Donaldson Company, Inc. (NYSE:DCI) today announced that it has filed a
Form 12b-25, Notification of Late Filing, with the U.S. Securities and
Exchange Commission with regard to its Annual Report on Form 10-K for
the year ended July 31, 2015. The filing provides the Company with an
additional 15 calendar days to file its Form 10-K, and Donaldson expects
to file its Form 10-K prior to the expiration of the extension.
Donaldson was unable to file its Form 10-K by the Sept. 29, 2015,
deadline because the Company has not yet completed an ongoing
investigation related to the recognition of revenue for certain projects
in its European Gas Turbine Products business.
Specifically, the Company's Compliance Committee received reports from
two former employees that revenue for a project in the European Gas
Turbine Products business was improperly recognized in the second
quarter of fiscal 2015. The Company initiated an internal investigation
which verified the substance of the report and identified additional
revenue transactions within the European Gas Turbine Products business
involving the same improper practices.
The Audit Committee of the Board has subsequently engaged independent
external counsel and independent forensic accountants to continue the
investigation, which is still on-going. Based on the investigation
findings to date, the Company concluded that documents were altered with
the intent to inappropriately recognize revenue for certain transactions
in periods earlier than would be allowable under generally accepted
accounting principles. There is also an indication that there may have
been purposeful deferring of certain charges from suppliers to later
time periods than appropriate.
The investigation findings to date suggest that the revenue transactions
were all valid, but revenue was inappropriately recognized in an
accelerated manner during the fourth quarter of fiscal 2014 and the
second and third quarters of fiscal 2015. Based on the investigation
findings to date, the Company believes that the financial statement
misstatements were immaterial, however the investigation is still
on-going and it is uncertain as to whether additional misstatements will
be found, either in revenue or other accounts. The Company has begun
taking remedial actions in response to the discovery of these practices.
Once the investigation is completed, including the evaluation of its
findings, the Company expects to complete its assessments as to the
impacts to the financial statements and effectiveness of internal
controls over financial reporting and file its Form 10-K.
Miscellaneous
The Company wishes to caution investors that any forward-looking
statements (such as those identified by words such as "believe,"
"expect" or similar expressions) 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 the
timing and outcome of the Audit Committee's investigation, including the
possible identification of additional facts that could have an impact on
the Company's historical or future financial results. The Company
undertakes no obligation to publicly update or revise any
forward-looking statements.
About Donaldson Company
Founded 100 years ago, Donaldson (NYSE: DCI) is a global leader in the
filtration industry. The Company's innovative filtration technologies
improve people's lives, enhance Customers' equipment performance, and
protect the environment. More than 12,500 employees support Customers at
140 sales, manufacturing, and distribution locations. For more
information, visit www.Donaldson.com.
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Donaldson Company, Inc.
Brad Pogalz, 952-887-3753
Sep 29, 2015