DONALDSON Co INC

Previous wording

Founded in 1915, Donaldson Company, Inc. is a global leader in technology-led filtration products and solutions, serving a broad range of industries and advanced markets. Donaldson’s diverse and skilled employees at approximately 150 locations on six continents, 77 of which are manufacturing and/or distribution centers, partner with customers - from small business owners to the world’s largest original equipment manufacturer (OEM) brands - to solve complex filtration challenges. Customers choose Donaldson’s filtration solutions due to their stringent performance requirements and need for reliability.

Current wording

Founded in 1915, Donaldson Company, Inc. is a global leader in technology-led filtration products and solutions, serving a broad range of industries and advanced markets. Donaldson’s diverse and skilled employees at more than 150 locations on six continents, 77 of which are manufacturing and/or distribution centers, partner with customers - from small business owners to the world’s largest original equipment manufacturer (OEM) brands - to solve complex filtration challenges. Customers choose Donaldson’s filtration solutions due to their stringent technical and performance requirements, the need for reliability and the value proposition of Donaldson’s solutions and/or services.

Previous wording

The Life Sciences segment is organized by end market and consists of the Bioprocessing Equipment and Consumables, Food and Beverage, Vehicle Electrification and Medical Device, Microelectronics and Disk Drive markets. Within these markets, products consist of micro-environment gas and liquid filtration for food and beverage and industrial processes, bioprocessing equipment, including bioreactors and fermenters, bioprocessing consumables including chromatography devices, reagents and filters, polytetrafluoroethylene membrane-based products, as well as specialized air and gas filtration systems for applications including hard disk drives, semiconductor manufacturing, sensors, battery systems and powertrain components. Life Sciences primarily sells to large OEMs and directly to various end users requiring cell growth, separation, purification, high purity filtration and device protection.

Current wording

The Life Sciences segment is organized by end market and consists of the Food and Beverage, Disk Drive, Vehicle Electrification and Medical Device, Microelectronics and Bioprocessing Equipment and Consumables markets. Within these markets, products consist of micro-environment gas and liquid filtration for food and beverage and industrial processes, bioprocessing equipment, including bioreactors and fermenters, bioprocessing consumables including chromatography devices, reagents and filters, polytetrafluoroethylene membrane-based products, as well as specialized air and gas filtration systems for applications including hard disk drives, semiconductor manufacturing, sensors, battery systems and powertrain components. Life Sciences primarily sells to large OEMs and directly to various end users requiring cell growth, separation, purification, high purity filtration and device protection.

Previous wording

In March 2025, the U.S. imposed additional tariffs on a wide range of imports, with the potential for further tariff actions, which resulted in retaliatory tariffs. These trade measures, along with updates to export controls and sanctions regimes, pose ongoing risks to global supply chains, potentially increasing the cost of goods, straining procurement cycles and impacting customer demand. The Company is closely monitoring the evolving trade landscape, as well as its ability to mitigate the impact of tariffs and its analysis of the potential impact. While the ultimate impact of tariffs remains uncertain, the Company expects annual costs related to recently implemented or increased tariffs of approximately $35 million, which represents less than 1% of the Company’s total sales and is expected to be largely offset by pricing increases.

Current wording

The U.S. imposed additional tariffs on a wide range of imports, with the potential for further tariff actions, which resulted in retaliatory tariffs. These trade measures, along with updates to export controls and sanctions regimes, pose ongoing risks to global supply chains, potentially increasing the cost of goods, straining procurement cycles and impacting customer demand. The Company is closely monitoring the evolving trade landscape, as well as its ability to mitigate the impact of tariffs and its analysis of the potential impact. While the ultimate impact of tariffs remains uncertain, the Company expects annual costs related to recently implemented or increased tariffs of approximately $25 million, down from $35 million previously, which represents less than 1% of the Company’s total sales and is expected to be largely offset by pricing increases. The Company will continue to utilize its global manufacturing footprint and supply chain to mitigate the cost impact of tariffs.

Previous wording

Net sales for the three months ended April 30, 2025 increased $12.2 million, or 1.3%, from the three months ended April 30, 2024, reflecting higher sales in the Industrial Solutions segment of $14.2 million, or 5.3% growth, and the Life Sciences segment of $0.6 million, or 0.7% growth, partially offset by lower sales in the Mobile Solutions segment of $2.6 million, or a 0.4% decline. Foreign currency translation decreased net sales by $2.8 million compared to the three months ended April 30, 2024, reflecting a decrease in the Mobile Solutions segment of $3.5 million and an increase in the Life Sciences segment of $0.7 million. Foreign currency translation had no impact on the Industrial Solutions segment. During the three months ended April 30, 2025, the Company’s net sales increase was driven by pricing benefits and volume growth, partially offset by unfavorable foreign currency impacts.

Current wording

Net sales for the three months ended October 31, 2025 increased $35.3 million, or 3.9%, from the three months ended October 31, 2024, reflecting higher sales in the Mobile Solutions segment of $25.9 million, or 4.5% growth, the Industrial Solutions segment of $0.2 million, or 0.1% growth, and the Life Sciences segment of $9.2 million, or 13.1% growth. Foreign currency translation increased net sales by $11.9 million compared to the three months ended October 31, 2024, reflecting an increase in the Mobile Solutions segment of $6.7 million, an increase in the Industrial Solutions segment of $3.0 million, and an increase in the Life Sciences segment of $2.2 million. During the three months ended October 31, 2025, the Company’s net sales increase was driven by pricing benefits, favorable foreign currency impacts and volume growth.

Previous wording

Gross margin as a percentage of net sales for the three months ended April 30, 2025 was 34.2% compared with 35.6% for the three months ended April 30, 2024. The decrease in gross margin as a percentage of net sales was driven primarily by higher manufacturing costs associated with footprint optimization initiatives.

Current wording

Gross margin as a percentage of net sales for the three months ended October 31, 2025 was 35.2% compared with 35.5% for the three months ended October 31, 2024. The decrease in gross margin as a percentage of net sales was driven primarily by higher operational costs, partially offset by benefits from pricing actions.

Previous wording

Selling, general and administrative expenses for the nine months ended April 30, 2025 were $476.4 million, or 17.6% of net sales, compared with $473.5 million, or 17.9% of net sales, for the nine months ended April 30, 2024, an increase of $2.9 million, or 0.6%. The decrease in selling, general and administrative expenses as a percentage of net sales was primarily due to a $6.2 million benefit from the reduction of the Purilogics’ contingent consideration liability, which represents the fair value based on the probability of achieving certain milestones, and ongoing disciplined expense management, partially offset by restructuring, business development and other non-recurring expenses.

Current wording

Selling, general and administrative expenses for the three months ended October 31, 2025 were $169.6 million, or 18.1% of net sales, compared with $166.1 million, or 18.5% of net sales, for the three months ended October 31, 2024, an increase of $3.5 million, or 2.1%. The decrease in selling, general and administrative expenses as a percentage of net sales was primarily due to leverage on higher sales, benefits from cost optimization initiatives, and ongoing disciplined expense management.

Previous wording

Research and development expenses for the three months ended April 30, 2025 were $21.4 million, or 2.3% of net sales, compared with $24.8 million, or 2.7% of net sales, for the three months ended April 30, 2024, a decrease of $3.4 million, or 14.0%, driven by focused project prioritization.

Current wording

Research and development expenses for the three months ended October 31, 2025 were $19.2 million, or 2.1% of net sales, compared with $22.7 million, or 2.5% of net sales, for the three months ended October 31, 2024, a decrease of $3.5 million, or 15.5%, driven by focused project prioritization.

Previous wording

Interest expense for the three months ended April 30, 2025 was $5.7 million, compared with $5.0 million for the three months ended April 30, 2024, an increase of $0.7 million, or 14.7%. The increase reflected a higher proportion of variable interest rate debt.

Current wording

Interest expense for the three months ended October 31, 2025 was $7.1 million, compared with $5.5 million for the three months ended October 31, 2024, an increase of $1.6 million, or 29.1%. The increase reflected a higher proportion of variable interest rate debt and higher overall level of debt.

Previous wording

Other income, net for the three months ended April 30, 2025 was $5.3 million, compared with other income, net of $5.4 million for the three months ended April 30, 2024, a decrease of $0.1 million, which was relatively consistent with the prior year.

Current wording

Other income, net for the three months ended October 31, 2025 was $5.3 million, compared with other income, net of $5.2 million for the three months ended October 31, 2024, an increase of $0.1 million, which was relatively consistent with the prior year.

Previous wording

The effective tax rate was 33.6% and 21.2% for the three months ended April 30, 2025 and 2024, respectively. The higher effective tax rate was primarily due to the loss on impairment of intangible assets in the three months ended April 30, 2025, as the discrete tax benefit on the loss on impairment of intangible assets was reduced by an increase in valuation allowance. Excluding the impact of the loss on impairment of intangible assets, the effective tax rate is higher due to a decrease in discrete tax benefits.

Current wording

The effective tax rate was 22.8% and 24.2% for the three months ended October 31, 2025 and 2024, respectively. The lower effective tax rate was primarily due to an increase in discrete tax benefits.

Previous wording

(1)Corporate and unallocated includes interest expense and certain corporate expenses determined to be non-allocable to the segments, such as restructuring charges and portions of incentive compensation.

Current wording

(1)Corporate and unallocated includes interest expense and certain corporate expenses determined to be non-allocable to the segments, such as a gain on the sale of fixed assets, restructuring and related charges and portions of incentive compensation.

Previous wording

Net sales of Aftermarket increased $14.8 million, primarily due to solid market demand. Net sales of On-Road and Off-Road decreased $8.8 million and $8.6 million, respectively, primarily due to a decline in global equipment production driven by weak end market conditions, including transportation and agriculture.

Current wording

Net sales of Aftermarket increased $29.1 million primarily due to market share gains. Net sales of Off-Road increased $5.5 million as supportive construction market conditions offset continued headwinds in agriculture. Net sales of On-Road decreased $8.7 million, primarily due to a decline in global truck production.

Previous wording

Net sales of Aerospace and Defense increased by $11.0 million due to ongoing strength in the Aerospace and Defense end markets. Net sales of IFS increased $3.2 million, driven by replacement part sales strength in several key businesses, partially offset by weakness in new equipment sales.

Current wording

Net sales of Aerospace and Defense decreased by $3.1 million due to weakness in the Defense end markets. Net sales of IFS increased $3.3 million, driven by sales growth in Power Generation and dust collection replacement part sales, partially offset by a decrease in Industrial Hydraulics.

Previous wording

Earnings before income taxes for the Industrial Solutions segment for the three months ended April 30, 2025 were $51.2 million, or 18.1% of net sales, a decrease from 18.7% of net sales for the three months ended April 30, 2024. The decrease was driven primarily by unfavorable mix.

Current wording

Earnings before income taxes for the Industrial Solutions segment for the three months ended October 31, 2025 were $32.2 million, or 12.5% of net sales, a decrease from 15.9% of net sales for the three months ended October 31, 2024. The decrease was driven primarily by unfavorable mix and increased operational costs.

Previous wording

Net sales for the Life Sciences segment for the three months ended April 30, 2025 were $74.2 million, compared with $73.6 million for the three months ended April 30, 2024, an increase of $0.6 million, or 0.7%. Foreign currency translation favorably impacted net sales for the Life Sciences segment by 0.9%. The increase in net sales was driven by strong market demand in Disk Drive and Food and Beverage, partially offset by unfavorable timing of bioprocessing sales.

Current wording

Net sales for the Life Sciences segment for the three months ended October 31, 2025 were $79.3 million, compared with $70.1 million for the three months ended October 31, 2024, an increase of $9.2 million, or 13.1%. Foreign currency translation favorably impacted net sales for the Life Sciences segment by 2.8%. The increase in net sales was driven by strong new sales in Food and Beverage and Disk Drive.

Previous wording

Earnings before income taxes for the Life Sciences segment for the three months ended April 30, 2025 were $5.8 million, or 7.8% of net sales, an increase from earnings before income taxes of 0.7% of net sales for the three months ended April 30, 2024. The improvement was driven by a $6.2 million benefit from the reduction of the Purilogics’ contingent consideration liability, which represents the fair value based on the probability of achieving certain milestones, and benefits from recent restructuring activities.

Current wording

Earnings before income taxes for the Life Sciences segment for the three months ended October 31, 2025 were $7.3 million, or 9.2% of net sales, an increase from losses before income taxes of 7.6% of net sales for the three months ended October 31, 2024. The improvement was driven by benefits from restructuring activities that occurred during fiscal 2025 and leverage from higher volume.

Previous wording

Cash provided by operating activities for the nine months ended April 30, 2025 was $251.0 million, compared with $366.5 million for the nine months ended April 30, 2024, a decrease of $115.5 million. The decrease in cash provided by operating activities was primarily driven by an increase in working capital.

Current wording

Cash provided by operating activities for the three months ended October 31, 2025 was $125.4 million, compared with $72.9 million for the three months ended October 31, 2024, an increase of $52.5 million. The increase in cash provided by operating activities was primarily driven by a decrease in working capital requirements.

Previous wording

Cash used in investing activities for the nine months ended April 30, 2025 was $129.8 million, compared with $67.8 million for the nine months ended April 30, 2024, an increase of $62.0 million. The increase in cash used was primarily due to the equity method investment in Medica.

Current wording

Cash used in investing activities for the three months ended October 31, 2025 was $3.4 million, compared with $96.0 million for the three months ended October 31, 2024, a decrease of $92.6 million. The decrease in cash used in investing activities was primarily due to the equity method investment in Medica during the three months ended October 31, 2024.

Previous wording

Cash used in financing activities generally relates to the use of cash for payment of dividends and repurchases of the Company’s common stock, net of borrowing activity and proceeds from the exercise of stock options. Cash used in financing activities for the nine months ended April 30, 2025 was $175.4 million, compared with cash used in financing activities of $257.5 million for the nine months ended April 30, 2024, a decrease of $82.1 million. The decrease was primarily driven by net proceeds from long-term debt of $125.0 million in the current year compared to a net repayment of long-term debt of $109.1 million in the prior year, partially offset by an increase in the repurchases of the Company’s common stock of $158.4 million.

Current wording

Cash used in financing activities generally relates to the use of cash for payment of dividends and repurchases of the Company’s common stock, net of borrowing activity and proceeds from the exercise of stock options. Cash used in financing activities for the three months ended October 31, 2025 was $93.1 million, compared with cash provided by financing activities of $9.8 million for the three months ended October 31, 2024, a decrease of $102.9 million. The decrease in cash provided by financing activities was primarily driven by a decrease in short-term borrowings of $78.6 million and an increase in the repurchases of the Company’s common stock of $17.0 million.

Previous wording

To determine the level of dividend and share repurchases, the Company considers recent and projected performance across key financial metrics, including earnings, cash flow from operations and total debt. Dividends paid for the nine months ended April 30, 2025 and 2024 were $96.9 million and $90.3 million, respectively. Share repurchases for the nine months ended April 30, 2025 and 2024 were $272.2 million and $113.8 million, respectively.

Current wording

To determine the level of dividend and share repurchases, the Company considers recent and projected performance across key financial metrics, including earnings, cash flow from operations and total debt. Dividends paid for the three months ended October 31, 2025 and 2024 were $34.7 million and $32.4 million, respectively. Share repurchases for the three months ended October 31, 2025 and 2024 were $91.5 million and $74.4 million, respectively.

Previous wording

Additional sources of liquidity are existing cash and available credit facilities. Cash and cash equivalents as of April 30, 2025 was $178.5 million, compared with $232.7 million as of July 31, 2024. The Company has capacity of $407.4 million available for further borrowing under existing credit facilities as of April 30, 2025, which includes $232.0 million available on the Company’s $500.0 million unsecured revolving credit facility that expires on May 21, 2026.

Current wording

Additional sources of liquidity are existing cash and available credit facilities. Cash and cash equivalents as of October 31, 2025 was $210.7 million, compared with $180.4 million as of July 31, 2025. The Company has capacity of $748.6 million available for further borrowing under existing credit facilities as of October 31, 2025, which includes $491.6 million available on the Company’s $600.0 million unsecured revolving credit facility that expires on June 12, 2030.

Previous wording

As of April 30, 2025, total debt, including short-term borrowings and long-term debt, represented 33.0% of total capitalization, defined as total debt plus total stockholders’ equity, compared with 26.5% as of July 31, 2024. As of April 30, 2025, the Company was in compliance with its financial covenants.

Current wording

As of October 31, 2025, total debt, including short-term borrowings and long-term debt, represented 31.0% of total capitalization, defined as total debt plus total stockholders’ equity, compared with 31.5% as of July 31, 2025. As of October 31, 2025, the Company was in compliance with its financial covenants.

Previous wording

Long-term debt outstanding was $638.8 million as of April 30, 2025, compared with $508.4 million as of July 31, 2024, an increase of $130.4 million, primarily due to share repurchases during the nine months ended April 30, 2025. As of April 30, 2025, there was $232.0 million available and $260.0 million outstanding on the Company’s $500.0 million unsecured revolving credit facility that expires on May 21, 2026. The Company intends to complete a renewal of the revolving credit facility during the three months ended July 31, 2025.

Current wording

Long-term debt outstanding was $678.0 million as of October 31, 2025, compared with $637.1 million as of July 31, 2025, an increase of $40.9 million, primarily due to share repurchases during the three months ended October 31, 2025. As of October 31, 2025, there was $491.6 million available and $100.0 million outstanding on the Company’s $600.0 million unsecured revolving credit facility that expires on June 12, 2030.

Previous wording

These forward-looking statements speak only as of the date such statements are made and are subject to risks and uncertainties that could affect the Company’s performance and could cause the Company’s actual results for future periods to differ materially from any opinions or statements expressed. These factors include, but are not limited to, challenges in global operations; impacts of global economic, industrial and political conditions on product demand, impacts from unexpected events, effects of unavailable raw materials, significant demand fluctuations or material cost changes; inability to attract and retain qualified personnel; inability to meet customer demand; inability to maintain competitive advantages; threats from disruptive technologies; effects of highly competitive markets with pricing pressure; exposure to customer concentration in certain cyclical industries; inability to manage productivity improvements; inability to achieve commitments related to ESG; results of execution of any acquisition, divestiture and other strategic transactions; vulnerabilities associated with information technology systems and security; inability to protect and enforce intellectual property rights; costs associated with governmental laws and regulations; impacts of foreign currency fluctuations; and effects of changes in capital and credit markets. These and other factors are described in Part I, Item 1A, “Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended July 31, 2024. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by law.

Current wording

These forward-looking statements speak only as of the date such statements are made and are subject to risks and uncertainties that could affect the Company’s performance and could cause the Company’s actual results for future periods to differ materially from any opinions or statements expressed. These factors include, but are not limited to, challenges in global operations; changes in international trade policy; impacts of global economic, industrial and political conditions on product demand, impacts from unexpected events, effects of unavailable raw materials, significant demand fluctuations or material cost changes; inability to attract and retain qualified personnel; inability to meet customer demand; inability to maintain competitive advantages; threats from disruptive technologies; effects of highly competitive markets with pricing pressure; exposure to customer concentration in certain cyclical industries; inability to manage productivity improvements; inability to achieve commitments related to sustainability; results of execution of any acquisition, divestiture and other strategic transactions; vulnerabilities associated with information technology systems and security; inability to protect and enforce intellectual property rights; costs associated with governmental laws and regulations; impacts of foreign currency fluctuations; and effects of changes in capital and credit markets. These and other factors are described in Part I, Item 1A, “Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended July 31, 2025. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by law.