DOVER CORPORATION DOWNERS GROVE, Ill., Jan. 27, 2015 /PRNewswire/ -- Dover (NYSE: DOV) announced today that for the fourth quarter ended December 31, 2014, revenue was $2.0 billion, an increase of 11% over the prior year. The revenue increase was driven by organic growth of 6% and an increase of 7% from acquisitions, partially offset by a 2% impact from foreign exchange. Earnings from continuing operations were $171.8 million, essentially flat compared to $172.2 million for the prior year period. Diluted earnings per share ("EPS") for the fourth quarter ended December 31, 2014 was $1.03, compared to $1.00 EPS in the prior year period, representing an increase of 3%. EPS from continuing operations for the fourth quarter of 2014 included discrete tax benefits of $0.02, compared to $0.01 EPS in the prior year period. Excluding these items, adjusted EPS from continuing operations for the fourth quarter of 2014 was $1.01, an increase of 2% over an adjusted EPS of $0.99 in the prior year period.
Revenue for the year ended December 31, 2014 was $7.8 billion, an increase of 8% over the prior year, reflecting organic growth of 4% and a 4% increase from acquisitions. Foreign exchange had a negligible impact. Earnings from continuing operations for the year ended December 31, 2014 were $778.1 million, compared to $797.5 million in the prior year period, representing a decrease of 2%. EPS for the year ended December 31, 2014 was $4.61 EPS, essentially flat compared to $4.60 EPS in the prior year. EPS from continuing operations during this period includes discrete tax benefits of $0.07 EPS compared to $0.43 EPS in the prior year, as well as $0.02 of other one-time gains recognized in the prior year. Excluding these items, adjusted EPS from continuing operations for the year ended December 31, 2014 was $4.54, an increase of 10% over an adjusted EPS of $4.14 in the prior year.
Dover also announced today its intention to divest Sargent Aerospace ("Sargent"), a supplier of precision-engineered components and aftermarket services in the aerospace and defense industries, and part of Dover's Engineered Systems segment. Both Sargent and Datamax O'Neil ("D-O") are reported as discontinued operations for the fourth quarter and full year 2014 results. Dover expects to complete the sale of D-O in the first quarter, with the sale of Sargent expected to occur in the second quarter of 2015.
Commenting on the fourth quarter results, Dover's President and Chief Executive Officer, Robert A. Livingston, said, "We finished the year with a very strong fourth quarter, achieving 11% revenue growth and earnings growth that exceeded expectations. We saw robust topline growth at each segment led by Energy and Fluids at 20% and 10%, respectively, and achieved solid volume leverage. In the quarter, we made the decision to divest Sargent and, as previously announced, Datamax O'Neil. While both are excellent companies with strong positions, they serve markets where others have greater scale. We expect after-tax proceeds of the divestitures to be used for share repurchases and growth opportunities."
"As previously announced, we took decisive actions in the quarter to adjust our costs and streamline our businesses, which accounted for the majority of nonrecurring charges of $0.17. Regarding our energy markets, there continues to be significant uncertainty driven by the rapid decline in oil prices. Accordingly, we took additional cost reduction steps in our Energy businesses during the quarter and continue to review further actions, including additional restructuring costs in the first quarter of 2015."
"As a result, we are updating our 2015 guidance to reflect the anticipated combined impact of lower oil prices, discontinued operations, share repurchase activity and FX. We now expect total revenue growth of 1% to -2%, principally reflecting our new Energy revenue estimate of -6% to -9%, a 15 point reduction from our prior forecast. Within our total revenue forecast, organic growth is anticipated to be approximately 1% to -2%, completed acquisitions will provide approximately 2% growth and FX is expected to be a 2% headwind. In total, we now expect full year adjusted EPS to be in the range of $4.70 to $4.95, a $0.35 reduction to our prior guidance."
Net earnings for the quarter ended December 31, 2014, were $169.3 million, or $1.02 EPS, which included a loss from discontinued operations of $2.5 million, or $0.02 EPS compared to net earnings of $194.0 million, or $1.13 EPS, for the same period of 2013, which included earnings from discontinued operations of $21.7 million, or $0.13 EPS.
Net earnings for the year ended December 31, 2014 were $775.2 million, or $4.59 EPS, compared to net earnings of $1.0 billion, or $5.78 EPS, for the same period of 2013. 2014 results reflected a loss from discontinued operations of $2.9 million, or $0.02 EPS, which included $27.1 million in spin-off costs. 2013 results reflected earnings from discontinued operations of $205.6 million or $1.18 EPS, which included spin-off costs of $30.1 million.
Dover will host a webcast of its fourth quarter 2014 conference call at 10:00 A.M. Eastern Time (9:00 A.M. Central Time) on Tuesday, January 27, 2015. The webcast can be accessed on the Dover website at www.dovercorporation.com. The conference call will also be made available for replay on the website. Additional information on Dover's fourth quarter results and its operating segments can also be found on the Company's website.
About Dover:
Dover is a diversified global manufacturer with annual revenues of $8 billion. We deliver innovative equipment and components, specialty systems and support services through four major operating segments: Energy, 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 nearly 60 years, our team of 27,000 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 www.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 relate to, among other things, operating and strategic plans, income, earnings, cash flows, changes in operations, industries in which Dover businesses operate, and operating improvements. Forward-looking statements 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 are subject to inherent risks and uncertainties that could cause actual results to differ materially from current expectations, including, but not limited to, oil and natural gas demand, production growth, and prices; changes in exploration and production spending by Dover's customers and changes in the level of oil and natural gas exploration and development; economic conditions generally and changes in economic conditions globally and in markets served by Dover businesses, including well activity, U.S. industrials activity and the status of economic recovery in Europe; the ability of Dover's businesses to expand into new geographic markets; Dover's ability to identify and successfully consummate value-adding acquisition opportunities or planned divestitures; Dover's ability to achieve expected savings from integration and other cost-control initiatives, such as lean and productivity programs; changes in customer demand or the impact of loss of a significant customer, or loss or non-renewal of significant contracts; the ability of Dover's 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; increased competition and pricing pressures; the impact of loss of a single-source manufacturing facility; short-term capacity constraints; increases in the cost of raw materials; domestic and foreign governmental and public policy changes or developments, including environmental regulations, conflict minerals disclosure requirements, and tax policies; protection and validity of patent and other intellectual property rights; the impact of legal matters and legal compliance risks; the impact of interest rate and currency exchange rate fluctuations; conditions and events affecting domestic and global financial and capital markets; and a downgrade in Dover's credit ratings which, among other matters, could make obtaining financing more difficult and costly. 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 - FOURTH QUARTER AND FULL YEAR 2014
-------------------------------------------------------
DOVER CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)(in thousands, except per share data)
Three Months Ended Years Ended December 31,
December 31,
------------
2014 2013 2014 2013
---- ---- ---- ----
Revenue $1,977,947 $1,785,922 $7,752,728 $7,155,096
Cost of goods and services 1,254,079 1,106,213 4,778,479 4,376,505
--------- --------- --------- ---------
Gross profit 723,868 679,709 2,974,249 2,778,591
Selling and administrative expenses 460,377 412,487 1,758,765 1,616,921
------- ------- --------- ---------
Operating earnings 263,491 267,222 1,215,484 1,161,670
Interest expense, net 31,332 29,912 127,179 120,654
Other expense (income), net 1,172 (3,500) (5,902) (4,970)
----- ------ ------ ------
Earnings before provision 230,987 240,810 1,094,207 1,045,986
for income taxes and
discontinued operations
Provision for income taxes 59,152 68,583 316,067 248,459
------ ------ ------- -------
Earnings from continuing operations 171,835 172,227 778,140 797,527
(Loss) earnings from discontinued operations, net (2,541) 21,736 (2,905) 205,602
Net earnings $169,294 $193,963 $775,235 $1,003,129
======== ======== ======== ==========
Basic earnings per common share:
Earnings from continuing operations $1.04 $1.01 $4.67 $4.66
(Loss) earnings from discontinued operations, net (0.02) 0.13 (0.02) 1.20
Net earnings 1.03 1.14 4.65 5.86
Weighted average shares outstanding 164,589 170,027 166,692 171,271
======= ======= ======= =======
Diluted earnings per common share:
Earnings from continuing operations $1.03 $1.00 $4.61 $4.60
(Loss) earnings from discontinued operations, net (0.02) 0.13 (0.02) 1.18
Net earnings 1.02 1.13 4.59 5.78
Weighted average shares outstanding 166,467 172,265 168,842 173,547
======= ======= ======= =======
Dividends paid per common share $0.40 $0.375 $1.55 $1.45
===== ====== ===== =====
DOVER CORPORATION
QUARTERLY SEGMENT INFORMATION
(unaudited)(in thousands)
2014 2013
---- ----
Q1 Q2 Q3 Q4 FY 2014 Q1 Q2 Q3 Q4 FY 2013
--- --- --- --- ------- --- --- --- --- -------
REVENUE
-------
Energy $478,773 $481,016 $507,334 $550,116 $2,017,239 $462,679 $465,906 $467,688 $457,580 $1,853,853
-------- -------- -------- -------- ---------- -------- -------- -------- -------- ----------
Engineered Systems
Printing & Identification 231,679 252,354 257,282 247,569 988,884 205,828 213,573 220,538 237,936 877,875
Industrials 335,995 361,467 355,019 344,600 1,397,081 317,059 330,423 332,095 320,518 1,300,095
------- ------- ------- ------- --------- ------- ------- ------- ------- ---------
567,674 613,821 612,301 592,169 2,385,965 522,887 543,996 552,633 558,454 2,177,970
------- ------- ------- ------- --------- ------- ------- ------- ------- ---------
Fluids 345,009 346,275 361,797 377,485 1,430,566 273,638 310,137 309,241 343,822 1,236,838
------- ------- ------- ------- --------- ------- ------- ------- ------- ---------
Refrigeration & Food Equipment 411,493 522,357 528,807 458,532 1,921,189 422,468 517,574 521,322 426,476 1,887,840
------- ------- ------- ------- --------- ------- ------- ------- ------- ---------
Intra-segment eliminations (379) (833) (664) (355) (2,231) (132) (632) (231) (410) (1,405)
---- ---- ---- ---- ------ ---- ---- ---- ---- ------
Total consolidated revenue $1,802,570 $1,962,636 $2,009,575 $1,977,947 $7,752,728 $1,681,540 $1,836,981 $1,850,653 $1,785,922 $7,155,096
========== ========== ========== ========== ========== ========== ========== ========== ========== ==========
NET EARNINGS
------------
Segment Earnings:
Energy $118,968 $114,991 $122,738 $105,118 $461,815 $118,708 $109,662 $119,086 $112,193 $459,649
Engineered Systems 83,227 101,766 108,800 93,205 386,998 74,162 87,818 98,044 87,473 347,497
Fluids 57,942 63,112 67,559 63,026 251,639 47,601 58,768 63,056 55,098 224,523
Refrigeration & Food Equipment 44,862 84,926 78,012 30,934 238,734 52,110 82,177 86,446 46,574 267,307
------ ------ ------ ------ ------- ------ ------ ------ ------ -------
Total Segments 304,999 364,795 377,109 292,283 1,339,186 292,581 338,425 366,632 301,338 1,298,976
Corporate expense / other 30,734 29,287 27,815 29,964 117,800 33,885 35,078 32,757 30,616 132,336
Net interest expense 32,655 31,961 31,231 31,332 127,179 30,282 30,230 30,230 29,912 120,654
------ ------ ------ ------ ------- ------ ------ ------ ------ -------
Earnings from continuing operations before 241,610 303,547 318,063 230,987 1,094,207 228,414 273,117 303,645 240,810 1,045,986
provision for income taxes
Provision for income taxes 71,569 92,966 92,380 59,152 316,067 68,147 25,129 86,600 68,583 248,459
------ ------ ------ ------ ------- ------ ------ ------ ------ -------
Earnings from continuing operations 170,041 210,581 225,683 171,835 778,140 160,267 247,988 217,045 172,227 797,527
(Loss) earnings from discontinued operations, net (9,903) 3,378 6,161 (2,541) (2,905) 49,736 82,061 52,069 21,736 205,602
------
Net earnings $160,138 $213,959 $231,844 $169,294 $775,235 $210,003 $330,049 $269,114 $193,963 $1,003,129
======== ======== ======== ======== ======== ======== ======== ======== ======== ==========
SEGMENT OPERATING MARGIN
------------------------
Energy 24.8% 23.9% 24.2% 19.1% 22.9% 25.7% 23.5% 25.5% 24.5% 24.8%
Engineered Systems 14.7% 16.6% 17.8% 15.7% 16.2% 14.2% 16.1% 17.7% 15.7% 16.0%
Fluids 16.8% 18.2% 18.7% 16.7% 17.6% 17.4% 18.9% 20.4% 16.0% 18.2%
Refrigeration & Food Equipment 10.9% 16.3% 14.8% 6.7% 12.4% 12.3% 15.9% 16.6% 10.9% 14.2%
Total Segment 16.9% 18.6% 18.8% 14.8% 17.3% 17.4% 18.4% 19.8% 16.9% 18.2%
DEPRECIATION AND AMORTIZATION EXPENSE
-------------------------------------
Energy $25,575 $25,807 $27,145 $33,429 $111,956 $24,448 $24,714 $24,707 $25,206 $99,075
Engineered Systems 15,850 15,982 15,334 14,780 61,946 14,309 14,774 14,950 15,025 59,058
Fluids 16,366 15,308 14,019 15,210 60,903 11,361 11,570 11,790 14,091 48,812
Refrigeration & Food Equipment 17,212 17,451 17,073 16,965 68,701 16,585 16,611 16,962 17,070 67,228
Corporate 870 1,000 910 902 3,682 859 1,028 1,030 943 3,860
$75,873 $75,548 $74,481 $81,286 $307,188 $67,562 $68,697 $69,439 $72,335 $278,033
======= ======= ======= ======= ======== ======= ======= ======= ======= ========
DOVER CORPORATION
QUARTERLY SEGMENT INFORMATION
(continued)
(unaudited)(in thousands)
2014 2013
---- ----
Q1 Q2 Q3 Q4 FY 2014 Q1 Q2 Q3 Q4 FY 2013
--- --- --- --- ------- --- --- --- --- -------
BOOKINGS
--------
Energy $478,469 $477,162 $526,134 $534,646 $2,016,411 $515,388 $416,892 $481,021 $440,261 $1,853,562
-------- -------- -------- -------- ---------- -------- -------- -------- -------- ----------
Engineered Systems
Printing & Identification 250,434 245,445 249,299 248,082 993,260 205,386 221,458 219,316 233,308 879,468
Industrials 370,949 363,773 342,687 374,438 1,451,847 346,539 343,194 300,655 325,840 1,316,228
Eliminations (18) (16) (11) (11) (56) (81) (129) (5) 278 63
--- --- --- --- --- --- ---- --- --- ---
621,365 609,202 591,975 622,509 2,445,051 551,844 564,523 519,966 559,426 2,195,759
------- ------- ------- ------- --------- ------- ------- ------- ------- ---------
Fluids 362,943 375,009 350,853 345,553 1,434,358 303,609 298,817 307,729 351,767 1,261,922
------- ------- ------- ------- --------- ------- ------- ------- ------- ---------
Refrigeration & Food Equipment 493,731 542,810 459,099 367,567 1,863,207 482,792 515,270 433,426 450,850 1,882,338
------- ------- ------- ------- --------- ------- ------- ------- ------- ---------
Intra-segment eliminations (506) (1,089) (737) (644) (2,976) (560) (708) (417) 735 (950)
---- ------ ---- ---- ------ ---- ---- ---- --- ----
Total consolidated bookings $1,956,002 $2,003,094 $1,927,324 $1,869,631 $7,756,051 $1,853,073 $1,794,794 $1,741,725 $1,803,039 $7,192,631
========== ========== ========== ========== ========== ========== ========== ========== ========== ==========
BACKLOG
-------
Energy $210,846 $206,415 $232,739 $233,347 $274,733 $218,764 $233,820 $206,790
-------- -------- -------- -------- -------- -------- -------- --------
Engineered Systems
Printing & Identification 131,298 128,912 115,352 110,359 91,020 98,624 99,615 95,597
Industrials 266,517 268,680 254,612 282,598 250,480 261,600 228,605 231,748
397,815 397,592 369,964 392,957 341,500 360,224 328,220 327,345
------- ------- ------- ------- ------- ------- ------- -------
Fluids 328,617 348,508 323,424 277,834 222,255 228,212 228,880 310,330
------- ------- ------- ------- ------- ------- ------- -------
Refrigeration & Food Equipment 431,298 450,065 376,141 282,507 417,246 412,366 324,042 347,004
------- ------- ------- ------- ------- ------- ------- -------
Intra-segment eliminations (374) (211) (302) (431) (596) (526) (387) (592)
---- ---- ---- ---- ---- ---- ---- ----
Total consolidated backlog $1,368,202 $1,402,369 $1,301,966 $1,186,214 $1,255,138 $1,219,040 $1,114,575 $1,190,877
========== ========== ========== ========== ========== ========== ========== ==========
DOVER CORPORATION
QUARTERLY EARNINGS PER SHARE
(unaudited)(in thousands, except per share data*)
2014 2013
---- ----
Q1 Q2 Q3 Q4 FY 2014 Q1 Q2 Q3 Q4 FY 2013
--- --- --- --- ------- --- --- --- --- -------
Basic earnings (loss) per common share:
Continuing operations $1.00 $1.26 $1.36 $1.04 $4.67 $0.92 $1.45 $1.27 $1.01 $4.66
Discontinued operations (0.06) 0.02 0.04 (0.02) (0.02) 0.29 0.48 0.31 0.13 1.20
Net earnings 0.94 1.29 1.40 1.03 4.65 1.21 1.93 1.58 1.14 5.86
Diluted earnings (loss) per common share:
Continuing operations $0.99 $1.25 $1.34 $1.03 $4.61 $0.91 $1.43 $1.26 $1.00 $4.60
Discontinued operations (0.06) 0.02 0.04 (0.02) (0.02) 0.28 0.47 0.30 0.13 1.18
Net earnings 0.93 1.27 1.38 1.02 4.59 1.20 1.91 1.56 1.13 5.78
Adjusted diluted earnings per common share (calculated below):
Continuing operations $0.97 $1.25 $1.31 $1.01 $4.54 $0.89 $1.08 $1.20 $0.99 $4.14
Net earnings (loss) and average shares used in calculated earnings (loss) per share amounts are as follows:
Net earnings (loss):
Continuing operations $170,041 $210,581 $225,683 $171,835 $778,140 $160,267 $247,988 $217,045 $172,227 $797,527
Discontinued operations (9,903) 3,378 6,161 (2,541) (2,905) 49,736 82,061 52,069 21,736 205,602
Net earnings 160,138 213,959 231,844 169,294 775,235 210,003 330,049 269,114 193,963 1,003,129
Average shares outstanding:
Basic 169,750 166,474 166,021 164,589 166,692 173,448 171,111 170,544 170,027 171,271
Diluted 172,013 168,857 168,343 166,467 168,842 175,567 173,097 172,734 172,265 173,547
Note:
Earnings from continuing operations are adjusted by discrete tax items and other one-time gains to derive adjusted earnings from continuing operations and adjusted diluted earnings per common share as follows:
2014 2013
---- ----
Q1 Q2 Q3 Q4 FY 2014 Q1 Q2 Q3 Q4 FY 2013
--- --- --- --- ------- --- --- --- --- -------
Adjusted earnings from continuing operations:
Earnings from continuing operations $170,041 $210,581 $225,683 $171,835 $778,140 $160,267 $247,988 $217,045 $172,227 $797,527
Gains (losses) from discrete and other tax items 2,541 (635) 5,524 3,860 11,290 3,893 61,477 7,751 2,338 75,459
Other one-time gains, net of tax (1) - - - - - - - 2,866 - 2,866
--- --- --- --- --- --- --- ----- --- -----
Adjusted earnings from continuing operations $167,500 $211,216 $220,159 $167,975 $766,850 $156,374 $186,511 $206,428 $169,889 $719,202
======== ======== ======== ======== ======== ======== ======== ======== ======== ========
Adjusted diluted earnings per common share:
Earnings from continuing operations $0.99 $1.25 $1.34 $1.03 $4.61 $0.91 $1.43 $1.26 $1.00 $4.60
Gains from discrete and other tax items 0.01 - 0.03 0.02 0.07 0.02 0.36 0.04 0.01 0.43
Other one-time gains, net of tax (1) - - - - - - - 0.02 - 0.02
--- --- --- --- --- --- --- ---- --- ----
Adjusted earnings from continuing operations $0.97 $1.25 $1.31 $1.01 $4.54 $0.89 $1.08 $1.20 $0.99 $4.14
===== ===== ===== ===== ===== ===== ===== ===== ===== =====
(1) Reflects a one-time curtailment gain recognized in the third quarter of 2013 in connection with the freeze of the Company's defined benefit pension plans.
* Per share data may not add due to rounding.
DOVER CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(unaudited)(in thousands)
December 31, 2014 December 31, 2013
----------------- -----------------
Assets:
Cash and cash equivalents $681,581 $803,882
Receivables, net of allowances 1,186,746 1,076,641
Inventories, net 863,737 715,311
Deferred tax and other current assets 164,758 122,138
Property, plant and equipment, net 837,069 787,849
Goodwill 3,491,557 3,032,991
Intangible assets, net 1,369,520 1,258,911
Other assets 168,246 202,806
Assets of discontinued operations 327,171 2,854,652
Total assets $9,090,385 $10,855,181
========== ===========
Liabilities and Stockholders' Equity:
Notes payable and current maturities of
long-term debt $777,956 $229,278
Payables and accrued expenses 1,261,398 1,112,863
Deferred taxes and other non-current
liabilities 1,046,547 975,823
Long-term debt 2,253,041 2,599,201
Liabilities of discontinued operations 50,718 560,620
Stockholders' equity 3,700,725 5,377,396
Total liabilities and stockholders'
equity $9,090,385 $10,855,181
========== ===========
DOVER CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)(in thousands)
Years Ended December 31,
------------------------
2014 2013
---- ----
Operating activities:
Net earnings $775,235 $1,003,129
Loss (earnings) from
discontinued operations, net 2,905 (205,602)
Depreciation and amortization 307,188 278,033
Stock-based compensation 31,628 30,480
Contributions to employee
benefit plans (24,232) (40,258)
Net change in assets and
liabilities (139,908) (86,170)
Net cash provided by operating
activities of continuing
operations 952,816 979,612
------- -------
Investing activities:
Additions to property, plant and
equipment (166,033) (141,694)
Acquisitions (net of cash and
cash equivalents acquired) (802,254) (322,838)
Proceeds from the sale of
businesses 191,348 76,457
Other (5,618) 26,398
Net cash used in investing
activities of continuing
operations (782,557) (361,677)
-------- --------
Financing activities:
Cash received from Knowles
Corporation, net of cash
distributed 359,955 -
Net increase in debt and notes
payable 244,934 19,530
Dividends to stockholders (258,487) (247,820)
Purchase of common stock (601,077) (457,871)
Net proceeds from exercise of
share-based awards (814) 7,619
Net cash used in financing
activities of continuing
operations (255,489) (678,542)
-------- --------
Net cash provided by
discontinued operations 3,355 65,764
----- ------
Effect of exchange rate changes
on cash (40,426) (1,351)
------- ------
Net (decrease) increase in cash
and cash equivalents (122,301) 3,806
Cash and cash equivalents at
beginning of period 803,882 800,076
Cash and cash equivalents at end
of period $681,581 $803,882
======== ========
DOVER CORPORATION
ADDITIONAL QUARTERLY INFORMATION
(unaudited)(in thousands, except per share data*)
FREE CASH FLOW
--------------
2014 2013
---- ----
Q1 Q2 Q3 Q4 FY 2014 Q1 Q2 Q3 Q4 FY 2013
--- --- --- --- ------- --- --- --- --- -------
Cash flow from operating $28,361 $185,013 $292,012 $447,430 $952,816 $58,222 $241,881 $261,659 $417,850 $979,612
activities
Less: Additions to property, (32,695) (42,550) (33,532) (57,256) (166,033) (25,082) (30,561) (39,191) (46,860) (141,694)
plant and equipment
Free cash flow $(4,334) $142,463 $258,480 $390,174 $786,783 $33,140 $211,320 $222,468 $370,990 $837,918
======= ======== ======== ======== ======== ======= ======== ======== ======== ========
Free cash flow as a (2.5)% 67.7% 114.5% 227.1% 101.1% 20.7% 85.2% 102.5% 215.4% 105.1%
percentage of earnings from
continuing operations
Free cash flow as a (0.2)% 7.3% 12.9% 19.7% 10.1% 2.0% 11.5% 12.0% 20.8% 11.7%
percentage of revenue
RESULTS OF SARGENT AEROSPACE AND DATAMAX O'NEIL
The following tables present the impact the operating results of Sargent Aerospace ("Sargent") and Datamax O'Neil ("D-O") had on the consolidated results of Dover Corporation. Sargent and D-O have been included in the consolidated financial statements as discontinued operations for all periods presented. See "Discontinued Operations" in this Investor Supplement for a discussion of the results and components of discontinued operations.
2014 2013
---- ----
Q1 Q2 Q3 Q4 FY 2014 Q1 Q2 Q3 Q4 FY 2013
--- --- --- --- ------- --- --- --- --- -------
Revenue:
Revenue including Sargent $1,884,647 $2,047,738 $2,092,467 $2,056,063 $8,080,915 $1,763,977 $1,932,411 $1,940,211 $1,879,054 $7,515,653
and D-O
Revenue of Sargent and D-O 82,077 85,102 82,892 78,116 328,187 82,437 95,430 89,558 93,132 360,557
Continuing revenue as $1,802,570 $1,962,636 $2,009,575 $1,977,947 $7,752,728 $1,681,540 $1,836,981 $1,850,653 $1,785,922 $7,155,096
reported
Earnings:
Earnings including Sargent $176,324 $217,443 $232,825 $177,837 $804,429 $167,213 $258,058 $226,235 $182,566 $834,072
and D-O
Earnings attributable to 6,283 6,862 7,142 6,002 26,289 6,946 10,070 9,190 10,339 36,545
Sargent and D-O
Earnings from continuing $170,041 $210,581 $225,683 $171,835 $778,140 $160,267 $247,988 $217,045 $172,227 $797,527
operations as reported
Diluted earnings per common share:
Earnings including Sargent $1.02 $1.29 $1.38 $1.07 $4.76 $0.95 $1.49 $1.31 $1.06 $4.81
and D-O
Earnings attributable to 0.04 0.04 0.04 0.04 0.16 0.04 0.06 0.05 0.06 0.21
Sargent and D-O
Earnings from continuing $0.99 $1.25 $1.34 $1.03 $4.61 $0.91 $1.43 $1.26 $1.00 $4.60
operations as reported
* Per share data may not add due to rounding.
ADDITIONAL INFORMATION
FOURTH QUARTER AND FULL YEAR 2014
Acquisitions
During the fourth quarter of 2014, the Company completed one acquisition within the Energy segment. For the full year 2014, Dover made a total of seven acquisitions for consideration totaling $802.3 million.
Discontinued Operations
The Company did not dispose of any businesses in the fourth quarter of 2014; however, in the fourth quarter, the Company announced its intent to divest Datamax O'Neil and Sargent Aerospace, two non-core businesses within the Engineered Systems segment. The results of operations and cash flows of these businesses have been reclassified to discontinued operations and the assets and liabilities of these businesses have been segregated within assets and liabilities of discontinued operations for all periods presented herein. For the fourth quarter of 2014, the Company recognized a loss from discontinued operations of $2.5 million, or $0.02 EPS, which includes $6.0 million of earnings, or $0.04 EPS, of the aforementioned businesses.
On a full-year basis, the Company generated a net loss of $2.9 million, or $0.02 EPS. Included in this amount is a $6.9 million loss on sale of DEK International, which was sold in the third quarter of 2014 and a $3.2 million gain to adjust the gain on sale of Everett Charles Technologies, which was sold in the fourth quarter of 2013. Also included in the results of discontinued operations is $26.3 million of earnings, or $0.16 EPS, attributable to the operations of Datamax O'Neil and Sargent Aerospace. Earnings from discontinued operations also include the results of Knowles Corporation, prior to the distribution on February 28, 2014, as well as the related spin-off costs incurred by Dover during the period, which totaled a loss of approximately $21.8 million, or $0.13 EPS.
Restructuring and Other Costs
During the quarter, the Company took actions to adjust our costs and streamline our businesses, resulting in $37.4 million, or $0.16 EPS, of restructuring charges. These charges were incurred at each of our business segments, including $5.8 million in Energy, $3.7 million in Engineered Systems, $2.8 million in Fluids, and $24.9 million in Refrigeration & Food Equipment. The Company expects to record an additional $17 to $20 million in restructuring charges in the first quarter of 2015, with the majority of these charges in the Energy segment. The Company also recorded a $3.6 million, or $0.01 EPS, pension settlement charge in the fourth quarter of 2014.
Tax Rate
The effective tax rate on continuing operations was 25.6% and 28.5% for the fourth quarters of 2014 and 2013, respectively. On a full year basis, the effective tax rates on continuing operations for 2014 and 2013 were 28.9% and 23.8%, respectively. The 2014 and 2013 rates were favorably impacted by discrete and other items, as shown in the reconciliation for quarterly earnings per share included herein. After adjusting for discrete and other items, the fourth quarter effective tax rates were 27.3% and 29.5% for 2014 and 2013, respectively, and the full year rates were 29.9% and 31.0% for 2014 and 2013, respectively. The lower rates for the quarter and full year primarily reflect the tax benefits associated with restructuring charges and lower rates in foreign jurisdictions. The fourth quarter rate was also favorably impacted by the extension of the R&D credit.
Revenue Growth Factors
2014
----
Q1 Q2 Q3 Q4 Full
Year
--- --- --- --- -----
Organic 4% 4% 5% 6% 4%
Acquisitions 3% 3% 4% 7% 4%
Currency
translation - % - % - % (2)% - %
--- --- ---
7% 7% 9% 11% 8%
=== === === === ===
Free Cash Flow
The following table is a reconciliation of free cash flow (a non-GAAP measure) from cash flow provided by operating activities:
Three Months Ended Years Ended December 31,
December 31,
------------
2014 2013 2014 2013
---- ---- ---- ----
Free Cash Flow (dollars in thousands)
Cash flow provided by operating activities $447,430 $417,850 $952,816 $979,612
Less: Capital expenditures (57,256) (46,860) (166,033) (141,694)
Free cash flow $390,174 $370,990 $786,783 $837,918
======== ======== ======== ========
Free cash flow as a percentage of revenue 19.7% 20.8% 10.1% 11.7%
==== ==== ==== ====
Free cash flow as a percentage of earnings from continuing operations 101.1% 105.1%
===== =====
The full year decrease in 2014 free cash flow reflects a higher investment in working capital year over year, higher capital expenditures, and lower earnings from continuing operations.
Share Repurchases
During the year ended December 31, 2014, the Company purchased a total of approximately 7.5 million shares of its common stock in the open market at a total cost of $601.1 million, or $80.50 per share. The Company completed its November 2012 $1.0 billion stock repurchase program in 2014 through the repurchase of 3.6 million shares. The remaining 3.9 million of share repurchases in 2014 were made pursuant to the share repurchase program approved in May 2012. As of December 31, 2014, the approximate number of shares still available for repurchase under the May 2012 share repurchase authorization was 38,041.
Capitalization
The following table provides a summary reconciliation of total debt and net debt to net capitalization to the most directly comparable GAAP measures:
Net Debt to Net
Capitalization Ratio
(in thousands) December 31, 2014 December 31, 2013
--------------------- ----------------- -----------------
Current maturities of
long-term debt $299,956 $2,778
Commercial paper 478,000 226,500
Long-term debt 2,253,041 2,599,201
--------- ---------
Total debt 3,030,997 2,828,479
Less: Cash and cash
equivalents (681,581) (803,882)
-------- --------
Net debt 2,349,416 2,024,597
Add: Stockholders'
equity 3,700,725 5,377,396
Net capitalization $6,050,141 $7,401,993
========== ==========
Net debt to net
capitalization 38.8% 27.4%
==== ====
Non-GAAP Information:
These Investor Supplement tables contain non-GAAP measures such as revenue including Sargent Aerospace and Datamax O'Neil and earnings including Sargent Aerospace and Datamax O'Neil, which is used in calculating earnings per share attributable to Sargent Aerospace and Datamax O'Neil. These tables also contain non-GAAP measures of adjusted earnings from continuing operations used in calculating adjusted diluted earnings per common share. 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. The company has also disclosed herein a number of non-GAAP measures related to free cash flow and the ratio of net debt to net capitalization. Management believes these metrics are important measures of the company's operating performance and liquidity. Free cash flow information provides both management and investors a measurement of cash generated from operations that is available to fund acquisitions, pay dividends, repay debt and repurchase common stock, while the net debt to net capitalization ratio is helpful in evaluating the company's capital structure and the amount of leverage employed.
CONTACT:
Paul Goldberg
Vice President - Investor Relations
(212) 922-1640
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/dover-reports-fourth-quarter-and-full-year-2014-results-and-updates-2015-guidance-300026086.html
SOURCE Dover
