Donaldson Company, Inc. (NYSE: DCI) announced its financial results for
its fiscal 2012 second quarter. Summarized financial results are as
follows (dollars in millions, except per share data):
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
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|
January 31
|
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January 31
|
|
|
| 2012 |
|
| 2011 |
|
| Change |
|
| 2012 |
|
| 2011 |
|
| Change |
Net sales
|
|
|
$
|
581
|
|
|
$
|
537
|
|
|
8
|
%
|
|
|
$
|
1,189
|
|
|
$
|
1,074
|
|
|
11
|
%
|
Operating income
|
|
|
|
75
|
|
|
|
67
|
|
|
11
|
%
|
|
|
|
165
|
|
|
|
142
|
|
|
16
|
%
|
Net earnings
|
|
|
|
54
|
|
|
|
45
|
|
|
21
|
%
|
|
|
|
122
|
|
|
|
98
|
|
|
25
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS
|
|
|
$
|
0.70
|
|
|
$
|
0.56
|
|
|
25
|
%
|
|
|
$
|
1.60
|
|
|
$
|
1.24
|
|
|
29
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
"We are very pleased to reach the midpoint of our year with another
strong performance as we established second quarter records in sales,
operating margin, and EPS," said Bill Cook, Chairman, President and CEO.
"Sales in our Engine Products segment increased 12 percent as new
equipment build rates at our global Off-Road and On-Road OEM Customers
remained healthy. Within our Industrial Products segment, sales of our
Torit® dust collectors were strong this quarter."
"Our operating margin performance was very good at 12.9 percent. Our
ongoing Continuous Improvement initiatives helped us again. We
also continue to leverage our fixed cost base as our sales grow. The
combination of our solid revenue growth, our strong margin performance,
and a lower tax rate drove second quarter net income and EPS up 21
percent and 25 percent, respectively."
"We now forecast our full year sales to grow between 7 and 12 percent
over last year. Forecasted business conditions in our end markets vary:
strong in the Americas, stable in Europe, and improving in China.
Currency translation is now projected to be unfavorable during the
second half of our year due to the strengthening of the U.S. dollar,
with an estimated reduction of our full year EPS estimate of $0.05 from
our previous forecast. As a result, we now forecast our FY12 EPS to be
between $3.25 and $3.45, which would be another new record, and would be
up 13 percent to 20 percent over last year."
Financial Statement Discussion
The impact of foreign currency translation decreased sales by $4.2
million, or 0.8 percent, during the second quarter and increased sales
by $9.2 million, or 0.9 percent, year-to-date, compared to the same
periods last year. The impact of foreign currency translation decreased
reported net earnings by $0.6 million, or 1.3 percent, during the second
quarter and increased reported net earnings by $0.7 million, or 0.8
percent, for the year.
Gross margin was 34.6 percent for the quarter and 35.0 percent
year-to-date, compared to prior year margins of 35.3 percent and 35.2
percent, respectively. The decrease in the quarter was due to lower
absorption of fixed costs resulting from the Thai floods and from fewer
shipping days compared to last year's second quarter. These were
partially offset by cost reductions from our ongoing Continuous
Improvement initiatives.
Operating expenses for the quarter were $126.0 million, up 3.2 percent
from $122.1 million last year primarily due to the increased sales
volume. As a percent of sales, operating expenses were 21.7 percent
compared to last year's 22.7 percent for the second quarter. Operating
expenses year-to-date were $250.7 million, or 21.1 percent of sales,
compared to $235.7 million, or 21.9 percent of sales, last year.
The effective tax rate for the quarter was 29.6 percent, compared to a
prior year rate of 34.4 percent. The prior year's quarter included a
$4.0 million tax charge related to the reorganization of our subsidiary
holdings to improve our global business and legal entity structure,
partially offset by $0.9 million in tax benefits primarily from the
retroactive reinstatement of the Research and Experimentation Credit in
the U.S. The year-to-date effective tax rate was 27.3 percent compared
to a prior year rate of 30.2 percent.
We did not repurchase any shares during the second quarter, and
year-to-date we have repurchased 1,376,000 shares, or 1.8 percent of our
diluted outstanding shares, for $73.6 million.
FY12 Outlook
We forecast our FY12 sales to be between $2.45 and $2.55 billion, or up
about 7 to 12 percent from the prior year. Our current forecast is based
on the Euro at US$1.32 and 76 Yen to the US$, which, in aggregate, is
less favorable than our previous currency guidance issued in November.
-
Our full year operating margin is forecast to be 13.7 to 14.5 percent.
-
Our full year FY12 tax rate is anticipated to be between 27 and 30
percent.
-
Cash generated by operating activities is projected to be between $250
and $280 million. Capital spending is now estimated to be
approximately $85 million.
Engine Products: We expect
full year sales to increase 8 to 12 percent, including the impact of
foreign currency translation.
-
We anticipate sales to both our Off-Road and On-Road OEM Customers
will remain strong in the second half of FY12. We will continue to
benefit from increased market share on our Customers' new Tier IV
equipment platforms.
-
Sales of our Aftermarket Products are expected to increase moderately
based on current utilization rates for both off-road equipment and
on-road heavy trucks. We should also benefit from our continued
expansion into the emerging economies and from the increasing number
of systems installed in the field with our proprietary filtration
systems, such as our PowerCore® products.
-
We forecast Aerospace and Defense Products' sales to be level with the
prior year as the continued slowdown in military spending is
anticipated to be offset by increased commercial aerospace sales.
Industrial Products: We
forecast full year sales to increase 7 to 11 percent, including the
impact of foreign currency translation.
-
Our Industrial Filtration Solutions' sales are projected to increase 7
to 11 percent and assume a continuing improvement in general
manufacturing activity in the U.S., stable conditions in Europe, and
improving conditions in Asia.
-
We anticipate our Gas Turbine Products' sales to be up 18 to 22
percent due to the recent strengthening in the large turbine power
generation market and ongoing strength in the oil and gas market
segment.
-
Special Applications Products' sales are forecast to be level with the
prior year as growth in our membrane and venting product sales should
offset the reduction in our disk drive filter sales related to the
Thai floods last fall.
About Donaldson Company
Donaldson is a leading worldwide provider of filtration systems that
improve people's lives, enhance our Customers' equipment performance,
and protect our environment. We are a technology-driven Company
committed to satisfying our Customers' needs for filtration solutions
through innovative research and development, application expertise, and
global presence. Our nearly 13,000 employees contribute to the Company's
success by supporting our Customers at our more than 100 sales,
manufacturing, and distribution locations around the world.
Donaldson is a member of the S&P MidCap 400 and Russell 1000 indices,
and our shares trade on the NYSE under the symbol DCI. Additional
information is available at www.donaldson.com.
SAFE HARBOR STATEMENT UNDER THE SECURITIES REFORM ACT OF 1995
The Company desires to take advantage of the "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995 (the "Act") and is
making this cautionary statement in connection with such safe harbor
legislation. This announcement contains forward-looking statements,
including forecasts, plans, and projections relating to our business and
financial performance and global economic conditions, which involve
uncertainties that could materially impact results.
The Company wishes to caution investors that any forward-looking
statements are subject to uncertainties and other risk factors that
could cause actual results to differ materially from such statements,
including but not limited to risks associated with: world economic
factors and the ongoing economic uncertainty, reduced demand for hard
disk drive products with the increased use of flash memory, the
potential for some Customers to increase their reliance on their own
filtration capabilities, currency fluctuations, commodity prices,
political factors, the Company's international operations, highly
competitive markets, governmental laws and regulations including the
impact of various economic stimulus and financial reform measures, the
implementation of our new information technology systems, potential
global events resulting in market instability including financial
bailouts and defaults of sovereign nations, military and terrorist
activities, health outbreaks, natural disasters, and other factors
included in our Annual and Quarterly Reports. We undertake no obligation
to publicly update or revise any forward-looking statements.
|
CONDENSED STATEMENTS OF CONSOLIDATED EARNINGS
|
DONALDSON COMPANY, INC. AND SUBSIDIARIES
|
(Thousands of dollars, except share and per share amounts)
|
(Unaudited)
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
January 31
|
|
|
January 31
|
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
Net sales
|
|
|
$
|
580,883
|
|
|
|
$
|
537,105
|
|
|
|
$
|
1,189,178
|
|
|
|
$
|
1,074,014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
|
380,066
|
|
|
|
|
347,562
|
|
|
|
|
773,427
|
|
|
|
|
696,381
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
|
|
200,817
|
|
|
|
|
189,543
|
|
|
|
|
415,751
|
|
|
|
|
377,633
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
126,049
|
|
|
|
|
122,102
|
|
|
|
|
250,656
|
|
|
|
|
235,689
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
74,768
|
|
|
|
|
67,441
|
|
|
|
|
165,095
|
|
|
|
|
141,944
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income, net
|
|
|
|
(4,550
|
)
|
|
|
|
(3,502
|
)
|
|
|
|
(9,410
|
)
|
|
|
|
(4,609
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
2,899
|
|
|
|
|
2,936
|
|
|
|
|
6,069
|
|
|
|
|
6,589
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before income taxes
|
|
|
|
76,419
|
|
|
|
|
68,007
|
|
|
|
|
168,436
|
|
|
|
|
139,964
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
|
|
22,598
|
|
|
|
|
23,428
|
|
|
|
|
46,062
|
|
|
|
|
42,251
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
|
|
$
|
53,821
|
|
|
|
$
|
44,579
|
|
|
|
$
|
122,374
|
|
|
|
$
|
97,713
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
|
|
|
|
|
|
|
|
|
|
|
|
|
outstanding*
|
|
|
|
75,052,805
|
|
|
|
|
77,580,064
|
|
|
|
|
75,154,873
|
|
|
|
|
77,375,086
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted shares outstanding*
|
|
|
|
76,412,785
|
|
|
|
|
78,977,509
|
|
|
|
|
76,480,673
|
|
|
|
|
78,766,895
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share*
|
|
|
$
|
0.72
|
|
|
|
$
|
0.57
|
|
|
|
$
|
1.63
|
|
|
|
$
|
1.26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
assuming dilution*
|
|
|
$
|
0.70
|
|
|
|
$
|
0.56
|
|
|
|
$
|
1.60
|
|
|
|
$
|
1.24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends paid per share*
|
|
|
$
|
0.150
|
|
|
|
$
|
0.130
|
|
|
|
$
|
0.300
|
|
|
|
$
|
0.255
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Earnings and dividends declared per share and weighted average
shares outstanding are presented before the effect of a 100 percent
stock dividend declared on January 27, 2012, to be distributed on March
23, 2012 to shareholders of record on March 2, 2012.
|
DONALDSON COMPANY, INC. AND SUBSIDIARIES
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(Thousands of dollars)
|
(Unaudited)
|
|
|
|
|
January 31
|
|
|
July 31
|
|
|
|
2012
|
|
|
2011
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and short-term investments
|
|
|
$
|
272,315
|
|
$
|
273,494
|
Accounts receivable – net
|
|
|
|
408,462
|
|
|
445,700
|
Inventories – net
|
|
|
|
270,212
|
|
|
271,476
|
Prepaids and other current assets
|
|
|
|
78,697
|
|
|
75,912
|
|
|
|
|
|
|
Total current assets
|
|
|
|
1,029,686
|
|
|
1,066,582
|
|
|
|
|
|
|
Other assets and deferred taxes
|
|
|
|
268,746
|
|
|
268,009
|
Property, plant and equipment – net
|
|
|
|
382,957
|
|
|
391,502
|
|
|
|
|
|
|
Total assets
|
|
|
$
|
1,681,389
|
|
|
$
|
1,726,093
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade accounts payable
|
|
|
$
|
190,076
|
|
|
$
|
215,918
|
Employee compensation and other liabilities
|
|
|
|
176,030
|
|
|
219,326
|
Short-term borrowings
|
|
|
|
92,728
|
|
|
13,129
|
Current maturity long-term debt
|
|
|
|
2,356
|
|
|
47,871
|
|
|
|
|
|
|
Total current liabilities
|
|
|
|
461,190
|
|
|
496,244
|
|
|
|
|
|
|
Long-term debt
|
|
|
|
205,217
|
|
|
205,748
|
Other long-term liabilities
|
|
|
|
99,569
|
|
|
89,390
|
|
|
|
|
|
|
Total liabilities
|
|
|
|
765,976
|
|
|
791,382
|
|
|
|
|
|
|
|
Equity
|
|
|
|
915,413
|
|
|
|
934,711
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
|
$
|
1,681,389
|
|
|
$
|
1,726,093
|
|
|
|
|
|
|
|
|
|
|
DONALDSON COMPANY, INC. AND SUBSIDIARIES
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Thousands of dollars)
|
(Unaudited)
|
|
|
|
|
Six Months Ended
|
|
|
|
January 31
|
|
|
|
2012
|
|
|
2011
|
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
|
|
$
|
122,374
|
|
|
$
|
97,713
|
|
Adjustments to reconcile net earnings to net cash provided by
operating activities:
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
30,896
|
|
|
|
30,478
|
|
Changes in operating assets and liabilities
|
|
|
|
(43,485
|
)
|
|
|
(19,947
|
)
|
Tax benefit of equity plans
|
|
|
|
(7,576
|
)
|
|
|
(7,445
|
)
|
Stock compensation plan expense
|
|
|
|
6,440
|
|
|
|
6,089
|
|
Other, net
|
|
|
|
(6,451
|
)
|
|
|
(13,828
|
)
|
Net cash provided by operating activities
|
|
|
|
102,198
|
|
|
|
93,060
|
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
Net expenditures on property and equipment
|
|
|
|
(36,349
|
)
|
|
|
(24,051
|
)
|
Purchases of short-term investments
|
|
|
|
(93,455
|
)
|
|
|
(66,494
|
)
|
Acquisitions and divestitures, net
|
|
|
|
-
|
|
|
|
3,613
|
|
Net cash used in investing activities
|
|
|
|
(129,804
|
)
|
|
|
(86,932
|
)
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of treasury stock
|
|
|
|
(73,558
|
)
|
|
|
(6,491
|
)
|
Net change in debt and short-term borrowings
|
|
|
|
33,452
|
|
|
|
(21,254
|
)
|
Dividends paid
|
|
|
|
(22,342
|
)
|
|
|
(19,542
|
)
|
Tax benefit of equity plans
|
|
|
|
7,576
|
|
|
|
7,445
|
|
Exercise of stock options
|
|
|
|
9,791
|
|
|
|
|
12,113
|
|
Net cash used in financing activities
|
|
|
|
(45,081
|
)
|
|
|
|
(27,729
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash
|
|
|
|
(19,877
|
)
|
|
|
|
9,236
|
|
Decrease in cash and cash equivalents
|
|
|
|
(92,564
|
)
|
|
|
|
(12,365
|
)
|
Cash and cash equivalents – beginning of year
|
|
|
|
273,494
|
|
|
|
|
232,000
|
|
Cash and cash equivalents – end of period
|
|
|
$
|
180,930
|
|
|
|
$
|
219,635
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT DETAIL
|
(Thousands of dollars)
|
(Unaudited)
|
|
|
|
|
Engine
|
|
|
Industrial
|
|
|
Corporate &
|
|
|
Total
|
|
|
|
Products
|
|
|
Products
|
|
|
Unallocated
|
|
|
Company
|
3 Months Ended January 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
370,834
|
|
|
$
|
210,049
|
|
|
---
|
|
|
|
$
|
580,883
|
Earnings before income taxes
|
|
|
|
48,418
|
|
|
|
30,597
|
|
|
(2,596
|
)
|
|
|
|
76,419
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3 Months Ended January 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
331,122
|
|
|
$
|
205,983
|
|
|
---
|
|
|
|
$
|
537,105
|
Earnings before income taxes
|
|
|
|
44,203
|
|
|
|
29,127
|
|
|
(5,323
|
)
|
|
|
|
68,007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6 Months Ended January 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
764,559
|
|
|
$
|
424,619
|
|
|
---
|
|
|
|
$
|
1,189,178
|
Earnings before income taxes
|
|
|
|
108,296
|
|
|
|
64,896
|
|
|
(4,756
|
)
|
|
|
|
168,436
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6 Months Ended January 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
664,891
|
|
|
$
|
409,123
|
|
|
---
|
|
|
|
$
|
1,074,014
|
Earnings before income taxes
|
|
|
|
92,654
|
|
|
|
59,162
|
|
|
(11,852
|
)
|
|
|
|
139,964
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET SALES BY PRODUCT
|
(Thousands of dollars)
|
(Unaudited)
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
January 31
|
|
|
January 31
|
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
Engine Products segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
Off-Road Products
|
|
|
$
|
87,035
|
|
|
$
|
73,852
|
|
|
$
|
181,143
|
|
|
$
|
146,498
|
On-Road Products
|
|
|
|
39,376
|
|
|
|
28,747
|
|
|
|
82,001
|
|
|
|
57,802
|
Aftermarket Products
|
|
|
|
214,070
|
|
|
|
199,891
|
|
|
|
440,967
|
|
|
|
401,758
|
Retrofit Emissions Products
|
|
|
|
4,651
|
|
|
|
4,908
|
|
|
|
9,288
|
|
|
|
8,255
|
Aerospace and Defense Products
|
|
|
|
25,702
|
|
|
|
23,724
|
|
|
|
51,160
|
|
|
|
50,578
|
Total Engine Products segment
|
|
|
$
|
370,834
|
|
|
$
|
331,122
|
|
|
$
|
764,559
|
|
|
$
|
664,891
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial Products segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial Filtration Solutions Products
|
|
|
$
|
132,041
|
|
|
$
|
123,430
|
|
|
$
|
265,440
|
|
|
$
|
242,783
|
Gas Turbine Products
|
|
|
|
37,011
|
|
|
|
34,871
|
|
|
|
72,592
|
|
|
|
70,376
|
Special Applications Products
|
|
|
|
40,997
|
|
|
|
47,682
|
|
|
|
86,587
|
|
|
|
95,964
|
Total Industrial Products segment
|
|
|
$
|
210,049
|
|
|
$
|
205,983
|
|
|
$
|
424,619
|
|
|
$
|
409,123
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Company
|
|
|
$
|
580,883
|
|
|
$
|
537,105
|
|
|
$
|
1,189,178
|
|
|
$
|
1,074,014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
|
(Thousands of dollars, except per share amounts)
|
(Unaudited)
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
January 31
|
|
|
January 31
|
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow
|
|
|
$
|
26,654
|
|
|
|
$
|
16,294
|
|
|
|
$
|
65,849
|
|
|
|
$
|
69,009
|
|
Net capital expenditures
|
|
|
|
17,858
|
|
|
|
|
14,003
|
|
|
|
|
36,349
|
|
|
|
|
24,051
|
|
Net cash provided by operating activities
|
|
|
$
|
44,512
|
|
|
|
$
|
30,297
|
|
|
|
$
|
102,198
|
|
|
|
$
|
93,060
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
|
$
|
93,530
|
|
|
|
$
|
85,911
|
|
|
|
$
|
203,492
|
|
|
|
$
|
175,919
|
|
Income taxes
|
|
|
|
(22,598
|
)
|
|
|
|
(23,428
|
)
|
|
|
|
(46,062
|
)
|
|
|
|
(42,251
|
)
|
Interest expense (net)
|
|
|
|
(1,789
|
)
|
|
|
|
(2,344
|
)
|
|
|
|
(4,160
|
)
|
|
|
|
(5,477
|
)
|
Depreciation and amortization
|
|
|
|
(15,322
|
)
|
|
|
|
(15,560
|
)
|
|
|
|
(30,896
|
)
|
|
|
|
(30,478
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
|
|
$
|
53,821
|
|
|
|
$
|
44,579
|
|
|
|
$
|
122,374
|
|
|
|
$
|
97,713
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales, excluding foreign currency translation
|
|
|
$
|
585,085
|
|
|
|
$
|
540,594
|
|
|
|
$
|
1,179,960
|
|
|
|
$
|
1,081,230
|
|
Foreign currency translation
|
|
|
|
(4,202
|
)
|
|
|
|
(3,489
|
)
|
|
|
|
9,218
|
|
|
|
|
(7,216
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
580,883
|
|
|
|
$
|
537,105
|
|
|
|
$
|
1,189,178
|
|
|
|
$
|
1,074,014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings, excluding foreign currency translation
|
|
|
$
|
54,408
|
|
|
|
$
|
44,417
|
|
|
|
$
|
121,630
|
|
|
|
$
|
97,432
|
|
Foreign currency translation
|
|
|
|
(587
|
)
|
|
|
|
162
|
|
|
|
|
744
|
|
|
|
|
281
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
|
|
$
|
53,821
|
|
|
|
$
|
44,579
|
|
|
|
$
|
122,374
|
|
|
|
$
|
97,713
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (CONTINUED)
|
(Thousands of dollars, except per share amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
January 31
|
|
|
January 31
|
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
Net earnings, excluding special items
|
|
|
$
|
53,821
|
|
|
$
|
44,579
|
|
|
$
|
122,374
|
|
|
$
|
98,279
|
|
Restructuring charges, net of tax
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(566
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
|
|
$
|
53,821
|
|
|
$
|
44,579
|
|
|
$
|
122,374
|
|
|
$
|
97,713
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share assuming dilution, excluding special items
|
|
|
$
|
0.70
|
|
|
$
|
0.56
|
|
|
$
|
1.60
|
|
|
$
|
1.25
|
|
Restructuring charges per share, net of tax
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share assuming dilution
|
|
|
$
|
0.70
|
|
|
$
|
0.56
|
|
|
$
|
1.60
|
|
|
$
|
1.24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Although free cash flow, EBITDA, net sales excluding foreign currency
translation, net earnings excluding foreign currency translation, net
earnings excluding restructuring charges and net earnings per share
assuming dilution excluding restructuring charges 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. Both net sales and net earnings excluding
foreign currency translation provide a comparable measure for
understanding the operating results of the company's foreign entities
excluding the impact of foreign exchange. Both net earnings excluding
restructuring charges and earnings per share excluding restructuring
charges provide a comparable measure for understanding the results of
the Company as compared to prior periods. 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.

Donaldson Company, Inc.
Rich Sheffer, 952-887-3753
Feb 22, 2012