margin Percentages* NA Industrial 13.5% - 14.1% Industrial ROW 11.8% - 12.4% Aerospa
Slide 22: FY 2006 Earnings Outlook Assumptions below Operating Margin
FY 2006 Earnings Outlook assumptions below Operating Margin Corporate Admin* +11% to +12.5% vs. FY 2005 Interest Expense -14% to -16% vs. FY 2005 Other Exp. (Income)** -28% to - -30% vs. FY 2005 Tax Rate 30.0% *Adoption of FAS 123R by the Company will result in additional expense of approximately $.
Slide 23: Earnings Outlook
Earnings Outlook Without FAS 123R Impact: Fiscal Year 2006 EPS Range $5.00 - $5.40 With FAS 123R Impact: Fiscal Year 2006 EPS Range $4.80 - $5.25 Note: Forecast Does Not Include Any Acquisitions or Divestitures That May Occur During Fiscal Year 2006. Adoption of FAS 123R by the Company will result i
Slide 24: Questions & Answers
Questions & Answers... anything parker Possible TM.
Slide 25: Appendix: Income Statements & Quarterly Segment Data
Appendix Income Statements & Quarterly Segment Data
Slide 26: Income Statement - 4th Quarter
Income Statement - 4thQuarter FY 2004FY 2005 % of Sales % of Sales 100.0%$1,964.3100.0%$2,210.5 Net sales78.9%1,549.3 78.6%1,738.5 Cost of sales21.1%414.921.4%472.1 Gross profit222.611.4%235.9 S, G & A 11.3%(17.0)-0.7%(16.4) Interest expense-0.9%6.60.0%(0.3) Interest & other income0.3%-0.5%(10.4)-0.
Slide 27: Income Statement - 4th Quarter YTD
Income Statement – 4th Quarter YTD FY 2005 FY 2004 % of Sales % of Sales Net sales $8,215.1 100.0% $6,998.8 100.0% Cost of sales 6,508.1 79.2% 5,672.3 81.0% Gross profit 1,707.0 20.8% 1,326.5 19.0% S, G & A 872.1 10.6% 776.5 11.1% Interest expense (67.0) -0.8% (73.2) -1.0% Interest & other income (1
Slide 28: Restated Income Statement
Restated Income Statement CONSOLIDATED STATEMENT OF INCOME - Restated Restated to present divestiture of a business unit as discontinued operations Fiscal 2004 Fiscal 2005 (Dollars in thousands, except per share amounts) 9/30/2003 12/31/2003 3/31/2004 6/30/2004 Total 9/30/2004 12/31/2004 3/31/2005 6
Slide 29: Restated Quarterly Segment Data
Restated Quarterly Segment Data BUSINESS SEGMENT INFORMATION BY INDUSTRY - Restated Industrial & Aerospace restated for reclass of business unit Other restated for the divestiture of business unit Fiscal 2004 Fiscal 2005 (Dollars in thousands) 9/30/2003 12/31/2003 3/31/2004 6/30/2004 Total 9/30/2004