Donaldson Company, Inc. (DCI) SEC Filings & Earnings Calls

CEO transition execution risk

“Mr. Lewis was appointed as President and Chief Executive Officer effective March 2, 2026. Mr. Lewis succeeds Tod E. Carpenter, who retired as President and CEO effective at the end of the day on March 1, 2026.”

Macroeconomic and tariff environment pressure

“Our team executed on our growth strategy, despite macroeconomic pressures including a dynamic tariff environment and the war in the Middle East.” · word for word

Key executive retirement and transition

“Mr. Briseño ceased to be our President, Industrial Solutions and retired effective at the close of business on July 31, 2026.” · word for word

Acquisition integration risk

“We also completed our largest acquisition in Company history, Facet Filtration.” · word for word

Tariff and Trade Policy Risk

“Any additional tariffs in the United States or retaliatory tariffs imposed by other governments could exacerbate the impact.” · word for word

Electrification Disruption Risk

“These risks include wider adoption of technologies providing alternatives to diesel engines such as electrification of equipment or other alternative power solutions.” · word for word

Facet acquisition dilution of $0.06 in Q4 and $0.12 in FY27 guidance.

“including $0.06 of dilution from Facet... inclusive of $0.12 of dilution from Facet acquisition”

Supply chain constraints in Aerospace and Defense organic sales.

“Organic Aerospace and Defense sales declined 2.8% from prior year as a result of ongoing supply chain constraints” · word for word

Industrial segment facing near-term headwinds; Aerospace and Defense sales down 13.5%.

“Industrial Solutions segment sales declined 0.6%; Aerospace and Defense sales decreased 13.5% due to weaker new equipment sales, ongoing supply chain constraints and project timing.”

Integration risk from $829M Facet acquisition.

“Completed acquisition of Facet Filtration for $829 million cash; results to be reported in Industrial Solutions segment.”

Geopolitical conflict in Iran

“If the conflict or geopolitical tensions continue or worsen, it could have a significant adverse effect on our business, financial condition, or results of operations.” · word for word

Tariff escalation

“Any new, substantial tariff increases on imports to the U.S. from Mexico, China and the European Union (EU) should they be implemented and sustained for an extended period of time, could have a significant adverse effect on us and our supply chain.” · word for word

Operational inefficiencies in Power Generation

“The decrease in gross margin as a percentage of net sales was driven primarily by $9.1 million of costs associated with footprint optimization efforts and operational inefficiencies related to shifting Power Generation equipment production to a new point of manufacturing.” · word for word

Debt covenant compliance risk; interest coverage ratio must be >=3.5x and adjusted debt-to-EBITDA <=3.5x

“Agreement requires the Company to maintain a consolidated interest coverage ratio of not less than 3.5 to 1.00 and an adjusted debt-to-EBITDA ratio of not more than 3.50 to 1.00” · word for word

Gross margin pressure from operating inefficiencies and footprint optimization costs.

“Gross margin was 33.5%, down versus 35.2% in 2025. Operating inefficiencies, including those related to production shifts to support higher demand in Power Generation within Industrial Solutions and costs associated with footprint optimization initiatives, were partially offset by higher pricing.” · word for word

On-Road and Aerospace & Defense segment sales declines due to weak end-market conditions.

“On-Road sales decreased 9.2% due to lower global truck production. Aerospace and Defense sales decreased 19.4% due to sales timing.” · word for word

Higher interest expense from increased debt levels and higher average interest rates.

“Interest expense was $7.7 million versus $5.9 million a year ago, primarily due to higher debt levels and higher average interest rates.” · word for word

Tariff exposure

“Any new, substantial tariff increases on imports to the U.S. from Mexico, China and the European Union (EU) should they be implemented and sustained for an extended period of time, could have a significant adverse effect on the Company and its supply chain.” · word for word

Operational inefficiency

“The decrease in gross margin as a percentage of net sales was driven primarily by operational inefficiencies related to shifting Power Generation equipment production to a new point of manufacturing to support higher customer demand in Industrial Solutions and costs associated with footprint optimization efforts” · word for word

Volume decline

“During the three months ended January 31, 2026, the Company’s net sales increase was driven by favorable foreign currency impacts and pricing benefits, partially offset by volume decline.” · word for word

Regulatory approval risk for acquisition

“consummation of the Transactions is subject to the satisfaction or waiver of certain customary closing conditions, including ... expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act” · word for word

Integration risk

“the ability to realize the projected benefits of the Transactions” · word for word

CEO transition risk is low due to planned succession and internal promotion.

“Planned succession with internal candidate; outgoing CEO remains as Executive Chairman.”

On-Road sales declined 27.1% due to lower global truck production; Aerospace and Defense sales down 7.1% due to soft Defense sales.

“On-Road sales decreased 27.1% due to lower global truck production; Aerospace and Defense sales declined 7.1%, due to soft Defense sales.” · word for word

Tariff cost exposure

“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” · word for word

Defense end market weakness

“Net sales of Aerospace and Defense decreased by $3.1 million due to weakness in the Defense end markets” · word for word