01—Abstract
Summary
Summary of the 10-K filed August 25, 2021. Cited figures are marked; the original filing is the authoritative source.
Parker-Hannifin Corporation, a global leader in motion and control technologies, presents its 2021 10-K filing, detailing a year marked by recovery and strategic growth initiatives.
The company demonstrated resilience, with net sales increasing to $14.3 billiona, driven by strong performance in its Diversified Industrial Segment, which constitutes 83% of total sales, and a notable recovery in the Aerospace Systems Segment. Despite ongoing economic uncertainties and the lingering effects of the COVID-19 pandemic, Parker-Hannifin achieved a 9.1% increase in its Diversified Industrial Segment net sales, benefiting from both organic growth and strategic acquisitions, alongside favorable currency impacts. The company's financial health remained robust, supported by strong cash flow from operations and a manageable debt profile.
Looking ahead, Parker-Hannifin is strategically positioned for future growth, underscored by its pending acquisition of Meggitt plc, which is expected to significantly enhance its Aerospace Systems Segment. The company's commitment to its 'Win Strategy 3.0,' focused on engaged people, customer experience, profitable growth, and financial performance, continues to guide its operations. Investors can find comfort in the company's consistent dividend payments and a strong commitment to operational efficiency and innovation across its diverse markets.
02—Key points
Key Highlights
- Net sales for fiscal year 2021 reached $14.3 billion, an increase driven by both the Diversified Industrial Segment and recovery in the Aerospace Systems Segment.
- The Diversified Industrial Segment showed strong performance, with net sales up 9.1%, benefiting from acquisitions and favorable currency exchange rates, particularly in international markets.
- The Aerospace Systems Segment saw a decrease in sales primarily due to COVID-19 impacts on commercial markets, but was partially offset by higher military demand and prior-year acquisitions.
- The company announced a significant strategic move with the agreement to acquire Meggitt plc for approximately £6,308 million, aiming to enhance its Aerospace Systems Segment.
- Backlog increased to $6.5 billion at June 30, 2021, indicating strong forward demand, with 84% scheduled for delivery within the next twelve months.
- Parker-Hannifin maintained a strong financial position with a working capital of $2.5 billion and a current ratio of 1.8, demonstrating healthy liquidity.
- The company continued its commitment to shareholder returns, with 284 consecutive quarters of dividend payments and a consistent annual dividend increase for 65 years.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, Parker-Hannifin Corp kept $0.12.
- Revenue$14.35B100.0%
- Cost of revenue−$9.60B66.9%
- Gross profit$4.74B33.1%
- Operating costs−$2.28B15.9%
- Operating income$2.46B17.1%
- Interest, other & tax−$713.1M5.0%
- Net income$1.75B12.2%
04—Financials
Financial Highlights
Figures from 10-KFY2021filed August 25, 2021Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $14.35B$13.70B | +4.8% |
| Cost of Revenue | $9.60B$10.29B | −6.7% |
| Gross Profit | $4.74B$3.40B | +39.4% |
| R&D Expenses | $205.00M$237.00M | −13.5% |
| SG&A Expenses | $2.38B$1.66B | +43.9% |
| Operating Income | $2.46B$1.97B | +25.1% |
| Interest Expense | $250.04M$308.16M | −18.9% |
| Net Income | $1.75B$1.20B | +45.3% |
| EPS (Basic) | $13.54$9.36 | +44.7% |
| EPS (Diluted) | $13.35$9.26 | +44.2% |
| Shares Outstanding (Basic) | 129.00M128.42M | +0.5% |
| Shares Outstanding (Diluted) | 130.83M129.81M | +0.8% |
05—Questions
Frequently Asked Questions
What was Parker-Hannifin's overall financial performance in fiscal year 2021?
In fiscal year 2021, Parker-Hannifin reported net sales of $14.3 billion. The company demonstrated a robust recovery, with net income attributable to common shareholders of $1.75 billion. The Diversified Industrial Segment was the primary driver of revenue, while the Aerospace Systems Segment showed signs of recovery despite ongoing market pressures.
What are the key strategic initiatives Parker-Hannifin is pursuing?
Parker-Hannifin's key strategic initiatives include the pending acquisition of Meggitt plc, which is expected to significantly bolster its Aerospace Systems Segment. The company continues to execute its 'Win Strategy 3.0,' focusing on enhancing customer experience, driving profitable growth, improving financial performance, and fostering an engaged workforce. Operational efficiency and innovation remain core to its strategy.
How is the COVID-19 pandemic impacting Parker-Hannifin's business?
The COVID-19 pandemic has had a mixed impact. While it led to reduced demand and operational disruptions, particularly in the aerospace sector, the company has implemented measures to mitigate these effects. The company experienced some recovery in demand for its industrial products. The pandemic also introduced supply chain uncertainties and cybersecurity risks, which are actively managed.
What is the outlook for the company's different segments?
The Diversified Industrial Segment is expected to continue its growth trajectory, driven by demand across various industrial and mobile markets, supported by acquisitions and favorable currency trends. The Aerospace Systems Segment, while impacted by pandemic-related travel restrictions, is anticipated to benefit from the ongoing recovery in air travel and the strategic acquisition of Meggitt, which will increase its size and significance within the company's portfolio.
06—Continue