Parker Hannifin FY 2Q17 Earnings Call Notes

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Parker-Hannifin’s (PH) CEO Tom Williams On Q2 2017 Results

Cut 10,000 people over the last 4 years

” But we have also done a strategic restructuring that focused combination of footprint and SG&A and that combination has dramatically lowered our fixed cost structure of the company. I think probably the best way to visualize that for people is the line we have put in the annual report this year, but we went from 59,000 people on the team, going back probably about 4 years ago, to 48,000 people. And we have done that through a variety of initiatives, responding to the market, looking at footprint, looking at SG&A and in general trying to make the company simpler, faster, easier to do business with, with our customers. And ultimately, that’s what’s driving the margin enhancements that you see. ”

Energy markets have gone from sparks to smoke

“I think the best way to sum it up, too, I was talking to one of our key partners in oil and gas, and he said, Lee, 60, 90 days ago, I would have said we see sparks, and today I am starting to see smoke. And so there is just things happening out there, which are positive.”

Lee Banks

The channel is not inventory heavy at all

No, I would not characterize the channel as inventory heavy at all. And you know some of them that were tied to oil and gas did get stuck with some inventory. I would say, by and large, that’s not 100% gone, but it’s burned off quite a bit. So I don’t consider the channel heavy at all.