At this time, reference slide number two in the slide deck which is the Safe Harbor disclosure statement addressing forward-looking statements. And again, just to remind you, if haven’t already done so, please take note of this statement in its entirety.Slide number three, this slide as required indicates that in cases where non-GAAP numbers have been used they’ve been reconciled to the appropriate GAAP numbers and are posted on Parker’s website again at phstock.com. To cover the agenda today, slide four, the call will be in four parts. First, Don Washkewicz, Chairman, Chief Executive Officer and President will provide highlights for the quarter and for the full year. Second, I’ll provide a review including key performance measures of the fourth quarter and full year fiscal year 2012, concluding with the guidance for next year fiscal year 2013. The third part of the call will consist of our standard Q&A session. And for the fourth part of the call today, Don will close with some final comments. At this time, I’ll turn it over to Don and ask that you refer to slide number five titled Fourth Quarter and Full Year Fiscal Year ‘12 highlights. Don Washkewicz Thanks, Pam, and welcome to everyone on the call. We’re certainly very pleased to report our results following a strong fourth quarter and another record year for the company. I’ll start-off by taking a moment to point out some of the highlights and some of the records for the quarter and then I’m going to follow-up and talk a little bit about the full year. So, first of all, the fourth quarter sales were a record at $3.4 billion, we’re really pleased with the level of activity there that we’re able to bring in the quarter. Net income for the quarter was $302 million or $1.96 per share on a diluted basis and we’re certainly pleased with that, and that was ahead of the street consensus expectations.
The margins were strong 15.5% that also will go down in the record books as a record for the fourth quarter.Cash flow was strong. We generated over $0.5 billion in operating cash flow in the quarter, I can remember years when we didn’t generate $0.5 billion. So this is pretty exciting for the company. We also -- so those are some of the quarter highlights, for the year then we closed out the fiscal year for Parker with a number of records as well. That includes the record sales of $13.1 billion that was up 6.5%, just and I might want to point out that most all of that was organic growth in a very tough economic environment out there. Total segment operating margin, which is really a highlight for the year was a record exceeding 15% and that was the first time in our history and for those of you that have been tracking us for a number of years, you’ll remember 10 years ago, when we launched the Win Strategy, we talked about hitting that 15% target. So we’re popping the champagne corks here a little bit, in the background if you hear some corks popping that’s what it’s all about. But you may recall that as we went through this last 10-year period. We consistently improved margins year-on-year even in some pretty ugly periods where we had two major recessions for the company. So, we -- in that 10-year period we dealt with two major recessions, we drove the margins up to what we see now as a record first time in the history of the company at 15%. And I know what everyone’s thinking that well this must be it, now that you’re at 15% only direction to go is down. I would just point out one thing and that is, if you look at our North American industrial margins, we hit 17.6%. So we certainly don’t think that it’s the end of the road. I think there’s more room on the topline and certainly on the operating margin line to continue to move these to higher levels. We can talk more about that later in the Q&A session.
Net income for the year was a record as well at $746, excuse me, at $745, and that increased 17% from the last year. We added $1.08 in earnings per share and that was on a 6.5% sales increase. So we’re very pleased with that performance as well.Operating cash flow for the year was a $1.5 billion or 11.6% of sales and I might point out too and I’m not sure some of you may be tracking this as well but our free cash flow was greater than net income now for the tenth year in a row. And that again includes some very, very difficult recessionary periods when you can say that we’ve increased cash flow greater than net income for 10 years in a row, we’ve got to be doing something right back here. So we used the cash flow during the year to increase the dividends per share payout by 23%. We’ve repurchased over 6 million shares of stock for total investment of just under $0.5 billion and we made acquisitions which added $141 million in annualized sales. Read the rest of this transcript for free on seekingalpha.com