Donaldson Company, Inc. (NYSE:DCI) Q2 2023 Earnings Conference Call March 1, 2023 10:00 AM ET

Company Representatives

Tod Carpenter - Chairman, Chief Executive Officer, President

Scott Robinson - Chief Financial Officer

Sarika Dhadwal - Senior Director of Investor Relations

Conference Call Participants

Bryan Blair - Oppenheimer

Dan Rizzo - Jefferies

Rob Mason - Baird

Dillon Cumming - Morgan Stanley

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, Second Quarter 2023 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions]. Thank you.

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

Sarika Dhadwal

Good morning. Thank you for joining Donaldson's second 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 second quarter performance and an update on our outlook for fiscal 2023. As a reminder, we are now reporting our results under three segments: Mobile Solutions, Industrial Solutions and Life Sciences. On January 25 we provided an 8-K showing select historical financial performance under this new segment structure. This 8-K as well as our regular supplemental quarterly earnings presentation can be found on our Investor Relations website at ir.Donaldson.com.

During today's call, we will discuss non-GAAP or adjusted results. For the second quarter of fiscal 2023, non-GAAP results exclude $9.3 million of non-recurring, pretax, restructuring and other changes, largely related to our previously announced organizational redesign, as well as costs associated with the exiting of the lower margin customer program.

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 the 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, everyone. I am pleased to report Donaldson company’s strong second quarter earnings results. Significant gross margin expansion driven by favorable pricing and the continued stabilization of input costs resulted in an operating margin above 15%. For the second quarter in a row, we achieved an operating margin at a six year quarterly high.