Company Announcements

Dover Reports Second Quarter 2020 Results; Re-Initiates Full Year Guidance

DOWNERS GROVE, Ill., July 22, 2020 /PRNewswire/ -- Dover (NYSE: DOV), a diversified global manufacturer, announced its financial results for the second quarter ended June 30, 2020.



Three Months Ended June 30,


Six Months Ended June 30,

($ in millions, except per share data)


2020


2019


% Change


2020


2019


% Change

U.S. GAAP

Revenue


$

1,499



$

1,811



(17)

%


$

3,155



$

3,535



(11)

%

Net earnings 1


125



198



(37)

%


301



304



(1)

%

Diluted EPS 


0.86



1.35



(36)

%


2.07



2.07



%














Non-GAAP

Organic revenue change






(16)

%






(10)

%

Adjusted net earnings 2


164



229



(28)

%


368



412



(11)

%

Adjusted diluted EPS


1.13



1.56



(28)

%


2.53



2.80



(10)

%


1 Q2 2020 and 2019 net earnings include rightsizing and other costs of $13.4 million and $5.1 million, respectively. Q2 2020 also includes a $0.6 million expense related to the sale of AMS Chino. Q2 year-to-date 2020 and 2019 net earnings include rightsizing and other costs of $19.6 million and $8.2 million, respectively. Q2 year-to-date 2020 also includes a $4.4 million non-cash gain on the sale of AMS Chino, and year-to-date 2019 includes a $46.9 million non-cash loss on assets held for sale related to Finder.


2 Q2 2020 and 2019 adjusted net earnings exclude after tax acquisition-related amortization costs of $25.7 million and $26.2 million, respectively, and rightsizing and other costs of $13.4 million and $5.1 million, respectively. Q2 2020 also excludes a $0.6 million expense related to the sale of AMS Chino. Q2 year-to-date 2020 and 2019 adjusted net earnings exclude acquisition-related amortization costs of $51.3 million and $52.9 million, respectively, and rightsizing and other costs of $19.6 million and $8.2 million, respectively. Q2 year-to-date 2020 also excludes a $4.4 million non-cash gain on the sale of AMS Chino, and year-to-date 2019 excludes a $46.9 million non-cash loss on assets held for sale related to Finder.

For the quarter ended June 30, 2020, Dover generated revenue of $1.5 billion, a decline of 17% (-16% organic) compared to the second quarter of the prior year. GAAP net earnings of $125 million decreased 37%, and GAAP diluted EPS of $0.86 was down 36%. On an adjusted basis, net earnings of $164 million declined 28%, and adjusted diluted EPS of $1.13 was down 28% versus the comparable quarter of the prior year.

For the six months ended June 30, 2020, Dover generated revenue of $3.2 billion, a decline of 11% (-10% organic) compared to the first six months of the prior year. GAAP net earnings of $301 million decreased 1%, and GAAP diluted EPS of $2.07 was flat year-over-year. On an adjusted basis, net earnings of $368 million declined 11%, and adjusted diluted EPS of $2.53 was down 10% versus the comparable quarter of 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, "We are proud of our work and results in the second quarter. Economic uncertainty and operational disruption caused by the COVID-19 pandemic slowed activity across many markets and made the operating environment undeniably challenging. Our businesses have navigated the quarter well, as we focused on what was and remains within our control: diligently managing our costs and cash flow, providing a safe working environment for our associates and supporting our customers with the critical products they needed to keep their essential operations running.

"As we expected, activity declined across a majority of the markets we serve, albeit the impact varied widely across our diverse portfolio with many businesses proving their profitability and cash flow resilience in challenging conditions. Demand conditions in textile printing, foodservice, below-ground fueling, food retail and automotive aftermarket were particularly challenged, partially offset by relative resilience in biopharma, aerospace & defense, heat exchangers and marking & coding. We remain positioned well for the second half with a higher backlog compared to this time last year, driven by our longer cycle businesses and sequential intra-quarter improvement in many shorter cycle businesses.

"Global lockdowns, travel restrictions, proactive production curtailments and reduced volumes created a challenging operating environment in the second quarter, but our cost controls and continued execution of our multi-year productivity program resulted in a satisfactory decremental margin performance, positioning us well to reach or exceed our annual conversion margin target.

"Looking forward, the demand outlook for the remainder of the year remains uncertain, with activity across most markets improving but not back to business-as-usual. As a result of our improved demand visibility into the third quarter, and our solid margin performance year-to-date, we are making the decision to reinstate our annual guidance, though with a wider range than usual for the mid-year reflecting the fluidity of market conditions. We retain additional flexibility to adjust our cost base if macroeconomic conditions in the second half of the year necessitate a response."

FULL YEAR 2020 GUIDANCE REINSTATED:

In 2020, Dover expects to generate GAAP EPS in the range of $4.16 to $4.41 ($5.00 to $5.25 on an adjusted basis). A full reconciliation between forecasted GAAP and forecasted adjusted EPS is included as an exhibit herein.

CONFERENCE CALL INFORMATION:

Dover will host a webcast and conference call to discuss its second quarter and year-to-date 2020 results as well as updated 2020 guidance at 9:00 A.M. Eastern Time (8:00 A.M. Central Time) on Wednesday, July 22, 2020. 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 second 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 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 - SECOND QUARTER 2020

 

DOVER CORPORATION

CONSOLIDATED STATEMENTS OF EARNINGS

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



Three Months Ended June 30,


Six Months Ended June 30,


2020


2019


2020


2019

Revenue

$

1,499,175



$

1,810,706



$

3,155,114



$

3,535,463


Cost of goods and services

947,577



1,138,113



1,991,273



2,239,328


Gross profit

551,598



672,593



1,163,841



1,296,135


Selling, general, and administrative expenses

366,740



396,634



753,681



805,100


Loss on assets held for sale







46,946


Operating earnings

184,858



275,959



410,160



444,089


Interest expense

28,711



31,754



55,979



63,562


Interest income

(728)



(945)



(1,911)



(1,835)


Loss (gain) on sale of a business

781





(5,770)




Other income, net

(735)



(4,589)



(8,467)



(5,695)


Earnings before provision for income taxes

156,829



249,739



370,329



388,057


Provision for income taxes

32,063



51,654



69,284



84,267


Net earnings

$

124,766



$

198,085



$

301,045



$

303,790










Net earnings per share:








Basic

$

0.87



$

1.36



$

2.09



$

2.09


Diluted

$

0.86



$

1.35



$

2.07



$

2.07


Weighted average shares outstanding:








Basic

143,955



145,366



144,107



145,227


Diluted

144,995



147,179



145,359



147,041










Dividends paid per common share

$

0.49



$

0.48



$

0.98



$

0.96










* Per share data may be impacted by rounding.









 

DOVER CORPORATION

QUARTERLY SEGMENT INFORMATION

(unaudited)(in thousands)



2020


2019


Q1

Q2

Q2 YTD


Q1

Q2

Q2 YTD

Q3

Q4

FY 2019

REVENUE











Engineered Products

$

408,160


$

342,380


$

750,540



$

418,851


$

429,928


$

848,779


$

426,689


$

422,089


$

1,697,557


Fueling Solutions

359,982


326,495


686,477



373,050


390,586


763,636


411,769


444,772


1,620,177


Imaging &
Identification

256,765


227,977


484,742



268,354


266,588


534,942


275,109


274,420


1,084,471


Pumps & Process
Solutions

319,536


309,095


628,631



330,219


338,924


669,143


341,337


328,048


1,338,528


Refrigeration & Food
Equipment

311,913


293,527


605,440



334,643


385,474


720,117


370,335


306,165


1,396,617


Intra-segment
eliminations

(417)


(299)


(716)



(360)


(794)


(1,154)


106


95


(953)


Total consolidated
revenue

$

1,655,939


$1,499,175


$3,155,114



$

1,724,757


$

1,810,706


$

3,535,463


$

1,825,345


$

1,775,589


$

7,136,397













NET EARNINGS











Segment Earnings:











Engineered
Products

$

69,094


$

47,702


$

116,796



$

67,119


$

77,129


$

144,248


$

74,367


$

73,233


$

291,848


Fueling Solutions

53,498


47,214


100,712



37,230


52,637


89,867


68,069


73,937


231,873


Imaging &
Identification

51,482


38,046


89,528



55,955


54,641


110,596


61,655


57,233


229,484


Pumps & Process
Solutions 1

66,079


67,702


133,781



14,991


76,278


91,269


77,433


71,379


240,081


Refrigeration & Food
Equipment 2

23,529


11,459


34,988



24,807


44,375


69,182


35,211


14,439


118,832


Total segment
earnings (EBIT)

263,682


212,123


475,805



200,102


305,060


505,162


316,735


290,221


1,112,118


Corporate expense /
other 3

24,097


27,311


51,408



30,866


24,512


55,378


28,658


63,781


147,817


Interest expense

27,268


28,711


55,979



31,808


31,754


63,562


31,410


30,846


125,818


Interest income

(1,183)


(728)


(1,911)



(890)


(945)


(1,835)


(1,263)


(1,428)


(4,526)


Earnings before
provision for income
taxes

213,500


156,829


370,329



138,318


249,739


388,057


257,930


197,022


843,009


Provision for income
taxes

37,221


32,063


69,284



32,613


51,654


84,267


51,924


28,900


165,091


Net earnings

$

176,279


$

124,766


$

301,045



$

105,705


$

198,085


$

303,790


$

206,006


$

168,122


$

677,918













SEGMENT MARGIN









Engineered Products

16.9 %


13.9 %


15.6 %



16.0 %


17.9 %


17.0 %


17.4 %


17.4 %


17.2 %


Fueling Solutions

14.9 %


14.5 %


14.7 %



10.0 %


13.5 %


11.8 %


16.5 %


16.6 %


14.3 %


Imaging &
Identification

20.1 %


16.7 %


18.5 %



20.9 %


20.5 %


20.7 %


22.4 %


20.9 %


21.2 %


Pumps & Process
Solutions 1

20.7 %


21.9 %


21.3 %



4.5 %


22.5 %


13.6 %


22.7 %


21.8 %


17.9 %


Refrigeration & Food
Equipment 2

7.5 %


3.9 %


5.8 %



7.4 %


11.5 %


9.6 %


9.5 %


4.7 %


8.5 %


Total segment
operating margin

15.9 %


14.1 %


15.1 %



11.6 %


16.8 %


14.3 %


17.4 %


16.3 %


15.6 %













DEPRECIATION AND AMORTIZATION EXPENSE

Engineered Products

$

10,122


$

9,722


$

19,844



$

10,359


$

10,452


$

20,811


$

10,095


$

10,126


$

41,032


Fueling Solutions

18,339


17,968


36,307



17,879


18,945


36,824


18,744


19,477


75,045


Imaging &
Identification

8,769


9,224


17,993



7,435


7,413


14,848


7,360


8,322


30,530


Pumps & Process
Solutions

18,336


17,572


35,908



17,548


16,201


33,749


16,018


17,817


67,584


Refrigeration & Food
Equipment

11,548


11,421


22,969



13,011


12,777


25,788


13,047


12,525


51,360


Corporate

1,638


1,696


3,334



1,506


1,981


3,487


1,523


1,726


6,736


Total depreciation
and amortization
expense

$

68,752


$

67,603


$

136,355



$

67,738


$

67,769


$

135,507


$

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, and Q2 YTD includes a $6,551 gain, a $781 expense and a $5,770 net gain on the sale of the Chino, California branch of The AMS Group ("AMS Chino"), respectively. Q2 and Q2 YTD also include a $3,640 write-off of assets.

3 Q4 and FY 2019 include a $23,543 loss on early extinguishment of debt.

 

DOVER CORPORATION

QUARTERLY EARNINGS PER SHARE

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


Earnings Per Share












2020


2019


Q1

Q2

Q2 YTD


Q1

Q2

Q2 YTD

Q3

Q4

FY 2019

Net earnings per share:











Basic

$

1.22


$

0.87


$

2.09



$

0.73


$

1.36


$

2.09


$

1.42


$

1.16


$

4.67


Diluted

$

1.21


$

0.86


$

2.07



$

0.72


$

1.35


$

2.07


$

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


$

301,045



$

105,705


$

198,085


$

303,790


$

206,006


$

168,122


$

677,918













Weighted average shares outstanding:








Basic

144,259


143,955


144,107



145,087


145,366


145,227


145,372


144,966


145,198


Diluted

145,782


144,995


145,359



146,911


147,179


147,041


147,051


146,790


146,992













* Per share data may be impacted by rounding.



 

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

Q2 YTD


Q1

Q2

Q2 YTD

Q3

Q4

FY 2019

Adjusted net earnings:











Net earnings

$

176,279


$

124,766


$

301,045



$

105,705


$

198,085


$

303,790


$

206,006


$

168,122


$

677,918


Acquisition-related amortization, pre-
tax 1

34,062


34,101


68,163



35,635


34,997


70,632


34,244


33,460


138,336


Acquisition-related amortization, tax
impact 2

(8,411)


(8,451)


(16,862)



(8,964)


(8,777)


(17,741)


(8,624)


(8,403)


(34,768)


Rightsizing and other costs, pre-tax 3

7,859


16,840


24,699



3,963


6,457


10,420


3,807


17,926


32,153


Rightsizing and other costs, tax
impact 2

(1,605)


(3,452)


(5,057)



(861)


(1,377)


(2,238)


(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




46,946


(Gain) loss on disposition, pre-tax 6

(6,551)


781


(5,770)









(Gain) loss on disposition, tax-impact 2

1,592


(190)


1,402









Adjusted net earnings

$

203,225


$

164,395


$

367,620



$

182,424


$

229,385


$

411,809


$

234,627


$

225,740


$

872,176













Adjusted diluted net earnings per share:









Diluted net earnings per share

$

1.21


$

0.86


$

2.07



$

0.72


$

1.35


$

2.07


$

1.40


$

1.15


$

4.61


Acquisition-related amortization, pre-
tax 1

0.23


0.24


0.47



0.24


0.24


0.48


0.23


0.23


0.94


Acquisition-related amortization, tax
impact 2

(0.06)


(0.06)


(0.12)



(0.06)


(0.06)


(0.12)


(0.06)


(0.06)


(0.24)


Rightsizing and other costs, pre-tax 3

0.05


0.12


0.17



0.03


0.04


0.07


0.03


0.12


0.22


Rightsizing and other costs, tax
impact 2

(0.01)


(0.02)


(0.03)



(0.01)


(0.01)


(0.02)


(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




0.32


(Gain) loss on disposition, pre-tax 6

(0.04)



(0.04)









(Gain) loss on disposition, tax-impact 2

0.01



0.01









Adjusted diluted net earnings per
share

$

1.39


$

1.13


$

2.53



$

1.24


$

1.56


$

2.80


$

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.












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

 

DOVER CORPORATION

QUARTERLY SEGMENT ADJUSTED EBIT AND ADJUSTED EBITDA (NON-GAAP)

(unaudited)(in thousands)


Non-GAAP Reconciliations


2020


2019


Q1

Q2

Q2 YTD


Q1

Q2

Q2 YTD

Q3

Q4

FY 2019

ADJUSTED SEGMENT EBIT AND ADJUSTED
EBITDA










Engineered Products:











Segment earnings (EBIT)

$

69,094


$

47,702


$

116,796



$

67,119


$

77,129


$

144,248


$

74,367


$

73,233


$

291,848


Rightsizing and other costs

361


4,169


4,530



80


1,125


1,205


590


1,355


3,150


Adjusted EBIT - Segment

69,455


51,871


121,326



67,199


78,254


145,453


74,957


74,588


294,998


Adjusted EBIT %

17.0

%

15.2

%

16.2

%


16.0

%

18.2

%

17.1

%

17.6

%

17.7

%

17.4

%

Adjusted D&A 2

10,122


9,722


19,844



10,359


9,855


20,214


10,095


10,126


40,435


Adjusted EBITDA - segment

$

79,577


$

61,593


$

141,170



$

77,558


$

88,109


$

165,667


$

85,052


$

84,714


$

335,433


Adjusted EBITDA %

19.5

%

18.0

%

18.8

%


18.5

%

20.5

%

19.5

%

19.9

%

20.1

%

19.8

%

Fueling Solutions:











Segment earnings (EBIT)

$

53,498


$

47,214


$

100,712



$

37,230


$

52,637


$

89,867


$

68,069


$

73,937


$

231,873


Rightsizing and other costs

1,493


868


2,361



752


1,768


2,520


811


1,554


4,885


Adjusted EBIT - Segment

54,991


48,082


103,073



37,982


54,405


92,387


68,880


75,491


236,758


Adjusted EBIT %

15.3

%

14.7

%

15.0

%


10.2

%

13.9

%

12.1

%

16.7

%

17.0

%

14.6

%

Adjusted D&A 2

18,339


17,783


36,122



17,879


18,945


36,824


18,744


19,477


75,045


Adjusted EBITDA - segment

$

73,330


$

65,865


$

139,195



$

55,861


$

73,350


$

129,211


$

87,624


$

94,968


$

311,803


Adjusted EBITDA %

20.4

%

20.2

%

20.3

%


15.0

%

18.8

%

16.9

%

21.3

%

21.4

%

19.2

%

Imaging & Identification:











Segment earnings (EBIT)

$

51,482


$

38,046


$

89,528



$

55,955


$

54,641


$

110,596


$

61,655


$

57,233


$

229,484


Rightsizing and other costs

264


(527)


(263)



389


1,268


1,657


301


4,392


6,350


Adjusted EBIT - Segment

51,746


37,519


89,265



56,344


55,909


112,253


61,956


61,625


235,834


Adjusted EBIT %

20.2

%

16.5

%

18.4

%


21.0

%

21.0

%

21.0

%

22.5

%

22.5

%

21.7

%

Adjusted D&A 2

8,769


9,224


17,993



7,336


7,317


14,653


7,286


7,892


29,831


Adjusted EBITDA - segment

$

60,515


$

46,743


$

107,258



$

63,680


$

63,226


$

126,906


$

69,242


$

69,517


$

265,665


Adjusted EBITDA %

23.6

%

20.5

%

22.1

%


23.7

%

23.7

%

23.7

%

25.2

%

25.3

%

24.5

%

Pumps & Process Solutions:











Segment earnings (EBIT)

$

66,079


$

67,702


$

133,781



$

14,991


$

76,278


$

91,269


$

77,433


$

71,379


$

240,081


Rightsizing and other costs

3,846


4,691


8,537



414


903


1,317


943


3,868


6,128


Loss on assets held for sale 1





46,946



46,946




46,946


Adjusted EBIT - Segment

69,925


72,393


142,318



62,351


77,181


139,532


78,376


75,247


293,155


Adjusted EBIT %

21.9

%

23.4

%

22.6

%


18.9

%

22.8

%

20.9

%

23.0

%

22.9

%

21.9

%

Adjusted D&A 2

16,230


16,816


33,046



17,548


16,199


33,747


16,018


17,004


66,769


Adjusted EBITDA - segment

$

86,155


$

89,209


$

175,364



$

79,899


$

93,380


$

173,279


$

94,394


$

92,251


$

359,924


Adjusted EBITDA %

27.0

%

28.9

%

27.9

%


24.2

%

27.6

%

25.9

%

27.7

%

28.1

%

26.9

%

Refrigeration & Food Equipment:










Segment earnings (EBIT)

$

23,529


$

11,459


$

34,988



$

24,807


$

44,375


$

69,182


$

35,211


$

14,439


$

118,832


Rightsizing and other costs

704


6,016


6,720



2,293


666


2,959


840


2,243


6,042


(Gain) loss on disposition 3

(6,551)


781


(5,770)









Adjusted EBIT - Segment

17,682


18,256


35,938



27,100


45,041


72,141


36,051


16,682


124,874


Adjusted EBIT %

5.7

%

6.2

%

5.9

%


8.1

%

11.7

%

10.0

%

9.7

%

5.4

%

8.9

%

Adjusted D&A 2

11,548


11,421


22,969



13,011


12,777


25,788


13,047


12,525


51,360


Adjusted EBITDA - segment

$

29,230


$

29,677


$

58,907



$

40,111


$

57,818


$

97,929


$

49,098


$

29,207


$

176,234


Adjusted EBITDA %

9.4

%

10.1

%

9.7

%


12.0

%

15.0

%

13.6

%

13.3

%

9.5

%

12.6

%

Total Segments:










Segment earnings (EBIT) 4

$

263,682


$

212,123


$

475,805



$

200,102


$

305,060


$

505,162


$

316,735


$

290,221


$

1,112,118


Rightsizing and other costs

6,668


15,217


21,885



3,928


5,730


9,658


3,485


13,412


26,555


Loss on assets held for sale 1





46,946



46,946




46,946


(Gain) loss on disposition 3

(6,551)


781


(5,770)









Adjusted EBIT - Segment 5

263,799


228,121


491,920



250,976


310,790


561,766


320,220


303,633


1,185,619


Adjusted EBIT % 4

15.9

%

15.2

%

15.6

%


14.5

%

17.2

%

15.9

%

17.5

%

17.1

%

16.6

%

Adjusted D&A 2

65,008


64,966


129,974



66,133


65,093


131,226


65,190


67,024


263,440


Adjusted EBITDA - segment 5

$

328,807


$

293,087


$

621,894



$

317,109


$

375,883


$

692,992


$

385,410


$

370,657


$

1,449,059


Adjusted EBITDA % 5

19.9

%

19.5

%

19.7

%


18.4

%

20.7

%

19.6

%

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, and Q2 YTD includes a $6,551 gain, a $781 expense and a $5,770 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.

 

DOVER CORPORATION

REVENUE GROWTH FACTORS (NON-GAAP)

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


Non-GAAP Reconciliations


Revenue Growth Factors



2020


Q2


Q2 YTD

Organic




Engineered Products

(20.1)

%


(11.1)

%

Fueling Solutions

(14.8)

%


(8.9)

%

Imaging & Identification

(14.0)

%


(9.2)

%

Pumps & Process Solutions

(8.8)

%


(5.0)

%

Refrigeration & Food Equipment

(20.2)

%


(12.8)

%

Total Organic

(16.0)

%


(9.5)

%

Acquisitions

0.7

%


0.8

%

Dispositions

(0.7)

%


(0.7)

%

Currency translation

(1.2)

%


(1.4)

%

Total*

(17.2)

%


(10.8)

%


 * Totals may be impacted by rounding.

 


2020


Q2

Organic


United States

(10.3)

%

Other Americas

(33.5)

%

Europe

(19.5)

%

Asia

(14.3)

%

Other

(33.1)

%

Total Organic

(16.0)

%

Acquisitions

0.7

%

Dispositions

(0.7)

%

Currency translation

(1.2)

%

Total*

(17.2)

%


 * Totals may be impacted by rounding.

 

Adjusted EPS Guidance Reconciliation


Range

2020 Guidance for Earnings per Share (GAAP)

$

4.16



$

4.41


Acquisition-related amortization, net


0.71


Rightsizing and other costs, net


0.16


Gain on disposition, net


(0.03)


2020 Guidance for Adjusted Earnings per Share (Non-GAAP)

$

5.00



$

5.25


 

DOVER CORPORATION

QUARTERLY CASH FLOW AND FREE CASH FLOW (NON-GAAP)

(unaudited)(in thousands)


Quarterly Cash Flow


2020


2019


Q1

Q2

Q2 YTD


Q1

Q2

Q2 YTD

Q3

Q4

FY 2019

Net Cash Flows Provided By (Used
In):











Operating activities

$

75,863


$

271,809


$

347,672



$

24,524


$

208,709


$

233,233


$

350,865


$

361,208


$

945,306


Investing activities

(230,511)


(67,763)


(298,274)



(217,690)


(69,755)


(287,445)


(48,612)


(48,198)


(384,255)


Financing activities

280,954


(67,458)


213,496



36,067


(60,596)


(24,529)


(277,901)


(255,612)


(558,042)



Quarterly Free Cash Flow (Non-GAAP)


2020


2019


Q1

Q2

Q2 YTD


Q1

Q2

Q2 YTD

Q3

Q4

FY 2019

Cash flow from operating
activities

$

75,863


$

271,809


$

347,672



$

24,524


$

208,709


$

233,233


$

350,865


$

361,208


$

945,306


Less: Capital expenditures

(40,172)


(38,999)


(79,171)



(37,122)


(53,970)


(91,092)


(46,184)


(49,528)


(186,804)


Free cash flow

$

35,691


$

232,810


$

268,501



$

(12,598)


$

154,739


$

142,141


$

304,681


$

311,680


$

758,502













Free cash flow as a
percentage of revenue

2.2

%

15.5

%

8.5

%


(0.7)

%

8.5

%

4.0

%

16.7

%

17.6

%

10.6

%












Free cash flow as a
percentage of net earnings

20.2

%

186.6

%

89.2

%


(11.9)

%

78.1

%

46.8

%

147.9

%

185.4

%

111.9

%

 

DOVER CORPORATION

PERFORMANCE MEASURES

(unaudited)(in thousands)



2020


2019


Q1

Q2

Q2 YTD


Q1

Q2

Q2 YTD

Q3

Q4

FY 2019

BOOKINGS






















Engineered Products

$

414,972


$

278,373


$

693,345



$

427,697


$

397,420


$

825,117


$

426,059


$

457,145


$

1,708,321


Fueling Solutions

373,070


311,498


684,568



343,083


394,256


737,339


450,727


425,698


1,613,764


Imaging &
Identification

272,604


221,315


493,919



267,762


264,175


531,937


284,527


276,451


1,092,915


Pumps & Process
Solutions

369,403


275,872


645,275



369,801


375,905


745,706


329,642


318,482


1,393,830


Refrigeration & Food
Equipment

355,157


326,400


681,557



376,998


384,365


761,363


323,422


361,970


1,446,755


Intra-segment
eliminations

(375)


(460)


(835)



(725)


(490)


(1,215)


(528)


872


(871)


Total consolidated
bookings

$

1,784,831


$

1,412,998


$

3,197,829



$

1,784,616


$

1,815,631


$

3,600,247


$

1,813,849


$

1,840,618


$

7,254,714













BACKLOG






















Engineered Products

$

453,867


$

378,874




$

451,335


$

418,154



$

416,025


$

452,142



Fueling Solutions

211,518


199,305




185,847


186,202



223,081


205,842



Imaging &
Identification

170,119


168,904




118,177


116,810



121,877


125,775



Pumps & Process
Solutions

397,969


379,090




353,066


378,427



361,478


353,073



Refrigeration & Food
Equipment

356,133


390,368




311,632


310,454



262,870


320,577



Intra-segment
eliminations

(159)


(367)




(403)


(141)



(252)


(249)



Total consolidated
backlog

$

1,589,447


$

1,516,174




$

1,419,654


$

1,409,906



$

1,385,079


$

1,457,160














 

Bookings Growth Factors



2020


Q2


Q2 YTD

Organic




Engineered Products

(29.8)

%


(15.6)

%

Fueling Solutions

(18.2)

%


(5.3)

%

Imaging & Identification

(16.5)

%


(8.0)

%

Pumps & Process Solutions

(25.7)

%


(11.9)

%

Refrigeration & Food Equipment

(11.6)

%


(7.9)

%

Total Organic

(20.6)

%


(10.0)

%

Acquisitions

0.7

%


0.9

%

Dispositions

(0.6)

%


(0.7)

%

Currency translation

(1.7)

%


(1.4)

%

Total*

(22.2)

%


(11.2)

%

* Totals may be impacted by rounding.

Non-GAAP Measures Definitions

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, free cash flow, free cash flow as a percentage of revenue, free cash flow as a percentage of net earnings, 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 acquisition-related amortization, rightsizing and other costs, loss on extinguishment of debt, loss on assets held for sale, and a 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.

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.

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



 

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SOURCE Dover