Donaldson Company, Inc.

Thank you for standing by and welcome to the Donaldson Company third quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again press the star one. Thank you. I'd now like to turn the call over to Sarika Dodwell, Senior Director of Investor Relations and ESG. You may begin.

Good morning. Thank you for joining Donaldson's third quarter fiscal 2024 earnings conference call. With me today are Todd Carpenter, Chairman, CEO, and President, and Scott Robinson, Chief Financial Officer. This morning, Todd and Scott will provide a summary of our third quarter performance and details on our outlook for fiscal 2024. During today's call, we will discuss non-GAAP or adjusted results. While there were no non-GAAP adjustments in the third quarter of either fiscal 2024 or 2023, for the full year fiscal 2023, non-GAAP results exclude pre-tax restructuring and other charges of $21.8 million. 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 Todd Carpenter. Please go ahead.

Thanks, Arka. Good morning. Donaldson Company's third quarter results were excellent. Sales increased 6% to a record $928 million. EPS increased 22% to a record 92 cents. And operating margin was at more than a decade-long high. All three operating segments demonstrated growth and profitability. In mobile solutions, volume growth exceeded pricing gains driven by strength in our aftermarket business. We continue to benefit from market share gains as well as a return to more normalized demand levels after destocking in the prior year period. Profitability in mobile solutions continues to be exceptional. Pre-tax profit margin hit an all-time high of 18.4%. This 340 basis point improvement over prior year was the result of favorable mix, volume growth, and pricing. In industrial solutions, sales strength and high levels of profitability continued, driven by project wins and market share gains in dust collection and power generation. Aerospace and defense also had a strong quarter, and backlogs remain robust. We maintain focus on advancing our create, connect, replace, and service model. This quarter, we acquired Easy Flow Filtration, an industrial services business in LaGrange, Georgia. Easy Flow brings to Donaldson additional service capabilities in both hydraulic and power generation filtration and a new geographic presence in the southeast United States. In life sciences, we achieved sales growth above 20% and profitability through strength in our bioprocessing and disk drive businesses. We also continued to build for the future. In April, we entered into an agreement to acquire a 49% stake in MedicaSPA, a leader in hollow fiber membrane technology based in Metala, Italy. This transaction is expected to be completed through a public tender offer and includes a call option to acquire the remaining 51% stake in the company in the years to come. Donaldson and Medica have a previously established relationship through an exclusive joint development agreement allowing for the development and commercialization of hollow fiber modules in life sciences applications, including bioprocessing and food and beverage. These modules can be used with Solaris, Universal Technologies, and Isolair products. demonstrating our vision and progress toward providing customers with a complete and differentiated product portfolio. From an operational standpoint, backlogs across all three segments remain strong, indicating the overall health of our businesses for the foreseeable future. With supply chain conditions mostly supportive, Donaldson's customer focus remains steadfast as we continually work to improve on-time delivery rates. This quarter, R&D, capital expenditures, and M&A activity continued as we invested to meet the future needs of our customers. R&D included product development initiatives in our legacy and newly acquired businesses, and we expect to grow our investment levels double digits for the full year. Capital expenditures were primarily focused on increasing capacity and expanding new products and technology including in our life sciences segment. In keeping with our M&A strategic focus areas, we also deployed capital on the previously mentioned industrial services acquisition, EasyFlow. Now I will provide some detail on third quarter sales. Total company sales were $928 million, up 6% compared with prior year. Pricing contributed approximately 2%. In mobile solutions, total sales were $585 million, a 6% increase versus 2023. Mobile aftermarket sales grew 11% year over year to $445 million. Independent channel sales grew mid-single digits from market share gains, and OE channel sales were up mid-teens as demand returned to more normalized levels following destocking in the prior year period. partially offsetting the strong aftermarket performance where declines in the first fit businesses. Sales in on-road were $36 million, down 6% due to lower levels of equipment production, particularly in APAC. Off-road sales of $104 million declined 10% as agriculture markets remain soft and business in China continues to be weak. To that end, I will touch on our mobile solutions business in China in aggregate, where sales decreased 32% over prior year. Both first hit an aftermarket sales decline impacted by weak overall demand and the timing of Chinese New Year, which fell into the third quarter this year versus the second quarter a year ago, resulting in fewer shift days this year. Despite the challenging nature of the China market today, we remain optimistic with respect to the long-term market growth opportunities and our ability to gain share there over time. Now I'll move on to the industrial solution segment. Industrial sales increased 3% to $269 million. Industrial filtration solutions, or IFS, sailed through 2% to $229 million due to strong dust collection replacements. part sales, and power generation product timing. Aerospace and defense sales rose 6% to $41 million during by robust aerospace and market conditions. In the life sciences segment, sales were $74 million, up 24% year-over-year as a result of bioprocessing equipment and disk drive strength. Acquisitions added approximately $10 million, or 15 percentage points of sales growth, due in large part to the timing of project shipments. In summary, I am proud of what the Donaldson team accomplished this quarter. Driven by the strong results and our outlook for the fourth quarter, we are increasing our full year earnings guidance, which Scott will detail. Fiscal 2024 is forecasted to be a year of record sales, record operating margin, and record earnings. Now I'll turn it over to Scott, who will provide more details on the financials. Scott? Thanks, Todd.