Dover Reports Fourth Quarter and Full Year 2022 Results

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Dover Reports Fourth Quarter and Full Year 2022 Results

DOWNERS GROVE, Ill., Jan. 31, 2023 /PRNewswire/ -- Dover (NYSE: DOV), a diversified global manufacturer, announced its financial results for the fourth quarter and full year ended December 31, 2022. All comparisons are to the comparable period of the prior fiscal year, unless otherwise noted.

Three Months Ended December 31,

Years Ended December 31,

($ in millions, except per share data)

2022

2021

% Change

2022

2021

% Change

U.S. GAAP

Revenue

$       2,139

$       1,989

8 %

$       8,508

$       7,907

8 %

Net earnings 

264

363

(27) %

1,065

1,124

(5) %

Diluted EPS 

1.87

2.49

(25) %

7.42

7.74

(4) %













Non-GAAP

Organic revenue change




9 %




9 %

Adjusted net earnings 1

305

259

18 %

1,213

1,109

9 %

Adjusted diluted EPS

2.16

1.78

21 %

8.45

7.63

11 %

1 Q4 2022 and 2021 adjusted net earnings exclude after tax purchase accounting expenses of $31.6 million and $27.0 million, respectively, and restructuring and other costs of $9.6 million and $22.1 million, respectively. Full year 2022 and 2021 adjusted net earnings exclude after tax purchase accounting expenses of $139.4 million and $107.2 million, respectively, and restructuring and other costs of $30.8 million and $31.1 million, respectively. Full year 2022 also excludes a $22.6 million reduction to income taxes previously recorded related to the Tax Cuts and Jobs Act, and Q4 and full year 2021 exclude a $135.1 million gain on the sale of Unified Brands and a $18.0 million gain related to the sale of our Race Winning Brands equity method investment.

For the quarter ended December 31, 2022, Dover generated revenue of $2.1 billion, an increase of 8% (+9% organic). GAAP net earnings of $264 million decreased 27%, and GAAP diluted EPS of $1.87 was down 25%. On an adjusted basis, net earnings of $305 million increased 18% and adjusted diluted EPS of $2.16 was up 21%.

For the full year ended December 31, 2022, Dover generated revenue of $8.5 billion, an increase of 8% (+9% organic). GAAP net earnings of $1,065 million decreased 5%, and GAAP diluted EPS of $7.42 was down 4%. On an adjusted basis, net earnings of $1,213 million increased 9%, and adjusted diluted EPS of $8.45 was up 11%.

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 strong revenue growth and margin improvement in the fourth quarter driven by rigorous execution and improving price-cost dynamics that more than offset the impact of input shortages, inflationary cost pressures and foreign currency translation.

Demand trends remained constructive across the portfolio in 2022. Lead times in many businesses have returned to pre-pandemic levels as global supply chains improved. Our order backlog remains elevated compared to normal levels and provides us good top line visibility into next year.

During the fourth quarter, we focused on improving our product delivery metrics and driving solid incremental margins. Additionally, we took numerous measures to improve productivity and efficiency into 2023, principally enabled by advances we achieved in e-commerce adoption, back-office consolidation and SKU complexity reduction. The strong margin performance in the fourth quarter is a testament to the high quality of the team's work, and we expect further benefits from our recent efforts in 2023.

We continued to deploy capital toward portfolio improvement, growth and efficiency in 2022. We stepped up capital expenditures towards productivity projects and capacity expansions. We completed several attractive bolt-on acquisitions that provide exposure to high-growth technologies and markets. Finally, we took the opportunity to return capital to shareholders via repurchases principally in the second half of the year.

We enter 2023 with a constructive stance. Demand trends in our industrial markets remain healthy and we have a significant volume of business in backlog entering the new year. Expected revenue growth, pricing actions and productivity measures from 2022 lay the foundation for margin accretion in 2023. We have high confidence in Dover's resilient markets, flexible business model and proven execution playbook. Our strategy for superior through-cycle shareholder value creation remains unchanged: to combine solid and consistent growth above GDP, strong operational execution generating meaningful margin accretion over time, and value-added disciplined capital deployment."

FULL YEAR 2023 GUIDANCE:

In 2023, Dover expects to generate GAAP EPS in the range of $7.87 to $8.07 (adjusted EPS of $8.85 to $9.05), based on full year revenue growth of 3% to 5% (all-in and organic).

CONFERENCE CALL INFORMATION:

Dover will host a webcast and conference call to discuss its fourth quarter and full year 2022 results at 9:00 A.M. Eastern Time (8:00 A.M. Central Time) on Tuesday, January 31, 2023. 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 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 over $8 billion. We deliver innovative equipment and components, consumable supplies, aftermarket parts, software and digital solutions, and support services through five operating segments: Engineered Products, Clean Energy & Fueling, Imaging & Identification, Pumps & Process Solutions and Climate & Sustainability Technologies. Dover combines global scale with operational agility to lead the markets we serve. Recognized for our entrepreneurial approach for over 65 years, our team of over 25,000 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, general economic conditions and conditions in the particular markets in which we operate, supply chain constraints and labor shortages that could result in production stoppages, inflation in material input costs and freight logistics, the impacts of COVID-19, or other future pandemics, on the global economy and on our customers, suppliers, employees, business and cash flows, the impact on global or a regional economy due to the outbreak or escalation of hostilities or war, 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, 2021, 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 2022

DOVER CORPORATION

CONSOLIDATED STATEMENTS OF EARNINGS

(unaudited)(in thousands, except per share data*)


Three Months Ended December 31,

Years Ended December 31,

2022

2021

2022

2021

Revenue

$      2,139,181

$      1,989,235

$      8,508,088

$      7,907,081

Cost of goods and services

1,372,852

1,267,748

5,444,532

4,937,295

Gross profit

766,329

721,487

3,063,556

2,969,786

Selling, general, and administrative expenses

413,611

438,685

1,684,226

1,688,278

Operating earnings

352,718

282,802

1,379,330

1,281,508

Interest expense

33,126

26,402

116,456

106,319

Interest income

(1,462)

(1,353)

(4,430)

(4,441)

Gain on dispositions

—

(206,338)

—

(206,338)

Other income, net

(2,359)

3,378

(20,201)

(14,858)

Earnings before provision for income taxes

323,413

460,713

1,287,505

1,400,826

Provision for income taxes

59,834

97,928

222,129

277,008

Net earnings

$         263,579

$         362,785

$      1,065,376

$      1,123,818








Net earnings per share:






Basic

$              1.88

$              2.52

$              7.47

$              7.81

Diluted

$              1.87

$              2.49

$              7.42

$              7.74

Weighted average shares outstanding:






Basic

140,343

144,005

142,681

143,923

Diluted

141,168

145,460

143,595

145,273








Dividends paid per common share

$             0.505

$             0.500

$              2.01

$              1.99








* Per share data may be impacted by rounding.






 

DOVER CORPORATION

QUARTERLY SEGMENT INFORMATION

(unaudited)(in thousands)


2022

2021

Q1

Q2

Q3

Q4

FY 2022

Q1

Q2

Q3

Q4

FY 2021

REVENUE










Engineered Products

$ 487,647

$ 514,436

$ 516,501

$ 525,048

$  2,043,632

$ 428,127

$ 442,091

$ 447,798

$ 462,811

$ 1,780,827

Clean Energy & Fueling

458,395

494,075

464,022

462,015

1,878,507

389,678

437,042

410,561

410,872

1,648,153

Imaging & Identification

272,255

275,951

282,371

293,238

1,123,815

284,328

294,076

292,535

292,428

1,163,367

Pumps & Process Solutions

435,195

441,127

433,558

418,355

1,728,235

394,377

428,701

438,240

447,316

1,708,634

Climate & Sustainability Technologies

399,078

434,164

462,671

441,811

1,737,724

372,077

430,506

429,425

376,167

1,608,175

Intersegment eliminations

(669)

(1,038)

(832)

(1,286)

(3,825)

(686)

(740)

(290)

(359)

(2,075)

Total consolidated revenue

$  2,051,901

$  2,158,715

$  2,158,291

$  2,139,181

$  8,508,088

$  1,867,901

$  2,031,676

$  2,018,269

$  1,989,235

$ 7,907,081












NET EARNINGS










Segment Earnings:










Engineered Products

$   71,130

$   81,671

$   90,145

$ 103,573

$   346,519

$   76,684

$   71,255

$   67,376

$   62,537

$   277,852

Clean Energy & Fueling

72,962

99,034

90,208

90,789

352,993

79,572

93,430

80,101

74,083

327,186

Imaging & Identification

58,598

61,392

74,477

73,617

268,084

63,618

66,565

70,635

66,114

266,932

Pumps & Process Solutions

146,617

138,048

128,573

119,780

533,018

128,895

146,759

150,275

149,664

575,593

Climate & Sustainability Technologies

53,609

64,181

75,190

61,504

254,484

43,475

56,905

49,734

35,403

185,517

Total segment earnings

402,916

444,326

458,593

449,263

1,755,098

392,244

434,914

418,121

387,801

1,633,080

Purchase accounting expenses 1

53,286

47,019

40,526

40,272

181,103

35,516

35,162

35,587

35,715

141,980

Restructuring and other costs (benefits) 2

10,552

7,944

8,613

11,881

38,990

4,162

10,779

(3,201)

26,696

38,436

Loss (gain) on dispositions 3

194

—

—

—

194

—

—

—

(206,338)

(206,338)

Corporate expense / other 4,5

37,404

27,967

27,876

42,033

135,280

37,173

39,910

33,249

45,966

156,298

Interest expense

26,552

26,989

29,789

33,126

116,456

26,823

26,661

26,433

26,402

106,319

Interest income

(775)

(949)

(1,244)

(1,462)

(4,430)

(680)

(942)

(1,466)

(1,353)

(4,441)

Earnings before provision for income taxes

275,703

335,356

353,033

323,413

1,287,505

289,250

323,344

327,519

460,713

1,400,826

Provision for income taxes

49,550

45,738

67,007

59,834

222,129

56,481

58,836

63,763

97,928

277,008

Net earnings

$ 226,153

$ 289,618

$ 286,026

$ 263,579

$ 1,065,376

$ 232,769

$ 264,508

$ 263,756

$ 362,785

$ 1,123,818












SEGMENT EARNINGS MARGIN








Engineered Products

14.6 %

15.9 %

17.5 %

19.7 %

17.0 %

17.9 %

16.1 %

15.0 %

13.5 %

15.6 %

Clean Energy & Fueling

15.9 %

20.0 %

19.4 %

19.7 %

18.8 %

20.4 %

21.4 %

19.5 %

18.0 %

19.9 %

Imaging & Identification

21.5 %

22.2 %

26.4 %

25.1 %

23.9 %

22.4 %

22.6 %

24.1 %

22.6 %

22.9 %

Pumps & Process Solutions

33.7 %

31.3 %

29.7 %

28.6 %

30.8 %

32.7 %

34.2 %

34.3 %

33.5 %

33.7 %

Climate & Sustainability Technologies

13.4 %

14.8 %

16.3 %

13.9 %

14.6 %

11.7 %

13.2 %

11.6 %

9.4 %

11.5 %

Total segment earnings margin

19.6 %

20.6 %

21.2 %

21.0 %

20.6 %

21.0 %

21.4 %

20.7 %

19.5 %

20.7 %












1 Purchase accounting expenses are primarily comprised of amortization of intangible assets and charges related to fair value step-ups for acquired inventory sold during the period.

2 Restructuring and other costs (benefits) relate to actions taken for headcount reductions, facility consolidations and site closures, exit costs, and other asset charges.

3 Loss (gain) on dispositions includes working capital adjustments related to dispositions.

4 Certain expenses are maintained at the corporate level and not allocated to the segments. These expenses include executive and functional compensation costs, non-service pension costs, non-operating insurance expenses, shared business services overhead costs, deal-related expenses and various administrative expenses relating to the corporate headquarters.

5 Q4 and FY 2022 include a $6.3 million settlement charge related to our U.S. qualified defined benefit plan.

 

DOVER CORPORATION

QUARTERLY EARNINGS PER SHARE

(unaudited)(in thousands, except per share data*)

Earnings Per Share











2022

2021

Q1

Q2

Q3

Q4

FY 2022

Q1

Q2

Q3

Q4

FY 2021

Net earnings per share:










Basic

$       1.57

$       2.01

$       2.01

$       1.88

$         7.47

$       1.62

$       1.84

$       1.83

$       2.52

$         7.81

Diluted

$       1.56

$       2.00

$       2.00

$       1.87

$         7.42

$       1.61

$       1.82

$       1.81

$       2.49

$         7.74












Net earnings and weighted average shares used in calculated earnings per share amounts are as follows:

Net earnings

$ 226,153

$ 289,618

$ 286,026

$ 263,579

$  1,065,376

$ 232,769

$ 264,508

$ 263,756

$ 362,785

$  1,123,818












Weighted average shares outstanding:








Basic

144,087

143,832

142,506

140,343

142,681

143,765

143,941

143,976

144,005

143,923

Diluted

145,329

144,669

143,257

141,168

143,595

144,938

145,118

145,440

145,460

145,273












* Per share data may be impacted by rounding.

 

DOVER CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)(in thousands)


December 31, 2022

December 31, 2021

Assets:


Cash and cash equivalents

$                        380,868

$                        385,504

Receivables, net of allowances

1,516,871

1,347,514

Inventories, net

1,366,608

1,191,095

Prepaid and other current assets

159,118

137,596

Property, plant and equipment, net

1,004,825

957,310

Goodwill

4,669,494

4,558,822

Intangible assets, net

1,333,735

1,359,522

Other assets and deferred charges

465,000

466,264

Total assets

$                  10,896,519

$                  10,403,627




Liabilities and Stockholders' Equity:


Short-term borrowings

$                        735,772

$                        105,702

Payables, accrued expenses and other current liabilities

2,037,502

2,144,639

Deferred taxes and other non-current liabilities

894,366

945,044

Long-term debt

2,942,513

3,018,714

Stockholders' equity

4,286,366

4,189,528

Total liabilities and stockholders' equity

$                  10,896,519

$                  10,403,627

 

DOVER CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)(in thousands)


Years Ended December 31,

2022

2021

Operating activities:


Net earnings

$                1,065,376

$                1,123,818

Depreciation and amortization

307,538

290,123

Stock-based compensation

30,821

31,111

Contributions to employee benefit plans

(12,890)

(14,383)

Gain on dispositions

—

(206,338)

Net change in assets and liabilities

(585,121)

(108,466)

Net cash provided by operating activities

805,724

1,115,865




Investing activities:


Additions to property, plant and equipment

(220,962)

(171,465)

Acquisitions (net of cash and cash equivalents acquired)

(312,855)

(1,112,075)

Proceeds from the sale of property, plant and equipment

6,061

7,070

Proceeds from dispositions

—

274,982

Other

(13,168)

8,735

Net cash used in investing activities

(540,924)

(992,753)




Financing activities:


Change in commercial paper and other short-term borrowings, net

629,891

105,000

Dividends to stockholders

(287,551)

(286,896)

Repurchase of common stock, including accelerated share repurchase program

(585,000)

(21,637)

Payments to settle employee tax obligations on exercise of share-based awards

(14,637)

(41,924)

Other

(2,968)

(4,423)

Net cash used in financing activities

(260,265)

(249,880)




Effect of exchange rate changes on cash

(9,171)

(803)




Net decrease in cash and cash equivalents

(4,636)

(127,571)

Cash and cash equivalents at beginning of period

385,504

513,075

Cash and cash equivalents at end of period

$                    380,868

$                    385,504

 

DOVER CORPORATION

QUARTERLY ADJUSTED EARNINGS AND ADJUSTED EARNINGS PER SHARE (NON-GAAP)

(unaudited)(in thousands, except per share data*)

Non-GAAP Reconciliations



2022

2021

Q1

Q2

Q3

Q4

FY 2022

Q1

Q2

Q3

Q4

FY 2021

Adjusted net earnings:










Net earnings

$  226,153

$  289,618

$  286,026

$ 263,579

$  1,065,376

$  232,769

$  264,508

$  263,756

$   362,785

$  1,123,818

Purchase accounting expenses, pre-tax 1

53,286

47,019

40,526

40,272

181,103

35,516

35,162

35,587

35,715

141,980

Purchase accounting expenses, tax
impact 2

(12,538)

(11,013)

(9,494)

(8,689)

(41,734)

(8,720)

(8,571)

(8,700)

(8,763)

(34,754)

Restructuring and other costs (benefits),
pre-tax 3

10,552

7,944

8,613

11,881

38,990

4,162

10,779

(3,201)

26,696

38,436

Restructuring and other costs (benefits),
tax impact 2

(2,191)

(1,803)

(1,921)

(2,311)

(8,226)

(1,031)

(2,597)

902

(4,610)

(7,336)

Loss (gain) on dispositions, pre-tax 4

194

—

—

—

194

—

—

—

(206,338)

(206,338)

Loss (gain) on dispositions, tax-impact 2

(27)

—

—

—

(27)

—

—

—

53,218

53,218

Tax Cuts and Jobs Act 5

—

(22,579)

—

—

(22,579)

—

—

—

—

—

Adjusted net earnings

$  275,429

$  309,186

$  323,750

$ 304,732

$  1,213,097

$  262,696

$  299,281

$  288,344

$   258,703

$  1,109,024












Adjusted diluted net earnings per share:








Diluted net earnings per share

$     1.56

$     2.00

$     2.00

$       1.87

$        7.42

$     1.61

$     1.82

$     1.81

$     2.49

$         7.74

Purchase accounting expenses, pre-tax 1

0.37

0.33

0.28

0.29

1.27

0.25

0.24

0.24

0.25

0.98

Purchase accounting expenses, tax
impact 2

(0.09)

(0.08)

(0.07)

(0.06)

(0.30)

(0.06)

(0.06)

(0.06)

(0.06)

(0.24)

Restructuring and other costs (benefits),
pre-tax 3

0.07

0.05

0.06

0.08

0.26

0.03

0.07

(0.02)

0.18

0.26

Restructuring and other costs (benefits),
tax impact 2

(0.02)

(0.01)

(0.01)

(0.02)

(0.06)

(0.01)

(0.02)

0.01

(0.03)

(0.05)

Loss (gain) on dispositions, pre-tax 4

—

—

—

—

—

—

—

—

(1.42)

(1.42)

Loss (gain) on dispositions, tax-impact 2

—

—

—

—

—

—

—

—

0.37

0.37

Tax Cuts and Jobs Act 5

—

(0.16)

—

—

(0.16)

—

—

—

—

—

Adjusted diluted net earnings per share

$     1.90

$     2.14

$     2.26

$       2.16

$        8.45

$     1.81

$     2.06

$     1.98

$     1.78

$         7.63












1 Purchase accounting expenses are primarily comprised of amortization of intangible assets and charges related to fair value step-ups for acquired inventory sold during the period. Q1, Q2, and FY 2022 include $12,487, $7,158, and $19,869 of amortization of inventory step-up, respectively, primarily related to the Q4 2021 acquisitions within our Clean Energy & Fueling segment.

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 Restructuring and other costs (benefits) relate to actions taken for headcount reductions, facility consolidations and site closures, exit costs, and other asset charges. Q1 and FY 2022 include $5,457 of non-cash foreign currency translation losses reclassified to earnings included within restructuring and other costs (benefits) and $2,117 related to write-off of assets due to an exit from certain Latin America countries for our Climate & Sustainability Technologies segment. Q4 and FY 2021 for our Climate & Sustainability Technologies segment include a $12,073 other than temporary impairment charge related to an equity method investment and a $6,072 write-off of assets incurred in connection with an exit from certain Latin America countries. Q3 and FY 2021 include a $9,078 payment received for previously incurred restructuring costs related to a product line exit in our Engineered Products segment.

4 Q1 2022 and FY 2022 represents working capital adjustments related to the disposition of Unified Brands ("UB") and the Race Winning Brands ("RWB") equity method investment in Q4 2021. Q4 and FY2021 represent a $181,615 gain on disposition of UB in our Climate & Sustainability Technologies segment and a $24,723 gain on disposition of our RWB equity method investment in our Engineered Products segment.

5 Q2 and FY 2022 represent a reduction to income taxes previously recorded related to the Tax Cuts and Jobs Act.













* Per share data and totals may be impacted by rounding.

 

DOVER CORPORATION

QUARTERLY ADJUSTED SEGMENT EBITDA (NON-GAAP)

(unaudited)(in thousands)

Non-GAAP Reconciliations


2022

2021

Q1

Q2

Q3

Q4

FY 2022

Q1

Q2

Q3

Q4

FY 2021

ADJUSTED SEGMENT EBITDA






















Engineered Products:












Segment earnings

$   71,130

$   81,671

$   90,145

$   103,573

$   346,519

$   76,684

$   71,255

$   67,376

$   62,537

$  277,852

Other depreciation and amortization 1

7,274

6,799

6,819

6,853

27,745

6,708

5,814

7,132

7,382

27,036

Adjusted segment EBITDA 2

78,404

88,470

96,964

110,426

374,264

83,392

77,069

74,508

69,919

304,888

Adjusted segment EBITDA margin 2

16.1 %

17.2 %

18.8 %

21.0 %

18.3 %

19.5 %

17.4 %

16.6 %

15.1 %

17.1 %












Clean Energy & Fueling:










Segment earnings 3

$   72,962

$   99,034

$   90,208

$     90,789

$   352,993

$   79,572

$   93,430

$   80,101

$   74,083

$  327,186

Other depreciation and amortization 1

8,466

6,533

6,893

6,923

28,815

6,489

6,571

6,411

6,371

25,842

Adjusted segment EBITDA 2

81,428

105,567

97,101

97,712

381,808

86,061

100,001

86,512

80,454

353,028

Adjusted segment EBITDA margin 2

17.8 %

21.4 %

20.9 %

21.1 %

20.3 %

22.1 %

22.9 %

21.1 %

19.6 %

21.4 %












Imaging & Identification:










Segment earnings

$   58,598

$   61,392

$   74,477

$     73,617

$   268,084

$   63,618

$   66,565

$   70,635

$   66,114

$  266,932

Other depreciation and amortization 1

3,497

3,496

3,372

3,820

14,185

3,274

3,544

3,896

3,475

14,189

Adjusted segment EBITDA 2

62,095

64,888

77,849

77,437

282,269

66,892

70,109

74,531

69,589

281,121

Adjusted segment EBITDA margin 2

22.8 %

23.5 %

27.6 %

26.4 %

25.1 %

23.5 %

23.8 %

25.5 %

23.8 %

24.2 %












Pumps & Process Solutions:










Segment earnings

$  146,617

$  138,048

$  128,573

$   119,780

$   533,018

$  128,895

$  146,759

$  150,275

$  149,664

$  575,593

Other depreciation and amortization 1

9,922

9,787

10,137

10,993

40,839

9,670

9,638

9,832

10,132

39,272

Adjusted segment EBITDA 2

156,539

147,835

138,710

130,773

573,857

138,565

156,397

160,107

159,796

614,865

Adjusted segment EBITDA margin 2

36.0 %

33.5 %

32.0 %

31.3 %

33.2 %

35.1 %

36.5 %

36.5 %

35.7 %

36.0 %












Climate & Sustainability Technologies:









Segment earnings

$   53,609

$   64,181

$   75,190

$     61,504

$   254,484

$   43,475

$   56,905

$   49,734

$   35,403

$  185,517

Other depreciation and amortization 1

6,495

6,443

6,736

6,530

26,204

6,349

6,682

7,019

6,937

26,987

Adjusted segment EBITDA 2

60,104

70,624

81,926

68,034

280,688

49,824

63,587

56,753

42,340

212,504

Adjusted segment EBITDA margin 2

15.1 %

16.3 %

17.7 %

15.4 %

16.2 %

13.4 %

14.8 %

13.2 %

11.3 %

13.2 %












Total Segments:










Segment earnings 2, 3, 4

$  402,916

$  444,326

$  458,593

$   449,263

$  1,755,098

$  392,244

$  434,914

$  418,121

$  387,801

$  1,633,080

Other depreciation and amortization 1

35,654

33,058

33,957

35,119

137,788

32,490

32,249

34,290

34,297

133,326

Adjusted segment EBITDA 2

438,570

477,384

492,550

484,382

1,892,886

424,734

467,163

452,411

422,098

1,766,406

Adjusted segment EBITDA margin 2

21.4 %

22.1 %

22.8 %

22.6 %

22.2 %

22.7 %

23.0 %

22.4 %

21.2 %

22.3 %












1 Other depreciation and amortization relates to property, plant, and equipment and intangibles, and excludes amounts related to purchase accounting expenses and restructuring and other costs (benefits).

2 Refer to Non-GAAP Disclosures section for definition.

3 Q1, Q2, and FY 2022 exclude $12,097, $6,898, and $18,995 of amortization of inventory step-up, respectively, related to the Q4 2021 acquisitions within our Clean Energy & Fueling segment.

4 Refer to Quarterly Segment Information section for reconciliation of total segment earnings to net earnings.

 

DOVER CORPORATION

QUARTERLY NET EARNINGS TO ADJUSTED SEGMENT EBITDA RECONCILIATION (NON-GAAP)

(unaudited)(in thousands)

Non-GAAP Reconciliations


2022

2021

Q1

Q2

Q3

Q4

FY 2022

Q1

Q2

Q3

Q4

FY 2021

Net earnings

$ 226,153

$ 289,618

$ 286,026

$ 263,579

$  1,065,376

$ 232,769

$ 264,508

$ 263,756

$ 362,785

$  1,123,818

Provision for income taxes

49,550

45,738

67,007

59,834

222,129

56,481

58,836

63,763

97,928

277,008

Earnings before provision for
income taxes

275,703

335,356

353,033

323,413

1,287,505

289,250

323,344

327,519

460,713

1,400,826

Interest income

(775)

(949)

(1,244)

(1,462)

(4,430)

(680)

(942)

(1,466)

(1,353)

(4,441)

Interest expense

26,552

26,989

29,789

33,126

116,456

26,823

26,661

26,433

26,402

106,319

Corporate expense / other 1,7

37,404

27,967

27,876

42,033

135,280

37,173

39,910

33,249

45,966

156,298

Loss (gain) on dispositions 2

194

—

—

—

194

—

—

—

(206,338)

(206,338)

Restructuring and other costs
(benefits) 3

10,552

7,944

8,613

11,881

38,990

4,162

10,779

(3,201)

26,696

38,436

Purchase accounting expenses 4

53,286

47,019

40,526

40,272

181,103

35,516

35,162

35,587

35,715

141,980

Total segment earnings 6

402,916

444,326

458,593

449,263

1,755,098

392,244

434,914

418,121

387,801

1,633,080

Add: Other depreciation and
amortization 5

35,654

33,058

33,957

35,119

137,788

32,490

32,249

34,290

34,297

133,326

Total adjusted segment EBITDA 6

$ 438,570

$ 477,384

$ 492,550

$ 484,382

$  1,892,886

$ 424,734

$ 467,163

$ 452,411

$ 422,098

$  1,766,406












1 Certain expenses are maintained at the corporate level and not allocated to the segments. These expenses include executive and functional compensation costs, non-service pension costs, non-operating insurance expenses, shared business services overhead costs, deal-related expenses and various administrative expenses relating to the corporate headquarters.

2 Loss (gain) on dispositions includes working capital adjustments related to dispositions.

3 Restructuring and other costs (benefits) relate to actions taken for headcount reductions, facility consolidations and site closures, exit costs, and other asset charges.

4 Purchase accounting expenses are primarily comprised of amortization of intangible assets and charges related to fair value step-ups for acquired inventory sold during the period.

5 Other depreciation and amortization relates to property, plant, and equipment and intangibles, and excludes amounts related to purchase accounting expenses and restructuring and other costs.

6 Refer to Non-GAAP Disclosures section for definition.

7 Q4 and FY 2022 include a $6.3 million settlement charge related to our U.S. qualified defined benefit plan.

 

DOVER CORPORATION

REVENUE GROWTH FACTORS AND ADJUSTED EPS GUIDANCE RECONCILIATIONS (NON-GAAP)

(unaudited)(in thousands, except per share data*)

Non-GAAP Reconciliations


Revenue Growth Factors



2022

Q1

Q2

Q3

Q4

Q4 YTD

Organic








Engineered Products

14.6 %

18.6 %

17.6 %

16.5 %

16.8 %

Clean Energy & Fueling

0.2 %

(1.1) %

(0.5) %

0.3 %

(0.3) %

Imaging & Identification

(1.1) %

(0.9) %

4.9 %

8.7 %

2.9 %

Pumps & Process Solutions

12.6 %

6.8 %

1.9 %

(3.9) %

4.1 %

Climate & Sustainability Technologies

17.4 %

11.4 %

19.3 %

26.9 %

18.5 %

Total Organic

9.3 %

7.5 %

9.0 %

9.3 %

8.8 %

Acquisitions

4.4 %

4.1 %

4.4 %

4.0 %

4.2 %

Dispositions

(1.6) %

(1.7) %

(1.7) %

(1.1) %

(1.5) %

Currency translation

(2.2) %

(3.6) %

(4.8) %

(4.7) %

(3.9) %

Total*

9.9 %

6.3 %

6.9 %

7.5 %

7.6 %

 * Totals may be impacted by rounding.


2022

Q1

Q2

Q3

Q4

Q4 YTD

Organic








United States

9.0 %

12.5 %

11.2 %

7.4 %

9.5 %

Other Americas

11.0 %

(17.7) %

(5.6) %

35.6 %

6.9 %

Europe

5.8 %

11.8 %

8.7 %

19.4 %

11.7 %

Asia 

18.9 %

0.4 %

13.0 %

(1.2) %

7.2 %

Other

9.4 %

(14.4) %

(1.5) %

(33.3) %

(11.3) %

Total Organic

9.3 %

7.5 %

9.0 %

9.3 %

8.8 %

Acquisitions

4.4 %

4.1 %

4.4 %

4.0 %

4.2 %

Dispositions

(1.6) %

(1.7) %

(1.7) %

(1.1) %

(1.5) %

Currency translation

(2.2) %

(3.6) %

(4.8) %

(4.7) %

(3.9) %

Total*

9.9 %

6.3 %

6.9 %

7.5 %

7.6 %

 * Totals may be impacted by rounding.

 

Adjusted EPS Guidance Reconciliation

2022 Actual

2023 Guidance

Adjusted net earnings per share*:


Net earnings (GAAP)

$            7.42

$7.87 - $8.07

Purchase accounting expenses, net

0.97

0.88

Restructuring and other costs, net

0.20

0.10

Tax Cuts and Jobs Act

(0.16)

—

Adjusted net earnings per share (Non-GAAP)

$            8.45

$8.85 - $9.05

* Per share data and totals may be impacted by rounding.

 

DOVER CORPORATION

PERFORMANCE MEASURES

(unaudited)(in thousands)


2022

2021

Q1

Q2

Q3

Q4

FY 2022

Q1

Q2

Q3

Q4

FY 2021

BOOKINGS






















Engineered Products

$  541,035

$  452,668

$  512,374

$   498,249

$  2,004,326

$  528,310

$  497,200

$  502,767

$  585,452

$  2,113,729

Clean Energy & Fueling

501,491

487,861

432,259

399,414

1,821,025

422,668

453,146

467,821

398,844

1,742,479

Imaging & Identification

307,104

292,136

281,789

273,170

1,154,199

293,614

299,608

293,782

303,400

1,190,404

Pumps & Process
Solutions

459,790

471,693

415,253

362,468

1,709,204

551,365

521,010

490,581

460,105

2,023,061

Climate & Sustainability
Technologies

444,852

403,574

422,820

388,527

1,659,773

537,326

606,545

540,280

632,849

2,317,000

Intersegment
eliminations

(2,295)

(1,207)

(423)

(1,391)

(5,316)

(863)

(498)

(407)

(290)

(2,058)

Total consolidated
bookings

$  2,251,977

$  2,106,725

$  2,064,072

$  1,920,437

$  8,343,211

$  2,332,420

$  2,377,011

$  2,294,824

$  2,380,360

$  9,384,615












BACKLOG






















Engineered Products

$  830,135

$  759,589

$  742,766

$   720,114

$  562,557

$  613,517

$  662,834

$  785,085

Clean Energy & Fueling

426,342

411,350

368,050

312,142

238,822

256,497

312,176

383,572

Imaging & Identification

243,411

255,255

241,896

232,812

198,556

206,125

204,766

212,098

Pumps & Process
Solutions

704,935

715,646

679,955

686,512

539,097

634,477

682,415

688,931

Climate & Sustainability
Technologies

1,218,155

1,186,180

1,139,737

1,068,644

677,309

854,188

964,233

1,174,479

Intersegment
eliminations

(1,756)

(1,839)

(1,439)

(1,893)

(544)

(262)

(252)

(225)

Total consolidated
backlog

$  3,421,222

$  3,326,181

$  3,170,965

$  3,018,331

$  2,215,797

$  2,564,542

$  2,826,172

$  3,243,940












 

Bookings Growth Factors


2022

Q1

Q2

Q3

Q4

Q4 YTD

Organic








Engineered Products

3.4 %

(8.3) %

0.8 %

(13.3) %

(4.7) %

Clean Energy & Fueling

(2.7) %

(4.6) %

(17.6) %

(9.8) %

(8.8) %

Imaging & Identification

7.7 %

2.6 %

3.7 %

(3.6) %

2.6 %

Pumps & Process Solutions

(14.0) %

(6.5) %

(12.2) %

(19.1) %

(12.8) %

Climate & Sustainability Technologies

(9.4) %

(24.1) %

(11.3) %

(31.6) %

(19.7) %

Total Organic

(4.3) %

(9.9) %

(8.2) %

(17.5) %

(10.0) %

Acquisitions

4.4 %

3.2 %

3.6 %

2.8 %

3.5 %

Dispositions

(1.4) %

(1.8) %

(1.7) %

(1.1) %

(1.5) %

Currency translation

(2.1) %

(2.9) %

(3.8) %

(3.5) %

(3.1) %

Total*

(3.4) %

(11.4) %

(10.1) %

(19.3) %

(11.1) %

* Totals may be impacted by rounding.

ADDITIONAL INFORMATION
FOURTH QUARTER AND FULL YEAR 2022
(unaudited)(amounts in thousands except share data and where otherwise indicated)

Acquisitions

During the fourth quarter of 2022, the Company completed the acquisition of Witte Pumps & Technology GmbH ("Witte") within the Pumps & Process Solutions segment for $81,293, net of cash acquired and subject to customary post-closing adjustments.

For the full year 2022, the Company acquired three businesses in separate transactions for total consideration of $312.9 million, net of cash acquired and subject to contingent consideration. The businesses were acquired to complement and expand upon existing operations within the Pumps & Process Solutions segment. The purchase price allocation for our acquisitions is preliminary and subject to change during the measurement period.

Dispositions

The Company had one immaterial disposition the full year of 2022.

Restructuring and Other Costs (Benefits)

During the fourth quarter and year ended December 31, 2022, restructuring and other costs (benefits) included restructuring charges of $10.7 million and $30.5 million, respectively, and other costs of $1.2 million and $8.5 million, respectively. For the full year 2022, restructuring expense was comprised primarily of restructuring programs initiated in 2021 and 2022 in response to demand conditions and broad-based operational efficiency initiatives focusing on footprint consolidation. Other costs (benefits) were comprised primarily of non-cash foreign currency translation losses due to the substantial liquidation and exit from certain Latin America countries in our Climate & Sustainability Technologies segment. 

($ in millions)

2022

2021

Q4

FY

Q4

FY

Engineered Products

$                0.5

$                6.5

$                0.5

$                0.8

Clean Energy & Fueling

4.8

9.6

0.5

3.8

Imaging & Identification

2.9

6.4

4.3

6.5

Pumps & Process Solutions

2.0

4.7

0.2

(0.4)

Climate & Sustainability Technologies

0.9

9.3

19.2

23.2

Corporate

0.8

2.6

2.0

4.5

Total*

$              11.9

$              39.0

$              26.7

$              38.4

 * Totals may be impacted by rounding.
Tax Rate

The effective tax rate was 18.5% and 21.3% for the fourth quarters of 2022 and 2021, respectively. On a full year basis, the effective tax rate for 2022 and 2021 was 17.3% and 19.8%, respectively. The 2022 tax rate was primarily driven by favorable audit resolutions, including a reduction to income taxes previously recorded related to the Tax Cut and Jobs Act, and the 2021 tax rate was primarily driven by favorable audit resolutions and the tax benefit of share award exercises.

Share Repurchases

During 2022, the Company received a total of 3,892,295 shares upon completion of an accelerated share repurchase agreement (the "ASR Agreement") for $500 million. The total number of shares ultimately repurchased under the ASR Agreement was based on the volume-weighted average share price of Dover's common stock during the calculation period of the ASR Agreement, less a discount, which was $128.46 over the term of the ASR Agreement.

During the year ended December 31, 2022, the Company purchased, exclusive of the ASR Agreement,  approximately 641,428 shares of its common stock for a total cost of $85 million, or $132.52 per share. As of December 31, 2022, 15,283,326 shares remain authorized for repurchase under the November 2020 share repurchase authorization.

ADDITIONAL INFORMATION (CONTINUED)
FOURTH QUARTER AND FULL YEAR 2022
(unaudited)(amounts in thousands except share data and where otherwise indicated)

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, 2022

December 31, 2021

Commercial paper

$                    734,936

$                    105,000

Other

836

702

Short-term borrowings

$                    735,772

$                    105,702

Long-term debt

2,942,513

3,018,714

Total debt

3,678,285

3,124,416

Less: Cash and cash equivalents

(380,868)

(385,504)

Net debt

3,297,417

2,738,912

Add: Stockholders' equity

4,286,366

4,189,528

Net capitalization

$                 7,583,783

$                 6,928,440

Net debt to net capitalization

43.5 %

39.5 %

 

Quarterly Cash Flow



2022

2021

Q1

Q2

Q3

Q4

FY 2022

Q1

Q2

Q3

Q4

FY 2021

Net Cash Flows Provided By (Used In):








Operating activities

$   23,683

$ 178,773

$ 264,625

$ 338,643

$  805,724

$ 177,184

$ 260,073

$ 351,329

$ 327,279

$  1,115,865

Investing activities

(46,963)

(68,890)

(286,208)

(138,863)

(540,924)

(29,572)

(121,631)

(135,439)

(706,111)

(992,753)

Financing activities

(75,204)

120,469

(178,844)

(126,686)

(260,265)

(124,239)

(75,949)

(74,610)

24,918

(249,880)

 

Quarterly Free Cash Flow (Non-GAAP)


2022

2021

Q1

Q2

Q3

Q4

FY 2022

Q1

Q2

Q3

Q4

FY 2021

Cash flow from operating activities

$ 23,683

$178,773

$264,625

$338,643

$805,724

$177,184

$260,073

$351,329

$327,279

$1,115,865

Less: Capital expenditures

(50,381)

(50,196)

(65,462)

(54,923)

(220,962)

(31,260)

(41,971)

(47,926)

(50,308)

(171,465)

Free cash flow

$(26,698)

$128,577

$199,163

$283,720

$584,762

$145,924

$218,102

$303,403

$276,971

$  944,400












Cash flow from operating activities as a percentage of revenue

1.2 %

8.3 %

12.3 %

15.8 %

9.5 %

9.5 %

12.8 %

17.4 %

16.5 %

14.1 %












Cash flow from operating activities as a percentage of adjusted net earnings

8.6 %

57.8 %

81.7 %

111.1 %

66.4 %

67.4 %

86.9 %

121.8 %

126.5 %

100.6 %












Free cash flow as a percentage of revenue

(1.3) %

6.0 %

9.2 %

13.3 %

6.9 %

7.8 %

10.7 %

15.0 %

13.9 %

11.9 %












Free cash flow as a percentage of adjusted net earnings

(9.7) %

41.6 %

61.5 %

93.1 %

48.2 %

55.5 %

72.9 %

105.2 %

107.1 %

85.2 %












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, total segment earnings margin, adjusted segment EBITDA, adjusted segment EBITDA margin, free cash flow, free cash flow as a percentage of revenue, free cash flow as a percentage of adjusted net earnings, net debt, net capitalization, net debt to net capitalization ratio, and organic revenue growth are not financial measures under GAAP and should not be considered as a substitute for net earnings, diluted net earnings per share, 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 purchase accounting expenses, restructuring and other costs/benefits, Tax Cuts and Jobs Act, and gain/loss on dispositions. Purchase accounting expenses are primarily comprised of amortization of intangible assets and charges related to fair value step-ups for acquired inventory sold during the period. We exclude after-tax purchase accounting expenses because the amount and timing of such charges are significantly impacted by the timing, size, number and nature of the acquisitions the Company consummates. While we have a history of acquisition activity, our acquisitions do not happen in a predictive cycle. Exclusion of purchase accounting expenses facilitates more consistent comparisons of operating results over time. We believe it is important to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation. 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 or adjusted earnings per share represent diluted EPS adjusted for the effect of purchase accounting expenses, restructuring and other costs/benefits, Tax Cuts and Jobs Act, and gain/loss on dispositions.

Total segment earnings is defined as the sum of earnings before purchase accounting expenses, restructuring and other costs/benefits, gain/loss on dispositions, corporate expenses/other, interest expense, interest income and provision for income taxes for all segments. Total segment earnings margin is defined as total segment earnings divided by revenue.

Adjusted segment EBITDA is defined as segment earnings plus other depreciation and amortization expense, which relates to property, plant, and equipment and intangibles, and excludes amounts related to purchase accounting expenses and restructuring and other costs/benefits. Adjusted segment EBITDA margin is defined as adjusted segment EBITDA divided by revenue.

Management believes the non-GAAP measures above are useful to investors to better understand the Company's ongoing profitability as they 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 is net debt divided by net capitalization. Net debt to net capitalization is helpful in evaluating our capital structure and the amount of leverage we employ.

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 adjusted net earnings equals free cash flow divided by adjusted net earnings. Management believes that free cash flow and free cash flow ratios are important measures of liquidity because they provide 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. We do not provide a reconciliation of forward-looking organic revenue to the most directly comparable GAAP financial measure pursuant to the exception provided in Item 10(e)(1)(i)(B) of Regulation S-K because we are not able to provide a meaningful or accurate compilation of reconciling items. This is due to the inherent difficulty in accurately forecasting the timing and amounts of the items that would be excluded from the most directly comparable GAAP financial measure or are out of our control. For the same reasons, we are unable to address the probable significance of unavailable information which may be material.

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 acquisitions 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 been 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.

Investor Contact:

Media Contact:

Jack Dickens

Adrian Sakowicz

Senior Director - Investor Relations

Vice President - Communications

(630) 743-2566

(630) 743-5039

jdickens@dovercorp.com

asakowicz@dovercorp.com

 

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SOURCE Dover