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Donaldson: Stay The Course And Keep Reinvesting Those Dividends
Seeking Alpha· 2025-01-31 10:35
Core Viewpoint - The company maintains a bullish stance on Donaldson Company, Inc. (NYSE: DCI) despite its returns trailing the S&P 500 in previous bullish commentaries [1]. Group 1: Investment Strategy - The investment strategy focuses on buying undervalued profitable stocks with strong balance sheets and minimal debt [1]. - The company also engages in writing calls against positions to generate additional income when opportunities arise [1]. - Risk management is implemented through position sizing and the use of trailing stop losses over time [1].
Here's Why Donaldson (DCI) is a Strong Value Stock
ZACKS· 2024-12-25 15:41
Core Viewpoint - Donaldson Company, Inc. (DCI) is highlighted as a stock to watch due to its upward earnings estimate revisions and solid performance metrics, making it an attractive option for investors [12][25]. Company Overview - Donaldson Company, Inc. is headquartered in Bloomington, MN, and specializes in manufacturing and selling filtration systems and replacement parts globally. The company was founded in 1915 [11]. Earnings Estimates - In the last 60 days, three analysts have revised their earnings estimates upwards for fiscal 2025, with the Zacks Consensus Estimate increasing by $0.01 to $3.64 per share. DCI has an average earnings surprise of 7.1% [12]. Zacks Rank and Style Scores - DCI currently holds a Zacks Rank of 3 (Hold) and has a VGM Score of A, indicating a solid position in the market [25]. - The company also boasts a Value Style Score of B, supported by attractive valuation metrics such as a forward P/E ratio of 18.68, which is appealing to value investors [20]. Investment Potential - With a strong Zacks Rank and top-tier Value and VGM Style Scores, DCI is recommended for investors looking for potential growth opportunities [26].
Zacks Industry Outlook Donaldson, Tetra Tech, and Atmus Filtration Technologies
ZACKS· 2024-12-12 08:16
For Immediate ReleaseChicago, IL – December 12, 2024 – Today, Zacks Equity Research Donaldson Co., Inc. (DCI) , Tetra Tech, Inc. (TTEK) and Atmus Filtration Technologies Inc. (ATMU) .Industry: Pollution ControlLink: https://www.zacks.com/commentary/2381985/3-pollution-control-stocks-poised-to-gain-on-prospering-industry-trendsThe Zacks Pollution Control industry is well-poised to benefit from the healthy demand for air pollution abatement products, thanks to rising greenhouse gas emissions and growing aware ...
Donaldson(DCI) - 2025 Q1 - Quarterly Report
2024-12-06 16:23
[PART I. FINANCIAL INFORMATION](index=2&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=2&type=section&id=Item%201.%20Financial%20Statements) For Q1 FY2025, Donaldson Company, Inc. reported increased net sales and earnings, with total assets growing to $3.04 billion, while cash flow from operations decreased due to higher working capital needs [Condensed Consolidated Statements of Earnings](index=2&type=section&id=Condensed%20Consolidated%20Statements%20of%20Earnings) Q1 FY2025 Earnings Summary (Unaudited) | Financial Metric | Three Months Ended Oct 31, 2024 | Three Months Ended Oct 31, 2023 | | :--- | :--- | :--- | | **Net Sales** | **$900.1 M** | **$846.3 M** | | Gross Profit | $319.6 M | $300.9 M | | Operating Income | $130.8 M | $124.6 M | | **Net Earnings** | **$99.0 M** | **$92.1 M** | | Diluted EPS | **$0.81** | **$0.75** | - Net sales increased by **6.4% YoY**, while net earnings grew by **7.5% YoY** for the three months ended October 31, 2024[7](index=7&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Comprehensive income significantly increased to $104.9 million, primarily driven by a positive foreign currency translation gain - Comprehensive income was **$104.9 million** for the quarter ended October 31, 2024, a significant increase from **$56.3 million** in the prior-year period, primarily driven by a positive foreign currency translation gain of **$4.9 million**, compared to a loss of **$37.6 million** in the same period last year[9](index=9&type=chunk) [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to $3,043.6 million, mainly due to growth in other long-term assets and inventories Balance Sheet Highlights (as of Oct 31, 2024) | Account | Oct 31, 2024 | July 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $221.2 M | $232.7 M | | Inventories, net | $520.0 M | $476.7 M | | **Total Assets** | **$3,043.6 M** | **$2,914.3 M** | | Long-term debt | $538.6 M | $483.4 M | | **Total Liabilities** | **$1,500.6 M** | **$1,425.2 M** | | **Total Stockholders' Equity** | **$1,543.0 M** | **$1,489.1 M** | - Total assets increased by **$129.3 million** from July 31, 2024, primarily due to a rise in 'Other long-term assets' (from **$180.4 M** to **$268.6 M**) and inventories[12](index=12&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow decreased significantly year-over-year, while investing activities increased due to a major equity investment Cash Flow Summary (Three Months Ended Oct 31) | Cash Flow Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash from Operating | $72.9 M | $138.0 M | | Net cash used in Investing | ($96.0 M) | ($23.2 M) | | Net cash from (used in) Financing | $9.8 M | ($78.9 M) | | **Decrease in Cash** | **($11.5 M)** | **$30.7 M (Increase)** | - Cash from operating activities decreased significantly YoY, mainly due to changes in operating assets and liabilities, while investing activities increased due to a **$71.0 million** equity investment[14](index=14&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail key accounting policies, including the acquisition of a 49% stake in Medica S.p.A., revenue growth across all regions and segments, share repurchases, and a restructuring charge - On August 9, 2024, the company acquired a **49% non-controlling stake** in Medica S.p.A. for approximately **€67.2 million ($73.7 million)**, including transaction costs, with an option to acquire the remaining **51%** in four years[24](index=24&type=chunk) Net Sales by Geographic Region (in millions) | Region | Q1 FY2025 | Q1 FY2024 | | :--- | :--- | :--- | | U.S. and Canada | $409.8 M | $381.5 M | | EMEA | $240.9 M | $234.4 M | | APAC | $155.2 M | $140.0 M | | LATAM | $94.2 M | $90.4 M | | **Total** | **$900.1 M** | **$846.3 M** | - During the quarter, the company repurchased **1.0 million shares** for **$74.9 million** and paid dividends of **27.0 cents per share**, an increase from **25.0 cents** in the prior year[36](index=36&type=chunk)[37](index=37&type=chunk) Segment Net Sales and Earnings Before Tax (in millions) | Segment | Net Sales Q1 FY25 | Net Sales Q1 FY24 | Earnings Before Tax Q1 FY25 | Earnings Before Tax Q1 FY24 | | :--- | :--- | :--- | :--- | :--- | | Mobile Solutions | $572.4 M | $540.0 M | $104.7 M | $92.2 M | | Industrial Solutions | $257.6 M | $246.2 M | $41.0 M | $43.3 M | | Life Sciences | $70.1 M | $60.1 M | ($5.3 M) | ($4.2 M) | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reported a 6.4% increase in net sales driven by volume growth across all segments, with strong liquidity despite decreased operating cash flow due to higher working capital needs [Consolidated Results of Operations](index=21&type=section&id=Consolidated%20Results%20of%20Operations) Consolidated net sales for Q1 FY2025 increased by 6.4% to $900.1 million, driven by volume and pricing, while gross margin slightly declined due to restructuring expenses Drivers of Net Sales Increase (YoY, in millions) | Segment | Oct 31, 2023 Sales | Sales Volume | Pricing | Currency Translation | Oct 31, 2024 Sales | | :--- | :--- | :--- | :--- | :--- | :--- | | Mobile Solutions | $540.0 M | $21.9 M | $7.2 M | $3.3 M | $572.4 M | | Industrial Solutions | $246.2 M | $7.4 M | $1.8 M | $2.2 M | $257.6 M | | Life Sciences | $60.1 M | $8.9 M | ($0.5 M) | $1.6 M | $70.1 M | | **Total Company** | **$846.3 M** | **$38.2 M** | **$8.5 M** | **$7.1 M** | **$900.1 M** | - The decrease in gross margin percentage was primarily attributed to **$1.1 million** in restructuring expenses related to global footprint and cost optimization actions[81](index=81&type=chunk) - The effective tax rate decreased to **24.2%** from **25.1%** in the prior year, mainly due to an increase in discrete tax benefits[86](index=86&type=chunk) [Segment Results of Operations](index=23&type=section&id=Segment%20Results%20of%20Operations) All three segments contributed to sales growth, with Mobile Solutions showing improved profit margin, Industrial Solutions experiencing a margin decrease, and Life Sciences reporting a larger pre-tax loss due to investments - **Mobile Solutions:** Sales increased **6.0% YoY**, driven by a **$43.7 million** increase in Aftermarket sales due to favorable market conditions and share gains, with earnings before tax margin increasing from **17.1%** to **18.3%**[88](index=88&type=chunk)[89](index=89&type=chunk) - **Industrial Solutions:** Sales grew **4.6% YoY**, led by a **$9.6 million** increase in Aerospace and Defense, but earnings before tax margin decreased from **17.6%** to **15.9%** due to investments for future growth and negative product mix[91](index=91&type=chunk)[92](index=92&type=chunk) - **Life Sciences:** Sales grew **16.6% YoY**, fueled by strong demand in disk drive and food & beverage markets, though the segment's pre-tax loss increased to **$5.3 million** from **$4.2 million**, reflecting investments in recent acquisitions[92](index=92&type=chunk)[94](index=94&type=chunk) [Liquidity, Capital Resources and Financial Condition](index=26&type=section&id=Liquidity%2C%20Capital%20Resources%20and%20Financial%20Condition) The company maintains strong liquidity with available credit, despite a significant decrease in operating cash flow primarily due to increased working capital and a major equity investment Cash Flow Summary (in millions) | Activity | Q1 FY2025 | Q1 FY2024 | Change | | :--- | :--- | :--- | :--- | | Operating | $72.9 M | $138.0 M | ($65.1 M) | | Investing | ($96.0 M) | ($23.2 M) | ($72.8 M) | | Financing | $9.8 M | ($78.9 M) | $88.7 M | - The decrease in operating cash flow was primarily driven by an increase in working capital requirements, including purchasing additional inventory to improve on-time deliveries[96](index=96&type=chunk) - As of October 31, 2024, the company had **$327.0 million** available on its **$500.0 million** unsecured revolving credit facility[99](index=99&type=chunk)[100](index=100&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages market risks from foreign currency exchange rates, interest rates, and commodity prices through hedging strategies and monitoring - The weaker U.S. dollar during the quarter had a positive impact, increasing reported net sales by **$7.1 million** and net earnings by **$0.9 million**[108](index=108&type=chunk) - The company uses foreign currency forward contracts to manage transaction exposures, with a total notional amount of **$257.0 million** (**$66.9 million** designated as hedges, **$190.1 million** not designated) as of October 31, 2024[110](index=110&type=chunk) - Net investment hedges with a notional amount of **€80 million** are used to hedge exposure for European operations[111](index=111&type=chunk) - A hypothetical **0.5 percentage point** increase in short-term interest rates would have increased interest expense by approximately **$0.4 million** in the quarter[112](index=112&type=chunk) [Item 4. Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the quarter - 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[117](index=117&type=chunk) - No material changes occurred in the company's internal control over financial reporting during the fiscal quarter ended October 31, 2024[118](index=118&type=chunk) [PART II. OTHER INFORMATION](index=32&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) The company assesses its recorded liabilities for claims and litigation as not material to its financial position or results of operations - The company believes its estimated liabilities for claims and litigation are adequate and not material to its financial position, considering it remote that settlements will materially exceed accrued amounts[121](index=121&type=chunk) [Item 1A. Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) 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, 2024 - The report refers to the "Risk Factors" section in the company's Annual Report on Form 10-K for the fiscal year ended July 31, 2024, indicating no material changes[122](index=122&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) During Q1 FY2025, the company repurchased approximately 1.0 million shares of common stock, with 9.7 million shares remaining authorized for repurchase Share Repurchases (Q1 FY2025) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Aug 2024 | 399,865 shares | $72.68 | | Sep 2024 | 186,399 shares | $72.42 | | Oct 2024 | 439,022 shares | $73.68 | | **Total** | **1,025,286 shares** | **$73.06** | - As of October 31, 2024, the company has remaining authorization to repurchase **9.7 million shares** under its stock repurchase plan authorized in November 2023[123](index=123&type=chunk) [Item 5. Other Information](index=32&type=section&id=Item%205.%20Other%20Information) No director or officer adopted, modified, or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter - No director or officer adopted, modified, or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" during the quarter[125](index=125&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 CEO and CFO certifications and financial statements in iXBRL format - Key exhibits filed include CEO and CFO certifications pursuant to Sarbanes-Oxley Sections 302 and 906, and financial data in iXBRL format[127](index=127&type=chunk)
Donaldson's Q1 Earnings Surpass Estimates, Sales Rise Year Over Year
ZACKS· 2024-12-04 11:37
Core Insights - Donaldson Company, Inc. (DCI) reported adjusted earnings of 83 cents per share for Q1 fiscal 2025, exceeding the Zacks Consensus Estimate of 82 cents, marking a 10.7% year-over-year increase [1] - Total revenues reached $900.1 million, surpassing the Zacks Consensus Estimate of $891 million, with a year-over-year growth of 6.4% [3] Revenue Results - The revenue growth was driven by aftermarket strength from market share gains and customer destocking [3] - Region-wise, net sales increased by 7% in the United States/Canada, 5% in Europe, the Middle East, and Africa, 6% in Latin America, and 7% in the Asia Pacific [3] Segment Performance - Mobile Solutions segment (63.6% of net sales) generated $572.4 million, a 6% year-over-year increase, benefiting from a 10.7% rise in aftermarket sales, although Off-Road and On-Road sales fell by 5.9% and 15% respectively [5] - Industrial Solutions segment (28.6%) reported revenues of $257.6 million, up 4.6% year over year, driven by a 26.8% increase in Aerospace and Defense sales [6] - Life Sciences segment (7.8%) achieved revenues of $70.1 million, a 16.6% year-over-year increase, supported by volume growth in Disk Drive and Food and Beverage businesses [6] Margin Profile - Cost of sales increased by 6.4% year over year to $580.5 million, while gross profit rose by 6.2% to $319.6 million, resulting in a gross margin decrease of 10 basis points to 35.5% [7] - Operating expenses rose 7.1% to $188.8 million, with operating profit increasing 4.9% to $130.8 million, leading to an operating margin of 14.5%, up 20 basis points year over year [7] Balance Sheet & Cash Flow - Cash and cash equivalents at the end of Q1 were $221.2 million, down from $232.7 million in the previous quarter, while long-term debt increased to $538.6 million from $483.4 million [9] - Net cash generated from operating activities was $72.9 million, a decrease of 47.2% year over year, with free cash flow down 58.3% to $47.9 million [10] FY25 Outlook - For fiscal 2025, adjusted earnings per share are expected to be between $3.56 and $3.72, with sales anticipated to grow by 2-6% from fiscal 2024 levels [12] - Segment-wise, Mobile Solutions sales are expected to be flat to increase by 4%, Industrial Solutions by 4-8%, and Life Sciences in the low-double-digit range [13] - Capital expenditure is projected to be between $85 million and $105 million, with free cash flow conversion expected to be in the range of 85-95% [14]
Donaldson(DCI) - 2025 Q1 - Earnings Call Transcript
2024-12-03 18:45
Donaldson Company, Inc. (NYSE:DCI) Q1 2025 Earnings Conference Call December 3, 2024 10:00 AM ET Company Participants Tod Carpenter - Chairman, President, Chief Executive Officer Brad Pogalz - Chief Financial Officer Scott Robinson - Former CFO, Strategic Advisor Sarika Dhadwal - Senior Director of Investor Relations Conference Call Participants Angel Castillo - Morgan Stanley Bryan Blair - Oppenheimer Brian Drab - William Blair Dan Rizzo - Jeffries Adam Farley - Stifel Rob Mason - Baird Operator Thank you ...
Donaldson(DCI) - 2025 Q1 - Earnings Call Presentation
2024-12-03 17:04
| --- | --- | --- | --- | --- | --- | --- | |--------------------------------|-------|---------------------------------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | D O N A L D S O N C O M P A N Y | | | | | | FIRST QUARTER FISCAL YEAR 2025 | | D e c e m b e r 2 0 2 4 | | | | | | | | | | | | | Forward-Looking Statement Safe Harbor Statements in this presentation regarding future events and expectations, such as forecasts, plans, trends, and projections relating to th ...
Donaldson (DCI) Q1 Earnings: How Key Metrics Compare to Wall Street Estimates
ZACKS· 2024-12-03 15:30
For the quarter ended October 2024, Donaldson (DCI) reported revenue of $900.1 million, up 6.4% over the same period last year. EPS came in at $0.83, compared to $0.75 in the year-ago quarter.The reported revenue represents a surprise of +1.00% over the Zacks Consensus Estimate of $891.18 million. With the consensus EPS estimate being $0.82, the EPS surprise was +1.22%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expe ...
Donaldson (DCI) Q1 Earnings and Revenues Surpass Estimates
ZACKS· 2024-12-03 13:11
Donaldson (DCI) came out with quarterly earnings of $0.83 per share, beating the Zacks Consensus Estimate of $0.82 per share. This compares to earnings of $0.75 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 1.22%. A quarter ago, it was expected that this maker of filtration systems would post earnings of $0.88 per share when it actually produced earnings of $0.94, delivering a surprise of 6.82%.Over the last four quarters, t ...
Donaldson(DCI) - 2025 Q1 - Quarterly Results
2024-12-02 22:36
Exhibit 99.1 Donaldson Reports Record First Quarter Fiscal 2025 Sales and Earnings First quarter sales of $900.1 million, a 6.4% year-over-year increase GAAP EPS of $0.81, up 8.1% versus prior year; adjusted EPS of $0.83 Reaffirming fiscal 2025 outlook MINNEAPOLIS (December 3, 2024) — Donaldson Company, Inc. (NYSE: DCI) (Donaldson or the Company), a global leader in technology-led filtration products and solutions, today reported first quarter fiscal 2025 generally accepted accounting principles (GAAP) net ...