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 MINNEAPOLIS, Nov. 19 /PRNewswire/ -- Donaldson Company, Inc. (NYSE: DCI) today reported first-quarter results for the period ended Oct. 31, 1993. Sales of $142.5 million were up more than 13 percent from prior-year sales of $125.7 million. Earnings, before the cumulative effect of the SFAS 109 accounting change, were $7.6 million, up more than 20 percent from prior-year earnings of $6.3 million. Earnings per share of 55 cents were up more than 22 percent from prior- year earnings per share of 45 cents.
 In the first quarter, the Company adopted Financial Accounting Standards Board (FASB) Standard No. 109 (income tax accounting), which requires the use of a liability approach to account for the effects of income taxes. The adoption resulted in the recognition of a gain of $2.2 million, or 16 cents per share, in the quarter. As a result, net earnings in the first quarter were $9.8 million, or 71 cents per share.
 "We are pleased to report that the first quarter results were the Company's seventh consecutive quarter of year-over-year sales and earnings improvements," said William A. Hodder, president and chief executive officer. "Overall, the quarter was a continuation of the favorable market trends and operating results we began to experience in the second half of last year.
 "Sales increases were reported in all businesses in the quarter except for a 36 percent decline in defense products sales. Gas turbine filtration sales were again particularly strong, up more than 125 percent over last year's first quarter and up more than 20 percent over last year's average quarterly sales.
 "Gross margins declined from 28.8 percent to 28.4 percent due primarily to the heavy shipments of relatively lower margin first fit gas turbine filtration products. Operating income as a percentage of sales improved from 8.7 percent to 9.0 percent as a decrease in operating expenses as a percentage of sales more than offset the decrease in gross margins.
 "The improvement in operating income was brought directly to the bottom line as return on sales before the accounting change also improved year-over-year from 5.0 percent of sales to 5.3 percent of sales."
 Total backlogs of $138.3 million were flat relative to the same period last year, but up 6 percent from prior year end. Hard order backlogs -- goods scheduled for delivery within 90 days -- of $87.5 million were down 5 percent from last year and down 1 percent from prior year end.
 Donaldson Company, Inc., is a worldwide manufacturer of filtration products. The Company's product mix includes air and liquid filters and exhaust and emission control products for heavy duty mobile equipment; in-plant air cleaning systems; air intake systems and exhaust products for industrial gas turbines; and specialized filters for such diverse applications as computer disk drives, aircraft and personal respirators. Products are produced at nine U.S. plants, ten other plants around the world, and two joint ventures. The Company's shares are traded on the New York Stock Exchange under the symbol DCI.
 Consolidated Statements of Earnings
 (Thousands of dollars except per share amounts)
 Three Months Ended October 31
 1993 1992
 Net Sales $142,518 $125,678
 Cost of Sales 101,982 89,478
 Gross Margin 40,536 36,200
 Operating Expenses 27,681 25,243
 Other Expense 74 147
 Interest Expense 683 786
 Earnings Before Income Taxes 12,098 10,024
 Income Taxes 4,537 3,729
 Earnings Before Cumulative
 Effect of Accounting Change 7,561 6,295
 Cumulative Effect of
 Accounting Change 2,206 --
 Net Earnings $9,767 $6,295
 Earnings Per Share Before
 Cumulative Effect of
 Accounting Change $.55 $.45
 Cumulative Effect of
 Accounting Change .16 --
 Net Earnings Per Share $.71 $ .45
 Weighted Average Numbers of Shares
 and Equivalents Outstanding 13,696,485 13,959,109
 -0- 11/19/93
 /CONTACT: Melissa Quinn of Padilla Speer Beardsley, 612-871-8877, for Donaldson; or John R. Schweers of Donaldson Company, 612-887-3014/

CO: Donaldson Company ST: Minnesota IN: SU: ERN

DS-DB -- MN004 -- 6530 11/19/93 12:22 EST
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Publication:PR Newswire
Date:Nov 19, 1993

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