DCI · CIK 29644
What Donaldson Company, Inc. told the SEC could break it.
Donaldson's risks trace almost entirely to the materials that go into its filters. Its principal inputs — steel, filter media and petrochemical-based products like plastic, rubber and adhesives — make up purchased raw materials equal to about 67% of its cost of sales, so swings in material costs drive its margins directly (it leans on supply arrangements, pricing, substitution and redesigns to soften the blow). Trade policy adds to that input-cost pressure: it expects roughly $35 million in annual tariff costs (under 1% of sales, largely offset by pricing), but further or retaliatory tariffs on imports from Mexico, China and the EU, plus export controls, could disrupt its supply chain. And it often concentrates sourcing of some of those materials with one or a few suppliers, where a delivery delay or quality failure could stall on-time shipment to customers.
3 self-disclosed vulnerabilities, pulled from its own filings, each in the company’s words, with the source. This is the risk register almost nobody reads.
In its own words
What could break it.
Commodity & input dependence
- steel, filter media and petrochemical-based products (plastic/rubber/adhesive) — ~67% of COGShigh
Donaldson's principal raw materials are steel, filter media and petrochemical-based products (plastic, rubber, adhesives), and purchased raw materials represent ~67% of its cost of sales — so material-cost changes directly drive margins, partly mitigated via supply arrangements, pricing, material substitution and redesigns.
“The principal raw materials the Company uses are steel, filter media and petrochemical-based products including plastic, rubber and adhesive products. Purchased raw materials represent approximately 67% of the Company's cost of sales.”
Regulatory & policy
- tariffs (~$35M annual cost; Mexico/China/EU) and export controls/sanctions on supply chainmedium
Donaldson expects ~$35M of annual costs from recently implemented/increased tariffs (<1% of sales, largely offset by pricing), but additional or retaliatory tariffs — especially substantial increases on US imports from Mexico, China and the EU — plus export controls and sanctions could materially disrupt its supply chain and raise costs.
“While the ultimate impact of tariffs remains uncertain, the Company continues to expect annual costs related to recently implemented or increased tariffs of approximately $35 million, which represents less than 1% of the Company's total sales and is expected to be largely offset by pricing increases.”
Supplier concentration
- single/few-supplier sourcing for some raw materials and componentsmedium
Donaldson obtains raw materials (steel, filter media, petroleum-based products and other components) from third-party suppliers and often concentrates sourcing of some materials from one or a few suppliers; an unanticipated delivery delay or quality failure could prevent on-time product delivery to customers.
“We obtain raw materials, including steel, filter media, petroleum-based products and other components from third-party suppliers. We often concentrate our sourcing of some materials from one supplier or a few suppliers. We rely, in part, on our suppliers to ensure they meet required quality and delivery standards.”
SEC filing →As of 2025
The hidden graph
Who it depends on, and who depends on it.
Relationships surfaced from filings, including ones disclosed by the other side, which is how the non-obvious ones come to light.
Its suppliers
Medica S.p.A.
“On August 9, 2024, the Company acquired a 49 % non-controlling stake in Medica, headquartered in Medolla, Italy, for cash consideration of approximately € 62.1 million, or $ 67.9 million... Medica is a leader in hollow fiber membrane filtration technology for medical applications and water purification.”
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