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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of earliest event reported: July 9, 1998
PARKER-HANNIFIN CORPORATION
---------------------------
(Exact name of registrant as specified in its charter)
OHIO 1-4982 34-0451060
- --------------- ------------------------ -------------------
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation)
6035 Parkland Boulevard, 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
The Exhibit Index appears on sequential page 3.
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PARKER-HANNIFIN CORPORATION
FORM 8-K
Item 5. Other Events.
The Company is filing herewith the following exhibit, which is
incorporated herein by this reference, to its Registration Statements on Form
S-3 (File No.s 333-47955 and 333-02761), which were declared effective on March
23, 1998 and May 2, 1996, respectively.
1. Computation of Ratio of Earnings to Fixed Charges (revised to
reflect the Company's financial results as of March 31, 1998).
The text of the press release, dated July 7, 1998, filed as Exhibit
99.1 to this Current Report on Form 8-K is hereby incorporated by reference
herein by this reference.
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 hereunto duly authorized.
PARKER-HANNIFIN CORPORATION
(Registrant)
By: /s/ Thomas A. Piraino, Jr.
---------------------------------
Vice President, General Counsel
and Secretary
Date: July 13, 1998
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EXHIBIT INDEX
Exhibit No. Description of Exhibit
- ----------- ---------------------------------------------------
12.3 Computation of Ratio of Earnings to Fixed Charges
(revised to reflect the Company's financial results
as of March 31, 1998)
99.1 Press Release, dated July 7, 1998
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Exhibit 12.3
<TABLE>
PARKER-HANNIFIN CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(IN THOUSANDS)
<CAPTION>
NINE MONTHS
ENDED MARCH 31, FISCAL YEAR ENDED JUNE 30,
1998 1997 1997 1996 1995 1994 1993
--------------------- ------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
EARNINGS
- --------
Income from continuing operations before
income taxes $363,792 $281,602 $424,867 $374,479 $348,407 $112,449 $108,066
Add:
Interest on indebtedness, exclusive of
interest capitalized in accordance
with FASB #34 and interest on ESOP
loan guarantee 36,797 35,861 46,373 35,665 28,884 34,687 43,055
Amortization of deferred loan costs 234 214 286 146 128 297 237
Portion of rents representative of
interest factor 8,326 7,475 11,102 9,966 8,791 7,157 10,299
Equity share of losses of companies
for which debt obligations are not
guaranteed 593 1,210 1,327 513 392 1,359 1,566
Amortization of previously capitalized
interest 221 202 220 219 216 217 206
--------------------- ------------------------------------------------------------
Income as adjusted $409,963 $326,564 $484,175 $420,988 $386,818 $156,166 $163,429
===================== ============================================================
FIXED CHARGES
- -------------
Interest on indebtedness, exclusive of
interest capitalized in accordance
with FASB #34 and interest on ESOP
loan guarantee $ 36,797 $ 35,861 $ 46,373 $ 35,665 $ 28,884 $ 34,687 $ 43,055
Capitalized interest 1,368 247 272 538 283 298 32
Amortization of deferred loan costs 234 214 286 146 128 297 237
Portion of rents representative of
interest factor 8,326 7,475 11,102 9,966 8,791 7,157 10,299
--------------------- ------------------------------------------------------------
Fixed charges $ 46,725 $ 43,797 $ 58,033 $ 46,315 $ 38,086 $ 42,439 $ 53,623
===================== ============================================================
RATIO OF EARNINGS TO FIXED CHARGES 8.77x 7.46x 8.34x 9.09x 10.16x 3.68x 3.05x
- ----------------------------------
</TABLE>
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Exhibit 99.1
News Release [PARKER HANNIFIN LOGO]
DATE: JULY 7, 1998
FOR RELEASE: IMMEDIATELY
CONTACT:
Media - CONTACT: Financial Analysts -
D.E. Logan, Corp. Communications T.K. Pistell, Treasurer
(216) 896-2752 (216) 896-2130
J.L. Bennett, Public Relations
(216) 896-3258 STOCK SYMBOL: PH-NYSE
PARKER HANNIFIN ANNOUNCES SPECIAL CHARGES; EXPECTS LOWER
THAN ANTICIPATED FOURTH QUARTER EARNINGS
CLEVELAND, OHIO, July 7, 1998 -- Parker Hannifin Corporation announced
today that while it expects record-level sales and earnings for the fiscal year
ending June 30, its fourth quarter results will be affected by several
extraordinary items.
Fourth quarter results will reflect an acquisition-related charge equal to
$.06 per share associated with the recent acquisition of UCC Securities Ltd., a
European filter company. The charge resulted from an appraisal of the goodwill
premium and research and development underway at UCC. Under generally accepted
accounting principles, the in-process R&D purchased as part of the acquisition
must be written off to expense as of the date of acquisition, which was April
30.
In addition, an extraordinary charge of $.03 per share in the fourth
quarter will result from the payment of the premium due to the early retirement
of the Company's $100 million 10.375 percent debentures. The refinancing of this
debt at current rates will result in savings of approximately $.02 per share per
year in the near term.
These charges will be partially offset by a fourth quarter settlement
reached with the Internal Revenue Service resulting in a credit to interest
income of $.02 per share.
President and Chief Executive Officer Duane E. Collins said that,
"Excluding these charges, the Company expects fourth quarter earnings, as of
June 30, to approximate its all-time record of 81 cents per diluted share set
during the same quarter of last year. However, we do not expect to meet the
current analysts' expectations due to several reasons: the direct and indirect
effects of the Asian financial crisis, the depressed semiconductor market and
our current sales mix that is favoring some lower-margin businesses. In
addition, the 10 acquisitions completed during the fiscal year, while accretive,
are
1
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still in the early stages of integration and have yet to contribute margins
comparable to our more mature businesses.
"Business conditions a year ago during the fourth quarter of fiscal 1997
and into the first quarter of fiscal 1998 were very favorable and generated net
after-tax returns on sales of 8.3 percent and 7.2 percent respectively. We
stated at that time that we felt that such business conditions and margins were
not sustainable. Unfortunately, the Asian crisis alone has shown this to be
true."
Mr. Collins pointed out that many of the conditions affecting this year's
fourth quarter are expected to continue through the summer, including the added
uncertainty of the General Motors strike.
"Our orders for June were very strong," he added, "as were our shipments.
Fiscal 1998 sales and earnings will end at record levels, and, on a yearly
basis, we are very positive regarding our fiscal year 1999."
Parker Hannifin's financial results for the fiscal year ending June 30 are
to be released on July 30. A more detailed outlook for fiscal 1999 will be
available then.
Parker Hannifin is a worldwide leader in the production of motion and
control components for hundreds of industrial and aerospace markets. For more
information about Parker, visit the Company's Web site at www.parker.com.
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PHNR-9822
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