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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Donaldson Co | NYSE:DCI | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.62 | 0.85% | 73.82 | 73.90 | 73.095 | 73.65 | 304,306 | 22:30:00 |
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JANUARY 31, 2018 OR
|
|
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _________________ TO _________________.
|
Delaware
|
|
41-0222640
|
(State or other jurisdiction of
|
|
(I.R.S. Employer
|
incorporation or organization)
|
|
Identification No.)
|
|
Large accelerated filer
x
|
Accelerated filer
o
|
|
|
|
|
Non-accelerated filer
o
(Do not check if a smaller reporting company)
|
Smaller reporting company
o
|
|
|
|
|
Emerging growth company
o
|
|
|
Item 1.
|
Financial Statements
|
|
Three Months Ended
January 31, |
|
Six Months Ended
January 31, |
||||||||||||
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
||||
Net sales
|
$
|
664.7
|
|
|
$
|
550.6
|
|
|
$
|
1,309.5
|
|
|
$
|
1,103.6
|
|
Cost of sales
|
445.8
|
|
|
362.7
|
|
|
866.3
|
|
|
721.5
|
|
||||
Gross profit
|
218.9
|
|
|
187.9
|
|
|
443.2
|
|
|
382.1
|
|
||||
Operating expenses
|
137.3
|
|
|
118.5
|
|
|
270.9
|
|
|
236.3
|
|
||||
Operating income
|
81.6
|
|
|
69.4
|
|
|
172.3
|
|
|
145.8
|
|
||||
Interest expense
|
5.1
|
|
|
4.8
|
|
|
10.3
|
|
|
9.6
|
|
||||
Other expense (income), net
|
0.1
|
|
|
(1.7
|
)
|
|
0.9
|
|
|
(9.8
|
)
|
||||
Earnings before income taxes
|
76.4
|
|
|
66.3
|
|
|
161.1
|
|
|
146.0
|
|
||||
Income taxes
|
129.3
|
|
|
19.8
|
|
|
153.1
|
|
|
41.5
|
|
||||
Net (loss) earnings
|
$
|
(52.9
|
)
|
|
$
|
46.5
|
|
|
$
|
8.0
|
|
|
$
|
104.5
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares – basic
|
130.6
|
|
|
132.9
|
|
|
130.7
|
|
|
133.2
|
|
||||
Weighted average shares – diluted
|
130.6
|
|
|
134.4
|
|
|
132.8
|
|
|
134.5
|
|
||||
Net (loss) earnings per share – basic
|
$
|
(0.40
|
)
|
|
$
|
0.35
|
|
|
$
|
0.06
|
|
|
$
|
0.78
|
|
Net (loss) earnings per share – diluted
|
$
|
(0.40
|
)
|
|
$
|
0.35
|
|
|
$
|
0.06
|
|
|
$
|
0.78
|
|
|
|
|
|
|
|
|
|
||||||||
Cash dividends paid per share
|
$
|
0.180
|
|
|
$
|
0.175
|
|
|
$
|
0.360
|
|
|
$
|
0.350
|
|
|
Three Months Ended
January 31, |
|
Six Months Ended
January 31, |
||||||||||||
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
||||
Net (loss) earnings
|
$
|
(52.9
|
)
|
|
$
|
46.5
|
|
|
$
|
8.0
|
|
|
$
|
104.5
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation income (loss)
|
55.5
|
|
|
(8.4
|
)
|
|
50.4
|
|
|
(20.8
|
)
|
||||
Pension liability adjustment, net of deferred taxes of $(0.4), $(0.8), $(0.9) and $(1.8), respectively
|
0.2
|
|
|
1.3
|
|
|
1.0
|
|
|
3.7
|
|
||||
(Loss) gain on hedging derivatives, net of deferred taxes of $0.3, $0.1, $(0.9) and $(0.4), respectively
|
(0.6
|
)
|
|
(0.3
|
)
|
|
1.7
|
|
|
0.7
|
|
||||
Comprehensive income
|
$
|
2.2
|
|
|
$
|
39.1
|
|
|
$
|
61.1
|
|
|
$
|
88.1
|
|
|
January 31,
2018 |
|
|
July 31,
2017 |
|
||
Assets
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
362.2
|
|
|
$
|
308.4
|
|
Accounts receivable, less allowance of $8.5 and $8.7, respectively
|
509.9
|
|
|
497.7
|
|
||
Inventories, net
|
344.9
|
|
|
293.5
|
|
||
Prepaid expenses and other current assets
|
62.9
|
|
|
51.4
|
|
||
Total current assets
|
1,279.9
|
|
|
1,151.0
|
|
||
Property, plant and equipment, net
|
507.7
|
|
|
484.6
|
|
||
Goodwill
|
242.0
|
|
|
238.1
|
|
||
Intangible assets, net
|
38.2
|
|
|
40.6
|
|
||
Deferred income taxes
|
24.9
|
|
|
30.3
|
|
||
Other long-term assets
|
38.6
|
|
|
35.1
|
|
||
Total assets
|
$
|
2,131.3
|
|
|
$
|
1,979.7
|
|
|
|
|
|
||||
Liabilities and shareholders' equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Short-term borrowings
|
$
|
17.7
|
|
|
$
|
23.3
|
|
Current maturities of long-term debt
|
0.4
|
|
|
50.6
|
|
||
Trade accounts payable
|
200.0
|
|
|
194.0
|
|
||
Other current liabilities
|
216.9
|
|
|
216.2
|
|
||
Total current liabilities
|
435.0
|
|
|
484.1
|
|
||
Long-term debt
|
667.7
|
|
|
537.3
|
|
||
Deferred income taxes
|
4.7
|
|
|
3.6
|
|
||
Other long-term liabilities
|
197.0
|
|
|
100.2
|
|
||
Total liabilities
|
1,304.4
|
|
|
1,125.2
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 14)
|
|
|
|
|
|
||
|
|
|
|
||||
Shareholders' Equity:
|
|
|
|
||||
Preferred stock, $1.00 par value, 1,000,000 shares authorized, none issued
|
—
|
|
|
—
|
|
||
Common stock, $5.00 par value, 240,000,000 shares authorized, 151,643,194 shares issued
|
758.2
|
|
|
758.2
|
|
||
Retained earnings
|
1,016.4
|
|
|
1,056.9
|
|
||
Non-controlling interests
|
4.6
|
|
|
4.4
|
|
||
Accumulated other comprehensive loss
|
(103.9
|
)
|
|
(157.0
|
)
|
||
Treasury stock, 21,784,693 and 21,037,353 shares, respectively, at cost
|
(848.4
|
)
|
|
(808.0
|
)
|
||
Total shareholders' equity
|
826.9
|
|
|
854.5
|
|
||
Total liabilities and shareholders' equity
|
$
|
2,131.3
|
|
|
$
|
1,979.7
|
|
|
Six Months Ended
January 31, |
||||||
|
2018
|
|
|
2017
|
|
||
Operating Activities
|
|
|
|
|
|
||
Net earnings
|
$
|
8.0
|
|
|
$
|
104.5
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
37.9
|
|
|
37.3
|
|
||
Deferred income taxes
|
7.0
|
|
|
(0.8
|
)
|
||
Stock-based compensation expense
|
9.6
|
|
|
5.8
|
|
||
Other, net
|
98.1
|
|
|
0.7
|
|
||
Changes in operating assets and liabilities, excluding effect of acquired businesses
|
(50.8
|
)
|
|
22.0
|
|
||
Net cash provided by operating activities
|
109.8
|
|
|
169.5
|
|
||
|
|
|
|
||||
Investing Activities
|
|
|
|
||||
Net expenditures on property, plant and equipment
|
(45.8
|
)
|
|
(25.0
|
)
|
||
Acquisitions, net of cash acquired
|
0.8
|
|
|
(10.9
|
)
|
||
Net cash used in investing activities
|
(45.0
|
)
|
|
(35.9
|
)
|
||
|
|
|
|
||||
Financing Activities
|
|
|
|
||||
Proceeds from long-term debt
|
140.0
|
|
|
—
|
|
||
Repayments of long-term debt
|
(60.2
|
)
|
|
(0.5
|
)
|
||
Change in short-term borrowings
|
(4.1
|
)
|
|
12.0
|
|
||
Purchase of treasury stock
|
(62.9
|
)
|
|
(51.8
|
)
|
||
Dividends paid
|
(46.8
|
)
|
|
(46.3
|
)
|
||
Tax withholding for stock compensation transactions
|
(2.2
|
)
|
|
(2.2
|
)
|
||
Exercise of stock options
|
13.6
|
|
|
12.1
|
|
||
Net cash used in financing activities
|
(22.6
|
)
|
|
(76.7
|
)
|
||
Effect of exchange rate changes on cash
|
11.6
|
|
|
(3.8
|
)
|
||
Increase in cash and cash equivalents
|
53.8
|
|
|
53.1
|
|
||
Cash and cash equivalents, beginning of year
|
308.4
|
|
|
243.2
|
|
||
Cash and cash equivalents, end of period
|
$
|
362.2
|
|
|
$
|
296.3
|
|
|
January 31,
2018 |
|
|
July 31,
2017 |
|
||
Raw materials
|
$
|
111.3
|
|
|
$
|
96.3
|
|
Work in process
|
26.0
|
|
|
19.7
|
|
||
Finished products
|
207.6
|
|
|
177.5
|
|
||
Inventories, net
|
$
|
344.9
|
|
|
$
|
293.5
|
|
|
January 31,
2018 |
|
|
July 31,
2017 |
|
||
Land
|
$
|
21.3
|
|
|
$
|
20.6
|
|
Buildings
|
305.6
|
|
|
292.5
|
|
||
Machinery and equipment
|
910.3
|
|
|
866.8
|
|
||
Construction in progress
|
65.6
|
|
|
48.9
|
|
||
Less: accumulated depreciation
|
(795.1
|
)
|
|
(744.2
|
)
|
||
Property, plant and equipment, net
|
$
|
507.7
|
|
|
$
|
484.6
|
|
|
Three Months Ended
January 31, |
|
Six Months Ended
January 31, |
||||||||||||
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
||||
Net (loss) earnings for basic and diluted earnings per share computation
|
$
|
(52.9
|
)
|
|
$
|
46.5
|
|
|
$
|
8.0
|
|
|
$
|
104.5
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares – basic
|
130.6
|
|
|
132.9
|
|
|
130.7
|
|
|
133.2
|
|
||||
Dilutive impact of share based awards
|
—
|
|
|
1.5
|
|
|
2.1
|
|
|
1.3
|
|
||||
Weighted average common shares – diluted
|
130.6
|
|
|
134.4
|
|
|
132.8
|
|
|
134.5
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net (loss) earnings per share – basic
|
$
|
(0.40
|
)
|
|
$
|
0.35
|
|
|
$
|
0.06
|
|
|
$
|
0.78
|
|
Net (loss) earnings per share – diluted
|
$
|
(0.40
|
)
|
|
$
|
0.35
|
|
|
$
|
0.06
|
|
|
$
|
0.78
|
|
|
Engine
Products
|
|
Industrial
Products
|
|
Total
Goodwill
|
||||||
Balance as of July 31, 2017
|
$
|
84.3
|
|
|
$
|
153.8
|
|
|
$
|
238.1
|
|
Goodwill acquired
|
0.6
|
|
|
—
|
|
|
0.6
|
|
|||
Foreign exchange translation
|
0.4
|
|
|
2.9
|
|
|
3.3
|
|
|||
Balance as of January 31, 2018
|
$
|
85.3
|
|
|
$
|
156.7
|
|
|
$
|
242.0
|
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Intangible Assets
|
||||||
Balance as of July 31, 2017
|
$
|
106.6
|
|
|
$
|
(66.0
|
)
|
|
$
|
40.6
|
|
Amortization expense
|
—
|
|
|
(2.8
|
)
|
|
(2.8
|
)
|
|||
Foreign exchange translation
|
(2.2
|
)
|
|
2.6
|
|
|
0.4
|
|
|||
Balance as of January 31, 2018
|
$
|
104.4
|
|
|
$
|
(66.2
|
)
|
|
$
|
38.2
|
|
|
Six Months Ended
January 31, |
||||||
|
2018
|
|
|
2017
|
|
||
Balance at beginning of period
|
$
|
14.6
|
|
|
$
|
11.9
|
|
Accruals for warranties issued during the reporting period
|
1.5
|
|
|
1.5
|
|
||
Accruals related to pre-existing warranties (including changes in estimates)
|
1.1
|
|
|
3.8
|
|
||
Less: settlements made during the period
|
(2.6
|
)
|
|
(2.5
|
)
|
||
Balance at end of period
|
$
|
14.6
|
|
|
$
|
14.7
|
|
|
Options
Outstanding
|
|
Weighted
Average
Exercise Price
|
|||
Outstanding as of July 31, 2017
|
6,685,551
|
|
|
$
|
32.60
|
|
Granted
|
877,050
|
|
|
$
|
45.69
|
|
Exercised
|
(530,916
|
)
|
|
$
|
26.32
|
|
Canceled
|
(21,193
|
)
|
|
$
|
37.60
|
|
Outstanding as of January 31, 2018
|
7,010,492
|
|
|
$
|
34.70
|
|
Range of Exercise Prices
|
|
Number Outstanding
|
|
Weighted
Average
Remaining
Contractual
Life (Years)
|
|
Weighted
Average
Exercise
Price of Outstanding Options
|
|
Number
Exercisable
|
|
Weighted
Average
Exercise
Price of Exercisable Options
|
||||||
$ 0.00 to $22.69
|
|
983,883
|
|
|
1.54
|
|
$
|
19.68
|
|
|
983,883
|
|
|
$
|
19.68
|
|
$22.70 to $28.69
|
|
861,049
|
|
|
7.86
|
|
$
|
28.06
|
|
|
567,606
|
|
|
$
|
28.05
|
|
$28.70 to $34.69
|
|
1,383,480
|
|
|
3.92
|
|
$
|
31.64
|
|
|
1,366,082
|
|
|
$
|
31.64
|
|
$34.70 to $40.69
|
|
1,380,549
|
|
|
5.64
|
|
$
|
37.03
|
|
|
1,370,383
|
|
|
$
|
37.03
|
|
$40.70 and above
|
|
2,401,531
|
|
|
8.34
|
|
$
|
43.65
|
|
|
947,730
|
|
|
$
|
42.39
|
|
|
|
7,010,492
|
|
|
5.92
|
|
$
|
34.70
|
|
|
5,235,684
|
|
|
$
|
32.36
|
|
|
Three Months Ended
January 31, |
|
Six Months Ended
January 31, |
||||||||||||
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
||||
Net periodic benefit costs:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Service cost
|
$
|
2.1
|
|
|
$
|
2.0
|
|
|
$
|
4.1
|
|
|
$
|
4.1
|
|
Interest cost
|
3.7
|
|
|
3.4
|
|
|
7.4
|
|
|
6.7
|
|
||||
Expected return on assets
|
(6.6
|
)
|
|
(6.6
|
)
|
|
(13.1
|
)
|
|
(13.2
|
)
|
||||
Prior service cost amortization
|
0.2
|
|
|
0.2
|
|
|
0.3
|
|
|
0.4
|
|
||||
Actuarial loss amortization
|
1.1
|
|
|
1.8
|
|
|
2.3
|
|
|
3.6
|
|
||||
Net periodic benefit costs
|
$
|
0.5
|
|
|
$
|
0.8
|
|
|
$
|
1.0
|
|
|
$
|
1.6
|
|
|
Foreign
Currency Translation Adjustment |
|
Pension
Benefits |
|
Derivative
Financial Instruments |
|
Total
|
||||||||
Balance as of October 31, 2017, net of tax
|
$
|
(63.9
|
)
|
|
$
|
(94.3
|
)
|
|
$
|
(0.8
|
)
|
|
$
|
(159.0
|
)
|
Other comprehensive income (loss) before reclassifications and tax
|
55.5
|
|
|
—
|
|
|
(0.4
|
)
|
|
55.1
|
|
||||
Tax benefit
|
—
|
|
|
—
|
|
|
0.1
|
|
|
0.1
|
|
||||
Other comprehensive income (loss) before reclassifications, net of tax
|
55.5
|
|
|
—
|
|
|
(0.3
|
)
|
|
55.2
|
|
||||
Reclassifications, before tax
|
—
|
|
|
0.6
|
|
|
(0.5
|
)
|
|
0.1
|
|
||||
Tax (expense) benefit
|
—
|
|
|
(0.4
|
)
|
|
0.2
|
|
|
(0.2
|
)
|
||||
Reclassifications, net of tax
|
—
|
|
|
0.2
|
|
(1)
|
(0.3
|
)
|
(2)
|
(0.1
|
)
|
||||
Other comprehensive income (loss), net of tax
|
55.5
|
|
|
0.2
|
|
|
(0.6
|
)
|
|
55.1
|
|
||||
Balance as of January 31, 2018, net of tax
|
$
|
(8.4
|
)
|
|
$
|
(94.1
|
)
|
|
$
|
(1.4
|
)
|
|
$
|
(103.9
|
)
|
|
|
|
|
|
|
|
|
||||||||
Balance as of October 31, 2016, net of tax
|
$
|
(101.7
|
)
|
|
$
|
(113.4
|
)
|
|
$
|
0.5
|
|
|
$
|
(214.6
|
)
|
Other comprehensive (loss) income before reclassifications and tax
|
(8.4
|
)
|
|
—
|
|
|
0.3
|
|
|
(8.1
|
)
|
||||
Tax expense
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
||||
Other comprehensive (loss) income before reclassifications, net of tax
|
(8.4
|
)
|
|
—
|
|
|
0.2
|
|
|
(8.2
|
)
|
||||
Reclassifications, before tax
|
—
|
|
|
2.1
|
|
|
(0.7
|
)
|
|
1.4
|
|
||||
Tax (expense) benefit
|
—
|
|
|
(0.8
|
)
|
|
0.2
|
|
|
(0.6
|
)
|
||||
Reclassifications, net of tax
|
—
|
|
|
1.3
|
|
(1)
|
(0.5
|
)
|
(2)
|
0.8
|
|
||||
Other comprehensive (loss) income, net of tax
|
(8.4
|
)
|
|
1.3
|
|
|
(0.3
|
)
|
|
(7.4
|
)
|
||||
Balance as of January 31, 2017, net of tax
|
$
|
(110.1
|
)
|
|
$
|
(112.1
|
)
|
|
$
|
0.2
|
|
|
$
|
(222.0
|
)
|
(1)
|
Primarily includes net amortization of prior service costs and actuarial losses included in net periodic benefit cost (see Note 8) that were reclassified from accumulated other comprehensive loss to operating expenses or cost of sales.
|
(2)
|
Relates to foreign currency cash flow hedges that were reclassified from accumulated other comprehensive loss to other income, net.
|
|
Foreign
Currency Translation Adjustment |
|
Pension
Benefits |
|
Derivative
Financial Instruments |
|
Total
|
||||||||
Balance as of July 31, 2017, net of tax
|
$
|
(58.8
|
)
|
|
$
|
(95.1
|
)
|
|
$
|
(3.1
|
)
|
|
$
|
(157.0
|
)
|
Other comprehensive income before reclassifications and tax
|
50.4
|
|
|
—
|
|
|
2.0
|
|
|
52.4
|
|
||||
Tax expense
|
—
|
|
|
—
|
|
|
(0.7
|
)
|
|
(0.7
|
)
|
||||
Other comprehensive income before reclassifications, net of tax
|
50.4
|
|
|
—
|
|
|
1.3
|
|
|
51.7
|
|
||||
Reclassifications, before tax
|
—
|
|
|
1.9
|
|
|
0.6
|
|
|
2.5
|
|
||||
Tax expense
|
—
|
|
|
(0.9
|
)
|
|
(0.2
|
)
|
|
(1.1
|
)
|
||||
Reclassifications, net of tax
|
—
|
|
|
1.0
|
|
(1)
|
0.4
|
|
(2)
|
1.4
|
|
||||
Other comprehensive income, net of tax
|
50.4
|
|
|
1.0
|
|
|
1.7
|
|
|
53.1
|
|
||||
Balance as of January 31, 2018, net of tax
|
$
|
(8.4
|
)
|
|
$
|
(94.1
|
)
|
|
$
|
(1.4
|
)
|
|
$
|
(103.9
|
)
|
|
|
|
|
|
|
|
|
||||||||
Balance as of July 31, 2016, net of tax
|
$
|
(89.3
|
)
|
|
$
|
(115.8
|
)
|
|
$
|
(0.5
|
)
|
|
$
|
(205.6
|
)
|
Other comprehensive (loss) income before reclassifications and tax
|
(20.8
|
)
|
|
—
|
|
|
1.9
|
|
|
(18.9
|
)
|
||||
Tax expense
|
—
|
|
|
—
|
|
|
(0.6
|
)
|
|
(0.6
|
)
|
||||
Other comprehensive (loss) income before reclassifications, net of tax
|
(20.8
|
)
|
|
—
|
|
|
1.3
|
|
|
(19.5
|
)
|
||||
Reclassifications, before tax
|
—
|
|
|
5.5
|
|
|
(0.8
|
)
|
|
4.7
|
|
||||
Tax (expense) benefit
|
—
|
|
|
(1.8
|
)
|
|
0.2
|
|
|
(1.6
|
)
|
||||
Reclassifications, net of tax
|
—
|
|
|
3.7
|
|
(1)
|
(0.6
|
)
|
(2)
|
3.1
|
|
||||
Other comprehensive (loss) income, net of tax
|
(20.8
|
)
|
|
3.7
|
|
|
0.7
|
|
|
(16.4
|
)
|
||||
Balance as of January 31, 2017, net of tax
|
$
|
(110.1
|
)
|
|
$
|
(112.1
|
)
|
|
$
|
0.2
|
|
|
$
|
(222.0
|
)
|
(1)
|
Primarily includes net amortization of prior service costs and actuarial losses included in net periodic benefit cost (see Note 8) that were reclassified from accumulated other comprehensive loss to operating expenses or cost of sales.
|
(2)
|
Relates to foreign currency cash flow hedges that were reclassified from accumulated other comprehensive loss to other income, net.
|
|
Three Months Ended
January 31, |
|
Six Months Ended
January 31, |
||||||||||||
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
||||
Net sales
|
|
|
|
|
|
|
|
||||||||
Engine Products segment
|
$
|
442.4
|
|
|
$
|
361.9
|
|
|
$
|
884.5
|
|
|
$
|
715.7
|
|
Industrial Products segment
|
222.3
|
|
|
188.7
|
|
|
425.0
|
|
|
387.9
|
|
||||
Total
|
$
|
664.7
|
|
|
$
|
550.6
|
|
|
$
|
1,309.5
|
|
|
$
|
1,103.6
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Earnings before income taxes
|
|
|
|
|
|
|
|
||||||||
Engine Products segment
|
$
|
54.5
|
|
|
$
|
48.7
|
|
|
$
|
118.1
|
|
|
$
|
94.1
|
|
Industrial Products segment
|
32.2
|
|
|
24.3
|
|
|
62.2
|
|
|
62.6
|
|
||||
Corporate and Unallocated
|
(10.3
|
)
|
|
(6.7
|
)
|
|
(19.2
|
)
|
|
(10.7
|
)
|
||||
Total
|
$
|
76.4
|
|
|
$
|
66.3
|
|
|
$
|
161.1
|
|
|
$
|
146.0
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
Six Months Ended January 31,
|
||||||||||||
|
2018
|
|
|
% of sales
|
|
|
2017
|
|
|
% of sales
|
|
||
Net sales
|
$
|
1,309.5
|
|
|
|
|
$
|
1,103.6
|
|
|
|
||
Cost of sales
|
866.3
|
|
|
66.2
|
%
|
|
721.5
|
|
|
65.4
|
%
|
||
Gross profit
|
443.2
|
|
|
33.8
|
%
|
|
382.1
|
|
|
34.6
|
%
|
||
Operating expenses
|
270.9
|
|
|
20.7
|
%
|
|
236.3
|
|
|
21.4
|
%
|
||
Operating income
|
172.3
|
|
|
13.2
|
%
|
|
145.8
|
|
|
13.2
|
%
|
||
Interest expense
|
10.3
|
|
|
0.8
|
%
|
|
9.6
|
|
|
0.9
|
%
|
||
Other expense (income), net
|
0.9
|
|
|
0.1
|
%
|
|
(9.8
|
)
|
|
(0.9
|
)%
|
||
Earnings before income taxes
|
161.1
|
|
|
12.3
|
%
|
|
146.0
|
|
|
13.2
|
%
|
||
Income taxes
|
153.1
|
|
|
11.7
|
%
|
|
41.5
|
|
|
3.8
|
%
|
||
Net earnings
|
$
|
8.0
|
|
|
0.6
|
%
|
|
$
|
104.5
|
|
|
9.5
|
%
|
|
Three Months Ended
January 31, |
|
Six Months Ended
January 31, |
||||||||||||
|
2018
|
|
|
2017
|
|
|
2018
|
|
2017
|
||||||
Net sales:
|
|
|
|
|
|
|
|
||||||||
Engine Products segment
|
$
|
442.4
|
|
|
$
|
361.9
|
|
|
$
|
884.5
|
|
|
$
|
715.7
|
|
Industrial Products segment
|
222.3
|
|
|
188.7
|
|
|
425.0
|
|
|
387.9
|
|
||||
Total
|
$
|
664.7
|
|
|
$
|
550.6
|
|
|
$
|
1,309.5
|
|
|
$
|
1,103.6
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings before income taxes:
|
|
|
|
|
|
|
|
||||||||
Engine Products segment
|
$
|
54.5
|
|
|
$
|
48.7
|
|
|
$
|
118.1
|
|
|
$
|
94.1
|
|
Industrial Products segment
|
32.2
|
|
|
24.3
|
|
|
62.2
|
|
|
62.6
|
|
||||
Corporate and Unallocated
(1)
|
(10.3
|
)
|
|
(6.7
|
)
|
|
(19.2
|
)
|
|
(10.7
|
)
|
||||
Total
|
$
|
76.4
|
|
|
$
|
66.3
|
|
|
$
|
161.1
|
|
|
$
|
146.0
|
|
(1)
|
Corporate and Unallocated includes corporate expenses determined to be non-allocable to the segments, such as interest income and expense.
|
|
Three Months Ended
January 31, |
|
Six Months Ended
January 31, |
||||||||||||
|
2018
|
|
|
2017
|
|
|
2018
|
|
2017
|
||||||
Engine Products segment:
|
|
|
|
|
|
|
|
||||||||
Off-Road
|
$
|
78.9
|
|
|
$
|
57.6
|
|
|
$
|
153.9
|
|
|
$
|
112.4
|
|
On-Road
|
35.2
|
|
|
23.3
|
|
|
68.5
|
|
|
49.9
|
|
||||
Aftermarket
|
303.5
|
|
|
256.6
|
|
|
612.6
|
|
|
504.2
|
|
||||
Aerospace and Defense
|
24.8
|
|
|
24.4
|
|
|
49.5
|
|
|
49.2
|
|
||||
Total Engine Products segment
|
$
|
442.4
|
|
|
$
|
361.9
|
|
|
$
|
884.5
|
|
|
$
|
715.7
|
|
|
|
|
|
|
|
|
|
||||||||
Engine Products segment earnings before income taxes
|
$
|
54.5
|
|
|
$
|
48.7
|
|
|
$
|
118.1
|
|
|
$
|
94.1
|
|
|
Three Months Ended
January 31, |
|
Six Months Ended
January 31, |
||||||||||||
|
2018
|
|
|
2017
|
|
|
2018
|
|
2017
|
||||||
Industrial Products segment:
|
|
|
|
|
|
|
|
||||||||
Industrial Filtration Solutions
|
$
|
145.1
|
|
|
$
|
127.8
|
|
|
$
|
279.6
|
|
|
$
|
254.2
|
|
Gas Turbine Systems
|
33.0
|
|
|
21.2
|
|
|
59.3
|
|
|
53.7
|
|
||||
Special Applications
|
44.2
|
|
|
39.7
|
|
|
86.1
|
|
|
80.0
|
|
||||
Total Industrial Products segment
|
$
|
222.3
|
|
|
$
|
188.7
|
|
|
$
|
425.0
|
|
|
$
|
387.9
|
|
|
|
|
|
|
|
|
|
||||||||
Industrial Products segment earnings before income taxes
|
$
|
32.2
|
|
|
$
|
24.3
|
|
|
$
|
62.2
|
|
|
$
|
62.6
|
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
|
Total Number
of Shares
Purchased
(1)
|
|
Average Price
Paid per Share
|
|
Total Number
of Shares
Purchased as
Part of Publicly
Announced Plans
or Programs
|
|
Maximum
Number
of Shares
that May Yet
Be Purchased
Under the Plans
or Programs
|
|||||
November 1 - November 30, 2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
6,241,152
|
|
December 1 - December 31, 2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,241,152
|
|
|
January 1 - January 31, 2018
|
|
400,000
|
|
|
50.55
|
|
|
400,000
|
|
|
5,841,152
|
|
|
Total
|
|
400,000
|
|
|
$
|
50.55
|
|
|
400,000
|
|
|
5,841,152
|
|
(1)
|
The Board of Directors has authorized the repurchase of up to 14.0 million shares of the Company's common stock. This repurchase authorization is effective until terminated by the Board of Directors. There were no repurchases of common stock made outside of the Company's current repurchase authorization during the
three months ended January 31, 2018
. While not considered repurchases of shares, the Company does at times withhold shares that would otherwise be issued under stock-based awards to cover the withholding of taxes due as a result of exercising stock options or payment of stock-based awards.
|
Item 3.
|
Defaults Upon Senior Securities
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Information
|
Item 6.
|
Exhibits
|
|
|
|
|
|
*4 – **
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101 – The following information from the Donaldson Company, Inc. Quarterly Report on Form 10-Q for the fiscal quarter ended January 31, 2018, as filed with the Securities and Exchange Commission, formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Statements of (Loss) Earnings, (ii) the Condensed Consolidated Balance Sheets, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Consolidated Statements of Cash Flows and (v) the Notes to Condensed Consolidated Financial Statements.
|
*
|
Exhibit has previously been filed with the Securities and Exchange Commission and is incorporated herein by reference as an exhibit.
|
**
|
Pursuant to the provisions of Regulation S-K Item 601(b)(4)(iii)(A), copies of instruments defining the rights of holders of certain long-term debts of the Registrant and its subsidiaries are not filed and in lieu thereof the Registrant agrees to furnish a copy thereof to the Securities and Exchange Commission upon request.
|
|
|
|
|
DONALDSON COMPANY, INC.
|
|
|
(Registrant)
|
Date: March 9, 2018
|
By:
|
/s/ Tod E. Carpenter
|
|
|
Tod E. Carpenter
Chairman, President and
Chief Executive Officer
(duly authorized officer)
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Date: March 9, 2018
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By:
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/s/ Scott J. Robinson
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Scott J. Robinson
Senior Vice President and
Chief Financial Officer
(principal financial officer)
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Date: March 9, 2018
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By:
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/s/ Melissa A. Osland
|
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Melissa A. Osland
Corporate Controller
(principal accounting officer)
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1 Year Donaldson Chart |
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