Donaldson Company, Inc. (DCI) has reported a 50.65 percent jump in profit for the quarter ended Oct. 31, 2016. The company has earned $58 million, or $0.43 a share in the quarter, compared with $38.50 million, or $0.29 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $51.20 million, or $0.38 a share compared with $45.40 million or $0.34 a share, a year ago.
Revenue during the quarter went up marginally by 2.79 percent to $553 million from $538 million in the previous year period. Gross margin for the quarter expanded 201 basis points over the previous year period to 35.12 percent. Total expenses were 86.18 percent of quarterly revenues, down from 89.68 percent for the same period last year. This has led to an improvement of 350 basis points in operating margin to 13.82 percent.
Operating income for the quarter was $76.40 million, compared with $55.50 million in the previous year period.
However, the adjusted operating income for the quarter stood at $76.40 million compared to $65.60 million in the prior year period. At the same time, adjusted operating margin improved 162 basis points in the quarter to 13.82 percent from 12.19 percent in the last year period.
"After an encouraging start to our fiscal year, we remain on track to achieve the full-year sales and adjusted profit targets that we laid out last quarter," said Tod Carpenter, president and chief executive officer. "Driven by our focus on operational efficiency, this guidance reflects our ability to deliver operating profit growth in a relatively flat sales environment."
For fiscal year 2017, Donaldson Company, Inc. expects operating income to grow in the range of 13.30 percent to 13.90 percent. It projects diluted earnings per share to be in the range of $1.50 to $1.66 on adjusted basis for the same period.
Operating cash flow improves significantly
Donaldson Company, Inc. has generated cash of $99.70 million from operating activities during the quarter, up 72.19 percent or $41.80 million, when compared with the last year period.
The company has spent $23.30 million cash to meet investing activities during the quarter as against cash outgo of $34.40 million in the last year period.
The company has spent $55.20 million cash to carry out financing activities during the quarter as against cash outgo of $32.30 million in the last year period.
Cash and cash equivalents stood at $262.20 million as on Oct. 31, 2016, up 45.75 percent or $82.30 million from $179.90 million on Oct. 31, 2015.
Working capital remains almost stable
Working capital of Donaldson Company, Inc. remained almost stable for the quarter at $429.60 million, when compared with the previous year period. Current ratio was at 1.76 as on Oct. 31, 2016, up from 1.73 on Oct. 31, 2015.
Cash conversion cycle (CCC) has decreased to 61 days for the quarter from 103 days for the last year period. Days sales outstanding went down to 73 days for the quarter compared with 76 days for the same period last year.
Days inventory outstanding has decreased to 32 days for the quarter compared with 70 days for the previous year period. At the same time, days payable outstanding was almost stable at 44 days for the quarter, when compared with the previous year period.
Debt comes down
Donaldson Company, Inc. has recorded a decline in total debt over the last one year. It stood at $569.70 million as on Oct. 31, 2016, down 10.41 percent or $66.20 million from $635.90 million on Oct. 31, 2015. Total debt was 32.36 percent of total assets as on Oct. 31, 2016, compared with 35.33 percent on Oct. 31, 2015. Debt to equity ratio was at 0.73 as on Oct. 31, 2016, down from 0.86 as on Oct. 31, 2015. Interest coverage ratio improved to 15.92 for the quarter from 11.10 for the same period last year.
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