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Donaldson Co Inc, USA
COMPANY WATCH
Donaldson Co Inc, USA
Entegris Inc, USA
Key Figures (US$ million) Third quarter ended 30.4
Key Figures (US$ million) First quarter ended
2007
2006
Net Sales
484.0
429.9
Net Sales
Cost of Sales
334.2
285.8
Cost of Sales
Gross Margin
31.3.2007
1.4.2006
161.1
157.7
92.3
84.7 73.0
149.8
144.1
Gross Profit
68.8
Operating Expenses
99.6
90.9
R&D Expenses
10.8
9.2
Operating Income
50.2
53.2
Operating Income
11.9
11.7
Earnings before Income Taxes
47.9
51.8
Income before Income Taxes
14.6
14.5
Net Earnings
40.1
37.0
Income from Continuing Operations
10.4
9.8
Net Income
10.4
11.4
Nine months ended 30.4 2007
2006
1394.1
1226.2
Cost of Sales
959.2
825.8
Gross Margin
434.9
400.4
Operating Expenses
288.2
266.0
Operating Income
146.7
134.4
Earnings before Income Taxes
142.2
133.3
Net Earnings
107.4
96.1
Net Sales
COMMENT Donaldson has posted record third quarter sales of US$484.0 million, up 12.6% on the comparable quarter in fiscal 2006. Net income for the period rose 8.4% to US$40.1 million, another record. Bill Cook, Donaldon’s chairman, president and CEO, said sales increased more than 20% in Europe and Asia, offsetting a US$10 million decrease in its North American transport sector. “While we are very pleased with our strong revenue growth, we experienced operating challenges in handling the combination of the downturn in our Transportation Products business and the higher sales volume in our other businesses, which kept our gross margin below our recent run rate,” Cook said. “We are aggressively working on a number of initiatives to
address these challenges and will see their positive impacts in the upcoming quarters. We did improve our operating expenses as a percentage of sales to 20.6% from 21.1% last year.” For the nine-month period, sales were up 14% on fiscal 2006 at US$1394.1 million. Net income increased 12% to US$107.4 million. Looking forward, Donaldson expects good sales growth throughout fiscal 2007 particularly in its Industrial Products division where strong sales are expected from its industrial filtration and gas turbine products. While sales in the Engine Products division are expected to show solid growth, tighter diesel emission standards are expected to continue to impact its North American business. ■ www.donaldson.com
COMMENT Entegris, whose product range includes gas and liquid filters for semiconductor and other applications, has reported first quarter sales of US$161.1 million, a 2.2% increase on the comparable three-month period a year earlier. Net income for the quarter was US$10.4 million, a dip of 8.2% on the fiscal 2006 equivalent, due in part to restructuring costs that included US$1.7 million of severance payments related to a reduction in the firm’s manufacturing workforce. Operating income rose 1.7% on the year earlier quarter to reach US$11.9 million. Gideon Argov, Entegris’ president and CEO, said most of the company’s business had held up well in the face of an anticipated softening across the semiconductor industry, as well as seasonal slowness in demand for its data storage products. “Unit-driven and capital driven sales were 58% and 42%, respectively, of total sales,” he said. “Our first-quarter operating results reflected steps to trim our manufacturing workforce to align with the current industry outlook, as well as increased investments to accelerate key new product initiatives.”
Looking forward, Entegris expects second quarter sales to be in the range of US$155 million to US$162 million. On 4 May 2007, Entegris was presented with a lawsuit from filtration competitor Pall Corp. The suit alleges that certain Entegris pointof-use filtration products used in semiconductor manufacturing infringe a newly issued Pall patent as well as three older Pall patents. This is the fifth legal action between Entegris and Pall alleging infringement of various patents, including three actions initiated by Entegris or its predecessor. “As our customers can attest, innovation is at the core of our leadership in the market,” Peter Walcott, senior vice president and general counsel, said. “Entegris takes great pains to respect the intellectual property of others and expects its competitors to do the same. We believe that Pall’s action is entirely without merit and we intend to vigorously defend our right to provide these products to solve our customers’ photolithography filtration needs.” ■ www.entegris.com
11 July 2007
Filtration Industry Analyst
Donaldson Co Inc, USA
Entegris Inc, USA
Key Figures (US$ million) Third quarter ended 30.4
Key Figures (US$ million) First quarter ended
2007
2006
Net Sales
484.0
429.9
Net Sales
Cost of Sales
334.2
285.8
Cost of Sales
Gross Margin
31.3.2007
1.4.2006
161.1
157.7
92.3
84.7 73.0
149.8
144.1
Gross Profit
68.8
Operating Expenses
99.6
90.9
R&D Expenses
10.8
9.2
Operating Income
50.2
53.2
Operating Income
11.9
11.7
Earnings before Income Taxes
47.9
51.8
Income before Income Taxes
14.6
14.5
Net Earnings
40.1
37.0
Income from Continuing Operations
10.4
9.8
Net Income
10.4
11.4
Nine months ended 30.4 2007
2006
1394.1
1226.2
Cost of Sales
959.2
825.8
Gross Margin
434.9
400.4
Operating Expenses
288.2
266.0
Operating Income
146.7
134.4
Earnings before Income Taxes
142.2
133.3
Net Earnings
107.4
96.1
Net Sales
COMMENT Donaldson has posted record third quarter sales of US$484.0 million, up 12.6% on the comparable quarter in fiscal 2006. Net income for the period rose 8.4% to US$40.1 million, another record. Bill Cook, Donaldon’s chairman, president and CEO, said sales increased more than 20% in Europe and Asia, offsetting a US$10 million decrease in its North American transport sector. “While we are very pleased with our strong revenue growth, we experienced operating challenges in handling the combination of the downturn in our Transportation Products business and the higher sales volume in our other businesses, which kept our gross margin below our recent run rate,” Cook said. “We are aggressively working on a number of initiatives to
address these challenges and will see their positive impacts in the upcoming quarters. We did improve our operating expenses as a percentage of sales to 20.6% from 21.1% last year.” For the nine-month period, sales were up 14% on fiscal 2006 at US$1394.1 million. Net income increased 12% to US$107.4 million. Looking forward, Donaldson expects good sales growth throughout fiscal 2007 particularly in its Industrial Products division where strong sales are expected from its industrial filtration and gas turbine products. While sales in the Engine Products division are expected to show solid growth, tighter diesel emission standards are expected to continue to impact its North American business. ■ www.donaldson.com
COMMENT Entegris, whose product range includes gas and liquid filters for semiconductor and other applications, has reported first quarter sales of US$161.1 million, a 2.2% increase on the comparable three-month period a year earlier. Net income for the quarter was US$10.4 million, a dip of 8.2% on the fiscal 2006 equivalent, due in part to restructuring costs that included US$1.7 million of severance payments related to a reduction in the firm’s manufacturing workforce. Operating income rose 1.7% on the year earlier quarter to reach US$11.9 million. Gideon Argov, Entegris’ president and CEO, said most of the company’s business had held up well in the face of an anticipated softening across the semiconductor industry, as well as seasonal slowness in demand for its data storage products. “Unit-driven and capital driven sales were 58% and 42%, respectively, of total sales,” he said. “Our first-quarter operating results reflected steps to trim our manufacturing workforce to align with the current industry outlook, as well as increased investments to accelerate key new product initiatives.”
Looking forward, Entegris expects second quarter sales to be in the range of US$155 million to US$162 million. On 4 May 2007, Entegris was presented with a lawsuit from filtration competitor Pall Corp. The suit alleges that certain Entegris pointof-use filtration products used in semiconductor manufacturing infringe a newly issued Pall patent as well as three older Pall patents. This is the fifth legal action between Entegris and Pall alleging infringement of various patents, including three actions initiated by Entegris or its predecessor. “As our customers can attest, innovation is at the core of our leadership in the market,” Peter Walcott, senior vice president and general counsel, said. “Entegris takes great pains to respect the intellectual property of others and expects its competitors to do the same. We believe that Pall’s action is entirely without merit and we intend to vigorously defend our right to provide these products to solve our customers’ photolithography filtration needs.” ■ www.entegris.com
11 July 2007
Filtration Industry Analyst