Cleveland, OH — Parker Hannifin Corporation, a supplier of motion and control technologies, surpassed US$10 billion in sales for the first time in its 89 year history in its 2007 fiscal year.
Sales reached a record $10.7 billion, an increase of 14.2% from $9.4 billion in the previous year. Income from continuing operations increased 30% to $830.0 million compared to $638.3 million a year ago, and earnings per diluted share from continuing operations increased 32.8% to $7.01 compared to $5.28 a year ago. Cash flow from operating activities reached a record $955.0 million, or 8.9% of sales.
“I want to thank our employees for their continued commitment to premier customer service, profitable growth and financial performance,” said chairman, CEO and president Don Washkewicz. “These three pillars of Parker’s Win Strategy enabled us to deliver record quarterly and annual results for our shareholders.”
“In surpassing the $10 billion sales milestone, we continue to demonstrate our propensity to grow. Our compound annual growth rate over the last 35 years is in excess of 11%. This year, we grew by more than 14%, or more than three times GDP. This exceeded our Win Strategy goal to grow both organically and through disciplined acquisitions at a 10% compound annual rate. Of the 14% growth, 5% was organic, 6% was from strategic acquisitions, and the remainder was from the effects of foreign currency exchange rates.
“We’re especially pleased with gains we’ve made in our Industrial International segment, where revenues grew by 34% and operating income grew by 51%. Margins in this segment also reached an all time high and continue to approach those in our North American segment.
“Overall, our revenues and profits are more balanced regionally than ever before, which speaks to the growing demand around the world for our motion and control technologies. By executing our Win Strategy, we delivered record earnings per share in the quarter and for the year. Total shareholder return for the year was 28%, or 35% higher than the S&P 500, and our return on invested capital remains at the top quartile among our peers.”
“We also generated close to $1 billion in annual cash flow from operating activities, which allowed us to both maintain our strong balance sheet and use cash wisely to invest in our company. We continued to invest in strategic acquisitions this year, purchasing eleven companies that added nearly $260 million in annualized revenues. We spent $433 million to repurchase 5.4 million shares, and we made discretionary contributions of $161 million to our pension funds. In fiscal 2007, we increased dividends 13%, paying out approximately $121 million to shareholders, maintaining our dividend increase record that spans 51 years.”
“Our employees have embraced The Parker Win Strategy as a proven roadmap to operational success and profitable growth,” added Washkewicz. “We remain uniquely positioned to meet the needs of both the OEM and MRO segments of the many diversified global motion and control markets we serve. Going forward, we expect to continue providing solid, dependable performance.”