- Email: [email protected]
Donaldson Co Inc, USA
October 2003
Filtration Industry Analyst
Cuno Inc, USA
Donaldson Co Inc, USA
Key Figures (US$ million) Third quarter ended 31.7 2003
2002
Net Sales
75.0
68.9
Costs and Expenses Of Which: Cost of Products Sold Selling, General and Administrative R&D Expenses
63.8
58.8
18.8 3.9
17.2 3.7
Operating Income
11.2
10.1
Income before Income Taxes
11.2
10.0
7.5
6.6
Net Income
41.1
37.9
Nine months ended 31.7
2002
Net Sales
330.3
303.9
Cost of Sales
223.0
208.9
Gross Margin
107.3
94.9
Operating Expenses
70.2
58.4
Operating Income
37.1
36.5
Earnings before Income Taxes
37.2
34.1
Net Earnings
27.1
24.9
Year ended 31.7 2003
2002
1218.3
1126.0
Cost of Sales
827.1
776.5
Gross Margin
391.2
349.5
Operating Expenses
259.4
225.6
Operating Income
131.8
123.9
Earnings before Income Taxes
130.6
119.0
95.3
86.9
Net Sales
2003
2002
Net Sales
210.7
190.7
Costs and Expenses Of Which: Cost of Products Sold Selling, General and Administrative R&D Expenses
181.5
165.4
115.8
105.3
54.9 10.9
49.2 10.9
Operating Income
29.2
25.3
Income before Income Taxes
29.1
25.2
Net Income
19.2
16.6
COMMENT Cuno posted record third quarter sales of US$75.0 million, up 9% versus the same period in 2002. Net income for the quarter increased by 13% to US$7.5 million from US$6.6 million, another record. Mark Kachur, Cuno’s chairman and CEO, said the results reflected the strength and resilience of the company’s business model. “Our sales growth was led by double-digit increases in both our healthcare and potable water businesses,” he said. “Our geographic diversity also contributed to our strong overall results, as international sales increased by
2003
19%, reflecting double-digit growth in Europe, the Asia/Pacific region and Latin America.” For the first nine months of fiscal 2003, sales were a record US$210.7 million, up 11%, and net income was US$19.2 million versus US$16.6 million in the prior year period. Strong sales in Cuno’s international operations helped offset modest growth in North America. Commenting on business conditions and the outlook for Cuno, Kachur said incoming orders were a third quarter record US$76.0 million and the company’s backlog remained strong. ■
Net Earnings
COMMENT With record sales of US$330.3 million in the fourth quarter, Donaldson has posted its 14th consecutive year of double-digit earnings growth. Net income for the full year was also a record at US$95.3 million, likewise net sales, which totalled US$1.218 billion. Donaldson’s chairman, president and CEO, Bill Van Dyke, said the result was particularly pleasing, as the company had begun the year facing a significant contraction in its gas turbine business. “The power of our diversified portfolio and the proven ability of our people to execute under adverse conditions gave us another year of record results,” Van Dyke said. Donaldson’s gas turbine business remained profitable
despite a US$101 million (44%) sales drop from last year by effectively managing its capacity utilization. Another factor behind Donaldson’s good results was the strong worldwide performance of the Engine Products division, with the company’s new small diesel filtration offering, featuring its PowerCore technology, leading the growth in North America. Van Dyke also pointed to the successful integration of Ultrafilter as a reason behind the company’s success. Looking forward, Donaldson expects low doubledigit sales growth from both its Engine Products and Industrial Products divisions in fiscal 2004, with its portfolio of filtration businesses entering the year at various levels of economic activity. ■
7
COMPANY WATCH
Key Figures (US$ million) Fourth quarter ended 31.7
Filtration Industry Analyst
Cuno Inc, USA
Donaldson Co Inc, USA
Key Figures (US$ million) Third quarter ended 31.7 2003
2002
Net Sales
75.0
68.9
Costs and Expenses Of Which: Cost of Products Sold Selling, General and Administrative R&D Expenses
63.8
58.8
18.8 3.9
17.2 3.7
Operating Income
11.2
10.1
Income before Income Taxes
11.2
10.0
7.5
6.6
Net Income
41.1
37.9
Nine months ended 31.7
2002
Net Sales
330.3
303.9
Cost of Sales
223.0
208.9
Gross Margin
107.3
94.9
Operating Expenses
70.2
58.4
Operating Income
37.1
36.5
Earnings before Income Taxes
37.2
34.1
Net Earnings
27.1
24.9
Year ended 31.7 2003
2002
1218.3
1126.0
Cost of Sales
827.1
776.5
Gross Margin
391.2
349.5
Operating Expenses
259.4
225.6
Operating Income
131.8
123.9
Earnings before Income Taxes
130.6
119.0
95.3
86.9
Net Sales
2003
2002
Net Sales
210.7
190.7
Costs and Expenses Of Which: Cost of Products Sold Selling, General and Administrative R&D Expenses
181.5
165.4
115.8
105.3
54.9 10.9
49.2 10.9
Operating Income
29.2
25.3
Income before Income Taxes
29.1
25.2
Net Income
19.2
16.6
COMMENT Cuno posted record third quarter sales of US$75.0 million, up 9% versus the same period in 2002. Net income for the quarter increased by 13% to US$7.5 million from US$6.6 million, another record. Mark Kachur, Cuno’s chairman and CEO, said the results reflected the strength and resilience of the company’s business model. “Our sales growth was led by double-digit increases in both our healthcare and potable water businesses,” he said. “Our geographic diversity also contributed to our strong overall results, as international sales increased by
2003
19%, reflecting double-digit growth in Europe, the Asia/Pacific region and Latin America.” For the first nine months of fiscal 2003, sales were a record US$210.7 million, up 11%, and net income was US$19.2 million versus US$16.6 million in the prior year period. Strong sales in Cuno’s international operations helped offset modest growth in North America. Commenting on business conditions and the outlook for Cuno, Kachur said incoming orders were a third quarter record US$76.0 million and the company’s backlog remained strong. ■
Net Earnings
COMMENT With record sales of US$330.3 million in the fourth quarter, Donaldson has posted its 14th consecutive year of double-digit earnings growth. Net income for the full year was also a record at US$95.3 million, likewise net sales, which totalled US$1.218 billion. Donaldson’s chairman, president and CEO, Bill Van Dyke, said the result was particularly pleasing, as the company had begun the year facing a significant contraction in its gas turbine business. “The power of our diversified portfolio and the proven ability of our people to execute under adverse conditions gave us another year of record results,” Van Dyke said. Donaldson’s gas turbine business remained profitable
despite a US$101 million (44%) sales drop from last year by effectively managing its capacity utilization. Another factor behind Donaldson’s good results was the strong worldwide performance of the Engine Products division, with the company’s new small diesel filtration offering, featuring its PowerCore technology, leading the growth in North America. Van Dyke also pointed to the successful integration of Ultrafilter as a reason behind the company’s success. Looking forward, Donaldson expects low doubledigit sales growth from both its Engine Products and Industrial Products divisions in fiscal 2004, with its portfolio of filtration businesses entering the year at various levels of economic activity. ■
7
COMPANY WATCH
Key Figures (US$ million) Fourth quarter ended 31.7