Donaldson takes restructuring actions to save $25 million annually

By Lisa Kerner

Charlotte, N.C., Nov. 25 – Donaldson Co., Inc. ended its first quarter of fiscal 2016 on Oct. 31 with cash and cash equivalents of about $198 million, compared with about $190 million at July 31.

Long-term debt was flat at $389 million.

Donaldson paid dividends of $23 million during the quarter, said chief financial officer Jim Shaw during the company’s earnings call on Wednesday.

In addition, the company bought back 2.07 million of its shares, or 1.5% of its common stock, for $68 million.

Free cash flow for the quarter totaled $36 million, resulting in a cash conversion rate of about 95%.

First-quarter net earnings were $38.5 million, or $0.29 cents per share.

Donaldson took restructuring actions during the quarter to generate annual savings of about $25 million, according to chief executive officer Tod Carpenter.

The company also revised its full-year 2016 sales and earnings guidance, reflecting slowing conditions primarily in its off-road, engine aftermarket and industrial filtration solutions businesses.

Donaldson now expects fiscal 2016 adjusted earnings per share of between $1.49 and $1.69, compared with prior adjusted earnings per share guidance of $1.57 to $1.77.

Based in Minneapolis, Donaldson manufactures filtration systems and replacement parts.

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