On Nov. 27, industrial filtration specialist Donaldson
- The healthy improvement in the operating margin was negated on the bottom line, thanks to a tough comparison against last year's unusually low tax rate. Donaldson didn't qualify for those research and development tax credits this time around.
-
Sales growth was a respectable and entirely organic 10.7%. Together with level net margins and a small but noticeable share buyback, you see a very nice boost to EPS.
- Large changes on the balance sheet wreaked havoc on free cash flow, but if you look at Tom Gardner's owner earnings instead, you see that Donaldson has plenty of actual cash to fuel its business.
(Figures in millions, except per-share data)
Income Statement Highlights
|
Avg. Est. |
Q1 2007 |
Q1 2006 |
Change |
|
|---|---|---|---|---|
|
Sales |
$442 |
$446.4 |
$403.4 |
10.7% |
|
Net Profit |
-- |
$36.0 |
$32.2 |
11.8% |
|
EPS |
$0.43 |
$0.43 |
$0.37 |
16.2% |
|
Diluted Shares |
83.5 |
86.1 |
(3.1%) |
Get back to basics with a look at the income statement.
Margin Checkup
|
Q1 2007 |
Q1 2006 |
Change* |
|
|---|---|---|---|
|
Gross Margin |
32.23% |
32.61% |
(0.38) |
|
Operating Margin |
12.03% |
10.76% |
1.27 |
|
Net Margin |
8.07% |
7.98% |
0.09 |
Margins are the earnings engine. See how they work.
Balance Sheet Highlights
Assets | Q1 2007 | Q1 2006 | Change |
|---|---|---|---|
Cash + ST Invest. | $50.3 | $93.3 | (46.1%) |
Accounts Rec. | $312.5 | $271.4 | 15.1% |
Inventory | $169.7 | $148.3 | 14.4% |
Liabilities | Q1 2007 | Q1 2006 | Change |
|---|---|---|---|
Accounts Payable | $160.4 | $129.0 | 24.4% |
Long-Term Debt | $96.3 | $97.7 | (1.4%) |
Learn the ways of the balance sheet.
Cash Flow Highlights
Q1 2007 | Q1 2006 | Change | |
|---|---|---|---|
Cash From Ops. | $17.3 | $30.8 | (43.7%) |
Capital Expenditures | $18.0 | $13.3 | 35.0% |
Free Cash Flow | -$0.7 | $17.4 | N/A |
$47.7 | $29.5 | 62.0% |
Find out why Fools always follow the money.
Cash Conversion Checkup
Q1 2007 | Q1 2006 | Change | |
|---|---|---|---|
Days in Inventory | 48.0 | 49.6 | (1.6) |
Days in Receivables | 63.0 | 63.1 | (0.1) |
Days Payables Outstanding | 48.2 | 43.5 | 4.7 |
Cash Conversion Cycle | 62.8 | 69.2 | (6.4) |
Read up on cash conversion metrics.
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(NYSE:GE) subsidiary
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At the time of publication, Fool contributorAnders Bylund had no position in any company mentioned. Fool rules are here.
