We are. We have the great pleasure of having Donaldson with us again, Ticker DCI. Minneapolis-based global manufacturer of filtration systems and replacement parts, and has some exciting technologies in the Life Sciences business. Tod Carpenter, company's Chairman, President, and CEO, is here, as is Richard Lewis, the company's COO. Hi, Derek. The company is about 115 million shares. Trades around 85. It's about a $10 billion equity cap business, about $10.4 billion total enterprise value. Had the pleasure of having Donaldson here as long as I can remember, and the shareholder returns will tell you that you should probably pay attention. Tod's going to come up with a few slides, and then we'll get into some Q&A. Thank you very much. Thanks, Brian. Appreciate it. Safe Harbor announcement here to please all the lawyers. You've all read it before. Won't spend time. The important thing here is that we actually completed our first quarter three days ago. Any remarks that I do make will actually be looking back to the close of our fiscal year, reminding you that our fiscal year is August 1 - July 31. We'll be reporting our first quarter at the end of this month. Five takeaways that I'd like to have you really remember about our corporation. Strategy is simply defined as choices. Our first choice is to be a technology leader in filtration. Second choice is to be everywhere the customers want us to be. Therefore, we are a global company. The third choice is to have deep customer relationships. Because we are technology-driven, that allows us to have best-in-class technology. Three years ago, we redesigned our company from a regional-based company to more of a vertically-based, business-oriented company. That has allowed us to make faster decisions and be more agile. Our solutions help our customers meet their sustainability targets. We have clear, strategic, and balanced growth strategies across every one of our businesses. About three years ago, we actually entered into the life sciences segment, which we'll talk further in the presentation. This is a very important slide, probably the best slide in the pitch if you want to understand one thing about our company. We are a 110-year-old filtration company. We are roughly at around $10 billion market cap at close market today. We have over 3,000 active patents. We said we are a technology-led filtration company. What that really means is between Investors' Day of April 2019 and Investor Day of April 2023, on average, somewhere in the world, Donaldson Company was granted a patent every day. We really look to be differentiated through technology. Our model is proprietary filtration to sell razor blades. Razors to sell razor blades. You see that in the lower left, where 68% of our products are replacement parts. 32% are that first-fit or CapEx-based parts. You look in the lower right. You can see coming out of COVID. You look at our revenue, we have been putting up record after record after record after record. Four years in a row and running, both in EPS as well as revenue. We look to continue our growth this fiscal year. I'll show you that in a couple of slides. We've sent U.S. and Canada, 30% in Europe, 10% in Latin America, and 17% in APAC. It's important on the lower bars. The lighter blue is that aftermarket piece. The darker blue is that first-fit piece within each of those business segments. We are represented physically in about 80% of the countries in the world that our customers want us to be. The second checkmark there on the right is very important in this world of tariffs. 75% of everything that we manufacture is manufactured in the region that it is consumed. That allows us great flexibility where our customers want us to manufacture. Also, on our $3.7 billion worth of revenue last year, our tariff exposure was $35 million. You can see that strategy of being where the customer wants us to be and manufacturing within region has really served Donaldson Company well, allows us to be agile and flexible for the customers in this time of uncertainty. I told you about the records we put up last year. Here is our guidance that we just put out. It is yet another record. We will be $3.8 billion. We will also put up record operating margin at 16.4% at midpoint, or expanding roughly 180 basis points of operating margin over a three-year period. Our EPS will also be a record at $4. Important, last year, we did raise our dividend by 11%. We are a proud member of the Dividend Aristocrats Fund, meaning we have increased our dividend for at least 20 years in a row. For Donaldson Company, it's actually 30. I told you we're a filtration leader. When you look at our competitive advantages, we have a long history of solving complex customer problems. We do have deep customer relationships. We are an industry leader in all the markets that we do serve. Again, high aftermarket retention due to that razor-to-sell razor blade model. We have best-in-class operations. We have now, coming out of COVID and then the subsequent supply chain issues that everyone in the world suffered through, we have now taken our late positions to all of our customers even lower than it was pre-pandemic. Our supply chain issues are certainly behind us as a company. When we talk about best-in-class operations, that's what we mean. We have three reporting segments: mobile solutions, industrial solutions, and life sciences. All three have opportunities for growth. Within mobile solutions, think of all the alternative fuel opportunities, as well as many aftermarket opportunities within diesel-based applications. In industrial solutions, we are digitizing that space and connecting all of our products, thus allowing deeper relations with our customers and driving the aftermarket back. A few years ago, when you talked to us about our industrial space, we would tell you our first-fit programs were about 65% of that particular segment and aftermarket was 35%. Today, it's now 50/50. That shows the strategy execution that we have had. Within life sciences, within the bioprocessing segment, that's elongated. It's well known in the industry. That's pushed out a couple, maybe two, maybe three years for us on some of the differentiated products that we are bringing out to market due to the end market headwinds. However, that particular segment for us is doing very good in the food and beverage, which has similar technologies to the areas within the bioprocessing side. Also, as a result of cloud-based storage, our disc drive business continues to grow nicely. Our use of cash over the last three years, our priorities remain the same: invest in the company in order to drive organic growth, M&A opportunities, dividends. Again, we talked about we did raise dividend last year and then share repurchases. We are a consistent story on dividends and share repurchases. We typically buy back 1% within share repurchases in order to offset dilution. We have guided 2.5% this year. Last year, frankly, our stock price got ridiculous. Therefore, we bought 4%. It was really the proper move for the company at the time because actually what that did to our net debt-to-EBITDA ratio was took it all the way up to 0.7. We have a strong balance sheet, and that seemed like the right thing to do. We like to run the company roughly at about one-time long-term debt, 85% free cash flow. We have available to us, with all the documents we have today, $700 million. Truth is, we can get a whole lot more than that very quickly because of the strength of our balance sheet. That makes us an acquirer of choice. Again, we are a leader in filtration. We do have best-in-class technology. We help our customers solve their complex needs. Our strategy is a balanced growth strategy along with M&A. We have entered strongly into the life sciences segment. Very quick overview of our company. With that, I'll toss it over to Brian for questions. Yeah, great. And thank you, Tod. Go ahead. No. Okay. Thank you. Yeah. 68% replacement, love that business. Okay. Can you talk about the life of the filter and how it has changed over the years, whether it's been extended, and whether or not there's a threat to someone making a very long-life filter, which would impact your sales growth? Sure. The actual replacement cycle depends upon the application. If you look at a long-haul truck, it's going to be about once a year. If you look at a mining opportunity, for example, it could be every two weeks, right? That hasn't really changed. Sorry, go ahead. That hasn't really changed. As far as extending the life, customers are looking at really driving costs down, first-fit costs more than the life opportunity. If you can give them equal life, less cost, they'll take it. One example, if you look at overroad trucking, and you'll see the trucks with the stainless steel cylinders on the side, very boxy. We make those in Greenville, Tennessee. Our technology, PowerCore, reduced that particular application by 70% with the same filtration outcomes, so exactly the same performance. It allowed them to put it under the hood, going after aerodynamics. Obviously, that gave us a leg up in the aftermarket because it's a highly proprietary technology. People look more to that rather than extending the life. We could, for example, take your lubrication filter, and we could make that last one year, two years, whatever you want. You don't want to pay for that. That really isn't what's driving the marketplace. Tod, just kind of taking a step back. Strategically to talk about strategy. And life sciences specifically, given that maybe the drug development cycle has been slower than otherwise anticipated, how do you balance strategic priorities for both your core engine and industrial business and also life sciences now going forward, particularly from an M&A perspective? Sure. What we're really doing, we talked a lot about life sciences because that was a new entry. We invest in our core technologies and life sciences organically to win where we can win. We press hard where we see opportunities. You see that strategy paying off in the market share gains within our mobile solutions business as well as our industrial businesses. Those strategies are doing quite nice for us. We press wherever we can on the organic side. Within life sciences, since those are new products, and two of the acquisitions, for example, were zero revenue-based companies, they were really pre-revenue. We were going to really drive that out to the market. It's just elongated on us. We still like the market space. We will look to acquire, really, and this is part of maybe part of what's maybe overemphasized on the life sciences. We would buy into mobile solutions if there was a technology advantage, for example, in alternative fuels. We'd buy there. We'd certainly buy into the industrial space in order to help that business and do more bolt-ons. We are also keen in the life sciences space. Our M&A strategy is really more broad-based than probably understood. Understood. Talking about portfolio evolution over the next several years, how much of what you're looking for is, we'll call it, breadth of offering versus penetration deeper into markets with customers? Yeah. So I think the evolution of the company over the next few years will really be our best opportunities are more aftermarket, mobile solutions as well as industrial solutions, simply because the OE portions, remember, construction, mining, ag, and long-haul trucks are all down right now. So that's that 32%-35% of our company are feeling headwinds. In spite of that. Every year for the last four years, we have grown. And when those companies come back, when those markets come back, I mean, they don't come back by 5%. They come back by 15% or 20%. You see that in long-haul trucks, for example. They're down from 320,000 down to somewhere in the neighborhood of 210,000. That will come back. We've seen that before in the 2012 - 2016 recession. We feel this is more similar to that type of an activity and expectations looking forward. Short-term, our aftermarket opportunities are really going to drive us. When those other markets bounce, clearly we'll have tailwinds because of our aftermarket opportunities and our first-fit positions with the OEs. Let's spend a couple of minutes talking about what you're seeing in those off-road markets and then a couple of minutes on the on-road. Whether it's ag or mining or construction, as far as any sort of green shoots that you might be looking for, I think you all talked about it a little bit on the last call. Sure. Maybe I'll let Rich talk through that one. Are we on? Yep. Yeah. I think if you take the aftermarket side of the business, we're seeing demand coming through pretty much at pull-through levels. Kind of normalized inventory. I would say last year, it was sort of region by region. We saw a lot of strength in Europe, in the U.S., some tough economic conditions in APAC and Latin America. This year, we're seeing sort of broad-based improvement. Good on the aftermarket side. On the first-fit side, I think we're at bottom for sure. We're looking for green shoots. I don't think there's anything clear that says it's coming back quickly. We do feel like we have bottomed. Those markets are going to bounce in the next 12-18 months. We'll start to see some life would be expected based on past cycles. It may not be exactly the same as last year, but I think that's what we're expecting. Tod, you have been very good at the razor-and-blades model. And the margins. Can you just help us out with regards to the military and defense and aerospace, particularly in what's going on in Europe? Anything there that we should be kind of thinking about? And obviously, in Life Sciences, your EBIT margins. What do you think five years from now? How close will they get to the corporate averages? Aerospace and defense first. We have an aerospace and defense business that's grown nicely the last couple of years, much like everyone in A&D. We did expand our overall operating margin within that particular segment. We are taking actions to also continue to improve that operating margin. For example, we're shutting down a manufacturing plant in California right now. It'll be shut at the end of March. Still keeping it manufactured in the United States, but it's clear there's a better cost structure out there. It's kind of standard work for us. With A&D, that's what's happening. As far as programs, we do have some long-term programs that actually now go away, replaced by some new programs like the H-53K helicopter, which is really just starting to get going. That's all Donaldson Technology. A&D has nice momentum. It's above company average operating margin. It'll continue to expand. We'll continue to grind out more wins there. Grind that out because I say that is the single longest sales cycle of any business in the company. It is not months. It is years. It could be decades before you see revenue on that. When you look at the life sciences, what we did within the last year and a half, we had a big appetite when we went in strategically. Things were really going well. The momentum was real positive within that particular industry. A lot of inventory started happening post-COVID. It really put us back on our heels. We focused that particular business so that we can then really cut down our appetite, if you will. You can't eat the whole smorgasbord, right? That's what we did. We now have chosen and proprietized what we believe are our best opportunities going forward. I think over the next five years, you'll see that whole business get up to the company average. When I say company average, we're not going to be sitting at 16.4 where our guide is. We'll continue to expand as a company. Over five years, that will be to the new company average. We see that path available to us. You've spoken at length over the course of the last year or so about telematics and your ability to gain greater aftermarket share, particularly in the industrial side. Talk about that initiative and how that's bearing for. Yeah. This is really cool. If you look at a dust collector, which us filter geeks, we look at fondly, you'll drive down the road, you'll see these big dust collectors. If you have a mist, a particulate, or a fume in a particular application of industrial, that's where our Torit-based business goes in. We are connecting those so that you can send alerts to the maintenance person to say, "Listen, go out and change the trash." Okay? For example, that collects a lot of particulate. If you do not actually empty that trash, we call it a hopper, but it is really a trash can, it could ingest back up into your dust collector, shut your entire manufacturing process down, and you'll be shut down for two or three hours, no longer making widgets. If you just do what our alert says, it takes you 15 minutes, you keep going. We went to one site, for example. We said, "Look, here is the value proposition." They said, "Okay, we'll try one." After a month, they called us back and said, "We have 60 collectors on site. Outfit all of them." We are really getting good momentum. Why is this important? Deeper customer relationships, like our strategy calls for. The aftermarket opportunity, because it is so easy to do business with us at that point, is about three to four times more than what a non-connected dust collector is. We look to continue to press that forward. It is part of the quiet little secret of the growth that we are seeing in our industrial aftermarket. We actually need to really hook them up faster, if you will. We look to hook up about another between 2,000 and 2,500 this fiscal year. The momentum will continue to grow. Does that same technology translate for your engine markets? It's different within engine. A lot of this AI and all the conversations within filtration industries, if you just take our products, for example, and you can imagine a filter, you can't put AI in a filter, right? Within an overall system base, you can put sensors, right? The sensors then will give you operational data that come back to us, which allow us then to turn the world into our laboratory. Our first-fit-based systems then become best in class applications for all of the customer base. You can reduce the size of them and really give the customer a better experience. That's what we're really looking to do. It's really more of a sensor game for us rather than digitizing some other kind of application, if you will. Talk about the last three or four years. You've done a spectacular job in your core business, driving profitability. We're in a very fluid environment from a tariff standpoint now. Maybe what lessons from supply chain disruptions have you been able to kind of make just a part of who Donaldson is right now from an operating standpoint? How are you a better operator now as a result of the? Yeah. First, I would tell you I thank our operations teams daily. Simply put, we're good. I know during the overall supply chain disruptions, we weren't where we wanted to be, but we were better than all of our competitors. We had customers calling us from our competitors and saying, "Hey, can you please sell to us?" Our answer was no, because we're going to take care of the customers that we have. That turned out pretty interesting in today's environment because some customers are calling us back and saying, "Hey, I really like what you did there. Will you take me now?" You can see that within some of the aftermarket share gain that we have been getting. Strategically, our operations team is doing really, really tremendous work. We always consider standard work as taking a look at every plant, have that plant stand up on its own merits. We are currently in the process of shutting down three manufacturing plants, one in California, a large one in California, a very small one in California, which will then rid us of all manufacturing in California. We just finished shutting down one in England, and we sold the land there. We continue to focus in on where our cost structure is best laid. We just consider that standard work. That's really more of who we are within our operations team. It's really helped. You can see our operation expansion here in the last couple of years. Looking at your balance sheet, clearly very conservatively levered, but part of that is just simply due to the amount of cash that you all generate. From an M&A pipeline standpoint, anything that we should be thinking about you wanting to expand in your core engine or industrial segments? If you take a look at industrial, we have a host of businesses within industrial. We do everything from industrial dust. We do industrial hydraulics, right? So we're doing air and liquid across multiple applications. We look to do bolt-ons within those opportunities geographically, technologically. That is really a focus for us. If we can expand and continue to diversify the company with new industrial-based applications, filtration focus, where we have an underlying technology that gives us an advantage, we'll continue to do that. Our M&A pipeline is full. It's strategic. And we continue to work it every single day. Question? Oh, okay. Are you shutting down the two California plants because of our rules and regulations? Rules, regulations, cost, all of it. Why is cost so high? Really, when you consider all the overheads and the cost of doing business in California, it is really problematic. I'll tell you what. We're moving this to the Heartland. We're moving that entire manufacturing plant to Illinois. The payback, two and a half years. Okay? That should tell you how bad California has gotten. Wish you could tell our governor that. That's someone else's job. We're just trying to be a filter company. I'll leave that to everyone else. Mario. Did you have one? Okay. You went to 4% of shares on the repo last year. Would there ever be a scenario where you just decided, similarly, when the stock got silly, that it's effectively an M&A of your own company? Why not even be more aggressive than that? I don't think that's—I don't think going private is the best use of cash for us. Oh, I didn't quite say all that. You said that. And now it's in my head. Look, we'll continue to be opportunistic on the buyback, but buyback's not our story. Buyback's not even our game, right? We're just a consistent buyback company. We just do 1% to offset dilution. The only reason we acted the way we did last year is, frankly, it was ridiculous. Okay? We were down to like $61-$62. Today, we're sitting at $84. I mean, it just made sense. That was the best use of cash. Because we had such a strong balance sheet, I think at the time we were 0.6, we went all the way up to 0.8, and now we're back down to 0.7. We returned over $400 million to the shareholders last year in the form of buybacks and dividends. It was just an opportunistic moment that we couldn't pass. That's not who we are, though. Victims of your own success in very difficult environments. I applaud performance by the operating team as well, Rich. I thank you all for being here. It's always great that you support us every year. Thanks. Appreciate it. Thanks for your interest.