Donaldson Co. said Wednesday that profits rose 13% in the fall quarter as it continued to expand into the life sciences business, a major turn from its decades as a maker of industrial filters and mufflers.
The Bloomington-based manufacturer reported earning $87.2 million, or 70 cents a share, in the quarter ended Oct. 31, the first of its new fiscal year. That's after a $7.6 million charge related to the restructuring of its business segments.
"Once again, we delivered double digit top and bottom line growth," said Tod Carpenter , president and chief executive of the company.
Revenue increased 11% to $847.3 million and grew strongest in the company's engine products segment, the business that provides mufflers for trucks and cars. The unit's revenue rose 15% to $604.5 million.
Donaldson had reported its results in two segments: engine products and industrial products. But executives said Wednesday that in the future, they will report results in three segments: mobile solutions, industrial solutions and life sciences.
The company made two life sciences acquisitions in the past year: Solaris Biotechnology Solutions, a 30-employee Italian company that makes bioprocessing equipment, and Purilogics LLC, an early-stage biotechnology company based in Greenville, S.C.
Donaldson paid a total of about $75 million for the companies. The life sciences segment has higher profit margin potential than Donaldson's industrial segments, executives have said.
Carpenter told analysts Wednesday that the restructuring will achieve three goals: It will put a focus on end market customers in each segment by aligning costs and resources, offer more opportunity for employee development and put more profit and loss responsibility within the segments.
"This creates greater internal ownership and accountability for short- and long-term performance," Carpenter said.
The restructure is mainly about business line reporting and will not result in layoffs, he said.
Donaldson expects to finish the restructuring plan in the current quarter when it will report results under the new segments, but will provide historical comparisons for each segment before reporting second-quarter results.
The company's shares rose 3% on Wednesday, in line with gains in the broader market.