Item 7.01. Regulation FD Disclosure
Changes to Reporting Segments
On November 30, 2022, Donaldson Company, Inc. (the “Company”) announced a change to its reporting segment structure associated with the Company’s organizational redesign. The Company will discontinue reporting results in terms of the Engine Products and Industrial Products operating segments, and instead has reorganized its existing businesses into three new operating segments: Mobile Solutions, Industrial Solutions, and Life Sciences. The change was effective November 1, 2022, which coincided with the beginning of the Company’s fiscal second quarter. These changes have no effect on the Company's previously reported consolidated financial statements or results of operations.
For mapping purposes, below are the notable changes and comparisons:
a.Mobile Solutions:
i.The segment is comprised of Off-Road, On-Road and Aftermarket.
ii.The revenue for Off-Road and Aftermarket are largely consistent with the previously reported Off-Road and Aftermarket businesses; however, they are not identical as the new segment excludes sales of the Company’s Industrial Hydraulics (formerly Stationary Hydraulics) business.
b.Industrial Solutions:
i.The segment is comprised of Industrial Filtration Solutions (IFS) and Aerospace and Defense.
ii.IFS includes Industrial Air Filtration, Industrial Gases, Power Generation (formerly Gas Turbine Systems) and Industrial Hydraulics.
c.Life Sciences:
i.The segment is comprised of Special Applications, solutions for the food and beverage market and bioprocessing equipment and consumables.
The Company also reports Corporate and unallocated, which includes interest expense and certain corporate expenses determined to be non-allocable to the segments, such as restructuring charges and incentive compensation.
Select financial information for the fiscal years ended July 31, 2022, 2021 and 2020, as well as the interim periods for the years ended July 31, 2022 and 2021 and the first quarter of the fiscal year ending July 31, 2023 has been recast to reflect the new reporting segments, and are furnished herewith as Exhibit 99.1. The figures presented are based on the Company’s historical classification of expenses based on the historical segment structure. The Company expects the expense composition to evolve as the organizational redesign is completed and the Company drives incremental investment in businesses with high sales growth and profitability potential. Consequently, the historical profit by operating segment may not be representative of results in future periods.
The recast items furnished herewith have been updated to reflect the change in the Company’s segment reporting described above. These select recast segment financial results have not otherwise been updated for activities or events occurring after the date the Company filed the Annual Report on Form 10-K for the year ended July 31, 2022, filed with the United States Securities and Exchange Commission (the “SEC”) on September 23, 2022 (the “2022 10-K”), or the Quarterly Report on Form 10-Q for the quarter ended October 31, 2022, filed with the SEC on December 7, 2022 (the “2023 Q1 10-Q”), as applicable, and the recast results included herein do not modify or update any other disclosures therein in any way. Without limitation of the foregoing, this filing does not purport to update the Safe Harbor Statement, Management’s Discussion and Analysis of Financial Condition and Results of Operations or the Risk Factors sections of the 2022 10-K or 2023 Q1 10-Q for any information, uncertainties, transactions, risks, events or trends occurring, or becoming known to management subsequent to the dates of filing such reports. Therefore, this filing should be read in conjunction with the 2022 10-K and the 2023 Q1 10-Q.