DOWNERS GROVE, Ill., April 27, 2018 /PRNewswire/ -- Dover DOV, a diversified global manufacturer, announced its financial results for the first quarter ended March 31, 2018.

First Quarter 2018 Financial Results (including Apergy):

For the first quarter ended March 31, 2018, Dover's revenue was $1.9 billion, an increase of 6% from the prior year. The increase in the quarter was driven by organic growth of 4%, acquisition growth of 1% and a favorable impact from foreign exchange ("FX") of 4%, partially offset by a 3% impact from dispositions. Net earnings were $131.4 million, a decrease of 24% as compared to $172.2 million for the prior year period. Diluted net earnings per share ("EPS") for the first quarter ended March 31, 2018, were $0.84, compared to $1.09 EPS in the prior year period, representing a decrease of 23%.

For the first quarter ended March 31, 2018, EPS included Apergy separation related costs of $0.06 and rightsizing and other costs of $0.02. First quarter EPS also included acquisition-related amortization costs of $0.24. Excluding these costs, adjusted EPS for the first quarter ended March 31, 2018, was $1.16, an increase of 26% over an adjusted EPS of $0.92 in the prior year period, which excludes a gain on disposition of $0.39 and acquisition-related amortization costs of $0.22.

A reconciliation between GAAP and adjusted measures is included as an exhibit herein.

Full Year 2018 Guidance (excluding Apergy):

Beginning with this earnings release, Dover is providing full year EPS and revenue guidance on a pro forma continuing operations basis, which excludes the 2018 operating results of Apergy. On this basis, in 2018, Dover expects to generate adjusted diluted earnings per share in the range of $4.70 to $4.85, representing an increase of approximately 15% over the prior year, on a comparable pro forma basis. This guidance is based on full year revenue growth of 4% to 5%, which is comprised of organic growth of 3% to 4%, acquisition growth of 1%, and a favorable impact from FX of 3%, partially offset by a 3% impact from dispositions. In addition, the effect of estimated incremental share repurchases is reflected in the updated guidance.

Dover's updated pro forma 2018 guidance for adjusted EPS from continuing operations excludes acquisition-related amortization costs of $0.71, Apergy-related separation costs of $0.06 incurred in the first quarter, and estimated full year rightsizing and other costs of $0.05. Dover expects to incur further separation costs in the second quarter of 2018 in the range of $33 to $35 million, which is not included in this guidance.

A reconciliation between Dover's prior EPS guidance and its updated pro forma EPS guidance, which excludes Apergy, is provided in the appendix of its first quarter 2018 earnings presentation, which is available on the Company's website, dovercorporation.com.

Apergy Separation Update:

As previously announced on April 18, 2018, Dover's Board of Directors formally approved the separation of Apergy through a distribution of all of the common stock of Apergy held by Dover to Dover shareholders. In connection with the approval, the Board has also set the distribution ratio, record date and distribution date for the spin-off.

The distribution is expected to be made at 12:01 a.m. ET on May 9, 2018, to Dover shareholders of record as of 5:00 p.m. ET on April 30, 2018, the record date for the distribution. On the distribution date, Dover shareholders will receive one share of Apergy common stock for every two shares of Dover common stock held as of the record date. Following the distribution, Apergy will be an independent, publicly traded company, and Dover will retain no ownership interest in Apergy.

Management Commentary:

Dover's President and Chief Executive Officer, Robert A. Livingston, said, "Our first quarter revenue and earnings performance was solid and in-line with our expectations. We experienced continued strength in many of our businesses, including those serving the waste handling, printing & identification, heat exchanger and upstream energy markets. A number of other businesses also turned in solid performances, including pumps, vehicle service equipment, and industrial winches. This performance was partially offset by softer than expected retail refrigeration markets in the first quarter.

"Separately, pro forma bookings on a continuing operations basis were strong in Engineered Systems and Fluids, resulting in a solid total company book-to-bill of 1.12, which positions us well as we continue through the second quarter.

"We recently made two important announcements. First, we announced the appointment of Rich Tobin as Dover's new President & CEO, effective May 1st. Rich is inheriting a strong company with outstanding talent and attractive businesses that are well-positioned in their markets. The Board and I are confident he is the right person to lead Dover to even greater success. We also announced the Board's approval of the Apergy spin-off. The spin-off positions Dover to become a more focused company with more consistent performance."

Conference Call Information:

Dover will host a webcast and conference call to discuss its first quarter 2018 results and 2018 guidance at 10:00 A.M. Eastern Time (9:00 A.M. Central Time) on Friday, April 27, 2018. 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 first quarter results and its operating segments can be found on the Company's website.

About Dover:

Dover is a diversified global manufacturer with annual revenue of approximately $8 billion. We deliver innovative equipment and components, specialty systems, consumable supplies, software and digital solutions, and support services through four operating segments: Engineered Systems, Fluids, Refrigeration & Food Equipment and Energy. 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 29,000 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. All statements in this document other than statements of historical fact are statements that are, or could be deemed, "forward-looking" statements. Some of these statements may be indicated by words such as "may", "anticipate", "expect", believe", "intend", "guidance", "estimates", "suggest", "will", "plan", "should", "would", "could", "forecast" and other words and terms that use the future tense or have a similar meaning.  Forward-looking statements are based on current expectations and 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, 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 identify and complete acquisitions and integrate and realize synergies from newly acquired businesses, our execution of the Apergy spinoff, capital allocation plans and changes in those plans, including with respect to dividends, share repurchases, investments in research and development, capital expenditures and acquisitions, changes in law, including the effect of U.S. tax reform and developments with respect to trade policy and tariffs, our ability to derive expected benefits from restructuring, productivity initiatives and other cost reduction actions, changes in sourcing input costs or the supply of input materials, the impact of legal compliance risks and litigation, including with respect to product quality and safety, cybersecurity and privacy, our ability to capture and protect intellectual property rights, and various other factors that are described in the Company's periodic reports filed with or furnished to the Securities and Exchange Commission, including our Annual Report on Form 10-K/A for the year ended December 31, 2017. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.

 

 

 

 

 

 

 

 

 

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 earnings per common share, adjusted free cash flow, and organic revenue growth are not financial measures under GAAP and should not be considered as a substitute for net earnings, diluted earnings per common 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 the acquisition-related amortization, Tax Cuts and Jobs Act, gains on disposition of businesses, disposition costs, Apergy separation costs, rightsizing and other costs, and a product recall reserve reversal. We exclude these 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. Management believes this information is useful to investors to better understand the company's ongoing profitability and facilitates easier comparisons of the company's profitability to prior and future periods and to its peers. Adjusted diluted earnings per common share represents adjusted net earnings divided by average diluted shares. Beginning in 2018, adjusted net earnings further 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 we consummate. Management believes excluding after-tax acquisition-related amortization will better reflect the Company's core operating results, offer more transparency and facilitate easier comparability with peer companies.

Adjusted free cash flow represents net cash provided by operating activities minus capital expenditures, plus the add back of cash taxes paid for gains on dispositions and cash paid for the Apergy separation costs and rightsizing actions. Management believes that adjusted free cash flow is an important measure 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 performance and trends between periods.

 

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SOURCE Dover