-----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, VYubF8GF4EiTtm5iAGcJ/saBuTiA9KKGh2EkW4HPYaSXvieXUHsFQN6sJJnQxUER XoLTXRjCautLTVq3Z5WKEA== 0000897101-96-000106.txt : 19960315 0000897101-96-000106.hdr.sgml : 19960315 ACCESSION NUMBER: 0000897101-96-000106 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960131 FILED AS OF DATE: 19960314 SROS: NYSE 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: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07891 FILM NUMBER: 96534937 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 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the period ended January 31, 1996 Commission File Number 1-7891 DONALDSON COMPANY, INC. (Exact name of registrant as specified in its charter) Delaware 41-0222640 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 1400 West 94th Street Minneapolis, Minnesota 55431 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (612) 887-3131 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes _X_ No ___ Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock, $5 Par Value -- 25,640,935 shares as of February 29, 1996 PART I. FINANCIAL INFORMATION Item 1. Financial Statements. CONDENSED STATEMENTS OF CONSOLIDATED EARNINGS DONALDSON COMPANY, INC. AND SUBSIDIARIES (Thousands of Dollars Except Per Share Amounts) (Unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED JANUARY 31 JANUARY 31 1996 1995 1996 1995 ----------- ----------- ----------- ----------- Net Sales $ 182,165 $ 168,861 $ 371,032 $ 333,036 Cost of Sales 129,726 121,478 264,694 240,320 ----------- ----------- ----------- ----------- Gross Margin 52,439 47,383 106,338 92,716 Operating Expenses 35,999 32,961 72,245 62,797 Other Expense 87 1,353 420 931 Interest Expense 665 745 1,376 1,528 ----------- ----------- ----------- ----------- Earnings Before Income Taxes 15,688 12,324 32,297 27,460 Income Taxes 6,441 4,639 12,919 10,270 ----------- ----------- ----------- ----------- Net Earnings $ 9,247 $ 7,685 $ 19,378 $ 17,190 =========== =========== =========== =========== Average Shares and Equivalents Outstanding During Period 26,055,226 26,541,012 26,119,924 26,668,500 =========== =========== =========== =========== Net Earnings Per Share $ .35 $ .29 $ .74 $ .64 =========== =========== =========== =========== Dividends Paid Per Share $ .07 $ .07 $ .14 $ .14 =========== =========== =========== ===========
See Notes to Condensed Consolidated Financial Statements. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION DONALDSON COMPANY, INC. AND SUBSIDIARIES (Thousands of Dollars) (Unaudited)
JANUARY 31, JULY 31, 1996 1995 --------- --------- ASSETS CURRENT ASSETS Cash and Cash Equivalents $ 27,613 $ 28,565 Accounts Receivable, Net 138,417 137,155 Inventories Materials 29,480 32,225 Work in Process 11,132 12,168 Finished Products 26,562 29,035 --------- --------- Total Inventories 67,174 73,428 Prepaids and Other Current Assets 18,963 8,756 --------- --------- TOTAL CURRENT ASSETS 252,167 247,904 Property, Plant and Equipment, at Cost 292,188 292,192 Less Accumulated Depreciation 180,976 181,552 --------- --------- Property, Plant and Equipment, Net 111,212 110,640 Other Assets 21,397 22,498 --------- --------- TOTAL ASSETS $ 384,776 $ 381,042 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Short-Term Debt $ 17,560 $ 17,802 Current Maturities of Long-Term Debt 2,973 2,998 Trade Accounts Payable 59,278 53,576 Accrued Employee Compensation & Related Taxes 20,539 23,114 Other Current Liabilities 30,596 26,257 --------- --------- TOTAL CURRENT LIABILITIES 130,946 123,747 Long-Term Debt 13,697 10,167 Deferred Income Taxes 5,232 5,233 Other Long-Term Liabilities 20,834 20,722 SHAREHOLDERS' EQUITY Preferred Stock, $1 par value, 1,000,000 shares authorized, no shares issued -- -- Common Stock, $5 par value, 40,000,000 shares authorized, 27,063,407 issued on January 31, 1996 and July 31, 1995 135,317 135,317 Capital Surplus 2,751 2,639 Retained Earnings 109,289 93,746 Cumulative Translation Adjustment 5,700 14,824 Treasury Stock - 1,425,547 and 878,243 shares, at cost (33,740) (20,103) Receivable from ESOP (5,250) (5,250) --------- --------- TOTAL SHAREHOLDERS' EQUITY 214,067 221,173 --------- --------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 384,776 $ 381,042 ========= =========
See Notes to Condensed Consolidated Financial Statements. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS DONALDSON COMPANY, INC. AND SUBSIDIARIES (Thousands of Dollars) (Unaudited) SIX MONTHS ENDED JANUARY 31 1996 1995 -------- -------- OPERATING ACTIVITIES Net Earnings $ 19,378 $ 17,190 Adjustments to Reconcile Net Earnings to Net Cash Provided by Operating Activities: Depreciation and Amortization 10,837 8,638 Property, Plant and Equipment Write-down 1,130 2,467 Changes in Operating Assets and Liabilities (2,353) (4,191) Other 87 2,351 -------- -------- 29,079 26,455 INVESTING ACTIVITIES Net Expenditures on PP&E (14,961) (13,069) FINANCING ACTIVITIES Purchase of Treasury Stock (14,619) (5,314) Net Change in Debt 3,939 9,622 Dividends Paid (3,688) (3,692) Other 238 121 -------- -------- (14,130) 737 Effect of Exchange Rate Changes on Cash (940) 276 -------- -------- (Decrease)Increase in Cash and Cash Equivalents (952) 14,399 Cash and Cash Equivalents-Beginning of Year 28,565 22,945 -------- -------- Cash and Cash Equivalents-End of Period $ 27,613 $ 37,344 ======== ======== See Notes to Condensed Consolidated Financial Statements. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note A - The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation have been included. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. A. Financial Condition Operating cash flows have increased this year due to higher net earnings, increased depreciation and amortization and smaller increases in working capital requirements. These increases were partially offset by a smaller amount of property, plant and equipment write-downs. This higher level of operating cash flows easily covered a relatively high capital spending program and increased repurchases of treasury stock. Treasury stock repurchases totaled $5.4 million in the second quarter and $14.6 million for the six month period ended January 31, 1996. In January 1996, the Company's Board of Directors authorized a program to repurchase up to 2.0 million shares of its common stock. Less than 0.1 million shares have been repurchased under this authority. The Board had granted authority to repurchase 1.0 million shares in May 1995, and almost 0.9 million shares were bought under this authorization. The most recent Board authority replaces and expands the Company's ongoing repurchase program. At the end of the second quarter, the Company held $27.6 million in cash and cash equivalents. Cash balances net of short-term debt and current maturities of long-term debt totaled $7.1 million, down from $7.8 million at July 31, 1995. Long-term debt of $13.7 million at January 31, 1996, represented 6.0 percent of total long-term capital, up from 4.4 percent at the end of the prior year. In December 1995, the Company entered into a five year multi-currency revolving credit facility totaling $100 million with a group of international banks, led by Citibank as the agent. There were no amounts outstanding under this facility at January 31, 1996. B. Results of Operations The Company reported record net sales and earnings in the second quarter and first six months of 1996. Second quarter net sales of $182.2 million increased 7.9 percent from $168.9 million in the second quarter of 1995. In the first six months, sales reached $371.0 million, up 11.4 percent from $333.0 million a year ago. Second quarter net earnings were $9.2 million, compared to $7.7 million in the second quarter of 1995. Earnings per share were 35 cents, up 20.7 percent from 29 cents a year earlier. Net earnings in the first six months were $19.4 million, compared with $17.2 million in 1995. Earnings per share were 74 cents, up 15.6 percent from 64 cents a year earlier. Sales increased, in part, due to a higher demand for the Company's dust collection and gas turbine systems products. In addition, the original equipment engine business benefited from solid growth in our traditional heavy duty transportation market combined with new programs in the light duty truck market. The Company's operating profitability also continues to be positively affected by broad based volume increases across all major product lines and its continuing efforts to control costs. For the second quarter, gross margins increased to 28.8 percent in 1996 from 28.1 percent in the second quarter of 1995. Gross margins for the first six months of 1996 were 28.7 percent compared to 27.8 percent in the prior year. The improvement reflects manufacturing efficiencies achieved from higher operating levels this year. Operating expenses during the second quarter of 1996 were $36.0 million, 19.8 percent of sales, compared to $33.0 million, 19.5 percent of sales in the same quarter a year ago. Operating expenses for the first six months were $72.2 million, 19.5 percent of sales, compared to $62.8 million, 18.9 percent of sales in 1995. Operating expenses in the first half of 1996 were higher primarily due to increased accrued warranty reserves. Hard order backlogs -- goods scheduled for delivery in 90 days -- of $120.2 million at January 31, 1996, declined 3 percent from the same period last year primarily due to a decline in gas turbine backlog following strong sales during the first six months of 1996 and generally soft market conditions. Hard order backlogs in the engine business (original equipment and aftermarket) are 13 percent higher than at the same time last year. PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibit Index None (b) Reports on Form 8-K. During the quarter ended January 31, 1996, Registrant filed a report on Form 8-K reporting adoption by the Board of Directors of a Rights Agreement and exhibits under Items 5 and 7. The report was filed January 30, 1996 and there were no financial statements filed with it. SIGNATURES 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 thereunto duly authorized. DONALDSON COMPANY, INC. (Registrant) Date 3/13/96 By /s/James R. Giertz James R. Giertz Vice President - Chief Financial Officer Date 3/13/96 By /s/Raymond F. Vodovnik Raymond F. Vodovnik Vice President-Legal EX-27 2
5 1,000 6-MOS JUL-31-1996 JAN-31-1996 27,613 0 142,311 3,894 67,174 252,167 292,188 180,976 384,776 130,946 13,697 0 0 135,317 78,750 384,776 371,032 0 264,694 72,245 420 472 1,376 32,297 12,919 19,378 0 0 0 19,378 .74 .74
-----END PRIVACY-ENHANCED MESSAGE-----