Parker-hannifin Corporation · NYSE:PH
Parker-hannifin — Q3 FY2004 Earnings Presentation
28 slides from Parker-hannifin's earnings presentation, Apr 19, 2004
Slide 1: Quarterly Earnings Release 3rd Quarter FY 2004
Exhibit 99.2 Parker Hannifin Corporation Quarterly Earnings Release 3rd Quarter FY 2004 April 19, 2004
Slide 2: Forward Looking Statements
Forward Looking Statements The company makes these statements as of the date of this disclosure, and 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 s
Slide 3: Non-GAAP Financial Measure
Non-GAAP Financial Measure This presentation reconciles sales amounts reported in to remove the effects of acquisitions and divestitures made within the prior four quarters as well as the The accordance with U.S. GAAP to sales amounts adjusted effects of currency exchange rates on sales. 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 HighlightsEPS -3rd Quarter and YTD as of March 31, 2004 $1.26 YTD FY 03 $1.85 YTD FY 04 $0.42 3Q FY 03 $0.90 3Q FY 04 $2.00 $1.80 $1.60 $1.40 $1.20 $1.00 $0.80 $0.60 $0.40 $0.20 $0.00 charges. FY03 3Q EPS was FY04 YTD EPS was reduced by $0.07 for for business realignment FY04 3Q EPS was re
Slide 6: Financial Highlights: Sales 3rd Quarter and YTD
3rd Quarter and YTD through March 31 Financial HighlightsSales – FY03 $4,749.9 $19.1 $4,730.8 $4,730.8 YTD FY 04 $5,114.0 7.7% $52.2 $5,061.8 7.0% $217.8 $4,844.0 2.4% FY03 $1,646.8 $8.5 $1,638.3 $1,638.3 3rd Quarter FY 04 $1,906.6 15.8% $38.7 $1,867.9 14.0% $81.3 $1,786.6 9.1% Sales % change Sales
Slide 7: Significant Influences on Sales
Significant Influences on Sales Commercial Military Industrial end market strength/weakness Aerospace Globalization Trends
Slide 8: Parker New Order Rates: Industrial North America
Parker New Order Rates Industrial North America J O J A J 0 3 O J A J 0 2 O J A J 0 1 O J A J 0 0 O J A J 9 9 O J A J 9 8 O J A J 9 7 O J A J 9 6 O J 30 20 10 0 -10 -20 -30 -40 Current month vs. prior year
Slide 9: Parker New Order Rates: Industrial R.O.W.
Parker New Order Rates Industrial R.O.W. J O 16 J A J 0 3 O J A J 0 2 O J A J 0 1 O J A J 0 0 O J A J 9 9 O J A J 9 8 O J A J 9 7 O J A J 9 6 O J 30 25 20 15 10 5 0 -5 -10 -15 Current month vs. prior year
Slide 10: Parker New Order Rates: Climate & Industrials
Parker New Order Rates Climate & Industrials Current month vs. prior year
Slide 11: Parker New Order Rates: Aerospace
Parker New Order Rates Aerospace J 11 O J A J 0 3 O J A J 0 2 O J A J 0 1 O J A J 0 0 O J A J 9 9 O J A J 9 8 O J A J 9 7 O J A J 9 6 O J 30 20 10 0 -10 -20 -30 Average last 12 months orders to previous 12 months orders
Slide 12: Influences on Earnings
Influences on Earnings Win Strategy Impact Aerospace/CIC Increased Volume Restructuring Sales Mix –
Slide 13: Segment Reporting: Industrial North America
Segment ReportingIndustrial North America $0.0 $0.0 $120.6 5.7% $5.2 $125.8 5.9% YTD $2,124.5 $2,124.5 $2,124.5 FY 2003 $0.0 $0.0 $42.2 5.8% $2.2 $44.4 6.1% 3rd Qtr $727.1 $727.1 $727.1 4.7% $24.3 3.6% $12.0 3.0% $192.6 8.7% $7.3 $199.9 9.0% YTD $2,224.5 $2,200.2 $2,188.2 FY 2004 15.0% $14.5 13.0% $
Slide 14: Segment Reporting: Industrial Rest of World
Segment ReportingIndustrial Rest of World $0.0 $0.0 $72.8 6.3% $6.1 $78.9 6.8% YTD $1,156.0 $1,156.0 $1,156.0 FY 2003 $0.0 $0.0 $23.8 5.7% $3.2 $27.0 6.5% 3rd Qtr $416.4 $416.4 $416.4 21.6% $27.8 19.2% $171.4 4.3% $103.8 7.4% $3.6 $107.4 7.6% YTD $1,405.3 $1,377.5 $1,206.1 FY 2004 30.1% $24.2 24.3%
Slide 15: Segment Reporting: Aerospace
Segment ReportingAerospace $832.7 $15.3 $817.4 $0.0 $817.4 $123.3 14.8% $1.0 $124.3 14.9% YTD FY 2003 $4.7 $0.0 $38.1 13.6% $0.1 $38.2 13.9% 3rd Qtr $280.0 $275.3 $275.3 $832.5 0.0% $0.0 $832.5 1.8% $4.8 $827.7 1.3% $101.8 12.2% $0.1 $101.9 12.2% YTD FY 2004 4.9% $0.0 6.7% $1.5 6.1% $37.1 12.6% $0.0
Slide 16: Segment Reporting: Climate & Industrial Controls
Segment ReportingClimate & Industrial Controls $484.3 $0.0 $484.3 $0.0 $484.3 $44.4 9.2% $0.9 $45.3 9.4% YTD FY 2003 $0.0 $0.0 $19.4 11.1% $0.6 $20.0 11.4% 3rd Qtr $175.1 $175.1 $175.1 $481.8 -0.5% $0.0 $481.8 -0.5% $10.4 $471.4 -2.7% $49.4 10.3% $0.4 $49.8 10.3% YTD FY 2004 3.8% $0.0 3.8% $3.8 1.6%
Slide 17: Segment Reporting: Other
Segment ReportingOther $152.4 $3.8 $148.6 $0.0 $148.6 $6.9 4.6% $1.3 $8.3 5.4% YTD FY 2003 $48.2 $3.8 $44.4 $0.0 $44.4 $0.6 1.2% $1.3 $1.9 4.4% 3rd Qtr $169.7 11.4% $0.0 $169.7 14.2% $19.2 $150.5 1.3% $12.6 7.4% $0.6 $13.2 7.8% YTD FY 2004 $53.3 10.6% $0.0 $53.3 20.0% $5.5 $47.8 7.7% $2.7 5.1% $0.2
Slide 18: Balance Sheet Summary
Balance Sheet Summary Inventory Cash Working Capital P, P & E Shareholders Equity
Slide 19: Financial Leverage
Financial Leverage Debt to Debt Equity 28.9% FY 04 Q3 FY03 FY02 FY01 Target FY00 FY99 38.0% 36.0% 34.0% 32.0% 30.0% 28.0% 26.0% 24.0% 22.0% 20.0%
Slide 20: Strong Cash Flow
Strong Cash Flow Sales % to 12.0% 10.0% 8.0% 6.0% 4.0% 504 YTD* 04 FY 557 03 FY 631 02 FY 529 01 FY 538 00 FY 459 99 FY FY 04 for the 9 months ending Mar. 31, 2004 * $700 $600 $500 $400 $300 $200 $100 $0 Flow Cash Operating
Slide 21: Earnings Outlook: Segment Sales & Operating Margins
Earnings Outlook Assumptions Segment Sales & Operating Margins FY 2004 8.1% 24.1% 1.5% -1.0% 9.9% 88% 57% -13% 5% 38% 7.6% 23.6% 1.0% -1.6% 9.4% 81% 50% -15% 2% 33% FY 2004 Sales change vs. FY 2003 NA Industrial Industrial ROW Aerospace CIC Other FY 2004 Operating Margin change vs. FY 2003 NA Indust
Slide 22: Earnings Outlook: Assumptions FY 2004
Earnings Outlook Assumptions FY 2004below Operating Margin vs. FY 2003 vs. FY 2003 vs. FY 2003 32.0% 9% + 27% to 29% 10% to – - + 30% to 45% quarter) th Corporate Admin. Interest Expense Other Exp. (Income) Tax Rate (4
Slide 23: Earnings Outlook: FY 2004 EPS Range
Earnings Outlook $2.65 Fiscal Year 2004 EPS Range $2.55 -
Slide 24: Forecast Risks
Forecast Risks Raw material price increases Automotive Downside: Aerospace recovery Upside:
Slide 25: Questions & Answers
Questions & Answers... anythingmens Possible:
Slide 26: Appendix: FY 2004 Income Statements
Appendix FY 2004 Income Statements
Slide 27: 3rd Quarter Income Statement
Quarter 3 rd Income Statement – $7.4 (7.4) 0.1 0.0 0.0 0.0 (7.5) (2.5) ($5.0) Business Realignment & Equity Adj. FY 2003 % of Sales 100.0% 83.1% 16.9% 11.1% -1.2% -0.1% -1.3% 4.5% 1.5% 3.0% $1,646.8 1,368.4 278.4 182.4 (20.3) (1.7) (22.1) 74.0 25.3 $48.7 Business Realignment $1.5 (1.5) 0.0 0.0 0.0 0
Slide 28: YTD Income Statement
YTD Income Statement – $13.6 (13.6) 3.6 0.0 0.0 0.0 (17.2) (4.9) ($12.3) Business Realignment & Equity Adj. FY 2003 % of Sales 100.0% 82.7% 17.3% 11.3% -1.3% -0.1% -1.3% 4.7% 1.6% 3.1% $4,749.9 3,927.1 822.8 535.8 (59.4) (3.9) (63.3) 223.7 76.5 $147.2 Business Realignment $11.9 (11.9) 0.2 0.0 (0.2)