DCI - Earnings call transcript Q3 2019 | Donaldson Company, Inc.

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Operator

Good morning, my name is Adam, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Donaldson's Q3 Fiscal 2019 Earnings Conference Call. All lines have been placed on mute to prevent any background noise and after the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Thank you.

Brad Pogalz, Director, Investor Relations and Corporate Communications, you may begin your conference.

Brad Pogalz

Adam. Thanks, morning. Good joining for quarter earnings XXXX Thank Donaldson's call. conference you third Chairman, are our President today me CEO Chief Tod Officer. Robinson, With Scott Carpenter, and and of Financial Donaldson; our Scott XXXX. on a Tod an will morning, performance and and summary This of third quarter update provide

we today's earnings. call, such adjusted reference will During metrics, non-GAAP as

during this subject of that I release. want risks remind everyone You reconciliation non-GAAP which described within press GAAP can are find are the release in morning's metrics forward-looking this statements and uncertainties, our made any to to and a schedules call attached to also filings. SEC to press

With the turn call Tod? Tod Carpenter. that, I'll over now to

Tod Carpenter

our morning Advance within and we gross growth everyone. Good operational we quarter, made in progress Brad. on and had efforts; largely We our portfolio. are our these accomplishments strong in margin Thanks, Accelerate efficiency our trend, Last improvement control. saw

toward a quarter. uncertainty in On our political and the economic behaviors end factors including other notable shift hand, the drove of macro customers' the

In two-year wider April, of which to volatility account a our fell market within guidance and usual our prior abruptly orders business, OEs a dust for large collection Scott Within we our discussed attempted backlog our with outlook, Day. to for range at Investors than low. some of

However, the not was acuteness of April wide enough. suggests it

get forecast the quarter. there the in are me disappointing, so is let into While our revised several bright business, spots

X.X% pricing without up Third BOFA X.X% X.X% quarter from X.X% quarter currency. another added third or FX. and sales X.X%. grew or sales in X.X% was Benefits Engine were without

year. pricing, which is We strongest also contribution our from realized this quarterly X.X%

conditions. continues business mixed off-road Our face to

change sales uncertainty offset Europe of customers with destocking and manufacturers gains America. pressures in quarter China the for regulatory of impact in share in partially were off-road Excluding reflecting U.S. political local slightly combined pre-buys upcoming were equipment. at with Latin off-road These an of by large currency, down, third

products our than last XX with Program led sales wins quarter. which quarter sales the razor-to-sell above fuel market Synteq We razor-blade demonstrating the as success third Fuel of portfolio high-teens. legacy incremental remains off-road faster including on-road, nearly XP were XX% quarter market encouraged us, the production to Class penetrating points our products X the in sales with filter are growth with were grew of media. last U.S. elevated. XX% truck by proprietary in in up In growth all first-fit

order new of comparison a from were nearly volatility with focused sales quarter or XX% local profitable combined drove Chinese China's massive on-road our Third in last so in strong China currency. we market. deepening in unexpected, not growth Significant volatility customers is to decline. The remain year down the drive order relationships on

Turning sales were to aftermarket; currency X% last up local quarter.

thirteenth from year. was independent a prior in OE the Third were the row both, quarter the and up channels where

demand Within the some providing a regions headwinds. and independent economic indicates we're was orders closely. has there to OE support watching but that at America number customers channel, mid-April In if pressures some are changed, energy across other It's us pull-through Latin channel, developing are markets sudden mining destocking. large drop unclear a of small the and so

last quarter gain faster is share sales us to Third products channel OE PowerCore. These products in grew legacy of XX tell our strategy working. than innovative the products part to due points in quarter,

that's product grew around changing industry aftermarket years and nearly PowerCore an to been has XX point. the still in driving for in level; sales quarter Third mid-teens PowerCore strong important a is record growth. this

to year products have we significantly in products, revenue. won were have timing portfolio in in play of up order share created XX% recurring stream first-fit and of and razor-to-sell and aerospace razor-blade comparison market success drivers. engine, the primary stable sales defense they'll and and recent our years last then the critical contributed a last expanding future. out quarter; By profitable Innovative our role were a a Rounding soft

The was declined the sales third impact from quarter currency Turning offset segment; BOFA by Industrial to X.X%. and benefits pricing. from

of quarter X%. IFS Industrial Solutions grew or Third sales Filtration

BOFA, but roughly business. single-digits year, there of flat and variability in last collection; the within equipment currency the were some sales currency was dust local new declined with Starting Excluding quarter. last sales high with

We equipment the where America of are quoting notable sales new local projects are make nearly base A is increasingly to doubled still small new Latin but reluctant customers our in investment. exception currency.

our these them manufacturer and and their global customers large knowledge engagement at depth a with us. we facilities leveraging world, can share of outcomes gaining around evolve the new creating improve help By model. customer as are of We we breadth our for offering, value

also in momentum collection have parts. dust We replacement

are in We and we investing of seeing people and progress. tools evidence are

sales example, growing China more expect than grow small With up China's initiative, in XX% local business were benefits and from overtime. Blue For to rapidly the and share currency. we take it Sky

dollar most Additionally, the last make in U.S. small, while quarter. the for digits orders Also potential easier last we mature feature as parts e-commerce market, dust in engage amount recently it the this we the first grew quarter. profitable believe with we still U.S., enabled booked our our replacement for us. growth mid-single it is and We which will is in guest customers drive to collectors through

have profitability. industry capacity. and local and year. filtration, production drive of food XX% growth sell that's the currency helping To new beverage and corporate the up are increased higher last These than margins we sales we filtration product process XX% sales into adding process on significantly bolster at average, nearly were our In top our team to

replacement sales products Turbine projects quarter. was which decline offset last down As lower in The expected, sales partially to currency, were by significant parts. we to growth due Gas new XX% local or GTS in of

are We our confident GTS in positioning.

turbine our parts sales and Our disciplined basis. improvement business rate on profit large is on a in of management the the growing replacement driving focus with year-over-year combined dollar

forecast. matched in Special Results Applications our also

were filters Excluding partially FX, offset Drive by by sales declined of lower rest that the Disk about growth sales X% across the portfolio. driven of

summarize to saw to we want over the some I Scott, successes the quarter. of turning last Before call

portfolio First, Advance up increase were company. our the Accelerate of the and drive single-digits strategic the quarter of for single-digit balance to high results. with sales in are low investments getting compared this Local the a portfolio last currency

Second, the double-digits razor-blade Innovative in works. razor-to-sell dust in and flow up model up low mid-single offering evolution in down the digits. our were products engine was in collection

parts XX% cyclicality revenue our of focus and impact sales some in new decline replacement make and first-fit of than equipment. modest parts they on quarter our of Third, increase a of products help to drives businesses. Replacement adds stability. in growth and total than local more had versus of currency XX% These a the last more up mitigate sales

the now Scott. With turn to that, I'll over Scott? call

Scott Robinson

Thanks, morning, Good last X% Tod. currency. headwind a X% quarter, everyone. Sales including grew from

seen one what modeled up than sequential do As impact from expected, said reason consistent dynamic to think Investor and than pressure what the lessen will That is we at FX so year step was with in this Day. we muted far quarter. the was in the more which be higher we've I QX fourth QX

sharp expectations, course, later. Of drop late backlogs the in changes the in third that I'll discuss quarter

now combined points up third last rate in nearly activity forecasted Based to full XX.X% tax option lower We year five rate generated the on a with other year. XX.X%. quarter, $X.XX U.S. discrete and a between below stock Benefits items rate our year QX, due taxes. X% resulted and is tax which last from corporate EPS from in primarily in was of the

operating In quarter operating XX effectively to remind which terms that want of revenue accounting basis margin points 'XX, we basis third XX%. fiscal business performance, to third diluted the XX points. quarter declined in recognition everyone I adopted margin standard by

also margin Gross impacted was by recognition. revenue

points basis the to of Third decline accounting declined change. XX.X% quarter gross with from XX the coming margin half

line We pricing. experiencing Broadly sequential points XXX which costs trends speaking, chain benefits gross were with forecast. quarter was from performance and still mostly higher supply offset our the and year-over-year are with of in margin raw material third favorable, basis we and in

basis operating XX.X%, to the rate last rate favorable XX points was points In basis that's impact. to compensation. XX year due Our incentive XX lower Engine's profit revenue our to basis expense segments, without grew recognition points

in and our was mid-XX% two an strongest incremental quarter margin in Third profit Engine best this years. performance range for year, the was the

to XXXX. X.X% added third get Engine margin the up Pricing quarter, helping from gross to in modestly

feel developing the we're a about and results getting. never-ending While we we're good is pricing the practices activity,

of a by like a and The last driven year and from GTS We expense pressure a also in with Engine, severance lower compensation. basis including incentive points rate mix. our better process reflecting pricing from XX businesses in expense in rate Industrial basis connected without higher the We expense strong rate filtration profit higher and margin, favorability solutions. decline amount had or gross revenue some was XX down small The performance little reflecting points was segment offset recognition. investments

rate was consolidated up While between corporate to in both was a gross segments and modestly, cost due the mix margins bit segments. down unallocated

expenditures capital $XX to projects. increased million last million $XX expansion year Third to from capacity quarter due

XX% and fuel Year-to-date, this CapEx big X.X% $XX PowerCore, fiscal typical up million footprint after record share million year. in of shares our years repurchase Friday quarterly did with are earnings of for $XXX invest production dividends so increase this dividend of our process and progress, are of plan XX.X% The about comes we adjusted larger major We we small paid quarter. we our Based in We announced repurchased last in region. New now X% increase a on outstanding far hit than a every and expanding year 'XX. amount last to on-track dividend. quarter, last we're and drivers, XX% to we filtration to two and last have year. profits,

long-term the felt supported yield. we our move So

and We to for been have more dividend yield were years proud the XX high paid consecutive we dividend Index have Aristocrats Dividend of increases. years in a XXXX, XX for than to added

commitment last future and an of dividend demonstrates Donaldson. in week's the trend to announcement think impressive I our that's the our confidence and

our have repurchase XX% repurchase commitment share announced means repurchases the another program replaces a shares, to as of also Like new We program, to our outstanding we prior to capacity of share the which returning shareholders. value continued signaling last authorization. upto

in changes cover I for to the now sales mid-teens, to of grow 'XX. Sales drop sales reflecting in want key aftermarket for decline the now forecast. expected and mid-single in backlog sharp now of off-road year expected fourth the reflecting are down off-road, to expected digit. X.X% IFS. sales to will mid-single and Aftermarket fiscal projection are implies a our to and quarter a between X.X%, Full guide switch are gears digits customers. in be updated sales our the largest grow from This few

X.X% includes a to We Altogether, which increase currency. we X.X% On-Road or the a in drove expect project up OEs still and digits. Aerospace X.X% the will most will this modest Once and in We X% X.X% in change. Engine quarter, expect grow from between grow without Defense sales be FX. mid-teens headwind fourth and mid-single large of the again, will year

The other notable was in change to forecast collection expect reflecting high We sales sales for now grow new lower to the IFS. equipment. our sales single-digits dust

quarter still year-over-year fourth to or forecast, changes high-single are sales digits, There which grow. in the BOFA, no projected to were special Excluding IFS respectively. low-single were the applications and of GTS declines

sales X% without for is growth X% industrial new Our the to to currency. X% X% forecast or

margin XX.X% XX.X%. 'XX between Fiscal is and operating projected

Excluding year. of last sales. from the from a points XX an impact forecast points prior basis increase expect to of from on recognition, base operating driven expense our revenue The by we leverage reduced change was XX lower basis

does tariff margin year-over-year basis points forecast expect basis Please recognition. gross or above change, revenue a of we XX full that any about from forecast points not Mexico. note, year imports still did our on Our XX include not decline

a is evaluating percent the details our Mexico. U.S. net the from cost you, all goods do as import of for small exporter they Although us, we we of of a are emerge. Like

forecast; was and the short came fourth full 'XX $X.XX, lower projected now back. Business is The EPS gave remaining the quarter rate of $X.XX performance out Turning driven QX. back prior the FY forecast. that our to from down, and came tax $X.XX at below between Breaking year $X.XX that's sales. $X.XX the midpoint the $X.XX by $X.XX

the level behavior clearly unique XX and at work days customers' impacted margin our perspective. the provide dynamics have presentation, which of What since urgency is on typically improvement, that Day. I there to is our some is touched in-flight. that In changes between our Investor we hasn't related to quarters, changed While this detail, don't gross

shared like and and for the we membranes higher gives seeing mix chance can supply budgets. consistent that's that process operating And last are I relationship. New products, the filtration, Venting growing again and remind a what year. term, went you at and with replacement by day. price-cost I chain, capacity up high by sales gross our review company fiscal we Investor Solutions. to Recall us doing to the of I all-time Tod we're end success want deliver Well, a and performance, operational story margin managing the grow margins plan Longer parts, on we 'XX; also that of this tour margin to laid takeout cost reset Day. year to Between our that business we world hi-tech out

very that early process. we to the I XXXX share are for in identified. But one item We overall have already want

during a reset a do headwind that year, the in which to expense our plan XXXX goal Advance reviews. Accelerate level, budget about in have with reasonable high investments we We'll estimate our is growth detailed continued annual plan, projections we compensation the $XX our At a we for offset and that businesses. balance discipline, As from every incentive be million we that amount of XXXX. working

committed levels that aligned excited frequently forward commitment. profit sharing plan look deep on say, sales and months. are the entire a XXXX higher of delivering and around to details increasing I'm I dive in I few into team to our our we is As begin to the

the back Tod. Tod? now call I'll to turn

Tod Carpenter

Thanks, Scott.

the world For tour excited I'm about record, the too.

than robust more is ever. process planned Our

engaged and we a plans. around of clear set leaders are aligned growth strategic Our are

to continue enhancement priorities growth profit attack opportunities. fund and will We

operations The top for team reducing priority supply our right chain. and costs re-optimizing the now is

referenced operational our at capacity is and new Scott an tool are increasing inflection for We gross the point margins. a

there of levels costing, freight to our happening, have work success premium already of is some better line do. still We seen transfers with are more pockets but where and lower

against our on include our solutions, strategic which executing acquisitions. focused access extending I our priorities a examples We are provide of how want expanding growth executing and are to these and recent strategic technologies also of market priorities. couple we

with starts solutions and and class. we technologies are Expanding innovation world

scientific products to Center, ground broke Material competitors. to We filtration higher strengthen we filter Science technology. even our Chief our markets. on ago. premium We Officer, great As in design leverage is few create building investments; result of are capability new That's market very the is our different enabled and a returns to weeks we this DNA make that media R&D and says, is Research our our that's We're the ourselves great capabilities. multiple with where having our R&D across and by is drive stronger. R&D a and on facility Technology part our Donaldson investing fundamentals. further Michael leading diversify Material Wynblatt media can secret having We The from

Importantly, focused innovation. we on are breakthrough

new We and will design start with markets. and the fundamentals and then adjacent technologies products to further penetrate

Another example of innovation Solutions. is Connected

customers recently for in We filters. air have with a solution we pilots both segments, commercial engine introduced truck happening and monitoring

uses the helps their solution and schedule. maintenance fleet existing managers telematics Our optimize

the to monitoring selling in hydraulic we filters future. air the for and are plan and We fuel today product add

executing one of all with about global Early going In many with are building new this and create By addition example are just managers, having alignment, strategic have a we are and to we These fleet pilots recent that couple Donaldson are customers. priorities, positive confident the OE are we capability. I'm major more. indications operating we excited we of portfolio our partnership are are on we management can focusing our as and how value long-term there for team, stakeholders. but the

Now, I'll line the back Adam? to to turn call for Adam open the questions.

Operator

open. comes Instructions] line first question of Blair. [Operator And William Brian, you. is your Thank from Brian your Drab

Brian Drab

up with X% we X% higher. revenue that coming expectation year, -- like thinking, you I on targets beyond, down have respect -- little longer-term taking take Analyst to touched just Investor revenue to you the revenue take Day you the fiscal the at with out this XXXX? my then organically for guidance the X% and year Thanks a for XXXX fiscal gave just for for to Day; have XXXX that wanted and do it and grow morning. and this. good ask think the that have target, first, guidance of I up -- out have focusing maybe Hi, questions. -- the But this X% feels the to Scott, you I we now -- on or to may through with came

Scott Robinson

need the adjust FY to FY to there, listed numbers, So that stand you outcome exact the We inherently those little we -- of in to by to little just still down brought quarter bit, same for obviously mean, listed targets range presentation, Investor existence, framework upward get Investor that still 'XX Day. a referred have a fourth and still to our those. the bit you Day I still range a we but those committed at the are in are to we so out reach 'XX that are we

Brian Drab

And then, the incremental year. -- incentive and Scott, you next comp and -- for budget tour incentive world mentioned the the

contemplated? that that margin XXX about doing contemplated correctly, operating mean, $XX over So It that math talked to margin. was sounds the guidance. million, not be was incremental points you that basis adjusted when your if And I'm headwind like really I could

Scott Robinson

Yes, was I that was partly contemplated. I say would that mean --

Brad Pogalz

of as is we came we about to you quarters driver came the now We've in expect then favorability, favorability neighborhood add incentive in that's Brad. and FY this this Brian, 'XX that in, $XX somewhere 'XX. talked that that that if offset just year of competitive. the our last of from I'll have as gets the few expense we 'XX, but we million into 'XX, think about

middle if a that. So, it's wash about of think 'XX, in you 'XX the to

Brian Drab

wondering just And is think significant on-road you It very market that just that your what over forecasted up point? you this you're is market -- looks I'm like and and last to next soften at year? Do that's helpful. well. do gaining share one there on somewhat the where quick holding to going perspective the that's be then seems Okay, on still the like feel

Tod Carpenter

of that an story that in do is On-road efforts. point. our suggest Tod. that is the make sure interesting Clearly, the on calendar etcetera I will to this their public Donaldson on-road, late and comments want is based through the at to cycle U.S., largely year. on to balance China-based specific base the to out customer eye and that keep U.S. the that, this but We'll and hold. that's continue on-road market all a we does an you point for continue would likely suggests point Brian,

currency. in out was called that we quarter down So our China, in script local this XX%

also bit tough a an we was it's because However, anomaly of that comp. said a it

So up a so on-road us. was down going to quarter to year was XXX%, fact XX% year, in in China this last from this this And and up year QX QX, XX%. we're actually not surprise QX sequentially,

really -- we China, continue to it's into. in good a and gains still had to just tough we comp make So come

and you So we're on-road. still very that all a outlook favorable on overall, wrap up, in

Brian Drab

Okay. much. you very Thank

Operator

And Godfrey from comes your is question of C.L. next your George, George open. King. line

George Godfrey

getting end upper ask CapEx three to is, wanted and more this requiring only What pretty range, more $XXX think next just products ramp year? the or the investment that of we moving it I that's are as a a years implies for seems and where my it's ago? big that develop to about Thanks. years And the just bigger million. of but asking, expensive for like the percentage do to and two from not question more more were you but customers your year, revenue,

Scott Robinson

with start that. Okay, I'll so

to progress for of and is that account elevated with you to re-balancing the experiencing. additional online. we be additional year on The additional expect forecast the bringing a volumes capacity we're regard said, supply next this to we're chain million the of making in CapEx just we we as $XXX So year capacity bring the know,

a that's mind, increasing my positive that in thing we're So that.

to -- to next capacity. those continue know, going are and so be we investments elevated about but the going projects in-flight in to and year invest we're Next complete smart year, right that of And many with continue continue we're to we'll be our make we'll progress. we'll now, you

Tod Carpenter

just develop to I'll cost relative to comment Tod. potential increases is this the new George, products. And

so of our to support is diversify year our the company increase up has our As after the allows our Material X% overall space us what reason which strengthening spend current the sales. really to higher direction than X% which go longer are we're we're further adjacencies, to And that overall term portfolio; to you our X% we're know, mix margin we look journey been help on products doing to to really overtime. typically based multiple frankly R&D product, Company to X%, strategic from Science which the

etcetera, continuing it's not to against Company our So reflection our a it's advantage in competition. furthering technology a relative really of reflection developing world-class products, air excellence additional our Donaldson and really

George Godfrey

the a follow-up operating leverage. production, hear So of all when think increased capacity then; capacity, things, I volume, just like those I

And as it these So new is capacity I'll filled? programs that's there. expecting and what you're leave Thanks.

Scott Robinson

we at towards end incremental Investor incremental the with FY the Yes, to range of margin through XX% highest laid XX% we're but the mean Day, expectations I projecting 'XX incremental out the in our margin cycle. that

So, to margins we're go improved projecting incremental and that. with the along margins investing for we're

George Godfrey

you, Thank Scott.

Operator

And line open. from your Stifel. next is Jones question comes Nathan, of Nathan your

Unidentified Analyst

Adam [ph] is for Nathan. morning. This Good on

Just it comp to currency you I broad-based? strong great. easy is year-over-year, performance? comp? an discrete the and Defense, it called would color So Is comp there Aerospace constant know projects, that what but be Is turning driving besides any out there. pretty

Tod Carpenter

We happen good relative business. to quarter a just It's lumpy to have had a just that.

full roughly. We up changed still outlook, to year, it's have not be mid-single-digits, expected our

the you it's little tougher of math In fact, do likely the on a all it fourth business. suggest just outlook it, would lumpiness quarter if that, but the to

Brad Pogalz

Brad, is mentioned. I'll the this on point Tod just Adam, chime-in

you last that If in year, business quarter years. had we've that quarter fourth largest look our at the results in was

aspect is pops that this of based just orders. there out timing on lumpiness an of So

Unidentified Analyst

this much to year? slow -- -- might in did starting projects of have some some the it there? bit, a the And these seems just later guys that then economy is the turning IFS; you confidence down That's What capital be moving to too uncertainty Or it out so industrial to helpful. any like will just that little is capital right. free-up

Tod Carpenter

the breakdown capital that be to the and there the would aftermarket. other we're aftermarket. are business. Take aftermarket One, equipments, things the two base is growing be would still first, first-fit, in there So

good have there there, well continue momentum is a to initiative, quarter, the of expected that's the to order signals mid-single-digits projects elongated, a in fourth execute look good we're We all positive. into and we still Where time to industrial quoting utilization; bit going and quote the as in that worldwide cycle production saw the so we them. so change quarter, the

And the you as so we so not out people now. It's converting we'll to fast a just uncertainty on the be smarter we'll at just close previously new to if have That XX some have has our opportunity, full also what nice order year in in will. outlook, they and and were things call. are as them and a of information about that that into next going We're to kicked elongation is in kind keep the it. bake days speaks year, eye

Unidentified Analyst

right, my All thanks for questions. taking

Operator

open. next line is from your Jefferies. Alexander your comes of question Laurence, Laurence And

Nick Cecero

for Nick is this Cecero Laurence. on Hi,

are rising your called pressure? I material again. media raw whether petrochemical-based And you seeing or I steel, it So across filter the where out guess basket, as you raw look most materials, you guess, products; be

Brad Pogalz

that. This and media in low media actually the largest continue is and single-digit. to within one, that. paid be were biggest Overall, Brad, is the prices Steel the up I'll take

Steel both since to be continues bigger has year, as we So would up. moderated media then, increase. the into while stabilized we be and expected came a

Nick Cecero

look mature, Advance look you look Accelerate, portfolio, when across Got your and QX core. critical you and it, at much. across And you entire very you thank

pretty any Accelerate compression Advance and or of portfolio, you your thus deceleration been part margin of sales the signs resilient it seeing or has are For far?

Scott Robinson

aftermarket been is pretty positive digits in that's mid-single resilient there It's continuing our so collection particularly dust up far, inside momentum. business;

up is venting Engine as talked filtration about single-digits, up about business process XX%. Our roughly aftermarket was we to high mid

across very feeling with we're that So, we're the positive board results seeing. still the

Nick Cecero

Great, very much. thank you

Operator

question And open. Charlie, your comes Brady. line your Charley final from is

Charley Brady

And a wondering of coming on end we're is question QX, that any of at back have know signs the on has little about the OEMs the maybe into I inventory And side? follow-up continued to pulling QX talk kind then a into the reversed but that. a that on month the Just large bit, QX? I you can of only trend commentary or independent kind levels

Tod Carpenter

is this Tod. Charley,

that, look peak, be that's we where remember off-road early more some destocking construction-based of didn't that but when cycle, we from would So is -- necessarily saw really see likely -- account mining you you we the specifically, have you saw little really that saw likely that still in a at be saw the take saw channel. market OE you're for we the OES And channel, we mining sector really as which really drives into that mid-cycle later-cycle, markets, at and we but to some usual. be how will themselves, so still ag If with lay-off also Construction float so business ag within area. to not ag, but then, moved in starts a mid-to-late, tariff uncertainty one was mid-to-early but obviously the the is could so remove is to did that different. different the destocking is going example, it it see or that ag could that destocking, story, some early-cycle; independent we be through that it's had and markets mid-cycle to just there about agricultural and so much the surrounding the uncertainty, bit

Charley Brady

thanks. And opportunity Great, on give through higher terms -- cost you realization? additional experiencing to on there is Thanks. price me, sense [indiscernible] offset that? And of increases one Can costs. put you're today price are where more cost, still versus I raw material think raw-mat so from just a price that. us in of appreciate you the the you to further

Scott Robinson

Yes.

making have Industrial; continue our in pretty in dealt discipline, to and our X.X% we'll programs, pricing we our Engine processes arrived our is the pricing pricing drive to that really to to want want performance with. to aftermarket every we feel and pleased And out we quarter. were with work We the X.X% our mean, the where done, hygiene the So put but prices we're we work we to day progress have have I we've good with to on be business. Those added to so concepts which it. and what Pricing process we on good we we're pleased going never to good feel first-fit on place future. and go by market-based in continue but all we've win with determine about it been continue are with, we into

Tod Carpenter

business a And of likely that that suggest approach Tod, this to color. would more in I we the pricing across you we little our to is processes worldwide. corporation returned add normalcy on just I'll have bit how

Charley Brady

much, guys. very Thanks Great.

Operator

have no questions further And time. at we this

I'll back over Carpenter the Tod remarks. turn to call closing So Mr. for

Tod Carpenter

your today's to concludes everyone a and for week. listening, want for interest I Goodbye. great Have Company. in Donaldson time call. thank That

Operator

Thank participation today. your you for

You may now disconnect.

Donaldson (DCI) 4 Jun 192019 Q3 Earnings call transcript