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News ReleaseParker Reports Record Quarterly Sales, Net Income, Earnings Per Diluted Share and Cash Flow from OperationsCompany raises earnings guidance for fiscal year 2008 Cleveland, OH - Parker Hannifin (NYSE: PH), the world leader in motion and control technologies, today reported record third quarter sales, net income, earnings per diluted share and cash flow from operations. For the third quarter of fiscal year 2008, which ended on March 31, 2008, sales were $3.2 billion, an increase of 14.4 percent from $2.8 billion in the same quarter a year ago. Net income increased 22.0 percent to $255.4 million from $209.3 million in the same quarter a year ago. Earnings per diluted share increased 25.2 percent to $1.49 as compared to $1.19 in the same quarter a year ago. Cash flow from operations was $863.8 million, or 9.8 percent of sales. "We are clearly headed to another record year for Parker, which will be the fifth record year in a row. The company continues to perform very well, showing strength during an economic cycle that has resulted in a challenging economic environment, particularly in North America. This is clearly the result of the dedication of our nearly 60,000 empowered employees who continue to stay focused on the Win Strategy, which is the clear roadmap that defines the goals, sets the strategies for achieving them, and identifies how progress will be measured," said Chairman, CEO and President Don Washkewicz. "First among those goals is one which serves Parker well independent of the economic cycle - to continually provide premier customer service. At Parker this means not just providing quality products on-time, but partnering with our customers all over the world to help them become more productive and profitable." "Our consistent profitable growth also clearly demonstrates the power behind Parker's globally balanced assets and capabilities to serve customers in key regions of the world," Washkewicz continued. "This allows for more consistent financial performance, and coupled with our strong global distribution network, also allows Parker to serve its customers, and their customers, anywhere in the world. This is a distinctive business model that we believe separates Parker from others in our industry." "Of the 14.4 percent sales growth this quarter, 4.3 percent was organic, 4.0 percent was the result of strategic acquisitions, and the remainder was from the movement of foreign currency exchange rates. Parker is benefiting today from the many strategic actions taken earlier in this decade. We have demonstrated our ability to profitably grow both organically and through strategic acquisitions of quality companies, and will continue to do so as further opportunities arise," continued Washkewicz. "Particularly strong results were again delivered this quarter by the Industrial International segment, with robust organic growth and an increase in operating income by over 50 percent as compared to the same period a year ago," added Washkewicz. "Adding high growth, advanced technologies and systems to our portfolio through acquisitions is an important part of the Win Strategy," said Washkewicz. "Strong cash flow is leveraged to selectively add to the portfolio. We made two recent strategic acquisitions, which added approximately $270 million in sales. These acquisitions included Vansco Electronics, a global leader in the design and manufacture of electronic controls, displays and terminals, communication and operator interfaces, and sensors. Vansco adds to our total systems capabilities to serve the mobile equipment market with applications for agricultural, construction, material handling, bus, RV, and specialty truck equipment. The other recent acquisition was HTR Holdings Corp., which provides Parker greater access to the life sciences market. It adds to our capability to provide precision elastomeric components for medical devices such as intravenous equipment, drug infusion pumps, masks, septums, respirator hoses, catheters and diaphragms sold directly to original equipment manufacturers." Segment Results In spite of a soft overall economy in the Industrial North America segment, third-quarter sales increased 3.7 percent to $1.1 billion, and operating income increased 0.8 percent to $148.0 million, as compared to the same period a year ago. In the Industrial International segment, third-quarter sales increased 32.2 percent to $1.3 billion, and operating income increased 54.7 percent to $217.2 million, as compared to the same period a year ago. In the Aerospace segment, third-quarter sales increased 7.7 percent to $470.1 million, and operating income increased 3.2 percent to $68.3 million, as compared to the same period a year ago. During the quarter, this segment was awarded a $2 billion long-term contract to supply the fuel package and hydraulic system for the new Airbus A350 XWB aircraft. In the Climate & Industrial Controls segment, third-quarter sales increased 0.5 percent to $279.6 million, and operating income decreased 4.9 percent to $18.3 million, as compared to the same period a year ago. This segment continues to be impacted by the ongoing weakness in the automotive, residential construction, and heavy duty truck markets. Orders In addition to financial results, for the quarter ending March 31, 2008, Parker also reported an increase of 9 percent in total orders before the effect of foreign currency and acquisitions, as compared to the same quarter a year ago. Parker reported the following orders by operating segment: -- Orders increased 2 percent in the Industrial North America segment versus the same quarter a year ago. -- Orders increased 11 percent in the Industrial International segment versus the same quarter a year ago. -- Orders increased 28 percent in the Aerospace segment on a rolling 12 month average basis. -- Orders decreased 1 percent in the Climate and Industrial Controls segment versus the same quarter a year ago.
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