Parker-hannifin Corporation · NYSE:PH
Parker-hannifin — Q4 FY2004 Earnings Presentation
29 slides from Parker-hannifin's earnings presentation, Jul 29, 2004
Slide 1: Quarterly Earnings Release 4th Quarter FY 2004
Exhibit 99.2 Parker Hannifin Corporation Quarterly Earnings Release 4th Quarter FY 2004 July 29, 2004 .
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, 2004 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 4Q FY 04 4Q FY 03 YTD FY 04 YTD FY 03 $1.05 $0.42 $2.91 $1.68 Note: FY04 4Q EPS was reduced by $0.02 for business realignment charges and benefited $0.05 from the divestiture of a busin
Slide 6: Financial Highlights: Sales
Financial Highlights Sales – 4th Quarter and YTD through June 30 4th Quarter YTD FY 04 FY03 FY 04 FY03 Sales $1,992.7 $1,660.7 $7,106.9 $6,410.6 % change 20.0% 10.9% Sales from acquisitions & divestitures $59.8 $8.4 $112.0 $27.5 Sales without acquisitions & divestitures $1,932.9 $1,652.3 $6,994.9 $6
Slide 7: Significant Influences on Sales
Significant Influences on Sales Industrial end market strength Aerospace Commercial Defense 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 9 6 A J O J 9 7 A J O J 9 8 A J O J 9 9 A J O J 0 0 A J O J 0 1 A J O J 0 2 A J O J 0 3 A J O J 0 4 A 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 9 6 A J O J 9 7 A J O J 9 8 A J O J 9 9 A J O J 0 0 A J O J 0 1 A J O J 0 2 A J O J 0 3 A J O J 0 4 A Current month vs. prior year
Slide 10: Parker New Order Rates: Climate & Industrial Controls
Parker New Order Rates Climate & Industrial Controls -2 30 25 20 15 10 5 0 -5 -10 -15 -20 J O J 0 2 A J O J 0 3 A J O J 0 4 A 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 O J 9 6 A J O J 9 7 A J O J 9 8 A J O J 9 9 A J O J 0 0 A J O J 0 1 A J O J 0 2 A J O J 0 3 A J O J 0 4 A Average last 12 months orders to previous 12 months orders
Slide 12: Influences on Earnings
Influences on Earnings Increased Volume Restructuring/Move to Low Cost Countries Win Strategy Sales Mix – Aerospace
Slide 13: Segment Reporting: Industrial North America
Segment Reporting Industrial North America FY 2004 FY 2003 4th Qtr YTD 4th Qtr YTD Sales As reported $867.4 $3,091.9 $716.1 $2,840.6 % change 21.1% 8.8% Acquisitions $17.3 $41.6 $0.0 $0.0 without Acquisitions $850.1 $3,050.3 $716.1 $2,840.6 % change 18.7% 7.4% Currency effects ($0.3) $11.8 $0.0 $0.0
Slide 14: Segment Reporting: Industrial Rest of World
Segment Reporting Industrial Rest of World FY 2004 FY 2003 4th Qtr YTD 4th Qtr YTD Sales As reported $565.1 $1,970.4 $428.4 $1,584.4 % change 31.9% 24.4% Acquisitions $42.6 $70.4 $0.0 $0.0 without Acquisitions $522.5 $1,900.0 $428.4 $1,584.4 % change 22.0% 19.9% Currency effects $31.5 $202.8 $0.0 $0
Slide 15: Segment Reporting: Aerospace
Segment Reporting Aerospace FY 2004 FY 2003 4th Qtr YTD 4th Qtr YTD Sales As reported $307.6 $1,140.1 $276.8 $1,109.6 % change 11.1% 2.7% Acquisitions/Divestitures $0.0 $0.0 $2.5 $17.9 without Acquisitions/Divestitures $307.6 $1,140.1 $274.3 $1,091.7 % change 12.1% 4.4% Currency effects $2.3 $7.1 $0
Slide 16: Segment Reporting: Climate & Industrial Controls
Segment Reporting Climate & Industrial Controls FY 2004 FY 2003 4th Qtr YTD 4th Qtr YTD Sales As reported $ 189.3 $ 671.2 $ 181.4 $ 665.6 % change 4.4% 0.8% Acquisitions/Divestitures $ 0.0 $ 0.0 $ 0.0 $ 0.0 without Acquisitions/Divestitures $ 189.3 $ 671.2 $ 181.4 $ 665.6 % change 4.4% 0.8% Currency
Slide 17: Segment Reporting: Other
Segment Reporting Other FY 2004 FY 2003 4th Qtr YTD 4th Qtr YTD Sales As reported $63.5 $233.3 $58.0 $210.3 % change 9.6% 10.9% Acquisitions $0.0 $0.0 $5.9 $9.6 without Acquisitions $63.5 $233.3 $52.1 $200.7 % change 21.9% 16.2% Currency effects $2.9 $22.1 $0.0 $0.0 without Acquisitions & Currency $
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% FY99 FY00 FY01 FY02 FY03 FY 04 FY04 Target 24.9%
Slide 20: Strong Cash Flow
Strong Cash Flow Operating Cash Flow $800 $700 $600 $500 $400 $300 $200 $100 $0 FY 99 FY 00 FY 01 FY 02 FY 03 FY 04 12.0% 10.0% 8.0% 6.0% 4.0% % to Sales
Slide 21: FY 2005 Earnings Outlook: Business Segment Adjustment
FY 2005 Earnings Outlook Business Segment Adjustment Revenue Reclassify $76 million from Industrial to Aerospace Segment Operating Income Margins Industrial North America decreases from 9.9% to 9.6% Aerospace increases from 12.4% to 13.0%
Slide 22: FY 2005 Earnings Outlook Assumptions: Segment Sales & Operating Income
FY 2005 Earnings Outlook Assumptions Segment Sales & Operating Income FY 2005 Sales change vs. FY 2004 NA Industrial 6.0% - 8.0% Industrial ROW 8.0% - 10.0% Aerospace 3.0% - 5.0% CIC -1.0% - 1.0% Other -1.0% - 1.0% FY 2005 Operating Margin percentage change vs. FY 2004 Basis points NA Industrial 120
Slide 23: FY 2005 Outlook Assumptions below Operating Margin
FY 2005 Earnings Outlook Assumptions below Operating Margin Corporate Admin. -1% to -3% vs. FY 2004 Interest Expense -8% to -10% vs. FY 2004 Other Exp. (Income) +75% to +100% vs. FY 2004 Tax Rate 31.0%
Slide 24: Earnings Outlook
Earnings Outlook Fiscal Year 2005 1st Quarter EPS Range $0.70 - $0.80 Fiscal Year 2005 EPS Range $3.30 - $3.70
Slide 25: Forecast Risks
Forecast Risks Downside: Raw material price increases Interest Rates Upside: Aerospace recovery Semiconductor Heavy Duty Truck Stability
Slide 26: Questions & Answers
Questions & Answers... anythingman Possible: Possible:
Slide 27: Appendix
Appendix FY 2004 Income Statements
Slide 28: Income Statement – 4th Quarter
Income Statement – 4thQuarter FY 2004 FY 2003 % of Sales Business Realignment % of Sales Business Realignment & Equity Adj. Net sales $1,992.9 100.0% $1,660.7 100.0% Cost of sales 1,567.5 78.7% $2.9 1,382.6 83.3% $6.5 Gross profit 425.4 21.3% (2.9) 278.1 16.7% (6.5) S, G & A 228.4 11.4% 0.1 185.3 11
Slide 29: Income Statement – YTD
Income Statement – YTD FY 2004 FY 2003 % of Sales Business Realignment % of Sales Business Realignment & Equity Adj. Net sales $7,106.9 100.0% $6,410.6 100.0% Cost of sales 5,742.1 80.8% $14.8 5,309.8 82.8% $20.1 Gross profit 1,364.8 19.2% (14.8) 1,100.8 17.2% (20.1) S, G & A 800.2 11.3% 0.3 721.1 1