Calgon Carbon Corporation (CCC), Pall Corporation (PLL), Donaldson Company, Inc. (DCI): Filtration Systems Industry, 3 Companies Explained

Page 1 of 2

As production processes become more specific, the use of quality filtration systems becomes a necessity. Game-changing technologies in electronics, biotechnology, medical and pharmaceutical industries use various filtration products, which is boosting revenues for its producers. In addition, the increase in environmental regulations makes it hard for clients to curb their spending in these systems, realizing high growth potential.

Pall Corporation (NYSE:PLL)

Let’s see how three filtration system producers are performing.

Currency exposure offsetting good performance
Calgon Carbon Corporation (NYSE:CCC)
manufactures, reactivates, and applies activated carbon, ultraviolet light disinfection, ballast water treatment, and advanced ion-exchange technologies.

The company presented a mixed first-quarter. Earnings per share were $0.18, a 29% increase year-over-year. Profit reached $9.8 million, up 27%. However, the top line was damaged by unfavorable currency translations.

Calgon Carbon Corporation (NYSE:CCC)’s cost reduction and pricing actions are expected to boost revenues. Its cost improvement program will offer savings in raw material costs, consolidation of operations and headcount reductions. Phase 1 has already been completed, saving $10 million per year, and with the same target, phase 2 is already making notable progress.

The company understands that it needs to balance its requirements for future investments with its responsibility for short-term returns. Its acquisition of Calgon Carbon Japan KK in 2011 reinforced the company’s position in the second largest carbon consuming market in the world. Moreover, through its Hyde Marine acquisition, the company entered the ballast water treatment market. This exciting legislative-driven market has great long-term growth potential.

Calgon Carbon is making big efforts to become a leader in mercury removal, which is expected to turn the largest market for activated carbon in the U.S. Its recent development, the FLUEPAC brominated powdered activated carbon product line is securing 2-year $20-plus million contracts with coal-fired power plants in the Midwest.

However, I remain cautious about the economic challenges that the company might face in the future, especially currency headwinds and a weakness in its equipment business’ performance. This business unit is subject to long project life cycles from bid solicitation until completion. Sales are dependent on the health of the economy, which make them volatile. Access to bituminous coal is becoming more costly and complicated as well, due to its current high demand.

Weak economy forcing cost reductions
Pall Corporation (NYSE:PLL)
produces and supplies filtration, separation and purification products.

Page 1 of 2