Third quarter 2023 sales increased 2.6% year
over year to $875.7 million
Operating margin of 14.2%, up 120 basis
points from prior year
EPS of $0.76 increased 14.0% versus
2022
Donaldson maintains fiscal 2023 sales and
EPS outlook
Donaldson Company, Inc. (NYSE: DCI) (Donaldson or the Company)
today reported fiscal third quarter 2023 net earnings of $93.7
million, a 13.0% increase from $83.0 million in 2022. Earnings per
share (EPS) for the third quarter 2023 increased to $0.76 from
$0.67 in the prior year.
“Our third quarter results continue this fiscal year’s trend of
Donaldson delivering double-digit earnings growth and margin
expansion.” said Tod Carpenter, chairman, president and chief
executive officer. “We met the needs of our customers by improving
our on-time delivery metrics, brought working capital towards more
normalized levels, and continued to invest in R&D and capacity
expansion.
“We expect fiscal 2023 to be another year of record earnings as
we build upon our long-term momentum showcased at our recent
Investor Day. Our focus remains on the execution of our strategic
initiatives and investments in profitable growth, including those
within Life Sciences, as we make progress towards achieving our
financial targets and creating value for customers and
shareholders.”
Operating Results
Third quarter 2023 sales increased 2.6% to $875.7 million from
$853.2 million in 2022, as pricing benefits more than offset a
negative impact from currency translation of 2.8%.
Three Months Ended
Nine Months Ended
April 30, 2023
April 30, 2023
Reported % Change
Constant Currency %
Change
Reported % Change
Constant Currency %
Change
Mobile Solutions segment
Off-Road
10.7
%
14.1
%
13.5
%
20.5
%
On-Road
5.3
8.5
7.7
12.7
Aftermarket
(3.3
)
(0.7
)
2.5
6.8
Total Mobile Solutions segment
(0.1
)
2.7
4.9
9.7
Industrial Solutions segment
Industrial Filtration Solutions
12.5
15.1
12.1
16.6
Aerospace and Defense
22.3
23.7
23.9
27.4
Total Industrial Solutions segment
13.8
16.3
13.6
18.0
Life Sciences segment
Total Life Sciences segment
(12.6
)
(9.4
)
(14.1
)
(7.7
)
Total Company
2.6
%
5.4
%
5.6
%
10.4
%
Third quarter 2023 sales in the Mobile Solutions segment
(Mobile) were approximately flat versus prior year and increased
2.7% on a constant currency basis driven primarily by pricing.
Off-Road and On-Road sales increased 10.7% and 5.3%, respectively,
supported by high levels of global equipment production.
Aftermarket sales decreased 3.3% as large OEM customers continued
to normalize inventories, reflecting improving global supply chain
conditions.
Third quarter Industrial Solutions segment (Industrial) sales
rose 13.8%, driven by robust broad-based demand and price
realization. Aerospace and Defense sales increased 22.3% due to
ongoing strength in the commercial aerospace industry. Industrial
Filtration Solutions (IFS) sales grew 12.5% from robust dust
collection and industrial gases part sales.
Third quarter sales in the Life Sciences segment decreased 12.6%
year over year. Softness in market demand for Disk Drive products
more than offset sales growth in Food and Beverage.
Third quarter 2023 gross margin was 33.0%, up 150 basis points
from 31.5% in 2022 as pricing benefits more than offset higher
input costs.
Third quarter 2023 operating expenses as a percentage of sales
were 18.8%, a 30 basis point increase versus 18.5% in the prior
year due to an uptick in post-COVID hiring and discretionary
expenses.
Third quarter 2023 operating income as a percentage of sales
(operating margin) of 14.2%, increased 120 basis points compared
with 13.0% in the prior year due to the improvement in gross
margin.
Third quarter 2023 interest expense was $5.1 million versus $3.8
million in the prior year resulting primarily from higher interest
rates. Other income, net was unfavorable by $1.5 million versus the
prior year from higher pension costs. The Company’s effective tax
rate of 22.9% was favorable versus 25.4% a year ago mainly driven
by an increase in discrete tax item benefits and export
incentives.
Year-to-date, Donaldson has paid $84.1 million in dividends and
repurchased 1.7% of its outstanding shares for $119.3 million.
Updated Fiscal 2023
Outlook
Fiscal 2023 full-year GAAP EPS is expected to be between $2.90
and $2.96, inclusive of $0.10 of first half restructuring and other
charges. Adjusted EPS is forecast between $3.00 and $3.06. Sales
are projected to increase between 3% and 5% over prior year, driven
by an approximate 8% increase in pricing and a negative impact from
currency translation of roughly 4%.
Fiscal 2023 Mobile sales are forecast to increase between 2% and
4% year over year as high levels of global equipment production are
expected to drive mid-single digit and high-single digit growth in
On-Road and Off-Road sales, respectively. Aftermarket sales are
projected to increase low-single digits.
Fiscal 2023 Industrial sales are expected to increase between
11% and 13% versus 2022. Robust end-market demand across the
segment is forecast to drive a year-over-year sales increase in IFS
and Aerospace and Defense of low-double digits and mid-teens,
respectively.
Fiscal 2023 Life Sciences sales are expected to decline between
10% and 12% compared with prior year due to continued Disk Drive
market weakness and bioprocessing equipment delivery timing.
Fiscal 2023 GAAP operating margin is forecast to be between
13.9% and 14.3% and adjusted operating margin is expected to be
between 14.4% and 14.8%. Prior year GAAP and adjusted operating
margin were 13.4% and 13.5%, respectively.
Fiscal 2023 interest expense is projected to be approximately
$20 million and other income is expected to be between $6 million
and $10 million. Donaldson expects a fiscal 2023 effective income
tax rate of approximately 24%.
Fiscal 2023 capital expenditures are expected to be between $115
million and $130 million and free cash flow conversion is forecast
between 105% and 115%. For the full year, Donaldson expects to
repurchase approximately 2% of its shares outstanding.
Miscellaneous
The Company will webcast its third quarter 2023 earnings
conference call today at 9:00 a.m. CT. To listen to the webcast,
visit the “Events & Presentations” section of Donaldson’s
Investor Relations website (IR.Donaldson.com), and click on the “listen to
webcast” option. The webcast replay will be available at
approximately 12:00 p.m. CT today. Also available on the website is
the Company’s supplemental quarterly earnings presentation.
Statements in this release regarding future events and
expectations, such as forecasts, plans, trends and projections
relating to the Company’s business and financial performance, are
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 and are identified by
words or phrases such as “will likely result,” “are expected to,”
“will continue,” “will allow,” “estimate,” “project,” “believe,”
“expect,” “anticipate,” “forecast,” “plan” and similar expressions.
These forward-looking statements speak only as of the date such
statements are made and are subject to risks and uncertainties that
could affect the Company’s performance and could cause the
Company’s actual results for future periods to differ materially
from any opinions or statements expressed. These factors include,
but are not limited to, challenges in global operations; impacts of
global economic, industrial and political conditions on product
demand, including the Russia and Ukraine conflict; impacts from
unexpected events, including the COVID-19 pandemic; effects of
unavailable raw materials or material cost inflation; inability to
attract and retain qualified personnel; inability to meet customer
demand; inability to maintain competitive advantages; threats from
disruptive technologies; effects of highly competitive markets with
pricing pressure; exposure to customer concentration in certain
cyclical industries; inability to manage productivity improvements;
results of execution of any acquisition, divestiture and other
strategic transactions; vulnerabilities associated with information
technology systems and security; inability to protect and enforce
intellectual property rights; costs associated with governmental
laws and regulations; impacts of foreign currency fluctuations; and
effects of changes in capital and credit markets. These and other
factors are described in Part I, Item 1A, “Risk Factors” of the
Company’s Annual Report on Form 10-K for the fiscal year ended July
31, 2022. The Company undertakes no obligation to publicly update
or revise any forward-looking statements, whether as a result of
new information, future events or otherwise, unless required by
law. The results presented herein are preliminary, unaudited and
subject to revision until the Company files its results with the
United States Securities and Exchange Commission on Form 10-Q.
About Donaldson Company
Founded in 1915, Donaldson is a global leader in technology-led
filtration products and solutions, serving a broad range of
industries and advanced markets. Our diverse, skilled employees at
over 140 locations on six continents partner with customers—from
small business owners to the world’s biggest OEM brands—to solve
complex filtration challenges. Discover how Donaldson is Advancing
Filtration for a Cleaner World at www.Donaldson.com.
DONALDSON COMPANY, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF EARNINGS
(In millions, except per share
amounts)
(Unaudited)
Three Months Ended
Nine Months Ended
April 30,
April 30,
2023
2022
Change
2023
2022
Change
Net sales
$
875.7
$
853.2
2.6
%
$
2,551.3
$
2,416.6
5.6
%
Cost of sales
586.9
584.2
0.5
1,690.8
1,640.8
3.0
Gross profit
288.8
269.0
7.4
860.5
775.8
10.9
Selling, general and administrative
145.8
140.6
3.8
444.7
411.1
8.2
Research and development
19.0
17.4
9.0
56.2
50.5
11.2
Operating expenses
164.8
158.0
4.3
500.9
461.6
8.5
Operating income
124.0
111.0
11.7
359.6
314.2
14.5
Interest expense
5.1
3.8
35.5
14.3
10.8
32.0
Other income, net
(2.6
)
(4.1
)
(34.0
)
(6.1
)
(6.4
)
(5.4
)
Earnings before income taxes
121.5
111.3
9.2
351.4
309.8
13.4
Income taxes
27.8
28.3
(1.7
)
84.5
78.0
8.3
Net earnings
$
93.7
$
83.0
13.0
%
$
266.9
$
231.8
15.2
%
Weighted average shares – basic
121.6
123.4
(1.5
)%
122.0
123.9
(1.5
)%
Weighted average shares – diluted
123.5
124.6
(0.9
)%
123.7
125.6
(1.5
)%
Net EPS – basic
$
0.77
$
0.67
14.6
%
$
2.19
$
1.87
17.0
%
Net EPS – diluted
$
0.76
$
0.67
14.0
%
$
2.16
$
1.85
16.9
%
Dividends paid per share
$
0.23
$
0.22
4.5
%
$
0.69
$
0.66
4.5
%
Note: Amounts may not foot due to
rounding.
DONALDSON COMPANY, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In millions)
(Unaudited)
April 30,
July 31,
2023
2022
Assets
Current assets:
Cash and cash equivalents
$
186.0
$
193.3
Accounts receivable, net
626.3
616.6
Inventories, net
449.7
502.4
Prepaid expenses and other current
assets
90.6
94.2
Total current assets
1,352.6
1,406.5
Property, plant and equipment, net
640.9
594.4
Goodwill
380.3
345.8
Intangible assets, net
138.8
99.8
Other long-term assets
162.9
153.8
Total assets
$
2,675.5
$
2,600.3
Liabilities and Stockholders’
Equity
Current liabilities:
Short-term borrowings
$
26.6
$
3.7
Current maturities of long-term debt
125.0
—
Accounts payable
311.1
338.5
Accrued employee compensation and related
taxes
105.8
113.8
Deferred revenue
31.2
22.3
Income taxes payable
29.6
31.8
Dividends payable
—
28.3
Other current liabilities
82.7
91.2
Total current liabilities
712.0
629.6
Long-term debt
470.5
644.3
Non-current income taxes payable
58.5
69.4
Deferred income taxes
32.7
32.7
Other long-term liabilities
103.1
91.1
Total liabilities
1,376.8
1,467.1
Total stockholders’ equity
1,298.7
1,133.2
Total liabilities and stockholders’
equity
$
2,675.5
$
2,600.3
DONALDSON COMPANY, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Nine Months Ended
April 30,
2023
2022
Operating Activities
Net earnings
$
266.9
$
231.8
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization
67.3
71.0
Deferred income taxes
(9.6
)
3.0
Stock-based compensation expense
17.1
17.0
Other, net
3.8
4.3
Changes in operating assets and
liabilities
8.2
(183.2
)
Net cash provided by operating
activities
353.7
143.9
Investing Activities
Purchases of property, plant and
equipment
(92.8
)
(56.8
)
Acquisitions, net of cash acquired
(62.3
)
(49.0
)
Net cash used in investing activities
(155.1
)
(105.8
)
Financing Activities
Proceeds from long-term debt
80.0
249.3
Repayments of long-term debt
(135.0
)
(90.0
)
Change in short-term borrowings
23.1
(16.4
)
Purchase of treasury stock
(119.3
)
(153.7
)
Dividends paid
(84.1
)
(81.8
)
Exercise of stock options and other
31.2
9.8
Net cash used in financing activities
(204.1
)
(82.8
)
Effect of exchange rate changes on
cash
(1.8
)
(9.4
)
Decrease in cash and cash equivalents
(7.3
)
(54.1
)
Cash and cash equivalents, beginning of
period
193.3
222.8
Cash and cash equivalents, end of
period
$
186.0
$
168.7
CONSOLIDATED RATE
ANALYSIS
(Unaudited)
Three Months Ended
Nine Months Ended
April 30,
April 30,
2023
2022
2023
2022
Gross margin
33.0 %
31.5 %
33.7 %
32.1 %
Operating expenses
18.8 %
18.5 %
19.6 %
19.1 %
Operating margin
14.2 %
13.0 %
14.1 %
13.0 %
Other income, net
(0.3)%
(0.5)%
(0.2)%
(0.3)%
Depreciation and amortization
2.6 %
2.8 %
2.6 %
2.9 %
EBITDA
17.0 %
16.2 %
17.0 %
16.2 %
Effective tax rate
22.9 %
25.4 %
24.0 %
25.2 %
Earnings before income taxes - Mobile
Solutions
15.0 %
14.3 %
14.8 %
13.1 %
Earnings before income taxes - Industrial
Solutions
18.8 %
14.9 %
18.0 %
13.3 %
Earnings before income taxes - Life
Sciences
0.3 %
20.6 %
9.5 %
24.2 %
Cash conversion ratio
104.6 %
49.3 %
97.8 %
37.6 %
Three Months Ended
Nine Months Ended
April 30,
April 30,
2023
2022
2023
2022
Adjusted Rates
Gross margin
33.0 %
31.5 %
33.8 %
32.1 %
Operating expenses
18.8 %
18.5 %
19.0 %
19.1 %
Operating margin
14.2 %
13.0 %
14.8 %
13.0 %
Other income, net
(0.3)%
(0.5)%
(0.2)%
(0.3)%
Depreciation and amortization
2.6 %
2.8 %
2.6 %
2.9 %
EBITDA
17.0 %
16.2 %
17.6 %
16.2 %
Effective tax rate
22.9 %
25.4 %
24.1 %
25.2 %
Earnings before income taxes - Mobile
Solutions
15.0 %
14.3 %
14.8 %
13.1 %
Earnings before income taxes - Industrial
Solutions
18.8 %
14.9 %
18.0 %
13.3 %
Earnings before income taxes - Life
Sciences
0.3 %
20.6 %
9.5 %
24.2 %
Cash conversion ratio
104.6 %
49.3 %
93.3 %
37.6 %
Note: Rate analysis metrics are computed
by dividing the applicable amount by net sales, and cash conversion
ratio reflects free cash flow divided by net earnings. Adjusted
rates exclude the impact of certain items not related to ongoing
operations. Adjusted rates are non-GAAP measures; see the
Reconciliation of Non-GAAP Financial Measures schedule for
additional information.
SEGMENT DETAIL
(In millions)
(Unaudited)
Three Months Ended April
30,
Nine Months Ended April
30,
2023
2022
Change
2023
2022
Change
Net sales
Mobile Solutions segment
Off-Road
$
115.6
$
104.4
10.7
%
$
325.3
$
286.7
13.5
%
On-Road
38.0
36.1
5.3
108.5
100.7
7.7
Aftermarket
401.4
415.1
(3.3
)
1,198.5
1,169.0
2.5
Total Mobile Solutions segment
555.0
555.6
(0.1
)
1,632.3
1,556.4
4.9
Industrial Solutions segment
Industrial Filtration Solutions
223.3
198.5
12.5
631.1
563.2
12.1
Aerospace and Defense
38.2
31.3
22.3
106.5
85.9
23.9
Total Industrial Solutions segment
261.5
229.8
13.8
737.6
649.1
13.6
Life Sciences segment
Total Life Sciences segment
59.2
67.8
(12.6
)
181.4
211.1
(14.1
)
Total Company
$
875.7
$
853.2
2.6
%
$
2,551.3
$
2,416.6
5.6
%
Earnings (loss) before income
taxes
Mobile Solutions segment
$
83.4
$
79.7
4.6
%
$
242.3
$
203.9
18.8
%
Industrial Solutions segment
49.1
34.3
43.1
133.0
86.1
54.5
Life Sciences segment
0.2
14.0
(98.6
)
17.3
51.1
(66.1
)
Corporate and unallocated
(11.2
)
(16.7
)
32.9
(41.2
)
(31.3
)
(31.6
)
Total Company
$
121.5
$
111.3
9.2
%
$
351.4
$
309.8
13.4
%
Earnings before income taxes
percentage
Mobile Solutions segment
15.0 %
14.3 %
0.7 %
14.8 %
13.1 %
1.7 %
Industrial Solutions segment
18.8 %
14.9 %
3.9 %
18.0 %
13.3 %
4.7 %
Life Sciences segment
0.3 %
20.6 %
(20.3)%
9.5 %
24.2 %
(14.7)%
Note: Earnings before income taxes
percentage is calculated by dividing earnings before income taxes
by net sales. Amounts may not foot due to rounding.
SEGMENT SALES PERCENT CHANGE
FROM PRIOR PERIODS BY GEOGRAPHY, AS REPORTED
(Unaudited)
Three Months Ended April 30,
2023
TOTAL
U.S.(1)/CA(2)
EMEA(3)
APAC(4)
LATAM(5)
Mobile Solutions segment
Off-Road
10.7
%
18.2
%
5.9
%
7.5
%
16.5
%
On-Road
5.3
3.6
2.3
9.4
12.8
Aftermarket
(3.3
)
(1.1
)
(1.7
)
0.5
(13.6
)
Total Mobile Solutions segment
(0.1
)
2.4
0.6
2.9
(12.0
)
Industrial Solutions segment
Industrial Filtration Solutions
12.5
18.9
4.0
14.6
3.0
Aerospace and Defense
22.3
18.8
33.0
(11.5
)
N/A
Total Industrial Solutions segment
13.8
18.8
7.2
14.2
3.0
Life Sciences segment
Total Life Sciences segment
(12.6
)
15.2
(6.3
)
(25.4
)
(27.7
)
Total Company
2.6
%
8.2
%
1.9
%
(0.5
)%
(10.8
)%
Nine Months Ended April 30,
2023
TOTAL
U.S./CA
EMEA
APAC
LATAM
Mobile Solutions segment
Off-Road
13.5
%
26.7
%
10.5
%
(3.7
)%
45.1
%
On-Road
7.7
11.1
(1.3
)
2.1
39.0
Aftermarket
2.5
7.6
(4.4
)
(2.8
)
6.4
Total Mobile Solutions segment
4.9
10.8
(0.3
)
(2.5
)
8.6
Industrial Solutions segment
Industrial Filtration Solutions
12.1
18.1
7.3
2.0
21.9
Aerospace and Defense
23.9
22.7
29.8
(14.4
)
N/A
Total Industrial Solutions segment
13.6
19.0
9.7
1.8
21.9
Life Sciences segment
Total Life Sciences segment
(14.1
)
27.8
(2.6
)
(33.1
)
6.6
Total Company
5.6
%
14.1
%
2.4
%
(8.4
)%
9.9
%
Note: Amounts may not foot due to
rounding.
(1) United States (U.S.)
(2) Canada (CA)
(3) Europe, Middle East and Africa
(EMEA)
(4) Asia Pacific (APAC)
(5) Latin America (LATAM)
SEGMENT SALES PERCENT CHANGE
FROM PRIOR PERIODS BY GEOGRAPHY, CONSTANT CURRENCY
(Unaudited)
Three Months Ended April 30,
2023
TOTAL
U.S./CA
EMEA
APAC
LATAM
Mobile Solutions segment
Off-Road
14.1
%
18.2
%
9.0
%
17.2
%
18.8
%
On-Road
8.5
3.6
4.3
20.0
14.8
Aftermarket
(0.7
)
(1.1
)
2.8
8.2
(12.2
)
Total Mobile Solutions segment
2.7
2.4
4.6
11.3
(10.5
)
Industrial Solutions segment
Industrial Filtration Solutions
15.1
18.9
7.7
23.7
3.6
Aerospace and Defense
23.7
18.8
38.0
(2.1
)
N/A
Total Industrial Solutions segment
16.3
18.8
11.1
23.4
3.6
Life Sciences segment
Total Life Sciences segment
(9.4
)
15.2
(3.3
)
(20.8
)
(27.0
)
Total Company
5.4
%
8.2
%
5.8
%
7.3
%
(9.4
)%
Nine Months Ended April 30,
2023
TOTAL
U.S./CA
EMEA
APAC
LATAM
Mobile Solutions segment
Off-Road
20.5
%
26.7
%
20.7
%
8.4
%
43.6
%
On-Road
12.7
11.1
6.8
15.8
37.0
Aftermarket
6.8
7.6
5.4
6.5
7.0
Total Mobile Solutions segment
9.7
10.8
9.5
7.9
9.1
Industrial Solutions segment
Industrial Filtration Solutions
16.6
18.1
16.0
12.3
21.5
Aerospace and Defense
27.4
22.7
42.2
(2.1
)
N/A
Total Industrial Solutions segment
18.0
19.0
18.7
12.1
21.5
Life Sciences segment
Total Life Sciences segment
(7.7
)
27.8
6.9
(27.0
)
6.1
Total Company
10.4
%
14.1
%
12.0
%
1.0
%
10.3
%
Note: The constant currency presentation,
which is a non-GAAP measure, excludes the impact of fluctuations in
foreign currency exchange rates. The Company believes providing
constant currency information provides valuable supplemental
information regarding its results of operations. The Company
calculates constant currency percentages by converting its current
period local currency financial results using the prior period
exchange rates and compares these adjusted amounts to its prior
period reported results. Amounts may not foot due to rounding.
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
(In millions)
(Unaudited)
Three Months Ended
Nine Months Ended
April 30,
April 30,
2023
2022
2023
2022
Net cash provided by operating
activities
$
133.2
$
64.2
$
353.7
$
143.9
Net capital expenditures
(35.2
)
(23.2
)
(92.8
)
(56.8
)
Free cash flow
$
98.0
$
41.0
$
260.9
$
87.1
Net earnings
$
93.7
$
83.0
$
266.9
$
231.8
Income taxes
27.8
28.3
84.5
78.0
Interest expense
5.1
3.8
14.3
10.8
Depreciation and amortization
22.5
23.5
67.3
71.0
EBITDA
$
149.1
$
138.6
$
433.0
$
391.6
Adjusted net earnings
$
93.7
$
83.0
$
279.6
$
231.8
Adjusted income taxes
27.8
28.3
88.7
78.0
Interest expense
5.1
3.8
14.3
10.8
Depreciation and amortization
22.5
23.5
67.3
71.0
Adjusted EBITDA
$
149.1
$
138.6
$
449.9
$
391.6
Gross profit
$
288.8
$
269.0
$
860.5
$
775.8
Restructuring and other charges
—
—
1.5
—
Adjusted gross profit
$
288.8
$
269.0
$
862.0
$
775.8
Operating expense
$
164.8
$
158.0
$
500.9
$
461.6
Restructuring and other charges
—
—
(15.4
)
—
Adjusted operating expense
$
164.8
$
158.0
$
485.4
$
461.6
Operating income
$
124.0
$
111.0
$
359.6
$
314.2
Restructuring and other charges
—
—
16.9
—
Adjusted operating income
$
124.0
$
111.0
$
376.6
$
314.2
Net earnings
$
93.7
$
83.0
$
266.9
$
231.8
Restructuring and other charges, net of
tax
—
—
12.7
—
Adjusted net earnings
$
93.7
$
83.0
$
279.6
$
231.8
Diluted EPS
$
0.76
$
0.67
$
2.16
$
1.85
Restructuring and other charges per
share
—
—
0.10
—
Adjusted diluted EPS
$
0.76
$
0.67
$
2.26
$
1.85
Note: Although free cash flow, EBITDA,
adjusted EBITDA, adjusted gross profit, adjusted operating expense,
adjusted operating income, adjusted income taxes, adjusted net
earnings and adjusted diluted EPS 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. The adjusted basis presentation
excludes the impact of certain matters not related to the Company’s
ongoing operations. Management believes that the adjusted basis
presentation reflects management’s performance in operating the
Company and provides a meaningful representation of the performance
of the Company’s core business and is useful to understanding its
financial results. 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. Amounts
may not foot due to rounding
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230531005299/en/
Sarika Dhadwal (952) 887-3753 Sarika.Dhadwal@Donaldson.com
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