Parker-Hannifin Corporation (PH) Earnings Call Transcript & Summary

Good morning, everyone, and thank you for attending the Parker-Hannifin Corporation 2025 Annual Meeting of Shareholders. I'm Jenny Parmentier, Parker's Chairman of the Board and Chief Executive Officer. I'll be acting as Chairman of this meeting, and I'm pleased to call the meeting to order and give a warm welcome to our shareholders who are here in person and listening on the webcast. Sitting here next to me is Joe Leonti, Executive Vice President, General Counsel and Secretary of Parker. Joe will be acting as Secretary of this meeting. And I'd also like to introduce our director nominees and a few other Parker executives and representatives here in attendance. Our director nominees who are all here with us today are Denis Russell Fleming, Lance Fritz, Linda Harty, Kevin Lobo, Jean Savage, Laura Thompson, James Verrier, Jim Wainscott, Beth Wozniak and myself. Along with me and Joe, we have many other company executives here today, including Andy Ross, President and Chief Operating Officer; and Todd Leombruno, Executive Vice President and Chief Financial Officer. And also present are Richard Kretz, a representative from Broadridge Financial Services, And Julie Wahrman, a representative from Deloitte & Touche LLP, our independent registered public accounting firm. Richard has been appointed to act as Inspector of Election for this meeting and Julie will be available to answer appropriate questions about the company's financial statements during the question-and-answer period following this meeting. Last but certainly not least, here with us today is Joe Scaminace, one of our current directors who is retiring from our board as of today. On behalf of the Board, I'd like to publicly recognize and extend our heartfelt gratitude to Joe for his many years of leadership, dedication and extensive contributions to Parker. Joe is a truly exceptional leader and person who has served our Board and shareholders with distinction and we wish him and his family great health and happiness in all the years to come. Please join me in thanking and congratulating Joe by giving him a big round of applause. Thank you. Before we move on to our voting items, I'd first like to turn it over to Joe to cover a few procedural matters.

Thank you, Jenny. Good morning, everyone. I'd also like to personally thank Joe Scaminace for his outstanding leadership and support over the years, just a tremendous record and legacy of strong independent governance and oversight. And so thank you, Joe, for everything you've done for Parker, everything you've done for our shareholders, very meaningful. So as Jenny mentioned, I'd like to cover a few procedural matters here. First, today's meeting is being held pursuant to our notice of annual meeting and proxy statement that was dated and filed with the U.S. Securities and Exchange Commission on September 19, 2025. That notice and proxy statement was also mailed to our shareholders of record as of September 5, 2025, starting on September 19. Second, those that are here in person were given a copy of the agenda for today's meeting and the rules of conduct to make sure that we have an orderly meeting. We'll need everybody to abide by those rules of conduct. To quickly review the agenda, we're going to first conduct the Annual Meeting of Shareholders, where we'll present the 3 voting items, collect any remaining ballots or proxy cards, close the polls and announce our preliminary voting results. We will then adjourn the meeting and Jenny is going to make a few closing comments and we'll hold a brief Q&A period. Third, in my capacity as secretary, I've delivered and I present the following documents. These are all going to be referenced in the minutes of today's Annual Meeting of Shareholders. I have the minutes of our last Annual Meeting of Shareholders, which was held on October 23, 2024. I have the financial statements of the company for the fiscal year ended June 30, 2025, that have been certified by Deloitte & Touche LLP. I've got an affidavit of mailing establishing that notice of today's annual meeting was duly given, and I have a list of the company's shareholders of record as of September 5, 2025, certified by our transfer agent, Equiniti Trust Company. Fourth, all shareholders of record as of the close of business on September 5, 2025, are entitled to vote at today's Annual Meeting of Shareholders. So we ask if there are any record date shareholders in attendance are still holding proxies or wanting to vote here in person, please come down and see Mr. Kretz right now. Okay. And lastly, I would like to report that Mr. Kretz has advised that there are present in person or by proxy, at least 114 million shares of Parker common stock. That represents over 90% of Parker's assuming outstanding common shares and it's a quorum for the transaction of business. That concludes the procedural matters I wanted to cover. So I'll turn it back over to Jenny, and we'll move on to our voting matters.

Thank you, Joe. There are 3 proposals being voted on here today. The first proposal is the election of directors. Our Board has nominated and recommends voting for the election of the following 10 individuals to serve as directors for 1-year terms expiring at the 2026 Annual Meeting of Shareholders. Denise Russell Fleming, Lance Fritz, Linda Harty, Kevin Lobo, Jenny Parmentier, Jean Savage, Laura Thompson, James Verrier, Jim Wainscott and Beth Wozniak. The second proposal is to approve the compensation of our named executive officers on a nonbinding advisory basis. Our Board also recommends a vote for this proposal. And the third proposal is to ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending June 30, 2026. Our Board also recommends a vote for this proposal. Those are the 3 proposals being voted on today. Are there any questions or comments on these proposals? [Voting]

The Inspector of Election will now collect any remaining outstanding ballots or proxy cards. The votes are now in, and I declare the polls closed. Joe, please go ahead and review the preliminary vote results.

All right. Thank you, Jenny. So based on our preliminary vote results, each of the director nominees has been elected. The compensation of our named executive officers has been approved on a nonbinding advisory basis and the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal year '26 6 has been ratified. Please note that the final report of our Inspector of Election will include any ballots that were collected before the polls closed and that were not included in this preliminary report. After our Inspector of Election certifies and issues its final report, we will file a Form 8-K with the SEC that discloses the final vote results. Jenny, That concludes my report.

Thank you, Joe. With no further business to be addressed at the 2025 Annual Meeting of Shareholders, the meeting is now formally adjourned. Before we move into Q&A, I just want to remind everyone that we'll be updating investors on our fiscal year '26 first quarter performance in our next earnings webcast, which is scheduled for November 6, 2025, at 11:00 a.m. Eastern Time. And I'd also like to make a few brief comments on the business. Looking back in fiscal year '25, we delivered another record year of outstanding performance despite a very challenging macro environment. At the end of the day, we continue to build on our strong track record of past results, make progress towards our fiscal year '29 financial targets and demonstrate once again that our portfolio transformation, the focus and commitment of our global team members on continuous improvement and the power of The Win Strategy has helped us create a resilient company that is capable of delivering shareholder value consistently through business cycles. I couldn't be more proud of all the hard work that's put us in a position to weather the headwinds while delivering this level of performance and value creation. And I want to thank all of our team members around the world for keeping each other safe and leading and executing with purpose every day. You are the ones making it happen. And the good news is we're not done. Looking ahead, I continue to believe the future is very bright for Parker, and we're well positioned to drive further growth and performance. We'll continue leveraging our business system, The Win Strategy and our decentralized operating structure, deep customer partnerships, innovative products, engineering expertise, interconnected technologies and unparalleled distribution network. This will ensure we remain strategically positioned to drive team member engagement, delivering exceptional customer experience, achieved sustained profitable growth and financial performance and ultimately create shareholder value. And we will continue to look to and lean on our incredible team members across the globe to help us overcome the challenges and accomplish the goals we have in front of us. This is a leaner, more efficient Parker that is operating like never before. And I want to once again thank our dedicated team members around the world for their hard work, commitment and outstanding performance. And of course, thank all of our shareholders for their confidence and support. We are very grateful that you are here and partnering with us on our journey from better to best. With that, if there are any questions from the floor, we will now open it up for a brief Q&A period. On behalf of our Board of Directors and our team members around the world, thank you for attending and participating today and for your continuing support of Parker-Hannifin Corporation.