Core Viewpoint - Donaldson (DCI) reported a slight decline in revenue for the quarter ended January 2025, with earnings per share (EPS) showing a modest increase compared to the previous year [1] Financial Performance - Revenue for the quarter was $870 million, down 0.8% year-over-year, and below the Zacks Consensus Estimate of $908.65 million, resulting in a surprise of -4.25% [1] - EPS was reported at $0.83, an increase from $0.81 in the same quarter last year, but below the consensus estimate of $0.85, leading to an EPS surprise of -2.35% [1] Segment Performance - Industrial Solutions segment reported net sales of $253.70 million, below the estimated $277.26 million, reflecting a year-over-year decline of -3.7% [4] - Mobile Solutions generated net sales of $547.50 million, slightly below the estimated $555.49 million, with a year-over-year change of -0.5% [4] - Life Sciences segment achieved net sales of $68.80 million, surpassing the estimated $71.47 million, marking a year-over-year increase of +9.2% [4] - Industrial Filtration Solutions within Industrial Solutions reported net sales of $207.50 million, below the estimate of $238.85 million, representing a year-over-year decline of -7.6% [4] - Aerospace and Defense within Industrial Solutions saw net sales of $46.20 million, exceeding the estimate of $38.90 million, with a year-over-year increase of +18.8% [4] - Off-Road Mobile Solutions reported net sales of $80.20 million, below the estimate of $92.06 million, reflecting a year-over-year decline of -12.7% [4] - On-Road Mobile Solutions had net sales of $25.30 million, below the estimate of $29.49 million, with a year-over-year decline of -24.5% [4] - Aftermarket Mobile Solutions reported net sales of $442 million, exceeding the estimate of $431.17 million, with a year-over-year increase of +4% [4] Earnings Before Income Taxes - Mobile Solutions reported earnings before income taxes of $95.50 million, above the estimate of $93.47 million [4] - Industrial Solutions reported earnings before income taxes of $40.90 million, below the estimate of $47.72 million [4] - Life Sciences reported a loss before income taxes of -$0.50 million, better than the estimated loss of -$1.22 million [4] - Corporate and unallocated reported a loss before income taxes of -$10.90 million, slightly worse than the estimate of -$10.67 million [4] Stock Performance - Donaldson's shares returned -1.5% over the past month, compared to the Zacks S&P 500 composite's -2.2% change, indicating relative stability [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Financial Performance - Donaldson reported quarterly earnings of $0.83 per share, missing the Zacks Consensus Estimate of $0.85 per share, but showing an increase from $0.81 per share a year ago, resulting in an earnings surprise of -2.35% [1] - The company posted revenues of $870 million for the quarter ended January 2025, missing the Zacks Consensus Estimate by 4.25%, and down from $876.7 million year-over-year [2] - Over the last four quarters, Donaldson has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Stock Performance and Outlook - Donaldson shares have increased by approximately 2.8% since the beginning of the year, outperforming the S&P 500's gain of 1.3% [3] - The company's earnings outlook, including current consensus earnings expectations for upcoming quarters, will be crucial for assessing future stock performance [4] - The current consensus EPS estimate for the coming quarter is $0.96 on revenues of $961.09 million, and for the current fiscal year, it is $3.64 on revenues of $3.74 billion [7] Industry Context - The Pollution Control industry, to which Donaldson belongs, is currently ranked in the bottom 40% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor sentiment [5]

Financial Performance - Second quarter sales were $870.0 million, down 0.8% year over year, but up 0.9% in constant currency[1] - GAAP EPS for the second quarter was $0.79, a decrease of 2.2% compared to 2024, while adjusted EPS was $0.83, an increase of 2.5%[1] - Operating income margin decreased to 14.4%, down 40 basis points year over year, while adjusted operating margin increased to 15.2%[7][6] - Full-year adjusted EPS guidance is narrowed to between $3.60 and $3.68, with sales forecasted to be flat to up 4% compared to the prior year[9][10] - Net earnings for the six months ended January 31, 2025, were $194.9 million, up from $190.8 million in the same period of 2024, representing a growth of 1.6%[23] - The company reported net earnings of $95.9 million for the three months ended January 31, 2025, compared to $98.7 million in the same period last year[38] - Adjusted diluted EPS for the three months ended January 31, 2025, was $0.83, up from $0.81 in the prior year[39] - The adjusted EBITDA for the six months ended January 31, 2025, was $327.3 million, an increase from $311.9 million in the prior year[38] Segment Performance - The company generated sales growth in Aftermarket (up 4.0%), Aerospace and Defense (up 18.7%), and Life Sciences (up 9.2%) segments[3][5] - Mobile Solutions segment sales decreased 0.5%, with Off-Road and On-Road sales declining 12.8% and 24.4%, respectively[4] - Industrial Solutions segment sales decreased 3.7%, primarily due to volume declines, while Aerospace and Defense sales grew 18.7%[5] - The Mobile Solutions segment reported net sales of $870.0 million for the three months ended January 31, 2025, down 0.8% from $876.7 million in the same period of 2024[28] - The Industrial Solutions segment saw a 3.7% decrease in net sales to $253.7 million for the three months ended January 31, 2025, compared to $263.4 million in 2024[28] - Life Sciences segment net sales increased by 9.2% to $68.8 million for the three months ended January 31, 2025, compared to $63.0 million in 2024[28] - The Life Sciences segment showed a strong performance with a 12.8% increase in revenue for the six months ended January 31, 2025, driven by a 24.2% growth in the U.S./CA region[32] - The Aerospace and Defense sector within the Industrial Solutions segment experienced a significant revenue increase of 22.6% for the six months ended January 31, 2025[32] - The Aftermarket segment in Mobile Solutions saw a revenue increase of 7.3% for the six months ended January 31, 2025, with a 9.3% growth in the U.S./CA region[32] - The total revenue for the Industrial Solutions segment remained flat with a slight increase of 0.3% for the six months ended January 31, 2025[32] - The On-Road category in Mobile Solutions faced a decline of 19.5% for the six months ended January 31, 2025, particularly impacted in the U.S./CA region[32] Cash Flow and Investments - Capital expenditures are forecasted to be between $85 million and $100 million, with free cash flow conversion expected between 85% and 95%[13] - Free cash flow for the three months ended January 31, 2025, was reported at $71.5 million, compared to $65.8 million in the same period last year[38] - The cash conversion ratio improved to 74.4% for the three months ended January 31, 2025, compared to 66.7% in the same period of 2024[25] - The company anticipates repurchasing 2% to 3% of its outstanding shares during the fiscal year[13] Tax and Liabilities - The effective tax rate for the company was 23.2%, compared to 23.5% in the previous year[8] - The effective tax rate for the six months ended January 31, 2025, was 23.7%, down from 24.2% in the same period of 2024[25] - Total current liabilities decreased slightly to $765.8 million from $782.5 million, a reduction of 2.5%[21] Assets and Overall Growth - Total assets increased to $2,961.3 million as of January 31, 2025, compared to $2,914.3 million on July 31, 2024, reflecting a growth of 1.6%[21] - Total company revenue increased by 2.7% for the six months ended January 31, 2025, with a notable growth of 5.6% in the U.S./CA region[32]

Core Viewpoint - Wall Street analysts forecast that Donaldson (DCI) will report quarterly earnings of $0.85 per share, reflecting a year-over-year increase of 4.9%, with anticipated revenues of $908.65 million, showing a 3.6% increase compared to the previous year [1]. Earnings Projections - Over the last 30 days, there has been no revision in the consensus EPS estimate for the quarter, indicating that analysts have not changed their initial forecasts during this period [2]. - Changes in earnings projections are crucial for predicting investor reactions to the stock, as empirical studies show a strong correlation between earnings estimate trends and short-term stock price movements [3]. Key Metrics Estimates - Analysts estimate 'Net Sales- Industrial Solutions segment' at $277.26 million, indicating a year-over-year change of +5.3% [5]. - 'Net Sales- Mobile Solutions' is expected to reach $555.49 million, reflecting a change of +0.9% from the year-ago quarter [5]. - The 'Net Sales- Life Sciences segment' is projected to be $71.47 million, suggesting a year-over-year increase of +13.4% [5]. Segment-Specific Sales Estimates - 'Net Sales- Industrial Solutions- Industrial Filtration Solutions' is estimated at $238.85 million, indicating a +6.4% change from the prior-year quarter [6]. - 'Net Sales- Industrial Solutions- Aerospace and Defense' is projected to be $38.90 million, with no change from the year-ago quarter [6]. - 'Net Sales- Mobile Solutions- Off-Road' is expected to reach $92.06 million, reflecting a +0.2% change from the prior-year quarter [7]. - 'Net Sales- Mobile Solutions- On-Road' is estimated at $29.49 million, suggesting a -12% year-over-year change [7]. - 'Net Sales- Mobile Solutions- Aftermarket' is projected to be $431.17 million, indicating a +1.5% change year-over-year [8]. Earnings Before Income Taxes - The consensus estimate for 'Earnings / (loss) before income taxes- Mobile Solutions' is $93.47 million, down from $99.20 million reported in the same quarter last year [8]. - For 'Earnings / (loss) before income taxes- Industrial Solutions', the estimate stands at $47.72 million, slightly up from $47.40 million reported in the same quarter last year [9]. Stock Performance - Shares of Donaldson have shown a return of -4.8% over the past month, compared to a -0.5% change in the Zacks S&P 500 composite [9].

Core Insights - Zacks Premium offers tools to enhance investor confidence and market engagement through daily updates, research reports, and stock screens [1] - The Zacks Style Scores are designed to help investors select stocks with the highest potential to outperform the market within a 30-day timeframe [2] Zacks Style Scores Overview - Stocks are rated A, B, C, D, or F based on value, growth, and momentum characteristics, with higher scores indicating better chances of outperforming the market [3] - The Style Scores are categorized into four types: Value Score, Growth Score, Momentum Score, and VGM Score, each focusing on different investment strategies [3][4][5][6] Value Score - The Value Score identifies attractive and discounted stocks using financial ratios such as P/E, PEG, Price/Sales, and Price/Cash Flow [3] Growth Score - The Growth Score evaluates stocks based on projected and historical earnings, sales, and cash flow to identify sustainable growth opportunities [4] Momentum Score - The Momentum Score assesses stocks based on recent price changes and earnings estimate trends to identify favorable buying opportunities [5] VGM Score - The VGM Score combines all three Style Scores, providing a comprehensive indicator for investors who utilize multiple investment strategies [6] Zacks Rank Integration - The Zacks Rank uses earnings estimate revisions to simplify portfolio building, with 1 (Strong Buy) stocks achieving an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [7][8] - Investors are encouraged to select stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B to maximize returns [9] Stock Highlight: Donaldson Company, Inc. (DCI) - Donaldson Company, Inc. is a filtration systems manufacturer with a Zacks Rank of 3 (Hold) and a VGM Score of A, indicating potential for momentum investors [11] - The company has seen a 6.5% increase in share price over the past four weeks, with three analysts revising earnings estimates upwards for fiscal 2025 [11][12] - The Zacks Consensus Estimate for DCI has risen by $0.01 to $3.64 per share, with an average earnings surprise of 7.1%, making it a noteworthy option for investors [12]

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].

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].

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 ...

[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)

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]