Dover Reports Second Quarter 2017 Results And Raises Full Year Revenue And EPS Guidance

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- Reports quarterly revenue of $2.0 billion, an increase of 18% from the prior year

- Delivers quarterly diluted net earnings per share of $1.04, up 37%

- Increases full year revenue growth forecast; now expected to be 12% to 14%

- Raises 2017 full year diluted earnings per share guidance to now be in the range of $4.23 to $4.33, an increase of $0.15 at the mid-point of guidance

DOWNERS GROVE, Ill., July 20, 2017 /PRNewswire/ -- Dover DOV announced today that for the second quarter ended June 30, 2017, revenue was $2.0 billion, an increase of 18% from the prior year. The increase in the quarter was driven by organic growth of 10% and acquisition growth of 12%, partially offset by a 3% impact from dispositions and an unfavorable impact from foreign exchange ("FX") of 1%. Net earnings were $164.1 million, an increase of 39% as compared to $118.3 million for the prior year period. Diluted net earnings per share ("EPS") for the second quarter ended June 30, 2017, were $1.04, compared to $0.76 EPS in the prior year period, representing an increase of 37%. EPS for the second quarter ended June 30, 2017, and June 30, 2016, include restructuring costs of $0.01 EPS and $0.04 EPS, respectively.

Dover's President and Chief Executive Officer, Robert A. Livingston, said, "The second quarter reflected the continuation of a trend that began to develop late last year, namely improving global markets and strong results reflecting solid execution by our teams. In all, we achieved revenue growth and margin expansion that exceeded our forecasts.

"All of our segments posted sequential increases in revenue and margin, which was most notable in Refrigeration & Food Equipment and Fluids. In addition, we benefited from strong broad-based activity in Engineered Systems, and also from higher than expected U.S. rig count and increased well completions, which resulted in significant growth in Energy. 

"As a result of our strong second quarter performance and increased confidence in the back half of the year, we are raising our full year guidance for revenue and EPS. Our revised guidance is based on full year revenue growth of 12% to 14% versus our prior forecast of 11% to 13%, and includes organic growth of 5% to 7%, which has been increased one percentage point. Our revenue forecast also includes acquisition growth of 10%, a 2% impact from dispositions, and a 1% headwind from FX, all of which remain unchanged from our prior forecast. Lastly, we now expect full year diluted earnings per share to be in the range of $4.23 to $4.33, versus our prior guidance of $4.05 to $4.20."

Dover will host a webcast of its second quarter 2017 conference call at 10:00 A.M. Eastern Time (9:00 A.M. Central Time) on Thursday, July 20, 2017. 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 with annual revenue exceeding $7 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, as amended. Such statements concern future events and may be indicated by words or phrases such as "anticipates," "expects," "believes," "suggests," "will," "plans," "should," "would," "could," and "forecast," or the use of the future tense and similar words or phrases. Forward-looking statements address matters that are uncertain, including, by way of example only: operating and strategic plans, future sales, earnings, cash flows, margins, organic growth, growth from acquisitions, restructuring charges, cost structure, capital expenditures, capital allocation, capital structure, dividends, cash flows, exchange rates, tax rates, interest rates, interest expense, changes in operations and trends in industries in which our businesses operate, anticipated market conditions and our positioning, global economies, and operating improvements. Forward-looking statements are subject to inherent risks and uncertainties that could cause actual results to differ materially from current expectations, including, but not limited to, economic conditions generally and changes in economic conditions globally and in the markets and industries served by our businesses, including oil and gas activity and U.S. industrials activity; conditions and events affecting domestic and global financial and capital markets; oil and natural gas demand, production growth, and prices; changes in exploration and production spending by our customers and changes in the level of oil and natural gas exploration and development; changes in customer demand and capital spending; risks related to our international operations and the ability of our businesses to expand into new geographic markets; the impact of interest rate and currency exchange rate fluctuations; increased competition and pricing pressures; the impact of loss of a significant customer, or loss or non-renewal of significant contracts; the ability of our businesses to adapt to technological developments; the ability of our businesses to develop and launch new products, timing of such launches and risks relating to market acceptance by customers; the relative mix of products and services which impacts margins and operating efficiencies; the impact of loss of a single-source manufacturing facility; short-term capacity constraints; domestic and foreign governmental and public policy changes or developments, including import/export laws and sanctions, tax policies, environmental regulations and conflict minerals disclosure requirements; increases in the cost of raw materials; our ability to identify and successfully consummate value-adding acquisition opportunities or planned divestitures, and to realize anticipated earnings and synergies from acquired businesses and joint ventures; our ability to achieve expected savings from integration and other cost-control initiatives, such as lean and productivity programs as well as efforts to reduce sourcing input costs; the impact of legal compliance risks and litigation, including product recalls; indemnification obligations related to acquired or divested businesses; cybersecurity and privacy risks; protection and validity of patent and other intellectual property rights; goodwill or intangible asset impairment charges; a downgrade in our credit ratings which, among other matters, could make obtaining financing more difficult and costly; and work stoppages, union and works council campaigns and other labor disputes which could impact our productivity. Dover refers you to the documents that it files from time to time with the Securities and Exchange Commission, such as its reports on Form 10-K, Form 10-Q and Form 8-K, for a discussion of these and other risks and uncertainties that could cause its actual results to differ materially from its current expectations and from the forward-looking statements contained herein. Dover undertakes no obligation to update any forward-looking statement, except as required by law.

 

 

INVESTOR SUPPLEMENT - SECOND QUARTER 2017


DOVER CORPORATION

CONSOLIDATED STATEMENTS OF EARNINGS

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



Three Months Ended June 30,


Six Months Ended June 30,


2017


2016


2017


2016

Revenue

$

1,993,351


$

1,686,345


$

3,806,723


$

3,308,618

Cost of goods and services

1,243,905


1,055,132


2,396,103


2,088,141

Gross profit

749,446


631,213


1,410,620


1,220,477

Selling, general, and administrative expenses

484,046


437,411


969,336


880,859

Operating earnings

265,400


193,802


441,284


339,618

Interest expense

36,932


33,779


73,341


67,097

Interest income

(2,338)


(1,622)


(4,918)


(3,226)

Gain on sale of businesses


(801)


(90,093)


(12,029)

Other expense (income), net

15


(2,053)


191


(4,347)

Earnings before provision for income taxes

230,791


164,499


462,763


292,123

Provision for income taxes

66,733


46,209


126,458


74,477

Net earnings

$

164,058


$

118,290


$

336,305


$

217,646


Net earnings per share:


Basic

$

1.05


$

0.76


$

2.16


$

1.40

Diluted

$

1.04


$

0.76


$

2.14


$

1.39



Weighted average shares outstanding:


Basic

155,703


155,180


155,622


155,122

Diluted

157,513


156,595


157,457


156,414



Dividends paid per common share

$

0.44


$

0.42


$

0.88


$

0.84

 

 

DOVER CORPORATION

QUARTERLY SEGMENT INFORMATION

(unaudited)(in thousands)


2017


2016


Q1

Q2

Q2 YTD


Q1

Q2

Q2 YTD

Q3

Q4

FY 2016

REVENUE


Engineered Systems


Printing & Identification

$

249,238


$

278,220


$

527,458



$

239,681


$

263,648


$

503,329


$

253,091


$

266,082


$

1,022,502


Industrials

358,397


377,210


735,607



337,314


328,784


666,098


317,471


360,212


1,343,781



607,635


655,430


1,263,065



576,995


592,432


1,169,427


570,562


626,294


2,366,283




Fluids

525,195


553,259


1,078,454



399,062


405,838


804,900


412,822


482,852


1,700,574




Refrigeration & Food
Equipment

356,834


426,304


783,138



363,252


429,386


792,638


451,328


376,373


1,620,339




Energy

324,088


359,168


683,256



283,230


259,008


542,238


273,248


292,952


1,108,438




Intra-segment
eliminations

(380)


(810)


(1,190)



(266)


(319)


(585)


(197)


(510)


(1,292)


Total consolidated
revenue

$

1,813,372


$

1,993,351


$

3,806,723



$

1,622,273


$

1,686,345


$

3,308,618


$

1,707,763


$

1,777,961


$

6,794,342




NET EARNINGS


Segment Earnings:


Engineered Systems

$

174,398


$

106,820


$

281,218



$

93,748


$

104,034


$

197,782


$

97,240


$

96,807


$

391,829


Fluids

52,639


73,558


126,197



46,047


54,033


100,080


66,178


34,663


200,921


Refrigeration & Food
Equipment

33,562


65,829


99,391



38,161


63,230


101,391


64,111


118,126


283,628


Energy

41,691


53,368


95,059



11,244


(75)


11,169


13,279


30,888


55,336


Total segments

302,290


299,575


601,865



189,200


221,222


410,422


240,808


280,484


931,714


Corporate expense /
other

36,489


34,190


70,679



29,862


24,566


54,428


26,638


31,674


112,740


Interest expense

36,409


36,932


73,341



33,318


33,779


67,097


33,789


35,515


136,401


Interest income

(2,580)


(2,338)


(4,918)



(1,604)


(1,622)


(3,226)


(795)


(2,738)


(6,759)


Earnings before
provision for income
taxes

231,972


230,791


462,763



127,624


164,499


292,123


181,176


216,033


689,332


Provision for income
taxes

59,725


66,733


126,458



28,268


46,209


74,477


51,092


54,871


180,440


Net earnings

$

172,247


$

164,058


$

336,305



$

99,356


$

118,290


$

217,646


$

130,084


$

161,162


$

508,892




SEGMENT MARGIN


Engineered Systems

28.7

%

16.3

%

22.3

%


16.2

%

17.6

%

16.9

%

17.0

%

15.5

%

16.6

%

Fluids

10.0

%

13.3

%

11.7

%


11.5

%

13.3

%

12.4

%

16.0

%

7.2

%

11.8

%

Refrigeration & Food
Equipment

9.4

%

15.4

%

12.7

%


10.5

%

14.7

%

12.8

%

14.2

%

31.4

%

17.5

%

Energy

12.9

%

14.9

%

13.9

%


4.0

%

%

2.1

%

4.9

%

10.5

%

5.0

%

Total segment
operating margin

16.7

%

15.0

%

15.8

%


11.7

%

13.1

%

12.4

%

14.1

%

15.8

%

13.7

%



DEPRECIATION AND AMORTIZATION EXPENSE


Engineered Systems

$

19,575


$

20,259


$

39,834



$

16,036


$

16,075


$

32,111


$

16,238


$

25,597


$

73,946


Fluids

28,503


29,473


57,976



20,511


20,981


41,492


20,833



22,899


85,224


Refrigeration & Food
Equipment

15,035


14,522


29,557



16,728


16,881


33,609


16,146



15,263


65,018


Energy

31,365


32,000


63,365



34,160


33,289


67,449


32,605



31,366


131,420


Corporate

1,120


1,164


2,284



1,169


868


2,037


901



2,193


5,131


Total depreciation and
amortization expense

$

95,598


$

97,418


$

193,016



$

88,604


$

88,094


$

176,698


$

86,723


$

97,318


$

360,739



 

 

DOVER CORPORATION

QUARTERLY SEGMENT INFORMATION

(continued)

(unaudited)(in thousands)


2017


2016


Q1

Q2

Q2 YTD


Q1

Q2

Q2 YTD

Q3

Q4

FY 2016

BOOKINGS











Engineered Systems











Printing & Identification

$

256,665


$

282,157


$

538,822



$

242,569


$

266,490


$

509,059


$

248,443


$

268,951


$

1,026,453



Industrials

419,455


367,352


786,807



329,957


304,345


634,302


331,435


374,073


1,339,810




676,120


649,509


1,325,629



572,526


570,835


1,143,361


579,878


643,024


2,366,263














Fluids

565,987


554,656


1,120,643



418,345


413,767


832,112


413,535


457,283


1,702,930














Refrigeration & Food
Equipment

438,576


466,276


904,852



411,367


468,661


880,028


429,134


336,645


1,645,807














Energy

348,317


352,617


700,934



273,445


246,021


519,466


270,685


299,771


1,089,922














Intra-segment eliminations

(1,149)


(529)


(1,678)



(90)


(944)


(1,034)


(245)


(308)


(1,587)














Total consolidated bookings

$

2,027,851


$

2,022,529


$

4,050,380



$

1,675,593


$

1,698,340


$

3,373,933


$

1,692,987


$

1,736,415


$

6,803,335














BACKLOG











Engineered Systems











Printing & Identification

$

109,347


$

115,763




$

102,640


$

104,509



$

101,190


$

98,924



Industrials

310,008


301,474




235,384


210,646



224,892


252,780




419,355


417,237




338,024


315,155



326,082


351,704














Fluids

371,717


378,774




286,457


315,786



318,246


331,238














Refrigeration & Food
Equipment

341,530


382,598




303,479


332,312



309,462


258,329














Energy

156,255


147,568




144,828


129,873



$

126,519


$

134,181














Intra-segment eliminations

(729)


(378)




(36)


(265)



(252)


(102)














Total consolidated backlog

$

1,288,128


$

1,325,799




$

1,072,752


$

1,092,861



$

1,080,057


$

1,075,350



 

 

 

DOVER CORPORATION

QUARTERLY EARNINGS PER SHARE

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


Earnings Per Share












2017


2016


Q1

Q2

Q2 YTD


Q1

Q2

Q2 YTD

Q3

Q4

FY 2016

Net earnings per share:











Basic

$

1.11


$

1.05


$

2.16



$

0.64


$

0.76


$

1.40


$

0.84


$

1.04


$

3.28


Diluted

$

1.09


$

1.04


$

2.14



$

0.64


$

0.76


$

1.39


$

0.83


$

1.03


$

3.25













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












Net earnings

$

172,247


$

164,058


$

336,305



$

99,356


$

118,290


$

217,646


$

130,084


$

161,162


$

508,892













Weighted average shares outstanding:








Basic

155,540


155,703


155,622



155,064


155,180


155,122


155,300


155,376


155,231


Diluted

157,399


157,513


157,457



156,161


156,595


156,414


156,798


156,816


156,636






















Adjusted Earnings Per Share (Non-GAAP)

Net earnings are adjusted by gains on disposition of businesses and a product recall charge to derive adjusted net earnings and adjusted diluted earnings per
common share as follows:



2017


2016



Q1


Q2


Q2 YTD




Q1



Q2



Q2 YTD



Q3



Q4



FY 2016


Adjusted net earnings:





























Net earnings

$

172,247


$

164,058


$

336,305



$

99,356


$

118,290


$

217,646


$

130,084


$

161,162


$

508,892


Gain on dispositions, pre-tax

(88,402)



(88,402)



(11,853)




(11,853)



(85,035)


(96,888)

Gain on dispositions, tax impact 1

26,682



26,682



625




625



28,060


28,685

Product recall charge, pre-tax










23,150


23,150

Product recall charge, tax impact 1










(8,913)


(8,913)

Adjusted net earnings

$

110,527


$

164,058


$

$274,585



$

88,128


$

118,290


$

206,418


$

130,084


$

118,424


$

454,926




Adjusted diluted earnings per common share:

Net earnings

$

1.09


$

1.04


$

2.14



$

0.64


$

0.76


$

1.39


$

0.83


$

1.03


$

3.25


Gain on dispositions, pre-tax

(0.56)



(0.56)



(0.08)



(0.08)




(0.54)


(0.62)

Gain on dispositions, tax impact

0.17



0.17








0.18


0.18

Product recall charge, pre-tax










0.15


0.15

Product recall charge, tax impact










(0.06)


(0.06)

Adjusted net earnings

$

0.70


$

1.04


$

1.75



$

0.56


$

0.76


$

1.31


$

0.83


$

0.76


$

2.90




1 Gain on dispositions and the product recall charge were tax effected using the statutory tax rates in the specific jurisdiction for each period.


* Per share data may be impacted by rounding.

 

 

DOVER CORPORATION

ADDITIONAL INFORMATION

(unaudited)(in thousands)

Quarterly Cash Flow





2017


2016


Q1

Q2

Q2 YTD


Q1

Q2

Q2 YTD

Q3

Q4

FY 2016

Net Cash Flows Provided By (Used In):











Operating activities

$

78,071


$

155,877


$

233,948



$

133,413


$

207,868


$

341,281


$

231,665


$

289,029


$

861,975


Investing activities

81,780


(51,137)


30,643



(425,857)


(69,415)


(495,272)


(66,110)


(942,461)


(1,503,843)


Financing activities

(93,293)


(216,273)


(309,566)



178,507


(127,678)


50,829


98,491


484,288


633,608



Quarterly Free Cash Flow (Non-GAAP)





2017


2016


Q1

Q2

Q2 YTD


Q1

Q2

Q2 YTD

Q3

Q4

FY 2016

Cash flow from operating activities

$

78,071


$

155,877


$

233,948



$

133,413


$

207,868


$

341,281


$

231,665


$

289,029


$

861,975


Less: Capital expenditures

(42,259)


(48,335)


(90,594)



(37,230)


(35,422)


(72,652)


(43,116)


(49,437)


(165,205)


Plus: Cash taxes paid from gains on dispositions1


42,955


42,955




435


435


217


217


869


Free cash flow

$

35,812


$

150,497


$

186,309



$

96,183


$

172,881


$

269,064


$

188,766


$

239,809


$

697,639













Free cash flow as a percentage of revenue

2.0

%

7.5

%

4.9

%


5.9

%

10.3

%

8.1

%

11.1

%

13.5

%

10.3

%












Free cash flow as a percentage of net earnings

20.8

%

91.7

%

55.4

%


96.8

%

146.2

%

123.6

%

145.1

%

148.8

%

137.1

%












1 Federal and state tax payments related to the gains on the dispositions of Performance Motorsports in 2017 and Tipper Tie and Texas Hydraulics in 2016.

 



Revenue Growth Factors



Three Months Ended June 30, 2017


Engineered Systems


Fluids


Refrigeration & Food Equipment


Energy


Total

Organic

5

%


4

%


5

%


39

%


10

%

Acquisitions

10

%


34

%


%


%


12

%

Dispositions

(4)

%


%


(6)

%


%


(3)

%

Currency translation

(1)

%


(2)

%


%


(1)

%


(1)

%

Total *

11

%


36

%


(1)

%


38

%


18

%











* Totals may be impacted by rounding.













Six Months Ended June 30, 2017


Engineered Systems


Fluids


Refrigeration & Food Equipment


Energy


Total

Organic

4

%


1

%


5

%


39

%


7

%

Acquisitions

9

%


35

%


%


%


12

%

Dispositions

(4)

%


%


(6)

%


%


(3)

%

Currency translation

(1)

%


(2)

%


%


(1)

%


(1)

%

Total *

8

%


34

%


(1)

%


38

%


15

%











* 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 net earnings, adjusted diluted earnings per common share, 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 gains on disposition of businesses and a product recall charge. Adjusted diluted earnings per common share represents adjusted net earnings divided by average diluted shares. 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. 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 (which reflect tax payments on disposition-related investing activities). 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.

 

View original content:http://www.prnewswire.com/news-releases/dover-reports-second-quarter-2017-results-and-raises-full-year-revenue-and-eps-guidance-300491387.html

SOURCE Dover Corporation

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