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Business Strength: Donaldson is benefiting from the strong performance of the Mobile Solutions, Industrial Solutions and Life Sciences segments. The Mobile Solutions segment is benefiting from strength in the aftermarket business driven by market share gains and pricing benefits. The Industrial Solutions segment is supported by continued project wins and market share gains in dust collection and power generation verticals within the industrial filtration solutions business. Solid momentum in the aerospace a ...

Donaldson Company, Inc. (DCI) reported third-quarter fiscal 2024 (ended Apr 30, 2024) adjusted earnings of 92 cents per share, which surpassed the Zacks Consensus Estimate of 84 cents. The bottom line increased 21.7% year over year. Revenue Results In the fiscal third quarter, total revenues of $927.9 million outperformed the Zacks Consensus Estimate of $920 million. The top line increased 6% year over year (up 6.8% at constant currency) in the reported quarter, driven by volume growth and benefits of prici ...

Donaldson Company Inc. (NYSE:DCI) Q3 2024 Earnings Conference Call June 4, 2024 10:00 AM ET Company Participants Tod Carpenter - Chairman, President, Chief Executive Officer Scott Robinson - Chief Financial Officer Sarika Dhadwal - Senior Director, Investor Relations Conference Call Participants Angel Castillo - Morgan Stanley Dan Rizzo - Jefferies Adam Farley - Stifel Tyler Mulier - William Blair Rob Mason - Baird Operator Thank you for standing by, and welcome to the Donaldson Company third quarter 2024 ...

Core Insights - Donaldson (DCI) reported revenue of $927.9 million for the quarter ended April 2024, marking a year-over-year increase of 6% and exceeding the Zacks Consensus Estimate by 0.90% [1] - The earnings per share (EPS) for the same period was $0.92, compared to $0.76 a year ago, representing a surprise of 9.52% over the consensus estimate of $0.84 [1] Revenue Performance - Net sales in the Industrial Products segment were $269.10 million, slightly below the average estimate of $272.66 million, reflecting a year-over-year change of +2.9% [3] - Mobile Solutions generated net sales of $585.20 million, surpassing the estimated $568.31 million [3] - The Life Sciences segment reported net sales of $73.60 million, which is a +24.3% change compared to the year-ago quarter, but below the estimate of $76.23 million [3] - Industrial Filtration Solutions within Industrial Solutions had net sales of $228.60 million, below the average estimate of $235.42 million [3] - Aerospace and Defense under Industrial Solutions reported net sales of $40.50 million, slightly above the estimate of $39.72 million [3] - Off-Road Mobile Solutions achieved net sales of $104.20 million, exceeding the estimate of $98.90 million [3] - On-Road Mobile Solutions reported net sales of $35.70 million, slightly below the estimate of $36.86 million [3] - Aftermarket Mobile Solutions had net sales of $445.30 million, surpassing the average estimate of $434.46 million [3] Earnings Performance - Earnings before income taxes for the Mobile Solutions segment were $107.90 million, exceeding the estimate of $98.42 million [3] - The Corporate and unallocated segment reported a loss before income taxes of -$14.70 million, worse than the estimate of -$9.55 million [3] - Life Sciences segment earnings before income taxes were $0.50 million, below the estimate of $2.36 million [3] - Industrial Products segment earnings before income taxes were $50.30 million, slightly above the estimate of $48.88 million [3] Stock Performance - Over the past month, Donaldson's shares have returned -4.4%, contrasting with the Zacks S&P 500 composite's +3.2% change [4] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [4]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=2&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited Condensed Consolidated Financial Statements for Q3 FY2024, highlighting year-over-year growth in net sales and earnings | Metric | Three Months Ended April 30, 2024 | Three Months Ended April 30, 2023 | | :--- | :--- | :--- | | Net sales | $927.9 million | $875.7 million | | Gross profit | $330.1 million | $288.8 million | | Operating income | $143.6 million | $124.0 million | | Net earnings | $113.5 million | $93.7 million | | Diluted EPS | $0.92 | $0.76 | | Metric | Nine Months Ended April 30, 2024 | Nine Months Ended April 30, 2023 | | :--- | :--- | :--- | | Net sales | $2,650.9 million | $2,551.3 million | | Gross profit | $939.6 million | $860.5 million | | Operating income | $397.9 million | $359.6 million | | Net earnings | $304.3 million | $266.9 million | | Diluted EPS | $2.48 | $2.16 | | Metric | April 30, 2024 | July 31, 2023 | | :--- | :--- | :--- | | Total current assets | $1,400.7 million | $1,286.0 million | | Total assets | $2,866.1 million | $2,770.5 million | | Total current liabilities | $735.2 million | $756.4 million | | Total liabilities | $1,382.1 million | $1,449.8 million | | Total stockholders' equity | $1,484.0 million | $1,320.7 million | | Activity | Nine Months Ended April 30, 2024 | Nine Months Ended April 30, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $366.5 million | $353.7 million | | Net cash used in investing activities | ($67.8) million | ($155.1) million | | Net cash used in financing activities | ($257.5) million | ($204.1) million | | Increase (decrease) in cash | $36.6 million | ($7.3) million | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes on significant financial events, including a strategic acquisition, share repurchases, and dividends - In Q3 FY2024, the company entered a definitive agreement to purchase a **49% stake** in **Medica S.p.A.**, a leader in hollow fiber membrane filtration technology, with an option to acquire the remaining 51% in the future[33](index=33&type=chunk) Net Sales by Geographic Region (Nine Months Ended April 30) | Region | 2024 | 2023 | | :--- | :--- | :--- | | U.S. and Canada | $1,175.5 million | $1,099.0 million | | EMEA | $747.1 million | $734.5 million | | APAC | $441.6 million | $453.8 million | | LATAM | $286.7 million | $264.0 million | | **Total** | **$2,650.9 million** | **$2,551.3 million** | - During the nine months ended April 30, 2024, the company repurchased **1.8 million shares** for **$114.0 million**. As of April 30, 2024, authorization remained to repurchase **11.4 million shares**[50](index=50&type=chunk) - Dividends paid were **75.0 cents per common share** for the nine months ended April 30, 2024, an increase from **69.0 cents** for the same period in the prior year. A subsequent dividend of **27.0 cents per share** was declared on May 31, 2024[51](index=51&type=chunk) Net Sales by Segment (Nine Months Ended April 30) | Segment | 2024 | 2023 | | :--- | :--- | :--- | | Mobile Solutions | $1,675.5 million | $1,632.3 million | | Industrial Solutions | $778.7 million | $737.6 million | | Life Sciences | $196.7 million | $181.4 million | | **Total** | **$2,650.9 million** | **$2,551.3 million** | Earnings (Loss) Before Income Taxes by Segment (Nine Months Ended April 30) | Segment | 2024 | 2023 | | :--- | :--- | :--- | | Mobile Solutions | $299.3 million | $242.3 million | | Industrial Solutions | $141.0 million | $133.0 million | | Life Sciences | ($9.5) million | $17.3 million | | Corporate and unallocated | ($34.9) million | ($41.2) million | | **Total** | **$395.9 million** | **$351.4 million** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q3 and YTD FY2024 financial performance, covering sales growth, gross margin, segment results, and liquidity [Consolidated Results of Operations](index=22&type=section&id=Consolidated%20Results%20of%20Operations) This section details consolidated financial performance for Q3 and YTD, highlighting improvements in net sales, gross margin, and net earnings Q3 FY2024 vs Q3 FY2023 Performance | Metric | Q3 2024 | Q3 2023 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $927.9M | $875.7M | +6.0% | | Gross Margin | 35.6% | 33.0% | +260 bps | | Operating Income | $143.6M | $124.0M | +15.8% | | Net Earnings | $113.5M | $93.7M | +21.1% | | Diluted EPS | $0.92 | $0.76 | +21.7% | Nine Months YTD FY2024 vs YTD FY2023 Performance | Metric | YTD 2024 | YTD 2023 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $2,650.9M | $2,551.3M | +3.9% | | Gross Margin | 35.4% | 33.7% | +170 bps | | Operating Income | $397.9M | $359.6M | +10.6% | | Net Earnings | $304.3M | $266.9M | +14.0% | | Diluted EPS | $2.48 | $2.16 | +15.0% | - The increase in gross margin was primarily driven by leverage on higher sales, pricing actions, and input cost deflation[114](index=114&type=chunk) - Selling, general and administrative (SG&A) expenses increased, primarily due to increased headcount and incremental expenses from investments in acquired Life Sciences businesses[115](index=115&type=chunk)[125](index=125&type=chunk) [Segment Results of Operations](index=25&type=section&id=Segment%20Results%20of%20Operations) This section analyzes segment net sales and earnings, highlighting growth drivers and challenges for Mobile, Industrial, and Life Sciences Q3 FY2024 Net Sales Growth by Segment (YoY) | Segment | Q3 2024 Sales | Growth Rate | | :--- | :--- | :--- | | Mobile Solutions | $585.2M | +5.5% | | Industrial Solutions | $269.1M | +2.9% | | Life Sciences | $73.6M | +24.2% | - Mobile Solutions sales growth was driven by a **$43.9 million** increase in Aftermarket sales, partially offset by an **$11.4 million** decrease in Off-Road sales due to weak agriculture end market conditions[135](index=135&type=chunk) - Life Sciences sales saw a significant **24.2% increase** in Q3, driven by the timing of Bioprocessing Equipment sales and strong demand in Disk Drive[146](index=146&type=chunk) - The Life Sciences segment reported a loss before income taxes of **$9.5 million** for the nine-month period, a decrease from earnings of **$17.3 million** in the prior year, driven by investments to scale up recently-acquired businesses[149](index=149&type=chunk) [Liquidity, Capital Resources and Financial Condition](index=28&type=section&id=Liquidity%2C%20Capital%20Resources%20and%20Financial%20Condition) This section assesses liquidity, capital resources, and financial condition, detailing cash flow, debt, and available credit facilities - Cash provided by operating activities increased to **$366.5 million** for the nine months ended April 30, 2024, up from **$353.7 million** in the prior year, primarily due to higher earnings[151](index=151&type=chunk)[152](index=152&type=chunk) - Cash used in investing activities decreased significantly to **$67.8 million** from **$155.1 million**, mainly due to lower cash usage for acquisitions compared to the prior year[151](index=151&type=chunk)[153](index=153&type=chunk) - Total debt as a percentage of total capitalization decreased to **27.3%** as of April 30, 2024, from **33.2%** as of July 31, 2023[158](index=158&type=chunk) - The company maintains sufficient liquidity with **$223.7 million** in cash and cash equivalents and **$573.4 million** available for borrowing under existing credit facilities as of April 30, 2024[156](index=156&type=chunk)[157](index=157&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company details its exposure to market risks, including foreign currency and interest rates, and its use of derivative instruments - The company is exposed to foreign currency risk due to significant assets and operations outside the U.S. For the nine months ended April 30, 2024, foreign currency translation increased reported net sales by **$10.1 million** and net earnings by **$0.6 million**[169](index=169&type=chunk)[170](index=170&type=chunk) - To manage currency risk, the company uses foreign currency forward contracts (total notional amount of **$167.7 million**) and net investment hedges (notional amount of **€80 million**)[172](index=172&type=chunk)[173](index=173&type=chunk) - The company is exposed to interest rate risk on its variable-rate debt. A hypothetical **0.5 percentage point increase** in short-term interest rates would have increased interest expense by approximately **$1.0 million** in the nine-month period[175](index=175&type=chunk) [Item 4. Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective, with no material changes to internal control over financial reporting - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[179](index=179&type=chunk) - No changes in internal control over financial reporting occurred during the fiscal quarter that materially affected, or are reasonably likely to materially affect, the company's internal controls[180](index=180&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) The company believes its estimated liability for claims and litigation is adequate and not material to its financial position - The company believes its estimated liability for claims and litigation is adequate and not material to its financial position. It is considered remote that settlements will materially exceed accrued amounts[182](index=182&type=chunk) [Item 1A. Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for FY2023 - There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended July 31, 2023[183](index=183&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's common stock repurchases during Q3 FY2024 and remaining authorization under the new plan Share Repurchases (Q3 FY2024) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | February 2024 | 56,766 | $65.32 | | March 2024 | 1,337 | $72.52 | | April 2024 | 321,500 | $73.02 | | **Total** | **379,603** | **$71.86** | - On November 17, 2023, the Board of Directors authorized a new repurchase plan for up to **12.0 million shares**. As of the end of the quarter, **11.4 million shares** remained authorized for repurchase under this plan[184](index=184&type=chunk) [Item 6. Exhibits](index=33&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including required certifications and financial statements in iXBRL format

Donaldson (DCI) came out with quarterly earnings of $0.92 per share, beating the Zacks Consensus Estimate of $0.84 per share. This compares to earnings of $0.76 per share a year ago. These figures are adjusted for non- recurring items. This quarterly report represents an earnings surprise of 9.52%. A quarter ago, it was expected that this maker of filtration systems would post earnings of $0.73 per share when it actually produced earnings of $0.81, delivering a surprise of 10.96%. Over the last four quarter ...

Exhibit 99.1 MINNEAPOLIS (June 4, 2024) — Donaldson Company, Inc. (NYSE: DCI) (Donaldson or the Company), a global leader in technology-led filtration products and solutions, today reported third quarter fiscal 2024 generally accepted accounting principles (GAAP) net earnings of $113.5 million, compared with $93.7 million in fiscal 2023. Third quarter 2024 GAAP earnings per share (EPS) were $0.92 compared with 2023 earnings per share of $0.76. 1 Donaldson Reports Record Third Quarter Fiscal Year 2024 Sales ...

Core Insights - Donaldson Company, Inc. (DCI) has announced an 8% increase in its quarterly dividend to 27 cents per share, marking its 28th consecutive year of annual dividend increases [1][2] - The company has demonstrated strong financial health by utilizing free cash flow to enhance shareholder returns, with dividend payments totaling $60.3 million in the first half of fiscal 2024 [2][3] Financial Performance - DCI's dividend will be paid on June 28, 2024, to shareholders of record as of June 17, 2024 [1] - The company has consistently paid dividends for the last 68 years, with a previous increase of 8.7% to 25 cents per share in May 2023 [2] - In fiscal 2023, total dividend payments were $114.4 million, and share buybacks amounted to $141.8 million [3] Market Position - DCI currently holds a Zacks Rank of 2 (Buy) and is well-positioned for future growth due to its focus on innovation and strong demand in the industrial filtration solutions sector [4] - The company's shares have increased by 19.1% over the past six months, slightly trailing the industry growth of 21% [5] - The Zacks Consensus Estimate for DCI's fiscal 2024 earnings is $3.28 per share, stable from the previous 60 days [5]

Donaldson Company, Inc. (DCI) is scheduled to release third-quarter fiscal 2024 (ended Apr 30) results on Jun 6, before market open. The company has an impressive earnings surprise history, with the average surprise being 4.5%. In the last reported quarter, its earnings of 81 cents per share surpassed the Zacks Consensus Estimate of 73 cents by 11%. However, Donaldson is expected to put up a weak show in its upcoming results owing to softness in agriculture markets and weak end-market demand in China within ...