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): January 28, 2021
_______________________________
(Exact name of registrant as specified in its charter)
______________________________________________
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | |||||||||
| (Address of Principal Executive Offices) | (Zip Code) | ||||||||||
(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 (see General Instruction A.2. below):
| 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)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 2.02 Results of Operations and Financial Condition.
On January 28, 2021, Dover Corporation ("Dover") issued the Press Release attached hereto as Exhibit 99.1 announcing its results of operations for the quarter ended December 31, 2020.
The information in this Current Report on Form 8-K, including Exhibit 99.1, 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, as amended.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
The following exhibits are furnished as part of this report:
104 Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document).
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: | January 28, 2021 | DOVER CORPORATION | ||||||||||||
| (Registrant) | ||||||||||||||
| By: | /s/ Ivonne M. Cabrera | |||||||||||||
| Ivonne M. Cabrera | ||||||||||||||
| Senior Vice President, General Counsel & Secretary | ||||||||||||||
Exhibit 99.1
| Investor Contact: | Media Contact: | |||||||
| Andrey Galiuk | Adrian Sakowicz | |||||||
| Vice President - Corporate Development | Vice President - Communications | |||||||
| and Investor Relations | (630) 743-5039 | |||||||
| (630) 743-5131 | asakowicz@dovercorp.com | |||||||
| agaliuk@dovercorp.com | ||||||||
DOVER REPORTS FOURTH QUARTER AND FULL YEAR 2020 RESULTS; PROVIDES 2021 GUIDANCE
DOWNERS GROVE, Ill., January 28, 2021 — Dover (NYSE: DOV), a diversified global manufacturer, announced its financial results for the fourth quarter and full year ended December 31, 2020.
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||||||||||||||||||||||||
| ($ in millions, except per share data) | 2020 | 2019 | % Change | 2020 | 2019 | % Change | ||||||||||||||||||||||||||||||||
| U.S. GAAP | ||||||||||||||||||||||||||||||||||||||
| Revenue | $ | 1,780 | $ | 1,776 | — | % | $ | 6,684 | $ | 7,136 | (6) | % | ||||||||||||||||||||||||||
Net earnings 1 | 182 | 168 | 8 | % | 683 | 678 | 1 | % | ||||||||||||||||||||||||||||||
Diluted EPS | 1.25 | 1.15 | 9 | % | 4.70 | 4.61 | 2 | % | ||||||||||||||||||||||||||||||
| Non-GAAP | ||||||||||||||||||||||||||||||||||||||
| Organic revenue change | (2) | % | (7) | % | ||||||||||||||||||||||||||||||||||
Adjusted net earnings 2 | 225 | 226 | — | % | 824 | 872 | (5) | % | ||||||||||||||||||||||||||||||
| Adjusted diluted EPS | 1.55 | 1.54 | 1 | % | 5.67 | 5.93 | (4) | % | ||||||||||||||||||||||||||||||
1 Q4 2020 and 2019 net earnings include rightsizing and other costs of $16.5 million and $14.2 million, respectively. Q4 2019 also includes a $18.4 million loss on extinguishment of debt. Full year 2020 and 2019 net earnings include rightsizing and other costs of $40.7 million and $25.4 million, respectively. Full year 2020 also includes a $3.9 million non-cash gain on the sale of Chino, and full year 2019 includes a $46.9 million non-cash loss on assets held for sale related to Finder as well as a $18.4 million loss on extinguishment of debt.
2 Q4 2020 and 2019 adjusted net earnings exclude after tax acquisition-related amortization costs of $26.3 million and $25.1 million, respectively, and rightsizing and other costs of $16.5 million and $14.2 million, respectively. Q4 2019 also excludes a $18.4 million loss on extinguishment of debt. Full year 2020 and 2019 adjusted net earnings exclude acquisition-related amortization costs of $104.1 million and $103.6 million, respectively, and rightsizing and other costs of $40.7 million and $25.4 million, respectively. Full year 2020 also excludes a $3.9 million non-cash gain on the sale of Chino, and full year 2019 excludes a $46.9 million non-cash loss on assets held for sale related to Finder as well as a $18.4 million loss on extinguishment of debt.
For the quarter ended December 31, 2020, Dover generated revenue of $1.8 billion, a slight increase compared to the fourth quarter of the prior year (-2% organic). GAAP net earnings of $182 million increased 8%, and GAAP diluted EPS of $1.25 was up 9%. On an adjusted basis, net earnings of $225 million declined slightly, and adjusted diluted EPS of $1.55 was up 1% versus the comparable quarter of the prior year.
For the full year ended December 31, 2020, Dover generated revenue of $6.7 billion, a decline of 6% compared to the prior year (-7% organic). GAAP net earnings of $683 million increased 1%, and GAAP diluted EPS of $4.70 increased 2% year-over-year. On an adjusted basis, net earnings of $824 million declined 5%, and adjusted diluted EPS of $5.67 was down 4% versus the prior year.
A full reconciliation between GAAP and adjusted measures and definitions of non-GAAP and other performance measures are included as an exhibit herein.
MANAGEMENT COMMENTARY:
Dover’s President and Chief Executive Officer, Richard J. Tobin, said, “Dover delivered solid results in the fourth quarter despite lingering economic and operational effects of the pandemic. Our efficiency and productivity initiatives drove improvement in segment margins and cash flow metrics despite lower revenue for the full year. We advanced our operational priorities with
notable progress in the center-led digital, operational, and shared back office and engineering capabilities. These initiatives have contributed to our recent results and will continue to drive improvement ahead. Our strong execution was complemented by disciplined capital allocation, including several strategic bolt-on acquisitions that enhance our businesses with new capabilities and attractive end-market exposures.
“Improving market conditions coupled with a robust demand backlog enable us to look into 2021 with constructive optimism. With continued progress in our ongoing productivity and cost initiatives, we believe we are well-positioned to deliver robust top-line growth, margin expansion and EPS accretion in 2021. We also enter the year with a healthy balance sheet that will continue to support organic and inorganic capital deployment to continue enhancing our portfolio.”
“We are pleased to have 2020 in the rear view mirror for all the obvious reasons. On behalf of Dover Corporation’s Board of Directors, I would like to thank our entire team for their extraordinary efforts in the past 12 months. We were given a unique opportunity to demonstrate the resilience of the Dover team and our business portfolio in 2020, and we can all be proud of the results we achieved together.”
FULL YEAR 2021 GUIDANCE:
In 2021, Dover expects to generate GAAP EPS in the range of $5.42 to $5.62 (adjusted EPS of $6.25 to $6.45), based on full year revenue growth of 8% to 10% (5% to 6% on an organic basis). A full reconciliation between forecasted GAAP and forecasted adjusted measures is included as an exhibit herein.
CONFERENCE CALL INFORMATION:
Dover will host a webcast and conference call to discuss its fourth quarter and full year 2020 results as well as 2021 guidance at 10:00 A.M. Eastern Time (9:00 A.M. Central Time) on Thursday, January 28, 2021. The webcast can be accessed on the Dover website at dovercorporation.com. The conference call will also be made available for replay on the website. Additional information on Dover’s fourth quarter and full year results and its operating segments can be found on the Company’s website.
ABOUT DOVER:
Dover is a diversified global manufacturer and solutions provider with annual revenue of approximately $7 billion. We deliver innovative equipment and components, consumable supplies, aftermarket parts, software and digital solutions, and support services through five operating segments: Engineered Products, Fueling Solutions, Imaging & Identification, Pumps & Process Solutions and Refrigeration & Food Equipment. Dover combines global scale with operational agility to lead the markets we serve. Recognized for our entrepreneurial approach for over 60 years, our team of over 23,000 employees takes an ownership mindset, collaborating with customers to redefine what's possible. Headquartered in Downers Grove, Illinois, Dover trades on the New York Stock Exchange under "DOV." Additional information is available at dovercorporation.com.
FORWARD-LOOKING STATEMENTS:
This press release contains "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. All statements in this document other than statements of historical fact are statements that are, or could be deemed, “forward-looking” statements. Forward-looking statements are subject to numerous important risks, uncertainties, assumptions and other factors, some of which are beyond the Company’s control. Factors that could cause actual results to differ materially from current expectations include, among other things, the impacts of COVID-19, or other future pandemics, on the global economy and on our customers, suppliers, employees, business and cash flows, other general economic conditions and conditions in the particular markets in which we operate, changes in customer demand and capital spending, competitive factors and pricing pressures, our ability to develop and launch new products in a cost-effective manner, our ability to realize synergies from newly acquired businesses, and our ability to derive expected benefits from restructuring, productivity initiatives and other cost reduction actions. For details on the risks and uncertainties that could cause our results to differ materially from the forward-looking statements contained herein, we refer you to the documents we file with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2019, and our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. These documents are available from the Securities and Exchange Commission, and on our website, dovercorporation.com. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.
INVESTOR SUPPLEMENT - FOURTH QUARTER AND FULL YEAR 2020
DOVER CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)(in thousands, except per share data)
| Three Months Ended December 31, | Years Ended December 31, | ||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
| Revenue | $ | 1,780,390 | $ | 1,775,589 | $ | 6,683,760 | $ | 7,136,397 | |||||||||||||||
| Cost of goods and services | 1,128,941 | 1,124,274 | 4,209,741 | 4,515,459 | |||||||||||||||||||
| Gross profit | 651,449 | 651,315 | 2,474,019 | 2,620,938 | |||||||||||||||||||
| Selling, general, and administrative expenses | 405,520 | 403,223 | 1,541,032 | 1,599,098 | |||||||||||||||||||
| Loss on assets held for sale | — | — | — | 46,946 | |||||||||||||||||||
| Operating earnings | 245,929 | 248,092 | 932,987 | 974,894 | |||||||||||||||||||
| Interest expense | 28,234 | 30,846 | 111,937 | 125,818 | |||||||||||||||||||
| Interest income | (700) | (1,428) | (3,571) | (4,526) | |||||||||||||||||||
| Gain on sale of a business | — | — | (5,213) | — | |||||||||||||||||||
| Loss on extinguishment of debt | — | 23,543 | — | 23,543 | |||||||||||||||||||
| Other income, net | (2,013) | (1,891) | (11,900) | (12,950) | |||||||||||||||||||
| Earnings before provision for income taxes | 220,408 | 197,022 | 841,734 | 843,009 | |||||||||||||||||||
| Provision for income taxes | 38,302 | 28,900 | 158,283 | 165,091 | |||||||||||||||||||
| Net earnings | $ | 182,106 | $ | 168,122 | $ | 683,451 | $ | 677,918 | |||||||||||||||
| Net earnings per share: | |||||||||||||||||||||||
| Basic | $ | 1.27 | $ | 1.16 | $ | 4.74 | $ | 4.67 | |||||||||||||||
| Diluted | $ | 1.25 | $ | 1.15 | $ | 4.70 | $ | 4.61 | |||||||||||||||
| Weighted average shares outstanding: | |||||||||||||||||||||||
| Basic | 143,954 | 144,966 | 144,050 | 145,198 | |||||||||||||||||||
| Diluted | 145,355 | 146,790 | 145,393 | 146,992 | |||||||||||||||||||
| Dividends paid per common share | $ | 0.50 | $ | 0.49 | $ | 1.97 | $ | 1.94 | |||||||||||||||
| * Per share data may be impacted by rounding. | |||||||||||||||||||||||
IS - 1
DOVER CORPORATION
QUARTERLY SEGMENT INFORMATION
(unaudited)(in thousands)
| 2020 | 2019 | ||||||||||||||||||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | FY 2020 | Q1 | Q2 | Q3 | Q4 | FY 2019 | ||||||||||||||||||||||||||
| REVENUE | |||||||||||||||||||||||||||||||||||
| Engineered Products | $ | 408,160 | $ | 342,380 | $ | 386,562 | $ | 394,175 | $ | 1,531,277 | $ | 418,851 | $ | 429,928 | $ | 426,689 | $ | 422,089 | $ | 1,697,557 | |||||||||||||||
| Fueling Solutions | 359,982 | 326,495 | 380,511 | 409,294 | 1,476,282 | 373,050 | 390,586 | 411,769 | 444,772 | 1,620,177 | |||||||||||||||||||||||||
| Imaging & Identification | 256,765 | 227,977 | 265,690 | 287,746 | 1,038,178 | 268,354 | 266,588 | 275,109 | 274,420 | 1,084,471 | |||||||||||||||||||||||||
| Pumps & Process Solutions | 319,536 | 309,095 | 347,875 | 347,497 | 1,324,003 | 330,219 | 338,924 | 341,337 | 328,048 | 1,338,528 | |||||||||||||||||||||||||
| Refrigeration & Food Equipment | 311,913 | 293,527 | 368,395 | 342,255 | 1,316,090 | 334,643 | 385,474 | 370,335 | 306,165 | 1,396,617 | |||||||||||||||||||||||||
| Intra-segment eliminations | (417) | (299) | (777) | (577) | (2,070) | (360) | (794) | 106 | 95 | (953) | |||||||||||||||||||||||||
| Total consolidated revenue | $ | 1,655,939 | $ | 1,499,175 | $ | 1,748,256 | $ | 1,780,390 | $ | 6,683,760 | $ | 1,724,757 | $ | 1,810,706 | $ | 1,825,345 | $ | 1,775,589 | $ | 7,136,397 | |||||||||||||||
| NET EARNINGS | |||||||||||||||||||||||||||||||||||
| Segment Earnings: | |||||||||||||||||||||||||||||||||||
| Engineered Products | $ | 69,094 | $ | 47,702 | $ | 64,890 | $ | 56,481 | $ | 238,167 | $ | 67,119 | $ | 77,129 | $ | 74,367 | $ | 73,233 | $ | 291,848 | |||||||||||||||
| Fueling Solutions | 53,498 | 47,214 | 66,601 | 69,661 | 236,974 | 37,230 | 52,637 | 68,069 | 73,937 | 231,873 | |||||||||||||||||||||||||
| Imaging & Identification | 51,482 | 38,046 | 51,928 | 52,017 | 193,473 | 55,955 | 54,641 | 61,655 | 57,233 | 229,484 | |||||||||||||||||||||||||
Pumps & Process Solutions 1 | 66,079 | 67,702 | 89,786 | 81,709 | 305,276 | 14,991 | 76,278 | 77,433 | 71,379 | 240,081 | |||||||||||||||||||||||||
Refrigeration & Food Equipment 2 | 23,529 | 11,459 | 40,159 | 27,725 | 102,872 | 24,807 | 44,375 | 35,211 | 14,439 | 118,832 | |||||||||||||||||||||||||
| Total segment earnings (EBIT) | 263,682 | 212,123 | 313,364 | 287,593 | 1,076,762 | 200,102 | 305,060 | 316,735 | 290,221 | 1,112,118 | |||||||||||||||||||||||||
Corporate expense / other3 | 24,097 | 27,311 | 35,603 | 39,651 | 126,662 | 30,866 | 24,512 | 28,658 | 63,781 | 147,817 | |||||||||||||||||||||||||
| Interest expense | 27,268 | 28,711 | 27,724 | 28,234 | 111,937 | 31,808 | 31,754 | 31,410 | 30,846 | 125,818 | |||||||||||||||||||||||||
| Interest income | (1,183) | (728) | (960) | (700) | (3,571) | (890) | (945) | (1,263) | (1,428) | (4,526) | |||||||||||||||||||||||||
| Earnings before provision for income taxes | 213,500 | 156,829 | 250,997 | 220,408 | 841,734 | 138,318 | 249,739 | 257,930 | 197,022 | 843,009 | |||||||||||||||||||||||||
| Provision for income taxes | 37,221 | 32,063 | 50,697 | 38,302 | 158,283 | 32,613 | 51,654 | 51,924 | 28,900 | 165,091 | |||||||||||||||||||||||||
| Net earnings | $ | 176,279 | $ | 124,766 | $ | 200,300 | $ | 182,106 | $ | 683,451 | $ | 105,705 | $ | 198,085 | $ | 206,006 | $ | 168,122 | $ | 677,918 | |||||||||||||||
| SEGMENT MARGIN | |||||||||||||||||||||||||||||||||||
| Engineered Products | 16.9 % | 13.9 % | 16.8 % | 14.3 % | 15.6 % | 16.0 % | 17.9 % | 17.4 % | 17.4 % | 17.2 % | |||||||||||||||||||||||||
| Fueling Solutions | 14.9 % | 14.5 % | 17.5 % | 17.0 % | 16.1 % | 10.0 % | 13.5 % | 16.5 % | 16.6 % | 14.3 % | |||||||||||||||||||||||||
| Imaging & Identification | 20.1 % | 16.7 % | 19.5 % | 18.1 % | 18.6 % | 20.9 % | 20.5 % | 22.4 % | 20.9 % | 21.2 % | |||||||||||||||||||||||||
Pumps & Process Solutions 1 | 20.7 % | 21.9 % | 25.8 % | 23.5 % | 23.1 % | 4.5 % | 22.5 % | 22.7 % | 21.8 % | 17.9 % | |||||||||||||||||||||||||
Refrigeration & Food Equipment 2 | 7.5 % | 3.9 % | 10.9 % | 8.1 % | 7.8 % | 7.4 % | 11.5 % | 9.5 % | 4.7 % | 8.5 % | |||||||||||||||||||||||||
| Total segment operating margin | 15.9 % | 14.1 % | 17.9 % | 16.2 % | 16.1 % | 11.6 % | 16.8 % | 17.4 % | 16.3 % | 15.6 % | |||||||||||||||||||||||||
| DEPRECIATION AND AMORTIZATION EXPENSE | |||||||||||||||||||||||||||||||||||
| Engineered Products | $ | 10,122 | $ | 9,722 | $ | 10,717 | $ | 12,042 | $ | 42,603 | $ | 10,359 | $ | 10,452 | $ | 10,095 | $ | 10,126 | $ | 41,032 | |||||||||||||||
| Fueling Solutions | 18,339 | 17,968 | 18,014 | 18,482 | 72,803 | 17,879 | 18,945 | 18,744 | 19,477 | 75,045 | |||||||||||||||||||||||||
| Imaging & Identification | 8,769 | 9,224 | 9,809 | 10,576 | 38,378 | 7,435 | 7,413 | 7,360 | 8,322 | 30,530 | |||||||||||||||||||||||||
| Pumps & Process Solutions | 18,336 | 17,572 | 17,206 | 19,077 | 72,191 | 17,548 | 16,201 | 16,018 | 17,817 | 67,584 | |||||||||||||||||||||||||
| Refrigeration & Food Equipment | 11,548 | 11,421 | 12,081 | 11,491 | 46,541 | 13,011 | 12,777 | 13,047 | 12,525 | 51,360 | |||||||||||||||||||||||||
| Corporate | 1,638 | 1,696 | 1,662 | 1,539 | 6,535 | 1,506 | 1,981 | 1,523 | 1,726 | 6,736 | |||||||||||||||||||||||||
| Total depreciation and amortization expense | $ | 68,752 | $ | 67,603 | $ | 69,489 | $ | 73,207 | $ | 279,051 | $ | 67,738 | $ | 67,769 | $ | 66,787 | $ | 69,993 | $ | 272,287 | |||||||||||||||
1 Q1 and FY 2019 include a $46,946 loss on assets held for sale for Finder Pompe S.r.l. | |||||||||||||||||||||||||||||||||||
2 Q1, Q2, Q3, and FY 2020 include a $6,551 gain, a $781 expense, a $557 expense and a $5,213 net gain, respectively, on the sale of the Chino, California branch of The AMS Group ("AMS Chino"). Q2 and FY 2020 also include a $3,640 write-off of assets. | |||||||||||||||||||||||||||||||||||
3 Q4 and FY 2019 include a $23,543 loss on early extinguishment of debt. | |||||||||||||||||||||||||||||||||||
IS - 2
DOVER CORPORATION
QUARTERLY EARNINGS PER SHARE
(unaudited)(in thousands, except per share data*)
| Earnings Per Share | |||||||||||||||||||||||||||||||||||
| 2020 | 2019 | ||||||||||||||||||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | FY 2020 | Q1 | Q2 | Q3 | Q4 | FY 2019 | ||||||||||||||||||||||||||
| Net earnings per share: | |||||||||||||||||||||||||||||||||||
| Basic | $ | 1.22 | $ | 0.87 | $ | 1.39 | $ | 1.27 | $ | 4.74 | $ | 0.73 | $ | 1.36 | $ | 1.42 | $ | 1.16 | $ | 4.67 | |||||||||||||||
| Diluted | $ | 1.21 | $ | 0.86 | $ | 1.38 | $ | 1.25 | $ | 4.70 | $ | 0.72 | $ | 1.35 | $ | 1.40 | $ | 1.15 | $ | 4.61 | |||||||||||||||
| Net earnings and weighted average shares used in calculated earnings per share amounts are as follows: | |||||||||||||||||||||||||||||||||||
| Net earnings | $ | 176,279 | $ | 124,766 | $ | 200,300 | $ | 182,106 | $ | 683,451 | $ | 105,705 | $ | 198,085 | $ | 206,006 | $ | 168,122 | $ | 677,918 | |||||||||||||||
| Weighted average shares outstanding: | |||||||||||||||||||||||||||||||||||
| Basic | 144,259 | 143,955 | 144,032 | 143,954 | 144,050 | 145,087 | 145,366 | 145,372 | 144,966 | 145,198 | |||||||||||||||||||||||||
| Diluted | 145,782 | 144,995 | 145,289 | 145,355 | 145,393 | 146,911 | 147,179 | 147,051 | 146,790 | 146,992 | |||||||||||||||||||||||||
| * Per share data may be impacted by rounding. | |||||||||||||||||||||||||||||||||||
IS - 3
DOVER CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)(in thousands)
| December 31, 2020 | December 31, 2019 | ||||||||||
| Assets: | |||||||||||
| Cash and cash equivalents | $ | 513,075 | $ | 397,253 | |||||||
| Receivables, net of allowances | 1,137,223 | 1,217,190 | |||||||||
| Inventories, net | 835,804 | 806,141 | |||||||||
| Prepaid and other current assets | 133,085 | 127,846 | |||||||||
| Property, plant and equipment, net | 897,326 | 842,318 | |||||||||
| Goodwill | 4,072,542 | 3,783,347 | |||||||||
| Intangible assets, net | 1,083,772 | 1,055,014 | |||||||||
| Other assets and deferred charges | 479,247 | 440,368 | |||||||||
| Total assets | $ | 9,152,074 | $ | 8,669,477 | |||||||
| Liabilities and Stockholders' Equity: | |||||||||||
| Notes payable | $ | — | $ | 84,700 | |||||||
| Payables, accrued expenses and other current liabilities | 1,738,798 | 1,663,391 | |||||||||
| Deferred taxes and other non-current liabilities | 918,674 | 903,010 | |||||||||
| Long-term debt | 3,108,829 | 2,985,716 | |||||||||
| Stockholders' equity | 3,385,773 | 3,032,660 | |||||||||
| Total liabilities and stockholders' equity | $ | 9,152,074 | $ | 8,669,477 | |||||||
IS - 4
DOVER CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)(in thousands)
| Years Ended December 31, | |||||||||||
| 2020 | 2019 | ||||||||||
| Operating activities: | |||||||||||
| Net earnings | $ | 683,451 | $ | 677,918 | |||||||
| Loss on assets held for sale | — | 46,946 | |||||||||
| Loss on extinguishment of debt | — | 23,543 | |||||||||
| Depreciation and amortization | 279,051 | 272,287 | |||||||||
| Stock-based compensation | 25,026 | 29,702 | |||||||||
| Contributions to employee benefit plans | (19,801) | (21,436) | |||||||||
| Gain on sale of businesses | (5,213) | — | |||||||||
| Net change in assets and liabilities | 142,296 | (83,654) | |||||||||
| Net cash provided by operating activities | 1,104,810 | 945,306 | |||||||||
| Investing activities: | |||||||||||
| Additions to property, plant and equipment | (165,692) | (186,804) | |||||||||
| Acquisitions (net of cash and cash equivalents acquired) | (335,786) | (215,687) | |||||||||
| Proceeds from the sale of property, plant and equipment | 7,207 | 4,168 | |||||||||
| Proceeds from the sale of businesses | 15,400 | 24,218 | |||||||||
| Other | (2,508) | (10,150) | |||||||||
| Net cash used in investing activities | (481,379) | (384,255) | |||||||||
| Financing activities: | |||||||||||
| Change in commercial paper and notes payable, net | (84,700) | (135,650) | |||||||||
| Net increase in long-term debt | — | 42,357 | |||||||||
| Dividends to stockholders | (284,312) | (282,197) | |||||||||
| Purchase of common stock | (106,279) | (143,280) | |||||||||
| Payments to settle employee tax obligations on exercise | (28,476) | (37,370) | |||||||||
| Other | (2,523) | (1,902) | |||||||||
| Net cash used in financing activities | (506,290) | (558,042) | |||||||||
| Effect of exchange rate changes on cash | (1,319) | (1,977) | |||||||||
| Net increase in cash and cash equivalents | 115,822 | 1,032 | |||||||||
| Cash and cash equivalents at beginning of period | 397,253 | 396,221 | |||||||||
| Cash and cash equivalents at end of period | $ | 513,075 | $ | 397,253 | |||||||
IS - 5
DOVER CORPORATION
QUARTERLY ADJUSTED EARNINGS AND ADJUSTED EARNINGS PER SHARE (NON-GAAP)
(unaudited)(in thousands, except per share data*)
Non-GAAP Reconciliations
| 2020 | 2019 | ||||||||||||||||||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | FY 2020 | Q1 | Q2 | Q3 | Q4 | FY 2019 | ||||||||||||||||||||||||||
| Adjusted net earnings: | |||||||||||||||||||||||||||||||||||
| Net earnings | $ | 176,279 | $ | 124,766 | $ | 200,300 | $ | 182,106 | $ | 683,451 | $ | 105,705 | $ | 198,085 | $ | 206,006 | $ | 168,122 | $ | 677,918 | |||||||||||||||
Acquisition-related amortization, pre-tax 1 | 34,062 | 34,101 | 35,325 | 35,027 | 138,515 | 35,635 | 34,997 | 34,244 | 33,460 | 138,336 | |||||||||||||||||||||||||
Acquisition-related amortization, tax impact 2 | (8,411) | (8,451) | (8,810) | (8,695) | (34,367) | (8,964) | (8,777) | (8,624) | (8,403) | (34,768) | |||||||||||||||||||||||||
Rightsizing and other costs, pre-tax 3 | 7,859 | 16,840 | 5,848 | 20,925 | 51,472 | 3,963 | 6,457 | 3,807 | 17,926 | 32,153 | |||||||||||||||||||||||||
Rightsizing and other costs, tax impact 2 | (1,605) | (3,452) | (1,343) | (4,402) | (10,802) | (861) | (1,377) | (806) | (3,745) | (6,789) | |||||||||||||||||||||||||
Loss on extinguishment of debt, pre-tax 4 | — | — | — | — | — | — | — | — | 23,543 | 23,543 | |||||||||||||||||||||||||
Loss on extinguishment of debt, tax impact 2 | — | — | — | — | — | — | — | — | (5,163) | (5,163) | |||||||||||||||||||||||||
Loss on assets held for sale 5 | — | — | — | — | — | 46,946 | — | — | — | 46,946 | |||||||||||||||||||||||||
(Gain) loss on disposition, pre-tax 6 | (6,551) | 781 | 557 | — | (5,213) | — | — | — | — | — | |||||||||||||||||||||||||
(Gain) loss on disposition, tax-impact 2 | 1,592 | (190) | (135) | — | 1,267 | — | — | — | — | — | |||||||||||||||||||||||||
Adjusted net earnings | $ | 203,225 | $ | 164,395 | $ | 231,742 | $ | 224,961 | $ | 824,323 | $ | 182,424 | $ | 229,385 | $ | 234,627 | $ | 225,740 | $ | 872,176 | |||||||||||||||
| Adjusted diluted net earnings per share: | |||||||||||||||||||||||||||||||||||
| Diluted net earnings per share | $ | 1.21 | $ | 0.86 | $ | 1.38 | $ | 1.25 | $ | 4.70 | $ | 0.72 | $ | 1.35 | $ | 1.40 | $ | 1.15 | $ | 4.61 | |||||||||||||||
Acquisition-related amortization, pre-tax 1 | 0.23 | 0.24 | 0.24 | 0.24 | 0.95 | 0.24 | 0.24 | 0.23 | 0.23 | 0.94 | |||||||||||||||||||||||||
Acquisition-related amortization, tax impact 2 | (0.06) | (0.06) | (0.06) | (0.06) | (0.24) | (0.06) | (0.06) | (0.06) | (0.06) | (0.24) | |||||||||||||||||||||||||
Rightsizing and other costs, pre-tax 3 | 0.05 | 0.12 | 0.04 | 0.14 | 0.35 | 0.03 | 0.04 | 0.03 | 0.12 | 0.22 | |||||||||||||||||||||||||
Rightsizing and other costs, tax impact 2 | (0.01) | (0.02) | (0.01) | (0.03) | (0.07) | (0.01) | (0.01) | (0.01) | (0.03) | (0.06) | |||||||||||||||||||||||||
Loss on extinguishment of debt, pre-tax 4 | — | — | — | — | — | — | — | — | 0.16 | 0.16 | |||||||||||||||||||||||||
Loss on extinguishment of debt, tax impact 2 | — | — | — | — | — | — | — | — | (0.04) | (0.04) | |||||||||||||||||||||||||
Loss on assets held for sale 5 | — | — | — | — | — | 0.32 | — | — | — | 0.32 | |||||||||||||||||||||||||
(Gain) loss on disposition, pre-tax 6 | (0.04) | — | — | — | (0.03) | — | — | — | — | — | |||||||||||||||||||||||||
(Gain) loss on disposition, tax-impact 2 | 0.01 | — | — | — | 0.01 | — | — | — | — | — | |||||||||||||||||||||||||
Adjusted diluted net earnings per share | $ | 1.39 | $ | 1.13 | $ | 1.60 | $ | 1.55 | $ | 5.67 | $ | 1.24 | $ | 1.56 | $ | 1.60 | $ | 1.54 | $ | 5.93 | |||||||||||||||
1 Includes amortization on acquisition-related intangible assets and inventory step-up. | |||||||||||||||||||||||||||||||||||
2 Adjustments were tax effected using the statutory tax rates in the applicable jurisdictions or the effective tax rate, where applicable, for each period. | |||||||||||||||||||||||||||||||||||
3 Rightsizing and other costs include actions taken on employee reductions, facility consolidations and site closures, product line exits and other asset charges. | |||||||||||||||||||||||||||||||||||
4 Represents a loss on early extinguishment of €300,000 2.125% notes due 2020 and $450,000 4.30% notes due 2021. | |||||||||||||||||||||||||||||||||||
5 Represents a loss on assets held for sale of Finder Pompe S.r.l. ("Finder"). Under local law, no tax benefit is realized from the loss on the sale of a wholly-owned business. | |||||||||||||||||||||||||||||||||||
6 Represents a (gain) loss on the disposition of AMS Chino within the Refrigeration & Food Equipment segment, including working capital adjustments. | |||||||||||||||||||||||||||||||||||
| * Per share data and totals may be impacted by rounding. | |||||||||||||||||||||||||||||||||||
IS - 6
DOVER CORPORATION
QUARTERLY SEGMENT ADJUSTED EBIT AND ADJUSTED EBITDA (NON-GAAP)
(unaudited)(in thousands)
Non-GAAP Reconciliations
| 2020 | 2019 | ||||||||||||||||||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | FY 2020 | Q1 | Q2 | Q3 | Q4 | FY 2019 | ||||||||||||||||||||||||||
| ADJUSTED SEGMENT EBIT AND ADJUSTED EBITDA | |||||||||||||||||||||||||||||||||||
| Engineered Products: | |||||||||||||||||||||||||||||||||||
| Segment earnings (EBIT) | $ | 69,094 | $ | 47,702 | $ | 64,890 | $ | 56,481 | $ | 238,167 | $ | 67,119 | $ | 77,129 | $ | 74,367 | $ | 73,233 | $ | 291,848 | |||||||||||||||
| Rightsizing and other costs | 361 | 4,169 | 2,375 | 4,625 | 11,530 | 80 | 1,125 | 590 | 1,355 | 3,150 | |||||||||||||||||||||||||
| Adjusted EBIT - Segment | 69,455 | 51,871 | 67,265 | 61,106 | 249,697 | 67,199 | 78,254 | 74,957 | 74,588 | 294,998 | |||||||||||||||||||||||||
| Adjusted EBIT % | 17.0 % | 15.2 % | 17.4 % | 15.5 % | 16.3 % | 16.0 % | 18.2 % | 17.6 % | 17.7 % | 17.4 % | |||||||||||||||||||||||||
Adjusted D&A 2 | 10,122 | 9,722 | 10,651 | 10,193 | 40,688 | 10,359 | 9,855 | 10,095 | 10,126 | 40,435 | |||||||||||||||||||||||||
| Adjusted EBITDA - Segment | $ | 79,577 | $ | 61,593 | $ | 77,916 | $ | 71,299 | $ | 290,385 | $ | 77,558 | $ | 88,109 | $ | 85,052 | $ | 84,714 | $ | 335,433 | |||||||||||||||
| Adjusted EBITDA % | 19.5 % | 18.0 % | 20.2 % | 18.1 % | 19.0 % | 18.5 % | 20.5 % | 19.9 % | 20.1 % | 19.8 % | |||||||||||||||||||||||||
| Fueling Solutions: | |||||||||||||||||||||||||||||||||||
| Segment earnings (EBIT) | $ | 53,498 | $ | 47,214 | $ | 66,601 | $ | 69,661 | $ | 236,974 | $ | 37,230 | $ | 52,637 | $ | 68,069 | $ | 73,937 | $ | 231,873 | |||||||||||||||
| Rightsizing and other costs | 1,493 | 868 | 1,615 | 2,727 | 6,703 | 752 | 1,768 | 811 | 1,554 | 4,885 | |||||||||||||||||||||||||
| Adjusted EBIT - Segment | 54,991 | 48,082 | 68,216 | 72,388 | 243,677 | 37,982 | 54,405 | 68,880 | 75,491 | 236,758 | |||||||||||||||||||||||||
| Adjusted EBIT % | 15.3 % | 14.7 % | 17.9 % | 17.7 % | 16.5 % | 10.2 % | 13.9 % | 16.7 % | 17.0 % | 14.6 % | |||||||||||||||||||||||||
Adjusted D&A 2 | 18,339 | 17,783 | 18,014 | 18,225 | 72,361 | 17,879 | 18,945 | 18,744 | 19,477 | 75,045 | |||||||||||||||||||||||||
| Adjusted EBITDA - Segment | $ | 73,330 | $ | 65,865 | $ | 86,230 | $ | 90,613 | $ | 316,038 | $ | 55,861 | $ | 73,350 | $ | 87,624 | $ | 94,968 | $ | 311,803 | |||||||||||||||
| Adjusted EBITDA % | 20.4 % | 20.2 % | 22.7 % | 22.1 % | 21.4 % | 15.0 % | 18.8 % | 21.3 % | 21.4 % | 19.2 % | |||||||||||||||||||||||||
| Imaging & Identification: | |||||||||||||||||||||||||||||||||||
| Segment earnings (EBIT) | $ | 51,482 | $ | 38,046 | $ | 51,928 | $ | 52,017 | $ | 193,473 | $ | 55,955 | $ | 54,641 | $ | 61,655 | $ | 57,233 | $ | 229,484 | |||||||||||||||
| Rightsizing and other costs | 264 | (527) | 99 | 6,191 | 6,027 | 389 | 1,268 | 301 | 4,392 | 6,350 | |||||||||||||||||||||||||
| Adjusted EBIT - Segment | 51,746 | 37,519 | 52,027 | 58,208 | 199,500 | 56,344 | 55,909 | 61,956 | 61,625 | 235,834 | |||||||||||||||||||||||||
| Adjusted EBIT % | 20.2 % | 16.5 % | 19.6 % | 20.2 % | 19.2 % | 21.0 % | 21.0 % | 22.5 % | 22.5 % | 21.7 % | |||||||||||||||||||||||||
Adjusted D&A 2 | 8,769 | 9,224 | 9,809 | 10,201 | 38,003 | 7,336 | 7,317 | 7,286 | 7,892 | 29,831 | |||||||||||||||||||||||||
| Adjusted EBITDA - Segment | $ | 60,515 | $ | 46,743 | $ | 61,836 | $ | 68,409 | $ | 237,503 | $ | 63,680 | $ | 63,226 | $ | 69,242 | $ | 69,517 | $ | 265,665 | |||||||||||||||
| Adjusted EBITDA % | 23.6 % | 20.5 % | 23.3 % | 23.8 % | 22.9 % | 23.7 % | 23.7 % | 25.2 % | 25.3 % | 24.5 % | |||||||||||||||||||||||||
| Pumps & Process Solutions: | |||||||||||||||||||||||||||||||||||
| Segment earnings (EBIT) | $ | 66,079 | $ | 67,702 | $ | 89,786 | $ | 81,709 | $ | 305,276 | $ | 14,991 | $ | 76,278 | $ | 77,433 | $ | 71,379 | $ | 240,081 | |||||||||||||||
| Rightsizing and other costs | 3,846 | 4,691 | 1,771 | 3,128 | 13,436 | 414 | 903 | 943 | 3,868 | 6,128 | |||||||||||||||||||||||||
Loss on assets held for sale 1 | — | — | — | — | — | 46,946 | — | — | — | 46,946 | |||||||||||||||||||||||||
| Adjusted EBIT - Segment | 69,925 | 72,393 | 91,557 | 84,837 | 318,712 | 62,351 | 77,181 | 78,376 | 75,247 | 293,155 | |||||||||||||||||||||||||
| Adjusted EBIT % | 21.9 % | 23.4 % | 26.3 % | 24.4 % | 24.1 % | 18.9 % | 22.8 % | 23.0 % | 22.9 % | 21.9 % | |||||||||||||||||||||||||
Adjusted D&A 2 | 16,230 | 16,816 | 17,206 | 17,565 | 67,817 | 17,548 | 16,199 | 16,018 | 17,004 | 66,769 | |||||||||||||||||||||||||
| Adjusted EBITDA - Segment | $ | 86,155 | $ | 89,209 | $ | 108,763 | $ | 102,402 | $ | 386,529 | $ | 79,899 | $ | 93,380 | $ | 94,394 | $ | 92,251 | $ | 359,924 | |||||||||||||||
| Adjusted EBITDA % | 27.0 % | 28.9 % | 31.3 % | 29.5 % | 29.2 % | 24.2 % | 27.6 % | 27.7 % | 28.1 % | 26.9 % | |||||||||||||||||||||||||
| Refrigeration & Food Equipment: | |||||||||||||||||||||||||||||||||||
| Segment earnings (EBIT) | $ | 23,529 | $ | 11,459 | $ | 40,159 | $ | 27,725 | $ | 102,872 | $ | 24,807 | $ | 44,375 | $ | 35,211 | $ | 14,439 | $ | 118,832 | |||||||||||||||
| Rightsizing and other costs | 704 | 6,016 | (971) | 726 | 6,475 | 2,293 | 666 | 840 | 2,243 | 6,042 | |||||||||||||||||||||||||
(Gain) loss on disposition 3 | (6,551) | 781 | 557 | — | (5,213) | — | — | — | — | — | |||||||||||||||||||||||||
| Adjusted EBIT - Segment | 17,682 | 18,256 | 39,745 | 28,451 | 104,134 | 27,100 | 45,041 | 36,051 | 16,682 | 124,874 | |||||||||||||||||||||||||
| Adjusted EBIT % | 5.7 % | 6.2 % | 10.8 % | 8.3 % | 7.9 % | 8.1 % | 11.7 % | 9.7 % | 5.4 % | 8.9 % | |||||||||||||||||||||||||
Adjusted D&A 2 | 11,548 | 11,421 | 12,081 | 11,491 | 46,541 | 13,011 | 12,777 | 13,047 | 12,525 | 51,360 | |||||||||||||||||||||||||
| Adjusted EBITDA - Segment | $ | 29,230 | $ | 29,677 | $ | 51,826 | $ | 39,942 | $ | 150,675 | $ | 40,111 | $ | 57,818 | $ | 49,098 | $ | 29,207 | $ | 176,234 | |||||||||||||||
| Adjusted EBITDA % | 9.4 % | 10.1 % | 14.1 % | 11.7 % | 11.4 % | 12.0 % | 15.0 % | 13.3 % | 9.5 % | 12.6 % | |||||||||||||||||||||||||
| Total Segments: | |||||||||||||||||||||||||||||||||||
Segment earnings (EBIT) 4 | $ | 263,682 | $ | 212,123 | $ | 313,364 | $ | 287,593 | $ | 1,076,762 | $ | 200,102 | $ | 305,060 | $ | 316,735 | $ | 290,221 | $ | 1,112,118 | |||||||||||||||
| Rightsizing and other costs | 6,668 | 15,217 | 4,889 | 17,397 | 44,171 | 3,928 | 5,730 | 3,485 | 13,412 | 26,555 | |||||||||||||||||||||||||
Loss on assets held for sale 1 | — | — | — | — | — | 46,946 | — | — | — | 46,946 | |||||||||||||||||||||||||
(Gain) loss on disposition 3 | (6,551) | 781 | 557 | — | (5,213) | — | — | — | — | — | |||||||||||||||||||||||||
Adjusted EBIT - Segment 5 | 263,799 | 228,121 | 318,810 | 304,990 | 1,115,720 | 250,976 | 310,790 | 320,220 | 303,633 | 1,185,619 | |||||||||||||||||||||||||
Adjusted EBIT % 4 | 15.9 % | 15.2 % | 18.2 % | 17.1 % | 16.7 % | 14.5 % | 17.2 % | 17.5 % | 17.1 % | 16.6 % | |||||||||||||||||||||||||
Adjusted D&A 2 | 65,008 | 64,966 | 67,761 | 67,675 | 265,410 | 66,133 | 65,093 | 65,190 | 67,024 | 263,440 | |||||||||||||||||||||||||
Adjusted EBITDA - Segment 5 | $ | 328,807 | $ | 293,087 | $ | 386,571 | $ | 372,665 | $ | 1,381,130 | $ | 317,109 | $ | 375,883 | $ | 385,410 | $ | 370,657 | $ | 1,449,059 | |||||||||||||||
Adjusted EBITDA % 5 | 19.9 % | 19.5 % | 22.1 % | 20.9 % | 20.7 % | 18.4 % | 20.7 % | 21.1 % | 20.9 % | 20.3 % | |||||||||||||||||||||||||
1 Q1 and FY 2019 include a $46,946 loss on assets held for sale for Finder. | |||||||||||||||||||||||||||||||||||
2 Adjusted D&A is depreciation and amortization expense, excluding depreciation and amortization included within rightsizing and other costs. | |||||||||||||||||||||||||||||||||||
3 Q1, Q2, Q3, and FY 2020 includes a $6,551 gain, a $781 expense, a $557 expense and a $5,213 net gain on the sale of a business for AMS Chino, respectively. | |||||||||||||||||||||||||||||||||||
4 Refer to Quarterly Segment Information section for reconciliation of total segment earnings (EBIT) to net earnings. | |||||||||||||||||||||||||||||||||||
5 Refer to Non-GAAP Disclosures section for definition. | |||||||||||||||||||||||||||||||||||
IS - 7
DOVER CORPORATION
REVENUE GROWTH FACTORS (NON-GAAP)
(unaudited)(in thousands, except per share data*)
Non-GAAP Reconciliations
Revenue Growth Factors
| 2020 | |||||||||||||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | Q4 YTD | |||||||||||||||||||||||||
| Organic | |||||||||||||||||||||||||||||
| Engineered Products | (1.9) | % | (20.1) | % | (10.4) | % | (8.8) | % | (10.3) | % | |||||||||||||||||||
| Fueling Solutions | (2.6) | % | (14.8) | % | (7.9) | % | (9.4) | % | (8.8) | % | |||||||||||||||||||
| Imaging & Identification | (4.3) | % | (14.0) | % | (7.6) | % | (2.9) | % | (7.2) | % | |||||||||||||||||||
| Pumps & Process Solutions | (1.1) | % | (8.8) | % | (0.9) | % | 1.8 | % | (2.3) | % | |||||||||||||||||||
| Refrigeration & Food Equipment | (4.3) | % | (20.2) | % | 2.6 | % | 13.2 | % | (3.0) | % | |||||||||||||||||||
| Total Organic | (2.7) | % | (16.0) | % | (5.1) | % | (2.3) | % | (6.6) | % | |||||||||||||||||||
| Acquisitions | 0.8 | % | 0.7 | % | 1.0 | % | 1.2 | % | 1.0 | % | |||||||||||||||||||
| Dispositions | (0.7) | % | (0.7) | % | (0.8) | % | (0.5) | % | (0.7) | % | |||||||||||||||||||
| Currency translation | (1.4) | % | (1.2) | % | 0.7 | % | 1.9 | % | — | % | |||||||||||||||||||
| Total* | (4.0) | % | (17.2) | % | (4.2) | % | 0.3 | % | (6.3) | % | |||||||||||||||||||
* Totals may be impacted by rounding.
| 2020 | |||||||||||||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | Q4 YTD | |||||||||||||||||||||||||
| Organic | |||||||||||||||||||||||||||||
| United States | 3.5 | % | (10.3) | % | (4.2) | % | (1.0) | % | (3.1) | % | |||||||||||||||||||
| Other Americas | (4.7) | % | (33.5) | % | (4.7) | % | (1.4) | % | (12.1) | % | |||||||||||||||||||
| Europe | (7.4) | % | (19.5) | % | (4.2) | % | (2.5) | % | (8.5) | % | |||||||||||||||||||
| Asia | (19.2) | % | (14.3) | % | (10.1) | % | (11.4) | % | (13.5) | % | |||||||||||||||||||
| Other | (8.8) | % | (33.1) | % | (5.8) | % | 10.9 | % | (9.3) | % | |||||||||||||||||||
| Total Organic | (2.7) | % | (16.0) | % | (5.1) | % | (2.3) | % | (6.6) | % | |||||||||||||||||||
| Acquisitions | 0.8 | % | 0.7 | % | 1.0 | % | 1.2 | % | 1.0 | % | |||||||||||||||||||
| Dispositions | (0.7) | % | (0.7) | % | (0.8) | % | (0.5) | % | (0.7) | % | |||||||||||||||||||
| Currency translation | (1.4) | % | (1.2) | % | 0.7 | % | 1.9 | % | — | % | |||||||||||||||||||
| Total* | (4.0) | % | (17.2) | % | (4.2) | % | 0.3 | % | (6.3) | % | |||||||||||||||||||
* Totals may be impacted by rounding.
Adjusted Guidance Reconciliation
| 2020 Actual | 2021 Guidance | ||||||||||
| Adjusted net earnings per share*: | |||||||||||
| Net earnings (GAAP) | $ | 4.70 | $5.42 - $5.62 | ||||||||
| Acquisition-related amortization, net | 0.72 | 0.72 | |||||||||
| Rightsizing and other costs, net | 0.28 | 0.11 | |||||||||
| Gain on disposition, net | (0.03) | — | |||||||||
| Adjusted net earnings (Non-GAAP) | $ | 5.67 | $6.25 - $6.45 | ||||||||
* Per share data and totals may be impacted by rounding.
IS - 8
DOVER CORPORATION
PERFORMANCE MEASURES
(unaudited)(in thousands)
| 2020 | 2019 | ||||||||||||||||||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | FY 2020 | Q1 | Q2 | Q3 | Q4 | FY 2019 | ||||||||||||||||||||||||||
| BOOKINGS | |||||||||||||||||||||||||||||||||||
| Engineered Products | $ | 414,972 | $ | 278,373 | $ | 381,139 | $ | 484,002 | $ | 1,558,486 | $ | 427,697 | $ | 397,420 | $ | 426,059 | $ | 457,145 | $ | 1,708,321 | |||||||||||||||
| Fueling Solutions | 373,070 | 311,498 | 383,902 | 403,400 | 1,471,870 | 343,083 | 394,256 | 450,727 | 425,698 | 1,613,764 | |||||||||||||||||||||||||
| Imaging & Identification | 272,604 | 221,315 | 266,423 | 304,756 | 1,065,098 | 267,762 | 264,175 | 284,527 | 276,451 | 1,092,915 | |||||||||||||||||||||||||
| Pumps & Process Solutions | 369,403 | 275,872 | 323,801 | 365,262 | 1,334,338 | 369,801 | 375,905 | 329,642 | 318,482 | 1,393,830 | |||||||||||||||||||||||||
| Refrigeration & Food Equipment | 355,157 | 326,400 | 449,549 | 379,393 | 1,510,499 | 376,998 | 384,365 | 323,422 | 361,970 | 1,446,755 | |||||||||||||||||||||||||
| Intra-segment eliminations | (375) | (460) | (926) | (425) | (2,186) | (725) | (490) | (528) | 872 | (871) | |||||||||||||||||||||||||
| Total consolidated bookings | $ | 1,784,831 | $ | 1,412,998 | $ | 1,803,888 | $ | 1,936,388 | $ | 6,938,105 | $ | 1,784,616 | $ | 1,815,631 | $ | 1,813,849 | $ | 1,840,618 | $ | 7,254,714 | |||||||||||||||
| BACKLOG | |||||||||||||||||||||||||||||||||||
| Engineered Products | $ | 453,867 | $ | 378,874 | $ | 373,458 | $ | 463,701 | $ | 451,335 | $ | 418,154 | $ | 416,025 | $ | 452,142 | |||||||||||||||||||
| Fueling Solutions | 211,518 | 199,305 | 204,574 | 201,521 | 185,847 | 186,202 | 223,081 | 205,842 | |||||||||||||||||||||||||||
| Imaging & Identification | 170,119 | 168,904 | 171,158 | 192,785 | 118,177 | 116,810 | 121,877 | 125,775 | |||||||||||||||||||||||||||
| Pumps & Process Solutions | 397,969 | 379,090 | 361,631 | 390,238 | 353,066 | 378,427 | 361,478 | 353,073 | |||||||||||||||||||||||||||
| Refrigeration & Food Equipment | 356,133 | 390,368 | 472,140 | 510,498 | 311,632 | 310,454 | 262,870 | 320,577 | |||||||||||||||||||||||||||
| Intra-segment eliminations | (159) | (367) | (269) | (192) | (403) | (141) | (252) | (249) | |||||||||||||||||||||||||||
| Total consolidated backlog | $ | 1,589,447 | $ | 1,516,174 | $ | 1,582,692 | $ | 1,758,551 | $ | 1,419,654 | $ | 1,409,906 | $ | 1,385,079 | $ | 1,457,160 | |||||||||||||||||||
Bookings Growth Factors
| 2020 | |||||||||||||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | Q4 YTD | |||||||||||||||||||||||||
| Organic | |||||||||||||||||||||||||||||
| Engineered Products | (2.3) | % | (29.8) | % | (11.6) | % | 3.3 | % | (9.5) | % | |||||||||||||||||||
| Fueling Solutions | 9.5 | % | (18.2) | % | (14.2) | % | (6.0) | % | (8.0) | % | |||||||||||||||||||
| Imaging & Identification | 0.3 | % | (16.5) | % | (9.9) | % | 0.7 | % | (6.3) | % | |||||||||||||||||||
| Pumps & Process Solutions | 2.2 | % | (25.7) | % | (3.7) | % | 10.8 | % | (4.8) | % | |||||||||||||||||||
| Refrigeration & Food Equipment | (4.2) | % | (11.6) | % | 41.3 | % | 5.6 | % | 6.5 | % | |||||||||||||||||||
| Total Organic | 0.9 | % | (20.6) | % | (1.1) | % | 2.4 | % | (4.6) | % | |||||||||||||||||||
| Acquisitions | 1.0 | % | 0.7 | % | 0.8 | % | 1.5 | % | 1.0 | % | |||||||||||||||||||
| Dispositions | (0.7) | % | (0.6) | % | (0.6) | % | (0.4) | % | (0.6) | % | |||||||||||||||||||
| Currency translation | (1.2) | % | (1.7) | % | 0.4 | % | 1.7 | % | (0.2) | % | |||||||||||||||||||
| Total* | — | % | (22.2) | % | (0.5) | % | 5.2 | % | (4.4) | % | |||||||||||||||||||
* Totals may be impacted by rounding.
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ADDITIONAL INFORMATION
FOURTH QUARTER AND FULL YEAR 2020
(Amounts in thousands except share data and where otherwise indicated)
Acquisitions
During the fourth quarter of 2020 the Company completed the acquisition of Innovative Control Systems, Inc. ("ICS") within the Fueling Solutions segment for a total consideration of $77.0 million, net of cash acquired. For the full year 2020, the Company acquired six businesses in separate transactions for total consideration of $335.8 million, net of cash acquired. The businesses were acquired to complement and expand upon existing operations within the Engineered Products, Fueling Solutions, Imaging & Identification and Pumps & Process Solutions segments.
Discontinued and Disposed Businesses
The Company did not dispose of any businesses during the fourth quarter of 2020. For the full year 2020, the Company completed the sale of the Chino, California branch of The AMS Group ("AMS Chino"), a wholly owned subsidiary of the Company, which generated total cash proceeds of $15.4 million. This sale resulted in a pre-tax gain on sale of $5.2 million included within the Refrigeration & Food Equipment segment. The sale does not represent a strategic shift that will have a major effect on operations and financial results and, therefore, did not qualify for presentation as a discontinued operation.
Rightsizing and Other Costs
During the fourth quarter and year ended December 31, 2020, rightsizing activities included restructuring charges of $18.1 million and $44.5 million, respectively, and other costs of $2.8 million and $7.0 million, respectively. For the full year 2020, restructuring expense was comprised primarily of new actions executed in response to lower demand driven by COVID-19 as well as continuing broad-based selling, general and administrative expense reduction initiatives and broad-based operational efficiency initiatives focusing on footprint consolidation, and operational optimization and IT centralization. Other costs were comprised primarily of charges related to restructuring actions and asset charges, principally due to a $3.6 million write off of assets, partially offset by a $1.7 million gain on sale of assets in our Refrigeration & Food Equipment segment as a result of restructuring actions.
| ($ in millions) | 2020 | 2019 | |||||||||||||||||||||
| Q4 | FY | Q4 | FY | ||||||||||||||||||||
| Engineered Products | $ | 4.6 | $ | 11.5 | $ | 1.4 | $ | 3.2 | |||||||||||||||
| Fueling Solutions | 2.7 | 6.7 | 1.6 | 4.9 | |||||||||||||||||||
| Imaging & Identification | 6.2 | 6.0 | 4.4 | 6.4 | |||||||||||||||||||
| Pumps & Process Solutions | 3.1 | 13.4 | 3.9 | 6.1 | |||||||||||||||||||
| Refrigeration & Food Equipment | 0.7 | 6.5 | 2.2 | 6.0 | |||||||||||||||||||
| Corporate | 3.5 | 7.3 | 4.5 | 5.6 | |||||||||||||||||||
| Total* | $ | 20.9 | $ | 51.5 | $ | 17.9 | $ | 32.2 | |||||||||||||||
* Totals may be impacted by rounding.
Tax Rate
The effective tax rate was 17.4% and 14.7% for the fourth quarters of 2020 and 2019, respectively. On a full year basis, the effective tax rate for 2020 and 2019 was 18.8% and 19.6%, respectively. The 2020 tax rate was primarily driven by the release of reserves due to the statute of limitations expiration and the tax deduction for share-based awards. The 2019 tax rate was primarily driven by the tax deduction for share-based awards and other favorable discrete items, partially offset by the exclusion of capital losses on a disposition of a business under local tax law.
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ADDITIONAL INFORMATION (CONTINUED)
FOURTH QUARTER AND FULL YEAR 2020
(Amounts in thousands except share data and where otherwise indicated)
Share Repurchases
During the year ended December 31, 2020, the Company purchased approximately 1.0 million shares of its common stock for a total cost of $106.3 million, or $108.54 per share. In November 2020, the Company's Board of Directors approved a new standing share repurchase authorization, whereby the Company may repurchase up to 20 million shares beginning on January 1, 2021 through December 31, 2023.
Capitalization
The following table provides a reconciliation of total debt and net debt to net capitalization to the most directly comparable GAAP measures:
| Net Debt to Net Capitalization Ratio (Non-GAAP) | December 31, 2020 | December 31, 2019 | ||||||||||||
| Commercial paper | $ | — | $ | 84,700 | ||||||||||
| Long-term debt | 3,108,829 | 2,985,716 | ||||||||||||
| Total debt | 3,108,829 | 3,070,416 | ||||||||||||
| Less: Cash and cash equivalents | (513,075) | (397,253) | ||||||||||||
| Net debt | 2,595,754 | 2,673,163 | ||||||||||||
| Add: Stockholders' equity | 3,385,773 | 3,032,660 | ||||||||||||
| Net capitalization | $ | 5,981,527 | $ | 5,705,823 | ||||||||||
| Net debt to net capitalization | 43.4 | % | 46.8 | % | ||||||||||
Quarterly Cash Flow
| 2020 | 2019 | ||||||||||||||||||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | FY 2020 | Q1 | Q2 | Q3 | Q4 | FY 2019 | ||||||||||||||||||||||||||
| Net Cash Flows Provided By (Used In): | |||||||||||||||||||||||||||||||||||
| Operating activities | $ | 75,863 | $ | 271,809 | $ | 339,247 | $ | 417,891 | $ | 1,104,810 | $ | 24,524 | $ | 208,709 | $ | 350,865 | $ | 361,208 | $ | 945,306 | |||||||||||||||
| Investing activities | (230,511) | (67,763) | (64,724) | (118,381) | (481,379) | (217,690) | (69,755) | (48,612) | (48,198) | (384,255) | |||||||||||||||||||||||||
| Financing activities | 280,954 | (67,458) | (496,832) | (222,954) | (506,290) | 36,067 | (60,596) | (277,901) | (255,612) | (558,042) | |||||||||||||||||||||||||
Quarterly Free Cash Flow (Non-GAAP)
| 2020 | 2019 | ||||||||||||||||||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | FY 2020 | Q1 | Q2 | Q3 | Q4 | FY 2019 | ||||||||||||||||||||||||||
| Cash flow from operating activities | $ | 75,863 | $ | 271,809 | $ | 339,247 | $ | 417,891 | $ | 1,104,810 | $ | 24,524 | $ | 208,709 | $ | 350,865 | $ | 361,208 | $ | 945,306 | |||||||||||||||
| Less: Capital expenditures | (40,172) | (38,999) | (44,393) | (42,128) | (165,692) | (37,122) | (53,970) | (46,184) | (49,528) | (186,804) | |||||||||||||||||||||||||
| Free cash flow * | $ | 35,691 | $ | 232,810 | $ | 294,854 | $ | 375,763 | $ | 939,118 | $ | (12,598) | $ | 154,739 | $ | 304,681 | $ | 311,680 | $ | 758,502 | |||||||||||||||
| Free cash flow as a percentage of revenue | 2.2 | % | 15.5 | % | 16.9 | % | 21.1 | % | 14.1 | % | (0.7) | % | 8.5 | % | 16.7 | % | 17.6 | % | 10.6 | % | |||||||||||||||
| Free cash flow as a percentage of net earnings | 20.2 | % | 186.6 | % | 147.2 | % | 206.3 | % | 137.4 | % | (11.9) | % | 78.1 | % | 147.9 | % | 185.4 | % | 111.9 | % | |||||||||||||||
* FY 2020 cash flow from operating activities reflects benefits from permitted deferrals of tax payments, most significantly in Q2, Q3, and Q4 and advanced payments on contracts, most significantly in Q3.
Non-GAAP Disclosures
In an effort to provide investors with additional information regarding our results as determined by GAAP, Management also discloses non-GAAP information that Management believes provides useful information to investors. Adjusted net earnings, adjusted diluted net earnings per share, total segment earnings (EBIT), adjusted EBIT by segment, adjusted EBIT margin by segment, adjusted EBITDA by segment, adjusted EBITDA margin by segment, net debt, net capitalization, net debt to net capitalization ratios, free cash flow, free cash flow as a percentage of revenue, free cash flow as a percentage of earnings, and organic revenue growth are not financial measures under GAAP and should not be considered as a substitute for net earnings,
IS - 11
diluted net earnings per share, debt or equity, cash flows from operating activities, or revenue as determined in accordance with GAAP, and they may not be comparable to similarly titled measures reported by other companies.
Adjusted net earnings represents net earnings adjusted for the effect of acquisition-related amortization, rightsizing and other costs, loss on extinguishment of debt, loss on assets held for sale and gain/loss on disposition. We exclude after-tax acquisition-related amortization because the amount and timing of such charges are significantly impacted by the timing, size, number and nature of the acquisitions the Company consummates. We exclude the other items because they occur for reasons that may be unrelated to the Company's commercial performance during the period and/or Management believes they are not indicative of the Company's ongoing operating costs or gains in a given period.
Adjusted diluted net earnings per share represents adjusted net earnings divided by average diluted shares.
Total segment earnings (EBIT) is defined as net earnings before income taxes, net interest expense and corporate expenses. Total segment earnings (EBIT) margin is defined as total segment earnings (EBIT) divided by revenue.
Adjusted EBIT by Segment is defined as net earnings before income taxes, net interest expense, corporate expenses, rightsizing and other costs, a 2019 loss on assets held for sale and a 2020 gain/loss on disposition. Adjusted EBIT Margin by Segment is defined as adjusted EBIT by segment divided by segment revenue.
Adjusted EBITDA by Segment is defined as adjusted EBIT by segment plus depreciation and amortization, excluding depreciation and amortization included within rightsizing and other costs. Adjusted EBITDA Margin by Segment is defined as adjusted EBITDA by segment divided by segment revenue.
Management believes these measures are useful to investors to better understand the Company’s ongoing profitability as it will better reflect the Company's core operating results, offer more transparency and facilitate easier comparability to prior and future periods and to its peers.
Net debt represents total debt minus cash and cash equivalents. Net capitalization represents net debt plus stockholders' equity. Net debt to net capitalization ratio equals net debt divided by net capitalization. Management believes the net debt to net capitalization ratio is useful to assess our overall financial leverage and capacity.
Free cash flow represents net cash provided by operating activities minus capital expenditures. Free cash flow as a percentage of revenue equals free cash flow divided by revenue. Free cash flow as a percentage of net earnings equals free cash flow divided by net earnings. Management believes that free cash flow and free cash flow ratios are important measures of operating performance because it provides management and investors a measurement of cash generated from operations that is available for mandatory payment obligations and investment opportunities, such as funding acquisitions, paying dividends, repaying debt and repurchasing our common stock.
Management believes that reporting organic revenue growth, which excludes the impact of foreign currency exchange rates and the impact of acquisitions and dispositions, provides a useful comparison of our revenue and bookings performance and trends between periods.
Performance Measures Definitions
Bookings represent total orders received from customers in the current reporting period. This metric is an important measure of performance and an indicator of revenue order trends.
Organic bookings represent total orders received from customers in the current reporting period excluding the impact of foreign currency exchange rates and the impact of acquisition and dispositions. This metric is an important measure of performance and an indicator of revenue order trends.
Backlog represents an estimate of the total remaining bookings at a point in time for which performance obligations have not yet have satisfied. This metric is useful as it represents the aggregate amount we expect to recognize as revenue in the future.
We use the above operational metrics in monitoring the performance of the business. We believe the operational metrics are useful to investors and other users of our financial information in assessing the performance of our segments.
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