Donaldson Company, Inc. (NYSE: DCI) announced its financial results for
its fiscal 2013 third quarter. Summarized financial results are as
follows (dollars in millions, except per share data):
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
April 30
|
|
April 30
|
|
| 2013 |
| 2012 |
| Change |
| 2013 |
| 2012 |
| Change |
Net sales
|
|
$619
|
|
$647
|
|
(4)%
|
|
$1,804
|
|
$1,836
|
|
(2)%
|
Operating income
|
|
99
|
|
98
|
|
0%
|
|
243
|
|
264
|
|
(8)%
|
Net earnings
|
|
70
|
|
71
|
|
(2)%
|
|
175
|
|
193
|
|
(10)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS
|
|
$0.46
|
|
$0.46
|
|
0%
|
|
$1.16
|
|
$1.26
|
|
(8)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
"Our overall sales growth during the quarter continued to be challenged
by the global economic environment," said Bill Cook, Donaldson's CEO.
"On the positive side, our Gas Turbine Products' sales increased 35
percent as we delivered a number of large projects to our Customers. We
also achieved solid sales growth in several regions including Latin
America, South Africa, and India. But these strong performances were
offset by significant declines in our Engine Products' OEM businesses in
the U.S. and Japan. During the quarter, we continued to see many of our
major OEM On-Road and Off-Road Customers reduce their equipment
production schedules in response to their weaker end-market demand."
"Despite our lower sales, we delivered a record operating margin of 15.9
percent. We continued to proactively take actions to align our
manufacturing and operating expenses with our anticipated Customer
demand. During the quarter, we incurred $1.1 million as part of these
restructuring activities. In addition, we continued to generate
significant savings from our ongoing Continuous Improvement
initiatives. Due to our strong operating margin performance, our EPS of
$0.46 was equal to last year's record third quarter."
"We believe that the weak end-market conditions we have experienced this
year may have now stabilized. Unfortunately, we have not yet seen any
strong signs of a material recovery for our Customers in any of our
capital equipment-related end markets and, therefore, we are not
anticipating sales growth in these markets for at least the next
quarter. As a result, we are forecasting our Company's full-year sales
to be between $2.40 and $2.45 billion and our FY13 EPS forecast to be
between $1.57 and $1.65 per share."
Financial Statement Discussion
The impact of foreign currency translation decreased sales by $10.0
million, or 1.6 percent, during the quarter and decreased sales by $28.6
million, or 1.6 percent, year-to-date. The impact of foreign currency
translation decreased reported net earnings by $0.7 million, or 1.0
percent, during the quarter and decreased reported net earnings by $1.9
million, or 1.0 percent, year-to-date.
Gross margin was 35.8 percent for the quarter and 34.3 percent
year-to-date, compared to prior year margins of 35.3 percent and 35.1
percent, respectively. The improvement in the quarter is primarily
attributable to a higher percentage of our sales coming from replacement
filters and the benefits from our Continuous Improvement
initiatives, offset by a mix impact due to large Gas Turbine project
shipments and some impact from lower fixed cost absorption.
Restructuring expenses included in gross margin were $0.6 million in the
quarter and $1.3 million year-to-date.
Operating expenses for the quarter were $122.9 million, down 5.3 percent
from last year's $129.8 million. As a percent of sales, operating
expenses were 19.8 percent compared to last year's 20.1 percent.
Operating expenses year-to-date were $375.5 million, or 20.8 percent of
sales, compared to $380.4 million, or 20.7 percent of sales, last year.
Restructuring expenses included in operating expenses were $0.5 million
in the quarter and $1.5 million year-to-date. Our ongoing cost
containment actions helped to offset the restructuring expenses, higher
pension expenses, and the incremental expenses related to our Strategic
Business Systems project.
Our effective tax rate for the quarter was 29.8 percent, compared to a
prior year rate of 29.0 percent. The prior year's quarter included $1.8
million of tax benefits primarily from a statute of limitation
expiration. The year-to-date effective tax rate was 29.2 percent
compared to a prior year rate of 28.0 percent.
We did not repurchase any shares during the third quarter, and
year-to-date we have repurchased 1,820,000 shares, or 1.2 percent of our
diluted outstanding shares, for $61.0 million.
FY13 Outlook
-
We are projecting our full-year sales to decrease 2 to 4 percent from
last year's record $2.5 billion. Our forecast is based on the Euro at
US$1.31 and 98 Yen to the US$.
-
Our full-year operating margin forecast is 13.6 to 14.2 percent.
-
Our FY13 tax rate is anticipated to be between 29 and 30 percent.
-
We forecast our FY13 EPS to be between $1.57 and $1.65.
-
Cash generated by operating activities is projected to be between $260
and $280 million. Our capital spending is estimated to be
approximately $85 million.
Engine Products: We forecast
FY13 sales to decrease 4 to 6 percent compared to FY12, including the
impact of foreign currency.
-
Our On-Road OEM Customers are planning to build fewer heavy- and
medium-duty trucks, although the rate of decline is expected to begin
moderating in our fourth quarter. Demand from our Off-Road OEM
Customers is anticipated to be mixed: build rates of agriculture
equipment are forecasted to remain good, build rates of construction
equipment are expected to slowly improve in North America, but remain
weak in Europe and China, and the build rates of mining equipment are
expected to decrease globally.
-
We are anticipating slowly improving growth for our Aftermarket
Products. Current utilization rates for off-road equipment and on-road
heavy truck fleets in the field have begun stabilizing and inventory
levels at dealers and distributors are now consistent with current
end-market utilization. We should also benefit from our continued
expansion into emerging economies, from the increasing number of
systems installed in the field with our proprietary filters, and from
our increasing sales of liquid filtration products.
-
We forecast a mid-single digit percent decrease in our Aerospace and
Defense Products' sales compared to last year as the continued
slowdown in U.S. military activity is expected to be partially offset
by growth from our commercial aerospace sales.
Industrial Products: We
forecast sales to be consistent with FY12, including the impact of
foreign currency.
-
We forecast a mid-single digit percent decrease in our Industrial
Filtration Solutions Products' sales as compared to last year. We
assume general manufacturing activity will continue to increase
moderately in the U.S., slowly improve in Asia, and continue to be
weak in Europe.
-
We anticipate our Gas Turbine Products' sales to be up 27 to 30
percent due to continued strength in both the large turbine power
generation and the oil and gas markets.
-
Special Applications Products' sales are now forecast to be down 8 to
11 percent due to weaker market demand for our disk drive filters and
membranes products.
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 approximately 12,500 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 global economic uncertainty, the 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 the 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 all of the other
risk factors included in our Annual and Quarterly Reports. We undertake
no obligation to publicly update or revise any forward-looking
statements.
|
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|
|
|
|
|
|
|
|
|
|
|
CONDENSED STATEMENTS OF CONSOLIDATED EARNINGS
|
DONALDSON COMPANY, INC. AND SUBSIDIARIES
|
(Thousands of dollars, except share and per share amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
April 30
|
|
|
April 30
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
Net sales
|
|
$
|
619,371
|
|
|
|
$
|
647,237
|
|
|
|
$
|
1,804,354
|
|
|
|
$
|
1,836,415
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
397,870
|
|
|
|
|
419,008
|
|
|
|
|
1,185,583
|
|
|
|
|
1,192,435
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
|
221,501
|
|
|
|
|
228,229
|
|
|
|
|
618,771
|
|
|
|
|
643,980
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
122,914
|
|
|
|
|
129,792
|
|
|
|
|
375,455
|
|
|
|
|
380,448
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
98,587
|
|
|
|
|
98,437
|
|
|
|
|
243,316
|
|
|
|
|
263,532
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income, net
|
|
|
(3,608
|
)
|
|
|
|
(4,340
|
)
|
|
|
|
(11,962
|
)
|
|
|
|
(13,750
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
2,719
|
|
|
|
|
2,787
|
|
|
|
|
8,275
|
|
|
|
|
8,856
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before income taxes
|
|
|
99,476
|
|
|
|
|
99,990
|
|
|
|
|
247,003
|
|
|
|
|
268,426
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
|
29,634
|
|
|
|
|
29,044
|
|
|
|
|
72,235
|
|
|
|
|
75,106
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
|
$
|
69,842
|
|
|
|
$
|
70,946
|
|
|
|
$
|
174,768
|
|
|
|
$
|
193,320
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding
|
|
|
148,136,620
|
|
|
|
|
150,536,631
|
|
|
|
|
148,404,503
|
|
|
|
|
150,385,389
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted shares outstanding
|
|
|
150,234,445
|
|
|
|
|
153,207,471
|
|
|
|
|
150,591,003
|
|
|
|
|
153,067,148
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share
|
|
$
|
0.47
|
|
|
|
$
|
0.47
|
|
|
|
$
|
1.18
|
|
|
|
$
|
1.29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share assuming dilution
|
|
$
|
0.46
|
|
|
|
$
|
0.46
|
|
|
|
$
|
1.16
|
|
|
|
$
|
1.26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends paid per share
|
|
$
|
0.100
|
|
|
|
$
|
0.080
|
|
|
|
$
|
0.280
|
|
|
|
$
|
0.230
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DONALDSON COMPANY, INC. AND SUBSIDIARIES
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(Thousands of dollars)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
April 30
|
|
|
July 31
|
|
|
2013
|
|
|
2012
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents, and short-term investments
|
|
$
|
329,688
|
|
$
|
318,151
|
Accounts receivable, net
|
|
|
437,414
|
|
|
438,796
|
Inventories, net
|
|
|
240,476
|
|
|
256,116
|
Prepaids and other current assets
|
|
|
65,752
|
|
|
72,599
|
|
|
|
|
|
Total current assets
|
|
|
1,073,330
|
|
|
1,085,662
|
|
|
|
|
|
Other assets and deferred taxes
|
|
|
271,456
|
|
|
259,511
|
Property, plant, and equipment, net
|
|
|
412,822
|
|
|
384,909
|
|
|
|
|
|
Total assets
|
|
$
|
1,757,608
|
|
|
$
|
1,730,082
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Trade accounts payable
|
|
$
|
178,028
|
|
|
$
|
199,182
|
Employee compensation and other liabilities
|
|
|
167,802
|
|
|
201,848
|
Short-term borrowings
|
|
|
30,000
|
|
|
95,147
|
Current maturity long-term debt
|
|
|
82,002
|
|
|
2,346
|
|
|
|
|
|
Total current liabilities
|
|
|
457,832
|
|
|
498,523
|
|
|
|
|
|
Long-term debt
|
|
|
119,079
|
|
|
203,483
|
Other long-term liabilities
|
|
|
99,164
|
|
|
118,062
|
|
|
|
|
|
Total liabilities
|
|
|
676,075
|
|
|
820,068
|
|
|
|
|
|
|
Equity
|
|
|
1,081,533
|
|
|
|
910,014
|
|
|
|
|
|
|
Total liabilities and equity
|
|
$
|
1,757,608
|
|
|
$
|
1,730,082
|
|
|
|
|
|
|
|
|
DONALDSON COMPANY, INC. AND SUBSIDIARIES
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Thousands of dollars)
|
(Unaudited)
|
|
|
|
|
|
Nine Months Ended
|
|
|
April 30
|
|
|
2013
|
|
|
2012
|
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Net earnings
|
|
$
|
174,768
|
|
|
$
|
193,320
|
|
Adjustments to reconcile net earnings to net cash provided by
operating activities:
|
|
|
|
|
Depreciation and amortization
|
|
|
48,527
|
|
|
|
46,214
|
|
Changes in operating assets and liabilities
|
|
|
(8,346
|
)
|
|
|
(43,836
|
)
|
Tax benefit of equity plans
|
|
|
(9,483
|
)
|
|
|
(9,698
|
)
|
Stock compensation plan expense
|
|
|
7,363
|
|
|
|
8,624
|
|
Other, net
|
|
|
4,560
|
|
|
|
(12,223
|
)
|
Net cash provided by operating activities
|
|
|
217,389
|
|
|
|
182,401
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
Net expenditures on property and equipment
|
|
|
(69,425
|
)
|
|
|
(57,987
|
)
|
Net change in short-term investments
|
|
|
30,781
|
|
|
|
(119,930
|
)
|
Net cash used in investing activities
|
|
|
(38,644
|
)
|
|
|
(177,917
|
)
|
|
|
|
|
|
|
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
Purchase of treasury stock
|
|
|
(60,975
|
)
|
|
|
(82,573
|
)
|
Net change in debt and short-term borrowings
|
|
|
(67,623
|
)
|
|
|
24,435
|
|
Dividends paid
|
|
|
(41,184
|
)
|
|
|
(34,277
|
)
|
Tax benefit of equity plans
|
|
|
9,483
|
|
|
|
9,698
|
|
Exercise of stock options
|
|
|
12,131
|
|
|
|
|
12,345
|
|
Net cash used in financing activities
|
|
|
(148,168
|
)
|
|
|
|
(70,372
|
)
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash
|
|
|
7,622
|
|
|
|
|
(18,586
|
)
|
|
|
|
|
|
|
|
|
|
|
Increase (Decrease) in cash and cash equivalents
|
|
|
38,199
|
|
|
|
|
(84,474
|
)
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents – beginning of year
|
|
|
225,789
|
|
|
|
|
273,494
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents – end of period
|
|
$
|
263,988
|
|
|
|
$
|
189,020
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT DETAIL
|
(Thousands of dollars)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engine
|
|
|
Industrial
|
|
|
Corporate &
|
|
|
Total
|
|
|
Products
|
|
|
Products
|
|
|
Unallocated
|
|
|
Company
|
3 Months Ended April 30, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$383,314
|
|
|
$236,057
|
|
|
---
|
|
|
|
$619,371
|
Earnings before income taxes
|
|
65,680
|
|
|
37,555
|
|
|
(3,759
|
)
|
|
|
99,476
|
|
|
|
|
|
|
|
|
|
|
|
|
3 Months Ended April 30, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$407,041
|
|
|
$240,196
|
|
|
---
|
|
|
|
$647,237
|
Earnings before income taxes
|
|
62,136
|
|
|
38,792
|
|
|
(938
|
)
|
|
|
99,990
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9 Months Ended April 30, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$1,107,814
|
|
|
$696,540
|
|
|
---
|
|
|
|
$1,804,354
|
Earnings before income taxes
|
|
152,129
|
|
|
102,709
|
|
|
(7,835
|
)
|
|
|
247,003
|
|
|
|
|
|
|
|
|
|
|
|
|
9 Months Ended April 30, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$1,171,600
|
|
|
$664,815
|
|
|
---
|
|
|
|
$1,836,415
|
Earnings before income taxes
|
|
170,432
|
|
|
103,688
|
|
|
(5,694
|
)
|
|
|
268,426
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET SALES BY PRODUCT
|
(Thousands of dollars)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Nine Months Ended
|
|
|
April 30
|
|
|
|
April 30
|
|
|
2013
|
|
|
2012
|
|
|
|
2013
|
|
|
2012
|
Engine Products segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
Off-Road Products
|
|
$93,797
|
|
|
$100,307
|
|
|
|
$268,056
|
|
|
$
|
281,450
|
On-Road Products
|
|
30,288
|
|
|
42,133
|
|
|
|
96,207
|
|
|
|
124,134
|
Aftermarket Products
|
|
228,452
|
|
|
231,298
|
|
|
|
658,710
|
|
|
|
672,265
|
Retrofit Emissions Products
|
|
3,295
|
|
|
4,038
|
|
|
|
9,554
|
|
|
|
13,326
|
Aerospace and Defense Products
|
|
27,482
|
|
|
29,265
|
|
|
|
75,287
|
|
|
|
80,425
|
Total Engine Products segment
|
|
$383,314
|
|
|
$407,041
|
|
|
|
$1,107,814
|
|
|
$
|
1,171,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial Products segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial Filtration Solutions Products
|
|
$125,447
|
|
|
$136,082
|
|
|
|
$386,475
|
|
|
$
|
401,522
|
Gas Turbine Products
|
|
68,733
|
|
|
51,036
|
|
|
|
182,295
|
|
|
|
123,628
|
Special Applications Products
|
|
41,877
|
|
|
53,078
|
|
|
|
127,770
|
|
|
|
139,665
|
Total Industrial Products segment
|
|
$236,057
|
|
|
$240,196
|
|
|
|
$696,540
|
|
|
$
|
664,815
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Company
|
|
$619,371
|
|
|
$647,237
|
|
|
|
$1,804,354
|
|
|
$
|
1,836,415
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
|
(Thousands of dollars, except per share amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
April 30
|
|
|
April 30
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
$
|
108,209
|
|
|
|
$
|
80,203
|
|
|
|
$
|
217,389
|
|
|
|
$
|
182,401
|
|
Net capital expenditures
|
|
|
(17,672
|
)
|
|
|
|
(21,638
|
)
|
|
|
|
(69,425
|
)
|
|
|
|
(57,987
|
)
|
Free cash flow
|
|
$
|
90,537
|
|
|
|
$
|
58,565
|
|
|
|
$
|
147,964
|
|
|
|
$
|
124,414
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
|
$
|
69,842
|
|
|
|
$
|
70,946
|
|
|
|
$
|
174,768
|
|
|
|
$
|
193,320
|
|
Income taxes
|
|
|
29,634
|
|
|
|
|
29,044
|
|
|
|
|
72,235
|
|
|
|
|
75,106
|
|
Interest expense, net
|
|
|
2,269
|
|
|
|
|
1,553
|
|
|
|
|
6,110
|
|
|
|
|
5,713
|
|
Depreciation and amortization
|
|
|
15,631
|
|
|
|
|
15,318
|
|
|
|
|
48,527
|
|
|
|
|
46,214
|
|
EBITDA
|
|
$
|
117,376
|
|
|
|
$
|
116,861
|
|
|
|
$
|
301,640
|
|
|
|
$
|
320,353
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior year net sales
|
|
$
|
647,237
|
|
|
|
$
|
594,565
|
|
|
|
$
|
1,836,415
|
|
|
|
$
|
1,668,579
|
|
Change in net sales, excluding foreign currency translation
|
|
|
(17,843
|
)
|
|
|
|
41,023
|
|
|
|
|
(3,434
|
)
|
|
|
|
165,405
|
|
Foreign currency translation
|
|
|
(10,023
|
)
|
|
|
|
11,649
|
|
|
|
|
(28,627
|
)
|
|
|
|
2,431
|
|
Current year net sales
|
|
$
|
619,371
|
|
|
|
$
|
647,237
|
|
|
|
$
|
1,804,354
|
|
|
|
$
|
1,836,415
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior year net earnings
|
|
$
|
70,946
|
|
|
|
$
|
61,811
|
|
|
|
$
|
193,320
|
|
|
|
$
|
159,524
|
|
Change in net earnings, excluding foreign currency translation
|
|
|
(413
|
)
|
|
|
|
10,033
|
|
|
|
|
(16,698
|
)
|
|
|
|
33,642
|
|
Foreign currency translation
|
|
|
(691
|
)
|
|
|
|
(898
|
)
|
|
|
|
(1,854
|
)
|
|
|
|
154
|
|
Current year net earnings
|
|
$
|
69,842
|
|
|
|
$
|
70,946
|
|
|
|
$
|
174,768
|
|
|
|
$
|
193,320
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (CONTINUED)
|
(Thousands of dollars, except per share amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
April 30
|
|
|
April 30
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
Net earnings
|
|
$
|
69,842
|
|
|
$
|
70,946
|
|
|
$
|
174,768
|
|
|
$
|
193,320
|
Restructuring charges, net of tax
|
|
|
911
|
|
|
|
-
|
|
|
|
2,098
|
|
|
|
-
|
Net earnings, excluding special items
|
|
$
|
70,753
|
|
|
$
|
70,946
|
|
|
$
|
176,866
|
|
|
$
|
193,320
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share assuming dilution
|
|
$
|
0.46
|
|
|
$
|
0.46
|
|
|
$
|
1.16
|
|
|
$
|
1.26
|
Restructuring charges per share, net of tax
|
|
|
0.01
|
|
|
|
-
|
|
|
|
0.01
|
|
|
|
-
|
Net earnings per share assuming dilution, excluding special items
|
|
$
|
0.47
|
|
|
$
|
0.46
|
|
|
$
|
1.17
|
|
|
$
|
1.26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Although free cash flow, EBITDA, net sales excluding foreign currency
translation, and net earnings excluding foreign currency translation 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. 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
May 17, 2013