Donaldson Company Inc. (DCI, Financial) filed Quarterly Report for the period ended 2009-10-31.
Donaldson Company, Inc. is a worldwide manufacturer of air cleaners, liquid filters and exhaust products and accessories for heavy duty mobile equipment; in-plant air cleaning systems; air intake systems and exhaust products for industrial gas turbines; and specialized filters for diverse applications. The Company has one industry segment which consists of the design, manufacture and sale of products to filter air, sound and liquid. Donaldson Company Inc. has a market cap of $3.24 billion; its shares were traded at around $41.82 with a P/E ratio of 25.7 and P/S ratio of 1.8. The dividend yield of Donaldson Company Inc. stocks is 1.1%. Donaldson Company Inc. had an annual average earning growth of 13% over the past 10 years. GuruFocus rated Donaldson Company Inc. the business predictability rank of 5-star.
Other income for the first quarter of Fiscal 2010 totaled $0.5 million, compared to $3.1 million of other income in the first quarter of the prior year. Other income for the first quarter of Fiscal 2010 consisted of royalty income of $1.6 million, interest income of $0.3 million, income from unconsolidated affiliates of $0.2 million, and other miscellaneous income of $0.1 million partially offset by foreign exchange losses of $1.2 million, and charitable donations of $0.5 million. For the first quarter of Fiscal 2010, interest expense was $3.0 million, down from $4.3 million in the first quarter of the prior year, due to lower debt levels and lower interest rates on outstanding debt.
Engine Products Segment For the first quarter of Fiscal 2010, worldwide Engine Products sales were $244.0 million, a decrease of 21.0 percent from $308.8 million in the first quarter of the prior year. Total first quarter Engine Products sales in the United States decreased by 24.8 percent compared to the same period in the prior year, and international sales decreased by 17.0 percent as discussed below. The impact of foreign currency translation during the first quarter of Fiscal 2010 increased sales by $3.2 million, or 1.0 percent. Earnings before income taxes as a percentage of Engine Products segment sales of 12.7 percent increased from 11.7 percent in the prior year. This earnings improvement was driven by greater mix of higher-margin Aftermarket sales versus lower-margin first fit product sales and savings from completed restructuring actions of approximately $13 million, partially offset by lower absorption of fixed manufacturing costs due to the drop in production volumes and increased costs related to restructuring of $0.9 million.
Industrial Products Segment For the first quarter of Fiscal 2010, worldwide sales in the Industrial Products segment were $184.1 million, a decrease of 30.4 percent from $264.5 million in the first quarter of the prior year. Total first quarter international Industrial Products sales were down 28.7 percent compared to the same period in the prior year, while sales in the United States decreased by 34.5 percent. The impact of foreign currency translation during the first quarter of Fiscal 2010 increased sales by $3.4 million, or 1.3 percent. Although the Company had savings from completed restructuring activities of approximately $14 million, earnings before income taxes as a percentage of Industrial Products segment sales decreased to 12.1 percent from 13.1 percent in the prior year. This decrease is a result of higher operating expenses as a percent of sales and additional costs related to restructuring of $0.4 million.
The Company generated $70.1 million of cash from operations during the first three months of Fiscal 2010 as compared to $51.8 million in the first quarter of the prior year. Operating cash flows increased primarily as a result of the decrease in incentive compensation payouts which resulted in less cash outflows of $12.1 million in the three months ended October 31, 2009, as compared to the three months ended October 31, 2008, a larger decrease in accounts receivable of $8.8 million, and an increase in accounts payable of $5.6 million versus a decrease in the prior year of $2.7 million. In the first three months of Fiscal 2010, operating cash flows and cash on hand were used to support $7.7 million in capital additions, the repurchase of 0.2 million outstanding shares of the Companys common stock for $7.4 million, the repayment of $5.7 million in debt, and the payment of $8.9 million in dividends. For additional information regarding share repurchases see Part II Item 2, Unregistered Sales of Equity Securities and Use of Proceeds.
At the end of the first quarter, the Company held $188.2 million in cash and cash equivalents, up from $143.7 million at July 31, 2009. Short-term debt totaled $28.8 million, down slightly from $29.6 million at July 31, 2009. The amount of unused lines of credit as of October 31, 2009, was approximately $561.6 million. Long-term debt of $251.8 million at October 31, 2009, decreased slightly from $253.7 million at July 31, 2009. Long-term debt represented 25.5 percent of total long-term capital, defined as long-term debt plus total shareholders equity, compared to 26.9 percent at July 31, 2009.
Read the The complete ReportDCI is in the portfolios of Bill Frels of MAIRS & POWER INC, PRIMECAP Management, Chuck Royce of ROYCE & ASSOCIATES, Bruce Kovner of Caxton Associates, Jeremy Grantham of GMO LLC.
Donaldson Company, Inc. is a worldwide manufacturer of air cleaners, liquid filters and exhaust products and accessories for heavy duty mobile equipment; in-plant air cleaning systems; air intake systems and exhaust products for industrial gas turbines; and specialized filters for diverse applications. The Company has one industry segment which consists of the design, manufacture and sale of products to filter air, sound and liquid. Donaldson Company Inc. has a market cap of $3.24 billion; its shares were traded at around $41.82 with a P/E ratio of 25.7 and P/S ratio of 1.8. The dividend yield of Donaldson Company Inc. stocks is 1.1%. Donaldson Company Inc. had an annual average earning growth of 13% over the past 10 years. GuruFocus rated Donaldson Company Inc. the business predictability rank of 5-star.
Highlight of Business Operations:
The Company reported diluted net earnings per share of $0.44 for the first quarter of Fiscal 2010, down from $0.60 in the first quarter of the prior year. Net earnings for the quarter were $34.6 million, compared to $48.0 million in the first quarter of the prior year. The impact of foreign currency translation increased reported net earnings by 0.2 percent in the quarter. The Company reported sales in the first quarter of Fiscal 2010 of $428.1 million, a decrease of 25.3 percent from $573.3 million in the first quarter of the prior year. The impact of foreign currency translation increased reported sales by 1.2 percent in the quarter.Other income for the first quarter of Fiscal 2010 totaled $0.5 million, compared to $3.1 million of other income in the first quarter of the prior year. Other income for the first quarter of Fiscal 2010 consisted of royalty income of $1.6 million, interest income of $0.3 million, income from unconsolidated affiliates of $0.2 million, and other miscellaneous income of $0.1 million partially offset by foreign exchange losses of $1.2 million, and charitable donations of $0.5 million. For the first quarter of Fiscal 2010, interest expense was $3.0 million, down from $4.3 million in the first quarter of the prior year, due to lower debt levels and lower interest rates on outstanding debt.
Engine Products Segment For the first quarter of Fiscal 2010, worldwide Engine Products sales were $244.0 million, a decrease of 21.0 percent from $308.8 million in the first quarter of the prior year. Total first quarter Engine Products sales in the United States decreased by 24.8 percent compared to the same period in the prior year, and international sales decreased by 17.0 percent as discussed below. The impact of foreign currency translation during the first quarter of Fiscal 2010 increased sales by $3.2 million, or 1.0 percent. Earnings before income taxes as a percentage of Engine Products segment sales of 12.7 percent increased from 11.7 percent in the prior year. This earnings improvement was driven by greater mix of higher-margin Aftermarket sales versus lower-margin first fit product sales and savings from completed restructuring actions of approximately $13 million, partially offset by lower absorption of fixed manufacturing costs due to the drop in production volumes and increased costs related to restructuring of $0.9 million.
Industrial Products Segment For the first quarter of Fiscal 2010, worldwide sales in the Industrial Products segment were $184.1 million, a decrease of 30.4 percent from $264.5 million in the first quarter of the prior year. Total first quarter international Industrial Products sales were down 28.7 percent compared to the same period in the prior year, while sales in the United States decreased by 34.5 percent. The impact of foreign currency translation during the first quarter of Fiscal 2010 increased sales by $3.4 million, or 1.3 percent. Although the Company had savings from completed restructuring activities of approximately $14 million, earnings before income taxes as a percentage of Industrial Products segment sales decreased to 12.1 percent from 13.1 percent in the prior year. This decrease is a result of higher operating expenses as a percent of sales and additional costs related to restructuring of $0.4 million.
The Company generated $70.1 million of cash from operations during the first three months of Fiscal 2010 as compared to $51.8 million in the first quarter of the prior year. Operating cash flows increased primarily as a result of the decrease in incentive compensation payouts which resulted in less cash outflows of $12.1 million in the three months ended October 31, 2009, as compared to the three months ended October 31, 2008, a larger decrease in accounts receivable of $8.8 million, and an increase in accounts payable of $5.6 million versus a decrease in the prior year of $2.7 million. In the first three months of Fiscal 2010, operating cash flows and cash on hand were used to support $7.7 million in capital additions, the repurchase of 0.2 million outstanding shares of the Companys common stock for $7.4 million, the repayment of $5.7 million in debt, and the payment of $8.9 million in dividends. For additional information regarding share repurchases see Part II Item 2, Unregistered Sales of Equity Securities and Use of Proceeds.
At the end of the first quarter, the Company held $188.2 million in cash and cash equivalents, up from $143.7 million at July 31, 2009. Short-term debt totaled $28.8 million, down slightly from $29.6 million at July 31, 2009. The amount of unused lines of credit as of October 31, 2009, was approximately $561.6 million. Long-term debt of $251.8 million at October 31, 2009, decreased slightly from $253.7 million at July 31, 2009. Long-term debt represented 25.5 percent of total long-term capital, defined as long-term debt plus total shareholders equity, compared to 26.9 percent at July 31, 2009.
Read the The complete ReportDCI is in the portfolios of Bill Frels of MAIRS & POWER INC, PRIMECAP Management, Chuck Royce of ROYCE & ASSOCIATES, Bruce Kovner of Caxton Associates, Jeremy Grantham of GMO LLC.
