DCI
#Hi, <UNK>.
Right now, it's definitely commodity based, as of course the mining companies can get more for the raw materials they will continue to improve vehicle utilization.
But the consumption does have a role in the long run.
They aren't just going to continue to stock all of that.
As we saw with an abundant coal supply for example, in China that really put pressure all the way down through Australia and Indonesia in this downward cycle.
It needs a little bit more of a pick-up of a global GDP, if you will, to get the comprehensive mining sector really moving forward.
It's a bit more structural than just simply if commodity prices rise, things will all of a sudden turn for us.
We see it more incremental going forward as that whole market recovers.
I think you'll see that in Caterpillar's guidance, for example, as well, where they're calling for a more modest calendar year of 2017, for example.
We don't believe it does, because we have a strong brand in the number-one market, which is the Middle East.
We also now with our Northern Technical acquisition have a strong presence in the Middle East and so therefore we're much closer to our end-user customers than we have been before.
This gives us a stronger position to really continue to capture, have a higher capture rate in the aftermarket.
We also expanded our product family within the aftermarket within that Northern Technical acquisition and so we're now ---+ we actually have a much broader market opportunity within GTS to address within aftermarket.
We're very comfortable in this typical a little bit more pressured cycle with projects from a ---+ clearly GTS is pressured from pricing on the project side, but also the quantity of projects out there is less and so we need to be very selective.
This market goes through these types of cycles.
You have to be prudent and responsible while in that and that's what we are doing with this particular strategy.
Sure.
Good morning.
What we had last year, of course, is a lot of headwind in the fourth quarter.
We had a bit more of a pick-up in this year's fourth quarter.
If you look at ---+ I mentioned in my prepared comments that we have a bit more erratic ordering patterns.
Our aftermarket sales time fence, if you will, is much more compressed than it ever has been.
We're talking maybe just a couple weeks of visibility in some of these areas in some of the geographies.
I believe we did see the seasonality, but we did not see people take back all of the stock that they're used to normally carrying and so there was a little bit of a balance.
Notice that I said there's some of the geographies that have been destocking just a little bit and so they've compressed on the destock but also compressed their ordering patterns.
They kind of offset each other to really mute a little bit of what we would have hoped would be mid-single-digit growth to become low---+single-digit growth.
More destocking for sure across Asia, across our distribution channels, yes.
When a gas turbine is sold, no matter what the technology, in F&H or whatever technology from GE, Siemens or Mitsubishi, they are all projects.
What you have to have is the technology that really reaches across, if you will, that product family of gas turbines for that particular customer to be qualified.
Are we qualified with the H engine.
Absolutely.
With Donaldson technology, we are, but you still win those on a project.
You don't win, for example, like you do in an engine where you can win all of the 10-liter engines.
In this, you still got one particular project where that H engine is going to be implemented worldwide.
But we are qualified.
We do sell to the H engine and we'll continue to do so, however in that selective fashion as we mentioned in our strategy.
I'm saying a more stable volume situation.
Yes, it does.
All those things are considered.
That is correct.
Thanks.
I think that it's general cost containment, cost improvement across the board.
I wouldn't think there's any one particular specific area.
We had some restructuring to improve our cost structure, continued cost discipline, and that spreads across pretty much all the product lines.
You actually have that reversed.
Disk drive headwind, which will likely be high-single digits, is being offset by the other pieces of special applications with things which we expect to grow, like integrated venting solutions.
There's not a specific piece of that strategy that you mentioned that we would target.
The way we do this is each business unit has a particular organic growth strategy.
Within that strategy, if we see a way to accelerate that organic growth plan through an acquisition, as you saw us do with our recent Partmo acquisition, we knew eventually we had to manufacture product in Latin America, down in South America, because we had already expanded our distribution, expanded our product line and now we had to get closer to the customer to give them a quicker response.
That's just a normal strategic step for us and so we acquired.
It could be a channel, it could be a product expansion, it could be all of those, but it starts with that organic strategy that we have within a business segment.
Good morning, <UNK>.
I use the word encouraged because it's been a tough slog for the last 18 months and it's been a walk down that has been tough to get through.
I think as I look forward, the range of possible outcomes has certainly narrowed significantly for our Company, and so the encouragement is that while I'm not ready to call bottom, I am encouraged by the fact that we're a little bit more predictable than we have been at any time in the last 18 months.
The disk drive business specifically.
We're not calling out a time frame as to when we would see Special Apps be able to offset the headwinds we expect looking forward in the disk drive.
It's just that, as you called out, it's a natural secular decline that we'll see, so we've not laid that line in the sand, if you will.
Thank you.
Hi, <UNK>.
<UNK>, we haven't specifically guided to that but the FX loss that we've talked about and some of the variability from the OI&E line does flow through corporate and unallocated, so that gives you a sense that, that's where some of the improvement will come from, or show up.
What <UNK> talked about in his OI&E guide.
Good morning, <UNK>.
The overall atmosphere of winning any kind of project in H and F or whatever the turbine may be, GE is always a disciplined buyer and the value proposition that Donaldson Company brings forward is we, essentially, 20 years ago started this particular market.
We are number one in the gas turbine market and it's because of a technology that we have which in this particular market we call Spider-Web.
If you think about it, we have nano fibers, which are roughly about 0.1 the diameter of a human hair that we put within on our medias, which then filter out the particulate ambient air better than anyone else in the marketplace, which then allows you to have a cleaner turbine and produce more energy out the back side.
That's our value proposition as well as our strong customer projects execution, which we have a long, strong track record and that's how we win.
We'll build a gas turbine project anywhere in the world.
It's not uncommon for these complicated projects to have one line item purchase order to be worth millions of dollars, have 50 to 60 semi-trucks that are manufactured in four different countries and they all come together on a site.
It takes special coordination and a special team to be able to do that and Donaldson has that.
This is <UNK>.
I'll start with the restructuring answer and then toss it over to <UNK> to finish off.
Within restructuring, we currently do not have any additional restructuring plans in the Company.
However, we continue to look at aligning our Company overall with end markets, with the end-market demand.
Should there be a demand shift, surely we would look deeply among ourselves and adjust accordingly.
To be honest with you at Donaldson that's standard work.
That's what we do every day and we'll continue to act in that fashion.
