Parker-hannifin Corporation · NYSE:PH
Parker-hannifin — Q3 FY2006 Earnings Presentation
21 slides from Parker-hannifin's earnings presentation, Apr 18, 2006
Slide 1: Discussion Agenda
Discussion Agenda Financial Highlights Outlook Questions & Answers CEO Comments
Slide 2: Financial Highlights: EPS
Financial Highlights EPS – 3rd Quarter and YTD as of March 31st FY2006 FY2005 FY 2006 FY 2005 EPS as Reported 1.46 $ 1.15 $ 3.97 $ 3.68 $ Discontinued Operations - (0.01) 0.24 0.55 EPS from Continuing Operations as reported 1.46 $ 1.16 $ 3.73 $ 3.13 $ Loss on Sale of Thermoplastics - - 0.08 - Litiga
Slide 3: EPS from Continuing Operations
Financial Highlights EPS from Continuing Operations 3rd Quarter and YTD as of March 31st $1.16 $3.13 $3.73 $1.46 $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 Q3 FY06 Q3 FY05 YTD FY06 YTD FY05
Slide 4: Influences on Earnings
Influences on Earnings Increased Volume Win Strategy Restructuring/Move to Low Cost Countries Sales Mix – Aerospace Inventory Changes
Slide 5: Financial Highlights: Sales
Financial Highlights Sales – 3rd Quarter and YTD through March 31st FY06 FY05 FY06 FY05 Sales $2,498 $2,112 $6,769 $5,896 % change 18% 15% Sales from acquisitions & divestitures $203 $500 Sales without acquisitions & divestitures $2,295 $2,112 $6,269 $5,896 % change 9% 6% Currency effects ($37) ($67
Slide 6: Influences on Sales
Influences on Sales Continued Industrial End Market Strength Aerospace Commercial OEM Globalization Trends Acquisitions
Slide 7: Segment Reporting: Industrial North America
Segment Reporting Industrial North America 3rd Qtr YTD 3rd Qtr YTD Sales As reported $1,063 $2,922 $925 $2,577 % change 15% 13% Acquisitions $60 $177 without Acquisitions $1,003 $2,745 $925 $2,577 % change 8% 7% Currency effects $5 $12 without Acquisitions & Currency $998 $2,733 $925 $2,577 % change
Slide 8: Segment Reporting: Industrial Rest of World
Segment Reporting Industrial Rest of World 3rd Qtr YTD 3rd Qtr YTD Sales As reported $774 $2,071 $623 $1,756 % change 24% 18% Acquisitions $118 $251 without Acquisitions $656 $1,820 $623 $1,756 % change 5% 4% Currency effects ($39) ($74) without Acquisitions & Currency $695 $1,894 $623 $1,756 % chan
Slide 9: Segment Reporting: Aerospace
Segment Reporting Aerospace 3rd Qtr YTD 3rd Qtr YTD Sales As reported $391 $1,085 $337 $995 % change 16% 9% Acquisitions without Acquisitions $391 $1,085 $337 $995 % change 16% 9% Currency effects ($2) ($4) without Acquisitions $393 $1,089 $337 $995 % change 17% 9% Operating Margin As reported $54 $
Slide 10: Segment Reporting: Climate & Industrial Controls
Segment Reporting Climate & Industrial Controls 3rd Qtr YTD 3rd Qtr YTD Sales As reported $270 $691 $227 $569 % change 19% 22% Acquisitions $25 $72 without Acquisitions $245 $619 $227 $569 % change 8% 9% Currency effects ($1) without Acquisitions & Currency $246 $619 $227 $569 % change 8% 9% Operati
Slide 11: Fiscal YTD Results
Fiscal YTD Results Sales Increased 14.8% 7.4% Organic Growth Cash flow from operations -9.0% of sales Earnings from continuing operations per diluted share of $3.73, up 19.2% from $3.13 last year
Slide 12: Year over Year Comparisons
Year over Year Comparisons Excludes Acquisitions & Currency Aerospace Calculated on 12-Month Moving Average Parker New Order Rates March-06 March-05 March-04 North American Industrial +3% +5% +24% International Industrial +2% +4% +16% Aerospace +23% +12% +11% Climate & Industrial Controls +14% -3% +
Slide 13: Strong Cash Flow – Cash From Operations
Strong Cash Flow – Cash From Operations FY06 YTD $610M $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 4.0% 6.0% 8.0% 10.0% 12.0%
Slide 14: Financial Leverage
Financial Leverage Debt to Debt Equity 27.1% 20.0% 22.0% 24.0% 26.0% 28.0% 30.0% 32.0% 34.0% 36.0% 38.0% FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 Target
Slide 15: Balance Sheet Summary
Balance Sheet Summary Cash Working Capital Inventory Accounts Receivable PP & E Shareholders Equity
Slide 16: Earnings Outlook Assumptions: Segment Sales & Operating Income
FY 2006 Earnings Outlook Assumptions Segment Sales & Operating Income FY 2006 Sales Change versus FY 2005 22.0% - 20.0% CIC 9.2% - 8.8% Aerospace 18.2% - 17.5% Industrial ROW 13.6% - 13.2% NA Industrial FY 2006 Operating Margin Percentages 8.3% - 8.0% CIC 14.6% - 14.4% Aerospace 12.1% - 11.9% Indust
Slide 17: Earnings Outlook Assumptions below Operating Margin
FY 2006 Earnings Outlook assumptions below Operating Margin Corporate Admin +18.5% to +19.5% vs. FY 2005 Interest Expense +16.0% to +17.0% vs. FY 2005 Other Exp. (Income) * +35.0% to +38.0% vs. FY 2005 Tax Rate 29.0% *Adoption of FAS 123R by the Company will result in additional expense of no more t
Slide 18: Earnings Outlook
Earnings Outlook Low High Previous guidance, income from continuing operations $4.97 $5.22 including loss from divestiture Revised guidance, income from continuing operations $5.07 $5.22 including loss from divestiture Revised guidance, income from continuing operations $5.15 $5.30 excluding loss fr
Slide 19: anythingmstes
anythingmstes Possible:
Slide 20: Income Statement – 3rd Quarter
Income Statement – 3rd Quarter % of Sales % of Sales Net sales $2,498.1 100.0% $2,112.5 100.0% Cost of sales 1,952.2 78.1% 1,688.8 79.9% Gross profit 545.9 21.9% 423.7 20.1% S, G & A 276.7 11.1% 215.2 10.2% Interest expense 21.0 0.8% 17.1 0.8% Other expense (6.9) -0.3% 2.0 0.1% Income from Cont'g Op
Slide 21: Income Statement – 3rd Quarter YTD
Income Statement – 3rd Quarter YTD % of Sales % of Sales Net sales $6,769.2 100.0% $5,896.3 100.0% Cost of sales 5,313.6 78.5% 4,683.4 79.4% Gross profit 1,455.5 21.5% 1,212.9 20.6% S, G & A 759.6 11.2% 627.5 10.6% Interest expense 57.1 0.8% 50.5 0.9% Interest & other income 4.2 0.1% 11.6 0.2% Incom