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, 2013
________________________________
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, 2013, 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, 2013; and (ii) posted on its website at
http://www.dovercorporation.com the presentation slides attached hereto as Exhibit 99.2 for the third quarter ended September 30, 2013.
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, 2013.
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, 2013 | DOVER CORPORATION | ||
(Registrant) | ||||
By: | /s/ Ivonne M. Cabrera | |||
Ivonne M. Cabrera | ||||
Senior Vice President, General Counsel & Secretary | ||||
EXHIBIT INDEX
Number | Exhibit | |
99.1 | Press Release of Dover Corporation dated October 17, 2013 | |
99.2 | Presentation Slides posted on Dover Corporation’s website at http://www.dovercorporation.com | |
Exhibit 99.1
CONTACT: | ||
Paul Goldberg | ||
Vice President - Investor Relations | ||
(212) 922-1640 | ||
DOVER REPORTS THIRD QUARTER 2013 RESULTS; UPDATES FULL-YEAR OUTLOOK
• | Reports quarterly revenue of $2.3 billion, an increase of 7% over the prior year |
• | Delivers quarterly diluted earnings per share from continuing operations of $1.53, an increase of 20% over last year |
• | Achieves adjusted quarterly diluted earnings per share from continuing operations of $1.54, excluding Knowles spin-off costs of $0.06, tax benefits of $0.03, and other one-time gains gains of $0.02, up 23% from an adjusted prior year |
• | Revises outlook for full year revenue growth to approximately 7% |
• | Narrows the range for diluted earnings per share from continuing operations to $5.57 to $5.64, including one-time items |
Downers Grove, Illinois, October 17, 2013 — Dover (NYSE: DOV) announced today that for the third quarter ended September 30, 2013, revenue was $2.3 billion, an increase of 7% over the prior year period. The revenue increase was driven by organic growth of 3% and an increase of 4% from acquisitions. Earnings from continuing operations were $263.7 million, or $1.53 diluted earnings per share (“EPS”), compared to $233.3 million, or $1.27 EPS, in the prior year period, representing increases of 13% and 20%, respectively. EPS from continuing operations includes Knowles spin-off costs of $0.06 EPS, discrete tax benefits of $0.03 EPS, and other one-time gains of $0.02 recognized in the current quarter. Excluding these items, adjusted EPS from continuing operations for the third quarter of 2013 was $1.54, reflecting an increase of 23% over an adjusted EPS of $1.25 in the prior year period.
Revenue for the nine months ended September 30, 2013 was $6.5 billion, an increase of 7% over the prior year, reflecting organic growth of 2% and a 5% increase from acquisitions. Earnings from continuing operations for the nine months ended September 30, 2013 were $755.0 million, or $4.34 EPS, compared to $624.9 million, or $3.37 EPS in the prior year period, representing increases of 21% and 29%, respectively. EPS from continuing operations during this period includes Knowles spin-off costs of $0.08 EPS, discrete tax benefits of $0.41 EPS, and other one-time gains of $0.02 compared to $0.01 EPS of discrete tax benefits in the prior year. Excluding these items, adjusted EPS from continuing operations for the nine months ended September 30, 2013 was $4.00, an increase of 19% over an adjusted EPS of $3.36 in the prior year.
Commenting on the third quarter results, Dover's President and Chief Executive Officer, Robert A. Livingston, said, “I am pleased with our strong third quarter results, which were driven by broad-based organic growth across all segments. These results reflect the impact of our global growth initiatives and our recent acquisitions. Particularly strong were our drilling and downstream markets within Energy, our refrigeration & food equipment markets, and Printing & Identification. Our revenue growth was leveraged by solid execution and cost reduction activities, resulting in a segment margin of 19.4%, representing a 100 basis point improvement over last year.”
“Also encouraging, we continued to execute on our global growth strategies and productivity
initiatives during the quarter. We have announced several strategic acquisitions since our last quarterly report and expect more activity in the near-term. These deals are highly synergistic and help to broaden our product mix and geographic breadth within our growth spaces. In addition, we continued to execute on several projects which allow us to consolidate our manufacturing footprint and share infrastructure. These actions, taken together with the upcoming spin-off of Knowles, position Dover very well for sustained growth and outstanding performance.”
“While our overall third quarter performance was strong, market conditions proved to be softer than anticipated. As a result, we are revising our organic growth expectations to the low-end of our prior range, and now expect full year growth of about 3%. Our acquisition growth remains unchanged at 4%, resulting in total full-year revenue growth of approximately 7%. Based on this revised revenue guidance, we are narrowing our full year EPS guidance to the range of $5.57 to $5.64. This range includes incurred spin-off costs, discrete tax benefits, and one-time gains. This range does not include any prospective Knowles spin-off costs in the fourth quarter.”
Net earnings for the third quarter of 2013 were $269.1 million or $1.56 EPS, including earnings from discontinued operations of $5.5 million, or $0.03 EPS, compared to net earnings of $241.0 million, or $1.31 EPS, for the same period of 2012, which included earnings from discontinued operations of $7.7 million, or $0.04 EPS.
Net earnings for the nine months ended September 30, 2013 were $809.2 million, or $4.65 EPS, including net earnings from discontinued operations of $54.2 million, or $0.31 EPS, compared to net earnings of $651.2 million, or $3.51 EPS, for the same period of 2012, which included net earnings from discontinued operations of $26.3 million or $0.14 EPS. Reflected within discontinued operations was a goodwill impairment charge of $18.7 million, net of tax, or $0.11 EPS, in connection with the anticipated sale of our electronic test and assembly businesses, and discrete tax benefits of $54.4 million, or $0.31 EPS.
Dover will host a webcast of its third quarter 2013 conference call at 10:00 A.M. Eastern Time (9:00 A.M. Central Time) on Thursday, October 17, 2013. The webcast can be accessed on the Dover 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 is a diversified global manufacturer with annual revenues of over $8 billion. For over 50 years, Dover has been delivering outstanding products and services that reflect its market leadership and commitment to operational and technical excellence. The Company's entrepreneurial business model encourages, promotes and fosters deep customer engagement which has led to Dover's well-established and valued reputation for providing superior customer service and industry-leading product innovation. Dover 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. Headquartered in Downers Grove, Illinois, Dover employs 35,000 people worldwide. Dover is traded on the New York Stock Exchange under “DOV.” Additional information is available on our 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, operating and strategic plans, income, earnings, cash flows, changes in operations, operating improvements, industries in which Dover businesses operate and the U.S. and global economies. Statements in this press release that are not historical are hereby identified as “forward-looking statements” and may be indicated by words or phrases such as “anticipates,” “expects,” “believes,” “indicates,” “suggests,” “will,” “plans,” “supports,” “projects,” “should,” “would,” “could,” “forecast” and “management is of the opinion,” or the use of the 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, the state of the worldwide economy and sovereign credit, especially in Europe; political events that could impact the worldwide economy; the impact of natural disasters and their effect on global supply chains and energy markets; current economic conditions and uncertainties in the credit and capital markets; instability in countries where Dover conducts business; the ability of Dover's businesses to expand into new geographic markets and to anticipate and meet customer demands for new products and product enhancements; increased competition and pricing pressures in the markets served by Dover's businesses; the impact of the proposed spin-off and our ability to consummate it on the anticipated time line or terms; the terms and timing of the sale of any business in discontinued operations; the impact of loss of a single-source manufacturing facility; changes in customer demand or loss of a significant customer; the relative mix of products and services which impacts margins and operating efficiencies; short-term capacity constraints; increases in the cost of raw materials; domestic and foreign governmental and public policy changes including environmental regulations, conflict minerals disclosure requirements, and tax policies (including domestic and international export subsidy programs, R&E credits and other similar programs); protection and validity of patent and other intellectual property rights; the ability to identify and successfully consummate value-adding acquisition opportunities; Dover's ability to achieve expected savings from integration, synergy and other cost-control initiatives; unforeseen developments in contingencies such as litigation; international economic conditions including interest rate and currency exchange rate fluctuations; possible future terrorist threats and their effect on the worldwide economy; and a downgrade in Dover's credit ratings. Dover 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 undertakes no obligation to update any forward-looking statement, except as required by law.
INVESTOR SUPPLEMENT - THIRD QUARTER 2013
DOVER CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)(in thousands, except per share data)
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Revenue | $ | 2,252,349 | $ | 2,097,605 | $ | 6,520,685 | $ | 6,090,508 | |||||||
Cost of goods and services | 1,375,699 | 1,287,466 | 4,011,461 | 3,757,187 | |||||||||||
Gross profit | 876,650 | 810,139 | 2,509,224 | 2,333,321 | |||||||||||
Selling and administrative expenses | 482,284 | 451,943 | 1,472,333 | 1,372,021 | |||||||||||
Operating earnings | 394,366 | 358,196 | 1,036,891 | 961,300 | |||||||||||
Interest expense, net | 30,237 | 30,399 | 90,761 | 90,145 | |||||||||||
Other expense (income), net | 970 | 3,706 | (1,206 | ) | 5,855 | ||||||||||
Earnings before provision for income taxes and discontinued operations | 363,159 | 324,091 | 947,336 | 865,300 | |||||||||||
Provision for income taxes | 99,507 | 90,761 | 192,343 | 240,405 | |||||||||||
Earnings from continuing operations | 263,652 | 233,330 | 754,993 | 624,895 | |||||||||||
Earnings from discontinued operations, net | 5,462 | 7,716 | 54,173 | 26,315 | |||||||||||
Net earnings | $ | 269,114 | $ | 241,046 | $ | 809,166 | $ | 651,210 | |||||||
Basic earnings per common share: | |||||||||||||||
Earnings from continuing operations | $ | 1.55 | $ | 1.28 | $ | 4.40 | $ | 3.41 | |||||||
Earnings from discontinued operations, net | 0.03 | 0.04 | 0.32 | 0.14 | |||||||||||
Net earnings | 1.58 | 1.33 | 4.71 | 3.56 | |||||||||||
Weighted average shares outstanding | 170,544 | 181,763 | 171,690 | 183,000 | |||||||||||
Diluted earnings per common share: | |||||||||||||||
Earnings from continuing operations | $ | 1.53 | $ | 1.27 | $ | 4.34 | $ | 3.37 | |||||||
Earnings from discontinued operations, net | 0.03 | 0.04 | 0.31 | 0.14 | |||||||||||
Net earnings | 1.56 | 1.31 | 4.65 | 3.51 | |||||||||||
Weighted average shares outstanding | 172,734 | 183,932 | 173,870 | 185,489 | |||||||||||
Dividends paid per common share | $ | 0.375 | $ | 0.35 | $ | 1.075 | $ | 0.98 | |||||||
DOVER CORPORATION
QUARTERLY SEGMENT INFORMATION
(unaudited)(in thousands)
2013 | 2012 | ||||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q3 YTD | Q1 | Q2 | Q3 | Q3 YTD | Q4 | FY 2012 | ||||||||||||||||||||||
REVENUE | |||||||||||||||||||||||||||||||
Communication Technologies | $ | 372,790 | $ | 401,477 | $ | 413,608 | $ | 1,187,875 | $ | 357,575 | $ | 361,689 | $ | 396,470 | $ | 1,115,734 | $ | 400,851 | $ | 1,516,585 | |||||||||||
Energy | 561,198 | 573,471 | 577,350 | 1,712,019 | 531,570 | 538,786 | 562,263 | 1,632,619 | 539,985 | 2,172,604 | |||||||||||||||||||||
Engineered Systems | |||||||||||||||||||||||||||||||
Fluid Solutions | 203,991 | 226,882 | 227,104 | 657,977 | 180,364 | 211,974 | 218,324 | 610,662 | 206,500 | 817,162 | |||||||||||||||||||||
Refrigeration & Industrial | 664,294 | 777,396 | 778,336 | 2,220,026 | 642,213 | 674,501 | 674,116 | 1,990,830 | 613,012 | 2,603,842 | |||||||||||||||||||||
Eliminations | (352 | ) | (383 | ) | (485 | ) | (1,220 | ) | (453 | ) | (352 | ) | (319 | ) | (1,124 | ) | (336 | ) | (1,460 | ) | |||||||||||
867,933 | 1,003,895 | 1,004,955 | 2,876,783 | 822,124 | 886,123 | 892,121 | 2,600,368 | 819,176 | 3,419,544 | ||||||||||||||||||||||
Printing & Identification | 237,877 | 250,646 | 256,571 | 745,094 | 243,570 | 251,875 | 246,945 | 742,390 | 254,141 | 996,531 | |||||||||||||||||||||
Intra-segment eliminations | (225 | ) | (726 | ) | (135 | ) | (1,086 | ) | (225 | ) | (184 | ) | (194 | ) | (603 | ) | (322 | ) | (925 | ) | |||||||||||
Total consolidated revenue | $ | 2,039,573 | $ | 2,228,763 | $ | 2,252,349 | $ | 6,520,685 | $ | 1,954,614 | $ | 2,038,289 | $ | 2,097,605 | $ | 6,090,508 | $ | 2,013,831 | $ | 8,104,339 | |||||||||||
NET EARNINGS | |||||||||||||||||||||||||||||||
Segment Earnings: | |||||||||||||||||||||||||||||||
Communication Technologies | $ | 44,208 | $ | 51,789 | $ | 76,076 | $ | 172,073 | $ | 46,556 | $ | 50,322 | $ | 63,706 | $ | 160,584 | $ | 58,376 | $ | 218,960 | |||||||||||
Energy | 139,545 | 132,926 | 145,494 | 417,965 | 132,115 | 133,936 | 139,038 | 405,089 | 133,561 | 538,650 | |||||||||||||||||||||
Engineered Systems | 117,178 | 165,440 | 172,223 | 454,841 | 122,092 | 133,808 | 144,245 | 400,145 | 101,807 | 501,952 | |||||||||||||||||||||
Printing & Identification | 29,752 | 35,967 | 42,881 | 108,600 | 26,089 | 28,918 | 39,502 | 94,509 | 40,650 | 135,159 | |||||||||||||||||||||
Total Segments | 330,683 | 386,122 | 436,674 | 1,153,479 | 326,852 | 346,984 | 386,491 | 1,060,327 | 334,394 | 1,394,721 | |||||||||||||||||||||
Corporate expense / other | 33,763 | 38,341 | 43,278 | 115,382 | 36,546 | 36,335 | 32,001 | 104,882 | 31,127 | 136,009 | |||||||||||||||||||||
Net interest expense | 30,244 | 30,280 | 30,237 | 90,761 | 30,031 | 29,715 | 30,399 | 90,145 | 30,996 | 121,141 | |||||||||||||||||||||
Earnings from continuing operations before provision for income taxes | 266,676 | 317,501 | 363,159 | 947,336 | 260,275 | 280,934 | 324,091 | 865,300 | 272,271 | 1,137,571 | |||||||||||||||||||||
Provision for income taxes | 69,687 | 23,149 | 99,507 | 192,343 | 73,866 | 75,778 | 90,761 | 240,405 | 64,047 | 304,452 | |||||||||||||||||||||
Earnings from continuing operations | 196,989 | 294,352 | 263,652 | 754,993 | 186,409 | 205,156 | 233,330 | 624,895 | 208,224 | 833,119 | |||||||||||||||||||||
Earnings (loss) from discontinued operations, net | 13,014 | 35,697 | 5,462 | 54,173 | 9,654 | 8,945 | 7,716 | 26,315 | (48,364 | ) | (22,049 | ) | |||||||||||||||||||
Net earnings | $ | 210,003 | $ | 330,049 | $ | 269,114 | $ | 809,166 | $ | 196,063 | $ | 214,101 | $ | 241,046 | $ | 651,210 | $ | 159,860 | $ | 811,070 | |||||||||||
SEGMENT OPERATING MARGIN | |||||||||||||||||||||||||||||||
Communication Technologies | 11.9 | % | 12.9 | % | 18.4 | % | 14.5 | % | 13.0 | % | 13.9 | % | 16.1 | % | 14.4 | % | 14.6 | % | 14.4 | % | |||||||||||
Energy | 24.9 | % | 23.2 | % | 25.2 | % | 24.4 | % | 24.9 | % | 24.9 | % | 24.7 | % | 24.8 | % | 24.7 | % | 24.8 | % | |||||||||||
Engineered Systems | 13.5 | % | 16.5 | % | 17.1 | % | 15.8 | % | 14.9 | % | 15.1 | % | 16.2 | % | 15.4 | % | 12.4 | % | 14.7 | % | |||||||||||
Printing & Identification | 12.5 | % | 14.3 | % | 16.7 | % | 14.6 | % | 10.7 | % | 11.5 | % | 16.0 | % | 12.7 | % | 16.0 | % | 13.6 | % | |||||||||||
Total Segment | 16.2 | % | 17.3 | % | 19.4 | % | 17.7 | % | 16.7 | % | 17.0 | % | 18.4 | % | 17.4 | % | 16.6 | % | 17.2 | % | |||||||||||
DEPRECIATION AND AMORTIZATION EXPENSE | |||||||||||||||||||||||||||||||
Communication Technologies | $ | 35,501 | $ | 37,719 | $ | 38,251 | $ | 111,471 | $ | 31,513 | $ | 32,828 | $ | 32,997 | $ | 97,338 | $ | 35,281 | $ | 132,619 | |||||||||||
Energy | 26,298 | 26,599 | 26,549 | 79,446 | 21,184 | 23,533 | 24,639 | 69,356 | 25,721 | 95,077 | |||||||||||||||||||||
Engineered Systems | 31,551 | 32,282 | 32,961 | 96,794 | 19,582 | 23,913 | 23,060 | 66,555 | 27,066 | 93,621 | |||||||||||||||||||||
Printing & Identification | 7,630 | 7,606 | 7,701 | 22,937 | 8,331 | 8,496 | 8,777 | 25,604 | 7,998 | 33,602 | |||||||||||||||||||||
Corporate | 859 | 1,026 | 1,032 | 2,917 | 700 | 765 | 842 | 2,307 | 359 | 2,666 | |||||||||||||||||||||
$ | 101,839 | $ | 105,232 | $ | 106,494 | $ | 313,565 | $ | 81,310 | $ | 89,535 | $ | 90,315 | $ | 261,160 | $ | 96,425 | $ | 357,585 | ||||||||||||
DOVER CORPORATION
QUARTERLY SEGMENT INFORMATION
(continued)
(unaudited)(in thousands)
2013 | 2012 | ||||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q3 YTD | Q1 | Q2 | Q3 | Q3 YTD | Q4 | FY 2012 | ||||||||||||||||||||||
BOOKINGS | |||||||||||||||||||||||||||||||
Communication Technologies | $ | 379,122 | $ | 422,293 | $ | 423,662 | $ | 1,225,077 | $ | 347,291 | $ | 387,058 | $ | 411,005 | $ | 1,145,354 | $ | 363,624 | $ | 1,508,978 | |||||||||||
Energy | 620,640 | 525,612 | 595,421 | 1,741,673 | 585,775 | 530,352 | 526,824 | 1,642,951 | 550,091 | 2,193,042 | |||||||||||||||||||||
Engineered Systems | |||||||||||||||||||||||||||||||
Fluid Solutions | 223,764 | 213,359 | 222,402 | 659,525 | 184,711 | 204,139 | 197,767 | 586,617 | 209,872 | 796,489 | |||||||||||||||||||||
Refrigeration & Industrial | 755,026 | 784,904 | 662,464 | 2,202,394 | 711,911 | 666,223 | 600,065 | 1,978,199 | 606,931 | 2,585,130 | |||||||||||||||||||||
Eliminations | (373 | ) | (432 | ) | (372 | ) | (1,177 | ) | (408 | ) | (376 | ) | (258 | ) | (1,042 | ) | (399 | ) | (1,441 | ) | |||||||||||
978,417 | 997,831 | 884,494 | 2,860,742 | 896,214 | 869,986 | 797,574 | 2,563,774 | 816,404 | 3,380,178 | ||||||||||||||||||||||
Printing & Identification | 237,217 | 259,282 | 256,211 | 752,710 | 249,773 | 251,733 | 244,611 | 746,117 | 252,937 | 999,054 | |||||||||||||||||||||
Intra-segment eliminations | (720 | ) | (137 | ) | (109 | ) | (966 | ) | (609 | ) | (221 | ) | (759 | ) | (1,589 | ) | (1,020 | ) | (2,609 | ) | |||||||||||
Total consolidated bookings | $ | 2,214,676 | $ | 2,204,881 | $ | 2,159,679 | $ | 6,579,236 | $ | 2,078,444 | $ | 2,038,908 | $ | 1,979,255 | $ | 6,096,607 | $ | 1,982,036 | $ | 8,078,643 | |||||||||||
BACKLOG | |||||||||||||||||||||||||||||||
Communication Technologies | $ | 458,765 | $ | 480,426 | $ | 492,583 | $ | 451,110 | $ | 476,745 | $ | 491,041 | $ | 453,172 | |||||||||||||||||
Energy | 311,793 | 255,544 | 274,243 | 296,360 | 282,364 | 248,233 | 256,093 | ||||||||||||||||||||||||
Engineered Systems | |||||||||||||||||||||||||||||||
Fluid Solutions | 178,854 | 184,142 | 182,557 | 191,327 | 172,300 | 156,191 | 160,890 | ||||||||||||||||||||||||
Refrigeration & Industrial | 592,922 | 597,838 | 482,069 | 598,910 | 586,824 | 515,285 | 516,559 | ||||||||||||||||||||||||
Eliminations | (178 | ) | (227 | ) | (113 | ) | (132 | ) | (155 | ) | (94 | ) | (157 | ) | |||||||||||||||||
771,598 | 781,753 | 664,513 | 790,105 | 758,969 | 671,382 | 677,292 | |||||||||||||||||||||||||
Printing & Identification | 95,353 | 103,864 | 105,699 | 102,117 | 98,216 | 98,356 | 97,857 | ||||||||||||||||||||||||
Intra-segment eliminations | (886 | ) | (578 | ) | (423 | ) | (986 | ) | (648 | ) | (324 | ) | (591 | ) | |||||||||||||||||
Total consolidated backlog | $ | 1,636,623 | $ | 1,621,009 | $ | 1,536,615 | $ | 1,638,706 | $ | 1,615,646 | $ | 1,508,688 | $ | 1,483,823 | |||||||||||||||||
DOVER CORPORATION
QUARTERLY EARNINGS PER SHARE
(unaudited)(in thousands, except per share data*)
2013 | 2012 | ||||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q3 YTD | Q1 | Q2 | Q3 | Q3 YTD | Q4 | FY 2012 | ||||||||||||||||||||||
Basic earnings (loss) per common share: | |||||||||||||||||||||||||||||||
Continuing operations | $ | 1.14 | $ | 1.72 | $ | 1.55 | $ | 4.40 | $ | 1.01 | $ | 1.12 | $ | 1.28 | $ | 3.41 | $ | 1.17 | $ | 4.59 | |||||||||||
Discontinued operations | 0.08 | 0.21 | 0.03 | 0.32 | 0.05 | 0.05 | 0.04 | 0.14 | (0.27 | ) | (0.12 | ) | |||||||||||||||||||
Net earnings | 1.21 | 1.93 | 1.58 | 4.71 | 1.07 | 1.17 | 1.33 | 3.56 | 0.90 | 4.47 | |||||||||||||||||||||
Diluted earnings (loss) per common share: | |||||||||||||||||||||||||||||||
Continuing operations | $ | 1.12 | $ | 1.70 | $ | 1.53 | $ | 4.34 | $ | 1.00 | $ | 1.10 | $ | 1.27 | $ | 3.37 | $ | 1.16 | $ | 4.53 | |||||||||||
Discontinued operations | 0.07 | 0.21 | 0.03 | 0.31 | 0.05 | 0.05 | 0.04 | 0.14 | (0.27 | ) | (0.12 | ) | |||||||||||||||||||
Net earnings | 1.20 | 1.91 | 1.56 | 4.65 | 1.05 | 1.15 | 1.31 | 3.51 | 0.89 | 4.41 | |||||||||||||||||||||
Adjusted diluted earnings per common share (calculated below): | |||||||||||||||||||||||||||||||
Continuing operations | $ | 1.10 | $ | 1.36 | $ | 1.54 | $ | 4.00 | $ | 1.01 | $ | 1.10 | $ | 1.25 | $ | 3.36 | $ | 1.09 | $ | 4.44 | |||||||||||
Net earnings (loss) and average shares used in calculated earnings (loss) per share amounts are as follows: | |||||||||||||||||||||||||||||||
Net earnings (loss): | |||||||||||||||||||||||||||||||
Continuing operations | $ | 196,989 | $ | 294,352 | $ | 263,652 | $ | 754,993 | $ | 186,409 | $ | 205,156 | $ | 233,330 | $ | 624,895 | $ | 208,224 | $ | 833,119 | |||||||||||
Discontinued operations | 13,014 | 35,697 | 5,462 | 54,173 | 9,654 | 8,945 | 7,716 | 26,315 | (48,364 | ) | (22,049 | ) | |||||||||||||||||||
Net earnings | 210,003 | 330,049 | 269,114 | 809,166 | 196,063 | 214,101 | 241,046 | 651,210 | 159,860 | 811,070 | |||||||||||||||||||||
Average shares outstanding: | |||||||||||||||||||||||||||||||
Basic | 173,448 | 171,111 | 170,544 | 171,690 | 183,737 | 183,494 | 181,763 | 183,000 | 177,257 | 181,551 | |||||||||||||||||||||
Diluted | 175,567 | 173,097 | 172,734 | 173,870 | 186,706 | 185,780 | 183,932 | 185,489 | 179,365 | 183,993 | |||||||||||||||||||||
Note: | |||||||||||||||||||||||||||||||
Earnings from continuing operations are adjusted by discrete tax items, incurred spin-off costs, and other one-time gains to derive adjusted earnings from continuing operations and adjusted diluted earnings per common share as follows: | |||||||||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q3 YTD | Q1 | Q2 | Q3 | Q3 YTD | Q4 | FY 2012 | ||||||||||||||||||||||
Adjusted earnings from continuing operations: | |||||||||||||||||||||||||||||||
Earnings from continuing operations | $ | 196,989 | $ | 294,352 | $ | 263,652 | $ | 754,993 | $ | 186,409 | $ | 205,156 | $ | 233,330 | $ | 624,895 | $ | 208,224 | $ | 833,119 | |||||||||||
Gains (losses) from discrete and other tax items | 4,525 | 61,477 | 4,878 | 70,880 | (1,610 | ) | (372 | ) | 4,513 | 2,531 | 13,606 | 16,137 | |||||||||||||||||||
Knowles spin-off costs | — | (3,322 | ) | (10,637 | ) | (13,959 | ) | — | — | — | — | — | — | ||||||||||||||||||
Other one-time gains, net of tax | — | — | 2,866 | 2,866 | — | — | — | — | — | — | |||||||||||||||||||||
Adjusted earnings from continuing operations | $ | 192,464 | $ | 236,197 | $ | 266,545 | $ | 695,206 | $ | 188,019 | $ | 205,528 | $ | 228,817 | $ | 622,364 | $ | 194,618 | $ | 816,982 | |||||||||||
Adjusted diluted earnings per common share: | |||||||||||||||||||||||||||||||
Earnings from continuing operations | $ | 1.12 | $ | 1.70 | $ | 1.53 | $ | 4.34 | $ | 1.00 | $ | 1.10 | $ | 1.27 | $ | 3.37 | $ | 1.16 | $ | 4.53 | |||||||||||
Gains (losses) from discrete and other tax items | 0.02 | 0.36 | 0.03 | 0.41 | (0.01 | ) | — | 0.02 | 0.01 | 0.07 | 0.09 | ||||||||||||||||||||
Knowles spin-off costs | — | (0.02 | ) | (0.06 | ) | (0.08 | ) | — | — | — | — | — | — | ||||||||||||||||||
Other one-time gains, net of tax | — | — | 0.02 | 0.02 | — | — | — | — | — | — | |||||||||||||||||||||
Adjusted earnings from continuing operations | $ | 1.10 | $ | 1.36 | $ | 1.54 | $ | 4.00 | $ | 1.01 | $ | 1.10 | $ | 1.25 | $ | 3.36 | $ | 1.09 | $ | 4.44 | |||||||||||
* Per share data may not add due to rounding. | |||||||||||||||||||||||||||||||
DOVER CORPORATION
QUARTERLY FREE CASH FLOW
(unaudited)(in thousands)
2013 | 2012 | ||||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q3 YTD | Q1 | Q2 | Q3 | Q3 YTD | Q4 | FY 2012 | ||||||||||||||||||||||
Cash flow from operating activities | $ | 78,326 | $ | 304,729 | $ | 340,005 | $ | 723,060 | $ | 161,327 | $ | 243,363 | $ | 285,811 | $ | 690,501 | $ | 570,659 | $ | 1,261,160 | |||||||||||
Less: Additions to property, plant and equipment | (47,153 | ) | (53,284 | ) | (57,038 | ) | (157,475 | ) | (68,249 | ) | (72,758 | ) | (67,842 | ) | (208,849 | ) | (88,163 | ) | (297,012 | ) | |||||||||||
Free cash flow | $ | 31,173 | $ | 251,445 | $ | 282,967 | $ | 565,585 | $ | 93,078 | $ | 170,605 | $ | 217,969 | $ | 481,652 | $ | 482,496 | $ | 964,148 | |||||||||||
Free cash flow as a percentage of earnings from continuing operations | 15.8 | % | 85.4 | % | 107.3 | % | 74.9 | % | 49.9 | % | 83.2 | % | 93.4 | % | 77.1 | % | 231.7 | % | 115.7 | % | |||||||||||
Free cash flow as a percentage of revenue | 1.5 | % | 11.3 | % | 12.6 | % | 8.7 | % | 4.8 | % | 8.4 | % | 10.4 | % | 7.9 | % | 24.0 | % | 11.9 | % | |||||||||||
Third Quarter 2013 Earnings Conference Call October 17, 2013 - 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 by referring to our Forms 10-K and 10-Q 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
$0.60 $0.90 $1.20 $1.50 $1.80 Q1* Q2 Q3* Q4* Q1* Q2* Q3* Q3 2013 Performance Continuing Earnings Per Share • Strong revenue growth in refrigeration and drilling markets; solid growth in consumer electronics, downstream, fluids and Printing & Identification markets • North America markets are strong; China markets remain solid; Europe markets were improved, showing solid growth • Improved margin of 19.4%, driven by leverage on volume, productivity, and cost reduction activities •Bookings growth of 9% is broad-based, with growth across all segments • Overall book-to-bill of 0.96 Q3 Q3/Q3 * Includes discrete & other tax benefits of -$0.01 in Q1 2012, $0.02 in Q3 2012, $0.07 in Q4 2012, $0.02 in Q1 2013 , $0.36 in Q2 2013 and $0.03 in Q3 2013; includes spin off costs of $0.02 in Q2 2013 and $0.06 in Q3 2013: includes other one-time gains of $0.02 in Q3 2013 (a) See Press Release filed under Form 8-K for free cash flow reconciliation 3 Quarterly Comments Discrete tax benefits / Spin off costs / other one-time gains 2012 Adjusted continuing earnings per share FY $4.53 2013 Revenue $2.3B 7% $6.5B 7% EPS (cont.) $1.53 20% $4.34 29% Bookings $2.2B 9% $6.6B 8% Seg. Margins 19.4% 100 bps 17.7% 30 bps Organic Rev. 3% 2% Acq. Growth 4% 5% FCF (a) $283M 30% $566M 17% 9M 9M/9M
4 Revenue Q3 2013 Communication Technologies Energy Engineered Systems Printing & Identification Total Dover Organic 4% 3% 3% 3% 3% Acquisitions - 1% 9% - 4% Currency - -1% 1% 1% - Total 4% 3% 13% 4% 7% 9M 2013 Communication Technologies Energy Engineered Systems Printing & Identification Total Dover Organic 6% 2% 1% - 2% Acquisitions - 3% 9% - 5% Currency - - 1% - - Total 6% 5% 11% Flat 7%
$777 $778 $251 $257 $401 $414 $573 $577 $227 $227 $0 $350 $700 $1,050 DCT Q2 DCT Q3 DE Q2 DE Q3 DES Q2 DES Q3 DPI Q2 DPI Q3 $785 $662 $259 $256 $422 $424 $526 $595 $213 $222 $0 $350 $700 $1,050 DCT Q2 DCT Q3 DE Q2 DE Q3 DES Q2 DES Q3 DPI Q2 DPI Q3 Sequential Results – Q2 13 → Q3 13 Fluid Solutions ↑ 3% ↑ 1% Refrigeration & Industrial Flat ↑ 13% ↓ 11% ↓ 1% $ in millions 5 Bookings Flat ↑ 2% Revenue
6 Communication Technologies • Solid growth in Consumer Electronics markets, particularly smart phones, led by new product launches • Consumer electronics volume impacted by timing of launch and late product specification changes • Telecom/Other and Medical Technology markets improve; Aerospace/Defense largely stable • Strong margin driven by volume conversion, productivity, and the benefits of prior restructuring • Book-to-bill at 1.02 $ in millions Q3 2013 Q3 2012 % Change Revenue $414 $396 4% Earnings $ 76 $ 64 19% Margin 18.4% 16.1% 230 bps Bookings $424 $411 3% Quarterly Comments Revenue by End-Market % of Q3 Revenue Y / Y Growth Consumer Electronics 50% 6% Medical Technology 15% 5% Aerospace / Defense 25% - Telecom / Other 10% 6%
7 Energy • Strong drilling and downstream growth; Production impacted by weak winch markets, the timing of shipments and soft U.S. activity; Artificial Lift business remains solid with 3% organic growth • International markets remain robust • Margin reflects favorable product mix, productivity and solid conversion • Bookings growth is broad-based across all end-markets • Book-to-bill at 1.03 $ in millions Quarterly Comments Q3 2013 Q3 2012 % Change Revenue $577 $562 3% Earnings $145 $139 5% Margin 25.2% 24.7% 50 bps Bookings $595 $527 13% Revenue by End-Market % of Q3 Revenue Y / Y Growth Drilling 19% 12% Production 53% -2% Downstream 28% 7%
8 Engineered Systems • Record revenue driven by recent acquisitions, and strong results in the refrigeration & food equipment, fluids and waste handling markets • Anthony continues to benefit from its close-the-case activity • Margin performance reflects strong execution • Bookings growth reflects acquisitions and strong food equipment and fluids activity • Book-to-bill at a seasonally normal 0.88 $ in millions Quarterly Comments Q3 2013 Q3 2012 % Change Revenue $1,005 $892 13% Earnings $ 172 $144 19% Margin 17.1% 16.2% 90 bps Bookings $ 884 $798 11% Revenue by End-Market % of Q3 Revenue Y / Y Growth Fluids 22% 4% Refrigeration & Food Equipment 46% 27% Industrial 32% 2%
Printing & Identification • Revenue growth in both fast moving consumer goods and industrial end-markets • Strong growth in China and Europe •Operating margin continues to increase on volume, the benefits of prior restructuring and a continued focus on productivity • Bookings growth reflects growth in both end-markets •Book-to-bill at 1.00 $ in millions Quarterly Comments Q3 2013 Q3 2012 % Change Revenue $257 $247 4% Earnings $ 43 $ 40 9% Margin 16.7% 16.0% 70 bps Bookings $256 $245 5% 9 Revenue by End-Market % of Q3 Revenue Y / Y Growth Fast Moving Consumer Goods 59% 5% Industrial 41% 3%
Q3 2013 Overview Q3 2013 Net Interest Expense $30 million, essentially flat with last year Corporate Expense $43 million, up $11 million from last year, reflecting Q3 spin off costs and $4 million in pension curtailment gains. Effective Tax Rate (ETR) Q3 normalized rate was 28.7%, excluding $0.03 cents of discrete tax benefits, reflecting a slightly unfavorable mix of geographic earnings(a) Capex $57 million, in-line with expectations Share Repurchases Repurchased 650K shares ($57M) in quarter under the November $1 billion program. 10 (a) See press release filed under form 8-K for reconciliation
FY 2013 Guidance – Revenue Growth by Segment 11 Segment 2012 Revenue Mix 2013F Organic Growth 2013F Acquisition Growth* Total Communication Technologies 19% 6% - 7% - 6% - 7% Energy 27% ≈ 3% ≈ 3% ≈ 6% Engineered Systems 42% ≈ 2% ≈ 8% ≈ 10% Printing & Identification 12% 1% - 2% - 1% - 2% Total ≈ $8.1 B ≈ 3% ≈ 4% ≈ 7% * Acquisitions already completed
FY 2013 Guidance Revenue: • Organic revenue : ≈ 3% • Acquisitions: ≈ 4% • Total revenue: ≈ 7% Corporate expense: ≈ $150 million Interest expense: ≈ $123 million Full-Year Tax Rate: ≈ 27.8%(a) Capital expenditures: ≈ 3% of revenue FCF for full year: ≈ 10% of revenue 12 2013 EPS from continuing ops: $5.57 – $5.64 (a) Pre discrete tax adjustments and the tax impact of Knowles spin off costs
2012 EPS – Continuing Ops $4.53 • Less 2012 tax benefits (1): ($0.09) 2012 Adjusted EPS – Continuing Ops $4.44 • Volume, mix, price (inc. FX): $0.30 - $0.33 • Net benefits of productivity: $0.25 - $0.28 • Acquisitions: $0.11 - $0.12 • Investment / Compensation: ($0.18 - $0.20) • Corporate expenses (inc. Q3 one-time items): $0.02 • Interest / Shares / Tax Rate (net): $0.30 - $0.32 • Spin-off costs(2): ($0.08) • 2013 tax benefits(3): $0.41 2013 EPS – Continuing Ops $5.57 - $5.64 2013 EPS Guidance Bridge - Cont. Ops (1) Negligible amounts in Q1 2012 & Q2 2012, $0.02 in Q3 2012 and $0.07 in Q4 2012 13 (3) $0.02 in Q1 2013, $0.36 in Q2 2013, and $0.03 in Q3 2013 (2) $0.02 in Q2 2013, $0.06 in Q3 2013; does not include prospective Q4 2013 costs
Appendix – Reconciliations 14 EPS – Continuing Ops $1.53 $4.34 • Discrete tax items: ($0.03) ($0.41) • Knowles spin-off costs: $0.06 $0.08 • Other one-time gains: ($0.02) ($0.02) Adjusted EPS – Continuing Ops $1.54 $4.00 Q3 2013 9 Months 2013 ADJUSTED EPS FROM CONTINUING OPERATIONS Note: Per share data may not add due to rounding
Prior Guidance – EPS from Continuing Ops $5.56 - $5.71 • Third & fourth quarter performance: $0.02 - ($0.06) • Q3 Discrete tax items: $0.03 • Q3 Knowles spin-off costs: ($0.06) • Q3 Other one-time items: $0.02 Updated Guidance – EPS from Continuing Ops $5.57 - $5.64 Appendix – Guidance Reconciliations 15 EPS GUIDANCE – ADJUSTED CONTINUING OPERATIONS Prior EPS Guidance – Adjusted Continuing Ops $5.20 - $5.35 • Third & fourth quarter performance: $0.02 - ($0.06) Updated EPS Guidance – Adjusted Continuing Ops $5.22 - $5.29 Note: Per share data may not add due to rounding EPS GUIDANCE - CONTINUING OPERATIONS