Author: Minnie Arwood

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New Mountain Finance Corporation Announces Financial Results for the Quarter Ended September 30, 2021

Reports Net Investment Income of $0.31 per Share, Exceeding Previous Guidance

Announces a Permanent Decrease in the Base Management Fee from 1.75{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to 1.40{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

Extends Previously Announced Dividend Protection Program

NEW YORK, November 03, 2021–(BUSINESS WIRE)–New Mountain Finance Corporation (NASDAQ: NMFC) (the “Company”, “we”, “us” or “our”) today announced its financial results for the quarter ended September 30, 2021 and reported third quarter net investment income of $0.31 per weighted average share. At September 30, 2021, net asset value (“NAV”) per share was $13.26, compared to $13.33 at June 30, 2021. The Company also announced that its board of directors declared a fourth quarter distribution of $0.30 per share, which will be payable on December 30, 2021 to holders of record as of December 16, 2021. For additional details related to the quarter ended September 30, 2021, please refer to the New Mountain Finance Corporation Form 10-Q filed with the SEC and the supplemental investor presentation which can be found on the Company’s website at http://www.newmountainfinance.com.

Selected Financial Highlights

(in thousands, except per share data)

September 30, 2021

Investment Portfolio(1)

$

3,033,076

Total Assets

$

3,168,111

Total Statutory Debt(3)

$

1,529,828

NAV(2)

$

1,284,905

NAV per Share

$

13.26

Statutory Debt/Equity

1.19x

Investment Portfolio Composition

September 30, 2021

Percent of Total

First Lien

$

1,472,741

48.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

Second Lien(1)

743,040

24.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

Subordinated

38,863

1.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

Preferred Equity

147,313

4.8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

Investment Fund

252,400

8.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

Common Equity and Other(4)

378,719

12.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

Total

$

3,033,076

100.0{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

_____________________________

(1) Includes collateral for securities purchased under collateralized agreements to resell.
(2) Excludes non-controlling interest in New Mountain Net Lease Corporation (“NMNLC”).
(3) Excludes the Company’s United States (“U.S.”) Small Business Administration (“SBA”)-guaranteed debentures. Includes premium received on additional convertible notes issued in June 2019.
(4) Includes investments held in NMNLC.

We believe that the strength of the Company’s unique investment strategy – which focuses on middle market defensive growth companies that are well researched by New Mountain Capital, L.L.C. (“New Mountain”), a leading alternative investment firm, is underscored by continued stable credit performance. The Company has had only twelve portfolio companies, representing approximately $276 million of the cost of all investments made since inception in October 2008, or approximately 3.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of $8.8 billion, go on non-accrual.

“We believe New Mountain’s strategy of focusing on ‘defensive growth’ industries and on companies that we know well continues to prove to be a successful strategy”, added Steven B. Klinsky, NMFC Chairman. “We believe one of our keys to success is the strength of the team, which we continue to build over time, now at approximately 190 employees.”

Robert A. Hamwee, CEO, commented: “The third quarter represented another solid quarter of performance for NMFC, which was highlighted by our $430 million in originations. With the launch of our at-the-market (“ATM”) program, we will continue to focus our efforts on investing in high-quality, defensive growth companies, which we believe is a major factor in being able to maintain a stable book value”.

John R. Kline, President and COO, commented: “We are pleased to announce a fourth quarter distribution of $0.30 per share based on our expectation that Q4 Net Investment Income will be at least $0.30 per share, prior to any fee waivers. Given our outlook for consistent operating performance and continued support, if needed, from our investment advisor, we remain confident that our Net Investment Income will continue to cover our quarterly dividend for the foreseeable future.”

Portfolio and Investment Activity1

As of September 30, 2021, the Company’s NAV was approximately $1,284.9 million and its portfolio had a fair value of approximately $3,033.1 million in 106 portfolio companies, with a weighted average YTM at Cost2 of approximately 8.8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. For the three months ended September 30, 2021, the Company generated approximately $314.8 million of originations in fifteen new portfolio companies and approximately $114.1 million of originations, including commitments3 for follow-on investments in thirteen portfolio companies held as of June 30, 2021. For the three months ended September 30, 2021, the Company had $43.9 million of asset sales and cash repayments3 of approximately $446.9 million.

Consolidated Results of Operations4

The Company’s total investment income for the three months ended September 30, 2021 and 2020 was approximately $68.2 million and $65.3 million, respectively.

The Company’s total net expenses, after income tax expense, for the three months ended September 30, 2021 and 2020 were approximately $37.8 million and $36.5 million, respectively. Total net expenses, after income tax expense, for the three months ended September 30, 2021 and 2020 consisted of approximately $17.6 million and $18.1 million, respectively, of costs associated with the Company’s borrowings and approximately $17.7 million and $16.7 million, respectively, in net management and incentive fees. Since the Company’s initial public offering (“IPO”), the base management fee calculation has deducted the borrowings under the New Mountain Finance SPV Funding, L.L.C. credit facility (the “SLF Credit Facility”). The SLF Credit Facility had historically consisted of primarily lower yielding assets at higher advance rates. As part of an amendment to the Company’s existing credit facilities with Wells Fargo Bank, National Association, the SLF Credit Facility merged with and into the New Mountain Finance Holdings, L.L.C. credit facility (the “Holdings Credit Facility”) on December 18, 2014. Post credit facility merger and to be consistent with the methodology since the IPO, New Mountain Finance Advisers BDC, L.L.C. (the “Investment Adviser”) will continue to waive management fees on the leverage associated with those assets held under revolving credit facilities that share the same underlying yield characteristics with investments that were leveraged under the legacy SLF Credit Facility. Effective as of and for the quarter ended March 31, 2021 through the quarter ending December 31, 2022, the Investment Adviser has entered into a fee waiver agreement pursuant to which the Investment Adviser will waive base management fees in order to reach a target base management fee of 1.25{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} on gross assets (the “Reduced Base Management Fee”) as opposed to the Company’s current base management fee of 1.75{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} on gross assets less the borrowings under the SLF Credit Facility and less cash and cash equivalents (the “Base Management Fee”). If, for any quarterly period during the term of the fee waiver agreement, the Reduced Base Management Fee would be greater than the Base Management Fee calculated under the terms of the Investment Management Agreement, the Investment Adviser shall only be entitled to the lesser of those two amounts. The Investment Adviser cannot recoup management fees and incentive fees that the Investment Adviser has previously waived. For the three months ended September 30, 2021 and 2020 management fees waived were approximately $3.8 million and $2.8 million, respectively. For the three months ended September 30, 2021 and 2020 incentive fees waived were approximately $0 and $0.5 million, respectively. The Company’s net direct and indirect professional, administrative, other general and administrative and income tax expenses for the three months ended September 30, 2021 and 2020 were approximately $2.5 million and $1.7 million, respectively.

For the three months ended September 30, 2021 and 2020, the Company recorded approximately ($8.5) million and $59.4 million, respectively, of net realized and unrealized (losses) gains.

Liquidity and Capital Resources

As of September 30, 2021, the Company had cash and cash equivalents of approximately $83.4 million and total statutory debt outstanding of approximately $1,529.8 million5, which consisted of approximately $493.3 million of the $730.0 million of total availability on the Holdings Credit Facility, $150.0 million of the $188.5 million of total availability on the Company’s senior secured revolving credit facility (the “NMFC Credit Facility”), $167.8 million of the $280.0 million of total availability on the Company’s secured revolving credit facility (the “DB Credit Facility”), $0 of the $50.0 million of total availability on the uncommitted revolving loan agreement (the “Unsecured Management Company Revolver”), $5.8 million of the $10.0 million of total availability on the senior secured revolving credit facility (the “NMNLC Credit Facility II”), $201.4 million6 of convertible notes outstanding and $511.5 million of unsecured notes outstanding. Additionally, the Company had $300.0 million of SBA-guaranteed debentures outstanding as of September 30, 2021.

Portfolio and Asset Quality1

The Company puts its largest emphasis on risk control and credit performance. On a quarterly basis, or more frequently if deemed necessary, the Company formally rates each portfolio investment on a scale of one to four. Each investment is assigned an initial rating of a “2” under the assumption that the investment is performing materially in-line with expectations. Any investment performing materially below our expectations, where the risk of loss has materially increased since the original investment, would be downgraded from the “2” rating to a “3” or a “4” rating, based on the deterioration of the investment. An investment rating of a “4” could be moved to non-accrual status and the final development could be an actual realization of a loss through a restructuring or impaired sale.

As of September 30, 2021, seven portfolio companies had an investment rating of “3” and seven portfolio companies had an investment rating of “4”. The Company’s investments in the portfolio companies with an investment rating of “3” had an aggregate cost basis of approximately $168.4 million and an aggregate fair value of approximately $122.5 million. The Company’s investment in portfolio companies with an investment rating of “4” had an aggregate cost basis of approximately $138.7 million and an aggregate fair value of approximately $52.9 million.

Recent Developments

On October 27, 2021, the Company’s board of directors declared a fourth quarter 2021 distribution of $0.30 per share payable on December 30, 2021 to holders of record as of December 16, 2021.

On November 1, 2021, the Company entered into Amendment No. 1 to the Investment Management Agreement, pursuant to which the Base Management Fee will be reduced from 1.75{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of the Company’s gross assets to 1.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of the Company’s gross assets.

On November 2, 2021, the Investment Adviser extended the term of the Fee Waiver Agreement to be effective through the quarter ended December 31, 2023, rather than the quarter ended December 31, 2022. Under the Fee Waiver Agreement, the Investment Adviser will continue to waive base management fees in order to reach a target base management fee of 1.25{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} on gross assets.

On November 3, 2021, the Company entered into an equity distribution agreement (the “Distribution Agreement“) with B. Riley Securities, Inc. and Raymond James & Associates, Inc. Under the Distribution Agreement, the Company may offer for sale, from time to time, and sell, by means of “at the market” offerings, up to $250,000,000 in aggregate amount of shares of its common stock. Subject to the terms and conditions of the Equity Distribution Agreement, sales of common stock, if any, may be made in transactions that are deemed to be an “at the market” offering as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended.

_________________________________

1 Includes collateral for securities purchased under collateralized agreements to resell.
2 References to “YTM at Cost” assume the accruing investments, including secured collateralized agreements, in our portfolio as of a certain date, the ‘‘Portfolio Date’’, are purchased at cost on that date and held until their respective maturities with no prepayments or losses and are exited at par at maturity. This calculation excludes the impact of existing leverage. YTM at Cost uses the LIBOR curves at each quarter’s respective end date. The actual yield to maturity may be higher or lower due to the future selection of LIBOR contracts by the individual companies in the Company’s portfolio or other factors.
3 Originations exclude payment-in-kind (“PIK”); originations, repayments, and sales excludes revolvers, unfunded commitments, bridges, return of capital, and realized gains / losses.
4 Excludes net income related to non-controlling interests in NMNLC. For the quarter ended September 30, 2021, $0.2 million of dividend income is excluded from investment income and $0.8 million of unrealized gains is excluded from net realized and unrealized gains. For the quarter ended September 30, 2020, $0.3 million of dividend income is excluded from investment income and $1.1 million of unrealized gains is excluded from net realized and unrealized gains.
5 Excludes the Company’s United States (“U.S.”) Small Business Administration (“SBA”)-guaranteed debentures.
6 Includes premium received on additional convertible notes issued in June 2019.

Conference Call

New Mountain Finance Corporation will host a conference call at 10 a.m. Eastern Time on Thursday, November 4, 2021, to discuss its third quarter 2021 financial results. All interested parties may participate in the conference call by dialing +1 (877) 443-9109 approximately 15 minutes prior to the call. International callers should dial +1 (412) 317-1082. This conference call will also be broadcast live over the Internet and can be accessed by all interested parties through the Company’s website, http://ir.newmountainfinance.com. To listen to the live call, please go to the Company’s website at least 15 minutes prior to the start of the call to register and download any necessary audio software. Following the call, you may access a replay of the event via audio webcast on our website. We will be utilizing a presentation during the conference call and we have posted the presentation to the investor relations section of our website.

New Mountain Finance Corporation

Consolidated Statements of Assets and Liabilities

(in thousands, except shares and per share data)

(unaudited)

September 30, 2021

December 31, 2020

Assets

Investments at fair value

Non-controlled/non-affiliated investments (cost of $2,260,975 and $2,281,184 respectively)

$

2,206,300

$

2,249,615

Non-controlled/affiliated investments (cost of $79,591 and $115,543, respectively)

111,605

103,012

Controlled investments (cost of $663,216 and $600,942, respectively)

693,749

600,875

Total investments at fair value (cost of $3,003,782 and $2,997,669, respectively)

3,011,654

2,953,502

Securities purchased under collateralized agreements to resell (cost of $30,000 and $30,000, respectively)

21,422

21,422

Cash and cash equivalents

83,357

78,966

Interest and dividend receivable

32,773

28,411

Receivable from unsettled securities sold

8,990

9,019

Receivable from affiliates

–

117

Deferred tax asset

–

101

Other assets

9,915

5,981

Total assets

$

3,168,111

$

3,097,519

Liabilities

Borrowings

Unsecured Notes

$

511,500

$

453,250

Holdings Credit Facility

493,263

450,163

SBA-guaranteed debentures

300,000

300,000

Convertible Notes

201,443

201,520

DB Credit Facility

167,800

244,000

NMFC Credit Facility

149,977

165,500

NMNLC Credit Facility II

5,845

–

Deferred financing costs (net of accumulated amortization of $38,985 and $33,325, respectively)

(21,337)

(16,839)

Net borrowings

1,808,491

1,797,594

Payable for unsettled securities purchased

24,658

26,842

Management fee payable

9,988

10,419

Interest payable

9,528

15,587

Incentive fee payable

7,661

7,354

Payable to affiliates

316

867

Deferred tax liability

13

–

Other liabilities

2,498

1,967

Total liabilities

1,863,153

1,860,630

Commitments and contingencies

Net Assets

Preferred stock, par value $0.01 per share, 2,000,000 shares authorized, none issued

–

–

Common stock, par value $0.01 per share, 200,000,000 shares authorized, and 96,906,988 and 96,827,342 shares issued and outstanding, respectively

969

968

Paid in capital in excess of par

1,270,719

1,269,671

Accumulated undistributed (overdistributed) earnings

13,217

(48,764)

Total net assets of New Mountain Finance Corporation

$

1,284,905

$

1,221,875

Non-controlling interest in New Mountain Net Lease Corporation

20,053

15,014

Total net assets

$

1,304,958

$

1,236,889

Total liabilities and net assets

$

3,168,111

$

3,097,519

Number of shares outstanding

96,906,988

96,827,342

Net asset value per share of New Mountain Finance Corporation

$

13.26

$

12.62

New Mountain Finance Corporation

Consolidated Statements of Operations

(in thousands, except shares and per share data)

(unaudited)

Three Months Ended

Nine Months Ended

September 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Investment income

From non-controlled/non-affiliated investments:

Interest income (excluding Payment-in-kind (“PIK”) interest income)

$

40,540

$

41,854

$

119,919

$

144,383

PIK interest income

1,903

2,547

6,501

6,464

Dividend income

867

–

867

–

Non-cash dividend income

1,956

2,274

7,324

6,898

Other income

5,249

1,497

9,651

4,085

From non-controlled/affiliated investments:

Interest income (excluding PIK interest income)

296

781

1,322

1,963

PIK interest income

182

217

182

(1,131)

Dividend income

288

687

288

2,096

Non-cash dividend income

831

–

3,881

(3,418)

Other income

79

427

284

1,002

From controlled investments:

Interest income (excluding PIK interest income)

1,253

2,011

3,570

4,581

PIK interest income

3,614

2,244

10,384

6,393

Dividend income

9,686

8,107

31,278

24,061

Non-cash dividend income

918

1,576

3,533

5,716

Other income

812

1,299

3,759

2,479

Total investment income

68,474

65,521

202,743

205,572

Expenses

Incentive fee

7,661

7,135

22,207

21,857

Management fee

13,740

12,877

40,885

39,869

Interest and other financing expenses

17,693

18,077

54,949

59,500

Administrative expenses

1,082

1,024

3,240

3,303

Professional fees

923

731

2,413

2,605

Other general and administrative expenses

490

442

1,398

1,383

Total expenses

41,589

40,286

125,092

128,517

Less: management fees waived

(3,752)

(3,341)

(11,193)

(10,067)

Less: expenses waived and reimbursed

–

(589)

–

(924)

Net expenses

37,837

36,356

113,899

117,526

Net investment income before income taxes

30,637

29,165

88,844

88,046

Income tax (benefit) expense

(8)

123

15

116

Net investment income

30,645

29,042

88,829

87,930

Net realized gains (losses):

Non-controlled/non-affiliated investments

2,459

30

2,797

(4,431)

Non-controlled/affiliated investments

20,549

12

8,338

12

Controlled investments

–

5

1,557

12

New Mountain Net Lease Corporation

–

–

–

812

Net change in unrealized (depreciation) appreciation:

Non-controlled/non-affiliated investments

(19,951)

21,410

(22,601)

(67,407)

Non-controlled/affiliated investments

(20,469)

(1,111)

44,545

(14,718)

Controlled investments

9,684

39,943

30,600

(8,278)

New Mountain Net Lease Corporation

–

–

–

(812)

Foreign Currency

(13)

–

(13)

–

Benefit (provision) for taxes

1

257

(114)

778

Net realized and unrealized (losses) gains

(7,740)

60,546

65,109

(94,032)

Net increase (decrease) in net assets resulting from operations

22,905

89,588

153,938

(6,102)

Less: Net increase in net assets resulting from operations related to non-controlling interests in New Mountain Net Lease Corporation

(1,058)

(1,398)

(4,789)

(1,584)

Net increase (decrease) in net assets resulting from operations related to New Mountain Finance Corporation

$

21,847

$

88,190

$

149,149

$

(7,686)

Basic earnings (loss) per share

$

0.23

$

0.91

$

1.54

$

(0.08)

Weighted average shares of common stock outstanding-basic

96,906,988

96,827,342

96,854,474

96,827,342

Diluted earnings (loss) per share

$

0.22

$

0.82

$

1.42

$

(0.08)

Weighted average shares of common stock outstanding-diluted

110,164,573

110,084,927

110,112,059

110,084,927

Distributions declared and paid per share

$

0.30

$

0.30

$

0.90

$

0.94

ABOUT NEW MOUNTAIN FINANCE CORPORATION

New Mountain Finance Corporation is a closed-end, non-diversified and externally managed investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. The Company’s investment objective is to generate current income and capital appreciation through the sourcing and origination of debt securities at all levels of the capital structure, including first and second lien debt, notes, bonds and mezzanine securities. The Company’s first lien debt may include traditional first lien senior secured loans or unitranche loans. Unitranche loans combine characteristics of traditional first lien senior secured loans as well as second lien and subordinated loans. Unitranche loans will expose the Company to the risks associated with second lien and subordinated loans to the extent it invests in the “last out” tranche. In some cases, the investments may also include small equity interests. The Company’s investment activities are managed by its Investment Adviser, New Mountain Finance Advisers BDC, L.L.C., which is an investment adviser registered under the Investment Advisers Act of 1940, as amended. More information about New Mountain Finance Corporation can be found on the Company’s website at http://www.newmountainfinance.com.

ABOUT NEW MOUNTAIN CAPITAL

New Mountain Capital is a New York-based investment firm that emphasizes business building and growth, rather than debt, as it pursues long-term capital appreciation. The firm currently manages private equity, credit and net lease investment strategies with over $35 billion in assets under management. New Mountain seeks out what it believes to be the highest quality growth leaders in carefully selected industry sectors and then works intensively with management to build the value of these companies. For more information on New Mountain Capital, please visit http://www.newmountaincapital.com.

FORWARD-LOOKING STATEMENTS

Statements included herein may contain “forward-looking statements”, which relate to our future operations, future performance or our financial condition. Forward-looking statements are not guarantees of future performance, condition or results and involve a number of risks and uncertainties, including the impact of COVID-19 and related changes in base interest rates and significant volatility on our business, portfolio companies, our industry and the global economy. Actual results and outcomes may differ materially from those anticipated in the forward-looking statements as a result of a variety of factors, including those described from time to time in our filings with the Securities and Exchange Commission or factors that are beyond our control. New Mountain Finance Corporation undertakes no obligation to publicly update or revise any forward-looking statements made herein, except as may be required by law. All forward-looking statements speak only as of the time of this press release.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211103006296/en/

Contacts

New Mountain Finance Corporation
Investor Relations
Shiraz Y. Kajee, Authorized Representative
NMFCIR@newmountaincapital.com
(212) 220-3505

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Top 10 Financial Stocks To Invest In

In this article, we discuss the top 10 financial stocks to invest in. If you want to skip our detailed analysis of these stocks, go directly to the Top 5 Financial Stocks To Invest In.

One of the main drivers of the global economy, the financial sector, consisting of banks, investment firms, insurance companies, and fintech corporations, has seen massive changes in the past few years and is already evaluating the economic changes brought about by COVID-19 and their impact on the post-pandemic world. According to the Financial Services Global Market Report 2021, the financial services market is likely to reach $22.5 trillion, growing at a compound annual growth rate (CAGR) of 9.9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from the previous year, and further expected to reach $28.5 trillion by 2025. With global Gross Domestic Product (GDP) expected to reach $93 trillion in 2021, financial services comprise about 24{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of the world’s economy.

As such, a number of investors have decided to benefit from exposure to the economic recovery. With over $32 billion having been poured into the broad financial stocks by investors looking to make a hefty profit, opinions around investing in banking and finance are becoming more optimistic, with some investors looking for short-term gains, while others are choosing to stay for the long run.

Some of the best financial stocks on the market to watch out for in this regard include Visa Inc. (NYSE:V), Mastercard Incorporated (NYSE:MA), PayPal Holdings, Inc. (NASDAQ:PYPL), and JPMorgan Chase & Co. (NYSE:JPM), among others discussed in detail below.

Top 10 Financial Stocks To Invest In

Top 10 Financial Stocks To Invest In

Pixabay/Public Domain

Our Methodology

Let us now analyze our list of the top 10 financial stocks to invest in. For our list, we made use of hedge fund sentiment, positive analysts’ ratings, and fundamentals while choosing these stocks, ranking them according to the number of hedge funds that held stakes in the companies as of the end of the second quarter.

Why should we pay attention to hedge fund sentiment while choosing stocks? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, vs. 100.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} for the S&P 500 ETF (SPY). Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.

Top 10 Financial Stocks To Invest In

10. Global Payments Inc. (NYSE:GPN)

Number of Hedge Fund Holders: 66

Global Payments Inc. (NYSE:GPN) operates as a markets payments technology and software solutions company based in Atlanta, Georgia.

Of the 873 elite funds being tracked by Insider Monkey, 66 reported holding stakes in Global Payments Inc. (NYSE:GPN) at the end of the second quarter of 2021, up from 62 funds in the preceding quarter. Alexander Becker of Codex Capital is the leading stakeholder in the company, with 24,900 shares worth more than $4.66 billion.

On September 9, BMO Capital analyst James Fotheringham raised his price target on Global Payments Inc. (NYSE:GPN) to $217 from $206, and kept an Outperform rating on the shares of the company.

In its Q2 2021 investor letter, Carillon Tower Advisers mentioned Global Payments Inc. (NYSE:GPN). Here is what the fund said:

“Global Payments is a payments technology company delivering innovative payments and software solutions that allow customers to operate their businesses more efficiently. Investors have been disappointed at the pace of the revenue acceleration given the uneven nature of the reopening globally. The U.S. is doing well with issues, but Europe and Asia remain in various stages of reopening and lockdowns and thus, spending has been curtailed. However, we believe that the U.S. is leading the way and as vaccines are rolled out worldwide, Global Payments stands to benefit in the second half of this year and into 2022.”

9. Morgan Stanley (NYSE:MS)

Number of Hedge Fund Holders: 69

Morgan Stanley (NYSE:MS) is a multinational investment banking and financial services company based in New York. The company provides its financial products and services to a range of customers across the globe.

By the end of the second quarter of 2021, 69 hedge funds out of the 873 tracked by Insider Monkey held stakes in Morgan Stanley (NYSE:MS) worth roughly $5.34 billion.

Out of the hedge fund’s being tracked by Insider Monkey, Boykin Curry’s Eagle Capital Management was the biggest stakeholder in Morgan Stanley (NYSE:MS) at the end of the second quarter, with over 15.4 million shares worth more than $1.42 billion.

On October 18, Citi analyst Keith Horowitz raised the price target on Morgan Stanley (NYSE:MS) to $105 from $100, and kept a Neutral rating on its shares, following what he deemed another “strong” quarter for the company.

ClearBridge Investments, an investment management firm, mentioned Morgan Stanley (NYSE:MS) in its Q2 2021 investor letter. Here is what the fund said:

“The Strategy also benefited from strong showings from financials holdings such as recent addition Morgan Stanley, a leading bank holding company offering a variety of financial services worldwide, and one of the largest broker-dealers, investment banks and wealth managers in the U.S. Morgan Stanley has been a leader in helping direct capital to address global sustainability challenges. Its sustainability efforts include capital markets actions such as issuing green bonds and it was early in its support for sustainability in investing and its concern for the environment. Morgan Stanley reported a great quarter with record revenues and strength across the businesses as it works to integrate and find synergies with recent acquisition E*TRADE. Following stress tests for banks, Morgan Stanley increased its dividend and share repurchase plan more than expected.”

8. The Charles Schwab Corporation (NYSE:SCHW)

Number of Hedge Fund Holders: 72

The Charles Schwab Corporation (NYSE:SCHW) is a multinational financial services company that offers commercial banking, asset management and wealth management services. Shares of the company have doubled over the past 12 months.

By the end of the second quarter of 2021, 72 hedge funds out of the 873 tracked by Insider Monkey held stakes in The Charles Schwab Corporation (NYSE:SCHW) worth roughly $4.85 billion.

On October 26, Morgan Stanley analyst Michael Cyprys raised the price target on The Charles Schwab Corporation (NYSE:SCHW) to $115 from $97, and kept an Overweight rating on the shares of the company.

Robert Koehn of Ivy Lane Capital is the biggest stakeholder in The Charles Schwab Corporation (NYSE:SCHW), with 164,000 shares worth more than $11.9 billion.

Lakehouse Capital, an investment management firm, releases its Q2 2021 investor letter and mentioned The Charles Schwab Corporation (NYSE:SCHW) in it. Here is what the firm has to say:

“Charles Schwab is not a household name in Australia but it is in the US where it is the largest discount broker with more than 32 million brokerage accounts, 2 million corporate retirement plans, and total client assets of US$7.4 trillion. Schwab’s shares performed extremely well during the year thanks to a confluence of factors including a strong stock market with the S&P 500 up 39{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} year-on-year, the company’s recent merger with industry heavyweight TD Ameritrade, and expectations that interest rate income would grow as the US economy gained steam.

Two other important contributors to Schwab’s year, which were a mix of cyclical and structural, were an increase in net new accounts and increased trading activity. We view these as cyclical in the sense that markets are performing very well and that retail investors have been bored and emboldened during the American lockdowns, however, also structural because Schwab’s shift to $0 commissions on equity trades has permanently reduced a barrier to trading for investors with smaller accounts. We also note that, while brokerage activity is cyclical, the average brokerage account itself is very sticky — we estimate normalised annual retention rates for accounts of better than 93{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} — and that the average client assets per account grow over time thanks to asset growth and clients collectively being net savers.

Schwab makes for an excellent natural hedge for the Fund as Schwab tends to perform well when interest rates increase, which is generally negative for the rest of the portfolio. And the position did its job for us by increasing during a rising interest rate environment, enabling us to harvest much of our gains from Schwab and redeploy them to shares of other growth companies that had gotten cheaper in response to higher rates. We’re mindful of the run in the shares and the cyclical nature of the business but comfortable keeping a small position for now given Schwab’s natural hedging dynamics, extremely loyal customers, and an industry-leading position in a growing market.”

7. Citigroup, Inc. (NYSE:C)

Number of Hedge Fund Holders: 87

Citigroup, Inc. (NYSE:C) is a New York-based multinational investment banking and financial services corporation that operates in the diversified banks and financial services industry.

On October 15, BMO Capital analyst James Fotheringham raised his price target on Citigroup, Inc. (NYSE:C) to $86 from $84, and kept an Outperform rating on the shares of the company.

Irving Kahn of Kahn Brothers is one of the biggest stakeholders of Citigroup, Inc. (NYSE:C) as of the end of the second quarter, according to the data tracked by Insider Monkey. Overall, 87 funds were bullish on the company by the end of the June quarter, compared to 90 in the previous quarter.

Besides Visa Inc. (NYSE: V), Mastercard Incorporated (NYSE: MA), PayPal Holdings, Inc. (NASDAQ: PYPL), and JPMorgan Chase & Co. (NYSE: JPM), Citigroup, Inc. (NYSE:C) is a decent stock to invest in.

6. Bank of America Corporation (NYSE:BAC)

Number of Hedge Fund Holders: 87

Bank of America Corporation (NYSE:BAC) is a multinational bank and financial services holding company based in North Carolina. The company’s shares climbed 2.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} following the release of its Q3 earnings report.

At the end of the second quarter of 2021, 87 hedge funds in the database of Insider Monkey held stakes worth $46 billion in Bank of America Corporation (NYSE: BAC).

On October 25, Wells Fargo analyst Mike Mayo raised the price target on Bank of America Corporation (NYSE:BAC) to $60 from $55, and maintained an Overweight rating on the company’s shares.

Oakmark Funds, in its Bill Nygren third-quarter 2021 market commentary, mentioned Bank of America Corporation (NYSE:BAC). Here is what the fund had to say:

“Earlier this year, one of our holdings, Bank of America, announced that it was raising its minimum hourly wage from $15 to $20 and would increase it to $25 by 2025. The company received great press for placing the well-being of its employees above profits. But was it really either/or? Bank of America’s chief human resources officer spoke to the bigger picture: “A core tenet of responsible growth is our commitment to being a great place to work…that includes providing strong pay and competitive benefits to help them and their families, so that we continue to attract and retain the best talent.” Bank of America understood that engaged, high-caliber employees are more productive, less prone to turnover and, therefore, less expensive in the long run. Increasing the pay for employees wasn’t elevating employees above shareholders; it was the right thing to do for employees and for shareholders.

If an increase to $20 was good, why stop there? Why not $50 per hour? Because the benefits the business receives at $50 don’t justify the expense. The bank would no longer be able to price its products competitively and would lose business. The employees would “win” in the short term, but eventually the lost business would lead to job cuts, meaning both employees and shareholders would lose. The negative effects of stakeholder overreach are no different than when CEOs overreach to inflate short-term profits. Both hurt shareholders and stakeholders.”

Click to continue reading and see the Top 5 Financial Stocks To Invest In.

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Disclosure. None. Top 10 Financial Stocks To Invest In is originally published on Insider Monkey.

Posted on

Financial Analysts – Form 8-K

Financial Analysts – Form 8-K
Financial Analysts –
Robin J. Davenport, Vice President, Corporate Finance 216-896-2265
rjdavenport@parker.com
Stock Symbol: PH – NYSE

Parker Reports Fiscal 2022 First Quarter Results

– First quarter records for sales, segment operating margins, net income and EPS

– Sales increased 17{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to $3.76 billion, organic sales increased 16{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

– Segment operating margin was 19.7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} as reported, or 22.0{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} adjusted

– Net income was $451.2 million; EPS was $3.45 as reported, or $4.26 adjusted

– EBITDA margin was 20.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} as reported, or 22.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} adjusted

– Company increases fiscal 2022 EPS guidance

CLEVELAND, November 4, 2021 — Parker Hannifin Corporation (NYSE: PH), the global leader in motion and control technologies, today reported results for the fiscal 2022 first quarter ended September 30, 2021. Fiscal 2022 first quarter sales were a first quarter record at $3.76 billion, an increase of 17{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} compared with $3.23 billion in the first quarter of fiscal 2021. Net income was also a first quarter record at $451.2 million, an increase of 41{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} compared with $319.8 million in the prior year quarter. Fiscal 2022 first quarter earnings per share were also a first quarter record at $3.45, an increase of 41{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} compared with $2.45 in the first quarter of fiscal 2021. Adjusted earnings per share increased 40{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to $4.26 compared with adjusted earnings per share of $3.05 in the prior year quarter. Fiscal year-to-date cash flow from operations was $424.4 million, or 11.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of sales, compared with $737.4 million in the prior year period. A reconciliation of non-GAAP measures is included in the financial tables of this press release, Home Decoration.

“We delivered impressive results in the quarter,” said Chairman and Chief Executive Officer, Tom Williams. “Our performance demonstrated operational discipline and agility in a challenging manufacturing environment that coupled increased demand with labor and supply chain constraints. We achieved first quarter records for sales, segment operating margins, net income and earnings per share. Adjusted total segment operating margin and adjusted EBITDA margin both increased 210 basis points as a result of The Win Strategy™ 3.0, portfolio enhancements and the excellent efforts from our global team.”

Segment Results

Diversified Industrial Segment: North American first quarter sales increased 17{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to $1.79 billion and operating income was $333.7 million compared with $268.8 million in the same period a year ago. International first quarter sales increased 22{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to $1.38 billion and operating income was $291.2 million compared with $186.9 million in the same period a year ago.

Aerospace Systems Segment: First quarter sales increased 3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to $592.7 million and operating income was $118.3 million compared with $86.8 million in the same period a year ago.

Parker reported the following orders for the quarter ending September 30, 2021, compared with the same quarter a year ago:

· Orders increased 26{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} for total Parker

· Orders increased 32{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in the Diversified Industrial North America businesses

· Orders increased 25{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in the Diversified Industrial International businesses

· Orders increased 16{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in the Aerospace Systems Segment on a rolling 12-month average basis

Offer to Acquire Meggitt PLC

As previously announced on August 2, 2021, the company has reached an agreement on the terms of a recommended cash acquisition of the entire issued and to be issued ordinary share capital of Meggitt PLC. The acquisition was approved by Meggitt shareholders on September 21, 2021. The transaction remains subject to satisfaction of the conditions set out in the scheme document, including regulatory clearances. Under the UK Companies Act, the Scheme of Arrangement further requires the sanction of the Court, currently expected during the third quarter of calendar year 2022. For copies of all announcements and further information, please visit the dedicated transaction microsite at www.aerospacegrowth.com.

Outlook

For the fiscal year ending June 30, 2022, the company has increased guidance for earnings per share to the range of $14.52 to $15.22, or $16.95 to $17.65 on an adjusted basis. Guidance assumes organic sales growth of approximately 7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to 10{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} compared with the prior year. Fiscal year 2022 guidance is adjusted on a pre-tax basis for acquisition-related expenses of $52 million and expected business realignment expenses of approximately $35 million, LORD costs to achieve of approximately $7 million and acquisition-related intangible asset amortization of approximately $320 million. A reconciliation of forecasted earnings per share to adjusted forecasted earnings per share is included in the financial tables of this press release.

Williams added, “Robust demand trends continue across nearly all of our end markets reinforcing our positive outlook for sales and earnings per share for this fiscal year. The transformation of our portfolio and the Win Strategy 3.0 continue to position us to deliver sustainable long-term growth and top quartile performance.”

NOTICE OF CONFERENCE CALL:Parker Hannifin’s conference call and slide presentation to discuss its fiscal 2022 first quarter results are available to all interested parties via live webcast today at 11:00 a.m. ET, at www.phstock.com. A replay of the webcast will be available on the site approximately one hour after the completion of the call and will remain available for one year. To register for e-mail notification of future events please visit www.phstock.com.

About Parker Hannifin

Parker Hannifin is a Fortune 250 global leader in motion and control technologies. For more than a century the company has been enabling engineering breakthroughs that lead to a better tomorrow. Parker has increased its annual dividend per share paid to shareholders for 65 consecutive fiscal years, among the top five longest-running dividend-increase records in the S&P 500 index. Learn more at www.parker.com or @parkerhannifin.

Note on Orders

Orders provide near-term perspective on the company’s outlook, particularly when viewed in the context of prior and future quarterly order rates. However, orders are not in themselves an indication of future performance. All comparisons are at constant currency exchange rates, with the prior year restated to the current-year rates. All exclude acquisitions until they can be reflected in both the numerator and denominator. Aerospace comparisons are rolling 12-month average computations. The total Parker orders number is derived from a weighted average of the year-over-year quarterly {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} change in orders for Diversified Industrial North America and Diversified Industrial International, and the year-over-year 12-month rolling average of orders for the Aerospace Systems Segment.

Note on Net Income

Net income referenced in this press release is equal to net income attributable to common shareholders.

Note on Non-GAAP Financial Measures

This press release contains references to non-GAAP financial information including (a) adjusted earnings per share; (b) adjusted total segment operating margin; (c) EBITDA margin; and (d) adjusted EBITDA margin. The adjusted earnings per share and total segment operating margin measures are presented to allow investors and the company to meaningfully evaluate changes in earnings per share and total segment operating margin on a comparable basis from period to period. This press release also contains references to EBITDA, EBITDA margin and adjusted EBITDA margin. EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Although EBITDA, EBITDA margin and adjusted EBITDA margin are not measures of performance calculated in accordance with GAAP,

we believe that they are useful to an investor in evaluating the results of this quarter versus the prior period. A reconciliation of non-GAAP measures is included in the financial tables of this press release.

Forward-Looking Statements

Forward-looking statements contained in this and other written and oral reports are made based on known events and circumstances at the time of release, and as such, are subject in the future to unforeseen uncertainties and risks. Often but not always, these statements may be identified from the use of forward-looking terminology such as “anticipates,” “believes,” “may,” “should,” “could,” “potential,” “continues,” “plans,” “forecasts,” “estimates,” “projects,” “predicts,” “would,” “intends,” “expects,” “targets,” “is likely,” “will,” or the negative of these terms and similar expressions, and include all statements regarding future performance, earnings projections, events or developments. Neither Parker nor any of its respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this press release will actually occur. Parker cautions readers not to place undue reliance on these statements. It is possible that the future performance and earnings projections of the company, including its individual segments, may differ materially from past performance or current expectations, depending on economic conditions within its mobile, industrial and aerospace markets, and the company’s ability to maintain and achieve anticipated benefits associated with announced realignment activities, strategic initiatives to improve operating margins, actions taken to combat the effects of the current economic environment, and growth, innovation and global diversification initiatives. Additionally, the actual impact of changes in tax laws in the United States and foreign jurisdictions and any judicial or regulatory interpretation thereof on future performance and earnings projections may impact the company’s tax calculations. A change in the economic conditions in individual markets may have a particularly volatile effect on segment performance.

The risks and uncertainties in connection with such forward-looking statements related to the proposed acquisition of Meggitt include, but are not limited to, the occurrence of any event, change or other circumstances that could delay the closing of the proposed acquisition; the possibility of non-consummation of the proposed Acquisition; the failure to satisfy any of the conditions to the proposed acquisition (including the satisfaction of the conditions detailed in the Rule 2.7 announcement); the possibility that a governmental entity may prohibit the consummation of the proposed acquisition or may delay or refuse to grant a necessary regulatory approval in connection with the proposed acquisition, or that in order for the parties to obtain any such regulatory approvals, conditions are imposed that adversely affect the anticipated benefits from the proposed acquisition or cause the parties to abandon the proposed acquisition; adverse effects on Parker’s common stock because of the failure to complete the proposed acquisition; Parker’s business experiencing disruptions due to acquisition-related uncertainty or other factors making it more difficult to maintain relationships with employees, business partners or governmental entities; the possibility that the expected synergies and value creation from the proposed acquisition will not be realized or will not be realized within the expected time period; the parties being unable to successfully implement integration strategies; and significant transaction costs related to the proposed acquisition. Readers should consider these forward-looking statements in light of risk factors discussed in Parker’s Annual Report on Form 10-K for the fiscal year ended June 30, 2021 and other periodic filings made with the SEC.

Among other factors which may affect future performance are: the impact of the global outbreak of COVID-19 and governmental and other actions taken in response; changes in business relationships with and purchases by or from major customers, suppliers or distributors, including delays or cancellations in shipments; disputes regarding contract terms or significant changes in financial condition, changes in contract cost and revenue estimates for new development programs and changes in product mix; ability to identify acceptable strategic acquisition targets; uncertainties surrounding timing, successful completion or integration of acquisitions and similar transactions, including the integration of LORD Corporation or Exotic Metals; the ability to successfully divest businesses planned for divestiture and realize the anticipated benefits of such divestitures; the determination to undertake business realignment activities and the expected costs thereof and, if undertaken, the ability to complete such activities and realize the anticipated cost savings from such activities; ability to implement successfully capital allocation initiatives, including timing, price and execution of share

repurchases; availability, limitations or cost increases of raw materials, component products and/or commodities that cannot be recovered in product pricing; ability to manage costs related to insurance and employee retirement and health care benefits; legal and regulatory developments and changes; compliance costs associated with environmental laws and regulations; potential supply chain and labor disruptions, including as a result of labor shortages; threats associated with and efforts to combat terrorism and cyber-security risks; uncertainties surrounding the ultimate resolution of outstanding legal proceedings, including the outcome of any appeals; global competitive market conditions, including global reactions to U.S. trade policies, and resulting effects on sales and pricing; and global economic factors, including manufacturing activity, air travel trends, currency exchange rates, difficulties entering new markets and general economic conditions such as inflation, deflation, interest rates and credit availability; local and global political and economic conditions; inability to obtain, or meet conditions imposed for, required governmental and regulatory approvals; changes in consumer habits and preferences; foreign exchange rate fluctuations and interest rate fluctuations (including those from any potential credit rating decline); government actions and natural phenomena such as floods, earthquakes, hurricanes and pandemics; and success of business and operating initiatives.

###

PARKER HANNIFIN CORPORATION – SEPTEMBER 30, 2021
CONSOLIDATED STATEMENT OF INCOME
(Unaudited) Three Months Ended September 30,
(Dollars in thousands, except per share amounts) 2021 2020*
Net sales $ 3,762,809 $ 3,230,540
Cost of sales 2,713,897 2,386,449
Selling, general and administrative expenses 407,765 369,851
Interest expense 59,350 65,958
Other expense (income), net 10,052 (4,892)
Income before income taxes 571,745 413,174
Income taxes 120,282 93,063
Net income 451,463 320,111
Less: Noncontrolling interests 306 308
Net income attributable to common shareholders $ 451,157 $ 319,803
Earnings per share attributable to common shareholders:
Basic earnings per share $ 3.50 $ 2.48
Diluted earnings per share $ 3.45 $ 2.45
Average shares outstanding during period – Basic 128,726,721 128,707,745
Average shares outstanding during period – Diluted 130,827,971 130,294,223
CASH DIVIDENDS PER COMMON SHARE
(Unaudited) Three Months Ended September 30,
(Amounts in dollars) 2021 2020
Cash dividends per common share $ 1.03 $ 0.88
RECONCILIATION OF EARNINGS PER DILUTED SHARE TO ADJUSTED EARNINGS PER DILUTED SHARE
(Unaudited) Three Months Ended September 30,
(Amounts in dollars) 2021 2020*
Earnings per diluted share $ 3.45 $ 2.45
Adjustments:
Acquired intangible asset amortization expense 0.61 0.63
Business realignment charges 0.02 0.12
Integration costs to achieve 0.01 0.03
Acquisition-related expenses 0.40 –
Tax effect of adjustments1 (0.23) (0.18)
Adjusted earnings per diluted share $ 4.26 $ 3.05
*Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company’s fiscal 2021 Annual Report on Form 10-K.
1This line item reflects the aggregate tax effect of all non-tax adjustments reflected in the preceding line items of the table. We estimate the tax effect of each adjustment item by applying our overall effective tax rate for continuing operations to the pre-tax amount, unless the nature of the item and/or the tax jurisdiction in which the item has been recorded requires application of a specific tax rate or tax treatment, in which case the tax effect of such item is estimated by applying such specific tax rate or tax treatment.
PARKER HANNIFIN CORPORATION – SEPTEMBER 30, 2021
RECONCILIATION OF EBITDA TO ADJUSTED EBITDA
(Unaudited) Three Months Ended September 30,
(Dollars in thousands) 2021 2020*
Net sales $ 3,762,809 $ 3,230,540
Net income $ 451,463 $ 320,111
Income taxes 120,282 93,063
Depreciation and amortization 145,522 148,442
Interest expense 59,350 65,958
EBITDA 776,617 627,574
Adjustments:
Business realignment charges 3,014 15,701
Integration costs to achieve 1,202 3,947
Acquisition-related expenses 52,199 –
Adjusted EBITDA $ 833,032 $ 647,222
EBITDA margin 20.6 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} 19.4 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
Adjusted EBITDA margin 22.1 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} 20.0 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
*Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company’s fiscal 2021 Annual Report on Form 10-K.
PARKER HANNIFIN CORPORATION – SEPTEMBER 30, 2021
BUSINESS SEGMENT INFORMATION
(Unaudited) Three Months Ended September 30,
(Dollars in thousands) 2021 2020*
Net sales
Diversified Industrial:
North America $ 1,793,715 $ 1,528,111
International 1,376,436 1,129,251
Aerospace Systems 592,658 573,178
Total net sales $ 3,762,809 $ 3,230,540
Segment operating income
Diversified Industrial:
North America $ 333,702 $ 268,833
International 291,176 186,901
Aerospace Systems 118,251 86,766
Total segment operating income 743,129 542,500
Corporate general and administrative expenses 49,072 36,735
Income before interest expense and other expense 694,057 505,765
Interest expense 59,350 65,958
Other expense 62,962 26,633
Income before income taxes $ 571,745 $ 413,174
*Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company’s fiscal 2021 Annual Report on Form 10-K.
RECONCILIATION OF TOTAL SEGMENT OPERATING MARGIN TO ADJUSTED TOTAL SEGMENT OPERATING MARGIN
(Unaudited) Three Months Ended Three Months Ended
(Dollars in thousands) September 30, 2021 September 30, 2020
Operating income Operating margin Operating income Operating margin
Total segment operating income $ 743,129 19.7 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} $ 542,500 16.8 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
Adjustments:
Acquired intangible asset amortization expense 79,771 81,703
Business realignment charges 3,014 14,523
Integration costs to achieve 1,202 3,947
Adjusted total segment operating income $ 827,116 22.0 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} $ 642,673 19.9 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
PARKER HANNIFIN CORPORATION – SEPTEMBER 30, 2021
CONSOLIDATED BALANCE SHEET
(Unaudited) September 30, June 30, September 30,
(Dollars in thousands) 2021 2021 2020*
Assets
Current assets:
Cash and cash equivalents $ 478,582 $ 733,117 $ 742,394
Marketable securities and other investments 40,160 39,116 33,463
Trade accounts receivable, net 2,109,648 2,183,594 1,860,324
Non-trade and notes receivable 315,571 326,315 273,991
Inventories 2,264,725 2,090,642 1,943,222
Prepaid expenses and other 422,588 243,966 163,533
Total current assets 5,631,274 5,616,750 5,016,927
Property, plant and equipment, net 2,223,534 2,266,476 2,292,880
Deferred income taxes 145,972 104,251 129,751
Investments and other assets 800,211 774,239 778,591
Intangible assets, net 3,426,540 3,519,797 3,743,314
Goodwill 8,009,340 8,059,687 7,971,897
Total assets $ 20,236,871 $ 20,341,200 $ 19,933,360
Liabilities and equity
Current liabilities:
Notes payable and long-term debt payable within one year $ 302,309 $ 2,824 $ 884,450
Accounts payable, trade 1,636,272 1,667,878 1,264,991
Accrued payrolls and other compensation 341,355 507,027 332,110
Accrued domestic and foreign taxes 279,173 236,384 196,429
Other accrued liabilities 724,134 682,390 650,243
Total current liabilities 3,283,243 3,096,503 3,328,223
Long-term debt 6,263,941 6,582,053 7,057,723
Pensions and other postretirement benefits 997,392 1,055,638 1,864,506
Deferred income taxes 568,369 553,981 449,699
Other liabilities 618,081 639,355 577,325
Shareholders’ equity 8,490,781 8,398,307 6,640,599
Noncontrolling interests 15,064 15,363 15,285
Total liabilities and equity $ 20,236,871 $ 20,341,200 $ 19,933,360
*Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company’s fiscal 2021 Annual Report on Form 10-K.
PARKER HANNIFIN CORPORATION – SEPTEMBER 30, 2021
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited) Three Months Ended September 30,
(Dollars in thousands) 2021 2020*
Cash flows from operating activities:
Net income $ 451,463 $ 320,111
Depreciation and amortization 145,522 148,442
Share incentive plan compensation 57,666 58,461
Gain on disposal of property, plant and equipment (30) (498)
Loss (gain) on marketable securities 804 (340)
Gain on investments (200) (970)
Net change in receivables, inventories and trade payables (137,074) 196,471
Net change in other assets and liabilities (87,118) 4,207
Other, net (6,674) 11,490
Net cash provided by operating activities 424,359 737,374
Cash flows from investing activities:
Capital expenditures (48,203) (42,117)
Proceeds from sale of property, plant and equipment 7,751 6,590
Purchases of marketable securities and other investments (7,456) (10,726)
Maturities and sales of marketable securities and other investments 5,312 49,107
Other 649 1,054
Net cash (used in) provided by investing activities (41,947) 3,908
Cash flows from financing activities:
Net payments for common stock activity (244,731) (21,750)
Net payments for debt (595) (557,442)
Financing fees paid (42,703) –
Dividends paid (132,921) (113,542)
Net cash (used in) financing activities (420,950) (692,734)
Effect of exchange rate changes on cash (997) 8,332
Net (decrease) increase in cash, cash equivalents and restricted cash (39,535) 56,880
Cash, cash equivalents and restricted cash at beginning of year 733,117 685,514
Cash, cash equivalents and restricted cash at end of period $ 693,582 $ 742,394
*Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company’s fiscal 2021 Annual Report on Form 10-K.
PARKER HANNIFIN CORPORATION – SEPTEMBER 30, 2021
RECONCILIATION OF FORECASTED EARNINGS PER DILUTED SHARE TO ADJUSTED FORECASTED EARNINGS PER DILUTED SHARE
(Unaudited)
(Amounts in dollars) Fiscal Year 2022
Forecasted earnings per diluted share $14.52 to $15.22
Adjustments:
Business realignment charges 0.27
Costs to achieve 0.05
Acquisition-related intangible asset amortization expense 2.44
Acquisition-related expenses 0.40
Tax effect of adjustments1 (0.73)
Adjusted forecasted earnings per diluted share $16.95 to $17.65
1This line item reflects the aggregate tax effect of all non-tax adjustments reflected in the preceding line items of the table. We estimate the tax effect of each adjustment item by applying our overall effective tax rate for continuing operations to the pre-tax amount, unless the nature of the item and/or the tax jurisdiction in which the item has been recorded requires application of a specific tax rate or tax treatment, in which case the tax effect of such item is estimated by applying such specific tax rate or tax treatment.

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Parker Hannifin Corporation published this content on 04 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 November 2021 12:34:05 UTC.

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Analyst Recommendations on PARKER-HANNIFIN CORPORATION

Sales 2022 15 492 M
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–
Net income 2022 1 946 M
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–
Net Debt 2022 3 995 M
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–
P/E ratio 2022 20,5x
Yield 2022 1,37{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
Capitalization 39 257 M
39 257 M
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EV / Sales 2022 2,79x
EV / Sales 2023 2,51x
Nbr of Employees 54 640
Free-Float 70,9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

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Parker-Hannifin Corporation Technical Analysis Chart | MarketScreener

Technical analysis trends PARKER-HANNIFIN CORPORATION

Short Term Mid-Term Long Term
Trends Bullish Neutral Neutral

Income Statement Evolution

Sell

Buy
Mean consensus OUTPERFORM
Number of Analysts 17
Last Close Price
304,08 $
Average target price
347,07 $
Spread / Average Target 14,1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

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Yahoo Pulls Out of China, Citing ‘Challenging’ Environment | Business News

By ZEN SOO, Related Press

HONG KONG (AP) — Yahoo Inc. mentioned Tuesday it has pulled out of China, citing an ever more challenging operating setting.

The withdrawal was largely symbolic, as several of the company’s solutions have been currently blocked by China’s digital censorship. But modern federal government moves to broaden its command around tech providers typically, together with its domestic giants, may have tipped the scales for Yahoo.

“In recognition of the progressively tough small business and legal ecosystem in China, Yahoo’s suite of companies will no more time be accessible from mainland China as of November 1,” the firm explained in a assertion. It stated it “remains fully commited to the legal rights of our people and a totally free and open world-wide-web.”

The company’s go arrives as the American and Chinese governments feud over technologies and trade. The U.S. has place limits on telecom giant Huawei and other Chinese tech firms, alleging that they have ties with China’s federal government, armed service or each. China states the U.S. is unfairly suppressing level of competition and making an attempt to block China’s technological increase.

Political Cartoons

Yahoo is the latest international tech organization to exit China. Google gave up quite a few many years ago, and Microsoft’s qualified networking system LinkedIn reported final month it would shutter its Chinese site, replacing it with a work board rather. The departures illustrate the choices world-wide-web firms face in a enormous potential market, but 1 where the authorities needs them to censor material and keywords and phrases considered politically delicate or inappropriate.

In their area, Chinese businesses have stuffed the void, producing an substitute web with its possess digital giants. The Baidu lookup engine has largely changed Yahoo and Google in China, and WeChat and Weibo are the top social media platforms.

Yahoo’s departure coincided with the implementation of China’s Particular Data Defense Law, which limitations what information and facts companies can get and sets expectations for how it should be stored.

Chinese guidelines also stipulate that organizations operating in the place have to hand in excess of data if asked for by authorities, generating it tough for Western companies to function in China as they might also deal with force back household over offering in to China’s needs.

Yahoo was harshly criticized by lawmakers in the U.S. in 2007 following it handed about details on two Chinese dissidents to Beijing, finally primary to their imprisonment.

Yahoo had previously downsized its functions in China, dropping a tunes and email provider in the early 2010s and shuttering its Beijing office environment in 2015. Any person who attempted to accessibility Engadget China, a tech information internet site that it had continued to operate, was greeted Tuesday with a popup expressing the web site would no longer publish content.

China has also blocked most intercontinental social media internet sites and lookup engines, these types of as Fb and Google. Some people in China circumvent the block by utilizing a digital personal network (VPN) that masks who you are and exactly where you are logging in from.

Verizon Communications Inc. obtained Yahoo in 2017 and merged it with AOL, but later sold the entity off to personal equity firm Apollo World Administration in a $5 billion offer. Apollo announced in September that its acquisition of Yahoo was finish.

Copyright 2021 The Related Push. All rights reserved. This substance may not be released, broadcast, rewritten or redistributed.

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Zoe Financial Announces Its Partnership With Wealth Management Firm Mercer Advisors

Zoe Economic

Zoe Financial

Zoe Economic

Zoe Economic

NEW YORK, Nov. 03, 2021 (World NEWSWIRE) — Zoe Economic, a New York-centered economical information platform that connects shoppers with a curated independent advisor community, introduced currently a partnership with a renowned countrywide registered expenditure adviser, Mercer Advisors. Zoe’s extensive vetting procedure assures that Registered Investment Advisors (RIAs) admitted in their Qualified Network are between the best 5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in the region.

These looking for a fiduciary advisor specialized in in depth wealth administration and money organizing will now be in a position to match with Mercer Advisors through the Zoe Network. Mercer Advisors, dependent in Denver, was started in 1985 with the purpose to make clients’ life greater through fiduciary economic setting up relationships. Mercer Advisors aims to help their clientele through every single of life’s phases, from making wealth to enjoying retirement, and even creating methods to proceed one’s legacy.

With in excess of 55 places, 160+ advisors, and $33.5 billion in AUM, Mercer Advisors was awarded the Finest Non-public Wealth Supervisor for companies with in excess of $5 billion dollars in assets under management in 2019 by the distinguished Private Asset Management (PAM) Award.* “Partnering with Zoe makes sense for the reason that we each believe in personalization and transparency as the foundational things of a profitable monetary setting up connection,” explained Gary Foodim, Main Advertising and marketing Officer at Mercer Advisors.

Andres Garcia-Amaya, CEO of Zoe Economic also expressed exhilaration about Mercer Advisors becoming a member of the Zoe Network: “We are self-assured that Mercer Advisors is a excellent addition to our Community and will bring worth to our customers by giving them a believe in-based service customized to each and every individual’s distinctive economical lifestyle and plans.”

Learn more about Zoe Fiscal at www.zoefin.com

*2019 Personal Asset Administration (PAM), Mercer Advisors was awarded the Most effective Non-public Wealth Supervisor for firms with more than $5 billion dollars in property under management. Mercer Advisors was chosen as the winner from amongst 8 shortlisted entrants. The PAM Awards, organized by Personal Asset Administration journal, are designed for financial investment pros and wealth advisors, running in just the private asset administration market and are held annually. Candidates are invited to post responses in numerous categories to exhibit developments to their small business model, economical progress in enterprise overall performance and assistance of choices. Variety is determined by development in clientele and workers, customer gratification, and item Innovation more than the program of the prior 12 months. Winners are identified by an impartial panel of sector professionals and the PAM editorial team. Awards need to not be construed by clientele or prospective clients as a ensure that they will practical experience a certain level of outcomes if Mercer Advisors is engaged, or carries on to be engaged, to deliver financial investment advisory solutions, nor must it be construed as a present-day or previous endorsement of Mercer Advisors by any of its purchasers.

About Zoe Fiscal

Zoe Monetary was established with 1 mission: to empower buyers to make far better monetary selections. The company’s algorithm removes the friction from selecting a fiscal advisor, featuring a know-how-pushed market that presents matches based on your exclusive monetary goals and connects you with Zoe Certified Money Advisors throughout the United States. Zoe’s thoughtfully curated network of the very best independent, fiduciary monetary advisors and money planners contains only the best 5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in the nation.

About Mercer Advisors

Set up in 1985, Mercer Global Advisors Inc. (“Mercer Advisors”) is a comprehensive-service prosperity management business that specializes in providing financial commitment advice, fiscal and estate scheduling, and taxes, and corporate trustee and have confidence in administration products and services. It is a person of the largest Registered Expenditure Advisers and financial preparing firms in the U.S. with ~$33.5 billion in client property. Headquartered in Denver, Mercer Advisors is privately held, has more than 600 workers, and operates nationally across the state with 60 spots. Mercer Advisors, Inc. is a father or mother enterprise of Mercer World Advisors Inc. (RIA), the greater part-owned by the two Oak Hill Cash and Genstar Money. Mercer International Advisors has a similar coverage agency. Mercer Advisors Insurance coverage Solutions, LLC (MAIS) is a wholly-owned subsidiary of Mercer Advisors Inc. Employees of Mercer International Advisors serve as officers of MAIS. For Mercer International Advisors consumers who want to invest in insurance goods, MAIS has entered into a non-exceptional referral settlement with Strategic Husband or wife(s). Extra information and facts about MAIS and our Strategic Companions may perhaps be discovered in our Form ADV 2A. Take a look at us at http://www.merceradvisors.com.

Mercer World-wide Advisors Inc. is registered with the Securities and Trade Commission and provides all financial investment-relevant providers. Mercer Advisors Inc. is the parent enterprise of Mercer International Advisors Inc. and is not involved with financial investment providers. Mercer Advisors is not a law business and does not deliver lawful information to customers. All estate setting up documentation preparation and other legal tips is supplied through its affiliation with Sophisticated Services Law Group, Inc.

Details as of Sept. 30, 2021. AUM consists of affiliates and wholly-owned subsidiaries announced to date.

Make contact with: push@zoefin.com

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This written content was issued via the press release distribution support at Newswire.com.

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Why Finance Firms Need to Turbocharge the Careers of Women & Women of Color, and How They Can Do That

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Bigger talent range in finance is unambiguously very good for business enterprise and for culture.
 


Photo courtesy of Kindel Media via Pexels

Studies display that greater range outcomes in much better effectiveness, and more youthful generations of major expertise look at DEI as obligatory in the workplace. But as the industry seeks significant enhancement on metrics like gender and ethnic diversity in both equally the workforce and in management, companies should commit to far more than just inclusive recruiting they also want to cultivate and promote expertise currently current inside of the corporation.

Take into account women and ladies of colour in finance. These days, significantly of Wall Street can point to robust recruitment procedures that emphasize gender, among other range metrics, and a latest research identified that fifty percent of entry-level employees are girls. Early parity, on the other hand, is not replicated in the senior ranks: in 2018, girls held just 17 percent of SVP-amount management positions, and women of colour only 3 p.c. Obviously gals continue to deal with steep odds in the pursuit of occupation expansion. Recruitment, then, is only aspect of a option, and diversity initiatives chance failure unless corporations carry out a for a longer period-term system.

Comprehension Attrition

The approach that effects in this attrition commences nearly right away. In 2018, women were being 24 per cent a lot less possible than their male colleagues to get to their initial promotion. When occupation expansion develops like compound interest on an investment, the to start with advertising is a significant inflection point–and missing it can have a considerable, prolonged-lasting effects.

In this context, effectively-intentioned corporations are basically running on a meritocracy fallacy. The notion that all personnel have an equal shot at marketing in a sink-or-swim lifestyle ignores that some recruits, particularly these from communities traditionally underrepresented in financial services, could possibly involve a lot more or various varieties of assist to develop a profitable job.

Usually, girls notice that pursuing the achievements that won them difficult-attained access to a vocation in finance—diligent perform, technical mastery and delivered results—left small space for yet another vital aspect of vocation achievement: social funds. Gals, and specially women of coloration, will need to be ready to glance up, glimpse close to and construct sticky relationships with the professionals, mentors and sponsors who enjoy critical roles in improvement. That talent is not taught, and it could not appear quickly to women, in particular in social contexts that are male-dominated Indra Nooyi, previous Pepsi CEO, for illustration, remembers sensation “just happy to be in the room” as a youthful female of shade in organization.

Culture’s Marriage to Retention

There is no scarcity of advice directed to these women of all ages and, as Llanor Alleyne lately argued in a tale on Worthy of.com, they should really certainly use it to advocate for on their own. But corporations that are invested in range and retention are unable to anticipate their talent to remedy these troubles on your own it is the company’s obligation to assistance people who need it most, for everyone’s gain.

Nevertheless, institutional strategies that zero in on “retention readiness” on your own misunderstand the challenge. If running for retention simply usually means possessing HR handle expertise as it heads for the doorway, then the agency is already much too late. As an alternative, corporations will have to “think at the middle,” proactively addressing the cultural developing blocks that collectively affect a group member’s selections to remain or go away.

Building a Tradition of Fairness

Sustained diversity demands coordinated target at all concentrations of an group in get to produce a society of equity. Boards, executives, companies and managers on the lookout to make significant development must start out with these actionable steps:

For Board Associates:

  • Maintain companies accountable for range at just about every amount throughout departments, not just in full inhabitants. Evaluation a company’s vital effectiveness and electric power indicators via a DEI lens, location metrics for parts like representation in P&L roles or fairness in compensation packages.
  • Make diversity integral to succession preparing. Setting early DEI expectations—by assessing a candidate’s DEI observe file, for example—is no unique than anticipating excellence from best performers in other places of management.

For the C-Suite:

  • Verify in with crew users across id groups. No one team is a monolith, and markers of range are not instantly obvious. Social listening as a result of lunches, office hours or all-hands meetings is an quickly obtainable way to have an understanding of how expertise segments connect to—or wrestle with—their operate and the company.
  • Create concrete agency-extensive benchmarks and anticipations for diversity. In her 2014 Ted Communicate, trader Mellody Hobson asks why DEI is the only region in finance where corporations acknowledge “activities” around outcomes. Ahead-seeking companies previously evaluate and tie compensation to DEI progress.
  • Strengthen the tone from the best. Design DEI priorities by obvious commitments, brave discussions and by continually centering range initiatives in communications.

For Companies:

  • Build a robust talent pipeline that exposes underrepresented groups to critical finance competencies earlier. Build initiatives created to close information and knowledge gaps, like the programming by Ladies Who Commit, which gives academic programming, internships and community for females in finance, or the Gals in Private Equity Boot Camp.
  • Demand supervisor success schooling. Management is just one of the most impactful things for expertise achievement. Training should address ideas like providing efficient feedback, checking implicit bias and producing psychological security. In finance, as elsewhere, there is truth to the saying, “people give up their bosses.”
  • Workers girls of color on big-ticket clientele together with the highest carrying out supervisors. Significant accounts beget opportunity, recognition and career enhancement in finance’s producer-pushed lifestyle. In which does varied talent are likely to slide in the hierarchy of organization assignments? A commitment to lengthy-term range can necessarily mean closing opportunity gaps by allocating ladies of color—the talent inhabitants most at danger of attrition—to positions wherever there is the most to attain.

For Immediate Administration:

  • Give productive feedback. Pain and fear of misunderstanding generally compromise a supervisor’s potential to give worthwhile suggestions. Recognizing that management styles can fluctuate, managers should leverage instruction to give respectful suggestions that is crystal clear, direct, actionable and without having bias. For instance, ahead of suggesting a group member “develop her govt presence”—a prevalent critique for women—first evaluation that knowledge of executive presence for bias and, next, get unique about how and why her actions presently impression general performance.
  • Advocate for immediate stories in group configurations. In expert spheres, neutralize the “manterruption” phenomenon with an amplification technique that can help ladies have a voice in the area, lends credibility and visibly gives credit history where it is thanks. In social options, consider and correct for how affinity biases could be earning functions like golfing outings or March Insanity brackets exclusionary to specified members of the group.

In the long run, in fiscal providers as elsewhere, a firm’s tradition of fairness is essential for accomplishing lasting variety. Companies that undervalue the relevance of lifestyle and range do so at their individual charge, as illustrated by severe attrition of significant-executing woman talent in leadership roles.

Shoma Chatterjee Hayden is a companion and chief innovation officer at management advisory organization ghSMART. She can help public and private equity boards and CEOs make the leadership money essential for rewarding and sustainable development.

Cintia Nojima is a principal at ghSMART, exactly where she serves leaders across Fortune 500 companies and non-public fairness firms.