Donaldson Company, Inc. (NYSE:DCI) Q3 2023 Results Conference Call May 31, 2023 10:00 AM ET

Company Participants

Sarika Dhadwal - SD, IR

Tod Carpenter - Chairman, CEO & President

Scott Robinson - CFO

Conference Call Participants

Nathan Jones - Stifel

Brian Drab - William Blair

Dan Rizzo - Jefferies

Rob Mason - Baird

Operator

Good morning. My name is Emma, and I will be your conference operator today. At this time, I would like to welcome everyone to the Donaldson Company, Inc. Third Quarter 2023 Earnings Conference Call. [Operator Instructions].

Sarika Dhadwal, Senior Director of Investor Relations, you may begin your conference.

Sarika Dhadwal

Good morning. Thank you for joining Donaldson's Third Quarter Fiscal 2023 Earnings Conference Call. With me today are Tod Carpenter, Chairman, CEO and President; and Scott Robinson, Chief Financial Officer. This morning, Tod and Scott will provide a summary of our third quarter performance and an update on our outlook for fiscal 2023.

During today's call, we will discuss non-GAAP or adjusted results. A reconciliation of GAAP to non-GAAP metrics is provided within the schedules attached to this morning's press release. Additionally, please keep in mind that any forward-looking statements made during this call are subject to risks and uncertainties, which are described in our press release and SEC filings.

With that, I'll now turn the call over to Tod Carpenter. Please go ahead.

Tod Carpenter

Thanks, Sarika. Good morning. Third quarter was another record quarter for Donaldson Company. We continued the trends seen in the first half of this fiscal year. Compared with prior year, we grew our top line to a quarterly record, expanded both gross and operating margins over 100 basis points, delivered double-digit earnings growth and produce cash conversion of approximately 105%.

Before diving deeper into the quarterly results, I would like to express how pleased we were to have so many of you participate either in person or virtually at our Investors Day in April. It was a big day for our company, and I will recap some key takeaways. We demonstrated our leadership position and strategy across all 3 segments that together drives our expectation to achieve sales of approximately $4 billion and operating margins in the 16% range by fiscal 2026.

More specifically, I would like to highlight our new Life Sciences segment where there are significant compelling opportunities driven by organic and inorganic investments, including the recent acquisitions of Solaris, Purilogics and Isolere Bio. These businesses combined with Donaldson's technologies and expertise provide a portfolio of opportunities across several end markets such as food and beverage, alternative proteins, bioprocessing and medical devices.