- Email: [email protected]
Donaldson Co Inc, USA
Filtration Industry Analyst
April 1999
Donaldson Co Inc, USA
Esco Electronics Corp, USA
Key Figures (US$ million) ~ Second quarter ended 31.1
Key Figures (US$ million) 1 First quarter ended 31.12
Net Sales
1998
1997
1999
1998
220.2
233.0
Net Sales
88.2
78.1
Cost of Sales
65.3
56.0
Cost of Sales
157.9
168.0
Gross Margin
62.3
64.9
Earnings before Income Taxes
2.3
3.7
Operating Expenses
43.9
45.0
Net Earnings
13.2
12.5
Net Earnings before Accounting Change
1.5
2.6
US$0.12
US$0.22
Earnings per Share2 Six months ended 31.1
>. Z <
©
1999
1998
Net Sales
445.7
467.0
Cost of Sales
321.0
333.7
Gross Margin
124.6
133.3
Operating Expenses
85.7
91 3
Net Earnings
26.5
26.5
• Except oer share data.
Compared with the equivalent three-r~nth period of 1998. Donaldson Co's financial results for the second quarter o f f i ~ t999 were a little disappointing. Although sales declined and were tess than the company had expected. net earnings increased, and overall the results reflect the value of the diversity of the company's product lines and geographic reach. The company reported net earnings for the second quarter ended 31 January 1999 of US$13.2 million, which were around 5 per cent higher than US$12.5 million recorded in the second quarter last year. Total net sales of US$220.2 million for the three-month period dropped by about 6 per cent from the previous year's figure of US$233.0 million. The lower sales volume was mainly brought about by depressed demand in the
agricultural, mining and other off-road end-user markets. and generally unfavorable economic conditions in those markets. The increase in net earnings, despite the decrease in net sales, was driven primarily by a reduction in the effective income tax rate. cost reduction measures taken in general operating expenses and the favourable effect of various other income and expense items. The weakness in off-road market segments and lower sales to automotive customers contributed to an 8 per cent decline in net sales of Engine products, compared with the equivalent period of 1998, while net sales of Industrial products remained r o u ~ y the same. Despite lower gas turbine sales, the company says that backlogs are significantly higher for this product line. •
Except per share data (basic). Before accounting change.
Esco Electronics Corp's net sales of US$88.2 million for the first quarter of fiscal 1999, ended 31 December. increased US$10.1 million, or by 13 per cent, from a figure of US$78.1 million which was reported for the first quarter of fiscal 1998. The increase was brought about by a rise in defence sales at Systems & Electronics Inc (SEI), increased commercial sales as a result of the fiscal 1998 acquisitions of PTI Advanced Filtration (PTA) and Euroshield, and higher sales at Distribution Control Systems Inc (DCSI). The most significant orders during the period were for illtration/fluid flow products, M1000 Tank Transporters and a US$20 million contract from General Motors to build an electromagnetic compatibility test facility. Commercial ted to US$52.2 defence sales were US$36.0 million for the first quarter ended 31 December, compared with figures of US$46.7 million and US$31.4 million
respectively, recorded for the first quarter of fiscal 1998. Fiscal 1999 first-quarter earnings totalled US$1.5 million (before the adoption of an accounting change), compared with US$2.6 million, for the equivalent financial period. As previously indicated, the company expects the first half of fiscal 1999 to be challenging because of the impact of Hurricane Georges on its illtration/fluid flow operations. and the slow down experienced in some industrial markets. First quarter earnings were also adversely affected by lower gross margins in the company's defence sector. The company says that it is pleased with the level of orders received so far in fiscal 1999, and based on its growing backlog of profitable
year.
Operating
m ~
April 1999
Donaldson Co Inc, USA
Esco Electronics Corp, USA
Key Figures (US$ million) ~ Second quarter ended 31.1
Key Figures (US$ million) 1 First quarter ended 31.12
Net Sales
1998
1997
1999
1998
220.2
233.0
Net Sales
88.2
78.1
Cost of Sales
65.3
56.0
Cost of Sales
157.9
168.0
Gross Margin
62.3
64.9
Earnings before Income Taxes
2.3
3.7
Operating Expenses
43.9
45.0
Net Earnings
13.2
12.5
Net Earnings before Accounting Change
1.5
2.6
US$0.12
US$0.22
Earnings per Share2 Six months ended 31.1
>. Z <
©
1999
1998
Net Sales
445.7
467.0
Cost of Sales
321.0
333.7
Gross Margin
124.6
133.3
Operating Expenses
85.7
91 3
Net Earnings
26.5
26.5
• Except oer share data.
Compared with the equivalent three-r~nth period of 1998. Donaldson Co's financial results for the second quarter o f f i ~ t999 were a little disappointing. Although sales declined and were tess than the company had expected. net earnings increased, and overall the results reflect the value of the diversity of the company's product lines and geographic reach. The company reported net earnings for the second quarter ended 31 January 1999 of US$13.2 million, which were around 5 per cent higher than US$12.5 million recorded in the second quarter last year. Total net sales of US$220.2 million for the three-month period dropped by about 6 per cent from the previous year's figure of US$233.0 million. The lower sales volume was mainly brought about by depressed demand in the
agricultural, mining and other off-road end-user markets. and generally unfavorable economic conditions in those markets. The increase in net earnings, despite the decrease in net sales, was driven primarily by a reduction in the effective income tax rate. cost reduction measures taken in general operating expenses and the favourable effect of various other income and expense items. The weakness in off-road market segments and lower sales to automotive customers contributed to an 8 per cent decline in net sales of Engine products, compared with the equivalent period of 1998, while net sales of Industrial products remained r o u ~ y the same. Despite lower gas turbine sales, the company says that backlogs are significantly higher for this product line. •
Except per share data (basic). Before accounting change.
Esco Electronics Corp's net sales of US$88.2 million for the first quarter of fiscal 1999, ended 31 December. increased US$10.1 million, or by 13 per cent, from a figure of US$78.1 million which was reported for the first quarter of fiscal 1998. The increase was brought about by a rise in defence sales at Systems & Electronics Inc (SEI), increased commercial sales as a result of the fiscal 1998 acquisitions of PTI Advanced Filtration (PTA) and Euroshield, and higher sales at Distribution Control Systems Inc (DCSI). The most significant orders during the period were for illtration/fluid flow products, M1000 Tank Transporters and a US$20 million contract from General Motors to build an electromagnetic compatibility test facility. Commercial ted to US$52.2 defence sales were US$36.0 million for the first quarter ended 31 December, compared with figures of US$46.7 million and US$31.4 million
respectively, recorded for the first quarter of fiscal 1998. Fiscal 1999 first-quarter earnings totalled US$1.5 million (before the adoption of an accounting change), compared with US$2.6 million, for the equivalent financial period. As previously indicated, the company expects the first half of fiscal 1999 to be challenging because of the impact of Hurricane Georges on its illtration/fluid flow operations. and the slow down experienced in some industrial markets. First quarter earnings were also adversely affected by lower gross margins in the company's defence sector. The company says that it is pleased with the level of orders received so far in fiscal 1999, and based on its growing backlog of profitable
year.
Operating
m ~