DOVER CORPORATION DOWNERS GROVE, Ill., April 21, 2016 /PRNewswire/ -- Dover (NYSE: DOV) announced today that for the first quarter ended March 31, 2016, revenue was $1.6 billion, a decrease of 5% from the prior year. Organic revenue declined 7% and foreign exchange had an unfavorable impact of 1%. Acquisition revenue, net of dispositions, provided 3% growth in the quarter. Earnings from continuing operations were $99.4 million, a decrease of 15% as compared to $117.2 million for the prior year period. Diluted earnings per share from continuing operations ("EPS") for the first quarter ended March 31, 2016 were $0.64, compared to $0.72 EPS in the prior year period, representing a decrease of 11%. EPS from continuing operations for the first quarter of 2016 included discrete tax benefits of $0.05 and a gain on a disposition of $0.07. Excluding these items, adjusted EPS from continuing operations for the first quarter of 2016 was $0.52, a decrease of 28% over a comparative EPS of $0.72 in the prior year period. EPS for the first quarter ended March 31, 2016 and 2015 includes restructuring costs of $0.07 EPS and $0.10 EPS, respectively.
Robert A. Livingston, Dover's President and Chief Executive Officer, said, "Our first quarter results were well below our initial expectations, driven by significant further reductions in activity and capital spending within our US oil & gas related end-markets. These conditions primarily impacted our Energy results, and to a lesser extent our Fluids results. The markets served by Engineered Systems and Refrigeration & Food Equipment remained solid, resulting in organic growth of 3% in each segment.
"In response to these historically weak oil & gas markets, we have lowered our full year revenue growth expectations for our Energy and Fluids segments, resulting in reduced EPS guidance for the full year. We have also increased our restructuring activities, and expect full year restructuring costs to be approximately $40 million, an increase of $20 million over our prior forecast. Substantially all of these actions and costs will occur by the end of the second quarter.
"In all, we expect full year revenue to decline 2% to 5%, a three point reduction from our previous forecast. Within this forecast, organic revenue is anticipated to decline 5% to 8%, four points below our prior expectations. Acquisition revenue, net of dispositions, is unchanged and will provide approximately 4% growth, while FX has been reduced a point and is now expected to be a 1% headwind. In total, full year EPS is expected to be in the range of $3.51 to $3.66, as compared to the prior forecast of $3.85 to $4.05. This updated range includes approximately $0.18 of restructuring charges, and also includes $0.05 of discrete tax benefits and a $0.07 gain on a disposition."
Net earnings for the first quarter ended March 31, 2016, were $99.4 million, or $0.64 EPS, compared to net earnings of $209.5 million, or $1.28 EPS, for the same period of 2015, which included earnings from discontinued operations of $92.3 million, or $0.57 EPS.
Dover will host a webcast of its first quarter 2016 conference call at 10:00 A.M. Eastern Time (9:00 A.M. Central Time) on Thursday, April 21, 2016. 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 first 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 revenue of approximately $7 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 60 years, our team of 26,000 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, foreign exchange, changes in operations, acquisitions, industries in which Dover businesses operate, anticipated market conditions and our positioning, global economies, 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; changes in customer demand and capital spending; economic conditions generally and changes in economic conditions globally and in markets served by Dover businesses, including well activity and U.S. industrials activity; Dover's 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 interest rate and currency exchange rate fluctuations; 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; 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, tax policies, and export/import laws; protection and validity of patent and other intellectual property rights; the impact of legal matters and legal compliance risks; 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 - FIRST QUARTER 2016
----------------------------------------
DOVER CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)(in thousands, except per share data)
Three Months Ended March 31,
----------------------------
2016 2015
---- ----
Revenue $1,622,273 $1,715,501
Cost of goods and services 1,033,009 1,088,342
--------- ---------
Gross profit 589,264 627,159
Selling and administrative expenses 443,448 434,634
------- -------
Operating earnings 145,816 192,525
Interest expense, net 31,714 32,037
Other income, net (13,522) (4,187)
------- ------
Earnings before provision for income taxes and discontinued operations 127,624 164,675
Provision for income taxes 28,268 47,485
------ ------
Earnings from continuing operations 99,356 117,190
Earnings from discontinued operations, net - 92,320
Net earnings $99,356 $209,510
======= ========
Basic earnings per common share:
Earnings from continuing operations $0.64 $0.72
Earnings from discontinued operations, net - 0.57
Net earnings 0.64 1.30
Weighted average shares outstanding 155,064 161,650
======= =======
Diluted earnings per common share:
Earnings from continuing operations $0.64 $0.72
Earnings from discontinued operations, net - 0.57
Net earnings 0.64 1.28
Weighted average shares outstanding 156,161 163,323
======= =======
Dividends paid per common share $0.42 $0.40
===== =====
DOVER CORPORATION
QUARTERLY SEGMENT INFORMATION
(unaudited)(in thousands)
2016 2015
---- ----
Q1 Q1 Q2 Q3 Q4 FY 2015
--- --- --- --- --- -------
REVENUE
-------
Energy $283,230 $430,423 $366,044 $363,872 $323,341 $1,483,680
-------- -------- -------- -------- -------- ----------
Engineered Systems
Printing & Identification 239,681 230,181 229,934 227,992 255,563 943,670
Industrials 337,314 343,015 363,157 351,404 341,667 1,399,243
-------
576,995 573,196 593,091 579,396 597,230 2,342,913
------- ------- ------- ------- ------- ---------
Fluids 399,062 340,236 351,511 352,018 355,508 1,399,273
------- ------- ------- ------- ------- ---------
Refrigeration & Food Equipment 363,252 372,097 448,115 492,460 418,758 1,731,430
------- ------- ------- ------- ------- ---------
Intra-segment eliminations (266) (451) (133) (164) (237) (985)
---- ---- ---- ---- ---- ----
Total consolidated revenue $1,622,273 $1,715,501 $1,758,628 $1,787,582 $1,694,600 $6,956,311
========== ========== ========== ========== ========== ==========
NET EARNINGS
------------
Segment Earnings:
Energy $11,244 $52,305 $40,909 $48,726 $31,250 $173,190
Engineered Systems 93,748 88,149 96,702 102,866 89,244 376,961
Fluids 46,047 54,634 70,168 74,911 62,404 262,117
Refrigeration & Food Equipment 38,161 36,150 65,732 76,665 42,752 221,299
------ ------ ------ ------ ------ -------
Total Segments 189,200 231,238 273,511 303,168 225,650 1,033,567
Corporate expense / other 29,862 34,526 20,382 25,881 24,911 105,700
Net interest expense 31,714 32,037 31,988 31,983 31,249 127,257
------ ------ ------ ------ ------ -------
Earnings from continuing operations before 127,624 164,675 221,141 245,304 169,490 800,610
provision for income taxes
Provision for income taxes 28,268 47,485 65,507 58,821 32,916 204,729
------ ------ ------ ------ ------ -------
Earnings from continuing operations 99,356 117,190 155,634 186,483 136,574 595,881
Earnings (loss) from discontinued operations, net - 92,320 176,762 (385) 5,251 273,948
---
Net earnings $99,356 $209,510 $332,396 $186,098 $141,825 $869,829
======= ======== ======== ======== ======== ========
SEGMENT OPERATING MARGIN
------------------------
Energy 4.0% 12.2% 11.2% 13.4% 9.7% 11.7%
Engineered Systems 16.2% 15.4% 16.3% 17.8% 14.9% 16.1%
Fluids 11.5% 16.1% 20.0% 21.3% 17.6% 18.7%
Refrigeration & Food Equipment 10.5% 9.7% 14.7% 15.6% 10.2% 12.8%
Total Segment 11.7% 13.5% 15.6% 17.0% 13.3% 14.9%
DEPRECIATION AND AMORTIZATION EXPENSE
-------------------------------------
Energy $34,160 $34,427 $32,740 $31,858 $42,754 $141,779
Engineered Systems 16,036 14,526 14,392 14,503 16,493 59,914
Fluids 20,511 13,848 13,648 13,367 15,215 56,078
Refrigeration & Food Equipment 16,728 16,458 16,406 16,609 16,601 66,074
Corporate 1,169 923 841 837 643 3,244
$88,604 $80,182 $78,027 $77,174 $91,706 $327,089
======= ======= ======= ======= ======= ========
DOVER CORPORATION
QUARTERLY SEGMENT INFORMATION
(continued)
(unaudited)(in thousands)
2016 2015
---- ----
Q1 Q1 Q2 Q3 Q4 FY 2015
--- --- --- --- --- -------
BOOKINGS
--------
Energy $273,445 $416,628 $345,079 $351,557 $315,996 $1,429,260
-------- -------- -------- -------- -------- ----------
Engineered Systems
Printing & Identification 242,569 235,617 224,203 226,756 250,639 937,215
Industrials 329,957 337,070 336,173 338,744 357,451 1,369,438
572,526 572,687 560,376 565,500 608,090 2,306,653
------- ------- ------- ------- ------- ---------
Fluids 418,345 339,310 333,695 357,032 321,154 1,351,191
------- ------- ------- ------- ------- ---------
Refrigeration & Food Equipment 411,367 419,659 486,793 430,681 379,967 1,717,100
------- ------- ------- ------- ------- ---------
Intra-segment eliminations (90) (628) (417) (385) (486) (1,916)
--- ---- ---- ---- ---- ------
Total consolidated bookings $1,675,593 $1,747,656 $1,725,526 $1,704,385 $1,624,721 $6,802,288
========== ========== ========== ========== ========== ==========
BACKLOG
-------
Energy $144,828 $212,060 $194,819 $156,631 $155,586
-------- -------- -------- -------- --------
Engineered Systems
Printing & Identification 102,640 108,151 103,403 100,476 98,288
Industrials 235,384 276,598 248,592 236,298 250,725
338,024 384,749 351,995 336,774 349,013
------- ------- ------- ------- -------
Fluids 286,457 259,504 240,389 236,608 243,459
------- ------- ------- ------- -------
Refrigeration & Food Equipment 303,479 337,084 373,193 307,351 247,352
------- ------- ------- ------- -------
Intra-segment eliminations (36) (595) (354) (598) (808)
--- ---- ---- ---- ----
Total consolidated backlog $1,072,752 $1,192,802 $1,160,042 $1,036,766 $994,602
========== ========== ========== ========== ========
DOVER CORPORATION
QUARTERLY EARNINGS PER SHARE
(unaudited)(in thousands, except per share data*)
2016 2015
---- ----
Q1 Q1 Q2 Q3 Q4 FY 2015
--- --- --- --- --- -------
Basic earnings (loss)
per common share:
Continuing operations $0.64 $0.72 $0.98 $1.20 $0.88 $3.78
Discontinued operations - 0.57 1.11 - 0.03 1.74
Net earnings $0.64 $1.30 $2.10 $1.20 $0.92 $5.52
Diluted earnings (loss)
per common share:
Continuing operations $0.64 $0.72 $0.97 $1.19 $0.87 $3.74
Discontinued operations - 0.57 1.10 - 0.03 1.72
Net earnings $0.64 $1.28 $2.07 $1.19 $0.91 $5.46
Adjusted diluted earnings
per common share
(calculated below):
Continuing operations $0.52 $0.72 $0.97 $1.14 $0.81 $3.63
Net earnings (loss) and average shares used in calculated earnings (loss) per share amounts are as follows:
Net earnings (loss):
Continuing operations $99,356 $117,190 $155,634 $186,483 $136,574 $595,881
Discontinued operations - 92,320 176,762 (385) 5,251 273,948
Net earnings $99,356 $209,510 $332,396 $186,098 $141,825 $869,829
Average shares
outstanding:
Basic 155,064 161,650 158,640 155,300 154,986 157,619
Diluted 156,161 163,323 160,398 156,560 156,254 159,172
Note:
Earnings from continuing operations are adjusted by discrete tax items to derive adjusted earnings from continuing operations and adjusted diluted earnings per common share as follows:
2016 2015
---- ----
Q1 Q1 Q2 Q3 Q4 FY 2015
--- --- --- --- --- -------
Adjusted earnings from continuing
operations:
Earnings from continuing operations $99,356 $117,190 $155,634 $186,483 $136,574 $595,881
Gains from discrete and other tax items 7,348 - - 8,131 9,382 17,513
Gain on disposition of business 11,228 - - - - -
Adjusted earnings from continuing operations $80,780 $117,190 $155,634 $178,352 $127,192 $578,368
======= ======== ======== ======== ======== ========
Adjusted diluted earnings per common
share:
Earnings from continuing operations $0.64 $0.72 $0.97 $1.19 $0.87 $3.74
Gains from discrete and other tax items 0.05 - - 0.05 0.06 0.11
Gain on disposition of business 0.07 - - - - -
Adjusted earnings from continuing operations $0.52 $0.72 $0.97 $1.14 $0.81 $3.63
===== ===== ===== ===== ===== =====
* Per share data may not add due to rounding.
DOVER CORPORATION
ADDITIONAL INFORMATION
(unaudited)(in thousands)
Quarterly Free Cash Flow
------------------------
2016 2015
---- ----
Q1 Q1 Q2 Q3 Q4 FY 2015
--- --- --- --- --- -------
Cash flow from operating activities $133,413 $131,332 $218,911 $282,213 $316,603 $949,059
Less: Additions to property, plant and equipment (37,230) (27,956) (43,807) (39,516) (42,972) (154,251)
Free cash flow $96,183 $103,376 $175,104 $242,697 $273,631 $794,808
======= ======== ======== ======== ======== ========
Free cash flow as a percentage of earnings from continuing operations 96.8% 88.2% 112.5% 130.1% 200.4% 133.4%
Free cash flow as a percentage of revenue 5.9% 6.0% 10.0% 13.6% 16.1% 11.4%
Revenue Growth Factors
----------------------
Three Months Ended March 31, 2016
---------------------------------
Energy Engineered Fluids Refrigeration &
Systems Food Equipment Total
------ ----------- ------ -----
Organic (33)% 3% (3)% 3% (7)%
Acquisitions - % 3% 22% - % 6%
Dispositions - % (3)% - % (5)% (3)%
Currency
translation (1)% (2)% (2)% (1)% (1)%
--- --- --- --- ---
(34)% 1% 17% (3)% (5)%
Non-GAAP Disclosures
This release and investor supplement contain non-GAAP measures of adjusted earnings from continuing operations used in calculating adjusted diluted earnings per common share, as 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 organic revenue growth. Management believes these metrics are important measures of the company's 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. We believe that reporting organic revenue and organic revenue growth, which exclude the impact of foreign currency exchange rates and the impact of acquisitions and divestitures, provides a useful comparison of our revenue performance and trends between periods.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/dover-reports-first-quarter-2016-results-and-updates-full-year-guidance-300255216.html
SOURCE Dover Corporation
