DOVER CORPORATION 
DOWNERS GROVE, Ill., July 17, 2014 /PRNewswire/ -- Dover (NYSE: DOV) announced today that for the second quarter ended June 30, 2014, revenue was $2.0 billion, an increase of 6% over the prior year. The revenue increase was driven by organic growth of 3% and an increase of 3% from acquisitions. Earnings from continuing operations were $217.4 million, or $1.29 diluted earnings per share ("EPS"), compared to $258.1 million, or $1.49 EPS, in the prior year period, representing decreases of 16% and 13%, respectively. Excluding discrete tax benefits of $0.36 recognized in the prior year, EPS from continuing operations for the second quarter of 2014 increased 14% over an adjusted EPS of $1.13 in the prior year period.
Revenue for the six months ended June 30, 2014 was $3.9 billion, an increase of 6% over the prior year, reflecting organic growth of 3% and a 3% increase from acquisitions. Earnings from continuing operations for the six months ended June 30, 2014 were $393.8 million, or $2.31 EPS, compared to $425.3 million, or $2.44 EPS in the prior year period, representing decreases of 7% and 5%, respectively. EPS from continuing operations during this period includes discrete tax benefits of $0.01 EPS compared to $0.38 EPS in the prior year. Excluding these items, adjusted EPS from continuing operations for the six months ended June 30, 2014 was $2.30, an increase of 12% over an adjusted EPS of $2.06 in the prior year.
Commenting on the second quarter results, Dover's President and Chief Executive Officer, Robert A. Livingston, said, "Our second quarter results reflect the positive momentum we continue to experience across the majority of our businesses. Second quarter results were driven by solid revenue and earnings growth in our Fluids, Engineered Systems and Energy segments. We also generated strong broad-based order activity across all segments, resulting in total bookings growth of 11%. Overall, we are pleased with our performance in the first half of 2014, and our growing bookings and backlog reflect more positive market conditions. Combined, these factors give us confidence to raise our full year outlook."
"We made significant progress on a number of initiatives during the quarter. In particular, we completed the move to our consolidated manufacturing centers in Houston and Atlanta which will provide increased productivity and enhanced customer service capabilities for our Energy and Refrigeration & Food Equipment segments. Our companies continued to execute on core competencies including actively developing and delivering products and solutions that enable our customers to compete more effectively and profitably. Also, our acquisition pipeline developed quite nicely in the quarter, including several opportunities that are highly complementary to our existing businesses. We expect to close on some of these acquisitions in the coming quarters."
"Looking at the full year, we now expect organic growth to be about 4%, near the high end of our previously communicated range of 3% to 4%, principally driven by a more favorable mix. Completed acquisitions will provide 3% growth, resulting in total revenue growth at the high end of our 6% to 7% range. Our full year segment margin forecast of around 18% remains unchanged. As a result of these factors, we now expect our full year EPS to be in the range of $4.75 to $4.85."
Net earnings for the second quarter of 2014 were $214.0 million, or $1.27 EPS, which included a net loss from discontinued operations of $3.5 million, or $0.02 EPS compared to net earnings of $330.0 million, or $1.91 EPS, for the same period of 2013, which included earnings from discontinued operations of $72.0 million, or $0.42 EPS.
Net earnings for the six months ended June 30, 2014 were $374.1 million, or $2.19 EPS, compared to net earnings of $540.1 million, or $3.10 EPS, for the same period of 2013. 2014 results reflected a net loss from discontinued operations of $19.7 million, or $0.12 EPS, which included $26.7 million in spin off costs. 2013 results reflected earnings from discontinued operations of $114.8 million or $0.66 EPS, which included spin off costs of $3.3 million.
Dover will host a webcast of its second quarter 2014 conference call at 10:00 A.M. Eastern Time (9:00 A.M. Central Time) on Thursday, July 17, 2014. 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 second 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 28,000 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 and operating improvements. Forward-looking statements may be indicated by words or phrases such as "anticipates," "expects," "believes," "indicates," "suggests," "will," "plans," "supports," "projects," "should," "would," "could," "forecast" and "management is of the opinion," 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, the ability of Dover's businesses to expand into new geographic markets, particularly outside of North America and Europe; Dover's ability to identify and successfully consummate value-adding acquisition opportunities; Dover's ability to achieve expected savings from integration and synergies from existing businesses and future acquisitions, 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; economic conditions generally and changes in economic conditions globally and in markets served by Dover businesses, including well activity, US industrials activity and the status of economic recovery in Europe; the impact of natural disasters and their effect on global supply chains and energy markets; instability in countries where Dover conducts business; increased competition and pricing pressures in the markets served by Dover's businesses; the impact of loss of a single-source manufacturing facility on our businesses that use the 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 (including domestic and international export subsidy programs, R&E credits and other similar programs); protection and validity of patent and other intellectual property rights; the impact of regulation and regulatory and 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; possible future terrorist threats and their effect on the worldwide economy; 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 in this press release. Dover undertakes no obligation to update any forward-looking statement, except as required by law.
INVESTOR SUPPLEMENT - SECOND QUARTER 2014
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DOVER CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)(in thousands, except per share data)
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- -------------------------
2014 2013 2014 2013
---- ---- ---- ----
Revenue $2,047,738 $1,932,411 $3,932,385 $3,696,388
Cost of goods and services 1,251,321 1,176,593 2,399,759 2,258,952
--------- --------- --------- ---------
Gross profit 796,417 755,818 1,532,626 1,437,436
Selling and administrative expenses 456,115 435,620 908,397 852,057
------- ------- ------- -------
Operating earnings 340,302 320,198 624,229 585,379
Interest expense, net 31,967 30,232 64,632 60,516
Other (income) expense, net (6,042) 1,647 (5,686) (1,242)
------ ----- ------ ------
Earnings before provision for income taxes and discontinued operations 314,377 288,319 565,283 526,105
Provision for income taxes 96,934 30,261 171,516 100,834
------ ------ ------- -------
Earnings from continuing operations 217,443 258,058 393,767 425,271
(Loss) earnings from discontinued operations, net (3,484) 71,991 (19,670) 114,781
Net earnings $213,959 $330,049 $374,097 $540,052
======== ======== ======== ========
Basic earnings per common share:
Earnings from continuing operations $1.31 $1.51 $2.34 $2.47
Earnings (loss) from discontinued operations, net (0.02) 0.42 (0.12) 0.67
Net earnings 1.29 1.93 2.23 3.13
Weighted average shares outstanding 166,474 171,111 168,103 172,273
======= ======= ======= =======
Diluted earnings per common share:
Earnings from continuing operations $1.29 $1.49 $2.31 $2.44
Earnings (loss) from discontinued operations, net (0.02) 0.42 (0.12) 0.66
Net earnings 1.27 1.91 2.19 3.10
Weighted average shares outstanding 168,857 173,097 170,450 174,325
======= ======= ======= =======
Dividends paid per common share $0.375 $0.35 $0.75 $0.70
====== ===== ===== =====
DOVER CORPORATION
QUARTERLY SEGMENT INFORMATION
(unaudited)(in thousands)
2014 2013
---- ----
Q1 Q2 Q2 YTD Q1 Q2 Q2 YTD Q3 Q4 FY 2013
--- --- ------ --- --- ------ --- --- -------
REVENUE
Energy $478,773 $481,016 $959,789 $462,679 $465,906 $928,585 $467,688 $457,580 $1,853,853
-------- -------- -------- -------- -------- -------- -------- -------- ----------
Engineered Systems
Printing & Identification 263,533 287,300 550,833 237,869 250,616 488,485 256,565 276,672 1,021,722
Industrials 386,245 411,673 797,918 367,456 388,810 756,266 385,640 374,934 1,516,840
649,778 698,957 1,348,735 605,325 639,426 1,244,751 642,205 651,606 2,538,562
------- ------- --------- ------- ------- --------- ------- ------- ---------
Fluids 345,009 346,275 691,284 273,638 310,137 583,775 309,241 343,822 1,236,838
------- ------- ------- ------- ------- ------- ------- ------- ---------
Refrigeration & Food Equipment 411,493 522,357 933,850 422,468 517,574 940,042 521,322 426,476 1,887,840
------- ------- ------- ------- ------- ------- ------- ------- ---------
Intra-segment eliminations (406) (867) (1,273) (133) (632) (765) (245) (430) (1,440)
---- ---- ------ ---- ---- ---- ---- ---- ------
Total consolidated revenue $1,884,647 $2,047,738 $3,932,385 $1,763,977 $1,932,411 $3,696,388 $1,940,211 $1,879,054 $7,515,653
========== ========== ========== ========== ========== ========== ========== ========== ==========
NET EARNINGS
Segment Earnings:
Energy $118,968 $114,991 $233,959 $118,708 $109,662 $228,370 $119,086 $112,193 $459,649
Engineered Systems 92,320 112,422 204,742 83,283 102,804 186,087 111,850 101,511 399,448
Fluids 57,942 63,112 121,054 47,601 58,768 106,369 63,056 55,098 224,523
Refrigeration & Food Equipment 44,862 84,926 129,788 52,110 82,177 134,287 86,446 46,574 267,307
------ ------ ------- ------ ------ ------- ------ ------ -------
Total Segments 314,092 375,451 689,543 301,702 353,411 655,113 380,438 315,376 1,350,927
Corporate expense / other 30,521 29,107 59,628 33,632 34,860 68,492 32,532 28,752 129,776
Net interest expense 32,665 31,967 64,632 30,284 30,232 60,516 30,236 29,920 120,672
------ ------ ------ ------ ------ ------ ------ ------ -------
Earnings from continuing operations before provision for
income taxes 250,906 314,377 565,283 237,786 288,319 526,105 317,670 256,704 1,100,479
Provision for income taxes 74,582 96,934 171,516 70,573 30,261 100,834 91,435 74,138 266,407
------ ------ ------- ------ ------ ------- ------ ------ -------
Earnings from continuing operations 176,324 217,443 393,767 167,213 258,058 425,271 226,235 182,566 834,072
(Loss) earnings from discontinued operations, net (16,186) (3,484) (19,670) 42,790 71,991 114,781 42,879 11,397 169,057
------- ------
Net earnings $160,138 $213,959 $374,097 $210,003 $330,049 $540,052 $269,114 $193,963 $1,003,129
======== ======== ======== ======== ======== ======== ======== ======== ==========
SEGMENT OPERATING MARGIN
Energy 24.8% 23.9% 24.4% 25.7% 23.5% 24.6% 25.5% 24.5% 24.8%
Engineered Systems 14.2% 16.1% 15.2% 13.8% 16.1% 14.9% 17.4% 15.6% 15.7%
Fluids 16.8% 18.2% 17.5% 17.4% 18.9% 18.2% 20.4% 16.0% 18.2%
Refrigeration & Food Equipment 10.9% 16.3% 13.9% 12.3% 15.9% 14.3% 16.6% 10.9% 14.2%
Total Segment 16.7% 18.3% 17.5% 17.1% 18.3% 17.7% 19.6% 16.8% 18.0%
DEPRECIATION AND AMORTIZATION EXPENSE
Energy $25,575 $25,807 $51,382 $24,448 $24,714 $49,162 $24,707 $25,206 $99,075
Engineered Systems 18,977 19,028 38,005 17,450 17,885 35,335 18,110 18,137 71,582
Fluids 16,366 15,308 31,674 11,361 11,570 22,931 11,790 14,091 48,812
Refrigeration & Food Equipment 17,212 17,451 34,663 16,585 16,611 33,196 16,962 17,070 67,228
Corporate 869 999 1,868 858 1,029 1,887 1,030 944 3,861
$78,999 $78,593 $157,592 $70,702 $71,809 $142,511 $72,599 $75,448 $290,558
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DOVER CORPORATION
QUARTERLY SEGMENT INFORMATION
(continued)
(unaudited)(in thousands)
2014 2013
---- ----
Q1 Q2 Q2 YTD Q1 Q2 Q2 YTD Q3 Q4 FY 2013
--- --- ------ --- --- ------ --- --- -------
BOOKINGS
--------
Energy $478,469 $477,162 $955,631 $515,388 $416,892 $932,280 $481,021 $440,261 $1,853,562
-------- -------- -------- -------- -------- -------- -------- -------- ----------
Engineered Systems
Printing & Identification 282,867 282,326 565,193 237,291 259,380 496,671 256,210 270,392 1,023,273
Industrials 427,557 409,815 837,372 405,555 396,886 802,441 344,764 371,797 1,519,002
Eliminations (17) (17) (34) (82) (129) (211) (5) 279 63
--- --- --- --- ---- ---- --- --- ---
710,407 692,124 1,402,531 642,764 656,137 1,298,901 600,969 642,468 2,542,338
------- ------- --------- ------- ------- --------- ------- ------- ---------
Fluids 362,943 375,009 737,952 303,609 298,817 602,426 307,729 351,767 1,261,922
------- ------- ------- ------- ------- ------- ------- ------- ---------
Refrigeration & Food Equipment 493,731 542,810 1,036,541 482,742 515,320 998,062 433,426 450,850 1,882,338
------- ------- --------- ------- ------- ------- ------- ------- ---------
Intra-segment eliminations (506) (1,090) (1,596) (560) (708) (1,268) (416) 734 (950)
---- ------ ------ ---- ---- ------ ---- --- ----
Total consolidated bookings $2,045,044 $2,086,015 $4,131,059 $1,943,943 $1,886,458 $3,830,401 $1,822,729 $1,886,080 $7,539,210
========== ========== ========== ========== ========== ========== ========== ========== ==========
BACKLOG
-------
Energy $210,846 $206,415 $274,733 $218,764 $233,820 $206,790
-------- -------- -------- -------- -------- --------
Engineered Systems
Printing & Identification 136,309 135,872 95,353 103,864 105,699 100,032
Industrials 414,979 413,119 415,478 421,834 379,457 374,008
551,288 548,991 510,831 525,697 485,155 474,040
------- ------- ------- ------- ------- -------
Fluids 328,617 348,508 222,255 228,212 228,880 310,330
------- ------- ------- ------- ------- -------
Refrigeration & Food Equipment 431,298 450,065 417,246 412,366 324,042 347,004
------- ------- ------- ------- ------- -------
Intra-segment eliminations (374) (212) (385) (526) (387) (592)
---- ---- ---- ---- ---- ----
Total consolidated backlog $1,521,675 $1,553,767 $1,424,680 $1,384,513 $1,271,510 $1,337,572
========== ========== ========== ========== ========== ==========
DOVER CORPORATION
QUARTERLY EARNINGS PER SHARE
(unaudited)(in thousands, except per share data*)
2014 2013
---- ----
Q1 Q2 Q2 YTD Q1 Q2 Q2 YTD Q3 Q4 FY 2013
--- --- ------ --- --- ------ --- --- -------
Basic earnings (loss) per common share:
Continuing operations $1.04 $1.31 $2.34 $0.96 $1.51 $2.47 $1.33 $1.07 $4.87
Discontinued operations (0.10) (0.02) (0.12) 0.25 0.42 0.67 0.25 0.07 0.99
Net earnings 0.94 1.29 2.23 1.21 1.93 3.13 1.58 1.14 5.86
Diluted earnings (loss) per common share:
Continuing operations $1.02 $1.29 $2.31 $0.95 $1.49 $2.44 $1.31 $1.06 $4.81
Discontinued operations (0.09) (0.02) (0.12) 0.24 0.42 0.66 0.25 0.07 0.97
Net earnings 0.93 1.27 2.19 1.20 1.91 3.10 1.56 1.13 5.78
Adjusted diluted earnings per common share (calculated below):
Continuing operations $1.01 $1.29 $2.30 $0.93 $1.13 $2.06 $1.25 $1.02 $4.33
Net earnings (loss) and average shares used in calculated earnings (loss) per share amounts are as follows:
Net earnings (loss):
Continuing operations $176,324 $217,443 $393,767 $167,213 $258,058 $425,271 $226,235 $182,566 $834,072
Discontinued operations (16,186) (3,484) (19,670) 42,790 71,991 114,781 42,879 11,397 169,057
Net earnings 160,138 213,959 374,097 210,003 330,049 540,052 269,114 193,963 1,003,129
Average shares outstanding:
Basic 169,750 166,474 168,103 173,448 171,111 172,273 170,544 170,027 171,271
Diluted 172,013 168,857 170,450 175,567 173,097 174,325 172,734 172,265 173,547
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 Q2 YTD Q1 Q2 Q2 YTD Q3 Q4 FY 2013
--- --- ------ --- --- ------ --- --- -------
Adjusted earnings from continuing operations:
Earnings from continuing operations $176,324 $217,443 $393,767 $167,213 $258,058 $425,271 $226,235 $182,566 $834,072
Gains (losses) from discrete and other
tax items 2,541 (636) 1,905 4,343 61,477 65,820 7,751 6,084 79,655
Other one-time gains, net of tax - - - - - 2,866 - 2,866
--- --- --- --- --- ----- --- -----
Adjusted earnings from continuing
operations $173,783 $218,079 $391,862 $162,870 $196,581 $359,451 $215,618 $176,482 $751,551
======== ======== ======== ======== ======== ======== ======== ======== ========
Adjusted diluted earnings per common share:
Earnings from continuing operations $1.02 $1.29 $2.31 $0.95 $1.49 $2.44 $1.31 $1.06 $4.81
Gains from discrete and other tax items 0.01 - 0.01 0.02 0.36 0.38 0.04 0.04 0.46
Other one-time gains, net of tax - - - - - 0.02 - 0.02
--- --- --- --- --- ---- --- ----
Adjusted earnings from continuing
operations $1.01 $1.29 $2.30 $0.93 $1.13 $2.06 $1.25 $1.02 $4.33
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* Per share data may not add due to rounding.
DOVER CORPORATION
QUARTERLY FREE CASH FLOW
(unaudited)(in thousands)
2014 2013
---- ----
Q1 Q2 Q2 YTD Q1 Q2 Q2 YTD Q3 Q4 FY 2013
--- --- ------ --- --- ------ --- --- -------
Cash flow from operating activities $39,778 $197,696 $237,474 $57,713 $249,388 $307,101 $281,336 $424,713 $1,013,150
Less: Additions to property, plant and equipment (33,402) (43,924) (77,326) (26,326) (32,017) (58,343) (39,644) (47,579) (145,566)
------- ------- ------- ------- ------- ------- --------
Free cash flow $6,376 $153,772 $160,148 $31,387 $217,371 $248,758 $241,692 $377,134 $867,584
====== ======== ======== ======= ======== ======== ======== ======== ========
Free cash flow as a percentage of 3.6% 70.7% 40.7% 18.8% 84.2% 58.5% 106.8% 206.6% 104.0%
earnings from continuing operations
Free cash flow as a percentage of revenue 0.3% 7.5% 4.1% 1.8% 11.2% 6.7% 12.5% 20.1% 11.5%
SOURCE Dover Corporation
