Donaldson Company

Donaldson Company Inc.
Type public
Traded as NYSE: DCI
Industry Filtration Engines
Membranes Gas Turbines
Valves Hydraulics
Founded 1915
Headquarters Bloomington, Minnesota
Key people W. Cook, chair, pres, ceo
James Shaw, cfo, vp
Revenue $2294.029 milincrease22.2% 2011 FY[1]
Operating income $315.28 mil increase32.3% 2011 FY[1]
Net income $225.29 mil increase35.6% 2011 FY[1]
Total assets $1.6814 bil (Jan 2012)
Employees 12,300 (2011)
Divisions Engine
Industrial
Website Donaldson Company

Donaldson Company, Inc. is a vertically integrated filtration company engaged in the production and marketing of products used as a means to improve performance efficiency and air quality. Its products are used by various industry sectors ranging from commercial/industrial (engines, exhausts, transmissions of all types of vehicles, vents in private vehicles, hydraulics of pipelines, windmills and other equipment), aerospace (helicopters, planes) to chemical producers requiring membranes of various fiber sizes. The company also plays a key role in the alternative energy and pharmaceutical industries by providing self cleaning, temperature balancing air systems in rotating devices involved in energy production, and filters used to prevent contamination of chemicals in research facilities. As a multinational company it operates in Belgium, Mexico, China, UK, Thailand, USA, Japan, Italy, Germany and France. In fiscal 2011 39.6% of operating income came from business in the Asia, Pacific region (was 37.9% in 2008), 31.0% from Europe (43.3% in 2008) and 19.8% from the US (10.6% in 2008).[1][2] It is also an aftermarket parts supplier.

There was significant growth in the size of the company in terms of market value in 2009, going from about $2 billion at the start of the year to $3.26 billion in May 2010.[3][4] Although sales were steady between 2007 and 2010 long term debt rose 98.6% over that period; Long term debt increased 44% in 2008 and remained near that level until January 2011 when it fell 17% quarter to quarter (then fell a further 3% by January 2012).[2] No single customer contributes more than 10% to Donaldson's revenue (Caterpillar Inc. is the largest at 10%).

The company has been recognized for innovations it made in air filter technology (it has spent at least $40.6 million each year since 2008 on research and development).[5] Also it has been involved in technological advancements associated with fuel cells.[6]

History

Started as Donaldson Engineering, a small business built around Frank Donaldson's air intake filter invention (engine air cleaner).[7] The business was incorporated in 1915 by Donaldson, his parents and his siblings as Donaldson Company Inc.[8]

During the first decade Donaldson Company made two important moves, it acquired the Wilcox-Bennet air filter license and introduced a new kind of filter, the Simplex used to prevent engine damage. Deere & Company was the company's most important client during the first couple decades. The early 1930s brought additional prosperity when William Lowther joined the company and designed the NS Filter, a tractor performance enhancing filter that was invented by Frank Donaldson. The 1930s were a transitionary period for the company, at the beginning of the decade it was forced to contract in size due to tough economic conditions in the United States causing business from farmers to fall however the sale of patents to influential investors provided the funds and market exposure it needed to survive and grow (part of the agreement was that Donaldson Company produce the filters). World War II provided an opportunity for the company to expand into aerospace and military hydraulic equipment and device filters.

The 1950s were bittersweet, the company gained market share, grew in size and went public (1955) but was faced with employee strikes, the exodus of key employees (who started a new company to compete with Donaldson for market share) and IRS charges of hidden back taxes.[7]

In the 1960s subsidiaries were established in Germany, South Africa, Britain, France, Australia and Benelux.

Key dates and events

Divisions and Subsidiaries

Numerous subsidiaries are grouped based on whether their products are related to engine, industrial, aerospace or pharmaceutical applications. The 2 core business segments are

Industrial includes all business involved in the filtration of computer disk drives and commercial plant emissions as well as applications which enhance the performance of air compressors and rotating turbines. This segment accounted for 37.2% of revenue in fiscal 2011 down from 40.0% in 2010.[1]

Engine customers include OEM of many different types of commercial and private vehicles. Engine Products accounted for 62.8% of revenue in fiscal 2011 up from 60.0% in 2010. Engine sales are attributable to aftermarket parts (59.8%), off-road products (22.7%), on-road products (8.8%), aerospace and defense (7.3%), retrofit emissinos (1.4%).[1][13]

The business lines with growing importance are after market parts (37.5% of total sales in 2011 compared to 35% in 2010, 28-29% in 2008 and 2009), off-road products (14.3% in 2011 up from 11.8% in 2010, 13.0% in 2009) on-road products (5.5% of sales, up from around 4% the previous two years). Sales of industrial filtration solutions products were up 20% on the year. Aerospace and defense was the only major business category that had total sales drop in 2011 (-6%). All other business lines contributed a smaller fraction of total sales some more than others (gas turbine products down to 6.7% of total sales, down from 8%, 10%, 11% the previous three years).[2]

References

  1. ^ a b c d e f "Donaldson Company Inc 2011 SEC 10-K Report". 2012. http://b2icontent.irpass.cc/960%2F128955.pdf?AWSAccessKeyId=1Y51NDPSZK99KT3F8VG2&Expires=1331200008&Signature=0SLtEUlb40VEq4xEKgPcvtEBVdA%3D. 
  2. ^ a b c "Donaldson Company 2010 Fiscal Year SEC 10-K Form". 2010-09-24. http://www.faqs.org/sec-filings/100924/DONALDSON-CO-INC_10-K/#A104463A012_V1. 
  3. ^ "Donaldson Net Rises; Phillips-Van Heusen Net Loss". 2010-05-25. http://www.123jump.com/earnings-story/Donaldson-Net-Rises;-Phillips-Van-Heusen-Net-Loss/38830. 
  4. ^ "Donaldson:Looks Like the Streak Is Over". 2009-02-26. http://seekingalpha.com/article/122927-donaldson-looks-like-the-streak-is-over. 
  5. ^ "Donaldson Recognized by Frost & Sullivan for Product Innovation in Automotive Air Filters Aftermarket". 2006-02-14. http://www.frost.com/prod/servlet/press-release.pag?docid=60843453. 
  6. ^ "Donaldson Company and Los Alamos National Laboratory Join Forces". 2003-04-22. http://www.thefreelibrary.com/Donaldson+Company+and+Los+Alamos+National+Laboratory+Join+Forces+to...-a0100442851. 
  7. ^ a b about Donaldson
  8. ^ Donaldson Company History
  9. ^ "Donaldson Company". 2001-07-31. http://google.brand.edgar-online.com/EFX_dll/EDGARpro.dll?FetchFilingHTML1?ID=1665195&SessionID=M1GEHHhUWjA76-7. 
  10. ^ "Donaldson Company Announces Agreement to Acquire Ultrafilter international AG". 2002-06-13. http://www.thefreelibrary.com/Donaldson+Company+Announces+Agreement+to+Acquire+ultrafilter...-a087142621. 
  11. ^ "Kaman Industrial Technologies". 2007-10-01. http://www.kamandirect.com/news/2007_10_01.asp. 
  12. ^ "Donaldson Company Acquires Aerospace Filtration Systems, Inc.". 2007-03-01. http://news.thomasnet.com/companystory/Donaldson-Company-Acquires-Aerospace-Filtration-Systems-Inc-511021. 
  13. ^ "Donaldson Co Inc SEC 10K". 2010-03-04. http://www.faqs.org/sec-filings/100304/DONALDSON-CO-INC_10-Q/. 
Fortune 500 Corporations (by size)
Fortune 1000 Corporations (by size)
Companies listed above, plus: PepsiAmericas · Nash Finch · Pentair · Alliant Techsystems · Valspar · Patterson Companies · Securian Financial Group · Regis · Polaris Industries · Toro · Deluxe · Donaldson · Fastenal · H.B. Fuller · Federated Mutual Insurance Company · Ceridian
Major non-public or externally
owned corporations (alphabetically)