10/31/2024 | Press release | Distributed by Public on 10/31/2024 05:42
North America Businesses
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||||||||
$ in mm | FY25 Q1 | FY24 Q1 |
Change
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Organic Growth | ||||
Sales
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$ | 2,100 | $ | 2,230 | -5.8 | % | -5.0 | % |
Segment Operating Income
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$ | 485 | $ | 506 | -4.2 | % | ||
Segment Operating Margin
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23.1 | % | 22.7 | % | 40 | bps | ||
Adjusted Segment Operating Income | $ | 532 | $ | 554 | -4.1 | % | ||
Adjusted Segment Operating Margin
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25.3 | % | 24.9 | % | 40 | bps |
International Businesses | ||||||||
$ in mm
|
FY25 Q1 | FY24 Q1 |
Change
|
Organic Growth | ||||
Sales
|
$ | 1,356 | $ | 1,389 | -2.4 | % | -2.4 | % |
Segment Operating Income
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$ | 299 | $ | 301 | -0.6 | % | ||
Segment Operating Margin
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22.1 | % | 21.7 | % | 40 | bps | ||
Adjusted Segment Operating Income | $ | 327 | $ | 334 | -2.2 | % | ||
Adjusted Segment Operating Margin
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24.1 | % | 24.1 | % | - | bps |
$ in mm
|
FY25 Q1 | FY24 Q1 |
Change
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Organic Growth | ||||
Sales
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$ | 1,448 | $ | 1,229 | 17.8 | % | 17.2 | % |
Segment Operating Income
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$ | 323 | $ | 226 | 42.7 | % | ||
Segment Operating Margin
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22.3 | % | 18.4 | % | 390 | bps | ||
Adjusted Segment Operating Income | $ | 403 | $ | 320 | 26.3 | % | ||
Adjusted Segment Operating Margin
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27.9 | % | 26.0 | % | 190 | bps |
FY25 Q1 | |
Parker
|
+1%
|
Diversified Industrial Segment - North America Businesses
|
-3% |
Diversified Industrial Segment - International Businesses
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+1% |
Aerospace Systems Segment
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+7%
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Contacts:
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|
Media:
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Financial Analysts:
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Aidan Gormley
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Jeff Miller
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216-896-3258
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216-896-2708
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CONSOLIDATED STATEMENT OF INCOME | ||||
(Unaudited) | Three Months Ended September 30, | |||
(Dollars in thousands, except per share amounts) | 2024 | 2023 | ||
Net sales | $ | 4,903,984 | $ | 4,847,488 |
Cost of sales | 3,097,719 | 3,097,349 | ||
Selling, general and administrative expenses | 848,789 | 873,691 | ||
Interest expense | 113,091 | 134,468 | ||
Other income, net | (30,801) | (78,455) | ||
Income before income taxes | 875,186 | 820,435 | ||
Income taxes | 176,658 | 169,363 | ||
Net income | 698,528 | 651,072 | ||
Less: Noncontrolling interests | 108 | 245 | ||
Net income attributable to common shareholders | $ | 698,420 | $ | 650,827 |
Earnings per share attributable to common shareholders: | ||||
Basic earnings per share | $ | 5.43 | $ | 5.07 |
Diluted earnings per share | $ | 5.34 | $ | 4.99 |
Average shares outstanding during period - Basic | 128,663,088 | 128,472,550 | ||
Average shares outstanding during period - Diluted | 130,680,242 | 130,363,441 | ||
CASH DIVIDENDS PER COMMON SHARE | ||||
(Unaudited) | Three Months Ended September 30, | |||
(Amounts in dollars) | 2024 | 2023 | ||
Cash dividends per common share | $ | 1.63 | $ | 1.48 |
RECONCILIATION OF ORGANIC GROWTH | ||||||||
(Unaudited) | Three Months Ended | |||||||
As Reported | Adjusted | |||||||
September 30, 2024 | Currency | Divestitures | September 30, 2024 | |||||
Diversified Industrial Segment | (4.5) | % | (0.3) | % | (0.2) | % | (4.0) | % |
Aerospace Systems Segment | 17.8 | % | 0.6 | % | - | % | 17.2 | % |
Total | 1.2 | % | - | % | (0.2) | % | 1.4 | % |
RECONCILIATION OF NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS TO ADJUSTED NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS | ||||
(Unaudited) | Three Months Ended September 30, | |||
(Dollars in thousands) | 2024 | 2023 | ||
Net income attributable to common shareholders | $ | 698,420 | $ | 650,827 |
Adjustments: | ||||
Acquired intangible asset amortization expense | 140,121 | 155,520 | ||
Business realignment charges | 9,506 | 13,092 | ||
Integration costs to achieve | 6,411 | 6,406 | ||
Gain on sale of building | (10,461) | - | ||
Gain on divestiture | - | (13,260) | ||
Tax effect of adjustments1
|
(34,211) | (36,148) | ||
Adjusted net income attributable to common shareholders | $ | 809,786 | $ | 776,437 |
RECONCILIATION OF EARNINGS PER DILUTED SHARE TO ADJUSTED EARNINGS PER DILUTED SHARE | ||||
(Unaudited) | Three Months Ended September 30, | |||
(Amounts in dollars) | 2024 | 2023 | ||
Earnings per diluted share | $ | 5.34 | $ | 4.99 |
Adjustments: | ||||
Acquired intangible asset amortization expense | 1.07 | 1.19 | ||
Business realignment charges | 0.07 | 0.10 | ||
Integration costs to achieve | 0.05 | 0.05 | ||
Gain on sale of building | (0.08) | - | ||
Gain on divestiture | - | (0.10) | ||
Tax effect of adjustments1
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(0.25) | (0.27) | ||
Adjusted earnings per diluted share | $ | 6.20 | $ | 5.96 |
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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BUSINESS SEGMENT INFORMATION | ||||
(Unaudited) | Three Months Ended September 30, | |||
(Dollars in thousands) | 2024 | 2023 | ||
Net sales | ||||
Diversified Industrial | $ | 3,456,158 | $ | 3,618,528 |
Aerospace Systems | 1,447,826 | 1,228,960 | ||
Total net sales | $ | 4,903,984 | $ | 4,847,488 |
Segment operating income | ||||
Diversified Industrial | $ | 783,546 | $ | 806,754 |
Aerospace Systems | 322,986 | 226,260 | ||
Total segment operating income | 1,106,532 | 1,033,014 | ||
Corporate general and administrative expenses | 48,794 | 55,656 | ||
Income before interest expense and other expense, net | 1,057,738 | 977,358 | ||
Interest expense | 113,091 | 134,468 | ||
Other expense, net | 69,461 | 22,455 | ||
Income before income taxes | $ | 875,186 | $ | 820,435 |
RECONCILIATION OF SEGMENT OPERATING MARGINS TO ADJUSTED SEGMENT OPERATING MARGINS | ||||
(Unaudited) | Three Months Ended September 30, | |||
(Dollars in thousands) | 2024 | 2023 | ||
Diversified Industrial Segment sales | $ | 3,456,158 | $ | 3,618,528 |
Diversified Industrial Segment operating income | $ | 783,546 | $ | 806,754 |
Adjustments: | ||||
Acquired intangible asset amortization | 65,264 | 67,951 | ||
Business realignment charges | 8,900 | 12,639 | ||
Integration costs to achieve | 778 | 1,139 | ||
Adjusted Diversified Industrial Segment operating income | $ | 858,488 | $ | 888,483 |
Diversified Industrial Segment operating margin | 22.7 | % | 22.3 | % |
Adjusted Diversified Industrial Segment operating margin | 24.8 | % | 24.6 | % |
(Unaudited) | Three Months Ended September 30, | |||
(Dollars in thousands) | 2024 | 2023 | ||
Aerospace Systems Segment sales | $ | 1,447,826 | $ | 1,228,960 |
Aerospace Systems Segment operating income | $ | 322,986 | $ | 226,260 |
Adjustments: | ||||
Acquired intangible asset amortization | 74,857 | 87,569 | ||
Business realignment charges | 8 | 453 | ||
Integration costs to achieve | 5,633 | 5,267 | ||
Adjusted Aerospace Systems Segment operating income | $ | 403,484 | $ | 319,549 |
Aerospace Systems Segment operating margin | 22.3 | % | 18.4 | % |
Adjusted Aerospace Systems Segment operating margin | 27.9 | % | 26.0 | % |
RECONCILIATION OF SEGMENT OPERATING MARGINS TO ADJUSTED SEGMENT OPERATING MARGINS | ||||
(Unaudited) | Three Months Ended September 30, | |||
(Dollars in thousands) | 2024 | 2023 | ||
Total net sales | $ | 4,903,984 | $ | 4,847,488 |
Total segment operating income | $ | 1,106,532 | $ | 1,033,014 |
Adjustments: | ||||
Acquired intangible asset amortization | 140,121 | 155,520 | ||
Business realignment charges | 8,908 | 13,092 | ||
Integration costs to achieve | 6,411 | 6,406 | ||
Adjusted total segment operating income | $ | 1,261,972 | $ | 1,208,032 |
Total segment operating margin | 22.6 | % | 21.3 | % |
Adjusted total segment operating margin | 25.7 | % | 24.9 | % |
CONSOLIDATED BALANCE SHEET | ||||
(Unaudited) | September 30, | June 30, | ||
(Dollars in thousands) | 2024 | 2024 | ||
Assets | ||||
Current assets: | ||||
Cash and cash equivalents | $ | 371,068 | $ | 422,027 |
Trade accounts receivable, net | 2,712,656 | 2,865,546 | ||
Non-trade and notes receivable | 317,381 | 331,429 | ||
Inventories | 2,872,250 | 2,786,800 | ||
Prepaid expenses | 249,148 | 252,618 | ||
Other current assets | 511,198 | 140,204 | ||
Total current assets | 7,033,701 | 6,798,624 | ||
Property, plant and equipment, net | 2,839,542 | 2,875,668 | ||
Deferred income taxes | 91,882 | 92,704 | ||
Investments and other assets | 1,263,190 | 1,207,232 | ||
Intangible assets, net | 7,747,233 | 7,816,181 | ||
Goodwill | 10,625,287 | 10,507,433 | ||
Total assets | $ | 29,600,835 | $ | 29,297,842 |
Liabilities and equity | ||||
Current liabilities: | ||||
Notes payable and long-term debt payable within one year | $ | 3,515,613 | $ | 3,403,065 |
Accounts payable, trade | 1,953,477 | 1,991,639 | ||
Accrued payrolls and other compensation | 407,106 | 581,251 | ||
Accrued domestic and foreign taxes | 457,761 | 354,659 | ||
Other accrued liabilities | 1,004,073 | 982,695 | ||
Total current liabilities | 7,338,030 | 7,313,309 | ||
Long-term debt | 6,673,303 | 7,157,034 | ||
Pensions and other postretirement benefits | 427,702 | 437,490 | ||
Deferred income taxes | 1,544,503 | 1,583,923 | ||
Other liabilities | 715,948 | 725,193 | ||
Shareholders' equity | 12,891,900 | 12,071,972 | ||
Noncontrolling interests | 9,449 | 8,921 | ||
Total liabilities and equity | $ | 29,600,835 | $ | 29,297,842 |
CONSOLIDATED STATEMENT OF CASH FLOWS | ||||
(Unaudited) | Three Months Ended September 30, | |||
(Dollars in thousands) | 2024 | 2023 | ||
Cash flows from operating activities: | ||||
Net income | $ | 698,528 | $ | 651,072 |
Depreciation and amortization | 229,046 | 240,387 | ||
Stock incentive plan compensation | 75,842 | 77,894 | ||
Gain on sale of businesses | (313) | (13,260) | ||
(Gain) loss on property, plant and equipment and intangible assets | (8,422) | 1,333 | ||
Net change in receivables, inventories and trade payables | (40,430) | (69,280) | ||
Net change in other assets and liabilities | (223,585) | (185,691) | ||
Other, net | 13,309 | (52,496) | ||
Net cash provided by operating activities | 743,975 | 649,959 | ||
Cash flows from investing activities: | ||||
Capital expenditures | (95,302) | (97,746) | ||
Proceeds from sale of property, plant and equipment | 13,271 | 710 | ||
Proceeds from sale of businesses | 884 | 36,691 | ||
Other, net | (5,461) | 4,351 | ||
Net cash used in investing activities | (86,608) | (55,994) | ||
Cash flows from financing activities: | ||||
Net payments for common stock activity | (92,089) | (78,148) | ||
Acquisition of noncontrolling interests | - | (2,883) | ||
Net payments for debt | (408,929) | (346,411) | ||
Dividends paid | (209,937) | (190,420) | ||
Net cash used in financing activities | (710,955) | (617,862) | ||
Effect of exchange rate changes on cash | 2,629 | (2,359) | ||
Net decrease in cash and cash equivalents | (50,959) | (26,256) | ||
Cash and cash equivalents at beginning of year | 422,027 | 475,182 | ||
Cash and cash equivalents at end of period | $ | 371,068 | $ | 448,926 |
RECONCILIATION OF FORECASTED ORGANIC GROWTH | |
(Unaudited) | |
(Amounts in percentages) | Fiscal Year 2025 |
Forecasted net sales | 0.5% to 3.5% |
Adjustments: | |
Currency | (0.5)% |
Divestitures | 1.5% |
Adjusted forecasted net sales | 1.5% to 4.5% |
RECONCILIATION OF FORECASTED SEGMENT OPERATING MARGIN TO ADJUSTED FORECASTED SEGMENT OPERATING MARGIN | |
(Unaudited) | |
(Amounts in percentages) | Fiscal Year 2025 |
Forecasted segment operating margin | ~22.6% |
Adjustments: | |
Business realignment charges | 0.2% |
Costs to achieve | 0.1% |
Acquisition-related intangible asset amortization expense | 2.7% |
Adjusted forecasted segment operating margin | ~25.7% |
RECONCILIATION OF FORECASTED EARNINGS PER DILUTED SHARE TO ADJUSTED FORECASTED EARNINGS PER DILUTED SHARE | |
(Unaudited) | |
(Amounts in dollars) | Fiscal Year 2025 |
Forecasted earnings per diluted share | $22.78 to $23.48 |
Adjustments: | |
Business realignment charges | 0.39 |
Costs to achieve | 0.11 |
Acquisition-related intangible asset amortization expense | 4.21 |
Gain on sale of building | (0.08) |
Tax effect of adjustments1
|
(1.07) |
Adjusted forecasted earnings per diluted share | $26.35 to $27.05 |
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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Note: Totals may not foot due to rounding
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BUSINESS SEGMENT INFORMATION | ||||
(Unaudited) | Three Months Ended September 30, | |||
(Dollars in thousands) | 2024 | 2023 | ||
Net sales | ||||
Diversified Industrial: | ||||
North America businesses | $ | 2,100,324 | $ | 2,229,906 |
International businesses | 1,355,834 | 1,388,622 | ||
Segment operating income | ||||
Diversified Industrial: | ||||
North America businesses | $ | 484,563 | $ | 506,053 |
International businesses | 298,983 | 300,701 |
RECONCILIATION OF ORGANIC GROWTH | ||||||||
(Unaudited) | Three Months Ended | |||||||
As Reported | Adjusted | |||||||
September 30, 2024 | Currency | Divestitures | September 30, 2024 | |||||
Diversified Industrial Segment: | ||||||||
North America businesses | (5.8) | % | (0.5) | % | (0.3) | % | (5.0) | % |
International businesses | (2.4) | % | - | % | - | % | (2.4) | % |
RECONCILIATION OF SEGMENT OPERATING MARGINS TO ADJUSTED SEGMENT OPERATING MARGINS | ||||
(Unaudited) | Three Months Ended September 30, | |||
(Dollars in thousands) | 2024 | 2023 | ||
Diversified Industrial Segment: | ||||
North America businesses sales | $ | 2,100,324 | $ | 2,229,906 |
North America businesses operating income | $ | 484,563 | $ | 506,053 |
Adjustments: | ||||
Acquired intangible asset amortization | 42,975 | 44,683 | ||
Business realignment charges | 3,444 | 2,584 | ||
Integration costs to achieve | 605 | 945 | ||
Adjusted North America businesses operating income | $ | 531,587 | $ | 554,265 |
North America businesses operating margin | 23.1 | % | 22.7 | % |
Adjusted North America businesses operating margin | 25.3 | % | 24.9 | % |
(Unaudited) | Three Months Ended September 30, | |||
(Dollars in thousands) | 2024 | 2023 | ||
Diversified Industrial Segment: | ||||
International businesses sales | $ | 1,355,834 | $ | 1,388,622 |
International businesses operating income | $ | 298,983 | $ | 300,701 |
Adjustments: | ||||
Acquired intangible asset amortization | 22,289 | 23,268 | ||
Business realignment charges | 5,456 | 10,055 | ||
Integration costs to achieve | 173 | 194 | ||
Adjusted International businesses operating income | $ | 326,901 | $ | 334,218 |
International businesses operating margin | 22.1 | % | 21.7 | % |
Adjusted International businesses operating margin | 24.1 | % | 24.1 | % |