-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TOG2mwz46mgq7hCUVoMM8CkiW0m8Zz8tZ265kQPTIN0bPBu9zDVfNHhREG4GrJSf xPLqGBH61+ZVLTe5RdlSnA== 0000897101-05-002024.txt : 20050914 0000897101-05-002024.hdr.sgml : 20050914 20050914172022 ACCESSION NUMBER: 0000897101-05-002024 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050914 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050914 DATE AS OF CHANGE: 20050914 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DONALDSON CO INC CENTRAL INDEX KEY: 0000029644 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL & COMMERCIAL FANS & BLOWERS & AIR PURIFYING EQUIP [3564] IRS NUMBER: 410222640 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-07891 FILM NUMBER: 051085087 BUSINESS ADDRESS: STREET 1: 1400 W. 94TH ST. CITY: MINNEAPOLIS STATE: MN ZIP: 55431 BUSINESS PHONE: 6128873131 MAIL ADDRESS: STREET 1: 1400 W 94TH STREET CITY: MINNEAPOLIS STATE: MN ZIP: 55431 8-K 1 donaldson053872_8k.htm Donaldson Company Form 8-K dated September 14, 2005

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 14, 2005

DONALDSON COMPANY, INC.
(Exact name of registrant as specified in its charter)

Delaware	1-7891	41-0222640

(State or other jurisdiction of incorporation)	(Commission file number)	(I.R.S. Employer Identification No.)


	1400 West 94th Street Minneapolis, MN 55431

	(Address of principal executive offices)


	(952) 887-3131

	Registrant’s telephone number, including area code


	Not Applicable

	(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On September 14, 2005, Donaldson Company, Inc. issued a press release announcing its results of operation for the quarter and fiscal year ended July 31, 2005. A copy of the press release is furnished herewith as Exhibit 99.1.

The information in the Form 8-K and the Exhibit attached hereto shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

99.1

Press Release dated September 14, 2005 announcing results of operation for the quarter and fiscal year ended July 31, 2005 of Donaldson Company, Inc.

EXHIBIT INDEX

		Exhibit No.		Description

		99.1		Press Release dated September 14, 2005 announcing results of operation for the quarter and fiscal year ended July 31, 2005 of Donaldson Company, Inc.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

Date: September 14, 2005



		DONALDSON COMPANY, INC.



		By:		/s/ Thomas R. VerHage

				Name: Thomas R. VerHage
				Title: Vice President and
				Chief Financial Officer

EX-99.1 2 don0538872_ex99-1.txt Exhibit 99.1 FOR IMMEDIATE RELEASE: FOR FURTHER INFORMATION: Wednesday, September 14, 2005 Rich Sheffer (952) 887-3753 DONALDSON COMPANY ANNOUNCES RECORD FULL-YEAR RESULTS DELIVERS 16TH CONSECUTIVE YEAR OF RECORD EARNINGS MINNEAPOLIS (Sept. 14, 2005) -- Donaldson Company, Inc. (NYSE: DCI) announced fourth quarter diluted earnings per share ("EPS") of $.29, even with last year. Net income was $25.1 million compared to $26.2 million last year. Sales were a record $422.7 million, up from $384.0 million in fiscal 2004. For the year, EPS was a record $1.27, up from $1.18 last year. Net income was a record $110.6 million, versus $106.3 million last year. Record sales of $1.6 billion were up from $1.4 billion in the prior year. During the fourth quarter, we recognized a $4.0 million tax charge, or $.05 per share, for the previously announced $80.0 million foreign repatriation plan pursuant to the American Jobs Creation Act of 2004. We also increased our reserve related to the previously disclosed patent litigation between Donaldson and Engineered Products Company, Inc. ("EPC") by $6.4 million, or $.05 per share. "We are very pleased to announce our 16th consecutive record year, posting all-time highs for sales, earnings and EPS despite these fourth quarter charges," said Bill Cook, Chairman, President and Chief Executive Officer. "Demand continues to be strong in most of our end markets. Although we have seen rising oil prices affect our raw material costs for petroleum-based commodities and freight, we are working with our customers to offset these increases through a variety of efforts. We enter fiscal 2006 with continued strong orders and backlogs, giving us confidence of delivering another strong year of results." INCOME STATEMENT DISCUSSION Stronger foreign currencies contributed to the increase in fourth quarter and full year sales. Translated at constant exchange rates, sales increased 9.2 percent during the quarter and 10.4 percent for the year. The impact of foreign currency translation increased net earnings by $0.2 million in the fourth quarter and $2.0 million for the year. Gross margin of 31.8 percent for the fourth quarter and 31.7 percent for the year compares to prior year margins of 31.2 percent and 31.6 percent, respectively. This year's fourth quarter gross margin was affected by higher costs for petroleum-based raw materials and freight, and a slower than expected ramp up of our new Thailand plant. Last year's fourth quarter gross margin was negatively impacted by $2.3 million from the unusual expenses discussed in last year's release. This year's fourth quarter operating expenses were 22.3 percent of sales, down from 22.5 percent in the prior year. For the year, operating expenses were 21.9 percent of sales, down from 22.1 percent last year. Included in this year's fourth quarter operating expenses is the $6.4 million increase to our reserve for the EPC patent infringement judgment. Last year's fourth quarter operating expenses included $9.3 million of unusual expenses discussed in last year's release. (more) Donaldson Company, Inc. September 14, 2005 Page 2 Fourth quarter interest expense was $2.7 million, up from $1.3 million last year. The increase was driven by additional debt and higher short-term interest rates. For the year, interest expense was $9.4 million, up from $5.0 million last year. Other income was $1.4 million in the quarter versus $2.5 million last year on lower joint venture income. For the year, other income was $7.7 million, up from $5.2 million last year. The effective tax rate of 35.7 percent for the fourth quarter and 28.6 percent for the year compares to prior year rates of 24.2 percent and 25.0 percent, respectively. Excluding the $4.0 million tax charge related to the $80.0 million dividend reinvestment plan pursuant to the American Jobs Creation Act of 2004, the effective tax rate was 25.4 percent for the fourth quarter and 26.0 percent for the year. No shares were repurchased during the fourth quarter. For the year, we repurchased 3,763,700 shares, or 4.4 percent of outstanding shares, for $116.3 million. BACKLOG Total backlog is strong, setting a new fourth quarter record at $412 million, up 11 percent relative to last year. ENGINE PRODUCTS SEGMENT Engine Products sales were a record $243.6 million in the quarter, an increase of 10 percent from last year. For the year, Engine Products sales were a record $923.8 million, an increase of 14 percent from last year. Truck product sales in the quarter totaled $45.2 million, up 15 percent from last year. NAFTA truck product sales increased 15 percent due to growing new truck build rates. European truck product sales increased 9 percent on stronger build rates and increased market share. Truck product sales in Asia increased 22 percent from strong sales in Japan. For the year, worldwide truck product sales totaled $175.0 million, an increase of 12 percent from last year. Worldwide sales of off-road products in the quarter were $74.4 million, up 14 percent from last year. NAFTA sales increased 11 percent on continued strength in new construction, agriculture and mining equipment demand. European off-road product sales increased 12 percent while Asian sales increased 26 percent. Worldwide sales totaled $286.2 million for the year, up 17 percent from last year. Engine aftermarket or replacement part sales in the quarter were $124.0 million, an increase of 7 percent from last year. NAFTA aftermarket sales increased 10 percent as equipment utilization rates remained strong and sales of diesel emission retrofit equipment continued ramping up. European sales increased 7 percent and Asian sales were down 6 percent. For the year, worldwide aftermarket sales were $462.6 million, up 13 percent from the prior year. (more) Donaldson Company, Inc. September 14, 2005 Page 3 INDUSTRIAL PRODUCTS SEGMENT Industrial Products sales in the quarter were a record $179.1 million, an increase of 10 percent from last year. For the year, Industrial Products sales were a record $671.9 million, an increase of 11 percent from last year. Industrial Filtration Solutions ("IFS") sales in the quarter were a record $113.5 million, an increase of 10 percent from last year. IFS sales were strong in NAFTA and Asia as sales increased 18 and 12 percent, respectively. European sales increased 3 percent over last year. For the year, worldwide IFS sales totaled a record $424.7 million, up 15 percent from last year. Gas turbine product sales in the quarter were $31.2 million, up 5 percent from last year. Worldwide sales totaled $112.9 million in fiscal 2005, down 4 percent from last year. Sales of special application products in the quarter were a record $34.4 million, an increase of 16 percent from last year. For the year, worldwide special application sales were a record $134.3 million, up 16 percent from last year. OUTLOOK ENGINE PRODUCTS: We expect sales growth to be approximately 10 percent in fiscal 2006. o NAFTA heavy-duty new truck build rates should remain at their current high levels as truck manufacturers are near capacity. Market share gains should continue to fuel international sales growth. o Off-road sales are expected to remain strong worldwide with robust conditions continuing in the production of new construction and mining equipment. o Both NAFTA and international aftermarket sales are expected to continue growing as continued strong equipment utilization drives replacement filter sales. INDUSTRIAL PRODUCTS: We expect high single-digit sales growth in fiscal 2006. o IFS sales growth is expected to moderate following two consecutive years of strong growth. Our American and Asian markets remain healthy and our European market remains stable. o Globally, we expect full-year gas turbine sales to improve modestly. Strength is seen in the Middle East and in the oil and gas markets. o Market conditions for special applications products are expected to remain strong. OTHER: We will begin expensing stock options in our first quarter of fiscal 2006, and expect the full year EPS impact to be $.03 to $.06 per share. (more) Donaldson Company, Inc. September 14, 2005 Page 4 ABOUT DONALDSON COMPANY, INC. Donaldson is a leading worldwide provider of filtration systems and replacement parts. Donaldson is a technology-driven company committed to satisfying customer needs for filtration solutions through innovative research and development. Donaldson serves customers in the diesel engine and industrial markets including in-plant air cleaning, compressed air and gas purification, power generation, disk drive filtration, off-road equipment and trucks. Our 11,000 employees contribute to the company's success at over 30 manufacturing locations around the world. Donaldson is a member of the S&P MidCap 400 Index and Donaldson shares are traded on the NYSE under the symbol DCI. Additional company 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 earnings release, the Annual Report to Shareholders, any Form 10-K, 10-Q or Form 8-K of the company or any other written or oral statements made by or on behalf of the company may include forward-looking statements, forecasts and projections which reflect the company's current views with respect to future events and financial performance but involve uncertainties that could significantly impact results. The words "believe," "expect," "anticipate," "intends," "estimate," "forecast," "outlook," "plan," "promises," "project," "should," "will be" and similar expressions are intended to identify "forward-looking statements" within the meaning of the Act. 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: currency fluctuations, commodity prices, world economic factors, political factors, the company's international operations, including production facilities in China, highly competitive markets, changes in capital spending levels by customers, changes in product demand, cancellations of orders, litigation, including the EPC litigation disclosed in the Company's SEC filings, integration of acquisitions, facility and product line rationalization, research and development expenditures, including ongoing information technology improvements, and governmental laws and regulations, including diesel emissions controls. For a more detailed explanation, see the company's 2004 Form 10-K filed with the Securities and Exchange Commission. The company wishes to caution investors that new factors emerge from time to time, and it is not possible for management to predict all such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or a combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Investors are further cautioned not to place undue reliance on such forward-looking statements as they speak only to the company's views as of the date the statement is made. The company undertakes no obligation to publicly update or revise any forward-looking statements. (more) Donaldson Company, Inc. September 14, 2005 Page 5 DONALDSON COMPANY, INC. AND SUBSIDIARIES CONDENSED STATEMENTS OF CONSOLIDATED EARNINGS (Thousands of dollars, except share and per share amounts) (Unaudited)

(more) Donaldson Company, Inc. September 14, 2005 Page 6 DONALDSON COMPANY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Thousands of dollars) (Unaudited) July 31 July 31 2005 2004 ---------- ---------- ASSETS Cash and cash equivalents $134,066 $99,504 Accounts receivable - net 294,016 274,120 Inventories - net 151,599 143,418 Prepaid expenses and other current assets 39,141 40,338 ---------- ---------- Total current assets 618,822 557,380 Other assets and deferred taxes 217,458 182,700 Property, plant and equipment - net 275,493 261,529 ---------- ---------- Total assets $1,111,773 $1,001,609 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Trade accounts payable $134,063 $124,401 Employee compensation and other liabilities 98,083 87,385 Notes payable 102,004 19,736 Income taxes payable 12,280 9,656 Current maturity long-term debt 7,772 34,346 ---------- ---------- Total current liabilities 354,202 275,524 Long-term debt 103,302 70,856 Other long-term liabilities 129,653 105,936 ---------- ---------- Total liabilities 587,157 452,316 Equity 524,616 549,293 ---------- ---------- Total liabilities and equity $1,111,773 $1,001,609 ========== ========== (more) Donaldson Company, Inc. September 14, 2005 Page 7 DONALDSON COMPANY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Thousands of dollars) (Unaudited) Year Ended July 31 ---------------------- 2005 2004 --------- --------- OPERATING ACTIVITIES Net earnings $110,554 $106,317 Adjustments to reconcile net earnings to net cash provided by operating activities: Gain on sale of Ome land and building -- (5,616) Depreciation and amortization 44,284 41,555 Changes in operating assets and liabilities (14,050) (31,812) Other, net 1,800 7,608 --------- --------- Net cash provided by operating activities 142,588 118,052 INVESTING ACTIVITIES Net expenditures on property and equipment (50,198) (43,030) Acquisitions and investments in unconsolidated affiliates, net of cash acquired (13,362) (4,397) --------- --------- Net cash used in investing activities (63,560) (47,427) FINANCING ACTIVITIES Purchase of treasury stock (116,268) (29,765) Net change in debt 87,973 3,322 Dividends paid (19,757) (17,779) Other, net 2,703 3,298 --------- --------- Net cash used in financing activities (45,349) (40,924) Effect of exchange rate changes on cash 883 2,733 --------- --------- Increase in cash and cash equivalents 34,562 32,434 Cash and cash equivalents - beginning of year 99,504 67,070 --------- --------- Cash and cash equivalents - end of year $134,066 $99,504 ========= ========= (more) Donaldson Company, Inc. September 14, 2005 Page 8 SEGMENT DETAIL (Thousands of dollars) (Unaudited)

NET SALES BY PRODUCT (Thousands of dollars) (Unaudited)

(more) Donaldson Company, Inc. September 14, 2005 Page 9 RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Thousands of dollars) (Unaudited)

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. # # # -----END PRIVACY-ENHANCED MESSAGE-----