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Seprotech Systems Inc, Canada
COMPANY WATCH
Parker Hannifin Corp, USA Key Figures (US$ million) Third quarter ended 31.3 2009
2008
Net Sales Of Which: Industrial
2344.7
3182.5
1693.8
2432.8
Cost of Sales
1908.6
2447.2
Gross Profit
436.1
735.3
Operating Income Of Which: Industrial
169.7
451.9
111.4
365.3
53.4
255.4
Net Income
Nine months ended 31.3 2009
2008
Net Sales Of Which: Industrial
8098.1
8798.9
6059.9
6708.7
Cost of Sales
6367.3
6763.7
Gross Profit
1730.8
2035.2
Operating Income Of Which: Industrial
896.3
1237.7
697.5
1020.8
Net Income
459.0
696.9
COMMENT Parker Hannifin Corp continued to feel the effects of the contracting global economy in its third quarter of fiscal 2009 with its sales down 26.3% on a year earlier at US$2.3 billion and net income 79.1% lower at US$53.4 million. Parker’s Industrial North America segment saw sales for the quarter fall 21.2% to US$857.0 million, while operating income plummeted 50.6% to US$73.1 million. In the Industrial International segment, sales dropped 37.8% to US$836.8 million and operating income 82.4% to US$38.3 million. “Third quarter results reflect the impact of the global recession,” Parker’s chair, CEO and president, Don Washkewicz, said. “Weakness in customer order trends that began in
June 2009
the second quarter continued through the third quarter across almost all markets. This led to a 24.0% decline in organic sales, while foreign currency translation negatively impacted sales by 6.9% and acquisitions contributed 4.6% to sales.” Washkewicz said that in the face of this difficult business environment, Parker was continuing to focus on adjusting its cost structure to reflect the changing demand levels. “We have implemented a series of workforce reductions, established a wage freeze, offered select early retirement incentives, and instituted a 10% reduction in salaries, globally. Parker employees have responded remarkably, and with determination and tenacity,” he said. ■ www.parker.com
Seprotech Systems Inc, Canada Key Figures (C$ ’000) Three months ended 28.2 2009
2008
2925
2349
(92)
(159)
Six months ended 28.2 2009
2008
5295
4003
(82)
(313)
Revenue Net Income/(Loss)
Revenue Net Income/(Loss)
COMMENT Seprotech Systems Inc’s strong order backlog at the start of this current fiscal year has helped to deliver a 32% increase in first half revenues over the same six month period last year. “However the economic environment remains difficult and it will be challenging to maintain growth until the global economy turns. Management has implemented cost savings measures in keeping with the continued downturn and is working to address the company’s working capital requirements going forward into the second half of the year,” cautioned Martin Hauschild, president & CEO of Seprotech. “Base revenue consistency was aided by the acquisition of Envirosearch Operations Inc completed in January of this fiscal year. We expect to see the full benefits of the acquisition materialize over the coming year as Envirosearch is fully integrated into Seprotech,” added Hauschild. “This accretive transaction builds on management’s strategy to develop a utility division and is consistent with our core strategy for growing Seprotech into an integrated water treatment solutions provider. There are large technical and
regulatory barriers to entry in the water plant operations business, which the acquisition of Envirosearch allows us to quickly hurdle.” “We have some short and medium term challenges before us as we work through the negative impact of the current recession but we remain focused on the long-term water business,” said Seprotech’s recently appointed chairman Jordan Grant (see Filtration Industry Analyst, May 2009). “The addition of plant operations allows Seprotech to meet the growing demand for turnkey infrastructure models that include water treatment equipment and operations. This ability to meet all aspects of its clients’ water and wastewater treatment needs is a clear competitive advantage which provides the company with many revenue growth opportunities going forward,” said Grant. Seprotech is a provider of preengineered water and wastewater treatment plants to the land development, resource sector and military market place, including CrystalBlue membrane-based water recycling systems and the ROTORDISK wastewater treatment systems. ■ www.seprotech.com
Filtration Industry Analyst
11
Parker Hannifin Corp, USA Key Figures (US$ million) Third quarter ended 31.3 2009
2008
Net Sales Of Which: Industrial
2344.7
3182.5
1693.8
2432.8
Cost of Sales
1908.6
2447.2
Gross Profit
436.1
735.3
Operating Income Of Which: Industrial
169.7
451.9
111.4
365.3
53.4
255.4
Net Income
Nine months ended 31.3 2009
2008
Net Sales Of Which: Industrial
8098.1
8798.9
6059.9
6708.7
Cost of Sales
6367.3
6763.7
Gross Profit
1730.8
2035.2
Operating Income Of Which: Industrial
896.3
1237.7
697.5
1020.8
Net Income
459.0
696.9
COMMENT Parker Hannifin Corp continued to feel the effects of the contracting global economy in its third quarter of fiscal 2009 with its sales down 26.3% on a year earlier at US$2.3 billion and net income 79.1% lower at US$53.4 million. Parker’s Industrial North America segment saw sales for the quarter fall 21.2% to US$857.0 million, while operating income plummeted 50.6% to US$73.1 million. In the Industrial International segment, sales dropped 37.8% to US$836.8 million and operating income 82.4% to US$38.3 million. “Third quarter results reflect the impact of the global recession,” Parker’s chair, CEO and president, Don Washkewicz, said. “Weakness in customer order trends that began in
June 2009
the second quarter continued through the third quarter across almost all markets. This led to a 24.0% decline in organic sales, while foreign currency translation negatively impacted sales by 6.9% and acquisitions contributed 4.6% to sales.” Washkewicz said that in the face of this difficult business environment, Parker was continuing to focus on adjusting its cost structure to reflect the changing demand levels. “We have implemented a series of workforce reductions, established a wage freeze, offered select early retirement incentives, and instituted a 10% reduction in salaries, globally. Parker employees have responded remarkably, and with determination and tenacity,” he said. ■ www.parker.com
Seprotech Systems Inc, Canada Key Figures (C$ ’000) Three months ended 28.2 2009
2008
2925
2349
(92)
(159)
Six months ended 28.2 2009
2008
5295
4003
(82)
(313)
Revenue Net Income/(Loss)
Revenue Net Income/(Loss)
COMMENT Seprotech Systems Inc’s strong order backlog at the start of this current fiscal year has helped to deliver a 32% increase in first half revenues over the same six month period last year. “However the economic environment remains difficult and it will be challenging to maintain growth until the global economy turns. Management has implemented cost savings measures in keeping with the continued downturn and is working to address the company’s working capital requirements going forward into the second half of the year,” cautioned Martin Hauschild, president & CEO of Seprotech. “Base revenue consistency was aided by the acquisition of Envirosearch Operations Inc completed in January of this fiscal year. We expect to see the full benefits of the acquisition materialize over the coming year as Envirosearch is fully integrated into Seprotech,” added Hauschild. “This accretive transaction builds on management’s strategy to develop a utility division and is consistent with our core strategy for growing Seprotech into an integrated water treatment solutions provider. There are large technical and
regulatory barriers to entry in the water plant operations business, which the acquisition of Envirosearch allows us to quickly hurdle.” “We have some short and medium term challenges before us as we work through the negative impact of the current recession but we remain focused on the long-term water business,” said Seprotech’s recently appointed chairman Jordan Grant (see Filtration Industry Analyst, May 2009). “The addition of plant operations allows Seprotech to meet the growing demand for turnkey infrastructure models that include water treatment equipment and operations. This ability to meet all aspects of its clients’ water and wastewater treatment needs is a clear competitive advantage which provides the company with many revenue growth opportunities going forward,” said Grant. Seprotech is a provider of preengineered water and wastewater treatment plants to the land development, resource sector and military market place, including CrystalBlue membrane-based water recycling systems and the ROTORDISK wastewater treatment systems. ■ www.seprotech.com
Filtration Industry Analyst
11