Parker Hannifin Corporation (NYSE: PH), the global leader in motion
and control technologies, today reported results for the fiscal
2023 third quarter ended March 31, 2023. Fiscal 2023 third
quarter sales were a record at $5.1 billion, an increase of 24%,
compared with $4.1 billion in the third quarter of fiscal 2022. Net
income was $590.9 million compared with $348.0 million in the prior
year quarter. Adjusted net income was $771.9 million, an increase
of 22% compared with $630.2 million in the third quarter of fiscal
2022. Earnings per share were $4.54 compared with $2.67 in the
third quarter of fiscal 2022. Adjusted earnings per share increased
23% to a record of $5.93 compared with $4.83 in the prior year
quarter. Fiscal 2023 year-to-date cash flow from operations
increased 16% to $1.8 billion, or 12.8% of sales compared with $1.5
billion, or 13.3% of sales, in the prior year. A reconciliation of
non-GAAP measures is included in the financial tables of this press
release and includes various expenses associated with the
completion of the acquisition and divestitures during fiscal 2023.
“This was an outstanding quarter for Parker, driven
by our engaged team that continues to deliver record financial
performance,” said Chief Executive Officer, Jenny Parmentier. “For
the first time, quarterly sales surpassed $5 billion and we
achieved record adjusted segment operating margin and adjusted
earnings per share. Demand remained strong across the company with
double-digit organic sales growth, record backlog and positive
order levels. Meggitt's team members and technologies are bringing
significant value to our portfolio, and we are pleased to report
that the integration and synergies are ahead of schedule.”
Segment ResultsDiversified
Industrial Segment: North American third quarter sales increased
16% to $2.3 billion and operating income was $489.3 million
compared with $414.0 million in the same period a year ago. On an
adjusted basis, North American operating income was $536.7 million,
or 22.9% of sales. International third quarter sales increased 6%
to $1.5 billion and operating income was $329.5 million compared
with $298.5 million in the same period a year ago. On an adjusted
basis, International operating income was $357.0 million, or 23.4%
of sales, a 70 basis point increase compared with the prior year
quarter.
Aerospace Systems Segment: Third quarter sales
increased 89% to $1.2 billion and operating income was $133.9
million compared with $119.0 million in the same period a year ago.
On an adjusted basis, operating income was $281.3 million, or 23.5%
of sales, a 160 basis point increase compared with the prior year
quarter.
OrdersBeginning in the third
quarter of fiscal 2023, order comparisons include Meggitt to better
reflect the transformation of Parker's portfolio and its effect on
order rates. The company reported the following orders for the
quarter ending March 31, 2023, compared with the same quarter
a year ago:
- Orders increased 2% for total Parker
- Orders decreased 4% in the Diversified Industrial North America
businesses
- Orders decreased 4% in the Diversified Industrial International
businesses
- Orders increased 25% in the Aerospace Systems Segment on a
rolling 12-month average basis.
OutlookParker has increased its
outlook for organic sales and earnings per share for the fiscal
year ending June 30, 2023. The company expects fiscal 2023 organic
sales growth to be approximately 10% and earnings per share in the
range of $14.75 to $15.05, or $20.60 to $20.90 on an adjusted
basis. A reconciliation of forecasted earnings per share to
adjusted forecasted earnings per share is included in the financial
tables of this press release.
Parmentier added, “Our results this quarter give us
confidence in a strong finish to the fiscal year. Our continued
execution of The Win Strategy™ coupled with secular growth trends
and synergies from the Meggitt acquisition will support us in
achieving top quartile performance and our FY27 financial goals.
With many opportunities for continued improvement, I am very
excited about Parker's future.”
NOTICE OF CONFERENCE
CALL: Parker Hannifin's conference call and
slide presentation to discuss its fiscal 2023 third quarter results
are available to all interested parties via live webcast today at
11:00 a.m. ET, at www.phstock.com. A replay of the webcast will be
available on the site approximately one hour after the completion
of the call and will remain available for one year. To register for
e-mail notification of future events please visit
www.phstock.com.
About Parker HannifinParker
Hannifin is a Fortune 250 global leader in motion and control
technologies. For more than a century the company has been enabling
engineering breakthroughs that lead to a better tomorrow. Parker
has increased its annual dividend per share paid to shareholders
for 67 consecutive fiscal years, among the top five longest-running
dividend-increase records in the S&P 500 index. Learn more at
www.parker.com or @parkerhannifin.
Note on ReclassificationEffective
July 1, 2022, the company began classifying certain expenses,
previously classified as cost of sales, as selling, general and
administrative expenses (“SG&A”) or within other (income)
expense, net. During the integration of recently acquired
businesses, the company has seen diversity in practice of the
classifications of certain expenses, and the reclassification was
made to better align the presentation of expenses on the
Consolidated Statement of Income with management’s internal
reporting. The expenses reclassified from cost of sales to SG&A
relate to certain administrative activities conducted in production
facilities and research and development. Foreign currency
transaction expense was also reclassified from cost of sales to
other (income) expense, net on the Consolidated Statement of
Income. These reclassifications had no impact on net income,
earnings per share, cash flows, segment reporting or the financial
position of the Company and were retrospectively applied to all
periods presented in the financial tables of this press
release.
Note on OrdersOrders 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.
Beginning in the third quarter of fiscal 2023, all comparisons
include acquisitions in both the numerator and denominator and
exclude divestitures. Diversified Industrial comparisons are on
3-month average computations and Aerospace Systems comparisons are
rolling 12-month average computations.
Note on Net IncomeNet income
referenced in this press release is equal to net income
attributable to common shareholders.
Note on Non-GAAP Financial
MeasuresThis press release contains references to non-GAAP
financial information including (a) adjusted net income; (b)
adjusted earnings per share; (c) adjusted segment operating
margins; (d) adjusted segment operating income; (e) EBITDA margin;
(f) adjusted EBITDA margin and (g) organic sales growth. The
adjusted net income, earnings per share, segment operating margin,
adjusted segment operating income and organic sales measures are
presented to allow investors and the company to meaningfully
evaluate changes in net income, earnings per share and segment
operating margins on a comparable basis from period to period. This
press release also contains references to EBITDA, EBITDA margin and
adjusted EBITDA margin. EBITDA is defined as earnings before
interest, taxes, depreciation and amortization. Although EBITDA,
EBITDA margin and adjusted EBITDA margin are not measures of
performance calculated in accordance with GAAP, we believe that
they are useful to an investor in evaluating the results of this
quarter versus the prior period. Comparable descriptions of record
adjusted results in this release refer only to the period from the
first quarter of FY2011 to the periods presented in this release.
This period coincides with recast historical financial results
provided in association with our FY2014 change in segment
reporting. A reconciliation of non-GAAP measures is included in the
financial tables of this press release.
Forward-Looking
StatementsForward-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. Often but not
always, these statements may be identified from the use of
forward-looking terminology such as “anticipates,” “believes,”
“may,” “should,” “could,” “expects,” “targets,” “is likely,”
“will,” or the negative of these terms and similar expressions, and
include all statements regarding future performance, earnings
projections, events or developments. Neither Parker nor any of its
respective associates or directors, officers or advisers, provides
any representation, assurance or guarantee that the occurrence of
the events expressed or implied in any forward-looking statements
will actually occur. Parker cautions readers not to place undue
reliance on these statements. It is possible that the future
performance and earnings projections of the company, including its
individual segments, may differ materially from past performance or
current expectations.
Among other factors which may affect future
performance are: the impact of the global outbreak of COVID-19 and
governmental and other actions taken in response; 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 integration of Meggitt PLC; the ability to
successfully divest businesses planned for divestiture and realize
the anticipated benefits of such divestitures; 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 implement successfully business and operating
initiatives, including the timing, price and execution of share
repurchases and other capital initiatives; availability, cost
increases of or other limitations on our access to raw materials,
component products and/or commodities if associated costs cannot be
recovered in product pricing; ability to manage costs related to
insurance and employee retirement and health care benefits; legal
and regulatory developments and changes; compliance costs
associated with environmental laws and regulations; potential
supply chain and labor disruptions, including as a result of labor
shortages; threats associated with international conflicts and
efforts to combat terrorism and cyber security risks; uncertainties
surrounding the ultimate resolution of outstanding legal
proceedings, including the outcome of any appeals; local and global
political and competitive market conditions, including global
reactions to U.S. trade policies, and resulting effects on sales
and pricing; 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 (including fluctuations
associated with any potential credit rating decline) and credit
availability; inability to obtain, or meet conditions imposed for,
required governmental and regulatory approvals; changes in consumer
habits and preferences; government actions, including the impact of
changes in the tax laws in the United States and foreign
jurisdictions and any judicial or regulatory interpretation
thereof; and large scale disasters, such as floods, earthquakes,
hurricanes, industrial accidents and pandemics. Readers should
consider these forward-looking statements in light of risk factors
discussed in Parker’s Annual Report on Form 10-K for the fiscal
year ended June 30, 2022 and other periodic filings made with the
SEC.
Contact: |
Media - |
|
|
Aidan Gormley - Director, Global Communications and Branding |
216-896-3258 |
|
aidan.gormley@parker.com |
|
|
|
|
|
Financial Analysts - |
|
|
Jeff Miller - Vice President, Investor Relations |
216-896-2708 |
|
jeffrey.miller@parker.com |
|
PARKER
HANNIFIN CORPORATION - MARCH 31, 2023 |
|
|
|
|
CONSOLIDATED STATEMENT OF INCOME |
|
|
|
|
|
|
|
(Unaudited) |
|
Three Months Ended March 31, |
|
Nine Months Ended March 31, |
(Dollars in
thousands, except per share amounts) |
|
2023 |
|
|
2022* |
|
|
2023 |
|
|
2022* |
Net sales |
|
$ |
5,061,665 |
|
|
$ |
4,086,387 |
|
$ |
13,969,251 |
|
|
$ |
11,673,776 |
Cost of sales |
|
|
3,340,764 |
|
|
|
2,709,407 |
|
|
9,373,032 |
|
|
|
7,781,384 |
Selling, general
and administrative expenses |
|
868,393 |
|
|
|
640,498 |
|
|
2,519,163 |
|
|
|
1,853,105 |
Interest expense |
|
|
151,993 |
|
|
|
63,272 |
|
|
416,718 |
|
|
|
183,982 |
Other (income) expense,
net |
|
|
(55,866 |
) |
|
|
239,221 |
|
|
(116,131 |
) |
|
|
359,247 |
Income before income
taxes |
|
|
756,381 |
|
|
|
433,989 |
|
|
1,776,469 |
|
|
|
1,496,058 |
Income taxes |
|
|
165,421 |
|
|
|
85,901 |
|
|
402,011 |
|
|
|
308,778 |
Net income |
|
|
590,960 |
|
|
|
348,088 |
|
|
1,374,458 |
|
|
|
1,187,280 |
Less: Noncontrolling
interests |
|
|
71 |
|
|
|
71 |
|
|
478 |
|
|
|
506 |
Net income
attributable to common shareholders |
$ |
590,889 |
|
|
$ |
348,017 |
|
$ |
1,373,980 |
|
|
$ |
1,186,774 |
|
|
|
|
|
|
|
|
|
*Prior period
amounts have been reclassified to reflect the income statement
reclassification, as described in the attached press release. |
|
|
|
|
|
|
|
|
|
Earnings
per share attributable to common shareholders: |
|
|
|
|
|
|
|
Basic earnings per share |
|
$ |
4.61 |
|
|
$ |
2.71 |
|
$ |
10.71 |
|
|
$ |
9.23 |
Diluted earnings per
share |
|
$ |
4.54 |
|
|
$ |
2.67 |
|
$ |
10.58 |
|
|
$ |
9.10 |
|
|
|
|
|
|
|
|
|
Average shares
outstanding during period - Basic |
|
128,293,039 |
|
|
|
128,426,675 |
|
|
128,343,788 |
|
|
|
128,549,040 |
Average shares
outstanding during period - Diluted |
|
130,151,487 |
|
|
|
130,343,581 |
|
|
129,831,989 |
|
|
|
130,438,593 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
DIVIDENDS PER COMMON SHARE |
|
|
|
|
|
|
|
(Unaudited) |
|
Three Months Ended March 31, |
|
Nine Months Ended March 31, |
(Amounts in dollars) |
|
|
2023 |
|
|
|
2022 |
|
|
2023 |
|
|
|
2022 |
Cash
dividends per common share |
$ |
1.33 |
|
|
$ |
1.03 |
|
$ |
3.99 |
|
|
$ |
3.09 |
|
|
|
|
|
|
|
|
|
RECONCILIATION OF ORGANIC GROWTH |
|
|
|
|
|
|
|
(Unaudited) |
|
Three Months Ended March 31, |
|
Nine Months Ended March 31, |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Sales growth - as reported |
|
23.9 |
% |
|
9.1 |
% |
|
19.7 |
% |
|
12.4 |
% |
Adjustments: |
|
|
|
|
|
|
|
Acquisitions |
|
15.3 |
% |
|
— |
% |
|
12.0 |
% |
|
— |
% |
Divestitures |
|
(0.5)% |
|
— |
% |
|
(0.4)% |
|
— |
% |
Currency |
(2.4)% |
|
(2.0)% |
|
(3.9)% |
|
(0.8)% |
Organic sales
growth |
|
11.5 |
% |
|
11.1 |
% |
|
12.0 |
% |
|
13.2 |
% |
PARKER
HANNIFIN CORPORATION - MARCH 31, 2023 |
|
|
|
|
|
|
RECONCILIATION OF NET INCOME ATTRIBUTABLE TO COMMON
SHAREHOLDERS TO ADJUSTED NET INCOME ATTRIBUTABLE TO COMMON
SHAREHOLDERS |
(Unaudited) |
|
Three Months Ended March 31, |
|
Nine Months Ended March 31, |
(Dollars in thousands) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net income
attributable to common shareholders |
$ |
590,889 |
|
|
$ |
348,017 |
|
|
$ |
1,373,980 |
|
|
$ |
1,186,774 |
|
Adjustments: |
|
|
|
|
|
|
|
Acquired intangible asset amortization expense |
|
145,147 |
|
|
|
78,865 |
|
|
|
374,417 |
|
|
|
237,377 |
|
Business realignment charges |
|
8,241 |
|
|
|
3,152 |
|
|
|
17,480 |
|
|
|
9,811 |
|
Integration costs to achieve |
|
|
31,244 |
|
|
|
933 |
|
|
|
76,653 |
|
|
|
2,942 |
|
Acquisition-related expenses |
|
1,299 |
|
|
|
12,724 |
|
|
|
163,540 |
|
|
|
84,065 |
|
Loss on deal-contingent forward contracts |
|
— |
|
|
|
246,983 |
|
|
|
389,992 |
|
|
|
396,365 |
|
Net loss (gain) on divestitures |
|
10,927 |
|
|
|
— |
|
|
|
(362,003 |
) |
|
|
— |
|
Amortization of inventory step-up to fair value |
|
37,642 |
|
|
|
— |
|
|
|
167,973 |
|
|
|
— |
|
Russia liquidation |
|
|
— |
|
|
|
20,057 |
|
|
|
— |
|
|
|
20,057 |
|
Tax effect of adjustments1 |
|
|
(53,520 |
) |
|
|
(80,557 |
) |
|
|
(195,766 |
) |
|
|
(168,337 |
) |
Adjusted
net income attributable to common shareholders |
$ |
771,869 |
|
|
$ |
630,174 |
|
|
$ |
2,006,266 |
|
|
$ |
1,769,054 |
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF EARNINGS PER DILUTED SHARE TO ADJUSTED
EARNINGS PER DILUTED SHARE |
(Unaudited) |
|
Three Months Ended March 31, |
|
Nine Months Ended March 31, |
(Amounts in dollars) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Earnings
per diluted share |
$ |
4.54 |
|
|
$ |
2.67 |
|
|
$ |
10.58 |
|
|
$ |
9.10 |
|
Adjustments: |
|
|
|
|
|
|
|
Acquired intangible asset amortization expense |
|
1.12 |
|
|
|
0.61 |
|
|
|
2.88 |
|
|
|
1.82 |
|
Business realignment charges |
|
0.06 |
|
|
|
0.02 |
|
|
|
0.13 |
|
|
|
0.07 |
|
Integration costs to achieve |
|
0.24 |
|
|
|
0.01 |
|
|
|
0.59 |
|
|
|
0.03 |
|
Acquisition-related expenses |
|
0.01 |
|
|
|
0.10 |
|
|
|
1.27 |
|
|
|
0.65 |
|
Loss on deal-contingent forward contracts |
|
— |
|
|
|
1.89 |
|
|
|
3.00 |
|
|
|
3.03 |
|
Net loss (gain) on divestitures |
|
0.09 |
|
|
|
— |
|
|
|
(2.78 |
) |
|
|
— |
|
Amortization of inventory step-up to fair value |
|
0.29 |
|
|
|
— |
|
|
|
1.29 |
|
|
|
— |
|
Russia liquidation |
|
|
— |
|
|
|
0.15 |
|
|
|
— |
|
|
|
0.15 |
|
Tax effect of adjustments1 |
|
|
(0.42 |
) |
|
|
(0.62 |
) |
|
|
(1.51 |
) |
|
|
(1.29 |
) |
Adjusted
earnings per diluted share |
$ |
5.93 |
|
|
$ |
4.83 |
|
|
$ |
15.45 |
|
|
$ |
13.56 |
|
|
|
|
|
|
|
|
|
|
1This line item
reflects the aggregate tax effect of all non-tax adjustments
reflected in the preceding line items of the table. We estimate the
tax effect of each adjustment item by applying our overall
effective tax rate for continuing operations to the pre-tax amount,
unless the nature of the item and/or the tax jurisdiction in which
the item has been recorded requires application of a specific tax
rate or tax treatment, in which case the tax effect of such item is
estimated by applying such specific tax rate or tax treatment. |
PARKER
HANNIFIN CORPORATION - MARCH 31, 2023 |
|
|
|
|
RECONCILIATION OF EBITDA TO ADJUSTED EBITDA |
|
|
|
|
(Unaudited) |
|
Three Months Ended March 31, |
|
Nine Months Ended March 31, |
(Dollars in thousands) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net
sales |
|
$ |
5,061,665 |
|
|
$ |
4,086,387 |
|
|
$ |
13,969,251 |
|
|
$ |
11,673,776 |
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
590,960 |
|
|
$ |
348,088 |
|
|
$ |
1,374,458 |
|
|
$ |
1,187,280 |
|
Income taxes |
|
|
165,421 |
|
|
|
85,901 |
|
|
|
402,011 |
|
|
|
308,778 |
|
Depreciation |
|
|
80,194 |
|
|
|
63,832 |
|
|
|
234,649 |
|
|
|
194,945 |
|
Amortization |
|
|
145,147 |
|
|
|
78,865 |
|
|
|
374,417 |
|
|
|
237,377 |
|
Interest expense |
|
|
151,993 |
|
|
|
63,272 |
|
|
|
416,718 |
|
|
|
183,982 |
|
EBITDA |
|
|
1,133,715 |
|
|
|
639,958 |
|
|
|
2,802,253 |
|
|
|
2,112,362 |
|
Adjustments: |
|
|
|
|
|
|
|
|
Business realignment charges |
|
|
8,241 |
|
|
|
3,152 |
|
|
|
17,480 |
|
|
|
9,811 |
|
Integration costs to achieve |
|
31,244 |
|
|
|
933 |
|
|
|
76,653 |
|
|
|
2,942 |
|
Acquisition-related expenses |
|
|
1,299 |
|
|
|
12,724 |
|
|
|
163,540 |
|
|
|
84,065 |
|
Loss on deal-contingent forward contracts |
|
|
— |
|
|
|
246,983 |
|
|
|
389,992 |
|
|
|
396,365 |
|
Net loss (gain) on divestitures |
|
|
10,927 |
|
|
|
— |
|
|
|
(362,003 |
) |
|
|
— |
|
Amortization of inventory step-up to fair value |
|
|
37,642 |
|
|
|
— |
|
|
|
167,973 |
|
|
|
— |
|
Russia liquidation |
|
|
— |
|
|
|
20,057 |
|
|
|
— |
|
|
|
20,057 |
|
Adjusted
EBITDA |
|
$ |
1,223,068 |
|
|
$ |
923,807 |
|
|
$ |
3,255,888 |
|
|
$ |
2,625,602 |
|
|
|
|
|
|
|
|
|
|
EBITDA
margin |
|
|
22.4 |
% |
|
|
15.7 |
% |
|
|
20.1 |
% |
|
|
18.1 |
% |
Adjusted EBITDA
margin |
|
|
24.2 |
% |
|
|
22.6 |
% |
|
|
23.3 |
% |
|
|
22.5 |
% |
BUSINESS
SEGMENT INFORMATION |
|
|
|
|
|
|
|
(Unaudited) |
|
Three Months Ended March 31, |
|
Nine Months Ended March 31, |
(Dollars in thousands) |
|
|
2023 |
|
|
|
2022 |
|
|
2023 |
|
|
2022 |
Net
sales |
|
|
|
|
|
|
|
|
Diversified Industrial: |
|
|
|
|
|
|
|
|
North America |
|
$ |
2,342,590 |
|
|
$ |
2,014,715 |
|
$ |
6,615,035 |
|
$ |
5,615,454 |
International |
|
|
1,524,515 |
|
|
|
1,439,357 |
|
|
4,277,227 |
|
|
4,214,972 |
Aerospace Systems |
|
|
1,194,560 |
|
|
|
632,315 |
|
|
3,076,989 |
|
|
1,843,350 |
Total net
sales |
|
$ |
5,061,665 |
|
|
$ |
4,086,387 |
|
$ |
13,969,251 |
|
$ |
11,673,776 |
Segment operating
income |
|
|
|
|
|
|
|
|
Diversified Industrial: |
|
|
|
|
|
|
|
|
North America |
|
$ |
489,349 |
|
|
$ |
413,998 |
|
$ |
1,362,256 |
|
$ |
1,085,117 |
International |
|
|
329,498 |
|
|
|
298,475 |
|
|
908,958 |
|
|
881,206 |
Aerospace Systems |
|
|
133,905 |
|
|
|
119,016 |
|
|
234,849 |
|
|
352,063 |
Total
segment operating income |
|
952,752 |
|
|
|
831,489 |
|
|
2,506,063 |
|
|
2,318,386 |
Corporate general
and administrative expenses |
|
45,780 |
|
|
|
57,405 |
|
|
146,341 |
|
|
149,064 |
Income before
interest expense and other expense |
|
906,972 |
|
|
|
774,084 |
|
|
2,359,722 |
|
|
2,169,322 |
Interest expense |
|
|
151,993 |
|
|
|
63,272 |
|
|
416,718 |
|
|
183,982 |
Other (income) expense,
net |
|
|
(1,402 |
) |
|
|
276,823 |
|
|
166,535 |
|
|
489,282 |
Income before income
taxes |
|
$ |
756,381 |
|
|
$ |
433,989 |
|
$ |
1,776,469 |
|
$ |
1,496,058 |
|
|
|
|
|
|
|
|
|
PARKER
HANNIFIN CORPORATION - MARCH 31, 2023 |
|
|
|
|
|
RECONCILIATION OF SEGMENT OPERATING MARGINS TO ADJUSTED
SEGMENT OPERATING MARGINS |
(Unaudited) |
|
Three Months Ended March 31, |
|
Nine Months Ended March 31, |
(Dollars in thousands) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Diversified Industrial
North America sales |
|
$ |
2,342,590 |
|
|
$ |
2,014,715 |
|
|
$ |
6,615,035 |
|
|
$ |
5,615,454 |
|
|
|
|
|
|
|
|
|
|
Diversified Industrial
North America operating income |
|
$ |
489,349 |
|
|
$ |
413,998 |
|
|
$ |
1,362,256 |
|
|
$ |
1,085,117 |
|
Adjustments: |
|
|
|
|
|
|
|
|
Acquired intangible asset amortization |
|
|
44,184 |
|
|
|
47,408 |
|
|
|
134,816 |
|
|
|
141,695 |
|
Business realignment charges |
|
|
761 |
|
|
|
355 |
|
|
|
2,232 |
|
|
|
1,968 |
|
Integration costs to achieve |
|
|
2,442 |
|
|
|
297 |
|
|
|
3,759 |
|
|
|
957 |
|
Adjusted Diversified
Industrial North America operating income |
|
$ |
536,736 |
|
|
$ |
462,058 |
|
|
$ |
1,503,063 |
|
|
$ |
1,229,737 |
|
|
|
|
|
|
|
|
|
|
Diversified Industrial
North America operating margin |
|
|
20.9 |
% |
|
|
20.5 |
% |
|
|
20.6 |
% |
|
|
19.3 |
% |
Adjusted Diversified
Industrial North America operating margin |
|
|
22.9 |
% |
|
|
22.9 |
% |
|
|
22.7 |
% |
|
|
21.9 |
% |
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
Three Months Ended March 31, |
|
Nine Months Ended March 31, |
(Dollars in thousands) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Diversified Industrial
International sales |
|
$ |
1,524,515 |
|
|
$ |
1,439,357 |
|
|
$ |
4,277,227 |
|
|
$ |
4,214,972 |
|
|
|
|
|
|
|
|
|
|
Diversified Industrial
International operating income |
|
$ |
329,498 |
|
|
$ |
298,475 |
|
|
$ |
908,958 |
|
|
$ |
881,206 |
|
Adjustments: |
|
|
|
|
|
|
|
|
Acquired intangible asset amortization |
|
|
17,266 |
|
|
|
18,704 |
|
|
|
50,890 |
|
|
|
57,404 |
|
Business realignment charges |
|
|
7,314 |
|
|
|
2,416 |
|
|
|
12,232 |
|
|
|
6,867 |
|
Integration costs to achieve |
|
|
2,953 |
|
|
|
636 |
|
|
|
3,517 |
|
|
|
1,985 |
|
Russia liquidation |
|
|
— |
|
|
|
6,257 |
|
|
|
— |
|
|
|
6,257 |
|
Adjusted Diversified
Industrial International operating income |
|
$ |
357,031 |
|
|
$ |
326,488 |
|
|
$ |
975,597 |
|
|
$ |
953,719 |
|
|
|
|
|
|
|
|
|
|
Diversified Industrial
International operating margin |
|
|
21.6 |
% |
|
|
20.7 |
% |
|
|
21.3 |
% |
|
|
20.9 |
% |
Adjusted Diversified
Industrial International operating margin |
|
|
23.4 |
% |
|
|
22.7 |
% |
|
|
22.8 |
% |
|
|
22.6 |
% |
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
Three Months Ended March 31, |
|
Nine Months Ended March 31, |
(Dollars in thousands) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Aerospace Systems
sales |
|
$ |
1,194,560 |
|
|
$ |
632,315 |
|
|
$ |
3,076,989 |
|
|
$ |
1,843,350 |
|
|
|
|
|
|
|
|
|
|
Aerospace Systems
operating income |
|
$ |
133,905 |
|
|
$ |
119,016 |
|
|
$ |
234,849 |
|
|
$ |
352,063 |
|
Adjustments: |
|
|
|
|
|
|
|
|
Acquired intangible asset amortization |
|
|
83,697 |
|
|
|
12,753 |
|
|
|
188,711 |
|
|
|
38,278 |
|
Business realignment charges |
|
|
166 |
|
|
|
318 |
|
|
|
3,016 |
|
|
|
913 |
|
Integration costs to achieve |
|
|
25,849 |
|
|
|
— |
|
|
|
69,377 |
|
|
|
— |
|
Amortization of inventory step-up to fair value |
|
|
37,642 |
|
|
|
— |
|
|
|
167,973 |
|
|
|
— |
|
Russia liquidation |
|
|
— |
|
|
|
6,570 |
|
|
|
— |
|
|
|
6,570 |
|
Adjusted Aerospace
Systems operating income |
|
$ |
281,259 |
|
|
$ |
138,657 |
|
|
$ |
663,926 |
|
|
$ |
397,824 |
|
|
|
|
|
|
|
|
|
|
Aerospace Systems
operating margin |
|
|
11.2 |
% |
|
|
18.8 |
% |
|
|
7.6 |
% |
|
|
19.1 |
% |
Adjusted Aerospace
Systems operating margin |
|
|
23.5 |
% |
|
|
21.9 |
% |
|
|
21.6 |
% |
|
|
21.6 |
% |
|
|
|
|
|
|
|
|
|
PARKER
HANNIFIN CORPORATION - MARCH 31, 2023 |
|
|
|
|
|
|
RECONCILIATION OF SEGMENT OPERATING MARGINS TO ADJUSTED
SEGMENT OPERATING MARGINS |
(Unaudited) |
|
Three Months Ended March 31, |
|
Nine Months Ended March 31, |
(Dollars in thousands) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Total net
sales |
|
$ |
5,061,665 |
|
|
$ |
4,086,387 |
|
|
$ |
13,969,251 |
|
|
$ |
11,673,776 |
|
|
|
|
|
|
|
|
|
|
Total segment
operating income |
|
$ |
952,752 |
|
|
$ |
831,489 |
|
|
$ |
2,506,063 |
|
|
$ |
2,318,386 |
|
Adjustments: |
|
|
|
|
|
|
|
|
Acquired intangible asset amortization |
|
|
145,147 |
|
|
|
78,865 |
|
|
|
374,417 |
|
|
|
237,377 |
|
Business realignment charges |
|
|
8,241 |
|
|
|
3,089 |
|
|
|
17,480 |
|
|
|
9,748 |
|
Integration costs to achieve |
|
|
31,244 |
|
|
|
933 |
|
|
|
76,653 |
|
|
|
2,942 |
|
Amortization of inventory step-up to fair value |
|
|
37,642 |
|
|
|
— |
|
|
|
167,973 |
|
|
|
— |
|
Russia liquidation |
|
|
— |
|
|
|
12,827 |
|
|
|
— |
|
|
|
12,827 |
|
Adjusted total segment
operating income |
|
$ |
1,175,026 |
|
|
$ |
927,203 |
|
|
$ |
3,142,586 |
|
|
$ |
2,581,280 |
|
|
|
|
|
|
|
|
|
|
Total segment
operating margin |
|
|
18.8 |
% |
|
|
20.3 |
% |
|
|
17.9 |
% |
|
|
19.9 |
% |
Adjusted total segment
operating margin |
|
|
23.2 |
% |
|
|
22.7 |
% |
|
|
22.5 |
% |
|
|
22.1 |
% |
PARKER
HANNIFIN CORPORATION - MARCH 31, 2023 |
|
|
|
|
CONSOLIDATED BALANCE SHEET |
|
|
|
|
|
(Unaudited) |
|
March 31, |
|
June 30, |
|
March 31, |
(Dollars in thousands) |
|
2023 |
|
2022 |
|
2022 |
Assets |
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
534,831 |
|
$ |
535,799 |
|
$ |
467,711 |
Marketable securities and
other investments |
|
|
23,466 |
|
|
27,862 |
|
|
38,561 |
Trade accounts receivable,
net |
|
|
2,881,534 |
|
|
2,341,504 |
|
|
2,357,244 |
Non-trade and notes
receivable |
|
|
349,903 |
|
|
543,757 |
|
|
327,186 |
Inventories |
|
|
3,067,614 |
|
|
2,214,553 |
|
|
2,330,242 |
Prepaid expenses and
other |
|
|
376,066 |
|
|
6,383,169 |
|
|
2,708,750 |
Total current
assets |
|
|
7,233,414 |
|
|
12,046,644 |
|
|
8,229,694 |
Property, plant and equipment,
net |
|
|
2,843,795 |
|
|
2,122,758 |
|
|
2,174,237 |
Deferred income taxes |
|
|
131,782 |
|
|
110,585 |
|
|
144,506 |
Investments and other
assets |
|
|
1,188,671 |
|
|
788,057 |
|
|
787,986 |
Intangible assets, net |
|
|
8,287,517 |
|
|
3,135,817 |
|
|
3,254,062 |
Goodwill |
|
|
10,830,548 |
|
|
7,740,082 |
|
|
7,954,835 |
Total
assets |
|
$ |
30,515,727 |
|
$ |
25,943,943 |
|
$ |
22,545,320 |
|
|
|
|
|
|
|
Liabilities and
equity |
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
Notes payable and long-term
debt payable within one year |
|
$ |
1,992,919 |
|
$ |
1,724,310 |
|
$ |
1,923,860 |
Accounts payable, trade |
|
|
2,080,147 |
|
|
1,731,925 |
|
|
1,732,421 |
Accrued payrolls and other
compensation |
|
|
543,527 |
|
|
470,132 |
|
|
418,876 |
Accrued domestic and foreign
taxes |
|
|
270,807 |
|
|
250,292 |
|
|
276,159 |
Other accrued liabilities |
|
|
900,769 |
|
|
1,682,659 |
|
|
1,055,348 |
Total current
liabilities |
|
|
5,788,169 |
|
|
5,859,318 |
|
|
5,406,664 |
Long-term debt |
|
|
11,412,304 |
|
|
9,755,825 |
|
|
6,229,654 |
Pensions and other
postretirement benefits |
|
|
781,139 |
|
|
639,939 |
|
|
904,332 |
Deferred income taxes |
|
|
1,780,533 |
|
|
307,044 |
|
|
448,583 |
Other liabilities |
|
|
960,417 |
|
|
521,897 |
|
|
583,228 |
Shareholders' equity |
|
|
9,781,297 |
|
|
8,848,011 |
|
|
8,959,866 |
Noncontrolling interests |
|
|
11,868 |
|
|
11,909 |
|
|
12,993 |
Total liabilities and
equity |
|
$ |
30,515,727 |
|
$ |
25,943,943 |
|
$ |
22,545,320 |
|
|
|
|
|
|
|
PARKER
HANNIFIN CORPORATION - MARCH 31, 2023 |
|
|
CONSOLIDATED STATEMENT
OF CASH FLOWS |
|
|
|
|
(Unaudited) |
|
Nine Months Ended March 31, |
(Dollars in thousands) |
|
|
2023 |
|
|
|
2022 |
|
Cash flows from
operating activities: |
|
|
|
|
Net income |
|
$ |
1,374,458 |
|
|
$ |
1,187,280 |
|
Depreciation and
amortization |
|
|
609,066 |
|
|
|
432,322 |
|
Share incentive plan
compensation |
|
|
117,536 |
|
|
|
109,781 |
|
Gain on sale of
businesses |
|
|
(366,345 |
) |
|
|
(1,472 |
) |
Gain on disposal of property,
plant and equipment |
|
|
(1,270 |
) |
|
|
(6,782 |
) |
(Gain) loss on marketable
securities |
|
|
(1,391 |
) |
|
|
2,280 |
|
Gain on investments |
|
|
(4,341 |
) |
|
|
(2,024 |
) |
Net change in receivables,
inventories and trade payables |
|
|
(19,052 |
) |
|
|
(347,086 |
) |
Net change in other assets and
liabilities |
|
|
(77,389 |
) |
|
|
308,993 |
|
Other, net |
|
|
163,622 |
|
|
|
(134,854 |
) |
Net cash provided by
operating activities |
|
|
1,794,894 |
|
|
|
1,548,438 |
|
Cash flows from
investing activities: |
|
|
|
|
Acquisitions (net of cash of
$89,704 in 2023) |
|
|
(7,146,110 |
) |
|
|
— |
|
Capital expenditures |
|
|
(272,603 |
) |
|
|
(158,864 |
) |
Proceeds from sale of
property, plant and equipment |
|
|
11,821 |
|
|
|
29,320 |
|
Proceeds from sale of
businesses |
|
|
471,720 |
|
|
|
3,366 |
|
Purchases of marketable
securities and other investments |
|
|
(31,275 |
) |
|
|
(20,012 |
) |
Maturities and sales of
marketable securities and other investments |
|
|
35,075 |
|
|
|
17,662 |
|
Payments of deal-contingent
forward contracts |
|
|
(1,405,418 |
) |
|
|
— |
|
Other |
|
|
251,875 |
|
|
|
2,766 |
|
Net cash used in
investing activities |
|
|
(8,084,915 |
) |
|
|
(125,762 |
) |
Cash flows from
financing activities: |
|
|
|
|
Net payments for common stock
activity |
|
|
(199,911 |
) |
|
|
(372,430 |
) |
Net proceeds from debt |
|
|
906,811 |
|
|
|
1,622,442 |
|
Financing fees paid |
|
|
(8,911 |
) |
|
|
(52,655 |
) |
Dividends paid |
|
|
(513,232 |
) |
|
|
(398,099 |
) |
Net cash provided by
financing activities |
|
|
184,757 |
|
|
|
799,258 |
|
Effect of exchange rate
changes on cash |
|
|
(7,781 |
) |
|
|
106 |
|
Net (decrease) increase in
cash, cash equivalents and restricted cash |
|
|
(6,113,045 |
) |
|
|
2,222,040 |
|
Cash, cash equivalents and
restricted cash at beginning of year |
|
|
6,647,876 |
|
|
|
733,117 |
|
Cash, cash equivalents
and restricted cash at end of period |
|
$ |
534,831 |
|
|
$ |
2,955,157 |
|
|
|
|
|
|
|
|
|
PARKER
HANNIFIN CORPORATION - MARCH 31, 2023 |
|
RECONCILIATION OF FORECASTED EARNINGS PER DILUTED SHARE TO
ADJUSTED FORECASTED EARNINGS PER DILUTED SHARE |
|
|
|
(Unaudited) |
|
|
(Amounts in dollars) |
|
Fiscal Year 2023 |
Forecasted
earnings per diluted share |
$14.75 to $15.05 |
Adjustments: |
|
Business realignment charges |
0.23 |
Costs to achieve |
|
0.69 |
Acquisition-related intangible asset amortization expense |
|
4.00 |
Acquisition-related expenses |
|
2.55 |
Loss on deal-contingent forward contracts |
|
3.00 |
Net gain on divestitures |
|
(2.78) |
Tax effect of adjustments1 |
|
(1.84) |
Adjusted
forecasted earnings per diluted share |
$20.60 to $20.90 |
|
|
|
1This line item
reflects the aggregate tax effect of all non-tax adjustments
reflected in the preceding line items of the table. We estimate the
tax effect of each adjustment item by applying our overall
effective tax rate for continuing operations to the pre-tax amount,
unless the nature of the item and/or the tax jurisdiction in which
the item has been recorded requires application of a specific tax
rate or tax treatment, in which case the tax effect of such item is
estimated by applying such specific tax rate or tax treatment. |
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