UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________________
FORM 8-K
________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 17, 2012
________________________________
DOVER CORPORATION
(Exact name of registrant as specified in its charter)
________________________________
State of Delaware | 1-4018 | 53-0257888 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
3005 Highland Parkway | ||
Downers Grove, Illinois | 60515 | |
(Address of principal executive offices) | (Zip Code) | |
(630) 541-1540
(Registrant’s telephone number, including area code)
______________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition.
On October 17, 2012, Dover Corporation (i) issued the Press Release attached hereto as Exhibit 99.1 announcing its results of operations for the third quarter ended September 30, 2012; and (ii) posted on its website at
http://www.dovercorporation.com the presentation slides attached hereto as Exhibit 99.2 for the quarter ended September 30, 2012.
The information in this Current Report on Form 8-K, including exhibits, is being furnished to the Securities and Exchange Commission (the “SEC”) and shall not be deemed to be incorporated by reference into any of Dover’s filings with the SEC under the Securities Act of 1933.
Item 9.01 Financial Statements and Exhibits.
(a) | Financial statements of businesses acquired. |
Not applicable.
(b) | Pro forma financial information. |
Not applicable.
(c) | Shell company transactions. |
Not applicable.
(d) | Exhibits. |
The following exhibits are furnished as part of this report:
99.1 Dover Corporation Press Release dated October 17, 2012.
99.2 Presentation Slides posted on Dover Corporation’s website at http://www.dovercorporation.com.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.
Date: October 17, 2012 | DOVER CORPORATION | ||
(Registrant) | |||
By: | /s/ Joseph W. Schmidt | ||
Joseph W. Schmidt | |||
Senior Vice President, General Counsel & Secretary | |||
EXHIBIT INDEX
Number | Exhibit | |
99.1 | Press Release of Dover Corporation, dated October 17, 2012 | |
99.2 | Presentation Slides posted on Dover Corporation’s website at http://www.dovercorporation.com | |
Exhibit 99.1
CONTACT: | READ IT ON THE WEB | |
Paul Goldberg | www.dovercorporation.com | |
Vice President - Investor Relations | ||
(212) 922-1640 | ||
DOVER CORPORATION REPORTS THIRD QUARTER 2012 RESULTS
• | Reports revenue of $2.2 billion, an increase of 3% over the prior year |
• | Delivers quarterly diluted earnings per share from continuing operations of $1.32, an increase of 11% |
• | Revises outlook for full-year revenue growth and earnings per share; now expects revenue growth to be approximately 7%, and earnings per share to be $4.55 - $4.65 |
Downers Grove, Illinois, October 17, 2012 — Dover Corporation (NYSE: DOV) announced today that for the third quarter ended September 30, 2012, revenue was $2.2 billion, an increase of 3% over the prior-year period. The revenue increase was driven by organic growth of 1% and a 4% increase from acquisitions, offset in part by a 2% unfavorable impact from foreign exchange. Earnings from continuing operations were $242.2 million, or $1.32 diluted earnings per share (“EPS”), compared to $223.4 million, or $1.19 EPS, in the prior-year period, representing increases in earnings from continuing operations and EPS of 8% and 11%, respectively, inclusive of minor tax benefits realized in both periods.
Revenue for the nine months ended September 30, 2012 was $6.4 billion, an increase of 8% over the prior-year period, reflecting organic growth of 4%, a 6% increase from acquisitions and a 2% unfavorable impact from foreign exchange. Earnings from continuing operations for the nine months ended September 30, 2012 were $651.9 million, or $3.51 EPS, compared to $637.4 million, or $3.37 EPS in the prior-year period, representing an increase in earnings from continuing operations of 2% and an increase in EPS of 4%. Excluding the impact of tax benefits of $0.03 EPS in the the nine months ended September 30, 2012 and $0.17 EPS in the prior-year period, adjusted diluted EPS increased from continuing operations increased 9%.
Commenting on the third quarter results, Dover's President and Chief Executive Officer, Robert A. Livingston, said, “The third quarter demonstrated the strength of our businesses as we leveraged modest revenue growth with 18% segment margin and delivered $1.32 EPS. The margin performance was especially encouraging because it was broad-based, as Communication Technologies, Printing & Identification and Engineered Systems all showed significant sequential improvement, while Energy remained very strong.”
“While the quarter was solid and the majority of our businesses are performing very well, we are facing near-term revenue challenges in the Handset and Electronics markets, along with the continuing uncertain global economic environment.”
“Taking these challenges into account, we now expect full-year 2012 revenue growth of approximately 7%, comprised of organic growth of 3% (inclusive of a 2% unfavorable impact from foreign exchange), plus growth from completed acquisitions of 4%. Based on this revenue assumption, we expect full-year diluted EPS from continuing operations to be in the range of $4.55 - $4.65.”
Net earnings for the third quarter of 2012 were $241.0 million or $1.31 EPS, including a net loss from discontinued operations of $1.2 million, or $0.01 EPS, compared to net earnings of $172.3 million, or $0.91 EPS, for the same period of 2011, which included a loss from discontinued operations of $51.2 million, or $0.27 EPS. Net earnings for the nine months ended September 30, 2012 were $651.2 million, or $3.51 EPS, including a net loss from discontinued operations of $0.7 million, compared to net earnings of $617.0 million, or $3.26 EPS for the same period of 2011, which included a loss from discontinued operations of $20.5 million or $0.11 EPS.
Dover will host a webcast of its third quarter 2012 conference call at 10:00 A.M. Eastern Time (9:00 A.M. Central Time) on Wednesday, October 17, 2012. The webcast can be accessed at the Dover Corporation website at www.dovercorporation.com. The conference call will also be made available for replay on the website. Additional information on Dover’s third quarter results and its operating segments can also be found on the company’s website.
About Dover:
Dover Corporation is a multi-billion dollar diversified global manufacturer. For over 50 years, Dover has been providing its customers with outstanding products and services that reflect the company's commitment to operational excellence, innovation and market leadership. The company focuses on innovative equipment and components, specialty systems and support services through its four major operating segments: Communication Technologies, Energy, Engineered Systems and Printing & Identification. Dover is headquartered in Downers Grove, Illinois and employs 35,000 people worldwide. Dover Corporation is traded on the New York Stock Exchange under "DOV." Additional information is available on the company's website at www.dovercorporation.com.
Forward-Looking Statement:
This press release contains “forward-looking” statements within the meaning of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such statements relate to, among other things, income, earnings, cash flows, changes in operations, operating improvements, industries in which Dover companies operate and the U.S. and global economies. Statements in this press release that are not historical may be indicated by words or phrases such as “anticipates,” “expects,” “believes,” “indicates,” “suggests,” “will,” “plans,” “supports,” “projects,” “should,” “would,” “could,” “hope,” “forecast” and “management is of the opinion,” use of future tense and similar words or phrases. Forward-looking statements are subject to inherent risks and uncertainties that could cause actual results to differ materially from current expectations, including, but not limited to, uncertainties in the credit and capital markets, interest rates, currency exchange rates, the world economy and sovereign credit, especially in Europe; political events and possible future terrorist threats that could impact countries where Dover does business or the worldwide economy; the impact of natural disasters and their effect on global supply chains and energy markets; increases in the cost of raw materials; the Company's ability to achieve expected savings from integration, synergy and other cost-control initiatives; the ability to identify and successfully consummate value-adding acquisition opportunities; increased competition and pricing pressures in the markets served by Dover's operating companies; the ability of Dover's companies to expand into new geographic markets and to anticipate and meet customer demands for new products and product enhancements; the impact of loss of a single-source manufacturing facility; changes in customer demand; a downgrade in Dover's credit ratings; the relative mix of products and services which impacts margins and operating efficiencies; short-term capacity constraints; domestic and foreign governmental and public policy changes including environmental regulations, tax policies, export subsidy programs, R&E credits and other similar programs; unforeseen developments in contingencies such as litigation; protection and validity of patent and
other intellectual property rights; and the cyclical nature of some of Dover's companies. Dover Corporation refers you to the documents that it files from time to time with the Securities and Exchange Commission, such as its reports on Form 10-K, Form 10-Q and Form 8-K, for a discussion of these and other risks and uncertainties that could cause its actual results to differ materially from its current expectations and from the forward-looking statements contained in this press release. Dover Corporation undertakes no obligation to update any forward-looking statement.
INVESTOR SUPPLEMENT - THIRD QUARTER 2012
DOVER CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(unaudited)(in thousands, except per share data)
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Revenue | $ | 2,208,699 | $ | 2,138,606 | $ | 6,428,571 | $ | 5,945,654 | |||||||
Cost of goods and services | 1,361,769 | 1,332,324 | 3,983,720 | 3,651,625 | |||||||||||
Gross profit | 846,930 | 806,282 | 2,444,851 | 2,294,029 | |||||||||||
Selling and administrative expenses | 476,573 | 476,640 | 1,451,503 | 1,378,466 | |||||||||||
Operating earnings | 370,357 | 329,642 | 993,348 | 915,563 | |||||||||||
Interest expense, net | 30,388 | 30,061 | 90,132 | 86,536 | |||||||||||
Other expense, net | 3,962 | 48 | 6,726 | 2,713 | |||||||||||
Earnings before provision for income taxes and discontinued operations | 336,007 | 299,533 | 896,490 | 826,314 | |||||||||||
Provision for income taxes | 93,794 | 76,095 | 244,548 | 188,887 | |||||||||||
Earnings from continuing operations | 242,213 | 223,438 | 651,942 | 637,427 | |||||||||||
Loss from discontinued operations, net | (1,167 | ) | (51,158 | ) | (732 | ) | (20,473 | ) | |||||||
Net earnings | $ | 241,046 | $ | 172,280 | $ | 651,210 | $ | 616,954 | |||||||
Comprehensive earnings | $ | 334,327 | $ | 47,957 | $ | 692,146 | $ | 583,927 | |||||||
Basic earnings per common share: | |||||||||||||||
Earnings from continuing operations | $ | 1.33 | $ | 1.20 | $ | 3.56 | $ | 3.42 | |||||||
Loss from discontinued operations, net | (0.01 | ) | (0.28 | ) | — | (0.11 | ) | ||||||||
Net earnings | 1.33 | 0.93 | 3.56 | 3.31 | |||||||||||
Weighted average shares outstanding | 181,763 | 185,770 | 183,000 | 186,246 | |||||||||||
Diluted earnings per common share: | |||||||||||||||
Earnings from continuing operations | $ | 1.32 | $ | 1.19 | $ | 3.51 | $ | 3.37 | |||||||
Loss from discontinued operations, net | (0.01 | ) | (0.27 | ) | — | (0.11 | ) | ||||||||
Net earnings | 1.31 | 0.91 | 3.51 | 3.26 | |||||||||||
Weighted average shares outstanding | 183,932 | 188,436 | 185,489 | 189,420 | |||||||||||
Dividends paid per common share | $ | 0.35 | $ | 0.315 | $ | 0.98 | $ | 0.865 | |||||||
DOVER CORPORATION
QUARTERLY SEGMENT INFORMATION
(unaudited)(in thousands)
2012 | 2011 | ||||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q3 YTD | Q1 | Q2 | Q3 | Q3 YTD | Q4 | FY 2011 | ||||||||||||||||||||||
REVENUE | |||||||||||||||||||||||||||||||
Communication Technologies | $ | 357,575 | $ | 361,689 | $ | 396,470 | $ | 1,115,734 | $ | 269,582 | $ | 288,843 | $ | 405,357 | $ | 963,782 | $ | 396,295 | $ | 1,360,077 | |||||||||||
Energy | 531,570 | 538,786 | 562,263 | 1,632,619 | 425,424 | 454,327 | 510,608 | 1,390,359 | 510,390 | 1,900,749 | |||||||||||||||||||||
Engineered Systems | |||||||||||||||||||||||||||||||
Fluid Solutions | 180,364 | 211,974 | 218,324 | 610,662 | 163,196 | 178,031 | 173,804 | 515,031 | 162,590 | 677,621 | |||||||||||||||||||||
Refrigeration & Industrial | 642,213 | 674,501 | 674,116 | 1,990,830 | 560,453 | 645,573 | 649,768 | 1,855,794 | 568,844 | 2,424,638 | |||||||||||||||||||||
Eliminations | (453 | ) | (352 | ) | (319 | ) | (1,124 | ) | (382 | ) | (424 | ) | (431 | ) | (1,237 | ) | (287 | ) | (1,524 | ) | |||||||||||
822,124 | 886,123 | 892,121 | 2,600,368 | 723,267 | 823,180 | 823,141 | 2,369,588 | 731,147 | 3,100,735 | ||||||||||||||||||||||
Printing & Identification | 352,332 | 370,173 | 358,086 | 1,080,591 | 394,627 | 429,497 | 400,515 | 1,224,639 | 368,325 | 1,592,964 | |||||||||||||||||||||
Intra-segment eliminations | (237 | ) | (263 | ) | (241 | ) | (741 | ) | (822 | ) | (877 | ) | (1,015 | ) | (2,714 | ) | (1,671 | ) | (4,385 | ) | |||||||||||
Total consolidated revenue | $ | 2,063,364 | $ | 2,156,508 | $ | 2,208,699 | $ | 6,428,571 | $ | 1,812,078 | $ | 1,994,970 | $ | 2,138,606 | $ | 5,945,654 | $ | 2,004,486 | $ | 7,950,140 | |||||||||||
NET EARNINGS | |||||||||||||||||||||||||||||||
Segment Earnings: | |||||||||||||||||||||||||||||||
Communication Technologies | $ | 46,556 | $ | 50,322 | $ | 63,706 | $ | 160,584 | $ | 47,325 | $ | 54,527 | $ | 53,433 | $ | 155,285 | $ | 71,097 | $ | 226,382 | |||||||||||
Energy | 132,115 | 133,936 | 139,038 | 405,089 | 93,051 | 110,447 | 125,268 | 328,766 | 121,871 | 450,637 | |||||||||||||||||||||
Engineered Systems | 122,092 | 133,808 | 144,245 | 400,145 | 98,235 | 128,570 | 125,529 | 352,334 | 92,852 | 445,186 | |||||||||||||||||||||
Printing & Identification | 32,605 | 41,674 | 51,407 | 125,686 | 54,637 | 67,967 | 59,447 | 182,051 | 44,483 | 226,534 | |||||||||||||||||||||
Total Segments | 333,368 | 359,740 | 398,396 | 1,091,504 | 293,248 | 361,511 | 363,677 | 1,018,436 | 330,303 | 1,348,739 | |||||||||||||||||||||
Corporate expense / other | 36,546 | 36,335 | 32,001 | 104,882 | 36,112 | 35,391 | 34,083 | 105,586 | 32,393 | 137,979 | |||||||||||||||||||||
Net interest expense | 30,027 | 29,717 | 30,388 | 90,132 | 28,318 | 28,157 | 30,061 | 86,536 | 29,060 | 115,596 | |||||||||||||||||||||
Earnings from continuing operations before provision for income taxes | 266,795 | 293,688 | 336,007 | 896,490 | 228,818 | 297,963 | 299,533 | 826,314 | 268,850 | 1,095,164 | |||||||||||||||||||||
Provision for income taxes | 69,968 | 80,786 | 93,794 | 244,548 | 54,027 | 58,765 | 76,095 | 188,887 | 59,912 | 248,799 | |||||||||||||||||||||
Earnings from continuing operations | 196,827 | 212,902 | 242,213 | 651,942 | 174,791 | 239,198 | 223,438 | 637,427 | 208,938 | 846,365 | |||||||||||||||||||||
Earnings (loss) from discontinued operations, net | (764 | ) | 1,199 | (1,167 | ) | (732 | ) | 20,114 | 10,571 | (51,158 | ) | (20,473 | ) | 69,351 | 48,878 | ||||||||||||||||
Net earnings | $ | 196,063 | $ | 214,101 | $ | 241,046 | $ | 651,210 | $ | 194,905 | $ | 249,769 | $ | 172,280 | $ | 616,954 | 278,289 | $ | 895,243 | ||||||||||||
SEGMENT OPERATING MARGIN | |||||||||||||||||||||||||||||||
Communication Technologies | 13.0 | % | 13.9 | % | 16.1 | % | 14.4 | % | 17.6 | % | 18.9 | % | 13.2 | % | 16.1 | % | 17.9 | % | 16.6 | % | |||||||||||
Energy | 24.9 | % | 24.9 | % | 24.7 | % | 24.8 | % | 21.9 | % | 24.3 | % | 24.5 | % | 23.6 | % | 23.9 | % | 23.7 | % | |||||||||||
Engineered Systems | 14.9 | % | 15.1 | % | 16.2 | % | 15.4 | % | 13.6 | % | 15.6 | % | 15.2 | % | 14.9 | % | 12.7 | % | 14.4 | % | |||||||||||
Printing & Identification | 9.3 | % | 11.3 | % | 14.4 | % | 11.6 | % | 13.8 | % | 15.8 | % | 14.8 | % | 14.9 | % | 12.1 | % | 14.2 | % | |||||||||||
Total Segment | 16.2 | % | 16.7 | % | 18.0 | % | 17.0 | % | 16.2 | % | 18.1 | % | 17.0 | % | 17.1 | % | 16.5 | % | 17.0 | % | |||||||||||
DEPRECIATION AND AMORTIZATION EXPENSE | |||||||||||||||||||||||||||||||
Communication Technologies | $ | 31,513 | $ | 32,828 | $ | 32,997 | $ | 97,338 | $ | 18,685 | $ | 18,533 | $ | 34,360 | $ | 71,578 | $ | 30,261 | $ | 101,839 | |||||||||||
Energy | 21,184 | 23,533 | 24,639 | 69,356 | 18,573 | 18,765 | 19,399 | 56,737 | 21,082 | 77,819 | |||||||||||||||||||||
Engineered Systems | 19,582 | 23,913 | 23,060 | 66,555 | 18,415 | 18,816 | 18,332 | 55,563 | 19,213 | 74,776 | |||||||||||||||||||||
Printing & Identification | 11,206 | 11,448 | 11,604 | 34,258 | 11,372 | 11,685 | 11,548 | 34,605 | 11,543 | 46,148 | |||||||||||||||||||||
Corporate | 700 | 765 | 842 | 2,307 | 586 | 626 | 636 | 1,848 | 713 | 2,561 | |||||||||||||||||||||
$ | 84,185 | $ | 92,487 | $ | 93,142 | $ | 269,814 | $ | 67,631 | $ | 68,425 | $ | 84,275 | $ | 220,331 | $ | 82,812 | $ | 303,143 | ||||||||||||
DOVER CORPORATION
QUARTERLY SEGMENT INFORMATION
(continued)
(unaudited)(in thousands)
2012 | 2011 | ||||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q3 YTD | Q1 | Q2 | Q3 | Q3 YTD | Q4 | FY 2011 | ||||||||||||||||||||||
BOOKINGS | |||||||||||||||||||||||||||||||
Communication Technologies | $ | 356,386 | $ | 383,135 | $ | 412,092 | $ | 1,151,613 | $ | 274,611 | $ | 309,734 | $ | 410,616 | $ | 994,961 | $ | 349,579 | $ | 1,344,540 | |||||||||||
Energy | 585,775 | 530,352 | 526,824 | 1,642,951 | 495,125 | 472,543 | 498,212 | 1,465,880 | 519,525 | 1,985,405 | |||||||||||||||||||||
Engineered Systems | |||||||||||||||||||||||||||||||
Fluid Solutions | 184,711 | 204,139 | 197,767 | 586,617 | 173,626 | 175,539 | 174,772 | 523,937 | 158,895 | 682,832 | |||||||||||||||||||||
Refrigeration & Industrial | 711,911 | 666,223 | 600,065 | 1,978,199 | 660,449 | 623,929 | 602,488 | 1,886,866 | 625,840 | 2,512,706 | |||||||||||||||||||||
Eliminations | (408 | ) | (376 | ) | (258 | ) | (1,042 | ) | (733 | ) | (884 | ) | 179 | (1,438 | ) | (1,378 | ) | (2,816 | ) | ||||||||||||
896,214 | 869,986 | 797,574 | 2,563,774 | 833,342 | 798,584 | 777,439 | 2,409,365 | 783,357 | 3,192,722 | ||||||||||||||||||||||
Printing & Identification | 347,368 | 357,648 | 342,834 | 1,047,850 | 438,526 | 386,259 | 384,085 | 1,208,870 | 353,849 | 1,562,719 | |||||||||||||||||||||
Intra-segment eliminations | (609 | ) | (222 | ) | (759 | ) | (1,590 | ) | (2,736 | ) | (3,370 | ) | (2,452 | ) | (8,558 | ) | (3,153 | ) | (11,711 | ) | |||||||||||
Total consolidated bookings | $ | 2,185,134 | $ | 2,140,899 | $ | 2,078,565 | $ | 6,404,598 | $ | 2,038,868 | $ | 1,963,750 | $ | 2,067,900 | $ | 6,070,518 | $ | 2,003,157 | $ | 8,073,675 | |||||||||||
BACKLOG | |||||||||||||||||||||||||||||||
Communication Technologies | $ | 435,912 | $ | 457,624 | $ | 473,007 | $ | 410,843 | $ | 431,558 | $ | 483,512 | $ | 437,320 | |||||||||||||||||
Energy | 296,360 | 282,364 | 248,233 | 240,198 | 255,889 | 243,401 | 246,351 | ||||||||||||||||||||||||
Engineered Systems | |||||||||||||||||||||||||||||||
Fluid Solutions | 191,327 | 172,300 | 156,191 | 57,357 | 54,945 | 55,230 | 54,194 | ||||||||||||||||||||||||
Refrigeration & Industrial | 598,910 | 586,824 | 515,285 | 544,995 | 523,011 | 469,876 | 528,118 | ||||||||||||||||||||||||
Eliminations | (132 | ) | (155 | ) | (94 | ) | (339 | ) | (526 | ) | (94 | ) | (177 | ) | |||||||||||||||||
790,105 | 758,969 | 671,382 | 602,013 | 577,430 | 525,012 | 582,135 | |||||||||||||||||||||||||
Printing & Identification | 177,511 | 160,311 | 148,144 | 262,629 | 220,619 | 197,792 | 180,871 | ||||||||||||||||||||||||
Intra-segment eliminations | (987 | ) | (647 | ) | (324 | ) | (704 | ) | (1,178 | ) | (891 | ) | (193 | ) | |||||||||||||||||
Total consolidated backlog | $ | 1,698,901 | $ | 1,658,621 | $ | 1,540,442 | $ | 1,514,979 | $ | 1,484,318 | $ | 1,448,826 | $ | 1,446,484 | |||||||||||||||||
DOVER CORPORATION
QUARTERLY EARNINGS PER SHARE
(unaudited)(in thousands, except per share data*)
2012 | 2011 | ||||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q3 YTD | Q1 | Q2 | Q3 | Q3 YTD | Q4 | FY 2011 | ||||||||||||||||||||||
Basic earnings (loss) per common share: | |||||||||||||||||||||||||||||||
Continuing operations | $ | 1.07 | $ | 1.16 | $ | 1.33 | $ | 3.56 | $ | 0.94 | $ | 1.28 | $ | 1.20 | $ | 3.42 | $ | 1.13 | $ | 4.55 | |||||||||||
Discontinued operations | — | 0.01 | (0.01 | ) | — | 0.11 | 0.06 | (0.28 | ) | (0.11 | ) | 0.38 | 0.26 | ||||||||||||||||||
Net earnings | 1.07 | 1.17 | 1.33 | 3.56 | 1.04 | 1.34 | 0.93 | 3.31 | 1.51 | 4.82 | |||||||||||||||||||||
Diluted earnings (loss) per common share: | |||||||||||||||||||||||||||||||
Continuing operations | $ | 1.05 | $ | 1.15 | $ | 1.32 | $ | 3.51 | $ | 0.92 | $ | 1.26 | $ | 1.19 | $ | 3.37 | $ | 1.12 | $ | 4.48 | |||||||||||
Discontinued operations | — | 0.01 | (0.01 | ) | — | 0.11 | 0.06 | (0.27 | ) | (0.11 | ) | 0.37 | 0.26 | ||||||||||||||||||
Net earnings | 1.05 | 1.15 | 1.31 | 3.51 | 1.03 | 1.32 | 0.91 | 3.26 | 1.49 | 4.74 | |||||||||||||||||||||
Adjusted diluted earnings per common share (calculated below): | |||||||||||||||||||||||||||||||
Continuing operations | $ | 1.05 | $ | 1.15 | $ | 1.30 | $ | 3.48 | $ | 0.88 | $ | 1.14 | $ | 1.18 | $ | 3.20 | $ | 1.07 | $ | 4.26 | |||||||||||
Net earnings (loss) and average shares used in calculated earnings (loss) per share amounts are as follows: | |||||||||||||||||||||||||||||||
Net earnings (loss): | |||||||||||||||||||||||||||||||
Continuing operations | $ | 196,827 | $ | 212,902 | $ | 242,213 | $ | 651,942 | $ | 174,791 | $ | 239,198 | $ | 223,438 | $ | 637,427 | $ | 208,938 | $ | 846,365 | |||||||||||
Discontinued operations | (764 | ) | 1,199 | (1,167 | ) | (732 | ) | 20,114 | 10,571 | (51,158 | ) | (20,473 | ) | 69,351 | 48,878 | ||||||||||||||||
Net earnings | 196,063 | 214,101 | 241,046 | 651,210 | 194,905 | 249,769 | 172,280 | 616,954 | 278,289 | 895,243 | |||||||||||||||||||||
Average shares outstanding: | |||||||||||||||||||||||||||||||
Basic | 183,737 | 183,494 | 181,763 | 183,000 | 186,659 | 186,443 | 185,770 | 186,246 | 184,686 | 185,882 | |||||||||||||||||||||
Diluted | 186,706 | 185,780 | 183,932 | 185,489 | 190,090 | 189,705 | 188,436 | 189,420 | 187,208 | 188,887 | |||||||||||||||||||||
Note: | |||||||||||||||||||||||||||||||
Earnings from continuing operations are adjusted by discrete and other tax items to derive adjusted earnings from continuing operations and adjusted diluted earnings per common share as follows: | |||||||||||||||||||||||||||||||
2012 | 2011 | ||||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q3 YTD | Q1 | Q2 | Q3 | Q3 YTD | Q4 | FY 2011 | ||||||||||||||||||||||
Adjusted earnings from continuing operations: | |||||||||||||||||||||||||||||||
Earnings from continuing operations | $ | 196,827 | $ | 212,902 | $ | 242,213 | $ | 651,942 | $ | 174,791 | $ | 239,198 | $ | 223,438 | $ | 637,427 | $ | 208,938 | $ | 846,365 | |||||||||||
Gains (losses) from discrete and other tax items | 1,432 | (372 | ) | 4,513 | 5,573 | 8,016 | 22,338 | 2,390 | 32,744 | 8,590 | 41,334 | ||||||||||||||||||||
Adjusted earnings from continuing operations | $ | 195,395 | $ | 213,274 | $ | 237,700 | $ | 646,369 | $ | 166,775 | $ | 216,860 | $ | 221,048 | $ | 604,683 | $ | 200,348 | $ | 805,031 | |||||||||||
Adjusted diluted earnings per common share: | |||||||||||||||||||||||||||||||
Earnings from continuing operations | $ | 1.05 | $ | 1.15 | $ | 1.32 | $ | 3.51 | $ | 0.92 | $ | 1.26 | $ | 1.19 | $ | 3.37 | $ | 1.12 | $ | 4.48 | |||||||||||
Gains (losses) from discrete and other tax items | — | — | 0.02 | 0.03 | 0.04 | 0.12 | 0.01 | 0.17 | 0.05 | 0.22 | |||||||||||||||||||||
Adjusted earnings from continuing operations | $ | 1.05 | $ | 1.15 | $ | 1.30 | $ | 3.48 | $ | 0.88 | $ | 1.14 | $ | 1.18 | $ | 3.20 | $ | 1.07 | $ | 4.26 | |||||||||||
* Per share data may not add due to rounding. | |||||||||||||||||||||||||||||||
DOVER CORPORATION
QUARTERLY FREE CASH FLOW
(unaudited)(in thousands)
2012 | 2011 | ||||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q3 YTD | Q1 | Q2 | Q3 | Q3 YTD | Q4 | FY 2011 | ||||||||||||||||||||||
Cash flow from operating activities | $ | 160,127 | $ | 252,120 | $ | 298,987 | $ | 711,234 | $ | 117,503 | $ | 205,260 | $ | 376,614 | $ | 699,377 | $ | 358,852 | $ | 1,058,229 | |||||||||||
Less: Additions to property, plant and equipment | (71,429 | ) | (74,358 | ) | (69,329 | ) | (215,116 | ) | (51,379 | ) | (72,338 | ) | (65,000 | ) | (188,717 | ) | (83,092 | ) | (271,809 | ) | |||||||||||
Free cash flow | $ | 88,698 | $ | 177,762 | $ | 229,658 | $ | 496,118 | $ | 66,124 | $ | 132,922 | $ | 311,614 | $ | 510,660 | $ | 275,760 | $ | 786,420 | |||||||||||
Free cash flow as a percentage of earnings from continuing operations | 45.1 | % | 83.5 | % | 94.8 | % | 76.1 | % | 37.8 | % | 55.6 | % | 139.5 | % | 80.1 | % | 132.0 | % | 92.9 | % | |||||||||||
Free cash flow as a percentage of revenue | 4.3 | % | 8.2 | % | 10.4 | % | 7.7 | % | 3.6 | % | 6.7 | % | 14.6 | % | 8.6 | % | 13.8 | % | 9.9 | % | |||||||||||
Third Quarter 2012 Earnings Conference Call October 17, 2012 - 9:00am CT
Forward Looking Statements We want to remind everyone that our comments may contain forward-looking statements that are inherently subject to uncertainties. We caution everyone to be guided in their analysis of Dover Corporation by referring to our Form 10-K for a list of factors that could cause our results to differ from those anticipated in any such forward-looking statements. We would also direct your attention to our internet site, www.dovercorporation.com, where considerably more information can be found. 2
$0.40 $0.50 $0.60 $0.70 $0.80 $0.90 $1.00 $1.10 $1.20 $1.30 $1.40 Q1 Q2 Q3* Q4* Q1* Q2* Q3* Q4* Q1 Q2 Q3 Revenue $2.2B 3% $6.4B 8% EPS (cont.) $1.32 11% $3.51 4% Bookings $2.1B 1% $6.4B 6% Seg. Margins 18.0% 100 bps 17.0% -10 bps Organic Rev. 1% 4% Acq. Growth 4% 6% FCF (a) $230M -26% $496M -3% Dover’s Q3 2012 Performance Continuing Earnings Per Share FY $3.65 • Results driven by excellent conversion on modest revenue growth; Europe remains weak, China continues to slow • Solid revenue growth in Energy and Engineered Systems (10% & 8%, respectively) •Revenue declines in Communication Technologies and Printing & Identification driven by challenges at Sound Solutions and weaker electronics markets, respectively •Strong operating margin performance was broad-based •Overall book-to-bill of 0.94 Q3 Q3/Q3 2010 2011 * Includes discrete & other tax benefits of $0.20 EPS in Q3 2010, $0.07 in Q4 2010, $0.04 in Q1 2011, $0.12 in Q2 2011, $0.01 in Q3 2011, $0.05 in Q4 2011 and $0.02 in Q3 2012 FY $4.48 (a) See Press Release filed under Form 8-K for free cash flow reconciliation 3 Quarterly Comments Discrete tax benefits 2012 Adjusted continuing earnings per share YTD YTD/YTD
4 Revenue Q3 2012 Communication Technologies Energy Engineered Systems Printing & Identification Total Dover Organic -1% 3% 4% -6% 1% Acquisitions - 8% 7% - 4% Currency -1% -1% -3% -5% -2% Total -2% 10% 8% -11% 3% YTD 2012 Communication Technologies Energy Engineered Systems Printing & Identification Total Dover Organic 3% 13% 6% -8% 4% Acquisitions 14% 5% 5% - 6% Currency -1% -1% -1% -4% -2% Total 16% 17% 10% -12% 8%
$674 $674 $370 $358 $362 $396 $539 $562 $212 $218 $0 $300 $600 $900 DCT Q2 DCT Q3 DE Q2 DE Q3 DES Q2 DES Q3 DPI Q2 DPI Q3 $666 $600 $358 $343 $383 $412 $530 $527 $204 $198 $0 $300 $600 $900 DCT Q2 DCT Q3 DE Q2 DE Q3 DES Q2 DES Q3 DPI Q2 DPI Q3 Sequential Results – Q2 12 / Q3 12 Fluid Solutions ↑ 10% ↑ 4% Refrigeration & Industrial ↑ 8% ↓ 1% ↓ 8% ↓ 4% $ in millions 5 Bookings ↑ 1% ↓ 3% Revenue
6 Communication Technologies • Modest revenue declines in most served end-markets •Within the handset market, strong MEMs revenue growth offset by lower Sound Solutions volume • Margin gains driven by strong leverage on MEMS volume, and absence of one-time acquisition related costs realized in prior year, partially offset by lower Sound Solutions volume • Bookings growth led by handset markets •Book-to-bill at 1.04 $ in millions Q3 2012 Q3 2011 % Change Revenue $396 $405 -2% Earnings $ 64 $ 53 19% Margin 16.1% 13.2% 290 bps Bookings $412 $411 Flat Quarterly Comments Revenue by End-Market % of Q3 Revenue Y / Y Growth Handsets 38% -2% Life Sciences 16% -1% Aerospace / Industrial 15% 1% Military / Defense 13% -5% Telecom / Other 18% -4%
7 Energy • Revenue and earnings growth driven by production and downstream markets; drilling slowing as anticipated •Average NA rig count declined 7% over prior year; oil prices remain supportive of continued investment in production • Operating margin of 24.7% reflects strong execution • Bookings growth driven by recent acquisitions serving the production market • Book-to-bill at 0.94 $ in millions Quarterly Comments Q3 2012 Q3 2011 % Change Revenue $562 $511 10% Earnings $139 $125 11% Margin 24.7% 24.5% 20 bps Bookings $527 $498 6% Revenue by End-Market % of Q3 Revenue Y / Y Growth Drilling 17% -12% Production 56% 20% Downstream 27% 9%
8 Engineered Systems • Revenue growth in Refrigeration & Industrial was broad-based; revenue gains in Fluids were driven by recent acquisitions •Results in Fluids continue to be impacted by weak Europe and softer China • Strong margin performance driven by productivity and cost improvements • Bookings impacted by normal seasonality in refrigeration market • Book-to-bill at 0.89 $ in millions Quarterly Comments Q3 2012 Q3 2011 % Change Revenue $892 $823 8% Earnings $144 $126 15% Margin 16.2% 15.2% 100 bps Bookings $798 $777 3% Revenue by End-Market % of Q3 Revenue Y / Y Growth Fluids 24% 26% Refrigeration & Food Equipment 41% 2% Industrial 35% 6%
Printing & Identification • Revenue and earnings decline driven by a weaker electronics market, a weak Europe & softer China; Fast moving consumer goods market up 6% organically (ex.impact of FX) • Operating margin decline reflects volume decreases and product mix • Bookings decline most evident in electronics markets •Book-to-bill at 0.96 $ in millions Quarterly Comments Q3 2012 Q3 2011 % Change Revenue $358 $401 -11% Earnings $ 51 $ 59 -14% Margin 14.4% 14.8% -40 bps Bookings $343 $384 -10% 9 Revenue by End-Market % of Q3 Revenue Y / Y Growth Fast Moving Consumer Goods 40% -1% Industrial 24% -10% Electronics 36% -20%
Q3 2012 Overview Q3 2012 Net Interest Expense $30.4 million, largely unchanged from last year, in- line with expectations Corporate Expense $32.0 million, down $2 million from last year Effective Tax Rate (ETR) Q3 rate was 27.9%. Higher tax rate was driven by mix of geographic earnings, and included a $0.02 benefit from resolution of discrete tax matters. Capex $69.3 million, in-line with expectations Share Repurchases 4.3 million shares* 10 * Includes 900,000 shares repurchased in Q3 and settled in Q4
FY 2012 Guidance – Revenue Growth by Segment 11 2012F Organic Growth 2012F Acquisition Growth (b) Total Communication Technologies ≈ 1% 10% ≈ 11% Energy ≈ 11% ≈ 5% ≈ 16% Engineered Systems ≈ 4% ≈ 5% ≈ 9% Printing & Identification ≈ (9%) - ≈ (9%) Total ≈ 3% (a) ≈ 4% ≈ 7% (b) Includes completed deals only (a) Includes -2% impact from foreign exchange
FY 2012 Guidance Revenue: • Organic revenue : ≈ 3% (inc. -2% FX) • Acquisitions: ≈ 4% • Total revenue: ≈ 7% Corporate expense: ≈ $138 million Interest expense: ≈ $120 million Full-Year Tax Rate: ≈ 27.9% Capital expenditures: ≈ 3.8% of rev. FCF for full year: ≈ 10% of revenue 12 2012 EPS from continuing ops: $4.55 – $4.65
2011 EPS – Continuing Ops $4.48 • Less 2011 tax benefits (1): ($0.22) 2011 Adjusted EPS – Continuing Ops $4.26 • Volume, mix, price (inc. FX): $0.24 - $0.30 • Net benefits of productivity: $0.20 - $0.24 • Acquisitions: ($0.14) • Investment / Compensation: ($0.05) • Corporate expense: - • Interest / Shares / Tax Rate (net): $0.01 • Discrete tax benefits $0.03 2012 EPS – Continuing Ops $4.55 - $4.65 2012 EPS Guidance Bridge - Cont. Ops (1) $0.04 in Q1 2011, $0.12 in Q2 2011, $0.01 in Q3 2011 and $0.05 in Q4 2011 13