DOWNERS GROVE, Ill., Oct. 17, 2019 /PRNewswire/ -- Dover DOV, a diversified global manufacturer, announced its financial results for the third quarter ended September 30, 2019.
Three Months Ended | Nine Months Ended | |||||||||||||
($ in millions, except per share data) | 2019 | 2018 | % | 2019 | 2018 | % | ||||||||
U.S. GAAP from continuing operations | ||||||||||||||
Revenue | $1,825 | $1,747 | 4% | $5,361 | $5,183 | 3% | ||||||||
Earnings 1 | 206 | 157 | 31% | 510 | 433 | 18% | ||||||||
Diluted EPS 1 | 1.40 | 1.05 | 33% | 3.47 | 2.82 | 23% | ||||||||
Non-GAAP from continuing operations | ||||||||||||||
Adjusted earnings | 235 | 203 | 15% | 646 | 545 | 19% | ||||||||
Adjusted diluted EPS | 1.60 | 1.36 | 18% | 4.40 | 3.55 | 24% | ||||||||
1 Q1 2019 included a $46.9 million ($0.32 of EPS) non-cash after-tax loss on assets held for sale related to Finder Pompe S.r.l. |
A full reconciliation between GAAP and adjusted measures is included as an exhibit herein.
Third Quarter 2019 Financial Results:
For the third quarter ended September 30, 2019, revenue was $1.8 billion, an increase of 4.5% over the prior year. The increase in the quarter was driven by organic growth of 5.6% and acquisition growth of 1.0%, partially offset by a 1.6% unfavorable impact from foreign exchange ("FX") and 0.5% due to dispositions.
Earnings from continuing operations of $206.0 million included acquisition-related amortization costs of $25.6 million and rightsizing and other costs of $3.0 million, representing $0.17 and $0.02 of diluted earnings per share from continuing operations ("EPS"), respectively. Excluding these items, adjusted earnings from continuing operations for the quarter were $234.6 million (+15% over the comparable period in 2018), and adjusted EPS was $1.60 (+18% over the comparable period in 2018).
Year to Date 2019 Financial Results:
For the nine month period ended September 30, 2019, revenue was $5.4 billion, an increase of 3.4% over the comparable period in the prior year. The increase was driven by organic growth of 5.5% and acquisition growth of 0.8%, partially offset by a 2.5% unfavorable impact from FX and 0.4% due to dispositions.
Earnings from continuing operations of $509.8 million included acquisition-related amortization costs of $78.5 million and rightsizing and other costs of $11.2 million, representing $0.53 and $0.08 of EPS, respectively. In addition, the period included a $46.9 million, or $0.32 of EPS, non-cash after-tax loss on assets held for sale related to Finder Pompe S.r.l. (a supplier of pumps to the upstream oil & gas industry), which was sold on April 2, 2019. Excluding these items, adjusted earnings from continuing operations for the period were $646.4 million (+19% over the comparable period in 2018), and adjusted EPS was $4.40 (+24% over the comparable period in 2018).
Management Commentary:
Dover's President and Chief Executive Officer, Richard J. Tobin, said, "The Dover portfolio companies delivered solid third quarter results as organic growth of 6% drove 180 bps of improvement in adjusted operating margins over the comparable period in 2018 as a result of volume leverage and solid operational execution.
"Our Fluids segment had another solid quarter with organic growth of 10%, driven by robust trading conditions and solid production performance in both our retail fueling business and pumps and process solutions markets. Engineered Systems' organic growth of 6% was driven by both the industrial and printing & identification platforms, with our digital printing business posting strong growth during the quarter. Refrigeration & Food Equipment had a slower quarter due to reduced demand conditions in food retail and heat exchangers, particularly in Asia.
"As we turn our attention to the fourth quarter, we are focused on delivering on our objectives for both earnings and cash flow, despite the uncertain demand and macro environment in several of our businesses and operating geographies. As a result of our solid third quarter performance, we are reaffirming and tightening our full year 2019 adjusted EPS guidance to $5.82 to $5.85."
Conference Call Information:
Dover will host a webcast and conference call to discuss its third quarter 2019 results at 10:00 A.M. Eastern Time (9:00 A.M. Central Time) on Thursday, October 17, 2019. 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 third quarter and year to date 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 $7 billion. We deliver innovative equipment and components, specialty systems, consumable supplies, software and digital solutions, and support services through three operating segments: Engineered Systems, Fluids 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 24,000 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, 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, 2018, 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 - THIRD QUARTER 2019 | |||||||||||
DOVER CORPORATION CONSOLIDATED STATEMENTS OF EARNINGS (unaudited)(in thousands, except per share data) | |||||||||||
Three Months Ended | Nine Months Ended | ||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||
Revenue | $ | 1,825,345 | $ | 1,747,403 | $ | 5,360,808 | $ | 5,183,168 | |||
Cost of goods and services | 1,151,857 | 1,100,883 | 3,391,185 | 3,268,583 | |||||||
Gross profit | 673,488 | 646,520 | 1,969,623 | 1,914,585 | |||||||
Selling, general, and administrative expenses | 390,775 | 426,445 | 1,195,875 | 1,290,246 | |||||||
Loss on assets held for sale | — | — | 46,946 | — | |||||||
Operating earnings | 282,713 | 220,075 | 726,802 | 624,339 | |||||||
Interest expense | 31,410 | 31,192 | 94,972 | 98,957 | |||||||
Interest income | (1,263) | (2,060) | (3,098) | (6,680) | |||||||
Other income, net | (5,364) | (2,073) | (11,059) | (6,641) | |||||||
Earnings before provision for income taxes | 257,930 | 193,016 | 645,987 | 538,703 | |||||||
Provision for income taxes | 51,924 | 35,711 | 136,191 | 105,533 | |||||||
Earnings from continuing operations | 206,006 | 157,305 | 509,796 | 433,170 | |||||||
Loss from discontinued operations, net | — | — | — | (4,472) | |||||||
Net earnings | $ | 206,006 | $ | 157,305 | $ | 509,796 | $ | 428,698 | |||
Basic earnings (loss) per share*: | |||||||||||
Earnings from continuing operations | $ | 1.42 | $ | 1.07 | $ | 3.51 | $ | 2.87 | |||
Loss from discontinued operations, net | — | — | — | (0.03) | |||||||
Net earnings | $ | 1.42 | $ | 1.07 | $ | 3.51 | $ | 2.84 | |||
Weighted average shares outstanding | 145,372 | 147,344 | 145,276 | 151,177 | |||||||
Diluted earnings (loss) per common share*: | |||||||||||
Earnings from continuing operations | $ | 1.40 | $ | 1.05 | $ | 3.47 | $ | 2.82 | |||
Loss from discontinued operations, net | — | — | — | (0.03) | |||||||
Net earnings | $ | 1.40 | $ | 1.05 | $ | 3.47 | $ | 2.79 | |||
Weighted average shares outstanding | 147,051 | 149,457 | 147,053 | 153,429 | |||||||
Dividends paid per common share | $ | 0.49 | $ | 0.48 | $ | 1.45 | $ | 1.42 | |||
* Per share data may be impacted by rounding. | |||||||||||
DOVER CORPORATION QUARTERLY SEGMENT INFORMATION (unaudited)(in thousands) | |||||||||||||||||||||||||||||||
2019 | 2018 | ||||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q3 YTD | Q1 | Q2 | Q3 | Q3 YTD | Q4 | FY 2018 | ||||||||||||||||||||||
REVENUE | |||||||||||||||||||||||||||||||
Engineered Systems | |||||||||||||||||||||||||||||||
Printing & Identification | $ | 282,086 | $ | 278,813 | $ | 287,157 | $ | 848,056 | $ | 282,522 | $ | 299,834 | $ | 283,232 | $ | 865,588 | $ | 296,843 | $ | 1,162,431 | |||||||||||
Industrials | 405,105 | 417,688 | 414,634 | 1,237,427 | 389,104 | 403,155 | 388,302 | 1,180,561 | 399,956 | 1,580,517 | |||||||||||||||||||||
687,191 | 696,501 | 701,791 | 2,085,483 | 671,626 | 702,989 | 671,534 | 2,046,149 | 696,799 | 2,742,948 | ||||||||||||||||||||||
Fluids | 703,224 | 729,433 | 753,046 | 2,185,703 | 628,098 | 693,666 | 690,065 | 2,011,829 | 785,509 | 2,797,338 | |||||||||||||||||||||
Refrigeration & Food Equipment | 334,643 | 385,474 | 370,335 | 1,090,452 | 338,235 | 401,766 | 386,214 | 1,126,215 | 326,878 | 1,453,093 | |||||||||||||||||||||
Intra-segment eliminations | (301) | (702) | 173 | (830) | (288) | (327) | (410) | (1025) | (236) | (1,261) | |||||||||||||||||||||
Total consolidated revenue | $ | 1,724,757 | $ | 1,810,706 | $ | 1,825,345 | $ | 5,360,808 | $ | 1,637,671 | $ | 1,798,094 | $ | 1,747,403 | $ | 5,183,168 | $ | 1,808,950 | $ | 6,992,118 | |||||||||||
NET EARNINGS | |||||||||||||||||||||||||||||||
Segment Earnings: | |||||||||||||||||||||||||||||||
Engineered Systems | $ | 123,074 | $ | 131,770 | $ | 136,022 | $ | 390,866 | $ | 102,066 | $ | 126,649 | $ | 108,714 | $ | 337,429 | $ | 113,841 | $ | 451,270 | |||||||||||
Fluids 1 | 52,221 | 128,915 | 145,502 | 326,638 | 67,348 | 93,028 | 101,207 | 261,583 | 128,221 | 389,804 | |||||||||||||||||||||
Refrigeration & Food Equipment | 24,807 | 44,375 | 35,211 | 104,393 | 29,182 | 51,372 | 42,434 | 122,988 | 13,131 | 136,119 | |||||||||||||||||||||
Total segments | 200,102 | 305,060 | 316,735 | 821,897 | 198,596 | 271,049 | 252,355 | 722,000 | 255,193 | 977,193 | |||||||||||||||||||||
Corporate expense / other | 30,866 | 24,512 | 28,658 | 84,036 | 30,763 | 30,050 | 30,207 | 91,020 | 38,704 | 129,724 | |||||||||||||||||||||
Interest expense | 31,808 | 31,754 | 31,410 | 94,972 | 35,640 | 32,125 | 31,192 | 98,957 | 32,015 | 130,972 | |||||||||||||||||||||
Interest income | (890) | (945) | (1,263) | (3,098) | (2,057) | (2,563) | (2,060) | (6,680) | (2,201) | (8,881) | |||||||||||||||||||||
Earnings before provision for income taxes | 138,318 | 249,739 | 257,930 | 645,987 | 134,250 | 211,437 | 193,016 | 538,703 | 186,675 | 725,378 | |||||||||||||||||||||
Provision for income taxes | 32,613 | 51,654 | 51,924 | 136,191 | 24,841 | 44,981 | 35,711 | 105,533 | 28,700 | 134,233 | |||||||||||||||||||||
Earnings from continuing operations | 105,705 | 198,085 | 206,006 | 509,796 | 109,409 | 166,456 | 157,305 | 433,170 | 157,975 | 591,145 | |||||||||||||||||||||
Earnings (loss) from discontinued operations, net | — | — | — | — | 22,025 | (26,497) | — | (4,472) | (16,406) | (20,878) | |||||||||||||||||||||
Net earnings | $ | 105,705 | $ | 198,085 | $ | 206,006 | $ | 509,796 | $ | 131,434 | $ | 139,959 | $ | 157,305 | $ | 428,698 | $ | 141,569 | $ | 570,267 | |||||||||||
SEGMENT MARGIN | |||||||||||||||||||||||||||||||
Engineered Systems | 17.9% | 18.9% | 19.4% | 18.7% | 15.2% | 18.0% | 16.2% | 16.5% | 16.3% | 16.5% | |||||||||||||||||||||
Fluids 1 | 7.4% | 17.7% | 19.3% | 14.9% | 10.7% | 13.4% | 14.7% | 13.0% | 16.3% | 13.9% | |||||||||||||||||||||
Refrigeration & Food Equipment | 7.4% | 11.5% | 9.5% | 9.6% | 8.6% | 12.8% | 11.0% | 10.9% | 4.0% | 9.4% | |||||||||||||||||||||
Total segment operating margin | 11.6% | 16.8% | 17.4% | 15.3% | 12.1% | 15.1% | 14.4% | 13.9% | 14.1% | 14.0% | |||||||||||||||||||||
DEPRECIATION AND AMORTIZATION EXPENSE | |||||||||||||||||||||||||||||||
Engineered Systems | $ | 17,795 | $ | 17,865 | $ | 17,455 | $ | 53,115 | $ | 19,239 | $ | 19,203 | $ | 18,204 | $ | 56,646 | $ | 19,233 | $ | 75,879 | |||||||||||
Fluids | 35,426 | 35,146 | 34,762 | 105,334 | 34,449 | 34,981 | 34,954 | 104,384 | 36,060 | 140,444 | |||||||||||||||||||||
Refrigeration & Food Equipment | 13,011 | 12,777 | 13,047 | 38,835 | 13,579 | 13,524 | 13,533 | 40,636 | 19,841 | 60,477 | |||||||||||||||||||||
Corporate | 1,506 | 1,981 | 1,523 | 5,010 | 1,358 | 1,595 | 1,399 | 4,352 | 1,428 | 5,780 | |||||||||||||||||||||
Total depreciation and amortization expense | $ | 67,738 | $ | 67,769 | $ | 66,787 | $ | 202,294 | $ | 68,625 | $ | 69,303 | $ | 68,090 | $ | 206,018 | $ | 76,562 | $ | 282,580 | |||||||||||
1 Q1 and Q3 YTD 2019 includes a $46,946 loss on assets held for sale for Finder Pompe S.r.l. ("Finder"). Excluding this loss, Fluids segment earnings was $99,167 and $373,584, respectively, and segment margin was 14.1% and 17.1%, respectively. | |||||||||||||||||||||||||||||||
DOVER CORPORATION QUARTERLY SEGMENT INFORMATION (continued) (unaudited)(in thousands) | |||||||||||||||||||||
2019 | 2018 | ||||||||||||||||||||
Q1 | Q2 | Q3 | Q3 YTD | Q1 | Q2 | Q3 | Q3 YTD | Q4 | FY 2018 | ||||||||||||
BOOKINGS | |||||||||||||||||||||
Engineered Systems | |||||||||||||||||||||
Printing & Identification | $ | 280,658 | $ | 276,402 | $ | 296,654 | $ | 853,714 | $ | 284,437 | $ | 306,770 | $ | 271,367 | $ | 862,574 | $ | 295,963 | $ | 1,158,537 | |
Industrials | 414,786 | 385,181 | 413,925 | 1,213,892 | 466,722 | 412,780 | 390,606 | 1,270,108 | 481,172 | 1,751,280 | |||||||||||
695,444 | 661,583 | 710,579 | 2,067,606 | 751,159 | 719,550 | 661,973 | 2,132,682 | 777,135 | 2,909,817 | ||||||||||||
Fluids | 712,856 | 770,091 | 780,320 | 2,263,267 | 703,461 | 737,340 | 723,996 | 2,164,797 | 734,943 | 2,899,740 | |||||||||||
Refrigeration & Food Equipment | 376,998 | 384,365 | 323,422 | 1,084,785 | 372,701 | 428,816 | 331,979 | 1,133,496 | 341,221 | 1,474,717 | |||||||||||
Intra-segment eliminations | (682) | (408) | (472) | (1,562) | (624) | 33 | (549) | (1,140) | (584) | (1,724) | |||||||||||
Total consolidated bookings | $ | 1,784,616 | $ | 1,815,631 | $ | 1,813,849 | $ | 5,414,096 | $ | 1,826,697 | $ | 1,885,739 | $ | 1,717,399 | $ | 5,429,835 | $ | 1,852,715 | $ | 7,282,550 | |
BACKLOG | |||||||||||||||||||||
Engineered Systems | |||||||||||||||||||||
Printing & Identification | $ | 121,374 | $ | 119,967 | $ | 125,084 | $ | 135,915 | $ | 137,019 | $ | 126,609 | $ | 122,028 | |||||||
Industrials | 448,137 | 414,996 | 412,817 | 376,474 | 372,525 | 367,963 | 438,546 | ||||||||||||||
569,511 | 534,963 | 537,901 | 512,389 | 509,544 | 494,572 | 560,574 | |||||||||||||||
Fluids | 538,888 | 564,603 | 584,539 | 544,250 | 564,959 | 588,632 | 523,791 | ||||||||||||||
Refrigeration & Food Equipment | 311,632 | 310,454 | 262,870 | 283,250 | 309,440 | 255,783 | 268,991 | ||||||||||||||
Intra-segment eliminations | (377) | (114) | (231) | (389) | (134) | (58) | (185) | ||||||||||||||
Total consolidated backlog | $ | 1,419,654 | $ | 1,409,906 | $ | 1,385,079 | $ | 1,339,500 | $ | 1,383,809 | $ | 1,338,929 | $ | 1,353,171 | |||||||
DOVER CORPORATION QUARTERLY EARNINGS PER SHARE (unaudited)(in thousands, except per share data*) | |||||||||||||||||||||
Earnings Per Share | |||||||||||||||||||||
2019 | 2018 | ||||||||||||||||||||
Q 1 | Q2 | Q3 | Q3 YTD | Q1 | Q2 | Q3 | Q3 YTD | Q4 | FY 2018 | ||||||||||||
Basic earnings (loss) per common share: | |||||||||||||||||||||
Continuing operations | $ | 0.73 | $ | 1.36 | $ | 1.42 | $ | 3.51 | $ | 0.71 | $ | 1.10 | $ | 1.07 | $ | 2.87 | $ | 1.08 | $ | 3.94 | |
Discontinued operations | — | — | — | — | 0.14 | (0.17) | — | (0.03) | (0.11) | (0.14) | |||||||||||
Net earnings | $ | 0.73 | $ | 1.36 | $ | 1.42 | $ | 3.51 | $ | 0.85 | $ | 0.92 | $ | 1.07 | $ | 2.84 | $ | 0.97 | $ | 3.80 | |
Diluted earnings (loss) per common share: | |||||||||||||||||||||
Continuing operations | $ | 0.72 | $ | 1.35 | $ | 1.40 | $ | 3.47 | $ | 0.70 | $ | 1.08 | $ | 1.05 | $ | 2.82 | $ | 1.07 | $ | 3.89 | |
Discontinued operations | — | — | — | — | 0.14 | (0.17) | — | (0.03) | (0.11) | (0.14) | |||||||||||
Net earnings | $ | 0.72 | $ | 1.35 | $ | 1.40 | $ | 3.47 | $ | 0.84 | $ | 0.91 | $ | 1.05 | $ | 2.79 | $ | 0.96 | $ | 3.75 | |
Net earnings (loss) and weighted average shares used in calculated earnings per share amounts are as follows: | |||||||||||||||||||||
Net earnings (loss): | |||||||||||||||||||||
Continuing operations | $ | 105,705 | $ | 198,085 | $ | 206,006 | $ | 509,796 | $ | 109,409 | $ | 166,456 | $ | 157,305 | $ | 433,170 | $ | 157,975 | $ | 591,145 | |
Discontinued operations | — | — | — | — | 22,025 | (26,497) | — | (4,472) | (16,406) | (20,878) | |||||||||||
Net earnings | $ | 105,705 | $ | 198,085 | $ | 206,006 | $ | 509,796 | $ | 131,434 | $ | 139,959 | $ | 157,305 | $ | 428,698 | $ | 141,569 | $ | 570,267 | |
Weighted average shares outstanding: | |||||||||||||||||||||
Basic | 145,087 | 145,366 | 145,372 | 145,276 | 154,520 | 151,744 | 147,344 | 151,177 | 146,007 | 149,874 | |||||||||||
Diluted | 146,911 | 147,179 | 147,051 | 147,053 | 157,090 | 153,938 | 149,457 | 153,429 | 147,940 | 152,133 | |||||||||||
* Per share data may be impacted by rounding. | |||||||||||||||||||||
Non-GAAP Reconciliations | |||||||||||||||||||||
Adjusted Earnings Per Share (Non-GAAP) | |||||||||||||||||||||
Earnings from continuing operations are adjusted by the effect of acquisition-related amortization, rightsizing and other costs, loss on assets held for sale, and the Tax Cuts and Jobs Act to derive adjusted earnings from continuing operations and adjusted diluted earnings per | |||||||||||||||||||||
2019 | 2018 | ||||||||||||||||||||
Q1 | Q2 | Q3 | Q3 YTD | Q1 | Q2 | Q3 | Q3 YTD | Q4 | FY 2018 | ||||||||||||
Adjusted earnings: | |||||||||||||||||||||
Earnings from continuing operations | $ | 105,705 | $ | 198,085 | $ | 206,006 | $ | 509,796 | $ | 109,409 | $ | 166,456 | $ | 157,305 | $ | 433,170 | $ | 157,975 | $ | 591,145 | |
Acquisition-related amortization, pre-tax 1 | 35,635 | 34,997 | 34,244 | 104,876 | 38,150 | 38,072 | 34,997 | 111,219 | 35,078 | 146,297 | |||||||||||
Acquisition-related amortization, tax impact 2 | (8,964) | (8,777) | (8,624) | (26,365) | (9,716) | (9,683) | (8,785) | (28,184) | (8,817) | (37,001) | |||||||||||
Rightsizing and other costs, pre-tax 3 | 3,963 | 6,457 | 3,807 | 14,227 | 4,371 | 6,808 | 24,201 | 35,380 | 37,448 | 72,828 | |||||||||||
Rightsizing and other costs, tax impact 2 | (861) | (1,377) | (806) | (3,044) | (797) | (1,448) | (4,477) | (6,722) | (7,809) | (14,531) | |||||||||||
Loss on assets held for sale 4 | 46,946 | — | — | 46,946 | — | — | — | — | — | — | |||||||||||
Tax Cuts and Jobs Act 5 | — | — | — | — | — | — | — | — | (2,832) | (2,832) | |||||||||||
Adjusted earnings from continuing operations | $ | 182,424 | $ | 229,385 | $ | 234,627 | $ | 646,436 | $ | 141,417 | $ | 200,205 | $ | 203,241 | $ | 544,863 | $ | 211,043 | $ | 755,906 | |
Adjusted diluted earnings per common share*: | |||||||||||||||||||||
Diluted earnings per share from continuing operations | $ | 0.72 | $ | 1.35 | $ | 1.40 | $ | 3.47 | $ | 0.70 | $ | 1.08 | $ | 1.05 | $ | 2.82 | $ | 1.07 | $ | 3.89 | |
Acquisition-related amortization, pre-tax 1 | 0.24 | 0.24 | 0.23 | 0.71 | 0.24 | 0.25 | 0.23 | 0.72 | 0.24 | 0.96 | |||||||||||
Acquisition-related amortization, tax impact 2 | (0.06) | (0.06) | (0.06) | (0.18) | (0.06) | (0.06) | (0.06) | (0.18) | (0.06) | (0.24) | |||||||||||
Rightsizing and other costs, pre-tax 3 | 0.03 | 0.04 | 0.03 | 0.10 | 0.03 | 0.04 | 0.16 | 0.23 | 0.25 | 0.48 | |||||||||||
Rightsizing and other costs, tax impact 2 | (0.01) | (0.01) | (0.01) | (0.02) | (0.01) | (0.01) | (0.03) | (0.04) | (0.05) | (0.10) | |||||||||||
Loss on assets held for sale 4 | 0.32 | — | — | 0.32 | — | — | — | — | — | — | |||||||||||
Tax Cuts and Jobs Act 5 | — | — | — | — | — | — | — | — | (0.02) | (0.02) | |||||||||||
Adjusted diluted earnings per share from continuing operations | $ | 1.24 | $ | 1.56 | $ | 1.60 | $ | 4.40 | $ | 0.90 | $ | 1.30 | $ | 1.36 | $ | 3.55 | $ | 1.43 | $ | 4.97 | |
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 associated asset charges. | |||||||||||||||||||||
4 Represents a loss on assets held for sale of Finder. Under local law, no tax benefit is realized from the loss on the sale of a wholly-owned business. | |||||||||||||||||||||
5 2018 tax benefits related to additional Tax Cuts and Jobs Act regulatory guidance covered by SAB 118. | |||||||||||||||||||||
* Per share data and totals may be impacted by rounding. | |||||||||||||||||||||
Adjusted EPS from Continuing Operations Guidance Reconciliation | |||||
Range | |||||
2019 Guidance for Earnings per Share from Continuing Operations (GAAP) | $ | 4.69 | $ | 4.72 | |
Acquisition-related amortization, net | 0.71 | ||||
Rightsizing and other costs, net | 0.10 | ||||
Loss on assets held for sale | 0.32 | ||||
2019 Guidance for Adjusted Earnings per Share from Continuing Operations (Non-GAAP) | $ | 5.82 | $ | 5.85 | |
DOVER CORPORATION ADDITIONAL INFORMATION (unaudited)(in thousands) | |||||||||||||||||||||
Quarterly Cash Flow | |||||||||||||||||||||
2019 | 2018 | ||||||||||||||||||||
Q1 | Q2 | Q3 | Q3 YTD | Q1 | Q2 | Q3 | Q3 YTD | Q4 | FY 2018 | ||||||||||||
Net Cash Flows Provided By (Used In): | |||||||||||||||||||||
Operating activities | $ | 24,524 | $ | 208,709 | $ | 350,865 | $ | 584,098 | $ | 15,535 | $ | 159,205 | $ | 243,944 | $ | 418,684 | $ | 370,509 | $ | 789,193 | |
Investing activities | (217,690) | (69,755) | (48,612) | (336,057) | (122,597) | (51,606) | (35,922) | (210,125) | (35,355) | (245,480) | |||||||||||
Financing activities | 36,067 | (60,596) | (277,901) | (302,430) | (289,103) | (227,734) | (232,476) | (749,313) | (148,525) | (897,838) | |||||||||||
Quarterly Free Cash Flow (Non-GAAP) | |||||||||||||||||||||||||||||||
2019 | 2018 | ||||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q3 YTD | Q1 | Q2 | Q3 | Q3 YTD | Q4 | FY 2018 | ||||||||||||||||||||||
Cash flow from operating activities | $ | 24,524 | $ | 208,709 | $ | 350,865 | $ | 584,098 | $ | 15,535 | $ | 159,205 | $ | 243,944 | $ | 418,684 | $ | 370,509 | $ | 789,193 | |||||||||||
Less: Capital expenditures | (37,122) | (53,970) | (46,184) | (137,276) | (44,678) | (51,686) | (38,192) | (134,556) | (36,438) | (170,994) | |||||||||||||||||||||
Free cash flow | $ | (12,598) | $ | 154,739 | $ | 304,681 | $ | 446,822 | $ | (29,143) | $ | 107,519 | $ | 205,752 | $ | 284,128 | $ | 334,071 | $ | 618,199 | |||||||||||
Free cash flow as a percentage of revenue | (0.7)% | 8.5% | 16.7% | 8.3% | (1.8)% | 6.0% | 11.8% | 5.5% | 18.5% | 8.8% | |||||||||||||||||||||
Revenue Growth Factors | |||||||||||||||
Three Months Ended September 30, 2019 | |||||||||||||||
Engineered | Fluids | Refrigeration | Total | ||||||||||||
Organic | 6.3 | % | 9.8 | % | (3.2) | % | 5.6 | % | |||||||
Acquisitions | — | % | 2.6 | % | — | % | 1.0 | % | |||||||
Dispositions | — | % | (1.3) | % | — | % | (0.5) | % | |||||||
Currency translation | (1.8) | % | (2.0) | % | (0.9) | % | (1.6) | % | |||||||
Total * | 4.5 | % | 9.1 | % | (4.1) | % | 4.5 | % | |||||||
Nine Months Ended September 30, 2019 | |||||||||||||||
Engineered | Fluids | Refrigeration | Total | ||||||||||||
Organic | 4.5 | % | 10.7 | % | (1.9) | % | 5.5 | % | |||||||
Acquisitions | — | % | 2.0 | % | — | % | 0.8 | % | |||||||
Dispositions | — | % | (1.0) | % | — | % | (0.4) | % | |||||||
Currency translation | (2.6) | % | (3.1) | % | (1.3) | % | (2.5) | % | |||||||
Total * | 1.9 | % | 8.6 | % | (3.2) | % | 3.4 | % | |||||||
* Totals may be impacted by rounding. | |||||||||||||||
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 earnings from continuing operations, adjusted diluted earnings per share from continuing operations, free cash flow, and organic revenue growth are not financial measures under GAAP and should not be considered as a substitute for earnings from continuing operations, diluted earnings per share from continuing operations, 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 earnings from continuing operations represents earnings from continuing operations adjusted for the effect of acquisition-related amortization, rightsizing and other costs, loss on assets held for sale, and the Tax Cuts and Jobs Act. 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. Management believes this information is 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. Adjusted diluted earnings per share from continuing operations represents adjusted earnings from continuing operations divided by average diluted shares.
Free cash flow represents net cash provided by operating activities minus capital expenditures. Management believes that 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.
Investor Contact: | Media Contact: | |
Andrey Galiuk | Adrian Sakowicz | |
Vice President - Corporate Development | Vice President - Communications | |
and Investor Relations | (630) 743-5039 | |
(630) 743-5131 | ||
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SOURCE Dover
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