A maker of filters and filtration systems used everywhere from tractor engines to hospital labs. Its products — like PowerCore® air filters, dust collectors, and bioprocessing gear — keep construction, farming, aerospace, and life-sciences equipment running clean, sold to manufacturers and as replacement parts. The company began in 1915, when salesman Frank Donaldson rigged a tractor air cleaner out of a wire cage, eiderdown cloth, and an eight-foot pipe after watching a farmer's machine choke on Utah dust; his boss dismissed the idea, so he started his own company. That first makeshift "Twister" filter grew into one of the world's largest filtration businesses.
Operating income more than doubled to $155.3M as a prior-year $62M impairment did not recur, while gross margin fell to 33.5% on production relocation costs.
A $62 million charge from last year vanished, and more than doubled. rose 5.9% to $995.1 million, but fell 0.7 points to 33.5% as costs from relocating Power Generation equipment production weighed on results. The company closed the Facet acquisition after the quarter, adding roughly $820 million in new debt.
Key takeaways
rose 77.7% to $155.3 million, as the prior-year quarter included a $62.0 million non-cash of Life Sciences that did not recur.
fell 0.7 percentage points to 33.5%, driven by $9.1 million in costs from footprint optimization and operational inefficiencies tied to shifting Power Generation equipment production.
rose 5.9% to $995.1 million, led by an 8.1% increase in Mobile Solutions and a 12.7% increase in Life Sciences, while Industrial Solutions declined 0.6%.
Section summaries
Management's Discussion and Analysis
Q3 FY2026 net earnings rose 104% to $118M on 5.8% sales growth, driven by Mobile Solutions and Life Sciences, while margins compressed from production inefficiencies.
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Consolidated Q3 grew 5.8% to $995.1M, led by an 8.1% increase in Mobile Solutions (Aftermarket up $37.5M on higher vehicle utilization) and a 12.7% increase in Life Sciences (strong Food & Beverage and Disk Drive), partially offset by a 0.6% decline in Industrial Solutions.
Life Sciences profit reached $6.8 million, its third straight profitable quarter, though the prior-year period benefited from a non-recurring $6.2 million reduction in a .
for the first nine months rose to $293.8 million, up from $251.0 million a year ago, as improved.
The company closed the Facet acquisition in Q4, financing it with approximately $820 million in new debt, which will increase total to roughly $1.4 billion.
What changed
recovery did not materialize: the rate fell to 33.5%, below the 34.2% flagged as a potential trough in Q3 FY2025, as Power Generation production relocation costs and footprint optimization expenses more than offset pricing gains.
Life Sciences sustained profitability for a third straight quarter at $6.8 million, confirming the trajectory flagged after Q1 FY2026, though the prior-year comparison was aided by a $6.2 million contingent consideration benefit that did not repeat.
recovery continued: the nine-month of $293.8 million suggests the build that weighed on FY2025 is reversing, though the Facet acquisition's debt load will reshape the balance sheet going forward.
Tariff cost estimates were previously lowered to $25 million annually; the filing now flags potential refunds from IEEPA duties and a February 2026 Supreme Court ruling that may affect recoveries of previously paid tariffs.
What to watch
in Q4 FY2026: whether the 33.5% rate rises as Power Generation relocation costs roll off, or if operational inefficiencies persist and keep margins below 34%.
Facet acquisition integration costs and debt service: whether the roughly $820 million in new debt and integration expenses materially pressure earnings and cash flow in the first full quarter post-close.
Life Sciences profit sustainability above $6 million per quarter: whether the can maintain or improve profitability without one-time benefits, confirming the bioprocessing and disk drive businesses are self-sustaining.
Tariff ruling impact: whether the February 2026 Supreme Court ruling results in material recoveries of previously paid tariffs or introduces new cost exposures.
declined 70 to 33.5%, primarily due to $9.1M in costs from footprint optimization and operational inefficiencies tied to shifting Power Generation equipment production, partially offset by favorable pricing and mix.
more than doubled to $155.3M from $87.4M, as the prior-year period included a $62.0M charge for (Univercells Technologies and Solaris) that did not recur.
Life Sciences earnings before income taxes improved to $6.8M (8.1% of sales) from $5.8M, while the prior-year quarter benefited from a non-recurring $6.2M reduction in a .
rose $42.8M to $293.8M for the nine-month period, driven by higher earnings and improvements; the company closed the Facet acquisition in Q4 with ~$820M in new debt, increasing total to approximately $1.4B.
The company is monitoring evolving tariff and trade policy risks, including potential refunds from IEEPA duties, and geopolitical risks from the Iran conflict, which could adversely affect supply chains and demand.
Quantitative and Qualitative Disclosures About Market Risk
Foreign-currency translation boosted net sales by $65.2M and net earnings by $4.3M in the nine months ended April 30, 2026.
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A weaker U.S. dollar increased reported by $65.2 million and by $4.3 million for the nine months ended April 30, 2026.
The Company uses foreign-currency forward contracts to manage purchase and sale volatility, with $29.7M designated as cash-flow hedges and $152.3M undesignated as of April 30, 2026.
via fixed-to-fixed cross-currency swaps total €80M ($88.8M) to protect European operations; a 10% USD appreciation versus the euro would yield an $8.8M fair-value gain.
Variable-rate debt of $336.4M exposes the Company to interest-rate risk; a hypothetical 0.5-point rate increase would have raised by $1.3M in the period.
Commodity-price risk arises from steel, filter media, and petrochemical-based materials; the Company uses supply arrangements and cost-recovery pricing to mitigate margin pressure.
The Company records provisions when it is probable a liability has been incurred and the amount of the loss can be reasonably estimated. Claims and litigation are reviewed quarterly and provisions are taken or adjusted to reflect the status of a particular matter. The Company be…
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The Company records provisions when it is probable a liability has been incurred and the amount of the loss can be reasonably estimated. Claims and litigation are reviewed quarterly and provisions are taken or adjusted to reflect the status of a particular matter. The Company believes the estimated liability in its Condensed Consolidated Financial Statements for claims or litigation is adequate and appropriate for the probable and estimable outcomes. Liabilities recorded were not material to the Company’s financial position, results of operations or liquidity. The Company believes it is remote that the settlement of any of the currently identified claims or litigation will be materially in excess of what is accrued.
The Facet Filtration acquisition introduces material integration and liability risks that could harm financial performance.
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Integrating Facet may strain management, increase operating costs, and disrupt ongoing operations if not balanced effectively.
Undisclosed or underestimated liabilities from Facet could emerge, including litigation or regulatory matters, with potentially inadequate indemnification or insurance coverage.