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Donaldson Co Inc, USA
COMPANY WATCH
Donaldson Co Inc, USA
Clarcor Inc, USA Key Figures (US$ million) First quarter ended 27.2.2016 Net Sales Of Which: Engine/Mobile Filtration Industrial/Environmental Filtration
Key Figures (US$ million) Second quarter ended 31.1 2016
2015
Net Sales
517.2
588.5
Cost of Sales
346.4
385.4
Gross Margin
170.8
203.1
117.1
137.3
28.2.2015
316.3
351.1
134.6 181.7
144.5 190.9
Cost of Sales
215.4
238.1
Operating Expenses
Gross Profit
100.9
113.0
Operating Income
53.7
65.8
Selling and Admin Expenses
68.9
73.8
Earnings before Income Taxes
49.4
65.4
Operating Profit Of Which: Engine/Mobile Filtration Industrial/Environmental Filtration
32.0
39.2
Net Earnings
38.0
48.0
19.1 12.9
24.7 14.0
Six months ended 31.1 2016
2015
Earnings before Income Taxes (EBIT)
30.5
38.1
Net Sales
1055.2
1185.0
Net Earnings
21.2
26.7
Cost of Sales
706.3
772.8
Gross Margin
348.9
412.2
Operating Expenses
239.7
269.4
Operating Income
109.2
142.8
Earnings before Income Taxes
102.8
142.7
76.5
103.9
COMMENT Clarcor has posted net sales for the first quarter of fiscal 2016 of US$316.3 million, a decrease of 9.9% on a year earlier. Net earnings were 20.6% easier at US$21.2 million. Despite the falls, Chris Conway, Clarcor’s chair, president and CEO, said the results had exceeded the company’s expectations heading into the quarter. “Much of the challenging end-market dynamics we experienced in the second half of 2015 continued in this year’s first quarter, notably weak demand for heavy-duty, offroad fuel filtration products sold into the agricultural and construction equipment markets and lower capital vessel activity in the natural gas filtration market,” he said. Sales in Clarcor’s Engine/ Mobile Filtration segment reached US$134.6 million, down 6.9% on the fiscal 2015 comparator. Currency effects accounted for approximately US$3 million of the US$10 million drop, while the remaining US$7 million reduction was primarily due to
April 2016
a US$4 million (equivalent to 17%) decline in off-road fuel filtration product sales to the agricultural and construction equipment markets and a US$4 million reduction in net sales to other filtration companies. Revenues in the Industrial/ Environmental Filtration were down 4.7% on the year prior at US$181.7 million. Currency impacts reduced net sales by approximately US$6 million, while the remaining US$3 million fall was the result of lower industrial air and natural gas filtration sales partially offset by an increase in gas turbine and HVAC filtration sales. Clarcor continued with a number of efficiency efforts during the quarter. “We believe we are on track to realize approximately US$20.0 million of cost savings in 2016 as a result of implemented cost reduction initiatives and we continue to evaluate others including potential facility consolidations, which we believe would likely favourably impact costs beginning in fiscal year 2017,” Conway said. ■ www.clarcor.com
Net Earnings
COMMENT Donaldson has posted net sales of US$517.2 million for its second quarter of fiscal 2016, a decrease of 12.1% on the year earlier. Profitability was also down with operating income 18.5% lower at US$53.7 million and net earnings 20.8% easier at US$38.0 million. Sales in Donaldson’s Engine Products segment were down 10.1% on the prior year at US$320.9 million, with drops in three of its four business units. Revenues in the Industrial Products segment were 15.1% lower at US$196.3 million, with gas turbine products particularly impacted with a 40.8% drop in sales. “While market conditions remained stagnant last quarter,
we further intensified our focus on operational efficiency and expense management,” Tod Carpenter, Donaldson’s president and CEO, said. “Our efforts led to expense performance in the quarter that partially offset the pressure created by softer-than-expected sales, particularly in our Gas Turbine Systems business, and additional pressure from currency translation. We expect these pressures to continue into the second half of this fiscal year.” For the corresponding sixmonth period, Donaldson’s net sales fell 11.0% on the fiscal 2015 comparator to US$1.1 billion, while net profit was down 26.4% at US$76.5 million. ■ www.donaldson.com
Filtration Industry Analyst
9
Donaldson Co Inc, USA
Clarcor Inc, USA Key Figures (US$ million) First quarter ended 27.2.2016 Net Sales Of Which: Engine/Mobile Filtration Industrial/Environmental Filtration
Key Figures (US$ million) Second quarter ended 31.1 2016
2015
Net Sales
517.2
588.5
Cost of Sales
346.4
385.4
Gross Margin
170.8
203.1
117.1
137.3
28.2.2015
316.3
351.1
134.6 181.7
144.5 190.9
Cost of Sales
215.4
238.1
Operating Expenses
Gross Profit
100.9
113.0
Operating Income
53.7
65.8
Selling and Admin Expenses
68.9
73.8
Earnings before Income Taxes
49.4
65.4
Operating Profit Of Which: Engine/Mobile Filtration Industrial/Environmental Filtration
32.0
39.2
Net Earnings
38.0
48.0
19.1 12.9
24.7 14.0
Six months ended 31.1 2016
2015
Earnings before Income Taxes (EBIT)
30.5
38.1
Net Sales
1055.2
1185.0
Net Earnings
21.2
26.7
Cost of Sales
706.3
772.8
Gross Margin
348.9
412.2
Operating Expenses
239.7
269.4
Operating Income
109.2
142.8
Earnings before Income Taxes
102.8
142.7
76.5
103.9
COMMENT Clarcor has posted net sales for the first quarter of fiscal 2016 of US$316.3 million, a decrease of 9.9% on a year earlier. Net earnings were 20.6% easier at US$21.2 million. Despite the falls, Chris Conway, Clarcor’s chair, president and CEO, said the results had exceeded the company’s expectations heading into the quarter. “Much of the challenging end-market dynamics we experienced in the second half of 2015 continued in this year’s first quarter, notably weak demand for heavy-duty, offroad fuel filtration products sold into the agricultural and construction equipment markets and lower capital vessel activity in the natural gas filtration market,” he said. Sales in Clarcor’s Engine/ Mobile Filtration segment reached US$134.6 million, down 6.9% on the fiscal 2015 comparator. Currency effects accounted for approximately US$3 million of the US$10 million drop, while the remaining US$7 million reduction was primarily due to
April 2016
a US$4 million (equivalent to 17%) decline in off-road fuel filtration product sales to the agricultural and construction equipment markets and a US$4 million reduction in net sales to other filtration companies. Revenues in the Industrial/ Environmental Filtration were down 4.7% on the year prior at US$181.7 million. Currency impacts reduced net sales by approximately US$6 million, while the remaining US$3 million fall was the result of lower industrial air and natural gas filtration sales partially offset by an increase in gas turbine and HVAC filtration sales. Clarcor continued with a number of efficiency efforts during the quarter. “We believe we are on track to realize approximately US$20.0 million of cost savings in 2016 as a result of implemented cost reduction initiatives and we continue to evaluate others including potential facility consolidations, which we believe would likely favourably impact costs beginning in fiscal year 2017,” Conway said. ■ www.clarcor.com
Net Earnings
COMMENT Donaldson has posted net sales of US$517.2 million for its second quarter of fiscal 2016, a decrease of 12.1% on the year earlier. Profitability was also down with operating income 18.5% lower at US$53.7 million and net earnings 20.8% easier at US$38.0 million. Sales in Donaldson’s Engine Products segment were down 10.1% on the prior year at US$320.9 million, with drops in three of its four business units. Revenues in the Industrial Products segment were 15.1% lower at US$196.3 million, with gas turbine products particularly impacted with a 40.8% drop in sales. “While market conditions remained stagnant last quarter,
we further intensified our focus on operational efficiency and expense management,” Tod Carpenter, Donaldson’s president and CEO, said. “Our efforts led to expense performance in the quarter that partially offset the pressure created by softer-than-expected sales, particularly in our Gas Turbine Systems business, and additional pressure from currency translation. We expect these pressures to continue into the second half of this fiscal year.” For the corresponding sixmonth period, Donaldson’s net sales fell 11.0% on the fiscal 2015 comparator to US$1.1 billion, while net profit was down 26.4% at US$76.5 million. ■ www.donaldson.com
Filtration Industry Analyst
9