Parker Reports Fiscal 2021 First Quarter Results

-       First quarter EPS were $2.47 as reported, or $3.07 adjusted

-       First quarter total segment operating margin was 16.8% as reported, or 19.9% adjusted

-       First quarter EBITDA margin was 19.5% as reported, or 20.1% adjusted

-       Cash flow from operations was a first quarter record at $737.4 million, and reached22.8% of sales

-       Acquisition-related debt reduction of approximately $2 billion in the last 11 months

-       Company increases fiscal 2021 full year guidance

 

CLEVELAND, November 5, 2020 -- Parker Hannifin Corporation (NYSE: PH), the global leader in motion and control technologies, today reported results for the fiscal 2021 first quarter ended September 30, 2020.  Fiscal 2021 first quarter sales were $3.23 billion, compared with $3.33 billion in the prior year quarter.  Net income was $321.4 million, compared with $338.9 million in the first quarter of fiscal 2020.  Fiscal 2021 first quarter earnings per share were $2.47, compared with $2.60 in the prior year quarter.  Adjusted earnings per share were $3.07, compared with adjusted earnings per share of $3.05 in the first quarter of fiscal 2020.  Fiscal year-to-date cash flow from operations was a first quarter record at $737.4 million and reached 22.8% of sales, compared with $449.1 million or 13.5% of sales in the prior year period.  A reconciliation of non-GAAP measures is included in the financial tables of this press release.

 

“Thanks to the dedication of our global team executing The Win Strategy™, Parker continues to deliver excellent results in the midst of the ongoing challenging market conditions,” said Chairman and Chief Executive Officer, Tom Williams.  “We generated record operating cash flow and impressive margins in the quarter, reflecting both the near-term measures we have put in place to manage our cost structure and the portfolio and performance actions we have taken to strengthen our business.  Notably, adjusted total segment operating margin increased 110 basis points compared with the prior year to 19.9% and adjusted EBITDA margin increased 100 basis points to 20.1% in the quarter, despite an organic sales decline of 13%.  During the quarter, the balance sheet was further strengthened with debt repayment of $557 million, bringing our acquisition-related debt reduction to approximately $2 billion over the last 11 months, which represents 37% of the LORD and Exotic transaction debt."

 

Segment Results

Diversified Industrial Segment:  North American first quarter sales decreased 6% to $1.5 billion, and operating income was $268.8 million, compared with $275.2 million in the same period a year ago.  International first quarter sales increased 5% to $1.1 billion, and operating income was $186.9 million, compared with $168.6 million in the same period a year ago.

 

Aerospace Systems Segment:  First quarter sales decreased 9% to $573.2 million, and operating income was $86.8 million, compared with $123.0 million in the same period a year ago.

Parker reported the following orders for the quarter ending September 30, 2020, compared with the same quarter a year ago:

·       Orders decreased 12% for total Parker

·       Orders decreased 11% in the Diversified Industrial North America businesses

·       Orders decreased 4% in the Diversified Industrial International businesses

·       Orders decreased 25% in the Aerospace Systems Segment on a rolling 12-month average basis

 

Outlook

For the fiscal year ending June 30, 2021, the company has increased guidance for earnings per share to the range of $9.93 to $10.53, or $11.70 to $12.30 on an adjusted basis.  Guidance assumes an organic sales decline in the range of 9% to 6%.  Fiscal year 2021 guidance is adjusted on a pre-tax basis for expected business realignment expenses of approximately $60 million, costs to achieve of approximately $18 million, acquisition-related intangible asset amortization of approximately $322 million and a gain on the sale of land of approximately $101 million, which closed in October, 2020.  A reconciliation of forecasted earnings per share to adjusted forecasted earnings per share is included in the financial tables of this press release.