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What changed in DONALDSON Co INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of DONALDSON Co INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+215 added−203 removedSource: 10-K (2025-09-26) vs 10-K (2024-09-27)

Top changes in DONALDSON Co INC's 2025 10-K

215 paragraphs added · 203 removed · 176 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeKey Growth Drivers The key growth drivers within each segment are as follows: • Mobile Solutions ◦ Providing solutions to customers to address their higher performance requirements ◦ Utilization of technology to improve efficiencies and fuel economies in all end markets ◦ Increased activity in construction, transportation, agriculture and mining markets driven by expansion in living standards • Industrial Solutions ◦ Complementing automation trends through expanded connected applications and service offerings ◦ Industrial equipment designed for optimized energy consumption and carbon footprint reduction ◦ Growing operational efficiency needs to reduce costs associated with maintenance and downtime • Life Sciences ◦ Increasing need for cell and gene therapy as well as membrane applications for disease treatment and cures ◦ Changing customer preferences and regulatory standards driving demand for sustainable products, including food, materials, and use of alternative energies ◦ Continually increasing demand for cloud computing capacity and need for highly technical solutions 5 Competition Principal methods of competition in the Mobile Solutions, Industrial Solutions and Life Sciences segments are technology, innovation, price, geographic coverage, service and product performance.
Biggest changeKey Growth Drivers The key growth drivers within each segment are as follows: • Mobile Solutions ◦ Providing solutions to customers to address their higher performance requirements ◦ Utilization of technology to improve efficiencies and fuel economies in all end markets ◦ Increased new equipment production and activity in construction, transportation, agriculture and mining markets driven by expansion in living standards • Industrial Solutions ◦ Complementing automation trends through expanded connected applications and service offerings ◦ Growing operational efficiency needs to reduce costs associated with maintenance and downtime ◦ Industrial equipment designed for optimized energy consumption and carbon footprint reduction • Life Sciences ◦ Changing customer preferences and regulatory standards driving demand for sustainable products, including food, materials, and use of alternative energies ◦ Continually increasing demand for cloud computing capacity and need for highly technical solutions ◦ Increasing need for cell and gene therapy as well as membrane applications for disease treatment and cures Competition Principal methods of competition in the Mobile Solutions, Industrial Solutions and Life Sciences segments are technology, innovation, product performance, service, price, and geographic coverage.
In addition, UTEC’s automated NevoLine™ Upstream platform incorporates industry-standard filtration to provide integrated up-and mid-stream processing capabilities in a single unit, driving productivity improvements, a reduction in operational footprints and greater consistency of results. 4 During fiscal year 2022, the Company acquired Solaris Biotechnology S.r.l.
In addition, UTEC’s automated NevoLine™ Upstream platform incorporates industry-standard filtration to provide integrated up-and mid-stream processing capabilities in a single unit, driving productivity improvements, a reduction in operational footprints and greater consistency of results. During fiscal year 2022, the Company acquired Solaris Biotechnology S.r.l.
A variety of training methods are available to fulfill these requirements, including online learning, training, coaching or mentoring and group discussions and activities. Community Service Generations of the Company’s employees and their families give their time, energy and aid to various philanthropic efforts, addressing the needs of our local communities and helping transform lives.
A variety of training methods are available to fulfill these requirements, including online learning, training, coaching or mentoring and group discussions and activities. Community Service For generations, the Company’s employees and their families give their time, energy and aid to various philanthropic efforts, addressing the needs of our local communities and helping transform lives.
This makes it ideal for extreme fine dust environments, commonly found in mining and high soot industries. Fuel and Lube Fuel and lube systems achieve optimal operations when contaminants are removed. The various components of the engine impacted include fuel injectors, valves, pumps, bearings and actuators.
This makes it ideal for extreme fine dust environments, commonly found in mining and high soot industries. 3 Fuel and Lube Fuel and lube systems achieve optimal operations when contaminants are removed. The various components of the engine impacted include fuel injectors, valves, pumps, bearings and actuators.
Life Sciences primarily sells to large OEMs and directly to various end users requiring cell growth, separation, purification, high purity filtration and device protection. Diverse Product Groups The Company sells a diverse group of products within each segment and the business units within the segments.
Life Sciences primarily sells to large OEMs and directly to various end users requiring cell growth, separation, purification, high purity filtration and device protection. 2 Diverse Product Groups The Company sells a diverse group of products within each segment and the business units within the segments.
(Isolere), headquartered in Durham, North Carolina and Univercells Technologies (UTEC), headquartered in Nivelles, Belgium. • Isolere is an early-stage biotechnology company that has developed novel and proprietary IsoTag™ reagents used for the purification and streamlined manufacturing of biopharmaceuticals.
(Isolere), headquartered in Durham, North Carolina and Univercells Technologies (UTEC), headquartered in Nivelles, Belgium. 5 • Isolere is an early-stage biotechnology company that has developed novel and proprietary IsoTag™ reagents used for the purification and streamlined manufacturing of biopharmaceuticals.
Extend Market Access - Grow Addressable Market by Extending Presence Across Adjacencies • Significantly grow presence in bioprocessing markets organically and inorganically within Life Sciences segment • Strengthen position across alternative power solutions through innovated and differentiated products Expand Technologies and Solutions - Leverage Foundational Filtration Capabilities to Expand Best-in-class Technology and Service Offerings • Expand Industrial Solutions connected service offerings to gain additional aftermarket share • Enhance digital experience through stronger data integration and navigation capabilities Pursue Strategic Acquisitions - Accelerate Long-term Growth Through Strategic Acquisitions in High-margin Areas • Strengthen presence in bioprocessing capabilities with disruptive technologies • Penetrate underserved markets and expand service offerings Reportable Segments The Company’s reportable segments are Mobile Solutions, Industrial Solutions and Life Sciences. 1 The Mobile Solutions segment, which represents 62.8% of net sales in fiscal 2024, is organized based on a combination of customers and products and consists of the Off-Road, On-Road and Aftermarket business units.
Extend Market Access - Grow Addressable Market by Extending Presence Across Adjacencies • Significantly grow presence in bioprocessing markets organically and inorganically within Life Sciences segment • Strengthen position across alternative power solutions through innovated and differentiated products Expand Technologies and Solutions - Leverage Foundational Filtration Capabilities to Expand Best-in-class Technology and Service Offerings • Expand Industrial Solutions connected service offerings to gain additional aftermarket share • Enhance digital experience through stronger data integration and navigation capabilities Pursue Strategic Acquisitions - Accelerate Long-term Growth Through Strategic Acquisitions in High-margin Areas • Strengthen presence in bioprocessing capabilities with disruptive technologies • Penetrate underserved markets and expand industrial service offerings Reportable Segments The Company’s reportable segments are Mobile Solutions, Industrial Solutions and Life Sciences. 1 The Mobile Solutions segment, which represents 62.1% of net sales in fiscal 2025, is organized based on a combination of customers and products and consists of the Off-Road, On-Road and Aftermarket business units.
This includes delivering dust and particle collectors for air compressors at the inlet and output of air compressors and lube, fuel and air/oil separators used in a manufacturing environment. Major product categories include dryers, compressed air, gasses and steam. Filtration involved in liquids, sterile and condensation management are part of the portfolio as well.
This includes delivering dust and particle collectors for air compressors at the inlet and output of air compressors and lube, fuel and air/oil separators used in a manufacturing environment. Major product categories include dryers, compressed air, gases and steam. Filtration involved in liquids, sterile and condensation management are part of the portfolio as well.
In fiscal 2024, the Company did not experience any material effect on its capital expenditures, results of operations or financial condition due to compliance with government rules regulating the discharge of materials into the environment or otherwise relating to the protection of the environment, nor does it expect such impact during fiscal 2025.
In fiscal 2025, the Company did not experience any material effect on its capital expenditures, results of operations or financial condition due to compliance with government rules regulating the discharge of materials into the environment or otherwise relating to the protection of the environment, nor does it expect such impact during fiscal 2026.
Industrial gasses products are used within major industries including metals, mining, transportation, chemicals and construction materials. Industrial Hydraulics Industrial hydraulics helps to solve customers’ toughest contamination challenges with premium filtration products for hydraulics and lubrication. Hydraulic oil is adversely affected by contaminants such as wear metals, particulate, water and oxidation by-products.
Industrial gases products are used within major industries including metals, mining, transportation, chemicals and construction materials. Industrial Hydraulics Industrial hydraulics helps to solve customers’ toughest contamination challenges with premium filtration products for hydraulics and lubrication. Hydraulic oil is adversely affected by contaminants such as wear metals, particulate, water and oxidation by-products.
Other Life Sciences Bioprocessing Equipment and Consumables Donaldson’s bioprocessing business provides equipment and consumables to support the development and production of biologic drugs and genetic medicines, including mAbs, mRNA and cell and gene therapies, along with many other applications that use a bioprocessing workflow. In fiscal year 2023, Donaldson acquired Isolere Bio, Inc.
Bioprocessing Equipment and Consumables Donaldson’s bioprocessing business provides equipment and consumables to support the development and production of biologic drugs and genetic medicines, including mAbs, mRNA and cell and gene therapies, along with many other applications that use a bioprocessing workflow. In fiscal year 2023, Donaldson acquired Isolere Bio, Inc.
Industrial Air Filtration, Industrial Gasses and Industrial Hydraulics products consist of dust, fume and mist collectors, compressed air and industrial gasses purification systems, hydraulic and lubricated rotating filtration applications as well as gas and liquid filtration for industrial processes. Power Generation products consist of air inlet systems and filtration sold to gas compression, power generation and natural gas liquification industries.
Industrial Air Filtration, Industrial Gases and Industrial Hydraulics products consist of dust, fume and mist collectors, compressed air and industrial gases purification systems, hydraulic and lubricated rotating filtration applications as well as gas and liquid filtration for industrial processes. Power Generation products consist of air inlet systems and filtration sold to gas compression, power generation and natural gas liquification industries.
Below are the product groups across the Company’s three segments represented as a percentage of total fiscal 2024 net sales. 2 Mobile Solutions Air Filtration Air filtration systems are vital for safeguarding engine components against abrasive wear caused by dust particles. These systems play a pivotal role in supporting agricultural, construction and mining machinery, as well as commercial vehicles.
Below are the product groups across the Company’s three segments represented as a percentage of total fiscal 2025 net sales. Mobile Solutions Air Filtration Air filtration systems are vital for safeguarding engine components against abrasive wear caused by dust particles. These systems play a pivotal role in supporting agricultural, construction and mining machinery, as well as commercial vehicles.
The Company fosters learning and growth. To help employees continue to learn and succeed in their careers, while keeping pace with a rapidly changing global marketplace, the Company provides multiple learning opportunities and programs, including online courses and customized development plans.
To help employees continue to learn and succeed in their careers, while keeping pace with a rapidly changing global marketplace, the Company provides multiple learning opportunities and programs, including online courses and customized development plans.
The Life Sciences segment’s principal competitors include several large global competitors as well as niche players in the individual markets served by the segment. Raw Materials The principal raw materials the Company uses are steel, filter media and petrochemical-based products including plastic, rubber and adhesive products. Purchased raw materials represent approximately 69% of the Company’s cost of sales.
The Life Sciences segment’s principal competitors include several large global competitors as well as niche players in the individual markets served by the segment. 6 Raw Materials The principal raw materials the Company uses are steel, filter media and petrochemical-based products including plastic, rubber and adhesive products. Purchased raw materials represent approximately 67% of the Company’s cost of sales.
For a discussion of the risks associated with these laws and regulations, see Part I, Item 1A, "Risk Factors." Human Capital Resources As of July 31, 2024, the Company h ad approximately 14,000 full time employees, of which 58% were in p roduction related roles. When necessary, the Company’s production facilities augment their resources utilizing contingent labor.
For a discussion of the risks associated with these laws and regulations, see Part I, Item 1A, "Risk Factors." Human Capital Resources As of July 31, 2025, the Company h ad approximately 15,000 full time employees, of which 58% were in p roduction related roles. When necessary, the Company’s production facilities augment their resources utilizing contingent labor.
The principles that guide this purpose are as follows: • act with integrity - deliver on commitments and be accountable for actions; • engage and empower people - have a richly diverse and inclusive culture and provide opportunities for people to grow, build successful careers and make meaningful contributions; • deliver for customers - understand, anticipate and prioritize customers’ needs, delivering differentiated products and solutions that enable their success; 7 • cultivate innovation - pursue innovation in everything from continuous improvement in processes to breakthrough solutions that create value and competitive advantage; • operate safely and sustainably - committed to safety in the workplace, being good stewards of natural resources and reducing environmental impacts; and • enrich communities - share time, resources and talent to make a positive impact.
The principles that guide this purpose are as follows: • act with integrity - deliver on commitments and be accountable for actions; • engage and empower people - have a richly diverse and inclusive culture and provide opportunities for people to grow, build successful careers and make meaningful contributions; • deliver for customers - understand, anticipate and prioritize customers’ needs, delivering differentiated products and solutions that enable their success; • cultivate innovation - pursue innovation in everything from continuous improvement in processes to breakthrough solutions that create value and competitive advantage; • operate safely and sustainably - committed to safety in the workplace, being good stewards of natural resources and reducing environmental impacts; and • enrich communities - share time, resources and talent to make a positive impact. 8 Culture The Company is comprised of a diverse global team.
The Company protects its innovations arising from research and development through patent filings and owns a portfolio of over 3,000 is sued patents, including utility and design patents.
The Company protects its innovations arising from research and development through patent filings and owns a portfolio of over 3,100 is sued patents, including utility and design patents.
Donaldson’s four regions and their contributing share of fiscal year 2024 revenue are as follows: the U.S. and Canada 44.1%; Europe, Middle East and Africa (EMEA) 28.2%; Asia Pacific (APAC) 16.8%; and Latin America (LATAM) 10.9%. Below are the Company’s manufacturing plants and distribution centers by region. Strategic Priorities The company has three primary strategic priorities to drive profitable growth.
Donaldson’s four regions and their contributing share of fiscal year 2025 revenue are as follows: the U.S. and Canada 44.2%; Europe, Middle East and Africa (EMEA) 27.8%; Asia Pacific (APAC) 17.2%; and Latin America (LATAM) 10.8%. Below are the Company’s manufacturing plants and distribution centers by region. Strategic Priorities The Company has three primary strategic priorities to drive profitable growth.
Within our industrial portfolio, Donaldson provides the widest product offering in the market to industrial customers consisting of equipment, ancillary components, replacement parts, performance monitoring and service globally, that cost-effectively enhances productivity and manufacturing efficiency.
Within our industrial portfolio, the Company provides a wide product offering in the market to industrial customers consisting of equipment, ancillary components, replacement parts, performance monitoring and service globally, that cost-effectively enhances productivity and manufacturing efficiency.
Prior to joining the Company, Ms. Becker was an attorney for Dorsey and Whitney, LLP from 1991 to 1995 and was a Project Manager and Corporate Counsel for Harmon, Ltd. from 1995 to 1998. Mr. Briseño was appointed President, Industrial Solutions in November 2022. Mr.
Becker was an attorney for Dorsey and Whitney, LLP from 1991 to 1995 and was a Project Manager and Corporate Counsel for Harmon, Ltd. from 1995 to 1998. Mr. Briseño was appointed President, Industrial Solutions in November 2022. Mr.
Backlog orders expected to b e delivered within 90 days as of July 31, 2024 and 2023 were $574.7 million and $576.4 million, respectively. Seasonality Many of the Company’s end markets are generally stronger in the second half of the Company’s fiscal year.
Backlog orders expected to b e delivered within 90 days as of July 31, 2025 and 2024 were $552.2 million and $574.7 million, respectively. Seasonality Many of the Company’s end markets are generally stronger in the second half of the Company’s fiscal year.
The Industrial Solutions segment, which represents 29.7% of net sales in fiscal 2024, is organized based on product type and consists of Industrial Air Filtration, Industrial Gasses, Industrial Hydraulics, Power Generation and Aerospace and Defense products. These products are further organized by the Industrial Filtration Solutions and Aerospace and Defense business units.
The Industrial Solutions segment, which represents 29.9% of net sales in fiscal 2025, is organized based on product type and consists of Industrial Air Filtration, Industrial Gases, Industrial Hydraulics, Power Generation and Aerospace and Defense products. These products are further organized by the Industrial Filtration Solutions and Aerospace and Defense business units.
The Life Sciences segment, which represents 7.5% of net sales in fiscal 2024, is organized by end market and consists of the Bioprocessing Equipment and Consumables, Food and Beverage, Vehicle Electrification and Medical Device, Microelectronics and Disk Drive markets.
The Life Sciences segment, which represents 8.0% of net sales in fiscal 2025, is organized by end market and consists of the Food and Beverage, Disk Drive, Vehicle Electrification and Medical Device, Microelectronics and Bioprocessing Equipment and Consumables markets.
Culture The Company is comprised of a diverse global team. With a broad base of capabilities, cultures and perspectives, employees reflect the communities they serve. The Company promotes a collaborative workplace. By working together, the Company’s employees can better understand and meet the customers’ needs. Every role is recognized and individuals’ contributions have a direct impact.
With a broad base of capabilities, cultures and perspectives, employees reflect the communities they serve. The Company promotes a collaborative workplace. By working together, the Company’s employees can better understand and meet the customers’ needs. Every role is recognized and individuals’ contributions have a direct impact. The Company fosters learning and growth.
During the years ended July 31, 2024, 2023 and 2022, the Company spent $93.6 million, $78.1 million and $69.1 million, respectively, on research and development activities, which was 2.6%, 2.3% and 2.1% of net sales, respectively.
During the years ended July 31, 2025, 2024 and 2023, the Company spent $87.8 million, $93.6 million and $78.1 million, respectively, on research and development activities, which was 2.4%, 2.6% and 2.3% of net sales, respectively.
The information contained on the Company’s website is not incorporated by reference into this Annual Report and should not be considered as part of this report. 8 Executive Officers Our executive officers of the Company as of August 31, 2024 were as follows: Name Age Positions and Offices Held First Calendar Year Appointed as an Executive Officer Amy C.
The information contained on the Company’s website is not incorporated by reference into this Annual Report and should not be considered as part of this report. 9 Information about our Executive Officers Our executive officers of the Company as of September 15, 2025 were as follows: Name Age Positions and Offices Held First Calendar Year Appointed as an Executive Officer Amy C.
We are subject to local, state, federal and international environmental, safety and health laws and regulations concerning, among other things, emissions to air; discharges to water; the generation, handling, storage, transportation, treatment and disposal of waste materials; and the use of raw materials and goods such as iron, steel aluminum, electricity, natural gas and hydrogen.
Failure to comply with these regulations, however, could lead to fines and other penalties. 7 We are subject to local, state, federal and international environmental, safety and health laws and regulations concerning, among other things, emissions to air; discharges to water; the generation, handling, storage, transportation, treatment and disposal of waste materials; and the use of raw materials and goods such as iron, steel aluminum, electricity, natural gas and hydrogen.
No single intel lectual property right is responsible for protecting the Company’s products. 6 Government Regulations Donaldson is subject to a wide variety of local, state and federal governmental laws and regulations in the U.S., as well as the laws and regulations of other countries in which Donaldson conducts business, including securities laws, tax laws, data privacy, employment and pension-related laws, competition laws, U.S. and foreign export and trade laws, the Foreign Corrupt Practices Act ("FCPA") and similar worldwide anti-bribery laws, government procurement regulations and laws governing improper business practices.
Government Regulations Donaldson is subject to a wide variety of local, state and federal governmental laws and regulations in the U.S., as well as the laws and regulations of other countries in which Donaldson conducts business, including securities laws, tax laws, data privacy, employment and pension-related laws, competition laws, U.S. and foreign export and trade laws, the Foreign Corrupt Practices Act (FCPA) and similar worldwide anti-bribery laws, government procurement regulations and laws governing improper business practices.
Donaldson’s diverse and skilled employees at approximately 150 locations on six continents, 77 of which are manufacturing and/or distribution centers, partner with customers — from small business owners to the world’s largest original equipment manufacturer (OEM) brands — to solve complex filtration challenges. Customers choose Donaldson’s filtration solutions due to their stringent performance requirements and need for reliability.
Donaldson’s diverse and skilled employees at more than 150 locations on six continents, 77 of which are manufacturing and/or distribution centers, partner with customers — from small business owners to the world’s largest original equipment manufacturer (OEM) brands — to solve complex filtration challenges.
Key products/applications include lithography process air filtration, point-of-use chemical filtration, compressed air dryers and liquid filtration. Disk Drive Disk drive delivers products that have advanced materials and absorbent technologies to control moisture and contaminants in microenvironments. Disk drive filters work in the background to help protect critical components in cloud computing: streaming, storage, sharing and business-to-business interaction.
Disk Drive Disk drive delivers products that have advanced materials and absorbent technologies to control moisture and contaminants in microenvironments. Disk drive filters work in the background to help protect critical components in cloud computing: streaming, storage, sharing and business-to-business interaction. Key products and applications include particle filters, chemical filters and relative humidity control.
Lewis joined the Company in 2002 and has held various positions, including President, Mobile Solutions; Plant Manager; Director of Operations; General Manager, Liquid Filtration; General Manager, Operations; Vice President, Global Operations; and Senior Vice President, Global Operations. Mr. Robinson was appointed Chief Financial Officer and joined the Company in 2015. Prior to joining the Company, Mr.
Lewis joined the Company in 2002 and has held various positions, including President, Life Sciences; President, Mobile Solutions; Plant Manager; Director of Operations; General Manager, Liquid Filtration; General Manager, Operations; Vice President, Global Operations; and Senior Vice President, Global Operations. Mr. Pogalz was appointed Chief Financial Officer effective November 1, 2024. Mr.
Robinson 57 Chief Financial Officer 2015 Thomas R. Scalf 58 President, Enterprise Operations and Supply Chain 2014 Ms. Becker was appointed to Chief Legal Officer and Corporate Secretary in November 2022. Ms. Becker joined the Company in 1998 and held positions as Senior Counsel and Assistant Corporate Secretary; Assistant General Counsel; and Vice President, General Counsel and Secretary.
Becker was appointed to Chief Legal Officer and Corporate Secretary in November 2022. Ms. Becker joined the Company in 1998 and held positions as Senior Counsel and Assistant Corporate Secretary; Assistant General Counsel; and Vice President, General Counsel and Secretary. Prior to joining the Company, Ms.
Aftermarket filters and parts are used in a variety of applications including cartridge filters, panel and compact filters, pulse systems, inlet hood components, filter retention hardware and accessories. Power Generation filtration components are in power plants, oil and gas delivery systems, other industrial applications and refining and processing machinery.
Power Generation filtration components are custom-engineered air intake systems for gas turbines and industrial compressors, for both new and retrofit applications. Aftermarket filters and parts are used in a variety of applications including cartridge filters, panel and compact filters, pulse systems, inlet hood components, filter retention hardware and accessories.
For example, materials transformed in manufacturing, such as metal grinding, recycling, plasma cutting, mixing and welding, can create air contamination that may inhibit the production environment, which can be collected and filtered by Donaldson’s products. 3 Industrial Gasses Industrial gasses provides solutions for challenging industrial gas purification objectives with premium filtration, drying and purification products.
For example, materials transformed in manufacturing, such as metal grinding, recycling, plasma cutting, mixing and welding, can create air contamination that may inhibit the production environment, which can be collected and filtered by Donaldson’s products. Power Generation Power generation provides leading OEMs air inlet equipment systems that deliver filtration and air handling performance.
Diversity, Equity and Inclusion The Company values and welcomes employees’ unique views and contributions, knowing that together the global team can better understand and meet the needs of its customers and communities. The Company participates in outreach efforts for organizations focused on diversity and supporting educational opportunities to underserved students and communities.
The Company values and welcomes employees’ unique views and contributions, knowing that together the global team can better understand and meet the needs of its customers and communities.
Microelectronics Microelectronics delivers product filtration solutions for gas phase molecular contamination at fabrication, tool and point-of-use locations. It offers protection and filtering for a broad spectrum of contaminants that can degrade tools, affect critical processes and impact production yield, which enables increased processing speeds and miniaturization of semiconductors.
It offers protection and filtering for a broad spectrum of contaminants that can degrade tools, affect critical processes and impact production yield, which enables increased processing speeds and miniaturization of semiconductors. Key products and applications include lithography process air filtration, point-of-use chemical filtration, compressed air dryers and liquid filtration.
Aerospace and Defense Aerospace and defense products are specifically designed to protect critical systems from contamination to ensure proper and efficient operation. The filtration portfolio includes engine intake, cabin air, avionics air, fuel, lubrication and hydraulics. Applications are found on fixed wing aircraft, helicopters, ground defense vehicles and naval vessels.
Power Generation filtration components are in power plants, oil and gas delivery systems, other industrial applications and refining and processing machinery. 4 Aerospace and Defense Aerospace and defense products are specifically designed to protect critical systems from contamination to ensure proper and efficient operation. The filtration portfolio includes engine intake, cabin air, avionics air, fuel, lubrication and hydraulics.
Becker 59 Chief Legal Officer and Corporate Secretary 2014 Guillermo Briseño 57 President, Industrial Solutions 2022 Tod E. Carpenter 65 Chairman, President and Chief Executive Officer 2008 Andrew Dahlgren 53 President, Mobile Solutions 2022 Sheila G. Kramer 65 Chief Human Resources Officer 2015 Richard B. Lewis 52 President, Life Sciences 2017 Scott J.
Becker 60 Chief Legal Officer and Corporate Secretary 2014 Guillermo Briseño 58 President, Industrial Solutions 2022 Tod E. Carpenter 66 Chairman, President and Chief Executive Officer 2008 Darcy D. DeVincke 59 Chief Human Resources Officer 2024 Richard B. Lewis 53 Chief Operating Officer 2017 Bradley J. Pogalz 50 Chief Financial Officer 2024 Ms.
Vehicle Electrification and Medical Device Vehicle electrification and medical device equipment provide a broad range of filters that protect devices and enclosures from pressure fluctuation, liquids and harmful contaminants. Key products include battery, powertrain and headlight vents for the automotive industry, including for electric vehicles, as well as venting solutions for hearing aids, ostomy bags and implantable devices.
Other Life Sciences Vehicle Electrification and Medical Device Vehicle electrification and medical device equipment provide a broad range of filters that protect devices and enclosures from pressure fluctuation, liquids and harmful contaminants.
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Power Generation Power generation provides leading OEMs air inlet equipment systems that deliver filtration and air handling performance. Power Generation filtration components are custom-engineered air intake systems for gas turbines and industrial compressors, for both new and retrofit applications.
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Customers choose Donaldson's filtration solutions due to their stringent technical and performance requirements, the need for reliability and the value proposition of Donaldson's solutions and/or services.
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Key products/applications include particle filters, chemical filters and relative humidity control.
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Applications are found on fixed wing aircraft, helicopters, ground defense vehicles and naval vessels. Industrial Gases Industrial gases provides solutions for challenging industrial gas purification objectives with premium filtration, drying and purification products.
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Failure to comply with these regulations, however, could lead to fines and other penalties.
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Key products include battery, powertrain and headlight vents for the automotive industry, including for electric vehicles, as well as venting solutions for hearing aids, ostomy bags and implantable devices. Microelectronics Microelectronics delivers product filtration solutions for gas phase molecular contamination at fabrication, tool and point-of-use locations.
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Carpenter was appointed Chief Operating Officer in April 2014 and President and Chief Executive Officer in April 2015. Mr. Dahlgren was appointed President, Mobile Solutions effective August 1, 2024. Mr.
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No single intel lectual property right is responsible for protecting the Company’s products.
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Dahlgren joined the Company in 1994 and has held various positions, including President, Life Sciences; Manager Business Development, Disk Drive; Director of Business Development, IVS, Semiconductor, Fuel Cell; General Manager, Engine Air; General Manager, GTS; Vice President, GTS and Special Applications; and Vice President, Asia Pacific. Ms. Kramer was appointed Chief Human Resources Officer in November 2022. Ms.
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Carpenter was appointed Chief Operating Officer in April 2014 and President and Chief Executive Officer in April 2015. Ms. DeVincke was appointed Chief Human Resources Officer in October 2024. Ms. DeVincke resumed employment with the Company in 2016 and has held various positions, including Vice President, Global Human Resources, based in Leuven, Belgium, and Director, Human Resources.
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Kramer joined the Company in 2015 as Vice President, Human Resources. Prior to joining the Company, Ms. Kramer was Vice President, Human Resources for Taylor Corporation, a print and graphics media company, from 2013 until September 2015. Prior to that, Ms.
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From 2008 to 2016, Ms. DeVincke served as a consultant, working on various projects for the Company and other companies, with responsibility for issues related to human resources, labor relations, employee relations, and talent acquisition. Ms. DeVincke was a Human Resources Generalist at the Company from 2001 to 2008. Prior to joining the Company, Ms.
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Kramer spent 22 years at Lifetouch, Inc. in various human resources roles, including Corporate Vice President, Human Resources from 2009 to 2013. Mr. Lewis was appointed President, Life Sciences effective August 1, 2024. Mr.
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DeVincke practiced law and held Human Resources positions of increasing responsibility for United Defense Industries (BAE systems). Mr. Lewis was appointed Chief Operating Officer effective August 1, 2025. Mr.
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Robinson was the Chief Financial Officer for Imation Corp., a global data storage and information security company, from 2014 to 2015. During his 11 years with Imation Corp., he also served as the Investor Relations Officer, Corporate Controller and Chief Accounting Officer. Mr. Scalf was appointed President, Enterprise Operations and Supply Chain in November 2022. Mr.
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Pogalz joined the Company in 2015 and has held various positions, including Vice President Finance – Global FP&A, EMEA Finance; Finance Director – Europe, Middle East and Africa; and Director of Investor Relations. Prior to joining the Company, Mr. Pogalz was the Senior Group Manager, Investor Relations for Target Corporation from 2012 to 2015.
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Scalf joined the Company in 1989 and has held various positions, including Plant Manager; Manager, Site Integration; Director of Operations; General Manager, Exhaust and Emissions; General Manager, Industrial Filtration Solutions Americas; Vice President, Global Industrial Air Filtration; and Senior Vice President, Engine Products. 9
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Prior to that, he held various FP&A positions at Target Corporation from 2007 to 2012. 10 PART I

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOperations - complexity of manufacturing could cause inability to meet demand and result in the loss of customers. Our ability to fulfill customer orders is dependent on our manufacturing and distribution operations. Although we forecast demand, additional plant capacity takes significant time to bring online and thus, unexpected or extreme changes in demand could result in longer lead times.
Biggest changeOur ability to fulfill customer orders is dependent on our manufacturing and distribution operations. Unexpected or extreme changes in demand could result in longer lead times because additional plant capacity takes significant time to bring online. We cannot guarantee we will be able to adjust manufacturing capacity, in the short-term, to meet higher customer demand.
Productivity Improvements - if we do not successfully manage productivity improvements, we may not realize the expected benefits. Our financia l projections assume certain ongoing productivity improvements as a key component of our business strategy to, among other things, contain operating expenses, maintain competitiveness, increase operating efficiencies and align manufacturing capacity to demand.
Productivity Improvements - if we do not successfully manage productivity improvements, we may not realize the expected benefits. Our financia l projections assume certain ongoing productivity improvements as a key component of our business strategy to, among other things, contain manufacturing and operating expenses, maintain competitiveness, increase operating efficiencies and align manufacturing capacity to demand.
Certain unexpected events could adversely impact our business, results of operations, financial condition and cash flows. Operational Risks Supply Chain - unavailable raw materials, significant demand fluctuations and material cost changes could have an impa ct on our sales and cost of sales. We obtain raw materials, including steel, filter media, petroleum-based products and other components from third-party suppliers.
Certain unexpected events could adversely impact our business, results of operations, financial condition and cash flows. 11 Operational Risks Supply Chain - unavailable raw materials, significant demand fluctuations and material cost changes could have an impa ct on our sales and cost of sales. We obtain raw materials, including steel, filter media, petroleum-based products and other components from third-party suppliers.
Regulatory litigation or actions that could impose significant penalties may be brought against us in the event of a breach of data or alleged non-compliance with such laws and regulations. 12 Information technology security threats are increasing in frequency and sophistication; to date, none of the threats faced by the Company have been material.
Regulatory litigation or actions that could impose significant penalties may be brought against us in the event of a breach of data or alleged non-compliance with such laws and regulations. Information technology security threats are increasing in frequency and sophistication; to date, none of the threats faced by the Company have been material.
Significant fluctuations of the U.S. dollar in comparison to the foreign currencies of our subsidiaries during discrete periods may have a negative impact on our business, results of operations, financial condition and cash flows. 13 Liquidity - changes in the capital and credit markets may negatively affect our ability to access financing to support strategic initiatives.
Significant fluctuations of the U.S. dollar in comparison to the foreign currencies of our subsidiaries during discrete periods may have a negative impact on our business, results of operations, financial condition and cash flows. Liquidity - changes in the capital and credit markets may negatively affect our ability to access financing to support strategic initiatives.
As a result of these and other factors, we may not be able to compete effectively, which could adversely impact our business, results of operations, financial condition and cash flows. 11 Customer Concentration and Retention - a number of our customers operate in similar cyclical industries. Changes in economic conditions in these industries could impact our sales.
As a result of these and other factors, we may not be able to compete effectively, which could adversely impact our business, results of operations, financial condition and cash flows. Customer Concentration and Retention - a number of our customers operate in similar cyclical industries. Changes in economic conditions in these industries could impact our sales.
If we do not properly address future customer needs, we may be slower to adapt to such disruption, which could adversely impact our business, results of operations, financial condition and cash flows. Competition - we participate in highly competitive markets with pricing pressure.
If we do not properly address future customer needs, we may be slower to adapt to such disruption, which could adversely impact our business, results of operations, financial condition and cash flows. 12 Competition - we participate in highly competitive markets with pricing pressure.
The divestitures may also result in o ngoing financial or legal proceedings, such as retained liabilities, which could have an adverse impact on our business, results of operations, financial condition and cash flows. Cybersecurity Risks Cybersecurity Risks - vulnerability of our information technology systems and security.
The divestitures may also result in o ngoing financial or legal proceedings, such as retained liabilities, which could have an adverse impact on our business, results of operations, financial condition and cash flows. 13 Cybersecurity Risks Cybersecurity Risks - vulnerability of our information technology systems and security.
In addition, we may not be able to maintain our insurance at a reasonable cost or in sufficient amounts to protect us against any losses. Financial Risks Currency - an unfavorable fluctuation in foreign currency exchange rates could impact our results of operations.
In addition, we may not be able to maintain our insurance at a reasonable cost or in sufficient amounts to protect us against any losses. 14 Financial Risks Currency - an unfavorable fluctuation in foreign currency exchange rates could impact our results of operations.
No customer accounted for 10% or more of our net sales in fiscal 2024, 2023 or 2022. However, a number of our customers are concentrated in similar cyclical industries (e.g., construction, agriculture, mining, oil and gas, transportation, power generation and disk drive), resulting in additional risk based on their respective economic conditions.
No customer accounted for 10% or more of our net sales in fiscal 2025, 2024 or 2023. However, a number of our customers are concentrated in similar cyclical industries (e.g., construction, agriculture, mining, oil and gas, transportation, power generation and disk drive), resulting in additional risk based on their respective economic conditions.
In addition, standards and processes for measuring and reporting GHG emissions and other sustainability metrics may change over time, result in inconsistent data or result in significant revisions to our strategies, commitments and targets, or our ability to achieve them.
In addition, standards and processes for measuring and reporting GHG emissions and other sustainability metrics may change over time, resulting in inconsistent data or significant revisions to our strategies, commitments and targets, or our ability to achieve them.
We could encounter difficulties in developing new systems, maintaining and upgrading our existing systems, managing access to these systems and preventing information security breaches. Additionally, we collect and store sensitive data, including intellectual property and proprietary business information, in data centers and on information technology networks.
We could encounter difficulties in developing new systems, maintaining and upgrading our existing systems, managing access to these systems, managing the evolving use of artificial intelligence and preventing information security breaches. Additionally, we collect and store sensitive data, including intellectual property and proprietary business information, in data centers and on information technology networks.
Any scrutiny of our carbon emissions or other sustainability disclosures, our failure to achieve related strategies, commitments and targets or failure to meet sustainability requirements could negatively impact our reputation as well as the demand for our products and adversely affect our business, results of operations, financial condition and cash flow.
Our failure to achieve related strategies, commitments and targets or failure to meet sustainability requirements could negatively impact our reputation as well as the demand for our products and adversely affect our business, results of operations, financial condition and cash flow.
Environmental, Social and Governance (ESG) - achieving commitments could result in additional costs and our inability to achieve them could have an adverse impact on our reputation and performance. We periodically communicate our strategies, commitments and targets related to ESG matters, including greenhouse gas (GHG) emissions and diversity, equity and inclusion through the issuance of our ESG report.
Sustainability - achieving commitments could result in additional costs and our inability to achieve them could have an adverse impact on our reputation and performance. We periodically communicate our strategies, commitments and targets related to sustainability matters, including greenhouse gas (GHG) emissions through the issuance of our Sustainability report.
We operate in highly competitive markets and have numerous competitors that are already well-established in those markets. We expect our competitors to continue to improve the design and performance of their products and to introduce new products that could be competitive in both price and performance.
Products - maintaining a competitive advantage requires consistent investment with uncertain returns. We operate in highly competitive markets and have numerous competitors that are already well-established in those markets. We expect our competitors to continue to improve the design and performance of their products and to introduce new products that could be competitive in both price and performance.
We could experience an increase in the costs of doing business, including increasing raw material prices and transportation costs, which could have an adverse impact on our business, results of operations, financial condition and cash flows. 10 Personnel - our success has been and could in the future be affected, if we are not able to attract, engage, train and retain qualified personnel.
We could experience an increase in the costs of doing business, including increasing raw material prices and transportation costs, which could have an adverse impact on our business, results of operations, financial condition and cash flows.
We may incur defense costs, fines, penalties, damage to our reputation and business disruptions, which could resul t in an adverse effect on our results of operations, financial condition and cash flows. Business Disruption - unexpected events, including natural disasters, may increase our cost of doing business or disrupt our operations.
We may incur defense costs, fines, penalties, damage to our reputation and business disruptions, which could resul t in an adverse effect on our results of operations, financial condition and cash flows. Tariffs - costs associated with complying with potential new or incremental tariffs could negatively affect our business and results of operations.
Unacceptable levels of service for key customers may result if we are not able to fulfill orders on a timely basis or if product quality, warranty or safety issues result from compromised production. We may not be able to adjust our production schedules to reflect changes in customer demand on a timely basis.
Efficient operations require streamlining processes to maintain or reduce lead times, which we may not be capable of achieving. Unacceptable levels of service for key customers may result if we are not able to fulfill orders on a timely basis or if product quality, warranty or safety issues result from compromised production.
Due to the complexity of our manufacturing operations, we may be unable to timely respond to fluctuations in demand, which could adversely impact our business, results of operations, financial condition and cash flows. Products - maintaining a competitive advantage requires consistent investment with uncertain returns.
We may not be able to adjust our production schedules to reflect changes in customer demand on a timely basis. Due to the complexity of our manufacturing operations, we may be unable to timely respond to fluctuations in demand, which could adversely impact our business, results of operations, financial condition and cash flows.
Additionally, in some locations we have experienced labor shortages causing significant wage inflation and workplace availability. We may not be able to attract and retain qualified personnel and it may be difficult for us to compete effectively, which could adversely impact our business, results of operations, financial condition and cash flows.
We may not be able to attract and retain qualified personnel and it may be difficult for us to compete effectively, which could adversely impact our business, results of operations, financial condition and cash flows. Operations - complexity of manufacturing could cause inability to meet demand and result in the loss of customers.
Our success depends in large part on our ability to identify, recruit, engage, train and retain highly skilled, qualified and diverse personnel globally and successfully execute management transitions at leadership levels of the Company. There is competition for talent with market-leading skills and capabilities in new technologies.
Personnel - our success has been and could in the future be affected, if we are not able to attract, engage, train and retain qualified personnel. Our success depends in large part on our ability to identify, recruit, engage, train and retain highly skilled, qualified and diverse personnel globally and successfully execute management transitions at leadership levels of the Company.
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We cannot guarantee we will be able to adjust manufacturing capacity, in the short-term, to meet higher customer demand. Efficient operations require streamlining processes to maintain or reduce lead times, which we may not be capable of achieving.
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Steps taken by governments to consider applying additional or new tariffs have the potential to disrupt existing supply chains, impose additional costs on our business, and could lead to other countries attempting to retaliate by imposing tariffs, which would make our products more expensive for customers, and, in turn, could make our products less competitive.
Added
Any additional tariffs in the United States or retaliatory tariffs imposed by other governments could exacerbate the impact.
Added
Any new, substantial tariff increases on imports to the United States from Mexico, China and the European Union (EU), should they be implemented and sustained for an extended period of time, could have a material adverse effect on our business and our supply chain.
Added
Changes in international trade policy could result in an adverse effect on our results of operations, financial condition and cash flows due to the international footprint of our Company. Business Disruption - unexpected events, including natural disasters, may increase our cost of doing business or disrupt our operations.
Added
There is competition for talent with market-leading skills and capabilities in new technologies. Additionally, in some locations we have experienced labor shortages causing significant wage inflation.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThird-party assessments of the Company – We regularly engage third-party consultants, legal advisors and audit firms in evaluating and testing our risk management processes, compliance with international standards and regulations, and assessing potential cybersecurity threats, as appropriate. Any recommendations are tracked with senior IT ownership and timelines for remediation.
Biggest changeWe established monitoring procedures to mitigate risks related to data breaches or other security incidents originating from third parties. 15 Third-party assessments of the Company – We regularly engage third-party consultants, legal advisors and audit firms in evaluating and testing our risk management processes, compliance with international standards and regulations, and assessing potential cybersecurity threats, as appropriate.
For further discussion of the risks associated with cybersecurity incidents, refer to the cybersecurity risk factors in Item 1A, “Risk Factors” in this Form 10-K. 14 Cybersecurity Governance Our board of directors has oversight of overall risk management, prioritizing the most significant risks including strategic, operational, financial and legal compliance risks.
For further discussion of the risks associated with cybersecurity incidents, refer to the cybersecurity risk factors in Item 1A, “Risk Factors” in this Form 10-K. Cybersecurity Governance Our board of directors has oversight of overall risk management, prioritizing the most significant risks including strategic, operational, financial and legal compliance risks.
We do not believe we have experienced any risks from cybersecurity threats or previous cybersecurity incidents that have materially affected or are reasonably likely to materially affect us, our business strategy or our results of operations or financial condition, including for any of the three years ended July 31, 2024, 2023 or 2022.
We do not believe we have experienced any risks from cybersecurity threats or previous cybersecurity incidents that have materially affected or are reasonably likely to materially affect us, our business strategy or our results of operations or financial condition, including for any of the three years ended July 31, 2025, 2024 or 2023.
We consider cyber risks among the top risks for us within our enterprise risk management framework. This framework includes internal reporting at the business and enterprise levels, with consideration of key risk indicators, trends and countermeasures for cybersecurity and other types of significant risks.
Any recommendations are tracked with senior IT ownership and timelines for remediation. We consider cyber risks among the top risks for us within our enterprise risk management framework. This framework includes internal reporting at the business and enterprise levels, with consideration of key risk indicators, trends and countermeasures for cybersecurity and other types of significant risks.
Before any engagement, we conduct holistic risk assessments of third-party providers. We scrutinize multiple dimensions of risk factors including information security, regulatory compliance and architectural design. We established monitoring procedures to mitigate risks related to data breaches or other security incidents originating from third parties.
Before any engagement, we conduct holistic risk assessments of third-party providers. We scrutinize multiple dimensions of risk factors including information security, regulatory compliance and architectural design.
Beyond information technology, this leadership team also partners with our Enterprise Operations team managing the operational technology security of our manufacturing facilities.
Our CIO leads a cross-functional information security team, comprised of experienced professionals from the global infrastructure and cybersecurity, legal and compliance organizations. Beyond information technology, this leadership team also partners with our Enterprise Operations team managing the operational technology security of our manufacturing facilities.
Our CIO also attends annual audit committee meetings and provides cybersecurity updates which include specific cybersecurity topics, covering material risks and threats. Our CIO oversees the cybersecurity program.
Our CIO also attends annual audit committee meetings and provides cybersecurity updates which include specific cybersecurity topics, covering material risks and threats. Our CIO oversees the cybersecurity program. With an extensive background in the IT industry, our CIO has previously held CISO positions, and other top global leadership roles, that drove digital transformation and owned technology from end to end.
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With an extensive background in the IT industry, our CIO has previously been in multiple CIO positions and other top global leadership roles that drove digital transformation and owned technology from end to end. Our CIO leads a cross-functional information security team, comprised of experienced professionals from the global infrastructure and cybersecurity, legal and compliance organizations.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties The Company’s corporate headquarters and corporate research facilities are located in Minneapolis, Minnesota. The Company also has administrative and engineering offices, as well as research facilities in the regions of EMEA, APAC and LATAM.
Biggest changeItem 2. Properties The Company’s corporate headquarters and primary research facilities are located in Minneapolis, Minnesota. The Company also has administrative and engineering offices, as well as research facilities in the regions of EMEA, APAC and LATAM.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeInformation in connection with purchases made by, or on behalf of, the Company or any affiliated purchaser of the Company, of shares of the Company’s common stock during the three months ended July 31, 2024 was as follows: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs May 1 - May 31, 2024 347,111 $ 74.07 347,111 11,064,623 June 1 - June 30, 2024 316,576 $ 72.83 315,000 10,749,623 July 1 - July 31, 2024 3,948 $ 71.44 3,948 10,745,675 Total 667,635 $ 73.47 666,059 10,745,675 15 On November 17, 2023, the Board of Directors authorized the repurchase of up to 12.0 million shares of the Company’s common stock.
Biggest changeTo determine the appropriate level of dividend payouts, the Company considers recent and projected performance across key financial metrics, including earnings, cash flow from operations and total debt. 16 Information in connection with purchases made by, or on behalf of, the Company or any affiliated purchaser of the Company, of shares of the Company’s common stock during the three months ended July 31, 2025 was as follows: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs May 1 - May 31, 2025 251,865 $ 66.72 251,865 6,479,783 June 1 - June 30, 2025 399,922 $ 69.40 394,755 6,085,028 July 1 - July 31, 2025 214,353 $ 70.66 214,353 5,870,675 Total 866,140 $ 68.93 860,973 5,870,675 In November 2023, the Board of Directors authorized the repurchase of up to 12.0 million shares of the Company’s common stock under the Company’s stock repurchase plan, replacing the Company’s previous stock repurchase plan dated May 31, 2019.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company’s common stock, par value $5.00 per share, is traded on the New York Stock Exchange under the symbol “DCI.” As of September 13, 2024, there were 1,116 registered stockholders of common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company’s common stock, par value $5.00 per share, is traded on the New York Stock Exchange under the symbol “DCI.” As of September 12, 2025, there were 1,065 registered stockholders of common stock.
This repurchase authorization is effective until terminated by the Board of Directors. The Company has remaining authorization to repurchase 10.7 million shares under this plan. There were no repurchases of common stock made outside of the Company’s current repurchase authorization during the three months ended July 31, 2024.
This repurchase authorization is effective until terminated by the Board of Directors. The Company has remaining authorization to repurchase 5.9 million shares under this plan. There were no repurchases of common stock made outside of the Company’s current repurchase authorization during the three months ended July 31, 2025.
The “Total Number of Shares Purchased” column of the table above includes 1,576 shares of previously owned shares tendered by option holders in payment of the exercise price of options during the three months ended July 31, 2024.
The “Total Number of Shares Purchased” column of the table above includes 5,167 shares of previously owned shares tendered by option holders in payment of the exercise price of options during the three months ended July 31, 2025.
The table set forth in Part III, Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” of this Annual Report is also incorporated herein by reference.
The table set forth in Part III, Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” of this Annual Report is also incorporated herein by reference. 17 The graph below compares the cumulative total stockholder return on the Company’s common stock for the last five fiscal years with the cumulative total return of the Standard & Poor’s (S&P) 500 Stock Index and the S&P Industrial Machinery Index.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN Among Donaldson Company Inc., the S&P 500 Index and the S&P Industrial Machinery Index As of July 31, 2019 2020 2021 2022 2023 2024 Donaldson Company, Inc. $ 100.00 $ 98.41 $ 136.76 $ 114.17 $ 133.92 $ 161.96 S&P 500 Stock Index $ 100.00 $ 111.96 $ 152.76 $ 145.67 $ 164.63 $ 201.10 S&P Industrial Machinery Index $ 100.00 $ 104.65 $ 151.08 $ 130.18 $ 162.64 $ 185.80 Item 6. [Reserved] Reserved.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN Among Donaldson Company, Inc., the S&P 500 Index and the S&P Industrial Machinery Index As of July 31, 2020 2021 2022 2023 2024 2025 Donaldson Company, Inc. $ 100.00 $ 138.97 $ 116.02 $ 136.09 $ 164.58 $ 160.80 S&P 500 Stock Index $ 100.00 $ 136.45 $ 130.12 $ 147.05 $ 179.62 $ 208.96 S&P Industrial Machinery Index $ 100.00 $ 144.36 $ 124.40 $ 155.41 $ 177.54 $ 183.50 Item 6. [Reserved] Reserved.
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To determine the appropriate level of dividend payouts, the Company considers recent and projected performance across key financial metrics, including earnings, cash flow from operations and total debt.
Removed
The graph below compares the cumulative total stockholder return on the Company’s common stock for the last five fiscal years with the cumulative total return of the Standard & Poor’s (S&P) 500 Stock Index and the S&P Industrial Machinery Index.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeFinancial Statements and Supplementary Data 33 Report of Independent Registered Public Accounting Firm 33 Consolidated Statements of Earnings 35 Consolidated Statements of Comprehensive Income 36 Consolidated Balance Sheets 37 Consolidated Statements of Cash Flows 38 Consolidated Statements of Changes in Stockholders’ Equity 39 Notes to Consolidated Financial Statements 40
Biggest changeFinancial Statements and Supplementary Data 35 Report of Independent Registered Public Accounting Firm 35 Consolidated Statements of Earnings 37 Consolidated Statements of Comprehensive Income 38 Consolidated Balance Sheets 39 Consolidated Statements of Cash Flows 40 Consolidated Statements of Changes in Stockholders’ Equity 41 Notes to Consolidated Financial Statements 42
Item 6. [Reserved] 16 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 16 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 30 Item 8.
Item 6. [Reserved] 18 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 18 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 33 Item 8.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeUnder most economic conditions, the Company’s market diversification between its diesel engine end markets, its global end markets, its diversification through technology and its OEM and replacement parts customers has helped to limit the impact of weakness in any one product line, market or geography on the consolidated operating results of the Company. 17 C onsolidated Results of Operations Operating Results Operating results were as follows (in millions, except per share amounts): Year Ended July 31, 2024 % of net sales 2023 % of net sales Net sales $ 3,586.3 $ 3,430.8 Cost of sales 2,311.9 64.5 % 2,270.2 66.2 % Gross profit 1,274.4 35.5 1,160.6 33.8 Selling, general and administrative 636.7 17.8 602.3 17.6 Research and development 93.6 2.6 78.1 2.3 Operating expenses 730.3 20.4 680.4 19.8 Operating income 544.1 15.2 480.2 14.0 Interest expense 21.4 0.6 19.2 0.6 Other income, net (12.6) (0.3) (7.7) (0.2) Earnings before income taxes 535.3 14.9 468.7 13.7 Income taxes 121.3 3.4 109.9 3.2 Net earnings $ 414.0 11.5 % $ 358.8 10.5 % Net earnings per share (EPS) – diluted $ 3.38 $ 2.90 Geographic Net Sales by Origination Net sal es, generally disaggregated by l ocation where the customer’s order was received, were as follows (in millions): Year Ended July 31, 2024 % of net sales 2023 % of net sales U.S. and Canada $ 1,583.1 44.1 % $ 1,464.7 42.7 % Europe, Middle East and Africa (EMEA) 1,012.9 28.2 1,007.8 29.4 Asia Pacific (APAC) 601.5 16.8 608.8 17.7 Latin America (LATAM) 388.8 10.9 349.5 10.2 Total Company $ 3,586.3 100.0 % $ 3,430.8 100.0 % 18 Net Sales (1) The impact of foreign currency translation was calculated by translating current fiscal year foreign currency net sales into U.S. dollars using the average foreign currency exchange rates for the prior fiscal year.
Biggest changeC onsolidated Results of Operations Operating Results Operating results were as follows (in millions, except per share amounts): Year Ended July 31, 2025 % of net sales 2024 % of net sales Net sales $ 3,690.9 $ 3,586.3 Cost of sales 2,404.7 65.2 % 2,311.9 64.5 % Gross profit 1,286.2 34.8 1,274.4 35.5 Selling, general and administrative 641.0 17.4 636.7 17.8 Loss on impairment of assets 62.0 1.6 — — Research and development 87.8 2.4 93.6 2.6 Operating expenses 790.8 21.4 730.3 20.4 Operating income 495.4 13.4 544.1 15.2 Interest expense 24.2 0.7 21.4 0.6 Other income, net (21.0) (0.6) (12.6) (0.3) Earnings before income taxes 492.2 13.3 535.3 14.9 Income taxes 125.2 3.4 121.3 3.4 Net earnings $ 367.0 9.9 % $ 414.0 11.5 % Net earnings per share (EPS) – diluted $ 3.05 $ 3.38 Geographic Net Sales by Origination Net sal es, generally disaggregated by l ocation where the customer’s order was received, were as follows (in millions): Year Ended July 31, 2025 % of net sales 2024 % of net sales U.S. and Canada $ 1,632.3 44.2 % $ 1,583.1 44.1 % Europe, Middle East and Africa (EMEA) 1,027.2 27.8 1,012.9 28.2 Asia Pacific (APAC) 635.7 17.2 601.5 16.8 Latin America (LATAM) 395.7 10.8 388.8 10.9 Total Company $ 3,690.9 100.0 % $ 3,586.3 100.0 % 20 Net Sales (1) The impact of foreign currency translation was calculated by translating current fiscal year foreign currency net sales into U.S. dollars using the average foreign currency exchange rates for the prior fiscal year.
The impact of currency translation does not change the underlying drivers of revenue shown in this chart.
The impact of currency translation does not change the underlying drivers of revenue shown in this chart.
The impact of currency translation does not change the underlying drivers of revenue shown in this chart.
The impact of currency translation does not change the underlying drivers of revenue shown in this chart.
The impact of currency translation does not change the underlying drivers of revenue shown in this chart.
The impact of currency translation does not change the underlying drivers of revenue shown in this chart.
These and other factors are described in Part I, Item 1A, “Risk Factors” of this Annual Report. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by law.
These and other factors are described in Part I, Item 1A, “Risk Factors” of this Annual Report. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by law. 32
New Accounting Standard Not Yet Adopted For the new accounting standards not yet adopted, refer to Note 1 Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report.
New Accounting Standards Not Yet Adopted For new accounting standards not yet adopted, refer to Note 1 Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report.
These factors include, but are not limited to, challenges in global operations; impacts of global economic, industrial and political conditions on product demand; impacts from unexpected events; effects of unavailable raw materials, significant demand fluctuations or material cost changes; inability to attract and retain qualified personnel; inability to meet customer demand; inability to maintain competitive advantages; threats from disruptive technologies; effects of highly competitive markets with pricing pressure; exposure to customer concentration in certain cyclical industries; inability to manage productivity improvements; inability to achieve commitments related to ESG; results of execution of any acquisition, divestiture and other strategic transactions; vulnerabilities associated with information technology systems and security; inability to protect and enforce intellectual property rights; costs associated with governmental laws and regulations; impacts of foreign currency fluctuations; and effects of changes in capital and credit markets.
These factors include, but are not limited to, challenges in global operations; changes in international trade policy; impacts of global economic, industrial and political conditions on product demand; impacts from unexpected events; effects of unavailable raw materials, significant demand fluctuations or material cost changes; inability to attract and retain qualified personnel; inability to meet customer demand; inability to maintain competitive advantages; threats from disruptive technologies; effects of highly competitive markets with pricing pressure; exposure to customer concentration in certain cyclical industries; inability to manage productivity improvements; inability to achieve commitments related to sustainability; results of execution of any acquisition, divestiture and other strategic transactions; vulnerabilities associated with information technology systems and security; inability to protect and enforce intellectual property rights; costs associated with governmental laws and regulations; impacts of foreign currency fluctuations; and effects of changes in capital and credit markets.
The Company performed its annual impairment assessment during the third quarter of fiscal 2024. The goodwill impairment assessment is conducted at a reporting unit level, which is one level below the operating segment level and utilizes either a qualitative or quantitative assessment.
The Company performed its annual impairment assessment during the third quarter of fiscal 2025. The goodwill impairment assessment is conducted at a reporting unit level, which is one level below the operating segment level and utilizes either a qualitative or quantitative assessment.
A discussion of the changes in the Company’s results of operations and liquidity and capital resources for the year ended July 31, 2023 from July 31, 2022 can be found in Part II, “Item 7.
A discussion of the changes in the Company’s results of operations and liquidity and capital resources for the year ended July 31, 2024 from July 31, 2023 can be found in Part II, “Item 7.
Alternative Assumptions If the Company were to use alternative assumptions for its pension plans as of July 31, 2024, a one percentage point change in the assumptions would impact fiscal 2024 net periodic benefit cost as follows (in millions): +1% (1)% Rate of return $ (4.3) $ 4.3 Discount rate $ (0.3) $ 0.4 The Company’s net periodic benefit cost recognized in the Consolidated Statements of Earnings was $6.6 million, $6.2 million and $2.8 million for the years ended July 31, 2024, 2023 and 2022, respectively.
Alternative Assumptions If the Company were to use alternative assumptions for its pension plans as of July 31, 2025, a one percentage point change in the assumptions would impact fiscal 2025 net periodic benefit cost as follows (in millions): +1% (1)% Rate of return $ (4.0) $ 4.0 Discount rate $ (1.0) $ 1.3 The Company’s net periodic benefit cost recognized in the Consolidated Statements of Earnings was $0.5 million, $6.6 million and $6.2 million for the years ended July 31, 2025, 2024 and 2023, respectively.
As of July 31, 2024, the Company was in compliance with all such covenants. 25 Capital Requirements The Company’s cash requirements within the next 12 months include short-term borrowings, accounts payable, accrued expenses, income taxes payable, dividends payable, purchase commitments and other current liabilities.
As of July 31, 2025, the Company was in compliance with all such covenants. Capital Requirements The Company’s cash requirements within the next 12 months include short-term borrowings, accounts payable, accrued expenses, income taxes payable, dividends payable, purchase commitments and other current liabilities.
Long-term borrowing capacity is maintained through a $500.0 million unsecured rev olving credit facility. Borrowings against the credit facility are reported on the Consolidated Balance Sheets.
Long-term borrowing capacity is maintained through a $600.0 million unsecured rev olving credit facility. Borrowings against the credit facility are reported on the Consolidated Balance Sheets.
In conjunction with the organizational redesign, the Company recorded $21.8 million of charges consisting of $15.3 million of severance charges and other organizational redesign costs and $6.5 million of costs mainly associated with the exiting of a lower-margin customer program and a lower-margin product.
I n conjunction with the organizational redesign, the Company recorded $21.8 million of charges consisting of $15.3 million of severance charges and other organizational redesign costs and $6.5 million of costs mainly associated with the exiting of a lower-margin customer program and a lower-margin product.
The liability for unrecognized tax benefits, accrued interest and penalties was $23.0 million and $16.7 million as of July 31, 2024 and 2023, respectively. The Company believes it is remote that any adjustment necessary to the reserve for income taxes for the next 12 months will be material.
The liability for unrecognized tax benefits, accrued interest and penalties was $24.7 million and $23.0 million as of July 31, 2025 and 2024, respectively. The Company believes it is remote that any adjustment necessary to the reserve for income taxes for the next 12 months will be material.
Short-term borrowing capacity as of July 31, 2024 was as follows (in millions): European Commercial Paper Program U.S.
Short-term borrowing capacity as of July 31, 2025 was as follows (in millions): European Commercial Paper Program U.S.
To determine the level of dividend and share repurchases, the Company considers recent and projected performance across key financial metrics, including earnings, cash flow from operations and total debt. Dividends paid for the years ended July 31, 2024 and 2023 were $122.8 million and $114.4 million, respectively.
To determine the level of dividend and share repurchases, the Company considers recent and projected performance across key financial metrics, including earnings, cash flow from operations and total debt. Dividends paid for the years ended July 31, 2025 and 2024 were $131.9 million and $122.8 million, respectively.
(AFSI), established by the Company and Caterpillar Inc. (Caterpillar) in 1986. AFSI designs and manufactures high-efficiency fluid filters used in Caterpillar’s machinery worldwide. The Company and Caterpillar equally own the shares of AFSI and both companies guaran tee certain debt and banking services, including credit and debit cards, merchant processing and treasury management services, of the joint venture.
(AFSI), established by the Company and Caterpillar Inc. (Caterpillar) in 1986. AFSI designs and manufactures high-efficiency fluid filters use d in Caterpillar’s machinery worldwide. The Company and Caterpillar equally own the shares of AFSI and both companies guarantee certain debt and banking services, including credit and debit cards, merchant processing and treasury management services, of the joint venture.
A significant portion of the Company’s cash and cash equivalents is held by subsidiaries throughout the world as over half of the Company’s earnings occur outside the U.S. Additionally, the Company has capacity of $593.0 million available for further borrowing under existing credit facilities as of July 31, 2024.
A significant portion of the Company’s cash and cash equivalents is held by subsidiaries throughout the world as over half of the Company’s earnings occur outside the U.S. Additionally, the Company has capacity of $759.6 million available for further borrowing under existing credit facilities as of July 31, 2025.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Company’s Annual Report on Form 10-K for the year ended July 31, 2023 (the “2023 Annual Report”), which was filed with the SEC on September 22, 2023.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Company’s Annual Report on Form 10-K for the year ended July 31, 2024 (the 2024 Annual Report), which was filed with the SEC on September 27, 2024.
The Company accounts for AFSI as an equity method investment. The outstanding debt relating to AFSI, which the Company guarantees half, was $51.0 million and $59.6 million as of July 31, 2024 and 2023, respectively.
The Company accounts for AFSI as an equity method investment. The outstanding debt relating to AFSI, of which the Company guarantees half, was $43.9 million and $51.0 million as of July 31, 2025 and 2024, respectively.
Estimates and assumptions are utilized in the valuations, including discounted projected cash flows, earnings before interest, taxes, depreciation and amortization margins, terminal value growth rates, revenue growth rates, discount rates and the determination of comparable, publicly traded companies. Changes in these estimates and assumptions could materially affect the determination of fair value and goodwill impairment.
Estimates and assumptions are utilized in the valuations, including discounted projected cash flows, earnings before interest, taxes, depreciation and amortization margins, terminal value growth rates, revenue growth rates, discount rates and the determination of comparable, publicly traded companies.
Selling, General and Administrative Expenses Selling, gener al and administrative expenses for the year ended July 31, 2024 were $636.7 million, or 17.8% of net sales, compared with $602.3 million, or 17.6% of net sales, for the year ended July 31, 2023, an increase of $34.4 million, or 5.7%.
Selling, General and Administrative Expenses Selling, gener al and administrative expenses for the year ended July 31, 2025 were $641.0 million, or 17.4% of net sales, compared with $636.7 million, or 17.8% of net sales, for the year ended July 31, 2024, an increase of $4.3 million, or 0.7%.
Borrowing capacity as of July 31, 2024 was as follows (in millions): Revolving credit facility $ 500.0 Reductions to borrowing capacity: Outstanding borrowings 110.0 Contingent liability for standby letters of credit 7.5 Total reductions 117.5 Remaining borrowing capacity $ 382.5 Weighted average interest rate as of July 31, 2024 6.44 % Certain debt agreements contain financial covenants related to i nterest coverage and leverage ratios, as well as other non-financial covenants.
Borrowing capacity as of July 31, 2025 was as follows (in millions): Revolving credit facility $ 600.0 Reductions to borrowing capacity: Outstanding borrowings 60.0 Contingent liability for standby letters of credit 7.9 Total reductions 67.9 Remaining borrowing capacity $ 532.1 Weighted average interest rate as of July 31, 2025 5.44 % Certain debt agreements contain financial covenants related to i nterest coverage and leverage ratios, as well as other non-financial covenants.
Losses before income taxes for the Life Sciences segment for the year ended July 31, 2024 were $10.4 million, or a loss of 3.9% of net sales, a decrease from earnings of 4.1% of net sales for the year ended July 31, 2023.
Earnings before income taxes for the Life Sciences segment for the year ended July 31, 2025 were $4.4 million, or 1.5% of net sales, an increase from losses of $10.4 million, or 3.9% of net sales, for the year ended July 31, 2024.
Financial Condition The Company’s total capitalization components and debt-to-capitalization ratio were as follows (in millions): July 31, 2024 % of total capitalization 2023 % of total capitalization Short-term borrowings $ 28.3 1.4 % $ 34.1 1.7 % Current maturities of long-term debt 25.0 1.2 125.0 6.3 Long-term debt 483.4 23.9 496.6 25.1 Total debt 536.7 26.5 655.7 33.2 Total stockholders’ equity 1,489.1 73.5 1,320.7 66.8 Total capitalization $ 2,025.8 100.0 % $ 1,976.4 100.0 % As of July 31, 2024, total debt, including short-term borrowings and long-term debt, represented 26.5% of total capitalization, defined as total debt plus total stockholders’ equity, compared with 33.2% as of July 31, 2023.
Financial Condition The Company’s total capitalization components and debt-to-capitalization ratio were as follows (in millions): July 31, 2025 % of total capitalization 2024 % of total capitalization Short-term borrowings $ 31.2 1.5 % $ 28.3 1.4 % Current maturities of long-term debt 6.7 0.3 25.0 1.2 Long-term debt 630.4 29.7 483.4 23.9 Total debt 668.3 31.5 536.7 26.5 Total stockholders’ equity 1,453.5 68.5 1,489.1 73.5 Total capitalization $ 2,121.8 100.0 % $ 2,025.8 100.0 % As of July 31, 2025, total debt, including short-term borrowings and long-term debt, represented 31.5% of total capitalization, defined as total debt plus total stockholders’ equity, compared with 26.5% as of July 31, 2024.
The Company estimates the fair value of acquired customer relationships using the multi-period excess earnings method. This approach is typically applied when cash flows are not directly generated by the asset, but rather, by an operating group which includes the particular asset.
Independent valuation specialists are used to assist in determining certain fair value calculations. 31 The Company estimates the fair value of acquired customer relationships using the multi-period excess earnings method. This approach is typically applied when cash flows are not directly generated by the asset, but rather, by an operating group which includes the particular asset.
Life Sciences Segment Net sales and earnings before income taxes were as follows (in millions): Year Ended July 31, 2024 VS 2023 2024 2023 $ Change % Change Life Sciences segment net sales $ 269.0 $ 241.3 $ 27.7 11.5 % Life Sciences segment (losses) earnings before income taxes $ (10.4) $ 9.9 $ (20.3) NM Life Sciences segment (losses) earnings before income taxes % of net sales (3.9) % 4.1 % N/A (8.0) % 23 (1) The impact of foreign currency translation was calculated by translating current fiscal year foreign currency net sales into U.S. dollars using the average foreign currency exchange rates for the prior fiscal year.
The decrease was driven primarily by unfavorable mix. 25 Life Sciences Segment Net sales and earnings before income taxes were as follows (in millions): Year Ended July 31, 2025 VS 2024 2025 2024 $ Change % Change Life Sciences segment net sales $ 295.5 $ 269.0 $ 26.5 9.8 % Life Sciences segment (losses) earnings before income taxes $ 4.4 $ (10.4) $ 14.8 NM Life Sciences segment (losses) earnings before income taxes % of net sales 1.5 % (3.9) % N/A 5.4 % (1) The impact of foreign currency translation was calculated by translating current fiscal year foreign currency net sales into U.S. dollars using the average foreign currency exchange rates for the prior fiscal year.
Critical Accounting Estimates The Company’s Consolidated Financial Statements are prepared in conformity with GAAP. Our significant accounting policies are disclosed in Note 1 in the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report.
Our significant accounting policies are disclosed in Note 1 in the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report.
Donaldson’s diverse and skilled employees at approximately 150 locations on six continents, 77 of which are manufacturing and/or distribution centers, partner with customers — from small business owners to the world’s largest original equipment manufacturer ( OEM) brands — to solve complex filtration challenges. Customers choose Donaldson’s filtration solutions due to their stringent performance requirements and need for reliability.
Donaldson’s diverse and skilled employees at more than 150 locations on six continents, 77 of which are manufacturing and/or distribution centers, partner with customers — from small business owners to the world’s largest original equipment manufacturer ( OEM) brands — to solve complex filtration challenges.
Share repurchases for the years ended July 31, 2024 and 2023 were $162.7 million and $141.8 million, respectively. Capital Resources Additional sources of liquidity are existing cash and available credit facilities. Cash and cash equivalents as of July 31, 2024 was $232.7 million, compared with $187.1 million as of July 31, 2023.
Cash paid for share repurchases for the years ended July 31, 2025 and 2024 were $331.5 million and $162.7 million, respectively. Capital Resources Additional sources of liquidity are existing cash and available credit facilities. Cash and cash equivalents as of July 31, 2025 was $180.4 million, compared with $232.7 million as of July 31, 2024.
Cost of Sales and Gross Margin Cost of sales for the year ended July 31, 2024 was $2,311.9 million, compared with $2,270.2 million for the year ended July 31, 2023, an increase of $41.7 million, or 1.8%.
Cost of Sales and Gross Margin Cost of sales for the year ended July 31, 2025 was $2,404.7 million, compared with $2,311.9 million for the year ended July 31, 2024, an increase of $92.8 million, or 4.0%.
NM = Not meaningful Mobile Solutions Segment Net sales and earnings before income taxes were as follows (in millions): Year Ended July 31, 2024 VS 2023 2024 2023 $ Change % Change Net sales Off-Road $ 380.8 $ 428.7 $ (47.9) (11.2) % On-Road 139.8 145.8 (6.0) (4.1) Aftermarket 1,730.2 1,600.3 129.9 8.1 Total Mobile Solutions segment $ 2,250.8 $ 2,174.8 $ 76.0 3.5 % Mobile Solutions segment earnings before income taxes $ 404.5 $ 330.4 $ 74.1 22.4 % Mobile Solutions segment earnings before income taxes % of net sales 18.0 % 15.2 % N/A 2.8 % 21 (1) The impact of foreign currency translation was calculated by translating current fiscal year foreign currency net sales into U.S. dollars using the average foreign currency exchange rates for the prior fiscal year.
NM = Not meaningful 23 Mobile Solutions Segment Net sales and earnings before income taxes were as follows (in millions): Year Ended July 31, 2025 VS 2024 2025 2024 $ Change % Change Net sales Off-Road $ 359.5 $ 380.8 $ (21.3) (5.6) % On-Road 110.6 139.8 (29.2) (20.9) Aftermarket 1,820.9 1,730.2 90.7 5.2 Total Mobile Solutions segment $ 2,291.0 $ 2,250.8 $ 40.2 1.8 % Mobile Solutions segment earnings before income taxes $ 417.6 $ 404.5 $ 13.1 3.2 % Mobile Solutions segment earnings before income taxes % of net sales 18.2 % 18.0 % N/A 0.2 % (1) The impact of foreign currency translation was calculated by translating current fiscal year foreign currency net sales into U.S. dollars using the average foreign currency exchange rates for the prior fiscal year.
Expected Long-Term Rate of Return on Plan Assets The Company considers historical returns and future expected returns for each asset class, as well as the target asset allocation to develop the assumption for each of its U.S. pension plans. The assumption for non-U.S. pension plans reflects the investment allocation and expected total portfolio returns specific to each plan and country.
Similar appropriate benchmarks are used to determine the discount rate for the non-U.S. plans. Expected Long-Term Rate of Return on Plan Assets The Company considers historical returns and future expected returns for each asset class, as well as the target asset allocation to develop the assumption for each of its U.S. pension plans.
Revenue is recognized to the extent it is probable a significant reversal of revenue will not occur when the contingency is resolved. 27 For volume, purchase rebates and discounts, management estimates are based on the terms of the arrangements with customers, historical payment experience, field inventory levels, volume in quantity or mix of purchases of product during a specified time period and expectations for changes in relevant trends in the future.
For volume, purchase rebates and discounts, management estimates are based on the terms of the arrangements with customers, historical payment experience, field inventory levels, volume in quantity or mix of purchases of product during a specified time period and expectations for changes in relevant trends in the future.
The Company calculates days payable outstanding as the average accounts payable for the quarter, divided by cost of sales for the quarter multiplied by the number of days in the quarter.
The Company calculates days payable outstanding as the average accounts payable for the quarter, divided by cost of sales for the quarter multiplied by the number of days in the quarter. The Company calculates net cash cycle as the sum of days sales outstanding and days inventory outstanding, less days payables outstanding.
Financing Activities Cash used in financing activities generally relates to the use of cash for payment of dividends and repurchases of the Company’s common stock, net of borrowing activity and proceeds from the exercise of stock options.
The increase in cash used was primarily due to the equity method investment in Medica of $71.2 million. Financing Activities Cash used in financing activities generally relates to the use of cash for payment of dividends and repurchases of the Company’s common stock, net of borrowing activity and proceeds from the exercise of stock options.
Income Taxes Management is required to estimate income taxes in each of the jurisdictions in which the Company operates. This process involves estimating current tax exposure and assessing future tax consequences attributable to temporary differences between the financial statement carrying amount of existing assets and liabilities and their respective tax basis.
This process involves estimating current tax exposure and assessing future tax consequences attributable to temporary differences between the financial statement carrying amount of existing assets and liabilities and their respective tax basis.
Industrial Solutions Segment Net sales and earnings before income taxes were as follows (in millions): Year Ended July 31, 2024 VS 2023 2024 2023 $ Change % Change Net sales Industrial Filtration Solutions (IFS) $ 901.1 $ 872.2 $ 28.9 3.3 % Aerospace and Defense 165.4 142.5 22.9 16.0 Total Industrial Solutions segment $ 1,066.5 $ 1,014.7 $ 51.8 5.1 % Industrial Solutions segment earnings before income taxes $ 198.8 $ 186.2 $ 12.6 6.8 % Industrial Solutions segment earnings before income taxes % of net sales 18.6 % 18.4 % N/A 0.2 % 22 (1) The impact of foreign currency translation was calculated by translating current fiscal year foreign currency net sales into U.S. dollars using the average foreign currency exchange rates for the prior fiscal year.
The increase was driven by timing of inventory cost adjustments and leverage on higher sales. 24 Industrial Solutions Segment Net sales and earnings before income taxes were as follows (in millions): Year Ended July 31, 2025 VS 2024 2025 2024 $ Change % Change Net sales Industrial Filtration Solutions (IFS) $ 914.2 $ 901.1 $ 13.1 1.5 % Aerospace and Defense 190.2 165.4 24.8 15.0 Total Industrial Solutions segment $ 1,104.4 $ 1,066.5 $ 37.9 3.6 % Industrial Solutions segment earnings before income taxes $ 197.7 $ 198.8 $ (1.1) (0.6) % Industrial Solutions segment earnings before income taxes % of net sales 17.9 % 18.6 % N/A (0.7) % (1) The impact of foreign currency translation was calculated by translating current fiscal year foreign currency net sales into U.S. dollars using the average foreign currency exchange rates for the prior fiscal year.
The Company considers current and historical data and uses a third-party specialist to assist management in determining these estimates. 28 Discount Rates The Company’s objective in selecting a discount rate is to select the best estimate of the rate at which the benefit obligations could be effectively settled on the measurement date, taking into account the nature and duration of the benefit obligations of the plan.
Discount Rates The Company’s objective in selecting a discount rate is to select the best estimate of the rate at which the benefit obligations could be effectively settled on the measurement date, taking into account the nature and duration of the benefit obligations of the plan.
Estimates include many factors such as the nature of the acquired company’s business, its historical financial position and results, technology obsolescence, customer retention rates, discount rates, royalty rates and expected future performance. Independent valuation specialists are used to assist in determining certain fair value calculations.
Estimates include many factors such as the nature of the acquired company’s business, its historical financial position and results, technology obsolescence, customer retention rates, discount rates, royalty rates and expected future performance.
Cash used in financing activities for the year ended July 31, 2024 was $355.9 million, compared with $222.2 million for the year ended July 31, 2023, an increase of $133.7 million.
Cash used in financing activities for the year ended July 31, 2025 was $321.7 million, compared with $355.9 million for the year ended July 31, 2024, a decrease of $34.2 million.
Foreign currency translation decreased net sales by $0.5 million, reflecting decreases in the Mobile Solutions and Life Sciences segments of $2.1 million and $0.6 million, respectively, and an increase in the Industrial Solutions segment of $2.2 million. In fiscal 2024, the Company’s net sales increased primarily from higher volume and pricing actions.
Foreign currency translation increased net sales by $8.3 million, reflecting increases in the Industrial Solutions and Life Sciences segments of $4.7 million and $5.2 million, respectively, and a decrease in the Mobile Solutions segment of $1.6 million. In fiscal 2025, the Company’s net sales increased primarily from higher sales volume as well as pricing actions.
These products are further organized by the Industrial Filtration Solutions and Aerospace and Defense business units. Within our Industrial Solutions portfolio, Donaldson provides a wide product offering in the market to industrial customers consisting of equipment, ancillary components, replacement parts, performance monitoring and service globally, that cost-effectively enhance productivity and manufacturing efficiency.
Within our industrial portfolio, the Company provides a wide product offering in the market to industrial customers consisting of equipment, ancillary components, replacement parts, performance monitoring and service globally, that cost-effectively enhances productivity and manufacturing efficiency.
Research and Development Expenses Resea rch and development expenses for the year ended July 31, 2024 were $93.6 million, or 2.6% of net sales, compared with $78.1 million, or 2.3% of net sales, for the year ended July 31, 2023, an increase of $15.5 million, or 19.8%.
Research and Development Expenses Resea rch and development expenses for the year ended July 31, 2025 were $87.8 million, or 2.4% of net sales, compared with $93.6 million, or 2.6% of net sales, for the year ended July 31, 2024, a decrease of $5.8 million, or 6.2%.
Charges of $3.8 million were included in cost of sales and $2.6 million were included in operating expenses in the Consolidated Statement of Earnings for the year ended July 31, 2024. As of July 31, 2024, $6.4 million of accrued expenses were included in accrued employee compensation and related taxes in the Consolidated Balance Sheet.
Charges of $10.3 million and $2.6 million were included in operating expenses in the Consolidated Statements of Earnings for the years ended July 31, 2025 and 2024, respectively. As of July 31, 2025 and July 31, 2024, $7.1 million and $6.4 million of accrued expenses were included in accrued employee compensation and related taxes in the Consolidated Balance Sheets, respectively.
At the time of sale to a customer, the Company records an estimate of variable consideration as a reduction from gross sales. The Company primarily relies on historical experience and anticipated future performance to estimate the variable consideration.
At the time of sale to a customer, the Company records an estimate of variable consideration as a reduction from gross sales. The Company primarily relies on historical experience and anticipated future performance to estimate the variable consideration. Revenue is recognized to the extent it is probable a significant reversal of revenue will not occur when the contingency is resolved.
The Company calculates net cash cycle as the sum of days sales outstanding and days inventory outstanding, less days payables outstanding. 26 Working capital measurements and analysis were as follows (in millions, except days): July 31, 2024 2023 Change Accounts receivable, net $ 629.7 $ 599.7 $ 30.0 Days sales outstanding 62 64 (2) Inventories, net $ 476.7 $ 418.1 $ 58.6 Days inventory outstanding 71 69 2 Accounts payable $ 379.4 $ 304.9 $ 74.5 Days payable outstanding 57 49 8 Net cash cycle 76 84 (8) Off-Balance Sheet Arrangements Joint Venture Guarantee The Company has an unconsolidated joint venture, Advanced Filtration Systems Inc.
Working capital measurements and analysis were as follows (in millions, except days): July 31, 2025 2024 Change Accounts receivable, net $ 662.2 $ 629.7 $ 32.5 Days sales outstanding 62 62 — Inventories, net $ 513.6 $ 476.7 $ 36.9 Days inventory outstanding 75 71 4 Accounts payable $ 368.6 $ 379.4 $ (10.8) Days payable outstanding 52 57 (5) Net cash cycle 85 76 9 Off-Balance Sheet Arrangements Joint Venture Guarantee The Company has an unconsolidated joint venture, Advanced Filtration Systems Inc.
In accounting for these defined benefit pension plans, management must make a variety of estimates and assumptions including discount rates and expected return on plan assets.
In accounting for these defined benefit pension plans, management must make a variety of estimates and assumptions including discount rates and expected return on plan assets. The Company considers current and historical data and uses a third-party specialist to assist management in determining these estimates.
Earnings before income taxes for the Industrial Solutions segment f or the year ended July 31, 2024 were $198.8 million, or 18.6% of net sales, an increase from 18.4% of net sales for the year ended July 31, 2023.
Earnings before income taxes for t he Mobile Solutions segment for the year ended July 31, 2025 were $417.6 million, or 18.2% of net sales, an increase from 18.0% of net sales for the year ended July 31, 2024.
Net sales for the Industrial Solutions segment for the year ended July 31, 2024 w ere $1,066.5 million, compared with $1,014.7 million for the year ended July 31, 2023, an increase of $51.8 million, or 5.1%, driven by a $33.4 million volume increase and a $16.2 million increase from pricing benefits.
Net sales for the Industrial Solutions segment for the year ended July 31, 2025 were $1,104.4 million, compared with $1,066.5 million for the year ended July 31, 2024, an increase of $37.9 million, or 3.6%, driven by a $22.4 million volume increase and a $10.8 million increase from pricing benefits.
Net sales for the Life Sciences segment for the year ended July 31, 2024 were $269.0 million, compared with $241.3 million for the year ended July 31, 2023, an increase of $27.7 million, or 11.5%, driven by a $17.6 million volume increase, a $1.0 million increase from pricing benefits and a $9.7 million increase from acquisitions.
Net sales for the Life Sciences segment for the year ended July 31, 2025 were $295.5 million, compared with $269.0 million for the year ended July 31, 2024, an increase of $26.5 million, or 9.8%, driven by a $22.9 million volume increase, partially offset by a $1.6 million decrease from pricing.
The Company estimates the fair value of technology utilizing the multi-period excess earnings method or the relief from royalty method, depending on the technology asset acquired.
The Company estimates the fair value of technology utilizing the multi-period excess earnings method or the relief from royalty method, depending on the technology asset acquired. The multi-period excess earnings method is consistent with the approach used to value acquired customer relationships and the relief from royalty method is consistent with the approach used to value trade names and/or trademarks.
The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed elsewhere in this Annual Report, particularly Item 1A, “Risk Factors” and in the Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995.
The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed elsewhere in this Annual Report, particularly Item 1A, “Risk Factors” and in the Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995. 18 Throughout this MD&A, the Company refers to measures used by management to evaluate performance, including a number of financial measures that are not defined under generally accepted accounting principles (GAAP) in the U.S.
The decrease was driven by the expected impact from investments made to scale up the Company’s recently-acquired businesses. Liquidity, Capital Resources, Capital Requirements and Financial Condition Liquidity Liquidity is assessed in terms of the Company’s ability to generate cash to fund its operating, investing and financing activities.
Liquidity, Capital Resources, Capital Requirements and Financial Condition Liquidity Liquidity is assessed in terms of the Company’s ability to generate cash to fund its operating, investing and financing activities.
Industrial Solutions sells through multiple channels which include OEMs, distributors and direct-to-consumer in some markets. The Life Sciences segment is organized by end market and consists of the Bioprocessing Equipment and Consumables, Food and Beverage, Vehicle Electrification and Medical Device, Microelectronics and Disk Drive markets.
The Life Sciences segment is organized by end market and consists of the Food and Beverage, Disk Drive, Vehicle Electrification and Medical Device, Microelectronics and Bioprocessing Equipment and Consumables markets.
Net sales by segment (in millions): July 31, 2023 Sales volume Pricing Acquisitions Currency translation July 31, 2024 Mobile Solutions segment $ 2,174.8 $ 24.3 $ 53.8 $ — $ (2.1) $ 2,250.8 Industrial Solutions segment 1,014.7 33.4 16.2 — 2.2 1,066.5 Life Sciences segment 241.3 17.6 1.0 9.7 (0.6) 269.0 Total Company $ 3,430.8 $ 75.3 $ 71.0 $ 9.7 $ (0.5) $ 3,586.3 Net sales for the year ended July 31, 2024 increased $155.5 million, or 4.5% f rom fiscal 2023, refle cting higher sales in the Mobile Solutions segment of $76.0 million, or 3.5%, the Industrial Solutions segment of $51.8 million, or 5.1%, and the Life Sciences segment of $27.7 million, or 11.5%.
Net sales by segment (in millions): July 31, 2024 Sales volume Pricing Currency translation July 31, 2025 Mobile Solutions segment $ 2,250.8 $ 14.7 $ 27.1 $ (1.6) $ 2,291.0 Industrial Solutions segment 1,066.5 22.4 10.8 4.7 1,104.4 Life Sciences segment 269.0 22.9 (1.6) 5.2 295.5 Total Company $ 3,586.3 $ 60.0 $ 36.3 $ 8.3 $ 3,690.9 Net sales for the year ended July 31, 2025 increased $104.6 million, or 2.9% f rom fiscal 2024, refle cting higher sales in the Mobile Solutions segment of $40.2 million, or 1.8%, the Industrial Solutions segment of $37.9 million, or 3.6%, and the Life Sciences segment of $26.5 million, or 9.8%.
Estimated future costs associated with actions related to this restructuring initiative are not included due to the Company’s inability to reasonably quantify the anticipated restructuring charges. During fiscal 2023, the Company announced a company-wide organizational redesign to further support the Company’s growth strategies and better serve its customers.
The estimated range of future costs associated with actions related to this restructuring through fiscal 2026 is $5.0 million to $10.0 million. During fiscal 2023, the Company announced a company-wide organizational redesign to further support the Company’s growth strategies and better serve its customers.
Charges of $2.9 million were included in cost of sales and $18.9 million were included in selling, general and administrative expenses in the accompanying Consolidated Statements of Earnings. 20 Segment Results of Operations Net sales and earnings before income taxes were as follows (in millions): Year Ended July 31, 2024 VS 2023 2024 2023 $ Change % Change Net sales Mobile Solutions $ 2,250.8 $ 2,174.8 $ 76.0 3.5 % Industrial Solutions 1,066.5 1,014.7 51.8 5.1 Life Sciences 269.0 241.3 27.7 11.5 Total Company $ 3,586.3 $ 3,430.8 $ 155.5 4.5 % Earnings (loss) before income taxes Mobile Solutions $ 404.5 $ 330.4 $ 74.1 22.4 % Industrial Solutions 198.8 186.2 12.6 6.8 Life Sciences (10.4) 9.9 (20.3) NM Corporate and unallocated (1) (57.6) (57.8) 0.2 0.3 Total Company $ 535.3 $ 468.7 $ 66.6 14.2 % (1) Corporate and unallocated includes interest expense and certain corporate expenses determined to be non-allocable to the segments, such as restructuring charges and business development expenses.
Segment Results of Operations Net sales and earnings before income taxes were as follows (in millions): Year Ended July 31, 2025 VS 2024 2025 2024 $ Change % Change Net sales Mobile Solutions $ 2,291.0 $ 2,250.8 $ 40.2 1.8 % Industrial Solutions 1,104.4 1,066.5 37.9 3.6 Life Sciences 295.5 269.0 26.5 9.8 Total Company $ 3,690.9 $ 3,586.3 $ 104.6 2.9 % Earnings (loss) before income taxes Mobile Solutions $ 417.6 $ 404.5 $ 13.1 3.2 % Industrial Solutions 197.7 198.8 (1.1) (0.6) Life Sciences 4.4 (10.4) 14.8 NM Total Segment 619.7 592.9 26.8 4.5 % Corporate and unallocated (1) (127.5) (57.6) (69.9) NM Total Company $ 492.2 $ 535.3 $ (43.1) (8.1) % (1) Corporate and unallocated includes interest expense and certain corporate expenses determined to be non-allocable to the segments, such as restructuring charges and business development expenses.
The multi-period excess earnings method is consistent with the approach used to value acquired customer relationships and the relief from royalty method is consistent with the approach used to value trade names and/or trademarks. 29 While the Company uses its best estimates and assumptions, especially at the acquisition date, including its estimates for intangible assets, pre-acquisition contingencies and any contingent consideration, where applicable, the fair value estimates are inherently uncertain and subject to refinement.
While the Company uses its best estimates and assumptions, especially at the acquisition date, including its estimates for intangible assets, pre-acquisition contingencies and any contingent consideration, where applicable, the fair value estimates are inherently uncertain and subject to refinement.
The impact of these fluctuations on net earnings was as follows (in millions): Year Ended July 31, 2024 2023 Prior year net earnings $ 358.8 $ 332.8 Change in net earnings excluding translation 56.0 40.4 Impact of foreign currency translation (1) (0.8) (14.4) Current year net earnings $ 414.0 $ 358.8 (1) The impact of foreign currency translation was calculated by translating current fiscal year foreign currency net earnings into U.S. dollars using the average foreign currency exchange rates for the prior fiscal year.
The impact of these fluctuations on net earnings was as follows (in millions): Year Ended July 31, 2025 2024 Prior year net earnings $ 414.0 $ 358.8 Change in net earnings excluding translation (46.5) 56.0 Impact of foreign currency translation (1) (0.5) (0.8) Current year net earnings $ 367.0 $ 414.0 (1) The impact of foreign currency translation was calculated by translating current fiscal year foreign currency net earnings into U.S. dollars using the average foreign currency exchange rates for the prior fiscal year. 22 Restructuring During fiscal 2025, the Company continued its global footprint and cost optimization actions to further improve the operating and manufacturing cost structure, which began in fiscal 2024.
Net sales for the Mobile Solutions segment for the year ended July 31, 2024 w ere $2,250.8 million, compared with $2,174.8 million for the year ended July 31, 2023, an increase of $76.0 million, or 3.5%, driven by a $24.3 million volume increase and a $53.8 million increase from pricing benefits.
Net sales for the Mobile Solutions segm ent for the year ended July 31, 2025 were $2,291.0 million, compared with $2,250.8 million for the year ended July 31, 2024, an increase of $40.2 million, or 1.8%, driven by a $14.7 million volume increase and a $27.1 million increase from pricing benefits.
Cash Flow Summary Cash flows were as follows (in millions): July 31, 2024 2023 $ Change Net cash provided by (used in): Operating activities $ 492.5 $ 544.5 $ (52.0) Investing activities (86.9) (327.3) 240.4 Financing activities (355.9) (222.2) (133.7) Effect of exchange rate changes on cash (4.1) (1.2) (2.9) Increase (decrease) in cash and cash equivalents $ 45.6 $ (6.2) $ 51.8 Operating Activities Cash provided by operating activities for the year ended July 31, 2024 w as $492.5 million, compared with $544.5 million for the year ended July 31, 2023, a decrease of $52.0 million.
The Company generates substantial cash from the operation of its businesses as its primary source of liquidity, with sufficient liquidity available to fund growth through reinvestment in existing businesses and strategic acquisitions. 26 Cash Flow Summary Cash flows were as follows (in millions): July 31, 2025 2024 $ Change Net cash provided by (used in): Operating activities $ 418.8 $ 492.5 $ (73.7) Investing activities (150.4) (86.9) (63.5) Financing activities (321.7) (355.9) 34.2 Effect of exchange rate changes on cash 1.0 (4.1) 5.1 (Decrease) increase in cash and cash equivalents $ (52.3) $ 45.6 $ (97.9) Operating Activities Cash provided by operating activities for the year ended July 31, 2025 was $418.8 million, compared with $492.5 million for the year ended July 31, 2024, a decrease of $73.7 million.
The increase in research and development expenses as a percentage of net sales was primarily due to increased headcount and incremental expenses associated with investments in acquired Life Sciences businesses. 19 Non-Operating Items Intere st expense for the year ended July 31, 2024 was $21.4 million, compared with $19.2 million for the year ended July 31, 2023, an increase of $2.2 million, or 11.3%.
The decrease in research and development expenses as a percentage of net sales was primarily driven by focused project prioritization. Non-Operating Items Intere st expense for the year ended July 31, 2025 was $24.2 million, compared with $21.4 million for the year ended July 31, 2024, an increase of $2.8 million, or 13.5%.
Credit Facilities European Operations Credit Facilities Rest of the World Credit Facilities Total Available short-term credit facilities $ 108.3 $ 100.0 $ 48.4 $ 46.7 $ 303.4 Reductions to borrowing capacity: Outstanding borrowings 22.8 0.2 — 5.3 28.3 Other non-borrowing reductions — — 38.9 25.7 64.6 Total reductions 22.8 0.2 38.9 31.0 92.9 Remaining borrowing capacity $ 85.5 $ 99.8 $ 9.5 $ 15.7 $ 210.5 Weighted average interest rate as of July 31, 2024 4.34 % 6.44 % N/A 0.56 % 3.62 % Other non-borrowing reductions include financial instruments such as bank guarantees and foreign exchange instruments.
Credit Facilities European Operations Credit Facilities Rest of the World Credit Facilities Total Available short-term credit facilities $ 114.5 $ 100.0 $ 50.3 $ 52.7 $ 317.5 Reductions to borrowing capacity: Outstanding borrowings — 31.2 — — 31.2 Other non-borrowing reductions — — 30.1 28.7 58.8 Total reductions — 31.2 30.1 28.7 90.0 Remaining borrowing capacity $ 114.5 $ 68.8 $ 20.2 $ 24.0 $ 227.5 Weighted average interest rate as of July 31, 2025 N/A 5.20 % N/A N/A 5.20 % 27 Other non-borrowing reductions include financial instruments such as bank guarantees and foreign exchange instruments.
The Organization for Economic Co-operation and Development (“OECD”) released the Model GloBE Rules for Pillar Two on December 20, 2021, which defined a 15% global minimum tax.
Excluding the impact of the loss on impairment of intangible assets, the effective tax rate is higher due to a decrease in discrete tax benefits. The Organization for Economic Co-operation and Development (OECD) released the Model GloBE Rules for Pillar Two on December 20, 2021, which defined a 15% global minimum tax.
Segment Reporting in the Notes to Consolidated Financial Statements, included in Item 8 of Part II in this Annual Report for further detail of this change. 16 The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) provides a comparison of the Company’s results of operations, liquidity and capital resources for the years ended July 31, 2024 and 2023.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) provides a comparison of the Company’s results of operations, liquidity and capital resources for the years ended July 31, 2025 and 2024.
Net Earnings Net earnings for the year ended July 31, 2024 were $414.0 million, compared with $358.8 million for the year ended July 31, 2023, an increase of $55.2 million, or 15.4%. Diluted EPS were $3.38 for the year ended July 31, 2024, compared with $2.90 for the year ended July 31, 2023.
Net Earnings Net earnings for the year ended July 31, 2025 were $367.0 million, compared with $414.0 million for the year ended July 31, 2024, a decrease of $47.0 million, or 11.3%. Diluted EPS were $3.05 for the year ended July 31, 2025, compared with $3.38 for the year ended July 31, 2024.
Within these business units, products consist of replacement filters for both air and liquid filtration applications and filtration housings for new equipment production and systems related to exhaust and emissions. Applications include air filtration systems, fuel, lube and hydraulic systems, emissions systems and sensors, indicators and monitoring systems.
The Mobile Solutions segment is organized based on a combination of customers and products and consists of the Off-Road, On-Road and Aftermarket business units. Within these business units, products consist of replacement filters for both air and liquid filtration applications and filtration housings for new equipment production and systems related to exhaust and emissions.
Additionally, in fiscal 2025, the Company expects its cash paid for capital expenditures to be between $85 million and $105 million, primarily associated with capacity expansion and new products and technologies. The Company’s cash requirements greater than 12 months from various contractual obligations and commitments primarily include: • debt obligations and interest payments - see Note 7.
Additionally, in fiscal 2026, the Company expects its cash paid for capital expenditures to be between $65 million and $85 million, primarily associated with capacity expansion, new products and technologies and maintaining the Company’s existing assets.
The decrease in cash provided by operating activities was primarily driven by an increase in working capital requirements during the current year based on additional inventory needs to increase on-time deliveries, partially offset by higher earnings in the current year. 24 Investing Activities Cash used in investing activities for the year ended July 31, 2024 was $86.9 million, compared with $327.3 million for the year ended July 31, 2023, a decrease of $240.4 million.
The decrease in cash provided by operating activities was primarily driven by higher working capital requirements and the timing of income tax related payments. Investing Activities Cash used in investing activities for the year ended July 31, 2025 was $150.4 million, compared with $86.9 million for the year ended July 31, 2024, an increase in cash used of $63.5 million.
Industrial Air Filtration, Industrial Gasses and Industrial Hydraulics products consist of dust, fume and mist collectors, compressed air and industrial gasses purification systems, hydraulic and lubricated rotating equipment applications, gas and liquid filtration for industrial processes and connected services which provide on-demand maintenance services and replacements to support Industrial Air Filtration products.
Industrial Air Filtration, Industrial Gases and Industrial Hydraulics products consist of dust, fume and mist collectors, compressed air and industrial gases purification systems, hydraulic and lubricated rotating filtration applications as well as gas and liquid filtration for industrial processes. Power Generation products consist of air inlet systems and filtration sold to gas compression, power generation and natural gas liquification industries.
AFSI has $63.0 million in revolving credit facilities which expire in 2027 and $17.0 million in an additional multi-currency revolving credit facility which terminates upon notification of either party. The Company does not believe this guarantee will have a current or future effect on its financial condition, results of operations, liquidity or capital resources.
AFSI has $63.0 million in a revolving credit facility which expires in 2027 and $17.0 million in an additional multi-currency revolving credit facility which terminates upon notification of either party.
Gross margin as a percentage of net sales for the year ended July 31, 2024 was 35.5% compared with 33.8% for the year ended July 31, 2023, an increase of 1.7 percentage points. The increase in gross margin as a percentage of net sales was primarily driven by lower input costs, pricing actions and favorable product mix.
Gross margin as a percentage of net sales for the year ended July 31, 2025 was 34.8% compared with 35.5% for the year ended July 31, 2024, a decrease of 0.7%.
Income Taxes The effective tax rates were 22.7% and 23.4% for the years ended July 31, 2024 and 2023, respectively. The lower effective tax rate was primarily due to an increase in excess tax benefits on stock-based compensation.
Income Taxes The effective tax rates were 25.4% and 22.7% for the years ended July 31, 2025 and 2024, respectively.
Mobile Solutions sells to OEMs in the construction, mining, agriculture and transportation end markets and to independent distributors and OEM dealer networks. The Industrial Solutions segment is organized based on product type and consists of Industrial Air Filtration, Industrial Gasses, Industrial Hydraulics, Power Generation and Aerospace and Defense products.
The Industrial Solutions segment is organized based on product type and consists of Industrial Air Filtration, Industrial Gases, Industrial Hydraulics, Power Generation and Aerospace and Defense products. These products are further organized by the Industrial Filtration Solutions and Aerospace and Defense business units.
Power Generation products consist of air inlet systems and filtration sold to gas compression, power generation and natural gas liquification industries. Aerospace and Defense products consist of air, fuel, lubrication and hydraulic filtration for fixed-wing and rotorcraft aerospace applications and ground defense vehicle and naval platforms.
Aerospace and Defense products consist of air, fuel, lubrication and hydraulic filtration for fixed-wing and rotorcraft aerospace applications and ground defense vehicle and naval platforms. Industrial Solutions businesses sell through multiple channels which include OEMs, distributors and direct-to-consumer in some markets.
The increase reflected higher interest rates. Other income, net for the year ended July 31, 2024 was $12.6 million, compared with $7.7 million for the year ended July 31, 2023, an increase of $4.9 million, or 62.6%, driven by lower foreign exchange losses in the current year and higher income from joint ventures, partially offset by higher donations.
The increase primarily reflects a higher average level of indebtedness during fiscal 2025 compared to the prior year. Other income, net for the year ended July 31, 2025 was $21.0 million, compared with $12.6 million for the year ended July 31, 2024, an increase of $8.4 million, or 66.8%, driven primarily by lower pension related expenses in the current year.
Excluding a $0.6 million decrease from foreign currency translation, net sales increased 11.7%, primarily driven by strong market demand and market share gains in disk drive, sales of bioprocessing equipment and strong food and beverage markets in EMEA.
The net sales increase was primarily driven by strong market demand in Disk Drive and strong market demand and market share gains in Food and Beverage. Foreign currency translation positively impacted net sales for the Life Sciences segment by 1.9%.
Excluding a $2.1 million decrease from foreign currency translation, net sales increased 3.6%. Net sales of Off-Road decreased $47.9 million, due to weak agriculture end market conditions.
Net sales of On-Road and Off-Road decreased $29.2 million and $21.3 million, respectively, primarily due to a decline in global equipment production driven by weak end market conditions, including transportation and agriculture.
Long-te rm deb t outstanding as of July 31, 2024 was $508.4 million compared with $621.6 million as of July 31, 2023, a decrease of $113.2 million. In fiscal 2024, the Company used strong operating cash flows to reduce the long-term debt outstanding.
Long-te rm deb t outstanding as of July 31, 2025 was $637.1 million compared with $508.4 million as of July 31, 2024, an increase of $128.7 million.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe estimated impact of foreign currency translation for the year ended July 31, 2024 resulted in an overall decrease in reported net sales of $0.5 million and a decrease in reported net earnings of $0.8 million. 30 Derivative Fair Value Measurements The Company enters into derivative instrument agreements, including foreign currency forward contracts and net investment hedges, to manage risk in connection with changes in foreign currency.
Biggest changeThe estimated impact of foreign currency translation for the year ended July 31, 2025 resulted in an overall increase in reported net sales of $8.3 million and a decrease in reported net earnings of $0.5 million.
However, an increase in commodity prices could result in lower gross profit. 31 Bankers’ Acceptance Notes Consistent with common business practice in APAC, the Company has subsidiaries which accept bankers’ acceptance notes from their customers in settlement of certain customer billed accounts receivable.
However, an increase in commodity prices could result in lower gross profit. Bankers’ Acceptance Notes Consistent with common business practice in APAC, the Company has subsidiaries which accept bankers’ acceptance notes from their customers in settlement of certain customer billed accounts receivable.
Those transactions can be denominated in those suppliers’ local currency. The Company also sells to customers in foreign countries. Those transactions can be denominated in those customers’ local currency. Both of these transaction types can create volatility in the Company’s financial statements. The Company uses foreign currency forward contracts to manage those exposures and fluctuations.
The Company also sells to customers in foreign countries. Those transactions can be denominated in those customers’ local currency. Both of these transaction types can create volatility in the Company’s financial statements. The Company uses foreign currency forward contracts to manage those exposures and fluctuations.
These contracts generally mature in 12 months or less, which is consistent with the forecasts of the related purchases and sales. Certain contracts are designated as cash flow hedges, whereas the remaining contracts, most of which are related to certain intercompany transactions which offset balance sheet exposure, are not designated as hedging instruments.
These contracts generally mature in 15 months or less, which is consistent with the forecasts of the related purchases and sales. Certain contracts are designated as cash flow hedges, whereas the remaining contracts, most of which are related to certain intercompany transactions which offset balance sheet exposure, are not designated as hedging instruments.
Interest Rates The Company’s exposure to market risk for changes in interest rates primarily relates to debt obligations that are at variable rates, as well as the potential increase in the fair value of long-term debt resulting from a potential decrease in interes t rates.
Interest Rates The Company’s exposure to market risk for changes in interest rates primarily relates to debt obligations that are at variable rates, as well as the potential increase in the fair value of long-term debt resulting from a potential decrease in interest rates.
The total notional amount of net investment hedges as of July 31, 2024 and 2023 was €80 million, or $88.8 million. The maturity dates range from 2027 to 2029.
The total notional amount of net investment hedges as of July 31, 2025 and 2024 was €80 million, or $88.8 million. The maturity dates range from 2027 to 2029.
A portion of the Company’s foreign currency exposure is naturally hedged by incurring liabilities, including bank debt, denominated in the local currency in which the Company’s foreign subsidiaries are located. During fiscal 2024, the U.S. dollar was generally stronger than in fiscal 2023 compared with many of the currencies of the foreign countries in which the Company operates.
A portion of the Company’s foreign currency exposure is naturally hedged by incurring liabilities, including bank debt, denominated in the local currency in which the Company’s foreign subsidiaries are located. During fiscal 2025, the U.S. dollar was generally weaker than in fiscal 2024 compared with many of the currencies of the foreign countries in which the Company operates.
The fair values are estimated by discounting the projected cash flows using the interest rates at which similar amounts o f debt could currently be borrowed. In addition, the Company is exposed to market risk for changes in interest rates for the impact to its qualified defined benefit pension plans.
The fair values are estimated by discounting the projected cash flows using the interest rates at which similar amounts of debt could currently be borrowed. 33 In addition, the Company is exposed to market risk for changes in interest rates for the impact to its qualified defined benefit pension plans.
The plans were overfunded by $9.6 million as of July 31, 2024, since the fair value of the plan assets exceeded the projected benefit obligation. Commodity Prices The Company is exposed to market risk from fluctuating prices of purchased commodity raw materials, including steel, filter media and petrochemical-based products including plastics, rubber and adhesives.
The plans were overfunded by $2.7 million as of July 31, 2025, since the fair value of the plan assets exceeded the projected benefit obligation. Commodity Prices The Company is exposed to market risk from fluctuating prices of purchased commodity raw materials, including steel, filter media and petrochemical-based products including plastics, rubber and adhesives.
As of July 31, 2024, the Company’s financial liabilities with exposure to changes in interest rates consisted of $110.0 million, outstanding on the Company’s unsecured revolving credit facility, €80.0 million, or $86.6 million, of a variable rate term loan and ¥2.0 billion, or $13.4 million, of variable rate senior notes.
As of July 31, 2025, the Company’s financial liabilities with exposure to changes in interest rates consisted of $60.0 million outstanding on the Company’s unsecured revolving credit facility, €80.0 million, or $91.6 million, of a variable rate term loan, $200.0 million of a variable rate term loan and ¥2.0 billion, or $13.4 million, of variable rate senior notes.
Based on the net investment hedges outstanding as of July 31, 2024, a 10% appreciation of the U.S. dollar compared to the Euro, would result in a net gain of $7.9 million in the fair value of these contracts.
Based on the net investment hedges outstanding as of July 31, 2025, a 10% appreciation of the U.S. dollar compared to the Euro, would result in a net gain of $8.6 million in the fair value of these contracts.
The overall stronger dollar had a negative impact on the Company’s international net sales and net earnings because the foreign denominated revenues translated into less U.S. dollars in many regions around the world.
The overall weaker dollar had a positive impact on the Company’s international net sales and net earnings because the foreign denominated revenues translated into more U.S. dollars in many regions around the world.
The plans’ projected benefit obligation is inversely related to changes in interest rates. Consistent with published bond indices, in fiscal 2024, the Company decreased its weighted average discount rate from 5.58% to 5.44% on its U.S. plans and decreased its weighted average discount rate from 4.80% to 4.33% on its non-U.S. plans.
The plans’ projected benefit obligation is inversely related to changes in interest rates. Consistent with published bond indices, in fiscal 2025, the Company increased its weighted average discount rate from 5.44% to 5.60% on its U.S. plans and increased its weighted average discount rate from 4.33% to 4.82% on its non-U.S. plans.
As of July 31, 2024 and 2023, the Company owned $8.4 million and $13.2 million, respectively, of these bankers’ acceptance notes and includes them in accounts receivable on the Consolidated Balance Sheets. 32
As of July 31, 2025 and 2024, the Company owned $8.6 million and $8.4 million, respectively, of these bankers’ acceptance notes and includes them in accounts receivable on the Consolidated Balance Sheets. 34
As of July 31, 2024, short-term borrowings outstanding consisted of $28.3 million . Assuming a hypothetical 0.5 percentage point increase in short-term interest rates, with all other variables remaining constant, interest expense would have increased approximately $1.2 million in t he 12 months ended July 31, 2024 .
As of July 31, 2025, short-term borrowings outstanding consisted of $31.2 million. Assuming a hypothetical 0.5 percentage point increase in short-term interest rates, with all other variables remaining constant, interest expense would have increased approximately $2.0 million in the 12 months ended July 31, 2025. The Company had no interest rate hedging agreements in fiscal year 2025 or 2024.
The total notional amounts of the foreign currency forward contracts designated as hedges as of July 31, 2024 and 2023 were $32.3 million and $84.9 million, respectively. The total notional amounts of the foreign currency forward contracts not designated as hedges as of July 31, 2024 and 2023 were $249.7 million and $147.5 million, respectively.
The total notional amount of the foreign currency forward contracts designated as hedges as of July 31, 2025 and 2024 were $35.7 million and $32.3 million, respectively. The total notional amount of the foreign currency forward contracts not designated as hedges as of July 31, 2025 and 2024 was $189.6 million and $249.7 million, respectively.
The Company only enters into derivative instrument agreements with counterparties who have highly rated credit. See Notes 12, 15 and 16 in the Notes to Consolidated Financial Statements in Item 8 of this Annual Report. Foreign Currency Forward Contracts - Cash Flow Hedges and Derivatives Not Designated as Hedging Instruments The Company buys materials from foreign suppliers.
See Notes 12, 15 and 16 in the Notes to Consolidated Financial Statements in Item 8 of this Annual Report. Foreign Currency Forward Contracts - Cash Flow Hedges and Derivatives Not Designated as Hedging Instruments The Company buys materials from foreign suppliers. Those transactions can be denominated in those suppliers’ local currency.
The Company had no interest rate hedging agreements in fiscal year 2024 or 2023. Interest rate changes would also affect the fair market value of fixed-rate debt. As of July 31, 2024, the estimated fair values of fixed interest rate long-term debt were $267.7 million c ompared to the carrying values of $300.0 million.
Interest rate changes would also affect the fair market value of fixed-rate debt. As of July 31, 2025, the estimated fair values of fixed interest rate long-term debt were $247.5 million compared to the carrying values of $275.0 million.
Added
Derivative Fair Value Measurements The Company enters into derivative instrument agreements, including foreign currency forward contracts and net investment hedges, to manage risk in connection with changes in foreign currency. The Company only enters into derivative instrument agreements with counterparties who have highly rated credit.

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