1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________________ to _______________________
Commission File number 1-4982
PARKER-HANNIFIN CORPORATION
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(Exact name of registrant as specified in its charter)
OHIO 34-0451060
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(State or other (IRS Employer
jurisdiction of Identification No.)
incorporation)
6035 Parkland Blvd., Cleveland, Ohio 44124-4141
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (216) 896-3000
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Indicate by check mark whether Registrant: (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days.
Yes [X]. No __.
Number of Common Shares outstanding at March 31, 2000: 111,957,240
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PART I - FINANCIAL INFORMATION
PARKER-HANNIFIN CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
Three Months Ended Nine Months Ended
March 31, March 31,
------------------------------- -------------------------------
2000 1999 2000 1999
----------- ----------- ----------- -----------
Net sales $ 1,393,659 $ 1,255,789 $ 3,875,159 $ 3,673,534
Cost of sales 1,074,133 989,137 3,022,052 2,879,611
----------- ----------- ----------- -----------
Gross profit 319,526 266,652 853,107 793,923
Selling, general and
administrative expenses 141,254 136,278 419,559 411,806
Interest expense 14,571 15,634 43,142 49,050
Interest and other (income)
expense, net 796 (2,970) 696 (2,564)
----------- ----------- ----------- -----------
Income before income taxes 162,905 117,710 389,710 335,631
Income taxes 56,202 41,199 134,450 117,471
----------- ----------- ----------- -----------
Net income $ 106,703 $ 76,511 $ 255,260 $ 218,160
=========== =========== =========== ===========
Earnings per share - Basic $ .98 $ .71 $ 2.34 $ 2.01
Earnings per share - Diluted $ .97 $ .70 $ 2.32 $ 1.99
Cash dividends per common share $ .17 $ .17 $ .51 $ .47
See accompanying notes to consolidated financial statements.
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PARKER-HANNIFIN CORPORATION
CONSOLIDATED BALANCE SHEET
(DOLLARS IN THOUSANDS)
(UNAUDITED)
March 31, June 30,
ASSETS 2000 1999
- ----------------- ----------- -----------
Current assets:
Cash and cash equivalents $ 60,715 $ 33,277
Accounts receivable, net 800,241 738,773
Inventories:
Finished products 476,187 442,361
Work in process 309,302 347,376
Raw materials 124,346 125,393
----------- -----------
909,835 915,130
Prepaid expenses 18,029 22,928
Deferred income taxes 65,725 64,576
----------- -----------
Total current assets 1,854,545 1,774,684
Plant and equipment 2,609,943 2,506,812
Less accumulated depreciation 1,372,340 1,305,943
----------- -----------
1,237,603 1,200,869
Other assets 810,173 730,335
----------- -----------
Total assets $ 3,902,321 $ 3,705,888
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LIABILITIES
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Current liabilities:
Notes payable $ 83,351 $ 60,609
Accounts payable, trade 301,193 313,173
Accrued liabilities 322,869 328,147
Accrued domestic and foreign taxes 65,721 52,584
----------- -----------
Total current liabilities 773,134 754,513
Long-term debt 706,596 724,757
Pensions and other postretirement benefits 282,642 276,637
Deferred income taxes 30,244 30,800
Other liabilities 73,977 65,319
----------- -----------
Total liabilities 1,866,593 1,852,026
SHAREHOLDERS' EQUITY
- ----------------------------
Serial preferred stock, $.50 par value;
authorized 3,000,000 shares; none issued -- --
Common stock, $.50 par value; authorized
600,000,000 shares; issued 112,268,136 shares at
March 31 and 111,945,179 shares at June 30 56,134 55,973
Additional capital 136,573 132,227
Retained earnings 2,071,955 1,872,356
Unearned compensation related to guarantee of ESOP debt (99,501) (112,000)
Deferred compensation related to stock options 1,304 --
Accumulated other comprehensive income (118,680) (92,858)
----------- -----------
2,047,785 1,855,698
Common stock in treasury at cost;
310,896 shares at March 31 and
43,836 shares at June 30 (12,057) (1,836)
----------- -----------
Total shareholders' equity 2,035,728 1,853,862
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Total liabilities and shareholders' equity $ 3,902,321 $ 3,705,888
=========== ===========
See accompanying notes to consolidated financial statements.
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PARKER-HANNIFIN CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
Nine Months Ended
March 31,
-----------------------------
CASH FLOWS FROM OPERATING ACTIVITIES 2000 1999
- -------------------------------------- --------- ---------
Net income $ 255,260 $ 218,160
Adjustments to reconcile net income to net cash
provided by operations:
Depreciation 128,409 125,599
Amortization 28,597 28,419
Deferred income taxes (4,825) 3,279
Foreign currency transaction loss (gain) 3,182 (2,415)
(Gain) loss on sale of plant and equipment (5,637) 542
Changes in assets and liabilities:
Accounts receivable, net (51,778) (5,581)
Inventories 20,395 12,194
Prepaid expenses 4,854 5,707
Other assets (18,599) (25,346)
Accounts payable, trade (15,911) (79,415)
Accrued payrolls and other compensation (8,224) (32,359)
Accrued domestic and foreign taxes 14,956 15,045
Other accrued liabilities (3,592) (11,274)
Pensions and other postretirement benefits 9,317 15,243
Other liabilities 8,512 11,635
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Net cash provided by operating activities 364,916 279,433
CASH FLOWS FROM INVESTING ACTIVITIES
- ------------------------------------
Acquisitions (less cash acquired of $431 and $2,609 in 2000 and 1999) (121,474) (89,865)
Capital expenditures (168,131) (166,835)
Proceeds from sale of plant and equipment 23,027 4,582
Other (20,590) (1,926)
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Net cash used in investing activities (287,168) (254,044)
CASH FLOWS FROM FINANCING ACTIVITIES
- ------------------------------------
Net (payments for) proceeds from common share activity (4,410) 64,599
Proceeds from (payments for) notes payable, net 23,123 (112,248)
Proceeds from long-term borrowings 3,654 205,960
Payments of long-term borrowings (12,803) (122,584)
Dividends (55,661) (51,144)
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Net cash used in financing activities (46,097) (15,417)
Effect of exchange rate changes on cash (4,213) 617
--------- ---------
Net increase in cash and cash equivalents 27,438 10,589
Cash and cash equivalents at beginning of year 33,277 30,488
--------- ---------
Cash and cash equivalents at end of period $ 60,715 $ 41,077
========= =========
Non-cash activities: In 1999 assumption of ESOP debt guarantee for $112,000
and capital lease obligations of $7,346.
See accompanying notes to consolidated financial statements.
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PARKER-HANNIFIN CORPORATION
BUSINESS SEGMENT INFORMATION BY INDUSTRY
(DOLLARS IN THOUSANDS)
(UNAUDITED)
Parker operates in two industry segments: Industrial and Aerospace. The
Industrial Segment is the largest and includes a significant portion of
International operations.
Industrial - This segment produces a broad range of motion control and fluid
systems and components used in all kinds of manufacturing, packaging,
processing, transportation, mobile construction, agricultural and military
machinery and equipment. Sales are made directly to major original equipment
manufacturers (OEMs) and through a broad distribution network to smaller OEMs
and the aftermarket.
Aerospace - This segment designs and manufactures products and provides
aftermarket support for commercial, military and general aviation aircraft,
missile and spacecraft markets. The Aerospace Segment provides a full range of
systems and components for hydraulic, pneumatic and fuel applications.
Results by Business Segment:
Three Months Ended Nine Months Ended
March 31, March 31,
------------------------------- ------------------------------
2000 1999 2000 1999
---------- ---------- ---------- ----------
Net sales
Industrial:
North America $ 774,353 $ 660,368 $2,100,564 $1,885,837
International 331,104 312,166 933,485 944,298
Aerospace 288,202 283,255 841,110 843,399
---------- ---------- ---------- ----------
Total $1,393,659 $1,255,789 $3,875,159 $3,673,534
========== ========== ========== ==========
Segment operating income
Industrial:
North America $ 115,123 $ 86,225 $ 296,006 $ 235,550
International 29,015 19,760 62,014 67,897
Aerospace 49,126 43,326 121,113 129,102
---------- ---------- ---------- ----------
Total segment operating income 193,264 149,311 479,133 432,549
Corporate general and
administrative expenses 13,935 14,608 42,135 42,240
---------- ---------- ---------- ----------
Income before interest expense
and other 179,329 134,703 436,998 390,309
Interest expense 14,571 15,634 43,142 49,050
Other 1,853 1,359 4,146 5,628
---------- ---------- ---------- ----------
Income before income taxes $ 162,905 $ 117,710 $ 389,710 $ 335,631
========== ========== ========== ==========
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PARKER-HANNIFIN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS
-----------------------
1. Management Representation
In the opinion of the Company, the accompanying unaudited consolidated
financial statements contain all adjustments (consisting of only
normal recurring accruals except as discussed in Note 2) necessary to
present fairly the financial position as of March 31, 2000, the
results of operations for the three and nine months ended March 31,
2000 and 1999 and cash flows for the nine months then ended.
2. Charges related to business realignment
During the first quarter of fiscal 2000 the Company recorded a $8,555
charge ($5,560 after-tax or $.05 per share) related to the costs of
appropriately structuring its businesses to operate in their current
economic environment. The charge primarily relates to severance costs
attributable to approximately 260 employees principally associated
with the Industrial International operations. As of March 31, 2000,
the Company had made severance payments of $2,679 to approximately 150
employees. The majority of the remaining severance payments are
expected to be made by the end of fiscal 2000.
A change in the future utilization of long-lived assets at certain
locations triggered an impairment review of these long-lived assets
during the first quarter of fiscal 2000. The Company evaluated the
recoverability of the long-lived assets and determined that the
estimated future undiscounted cash flows were below the carrying value
of these assets. Accordingly, the Company recorded a non-cash
impairment loss of $4,875 ($3,169 after-tax or $.03 per share). Of the
pre-tax amount, $3,499 relates to the Aerospace segment and $1,376
relates to the Industrial segment.
The severance costs and impairment loss are presented in the Income
statement for the nine months ended March 31, 2000 in the following
captions: $2,552 in Cost of sales; $2,476 in Selling, general and
administrative expenses; and $8,402 in Interest and other (income)
expense, net.
Also recorded in the first quarter of fiscal 2000, was a gain of
$6,423 ($4,175 after-tax or $.04 per share) realized primarily on the
sale of real property. The gain is reflected in the Income statement
for the nine months ended March 31, 2000 in the Interest and other
(income) expense, net caption.
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3. Earnings per share
The following table presents a reconciliation of the numerator and
denominator of basic and diluted earnings per share for the three and
nine months ended March 31, 2000 and 1999.
Three Months Ended Nine Months Ended
March 31, March 31,
--------------------------------- ---------------------------------
Numerator: 2000 1999 2000 1999
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Net income applicable
to common shares $ 106,703 $ 76,511 $ 255,260 $ 218,160
Denominator:
------------
Basic - weighted average
common shares 109,373,820 108,503,957 109,210,607 108,803,871
Increase in weighted average
from dilutive effect of
exercise of stock options 827,060 832,510 955,170 825,027
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Diluted - weighted average
common shares, assuming
exercise of stock options 110,200,880 109,336,467 110,165,777 109,628,898
===========================================================================
Basic earnings per share $ .98 $ .71 $ 2.34 $ 2.01
Diluted earnings per share $ .97 $ .70 $ 2.32 $ 1.99
4. Stock repurchase program
The Board of Directors has approved a program to repurchase the
Company's common stock on the open market, at prevailing prices. The
repurchase is primarily funded from operating cash flows and the shares
are initially held as treasury stock. During the three-month and
nine-month periods ended March 31, 2000, the Company has purchased
267,200 shares of its common stock at an average price of $38.012 per
share.
5. Comprehensive income
The Company's only item of other comprehensive income is foreign
currency translation adjustments recorded in shareholders' equity.
Comprehensive income for the three and nine months ended March 31, 2000
and 1999 is as follows:
Three Months Ended Nine Months Ended
March 31, March 31,
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2000 1999 2000 1999
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Net income $ 106,703 $ 76,511 $ 255,260 $ 218,160
Foreign currency
translation adjustments (18,815) (44,637) (25,822) (19,946)
------------------------------------------------------------
Comprehensive income $ 87,888 $ 31,874 $ 229,438 $ 198,214
============================================================
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6. Acquisitions
On February 3, 2000, the Company acquired the assets of Dana
Corporation's Gresen Hydraulic business for approximately $112 million
in cash. Gresen manufactures a wide range of hydraulic pumps, motors,
cylinders, control valves, filters and electronic controls for on- and
off-highway vehicles and had prior-year annual sales of approximately
$128 million.
On April 11, 2000, the Company completed its merger with Commercial
Intertech Corp. of Youngstown, Ohio with the Company being the
surviving corporation. The merger consideration paid by the Company to
the shareholders of Commercial Intertech was approximately $160 million
in cash and the issuance of approximately 4.3 million shares of Company
common stock valued at $184 million. In addition, the Company assumed
approximately $104 million of Commercial Intertech debt. Commercial
Intertech's hydraulics business manufactures gear pumps and motors,
controls valves and telescopic cylinders for use on heavy duty-mobile
equipment. The Company is currently evaluating strategic alternatives
for Commercial Intertech's building systems and metal forming
businesses.
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PARKER-HANNIFIN CORPORATION
FORM 10-Q
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2000
AND COMPARABLE PERIODS ENDED MARCH 31, 1999
CONSOLIDATED STATEMENT OF INCOME
Net sales increased 11.0 percent for the third quarter of fiscal 2000 and 5.5
percent for the nine-month period ended March 31, 2000. Without acquisitions,
the increases would have been 9.0 percent and 4.4 percent, respectively,
primarily the result of higher volume in the North American Industrial
operations.
Income from operations was $178.3 million for the current third quarter and
$433.5 million for the current nine months, an increase of 36.7 percent and 13.5
percent, respectively. As a percent of sales, Income from operations increased
to 12.8 percent from 10.4 percent for the quarter and increased to 11.2 percent
from 10.4 percent for the nine months. Cost of sales as a percent of sales
declined to 77.1 percent from 78.8 percent for the quarter and decreased to 78.0
percent from 78.4 percent for the nine months. The increased margins in the
third quarter are primarily the result of higher volume experienced in the North
American Industrial operations and a higher mix of aftermarket business in the
Aerospace operations. The increased margins for the nine months reflect higher
volume experienced in the North American Industrial operations, offset by
weakness experienced in the International Industrial and Aerospace operations as
well as the effect of business realignment charges recorded in fiscal 2000 (as
discussed in more detail below). Selling, general and administrative expenses,
as a percent of sales, decreased to 10.1 percent of sales from 10.9 percent for
the quarter and to 10.8 percent from 11.2 percent for the nine months.
Interest expense decreased $1.1 million for the quarter ended March 31, 2000 and
$5.9 million for the nine-month period ended March 31, 2000 due to lower average
debt outstanding in both the current year quarter and nine months.
Interest and other (income) expense, net for the current nine months includes
$6.4 million in gains primarily from the sale of real property and $8.4 million
of asset impairment losses and other plant closure costs, while the prior year
third quarter and nine-month period included $1.7 million in interest income
related to an IRS refund.
Net income increased 39.5 percent for the quarter, and 17.0 percent for the nine
months, as compared to the prior year. As a percent of sales, Net income
increased to 7.7 percent from 6.1 percent for the quarter and to 6.6 percent
from 5.9 percent for the nine months.
Backlog was $1.74 billion at March 31, 2000 compared to $1.69 billion in the
prior year and $1.63 billion at June 30, 1999. The increase in the level of
backlog reflects strong order-entry rates in the North American Industrial
operations and an improvement in order rates in the International Industrial
operations.
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RESULTS BY BUSINESS SEGMENT
INDUSTRIAL - The Industrial Segment operations had the following changes in Net
sales in the current year when compared to the equivalent prior-year period:
Period ending March 31,
-----------------------
Three Months Nine Months
------------ -----------
Industrial North America 17.3 % 11.4 %
Industrial International 6.1 % (1.1) %
Total Industrial 13.7 % 7.2 %
Without the effect of currency-rate changes, International sales would have
increased 15.5 percent for the quarter and 7.4 percent for the nine months.
Without the effect of acquisitions completed within the past 12 months, the
changes in Net sales would have been:
Period ending March 31,
-----------------------
Three Months Nine Months
------------ -----------
Industrial North America 14.3 % 9.8 %
Industrial International 4.2 % (2.3) %
Total Industrial 11.1 % 5.7 %
The increase in Industrial North American sales for the current quarter and nine
months is attributed to higher volume across all businesses, particularly in the
semiconductor manufacturing and telecommunications markets. The increase in
International Industrial sales for the quarter reflects higher sales across all
businesses in the Asia Pacific region as well as higher total volume in Europe
and Latin America. For the nine-month period, sales were affected by the
struggling economy in Europe and Latin America, offset by higher Asia Pacific
sales.
Operating income for the Industrial segment increased 36.0 percent for the
quarter and 18.0 percent for the nine months. Industrial North American
operating income increased 33.5 percent for the quarter and 25.7 percent for the
nine months. Industrial North American operating income, as a percent of sales,
increased to 14.9 percent from 13.1 percent for the quarter and to 14.1 percent
from 12.5 percent for the nine months as margins benefited from the higher sales
volume.
Industrial International operating income increased 46.8 percent for the quarter
and decreased 8.7 percent for the nine months. Included in the International
Industrial operating income for the current year nine-month period was $9.0
million in business realignment charges. These charges were made as a result of
actions the Company took to appropriately structure the European operations to
operate in their current environment. Without the business realignment charges,
International Industrial operating income increased 4.5 percent for the current
year first nine months compared to the prior year nine months. Industrial
International operating income, as a percent of sales, increased to 8.8 percent
from 6.3 percent for the quarter and to 7.6 percent from 7.2 percent for the
nine months, excluding the business realignment charges. The increased margins
reflect better capacity utilization as market demand improved.
Total Industrial Segment backlog increased 13.5 percent compared to March 31,
1999 and 20.7 percent since June 30, 1999 driven primarily from an increase in
order rates in the North American Industrial operations and an improvement
experienced in the third quarter in order rates in the International Industrial
operations. Strong-order entry indicates a continuation of this trend through
the rest of the fiscal year.
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AEROSPACE - Aerospace Net sales increased 1.7 percent for the quarter and
declined slightly for the nine months. Operating income for the Aerospace
Segment increased 13.4 percent for the quarter and decreased 6.2 percent for the
nine-month period. Included in the Aerospace operating income for current year
nine-month period was $4.4 million in business realignment charges. These
charges were a result of the actions the Company took to resize the business in
response to a decline in OEM orders. Operating income, as a percent of sales,
increased to 17.0 percent from 15.3 percent for the quarter and decreased to
14.9 percent from 15.3 percent for the nine-month period, excluding the business
realignment charges. The increase in margins for the current year fiscal quarter
is due to lower contract costs and a higher mix of aftermarket business. The
decrease in margins for the nine-month period is due to lower volume, the mix of
original-equipment programs, as well as lower capacity utilization.
Backlog for the Aerospace Segment decreased 3.0 percent compared to March 31,
1999 and declined slightly since June 30, 1999. The decline in backlog reflects
the expected slowdown in OEM order rates which should continue through the rest
of the fiscal year.
Corporate general and administrative expenses decreased to $13.9 million from
$14.6 million for the quarter and decreased slightly for the nine months. The
lower expense in the quarter is a result of reduced expenses associated with
non-qualified benefit plans.
BALANCE SHEET
Working capital increased to $1,081.4 million at March 31, 2000 from $1,020.2
million at June 30, 1999 while the ratio of current assets to current
liabilities remained at 2.4 to 1. The increase in working capital was primarily
due to an increase in Cash and Accounts receivable, partially offset by an
increase in Notes payable.
Accounts receivable were higher by $61.5 million on March 31, 2000 compared to
June 30, 1999. Days sales outstanding declined to 46 days at March 31, 2000 from
47 days at June 30, 1999. Inventories remained relatively flat since June 30,
1999 while months supply declined slightly.
Other assets increased $79.8 million since June 30, 1999 primarily due to
goodwill recognized as a result of acquisitions.
The debt to debt-equity ratio decreased to 28.0 percent at March 31, 2000 from
29.8 percent at June 30, 1999 .
Due to the strength of the dollar, foreign currency translation adjustments
resulted in a decrease in net assets of $25.8 million during the first nine
months of fiscal 2000. The translation adjustments primarily affected Accounts
receivable, Inventories and Plant and equipment.
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STATEMENT OF CASH FLOWS
Net cash provided by operating activities was $364.9 million for the nine months
ended March 31, 2000, as compared to $279.4 million for the same nine months of
1999. The increase in net cash provided was due to an increase in Net income of
$37.1 million as well as the result of activity within the working capital items
- - Accounts receivable, Accounts payable, trade and Accrued payrolls and other
compensation - which used cash of $75.9 million in fiscal 2000 compared to using
cash of $117.4 million in fiscal 1999.
Net cash used in investing activities increased to $287.2 million for fiscal
2000 compared to $254.0 million for fiscal 1999 primarily due to an increase in
the amount spent on acquisitions partially offset by an increase in the proceeds
received from the sale of real property. Included in Other is an increase in
cash used for equity investments in fiscal 2000.
Financing activities used cash of $46.1 million for the nine months ended March
31, 2000 compared to using cash of $15.4 million for the same period in 1999.
The change resulted primarily from common stock activity using cash of $4.4
million in fiscal 2000 compared to providing cash of $64.6 million in the prior
year, partially offset by net debt borrowings providing cash of $14.0 million in
fiscal 2000 compared to using cash of $28.9 million in the prior year. The
fluctuation between fiscal 2000 and fiscal 1999 cash flow from common stock
activity is the result of the Company selling treasury shares to the ESOP trust
in fiscal 1999.
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
The Company enters into forward exchange contracts and cross-currency swap
agreements to reduce its exposure to fluctuations in related foreign currencies.
These contracts are with major financial institutions and the risk of loss is
considered remote. The Company does not hold or issue derivative financial
instruments for trading purposes. In addition, the Company's foreign locations,
in the ordinary course of business, enter into financial guarantees through
financial institutions which enable customers to be reimbursed in the event of
nonperformance by the Company. The total value of open contracts and any risk to
the Company as a result of these arrangements is not material to the Company's
financial position, liquidity or results of operations.
YEAR 2000 CONSIDERATONS
The Company took action to assure that its computerized products and systems and
all external interfaces were Year 2000 compliant. These actions were part of a
formal information technology initiative which the Company began several years
ago. The Company has not experienced any business interruptions as a result of
the Year 2000.
In addition, the Company contacted its key suppliers, customers, distributors
and financial service providers regarding their Year 2000 status. Follow-up
inquiries and audits indicated that substantially all key third parties would be
year 2000 compliant on a timely basis. The Company is unaware of any key
suppliers, customers, distributors or financial service providers who have
experienced problems regarding their Year 2000 compliance.
While there have been no known adverse consequences of any unsuccessful
modifications significantly affecting the financial position, liquidity, or
results of operations of the Company, there can be no assurance that any unknown
unsuccessful modifications would not have an adverse impact on the Company.
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FORWARD-LOOKING STATEMENTS
This Report on Form 10-Q and other written reports and oral statements made from
time to time by the Company may contain "forward-looking statements", all of
which are subject to risks and uncertainties. All statements which address
operating performance, events or developments that the Company expects or
anticipates will occur in the future, including statements relating to growth,
operating margin performance or earnings per share or statements expressing
general opinions about future operating results, are forward-looking statements.
These forward-looking statements rely on a number of assumptions concerning
future events, and are subject to a number of uncertainties and other factors,
many of which are outside the Company's control, that could cause actual results
to differ materially from such statements. Such factors include:
- - continuity of business relationships with and purchases by major customers,
including among others, orders and delivery schedules for aircraft
components,
- - ability of suppliers to provide materials as needed,
- - uncertainties surrounding timing, successful completion or integration of
acquisitions,
- - competitive pressure on sales and pricing,
- - increases in material and other production costs which cannot be recovered
in product pricing,
- - uncertainties surrounding the year 2000 issues,
- - difficulties in introducing new products and entering new markets, and
- - uncertainties surrounding the global economy and global market conditions,
including among others, the potential devaluation of currencies.
Any forward-looking statements are based on known events and circumstances at
the time. The Company undertakes no obligation to update or publicly revise
these forward-looking statements to reflect events or circumstances that arise
after the date of this Report.
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PARKER-HANNIFIN CORPORATION
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
------ --------------------------------
(a) The following documents are furnished as exhibits and are numbered
pursuant to Item 601 of Regulation S-K:
Exhibit 2 - Agreement and Plan of Merger, dated as of
January 14, 2000, between Parker-Hannifin
Corporation and Commercial Intertech Corp.
(previously filed as Exhibit 2.1 to the
Registrant's Report on Form 8-K filed with the
Securities and Exchange Commission on January
19, 2000).
Exhibit 10(a) - Exchange Agreement entered into as of
February 22, 2000 between the Registrant and
Daniel T. Garey including the Executive
Estate Protection Agreement among the
Registrant, Daniel T. Garey, and the Daniel
T. Garey and Diane-Worthington Garey
Irrevocable Trust dated December 22, 1999
(the "Trust") and the Collateral Assignment
between the Trust and the Registrant.
Exhibit 27 - Financial Data Schedule
(b) During the quarter ended March 31, 2000, the Registrant filed the
following reports on Form 8-K:
1. On January 19, 2000 to file the press release issued jointly by
the Registrant and Commercial Intertech Corp. announcing that the Registrant
entered into an Agreement and Plan of Merger with Commercial Intertech Corp.
whereby Commercial Intertech Corp. will be merged with and into the Registrant,
with the Registrant as the surviving corporation and to file the Agreement and
Plan of Merger.
2. On February 7, 2000 to file the press release issued jointly by
the Registrant and Dana Corporation announcing the Registrant's purchase of
substantially all of the assets of the Gresen Hydraulics Division from Dana
Corporation.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PARKER-HANNIFIN CORPORATION
(Registrant)
/s/ Michael J. Hiemstra
Michael J. Hiemstra
Vice President - Finance and Administration
and Chief Financial Officer
Date: May 11, 2000
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15
EXHIBIT INDEX
Exhibit No. Description of Exhibit
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2 Agreement and Plan of Merger, dated as of
January 14, 2000, between Parker-Hannifin
Corporation and Commercial Intertech Corp.
(previously filed as Exhibit 2.1 to the
Registrant's Report on Form 8-K filed with
the Securities and Exchange Commission on
January 19, 2000).
10(a) Exchange Agreement entered into as of
February 22, 2000 between the Registrant and
Daniel T. Garey including the Executive
Estate Protection Agreement among the
Registrant, Daniel T. Garey, and the Daniel
T. Garey and Diane-Worthington Garey
Irrevocable Trust dated December 22, 1999
(the "Trust") and the Collateral Assignment
between the Trust and the Registrant.
27 Financial Data Schedule
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