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Dover Reports Second Quarter Records
NEW YORK, July 17 /PRNewswire/ -- Dover Corporation (NYSE: DOV) earned $.67 per diluted share from continuing operations in the second quarter ended June 30, 2000, an increase of 52% from the $.44 per diluted share earned in the comparable quarter last year. Net income from continuing operations for the second quarter was a record of $136.7 million, up 47% from $93.3 million in net income from continuing operations last year. Sales in the quarter were a record $1.38 billion, up 28% from $1.08 billion last year.
Strong performance in each of Dover's four business segments was led by Technologies where income more than doubled from the second quarter of last year.
Dover completed seven add-on acquisitions during the quarter at a combined investment of $74 million, bringing the total for the year to 12 acquisitions for a total investment of $242 million. The profit impact of these acquisitions in 2000 will be small due to acquisition write-offs, and imputed financing costs. Acquisitions completed in the last twelve months added $105 million in sales and $19 million in operating profit in the second quarter.
Segment Results:
Dover Technologies sales in the second quarter increased 57% to $527.4 million, from $334.9 million last year, and segment profit increased 130% to $110.3 million, from $47.9 million last year. These strong results were a continuation of trends apparent in the second half of last year. Segment bookings set a quarterly record, and at $628 million were 19% greater than shipments.
Technologies' companies which make production equipment for circuit board assembly and test (CBAT), used in a broad array of high volume electronics manufacturing applications, achieved their fifth consecutive quarterly improvement in orders, shipments, and earnings. CBAT bookings were up 66% from last year to $386 million, sales were up 71% to $356 million, and earnings were up 154% to $74 million. The book-to-bill ratio in the quarter was 1.08. The continuation of robust growth into the second quarter is the result of high customer demand in telecom, data com, and networking markets.
Technologies' companies that make specialty electronic components (SEC) also experienced a continuing strong market, driven by telecommunications infrastructure spending. SEC sales were $121 million, up 54% from the prior period, profits more than doubled to $24 million, and bookings were up 113% to $188 million on a 54% sales gain. The quarter's book-to-bill ratio was 1.56. In response to these strong trends, numerous capacity expansion projects have been undertaken at the SEC companies.
The plans of the telecommunications companies to replace much of the infrastructure for wired and wireless communications, along with the robust demand growth for portable communication devices with broadband connection to the network makes the outlook for these businesses bright. The electronics industry recovery that began late in the second quarter of 1999 has continued. Comparisons for the balance of 2000 will be made to a period after the industry recovery had begun.
Technologies' industrial marking business, Imaje, also continues its steady growth, with earnings up over 21% on an 18% sales increase.
Dover Industries sales in the second quarter increased 11% to $326.3 million from $293.8 million last year, and segment earnings increased 6% from $48.7 million to $51.5 million. Acquisitions made in the last year, including Triton, the manufacturer of cash dispenser systems acquired in the first quarter contributed all of the sales increase. Segment earnings were down 9% excluding acquisitions made in the last year. Segment bookings in the quarter were up 7% to $307 million and the book-to-bill ratio was .94.
Sales and earnings at Heil Environmental and Dovatech set quarterly records. The automotive service equipment market remains strong, helping Rotary Lift and Chief achieve higher sales and earnings, but the impact of pending new product introductions on sales of existing products temporarily negatively impacted PDQ.
Heil Trailer, the liquid and dry bulk tank trailer company, has experienced weakness in its markets since last year due to the impact of higher fuel costs on its customer base.
Dover Diversified sales in the second quarter increased 19% to $310.4 million from $260.7 million, last year, and segment income increased 27% to $44.2 million from $34.8 million. Segment bookings in the quarter were down 1% to $294 million and the book bill was 0.95.
As in first quarter, acquisitions made in 1999 (especially Crenlo and JE Piston), contributed strongly to this result, as did the performances at AC Compressor, Mark Andy, Wiseco, and Sargent. Acquisitions, net of divestments, added about $37 million to Diversified's second quarter sales. The Belvac turnaround also boosted the second quarter.
Hill Phoenix, which manufactures commercial refrigeration equipment and display cases, has been adversely impacted by consolidation in its customer base.
Dover Resources sales in the second quarter increased to $217.5 million from $189.6 million last year, or 15%, and segment income increased 29%, from $24.9 million to $32.0 million. Segment bookings in the quarter were up 18% to $221 million and the book-to-bill ratio was 1.01.
The Petroleum Equipment Group, which is heavily influenced by North American oil production activity and particularly of existing wells, continued its very strong performance in the quarter, compared to the lower oil price environment last year. Quartzdyne and C. Lee Cook, more heavily influenced by new production and development, have also begun to improve compared to the prior year. Companies serving the process industries (Wilden, Blackmer, Ronninger - Petter) were about flat to the prior year.
OPW Fueling Components, which serves the retail petroleum distribution market, has been hurt by the current pressure on customers' retail margins, and industry consolidation.
Dover Corporation reports its pretax earnings in two ways -- on the GAAP/SEC required segment reporting described above, and on an EBITACQ basis (Earnings Before Interest, Taxes, and non-cash charges arising from purchase accounting for acquisitions). Second quarter EBITACQ of $252 million was 45% higher than prior year. Of this, about 11 percentage points reflect acquisitions and 34 percentage points reflect the growth of existing companies (notably electronics). The reduction in shares outstanding during the last 6 months of 1999 resulted in stronger growth for EBITACQ per outstanding share, as this measure increased 55% to $1.24 per share.
Dover will report as part of its second quarter 10Q Statement of Comprehensive Income an Unrealized Gain of $41.7 million ($27.1 after tax). In 1997, Dover Technologies made a small 720,000 share investment in Bookham Technology PLC for strategic business reasons. Bookham (Nasdaq: BKHM) went public in April of this year resulting in the unrealized appreciation. Dover has no current plans to sell the investment and is in fact prohibited from doing so for six months from the date of the initial public offering.
Thomas L. Reece, Dover's Chairman and CEO, noted, "The Dover Technologies results, which while they may not continue to strengthen, certainly appear unlikely to deteriorate soon. Together with the admirable profit improvements at Industries, Diversified and Resources, which also appear, in aggregate, sustainable, Dover may well finish the year with earnings per share growth approaching 35%."
Additional information on Dover and its operating companies can be found on the Company's Website. (http://www.dovercorporation.com)
Dover Corporation makes information available to the public, orally and in writing, which may use words like 'expects' and 'believes', which are 'forward-looking' statements' under the Private Securities Litigation Reform Act of 1995. These 'forward-looking' statements are subject to a number of risks and uncertainties, which could cause actual results to differ materially from historical results or those anticipated. People receiving such information are advised to evaluate this information in light of the various risk factors identified in the Company's most recent Annual Report on Form 10-K, see page 2 - Special Notes Regarding Forward Looking Statements.
DOVER CORPORATION CONSOLIDATED
MARKET SEGMENT RESULTS
(unaudited)
Second quarter ended June 30
Percent
SALES 2000 1999 Change
Dover Technologies $527,352,000 $334,883,000 57%
Dover Industries 326,289,000 293,826,000 11%
Dover Diversified 310,412,000 260,715,000 19%
Dover Resources 217,506,000 189,554,000 15%
Total (after intramarket
eliminations) $1,379,260,000 $ 1,077,850,000 28%
EARNINGS
Dover Technologies $110,344,000 $ 47,904,000 130%
Dover Industries 51,502,000 48,709,000 6%
Dover Diversified 44,214,000 34,808,000 27%
Dover Resources 32,012,000 24,895,000 29%
Subtotal (after intramarket
eliminations) 238,072,000 156,316,000
Corporate expense (6,876,000) (5,158,000) 33%
Net interest expense (21,784,000) (8,333,000) 161%
Earnings before taxes
on income 209,412,000 142,825,000 47%
Taxes on income 72,679,000 49,515,000 47%
Net earnings $136,733,000 $93,310,000 47%
Net earnings per share:
Basic $0.67 $0.44 52%
Diluted $0.67 $0.44 52%
DOVER CORPORATION CONSOLIDATED
MARKET SEGMENT RESULTS
(unaudited)
Six months ended June 30,
SALES 2000 1999*
Dover Technologies $993,718,000 $623,003,000 60%
Dover Industries 625,330,000 552,532,000 13%
Dover Diversified 579,950,000 491,295,000 18%
Dover Resources 435,662,000 383,311,000 14%
Total (after intramarket
eliminations) $2,630,543,000 $ 2,047,605,000 28%
EARNINGS
Dover Technologies $195,139,000 $ 73,818,000 164%
Dover Industries 101,917,000 85,993,000 19%
Dover Diversified 77,679,000 62,089,000 25%
Dover Resources 65,553,000 51,828,000 26%
Subtotal (after intramarket
eliminations) 440,288,000 273,728,000
Gain (loss) on disposition (1,400,000) (3,675,000)
Corporate expense (13,117,000) (9,661,000) 36%
Net interest expense (37,366,000) (12,803,000) 192%
Earnings before taxes
on income 388,405,000 247,589,000 57%
Taxes on Income 134,353,000 85,059,000 58%
Net earnings -
Continuing Operations 254,052,000 162,530,000 56%
Gain on sale of
discontinued operations* - 523,938,000
Net earnings $254,052,000 $686,468,000 -63%
Net earnings per share:
Basic - Continuing $1.25 $0.76 64%
Gain on sale - 2.45
Net earnings $1.25 $3.21
Diluted - Continuing $1.24 $0.76 63%
Gain on sale - 2.43
Net earnings $1.24 $3.19
Average number of shares
outstanding - Basic 202,895,000 213,796,000
Average number of shares
outstanding - Diluted 204,683,000 215,248,000
-
On January 5, 1999, Dover completed the sale of its elevator business to Thyssen Industrie AG for $1.16 billion.
DOVER CORPORATION
OPERATIONAL PROFITS (1)
(in millions)
2000 - SIX MONTHS 1999 - SIX MONTHS
SALES EARNINGS % SALES EARNINGS %
Dover Technologies 994 208 21 623 91 15
Dover Industries 625 114 18 553 97 18
Dover Diversified 580 92 16 491 74 15
Dover Resources 436 80 18 383 62 16
Operational Profits
(after elim.)(1) $2,631 494 19 $2,048 324 16
Corporates and
other (24) (18)
EBITACQ(2) 470 306
Gain (loss) on
dispositions (1) (4)
Interest (37) (13)
Acquisition
Write-offs (44) (41)
Dover Pre-tax income $388 $248
(1) Differs from segment operating profits in that all non-cash write-offs
relating to acquisitions are excluded, along with the expenses of each
segment's corporate group.
(2) Earnings before taxes, interest, acquisition write-offs and
non-recurring gains.
DOVER CORPORATION
OPERATIONAL PROFITS (1)
(in millions)
1999 - FULL YEAR
SALES EARNINGS %
Dover Technologies 1,458 261 18
Dover Industries 1,145 203 18
Dover Diversified 1,072 177 17
Dover Resources 778 128 16
Operational Profits
(after elim.) (1) $4,446 769 17
Corporates and other (44)
EBITACQ (2) 725
Gain (loss) on dispositions 10
Interest (35)
Acquisition Write-offs (85)
Dover Pre-tax income $615
(1) Differs from segment operating profits in that all non-cash write-offs
relating to acquisitions are excluded, along with the expenses of each
segment's corporate group.
(2) Earnings before taxes, interest, acquisition write-offs and
non-recurring gains.
DOVER CORPORATION CONSOLIDATED
(unaudited)
June 30 December 31
BALANCE SHEET ('000) 2000 1999
Assets:
Cash & equivalents $135,711 $138,038
Receivables, net of allowances for
doubtful accounts 901,596 750,917
Inventories 715,837 639,379
Prepaid expenses 94,835 83,228
Net property, plant & equipment 673,074 646,475
Intangible and other assets 2,041,033 1,873,903
$4,562,086 $4,131,940
Liabilities & stockholders' equity:
Short-term debt $795,586 $297,900
Payables and accrued expenses 717,516 1,036,965
Deferred credits 184,019 150,294
Long-term debt 630,018 608,025
Stockholders' equity 2,234,947 2,038,756
$4,562,086 $4,131,940
Six Months
CASH FLOWS ('000) 2000 1999
Operating activities:
Net earnings $ 254,052 $ 686,468
Gain on sale of discontinued business,net - (523,938)
Loss on sale of business 1,400 --
Depreciation 68,462 60,286
Amortization 32,639 29,628
Working capital changes (228,915) (112,279)
Other, net 7,610 (12,372)
Net cash from operating activities 135,248 127,793
Investing activities:
Capital expenditures (77,347) (53,825)
Acquisitions, net of cash and
cash equivalents (224,606) (304,304)
Proceeds from sale of businesses 14,923 1,169,599
Purchase of treasury stock (3,906) (437,448)
Net cash from (used in) investing
activities (290,936) 374,022
Financing activities:
Increase (decrease) in notes payable 485,097 (325,560)
Increase (decrease) in long-term debt 16,309 (3,429)
Cash dividends (46,691) (44,805)
Proceeds from exercise of stock options 6,697 5,911
Net cash from (used in) financing activities 461,412 (367,883)
Discontinued operations - tax payments (308,051) -
Net increase (decrease) in cash &
equivalents (2,327) 133,932
Cash & cash equivalents at beginning
of period 138,038 96,774
Cash & cash equivalents at end of period $ 135,711 $ 230,706
DOVER CORPORATION
ACQUISITIONS - SECOND QUARTER 2000
DATE TYPE ACQUIRED LOCATION SEGMENT - Operating Co.
COMPANIES (Near)
10-Apr Stock Greer Company Santa Ana, CA. DRI Tulsa Winch
Manufactures systems that continuously monitor the load and configuration
of mobile cranes.
12-Apr Asset Hoegger Alpina(HA) Gossau, Switzerland DII Tipper Tie
Manufactures machinery, clips and loops primarily serving the food
processing industry.
24-May Stock Hydromotion, Inc. Spring City, PA. DII Texas Hydraulics
Designs & manufactures hydraulic swivels, electric slip rings and
telescopic waterway assemblies.
31-May Stock Salwasser Reedley, CA. DDI SWF
Manufacturing
Company, Inc.
Manufactures packaging machinery in automation of case packing for paper,
dry goods and toiletries markets.
8-Jun Asset Provacon, Inc. Gonzales, LA. DRI Midland
Designs & manufactures specialty valves and fitting for the transfer of
hazardous fluids in petro-chemical plants.
23-Jun Stock C & H Ontario, CA. DDI Sargent
Manufacturing,
Inc.
Manufactures specialty fasteners, primarily for use in aircraft landing
gears.
30-Jun Stock Groupe Aoustin Nanterre, France DRI Ronningen-Petter
Manufactures high volume, turnkey liquid filtration systems and specialty
high-viscosity mixers-extruders. SOURCE Dover Corporation
CONTACT: David S. Smith, Vice President of Dover, 212-922-1640/