Donaldson Reports Record Second Quarter Fiscal Year 2024 Sales and Earnings
- Strong sales growth of 5.8% YoY to $876.7 million.
- GAAP net earnings of $98.7 million, up from $86.0 million in fiscal 2023.
- EPS at $0.81, a 15.9% increase from 2023 GAAP EPS.
- On track to achieve record full-year sales and EPS, raising fiscal 2024 guidance.
- Mobile Solutions segment saw a 5.3% sales increase, driven by pricing and volume growth.
- Industrial Solutions segment sales increased by 6.9% due to volume growth and market share gains.
- Life Sciences segment sales surged by 6.0% with strong performance in various businesses.
- Gross margin improved to 35.2%, operating margin increased to 14.8%.
- Full-year EPS forecast raised to $3.24-$3.32 with sales expected to grow 3-7% YoY.
- Operating margin expected to improve to 15.0%-15.4% for fiscal 2024.
- Company webcasted second-quarter earnings conference call for further insights.
- None.
Insights
The reported increase in second quarter sales to $876.7 million, marking a 5.8% rise and the elevation of EPS by 15.9% to $0.81, are significant metrics indicating Donaldson Company's solid performance and improved profitability. The upward revision of fiscal 2024 operating margin and EPS guidance suggests confidence in the company's strategic initiatives and operational efficiency. This performance, particularly in the context of a diversified business model, reflects well on the company's ability to navigate market conditions and maintain growth in different segments.
From an investment perspective, the increase in gross margin by 90 basis points to 35.2% is notable as it implies better cost management and pricing strategies. The commitment to repurchase approximately 2% of its shares could signal management's belief in the company's undervaluation, which may be of interest to current and potential shareholders. The projected sales growth between 3% and 7% year over year, along with the expected improvement in operating margin to between 15.0% and 15.4%, indicates a positive outlook for the company's financial health.
Examining the segment-specific performance, the Mobile Solutions segment's growth is driven by aftermarket sales, which saw an 11.3% increase. This suggests a robust demand in the vehicle utilization market, potentially reflecting broader economic trends such as increased transportation and logistics activities. However, the decline in On-Road and Off-Road sales, particularly the double-digit decrease in the latter, could point to sector-specific challenges, such as those in the agriculture market and China's economic conditions.
Industrial Solutions segment's 6.9% growth, spearheaded by Industrial Filtration Solutions and Aerospace and Defense, indicates strong market conditions and the company's competitive positioning in these areas. The Life Sciences segment's 6.0% increase, driven by rebounding Disk Drive sales, hints at recovery in this market. The detailed breakdown of segment performance provides investors with insights into which areas are driving growth and which are facing headwinds.
The reported financials reflect broader economic trends, such as the impact of currency translations and interest rates. The currency translation tailwind of approximately 1% suggests a favorable international business environment for Donaldson, which could be attributed to recent fluctuations in currency markets. Meanwhile, the increase in interest expenses to $5.6 million from $4.6 million in the prior year is indicative of the rising interest rate environment, which could affect future borrowing costs and investment strategies.
The effective tax rate decrease to 23.5% from 24.1% is a result of a favorable shift in the mix of global earnings, suggesting efficient tax management and international earnings strategies. The company's ability to maintain a stable tax rate despite global economic uncertainties could be a point of interest for stakeholders concerned about fiscal policy impacts on corporate earnings.
Second quarter sales were
EPS of
Raising fiscal 2024 operating margin and EPS guidance
On track to deliver record full-year sales and EPS
“Our second quarter results reflect strength in several key businesses across all three operating segments,” said Tod Carpenter, chairman, president and chief executive officer. “Through our diversified business model, we delivered solid sales growth and gross margin expansion as we worked to meet the needs of our customers and deliver on our purpose of Advancing Filtration for a Cleaner World.”
“Given our confidence in executing on our strategic growth initiatives while investing for future profitable growth for the remainder of the year, we are increasing our earnings expectations for fiscal 2024. Looking ahead, our commitment to delivering higher levels of profitability on higher sales through our balanced growth strategy will enable us to achieve our fiscal 2026 Investor Day targets and continue to return value to our shareholders.”
________________________
1 All EPS figures refer to diluted EPS.
Second Quarter Operating Results
Sales of
|
Three Months Ended |
|
Six Months Ended |
||||||||
|
January 31, 2024 |
|
January 31, 2024 |
||||||||
|
Reported %
|
|
Constant
|
|
Reported %
|
|
Constant
|
||||
Mobile Solutions segment |
|
|
|
|
|
|
|
||||
Off-Road |
(13.4 |
)% |
|
(14.1 |
)% |
|
(11.0 |
)% |
|
(12.5 |
)% |
On-Road |
(3.0 |
) |
|
(2.3 |
) |
|
1.0 |
|
|
1.2 |
|
Aftermarket |
11.3 |
|
|
10.7 |
|
|
4.4 |
|
|
3.6 |
|
Total Mobile Solutions segment |
5.3 |
|
|
4.8 |
|
|
1.2 |
|
|
0.3 |
|
|
|
|
|
|
|
|
|
||||
Industrial Solutions segment |
|
|
|
|
|
|
|
||||
Industrial Filtration Solutions |
6.0 |
|
|
5.4 |
|
|
6.7 |
|
|
5.6 |
|
Aerospace and Defense |
12.4 |
|
|
11.5 |
|
|
9.2 |
|
|
7.8 |
|
Total Industrial Solutions segment |
6.9 |
|
|
6.2 |
|
|
7.0 |
|
|
5.9 |
|
|
|
|
|
|
|
|
|
||||
Life Sciences segment |
|
|
|
|
|
|
|
||||
Total Life Sciences segment |
6.0 |
|
|
5.1 |
|
|
0.8 |
|
|
(1.0 |
) |
|
|
|
|
|
|
|
|
||||
Total Company |
5.8 |
% |
|
5.3 |
% |
|
2.8 |
% |
|
1.8 |
% |
|
|
|
|
|
|
|
|
||||
Mobile Solutions segment (Mobile) sales increased
Industrial Solutions segment (Industrial) sales increased
Life Sciences segment (Life Sciences) sales increased
Gross margin was
Operating expenses as a percentage of sales were
Operating income as a percentage of sales (operating margin) of
Interest expense was
Year-to-date, Donaldson paid
Fiscal 2024 Outlook
Full-year EPS is forecast to be between
Mobile sales are forecast to increase between
Industrial sales are expected to increase between
Life Sciences sales, driven by increases in all businesses including Food & Beverage, Bioprocessing Equipment and Consumables, and Disk Drive, are forecast to grow approximately
Operating margin is expected to improve to between
Interest expense is forecast to be approximately
Capital expenditures are forecast to be between
Miscellaneous
The Company will webcast its second quarter fiscal 2024 earnings conference call today at 9:00 a.m. CT. To listen to the webcast, visit the “Events & Presentations” section of Donaldson’s Investor Relations website (IR.Donaldson.com), and click on the “listen to webcast” option. The webcast replay will be available at approximately 12:00 p.m. CT today. Also available on the website is the Company’s supplemental quarterly earnings presentation.
Statements in this release regarding future events and expectations, such as forecasts, plans, trends and projections relating to the Company’s business and financial performance, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are identified by words or phrases such as “will likely result,” “are expected to,” “will continue,” “will allow,” “estimate,” “project,” “believe,” “expect,” “anticipate,” “forecast,” “plan” and similar expressions. These forward-looking statements speak only as of the date such statements are made and are subject to risks and uncertainties that could affect the Company’s performance and could cause the Company’s actual results for future periods to differ materially from any opinions or statements expressed. These factors include, but are not limited to, challenges in global operations; impacts of global economic, industrial and political conditions on product demand; impacts from unexpected events, including natural disasters; effects of unavailable raw materials or material cost inflation; inability to attract and retain qualified personnel; inability to meet customer demand; inability to maintain competitive advantages; threats from disruptive technologies; effects of highly competitive markets with pricing pressure; exposure to customer concentration in certain cyclical industries; inability to manage productivity improvements; inability to achieve commitments to ESG; results of execution of any acquisition, divestiture and other strategic transactions; vulnerabilities associated with information technology systems and security; inability to protect and enforce intellectual property rights; costs associated with governmental laws and regulations; impacts of foreign currency fluctuations; and effects of changes in capital and credit markets. These and other factors are described in Part I, Item 1A, “Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended July 31, 2023. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by law. The results presented herein are preliminary, unaudited and subject to revision until the Company files its results with the United States Securities and Exchange Commission on Form 10-Q.
About Donaldson Company, Inc.
Founded in 1915, Donaldson (NYSE: DCI) is a global leader in technology-led filtration products and solutions, serving a broad range of industries and advanced markets. Diverse, skilled employees at over 140 locations on six continents partner with customers—from small business owners to R&D organizations and the world’s biggest OEM brands. Donaldson solves complex filtration challenges through three primary segments: Mobile Solutions, Industrial Solutions and Life Sciences. Additional information is available at www.Donaldson.com.
DONALDSON COMPANY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (In millions, except per share amounts) (Unaudited) |
|||||||||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||||
|
January 31, |
|
January 31, |
||||||||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
Change |
|
|
2024 |
|
|
|
2023 |
|
|
Change |
||
Net sales |
$ |
876.7 |
|
|
$ |
828.3 |
|
|
5.8 |
% |
|
$ |
1,723.0 |
|
|
$ |
1,675.6 |
|
|
2.8 |
% |
Cost of sales |
|
568.1 |
|
|
|
543.9 |
|
|
4.4 |
|
|
|
1,113.5 |
|
|
|
1,104.0 |
|
|
0.9 |
|
Gross profit |
|
308.6 |
|
|
|
284.4 |
|
|
8.5 |
|
|
|
609.5 |
|
|
|
571.6 |
|
|
6.6 |
|
Selling, general and administrative |
|
156.8 |
|
|
|
149.6 |
|
|
4.9 |
|
|
|
311.8 |
|
|
|
298.8 |
|
|
4.4 |
|
Research and development |
|
22.1 |
|
|
|
18.5 |
|
|
19.0 |
|
|
|
43.4 |
|
|
|
37.2 |
|
|
16.5 |
|
Operating expenses |
|
178.9 |
|
|
|
168.1 |
|
|
6.4 |
|
|
|
355.2 |
|
|
|
336.0 |
|
|
5.7 |
|
Operating income |
|
129.7 |
|
|
|
116.3 |
|
|
11.5 |
|
|
|
254.3 |
|
|
|
235.6 |
|
|
8.0 |
|
Interest expense |
|
5.6 |
|
|
|
4.6 |
|
|
20.3 |
|
|
|
11.1 |
|
|
|
9.2 |
|
|
20.5 |
|
Other income, net |
|
(4.9 |
) |
|
|
(1.6 |
) |
|
NM(1) |
|
|
(8.7 |
) |
|
|
(3.4 |
) |
|
NM(1) |
||
Earnings before income taxes |
|
129.0 |
|
|
|
113.3 |
|
|
13.9 |
|
|
|
251.9 |
|
|
|
229.8 |
|
|
9.6 |
|
Income taxes |
|
30.3 |
|
|
|
27.3 |
|
|
11.0 |
|
|
|
61.1 |
|
|
|
56.6 |
|
|
7.7 |
|
Net earnings |
$ |
98.7 |
|
|
$ |
86.0 |
|
|
14.8 |
% |
|
$ |
190.8 |
|
|
$ |
173.2 |
|
|
10.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average shares – basic |
|
120.5 |
|
|
|
121.7 |
|
|
(0.9 |
)% |
|
|
120.7 |
|
|
|
122.2 |
|
|
(1.2 |
)% |
Weighted average shares – diluted |
|
122.1 |
|
|
|
123.3 |
|
|
(1.0 |
)% |
|
|
122.4 |
|
|
|
123.7 |
|
|
(1.1 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net EPS – basic |
$ |
0.82 |
|
|
$ |
0.71 |
|
|
15.9 |
% |
|
$ |
1.58 |
|
|
$ |
1.42 |
|
|
11.5 |
% |
Net EPS – diluted |
$ |
0.81 |
|
|
$ |
0.70 |
|
|
15.9 |
% |
|
$ |
1.56 |
|
|
$ |
1.40 |
|
|
11.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Dividends paid per share |
$ |
0.25 |
|
|
$ |
0.23 |
|
|
8.7 |
% |
|
$ |
0.50 |
|
|
$ |
0.46 |
|
|
8.7 |
% |
Note: Amounts may not foot due to rounding. (1) NM = not meaningful |
|||||||||||||||||||||
DONALDSON COMPANY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In millions) (Unaudited) |
|||||
|
January 31, |
|
July 31, |
||
|
|
2024 |
|
|
2023 |
Assets |
|
|
|
||
Current assets: |
|
|
|
||
Cash and cash equivalents |
$ |
193.8 |
|
$ |
187.1 |
Accounts receivable, net |
|
599.3 |
|
|
599.7 |
Inventories, net |
|
433.4 |
|
|
418.1 |
Prepaid expenses and other current assets |
|
90.7 |
|
|
81.1 |
Total current assets |
|
1,317.2 |
|
|
1,286.0 |
Property, plant and equipment, net |
|
647.0 |
|
|
652.9 |
Goodwill |
|
475.9 |
|
|
481.1 |
Intangible assets, net |
|
179.4 |
|
|
188.1 |
Other long-term assets |
|
164.0 |
|
|
162.4 |
Total assets |
$ |
2,783.5 |
|
$ |
2,770.5 |
|
|
|
|
||
Liabilities and Stockholders’ Equity |
|
|
|
||
Current liabilities: |
|
|
|
||
Short-term borrowings |
$ |
50.4 |
|
$ |
34.1 |
Current maturities of long-term debt |
|
211.7 |
|
|
125.0 |
Accounts payable |
|
325.8 |
|
|
304.9 |
Accrued employee compensation and related taxes |
|
110.3 |
|
|
119.4 |
Deferred revenue |
|
29.7 |
|
|
25.3 |
Income taxes payable |
|
37.1 |
|
|
32.3 |
Dividends payable |
|
30.1 |
|
|
30.4 |
Other current liabilities |
|
98.4 |
|
|
85.0 |
Total current liabilities |
|
893.5 |
|
|
756.4 |
Long-term debt |
|
352.0 |
|
|
496.6 |
Non-current income taxes payable |
|
40.1 |
|
|
56.5 |
Deferred income taxes |
|
21.9 |
|
|
32.3 |
Other long-term liabilities |
|
100.2 |
|
|
108.0 |
Total liabilities |
|
1,407.7 |
|
|
1,449.8 |
|
|
|
|
||
Total stockholders’ equity |
|
1,375.8 |
|
|
1,320.7 |
Total liabilities and stockholders’ equity |
$ |
2,783.5 |
|
$ |
2,770.5 |
DONALDSON COMPANY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) (Unaudited) |
|||||||
|
Six Months Ended |
||||||
|
January 31, |
||||||
|
|
2024 |
|
|
|
2023 |
|
Operating Activities |
|
|
|
||||
Net earnings |
$ |
190.8 |
|
|
$ |
173.2 |
|
Adjustments to reconcile net earnings to net cash provided by operating activities: |
|
|
|
||||
Depreciation and amortization |
|
48.9 |
|
|
|
44.8 |
|
Deferred income taxes |
|
(10.3 |
) |
|
|
(7.1 |
) |
Stock-based compensation expense |
|
14.5 |
|
|
|
13.7 |
|
Other, net |
|
1.4 |
|
|
|
2.9 |
|
Changes in operating assets and liabilities |
|
(20.3 |
) |
|
|
(7.0 |
) |
Net cash provided by operating activities |
|
225.0 |
|
|
|
220.5 |
|
|
|
|
|
||||
Investing Activities |
|
|
|
||||
Purchases of property, plant and equipment |
|
(44.5 |
) |
|
|
(57.6 |
) |
Net cash used in investing activities |
|
(44.5 |
) |
|
|
(57.6 |
) |
|
|
|
|
||||
Financing Activities |
|
|
|
||||
Proceeds from long-term debt |
|
35.0 |
|
|
|
40.0 |
|
Repayments of long-term debt |
|
(88.7 |
) |
|
|
(65.0 |
) |
Change in short-term borrowings |
|
16.3 |
|
|
|
0.3 |
|
Purchase of treasury stock |
|
(86.6 |
) |
|
|
(115.2 |
) |
Dividends paid |
|
(60.3 |
) |
|
|
(56.2 |
) |
Exercise of stock options and other |
|
12.6 |
|
|
|
19.3 |
|
Net cash used in financing activities |
|
(171.7 |
) |
|
|
(176.8 |
) |
Effect of exchange rate changes on cash |
|
(2.1 |
) |
|
|
— |
|
Increase (decrease) in cash and cash equivalents |
|
6.7 |
|
|
|
(13.9 |
) |
Cash and cash equivalents, beginning of period |
|
187.1 |
|
|
|
193.3 |
|
Cash and cash equivalents, end of period |
$ |
193.8 |
|
|
$ |
179.4 |
|
CONSOLIDATED RATE ANALYSIS (Unaudited) |
|||||||||||
|
Three Months Ended |
Six Months Ended |
|||||||||
|
January 31, |
January 31, |
|||||||||
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Gross margin |
35.2 |
% |
|
34.3 |
% |
|
35.4 |
% |
|
34.1 |
% |
Operating expenses |
20.4 |
% |
|
20.3 |
% |
|
20.6 |
% |
|
20.1 |
% |
Operating margin |
14.8 |
% |
|
14.0 |
% |
|
14.8 |
% |
|
14.1 |
% |
Other income, net |
(0.5 |
)% |
|
(0.2 |
)% |
|
(0.5 |
)% |
|
(0.2 |
)% |
Depreciation and amortization |
2.8 |
% |
|
2.7 |
% |
|
2.8 |
% |
|
2.7 |
% |
EBITDA |
18.2 |
% |
|
16.9 |
% |
|
18.1 |
% |
|
16.9 |
% |
Effective tax rate |
23.5 |
% |
|
24.1 |
% |
|
24.2 |
% |
|
24.7 |
% |
Earnings before income taxes - Mobile Solutions |
18.0 |
% |
|
15.0 |
% |
|
17.6 |
% |
|
14.7 |
% |
Earnings before income taxes - Industrial Solutions |
18.0 |
% |
|
18.8 |
% |
|
17.8 |
% |
|
17.6 |
% |
Earnings before income taxes - Life Sciences |
(9.2 |
)% |
|
10.6 |
% |
|
(8.1 |
)% |
|
14.0 |
% |
Cash conversion ratio |
66.7 |
% |
|
84.7 |
% |
|
94.6 |
% |
|
94.1 |
% |
|
|
|
|
|
|
|
|
||||
|
Three Months Ended |
Six Months Ended |
|||||||||
|
January 31, |
January 31, |
|||||||||
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Adjusted Rates |
|
|
|
|
|
|
|
||||
Gross margin |
35.2 |
% |
|
34.5 |
% |
|
35.4 |
% |
|
34.2 |
% |
Operating expenses |
20.4 |
% |
|
19.3 |
% |
|
20.6 |
% |
|
19.1 |
% |
Operating margin |
14.8 |
% |
|
15.2 |
% |
|
14.8 |
% |
|
15.1 |
% |
Other income, net |
(0.5 |
)% |
|
(0.2 |
)% |
|
(0.5 |
)% |
|
(0.2 |
)% |
Depreciation and amortization |
2.8 |
% |
|
2.7 |
% |
|
2.8 |
% |
|
2.7 |
% |
EBITDA |
18.2 |
% |
|
18.1 |
% |
|
18.1 |
% |
|
17.9 |
% |
Effective tax rate |
23.5 |
% |
|
24.1 |
% |
|
24.2 |
% |
|
24.7 |
% |
Earnings before income taxes - Mobile Solutions |
18.0 |
% |
|
15.0 |
% |
|
17.6 |
% |
|
14.7 |
% |
Earnings before income taxes - Industrial Solutions |
18.0 |
% |
|
18.8 |
% |
|
17.8 |
% |
|
17.6 |
% |
Earnings before income taxes - Life Sciences |
(9.2 |
)% |
|
10.6 |
% |
|
(8.1 |
)% |
|
14.0 |
% |
Cash conversion ratio |
66.7 |
% |
|
78.3 |
% |
|
94.6 |
% |
|
87.6 |
% |
Note: Rate analysis metrics are computed by dividing the applicable amount by net sales, and cash conversion ratio reflects free cash flow divided by net earnings. Adjusted rates exclude the impact of certain items not related to ongoing operations. Adjusted rates are non-GAAP measures; see the Reconciliation of Non-GAAP Financial Measures schedule for additional information. |
|||||||||||
SEGMENT DETAIL (In millions) (Unaudited) |
|||||||||||||||||||||
|
Three Months Ended January 31, |
|
Six Months Ended January 31, |
||||||||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
Change |
|
|
2024 |
|
|
|
2023 |
|
|
Change |
||
Net sales |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Mobile Solutions segment |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Off-Road |
$ |
91.9 |
|
|
$ |
106.2 |
|
|
(13.4 |
)% |
|
$ |
186.6 |
|
|
$ |
209.8 |
|
|
(11.0 |
)% |
On-Road |
|
33.5 |
|
|
|
34.5 |
|
|
(3.0 |
) |
|
|
71.3 |
|
|
|
70.5 |
|
|
1.0 |
|
Aftermarket |
|
424.9 |
|
|
|
381.8 |
|
|
11.3 |
|
|
|
832.4 |
|
|
|
797.1 |
|
|
4.4 |
|
Total Mobile Solutions segment |
|
550.3 |
|
|
|
522.5 |
|
|
5.3 |
|
|
|
1,090.3 |
|
|
|
1,077.4 |
|
|
1.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Industrial Solutions segment |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Industrial Filtration Solutions |
|
224.5 |
|
|
|
211.8 |
|
|
6.0 |
|
|
|
435.1 |
|
|
|
407.8 |
|
|
6.7 |
|
Aerospace and Defense |
|
38.9 |
|
|
|
34.6 |
|
|
12.4 |
|
|
|
74.5 |
|
|
|
68.2 |
|
|
9.2 |
|
Total Industrial Solutions segment |
|
263.4 |
|
|
|
246.4 |
|
|
6.9 |
|
|
|
509.6 |
|
|
|
476.0 |
|
|
7.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Life Sciences segment |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total Life Sciences segment |
|
63.0 |
|
|
|
59.4 |
|
|
6.0 |
|
|
|
123.1 |
|
|
|
122.2 |
|
|
0.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total Company |
$ |
876.7 |
|
|
$ |
828.3 |
|
|
5.8 |
% |
|
$ |
1,723.0 |
|
|
$ |
1,675.6 |
|
|
2.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings (loss) before income taxes |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Mobile Solutions segment |
$ |
99.2 |
|
|
$ |
78.6 |
|
|
26.2 |
% |
|
$ |
191.4 |
|
|
$ |
158.9 |
|
|
20.5 |
% |
Industrial Solutions segment |
|
47.4 |
|
|
|
46.3 |
|
|
2.4 |
|
|
|
90.7 |
|
|
|
83.9 |
|
|
8.1 |
|
Life Sciences segment |
|
(5.8 |
) |
|
|
6.3 |
|
|
NM(1) |
|
|
(10.0 |
) |
|
|
17.1 |
|
|
NM(1) |
||
Corporate and unallocated |
|
(11.8 |
) |
|
|
(17.9 |
) |
|
34.1 |
|
|
|
(20.2 |
) |
|
|
(30.1 |
) |
|
32.9 |
|
Total Company |
$ |
129.0 |
|
|
$ |
113.3 |
|
|
13.9 |
% |
|
$ |
251.9 |
|
|
$ |
229.8 |
|
|
9.6 |
% |
Earnings before income taxes percentage |
|
|
|
|
|
|
|
|
|
|
|
||||||
Mobile Solutions segment |
18.0 |
% |
|
15.0 |
% |
|
3.0 |
% |
|
17.6 |
% |
|
14.7 |
% |
|
2.9 |
% |
Industrial Solutions segment |
18.0 |
% |
|
18.8 |
% |
|
(0.8 |
)% |
|
17.8 |
% |
|
17.6 |
% |
|
0.2 |
% |
Life Sciences segment |
(9.2 |
)% |
|
10.6 |
% |
|
(19.8 |
)% |
|
(8.1 |
)% |
|
14.0 |
% |
|
(22.1 |
)% |
Note: Earnings before income taxes percentage is calculated by dividing earnings before income taxes by net sales. Amounts may not foot due to rounding. (1) NM = not meaningful |
|||||||||||||||||
SEGMENT SALES PERCENT CHANGE FROM PRIOR PERIODS BY GEOGRAPHY, AS REPORTED (Unaudited) |
||||||||||||||
|
Three Months Ended January 31, 2024 |
|||||||||||||
|
TOTAL |
|
|
|
EMEA(3) |
|
APAC(4) |
|
LATAM(5) |
|||||
Mobile Solutions segment |
|
|
|
|
|
|
|
|
|
|||||
Off-Road |
(13.4 |
)% |
|
(6.5 |
)% |
|
(13.9 |
)% |
|
(23.9 |
)% |
|
(16.3 |
)% |
On-Road |
(3.0 |
) |
|
— |
|
|
22.0 |
|
|
(18.9 |
) |
|
— |
|
Aftermarket |
11.3 |
|
|
12.3 |
|
|
3.3 |
|
|
14.8 |
|
|
16.7 |
|
Total Mobile Solutions segment |
5.3 |
|
|
7.9 |
|
|
(1.5 |
) |
|
2.5 |
|
|
14.3 |
|
|
|
|
|
|
|
|
|
|
|
|||||
Industrial Solutions segment |
|
|
|
|
|
|
|
|
|
|||||
Industrial Filtration Solutions |
6.0 |
|
|
15.7 |
|
|
(4.0 |
) |
|
6.3 |
|
|
(10.1 |
) |
Aerospace and Defense |
12.4 |
|
|
12.6 |
|
|
7.7 |
|
|
142.6 |
|
|
N/A |
|
Total Industrial Solutions segment |
6.9 |
|
|
15.1 |
|
|
(2.8 |
) |
|
7.7 |
|
|
(10.1 |
) |
|
|
|
|
|
|
|
|
|
|
|||||
Life Sciences segment |
|
|
|
|
|
|
|
|
|
|||||
Total Life Sciences segment |
6.0 |
|
|
(37.6 |
) |
|
16.7 |
|
|
19.5 |
|
|
11.1 |
|
|
|
|
|
|
|
|
|
|
|
|||||
Total Company |
5.8 |
% |
|
8.8 |
% |
|
(0.2 |
)% |
|
6.1 |
% |
|
11.2 |
% |
|
|
|
|
|
|
|
|
|
|
|||||
|
Six Months Ended January 31, 2024 |
|||||||||||||
|
TOTAL |
|
|
|
EMEA |
|
APAC |
|
LATAM |
|||||
Mobile Solutions segment |
|
|
|
|
|
|
|
|
|
|||||
Off-Road |
(11.0 |
)% |
|
(5.7 |
)% |
|
(8.1 |
)% |
|
(23.8 |
)% |
|
(22.4 |
)% |
On-Road |
1.0 |
|
|
1.3 |
|
|
17.5 |
|
|
(4.7 |
) |
|
(10.6 |
) |
Aftermarket |
4.4 |
|
|
4.9 |
|
|
0.3 |
|
|
8.7 |
|
|
5.1 |
|
Total Mobile Solutions segment |
1.2 |
|
|
2.8 |
|
|
(1.7 |
) |
|
— |
|
|
3.2 |
|
|
|
|
|
|
|
|
|
|
|
|||||
Industrial Solutions segment |
|
|
|
|
|
|
|
|
|
|||||
Industrial Filtration Solutions |
6.7 |
|
|
13.0 |
|
|
2.8 |
|
|
(3.6 |
) |
|
0.3 |
|
Aerospace and Defense |
9.2 |
|
|
8.7 |
|
|
8.0 |
|
|
61.9 |
|
|
N/A |
|
Total Industrial Solutions segment |
7.0 |
|
|
12.1 |
|
|
3.4 |
|
|
(2.6 |
) |
|
0.3 |
|
|
|
|
|
|
|
|
|
|
|
|||||
Life Sciences segment |
|
|
|
|
|
|
|
|
|
|||||
Total Life Sciences segment |
0.8 |
|
|
(23.2 |
) |
|
14.8 |
|
|
(1.0 |
) |
|
16.1 |
|
|
|
|
|
|
|
|
|
|
|
|||||
Total Company |
2.8 |
% |
|
5.1 |
% |
|
1.5 |
% |
|
(0.7 |
)% |
|
3.0 |
% |
|
|
|
|
|
|
|
|
|
|
|||||
Note: Amounts may not foot due to rounding.
(1)
(2)
(3)
(4)
(5) |
||||||||||||||
SEGMENT SALES PERCENT CHANGE FROM PRIOR PERIODS BY GEOGRAPHY, CONSTANT CURRENCY (Unaudited) |
||||||||||||||
|
Three Months Ended January 31, 2024 |
|||||||||||||
|
TOTAL |
|
|
|
EMEA |
|
APAC |
|
LATAM |
|||||
Mobile Solutions segment |
|
|
|
|
|
|
|
|
|
|||||
Off-Road |
(14.1 |
)% |
|
(6.5 |
)% |
|
(16.9 |
)% |
|
(20.7 |
)% |
|
(18.1 |
)% |
On-Road |
(2.3 |
) |
|
— |
|
|
19.4 |
|
|
(15.2 |
) |
|
(3.4 |
) |
Aftermarket |
10.7 |
|
|
12.3 |
|
|
0.8 |
|
|
17.8 |
|
|
14.3 |
|
Total Mobile Solutions segment |
4.8 |
|
|
7.9 |
|
|
(4.2 |
) |
|
5.5 |
|
|
12.0 |
|
|
|
|
|
|
|
|
|
|
|
|||||
Industrial Solutions segment |
|
|
|
|
|
|
|
|
|
|||||
Industrial Filtration Solutions |
5.4 |
|
|
15.7 |
|
|
(6.5 |
) |
|
9.1 |
|
|
(11.3 |
) |
Aerospace and Defense |
11.5 |
|
|
12.6 |
|
|
4.2 |
|
|
150.5 |
|
|
N/A |
|
Total Industrial Solutions segment |
6.2 |
|
|
15.1 |
|
|
(5.3 |
) |
|
10.6 |
|
|
(11.3 |
) |
|
|
|
|
|
|
|
|
|
|
|||||
Life Sciences segment |
|
|
|
|
|
|
|
|
|
|||||
Total Life Sciences segment |
5.1 |
|
|
(37.6 |
) |
|
12.2 |
|
|
22.1 |
|
|
8.9 |
|
|
|
|
|
|
|
|
|
|
|
|||||
Total Company |
5.3 |
% |
|
8.8 |
% |
|
(3.0 |
)% |
|
9.1 |
% |
|
9.0 |
% |
|
|
|
|
|
|
|
|
|
|
|||||
|
Six Months Ended January 31, 2024 |
|||||||||||||
|
TOTAL |
|
|
|
EMEA |
|
APAC |
|
LATAM |
|||||
Mobile Solutions segment |
|
|
|
|
|
|
|
|
|
|||||
Off-Road |
(12.5 |
)% |
|
(5.7 |
)% |
|
(13.1 |
)% |
|
(21.1 |
)% |
|
(24.3 |
)% |
On-Road |
1.2 |
|
|
1.3 |
|
|
12.5 |
|
|
(1.3 |
) |
|
(13.4 |
) |
Aftermarket |
3.6 |
|
|
4.9 |
|
|
(3.7 |
) |
|
11.6 |
|
|
3.3 |
|
Total Mobile Solutions segment |
0.3 |
|
|
2.8 |
|
|
(6.0 |
) |
|
2.9 |
|
|
1.3 |
|
|
|
|
|
|
|
|
|
|
|
|||||
Industrial Solutions segment |
|
|
|
|
|
|
|
|
|
|||||
Industrial Filtration Solutions |
5.6 |
|
|
13.0 |
|
|
(1.3 |
) |
|
(1.0 |
) |
|
(0.9 |
) |
Aerospace and Defense |
7.8 |
|
|
8.7 |
|
|
2.5 |
|
|
65.7 |
|
|
N/A |
|
Total Industrial Solutions segment |
5.9 |
|
|
12.1 |
|
|
(0.9 |
) |
|
(0.1 |
) |
|
(0.9 |
) |
|
|
|
|
|
|
|
|
|
|
|||||
Life Sciences segment |
|
|
|
|
|
|
|
|
|
|||||
Total Life Sciences segment |
(1.0 |
) |
|
(23.2 |
) |
|
8.5 |
|
|
0.5 |
|
|
14.2 |
|
|
|
|
|
|
|
|
|
|
|
|||||
Total Company |
1.8 |
% |
|
5.1 |
% |
|
(3.0 |
)% |
|
1.9 |
% |
|
1.2 |
% |
|
|
|
|
|
|
|
|
|
|
|||||
Note: The constant currency presentation, which is a non-GAAP measure, excludes the impact of fluctuations in foreign currency exchange rates. The Company believes providing constant currency information provides valuable supplemental information regarding its results of operations. The Company calculates constant currency percentages by converting its current period local currency financial results using the prior period exchange rates and compares these adjusted amounts to its prior period reported results. Amounts may not foot due to rounding. |
||||||||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (In millions) (Unaudited) |
|||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
January 31, |
|
January 31, |
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net cash provided by operating activities |
$ |
87.0 |
|
|
$ |
102.3 |
|
|
$ |
225.0 |
|
|
$ |
220.5 |
|
Net capital expenditures |
|
(21.2 |
) |
|
|
(29.5 |
) |
|
|
(44.5 |
) |
|
|
(57.6 |
) |
Free cash flow |
$ |
65.8 |
|
|
$ |
72.8 |
|
|
$ |
180.5 |
|
|
$ |
162.9 |
|
|
|
|
|
|
|
|
|
||||||||
Net earnings |
$ |
98.7 |
|
|
$ |
86.0 |
|
|
$ |
190.8 |
|
|
$ |
173.2 |
|
Income taxes |
|
30.3 |
|
|
|
27.3 |
|
|
|
61.1 |
|
|
|
56.6 |
|
Interest expense |
|
5.6 |
|
|
|
4.6 |
|
|
|
11.1 |
|
|
|
9.2 |
|
Depreciation and amortization |
|
24.6 |
|
|
|
22.4 |
|
|
|
48.9 |
|
|
|
44.8 |
|
EBITDA |
$ |
159.2 |
|
|
$ |
140.3 |
|
|
$ |
311.9 |
|
|
$ |
283.8 |
|
|
|
|
|
|
|
|
|
||||||||
Adjusted net earnings |
$ |
98.7 |
|
|
$ |
93.0 |
|
|
$ |
190.8 |
|
|
$ |
185.9 |
|
Adjusted income taxes |
|
30.3 |
|
|
|
29.6 |
|
|
|
61.1 |
|
|
|
60.9 |
|
Interest expense |
|
5.6 |
|
|
|
4.6 |
|
|
|
11.1 |
|
|
|
9.2 |
|
Depreciation and amortization |
|
24.6 |
|
|
|
22.4 |
|
|
|
48.9 |
|
|
|
44.8 |
|
Adjusted EBITDA |
$ |
159.2 |
|
|
$ |
149.6 |
|
|
$ |
311.9 |
|
|
$ |
300.8 |
|
|
|
|
|
|
|
|
|
||||||||
Gross profit |
$ |
308.6 |
|
|
$ |
284.4 |
|
|
$ |
609.5 |
|
|
$ |
571.6 |
|
Restructuring and other charges |
|
— |
|
|
|
1.5 |
|
|
|
— |
|
|
|
1.5 |
|
Adjusted gross profit |
$ |
308.6 |
|
|
$ |
285.9 |
|
|
$ |
609.5 |
|
|
$ |
573.1 |
|
|
|
|
|
|
|
|
|
||||||||
Operating expense |
$ |
178.9 |
|
|
$ |
168.1 |
|
|
$ |
355.2 |
|
|
$ |
336.0 |
|
Restructuring and other charges |
|
— |
|
|
|
(7.8 |
) |
|
|
— |
|
|
|
(15.4 |
) |
Adjusted operating expense |
$ |
178.9 |
|
|
$ |
160.2 |
|
|
$ |
355.2 |
|
|
$ |
320.5 |
|
|
|
|
|
|
|
|
|
||||||||
Operating income |
$ |
129.7 |
|
|
$ |
116.3 |
|
|
$ |
254.3 |
|
|
$ |
235.6 |
|
Restructuring and other charges |
|
— |
|
|
|
9.3 |
|
|
|
— |
|
|
|
16.9 |
|
Adjusted operating income |
$ |
129.7 |
|
|
$ |
125.7 |
|
|
$ |
254.3 |
|
|
$ |
252.6 |
|
|
|
|
|
|
|
|
|
||||||||
Net earnings |
$ |
98.7 |
|
|
$ |
86.0 |
|
|
$ |
190.8 |
|
|
$ |
173.2 |
|
Restructuring and other charges, net of tax |
|
— |
|
|
|
7.0 |
|
|
|
— |
|
|
|
12.7 |
|
Adjusted net earnings |
$ |
98.7 |
|
|
$ |
93.0 |
|
|
$ |
190.8 |
|
|
$ |
185.9 |
|
|
|
|
|
|
|
|
|
||||||||
Diluted EPS |
$ |
0.81 |
|
|
$ |
0.70 |
|
|
$ |
1.56 |
|
|
$ |
1.40 |
|
Restructuring and other charges per share |
|
— |
|
|
|
0.06 |
|
|
|
— |
|
|
|
0.10 |
|
Adjusted diluted EPS |
$ |
0.81 |
|
|
$ |
0.75 |
|
|
$ |
1.56 |
|
|
$ |
1.50 |
|
Note: Although free cash flow, EBITDA, adjusted EBITDA, adjusted gross profit, adjusted operating expense, adjusted operating income, adjusted net earnings and adjusted diluted EPS are not measures of financial performance under GAAP, the Company believes they are useful in understanding its financial results. Free cash flow is a commonly used measure of a company’s ability to generate cash in excess of its operating needs. EBITDA is a commonly used measure of operating earnings less non-cash expenses. The adjusted basis presentation excludes the impact of certain matters not related to the Company’s ongoing operations. Management believes that the adjusted basis presentation reflects management’s performance in operating the Company and provides a meaningful representation of the performance of the Company’s core business and is useful to understanding its financial results. A shortcoming of these financial measures is that they do not reflect the Company’s actual results under GAAP. Management does not intend these items to be considered in isolation or as a substitute for the related GAAP measures. Amounts may not foot due to rounding. |
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View source version on businesswire.com: https://www.businesswire.com/news/home/20240228087992/en/
Sarika Dhadwal (952) 887-3753
Sarika.Dhadwal@Donaldson.com
Source: Donaldson Company, Inc.
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