DOVER CORPORATION 
DOWNERS GROVE, Ill., April 20, 2017 /PRNewswire/ -- Dover (NYSE: DOV) announced today that for the first quarter ended March 31, 2017, revenue was $1.8 billion, an increase of 12% from the prior year. The increase in the quarter was driven by acquisition growth of 12% and organic growth of 4%, partially offset by a 3% impact from dispositions and an unfavorable impact from foreign exchange ("FX") of 1%. Net earnings were $172.2 million, an increase of 73% as compared to $99.4 million for the prior year period. Diluted net earnings per share ("EPS") for the first quarter ended March 31, 2017, were $1.09, compared to $0.64 EPS in the prior year period, representing an increase of 70%. EPS for the first quarter of 2017 included a gain on a disposition of $0.39. EPS for the prior year period included a gain on a disposition of $0.07. Excluding these items, adjusted EPS for the first quarter of 2017 was $0.70, an increase of 25% from an adjusted EPS of $0.56 in the prior year period. EPS for the first quarter ended March 31, 2017, and March 31, 2016, include restructuring costs of $0.03 EPS and $0.07 EPS, respectively.
Dover's President and Chief Executive Officer, Robert A. Livingston, said, "I am very pleased with our first quarter business activity and results. The revenue growth of 12% was broad-based and bookings grew 21%, resulting in a strong book-to-bill of 1.12. Of particular note, organic revenue and bookings grew 4% and 12%, respectively.
"Among the highlights in the quarter was an acceleration in the recovery of our U.S. drilling and production market. At the same time, business activity was also very solid in our printing & identification, retail fueling, and retail refrigeration markets, as well as the majority of our other industrial markets. Strong growth and solid execution, along with an improved tax rate, resulted in adjusted EPS of $0.70.
"As a result of the solid first quarter performance, higher expectations in Energy, and overall strong bookings activity, we are raising our full year revenue and EPS guidance. We now expect full year diluted earnings per share to be in the range of $4.05 to $4.20, versus our prior guidance of $3.40 to $3.60. Our revised guidance includes the gain from our recent disposition. Further, this revised guidance is based on full year revenue growth of 11% to 13% versus our prior forecast of 10% to 12%, and is comprised of organic growth of 4% to 6% and acquisition growth of approximately 10%, partially offset by a 2% impact from the dispositions and a 1% headwind from FX. Our revised revenue forecast is primarily driven by a one point increase in organic growth. The combined impact of acquisitions, dispositions, and FX is essentially unchanged from our prior forecast."
Dover will host a webcast of its first quarter 2017 conference call at 10:00 A.M. Eastern Time (9:00 A.M. Central Time) on Thursday, April 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 first 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: 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 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 - FIRST QUARTER 2017
----------------------------------------
DOVER CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)(in thousands, except per share data)
Three Months Ended March 31,
2017 2016
---- ----
Revenue $1,813,372 $1,622,273
Cost
of
goods
and
services 1,152,198 1,033,009
--------- ---------
Gross
profit 661,174 589,264
Selling,
general,
and
administrative
expenses 485,290 443,448
------- -------
Operating
earnings 175,884 145,816
Interest
expense 36,409 33,318
Interest
income (2,580) (1,604)
Gain
on
sale
of
businesses (90,093) (11,228)
Other
income,
net 176 (2,294)
--- ------
Earnings
before
provision
for
income
taxes 231,972 127,624
Provision
for
income
taxes 59,725 28,268
------ ------
Net
earnings $172,247 $99,356
======== =======
Net earnings per share:
Basic $1.11 $0.64
Diluted $1.09 $0.64
Weighted average shares
outstanding:
Basic 155,540 155,064
Diluted 157,399 156,161
Dividends
paid
per
common
share $0.44 $0.42
===== =====
DOVER CORPORATION
QUARTERLY SEGMENT INFORMATION
(unaudited)(in thousands)
2017 2016
---- ----
Q1 Q1 Q2 Q3 Q4 FY 2016
--- --- --- --- --- -------
REVENUE
-------
Energy $324,088 $283,230 $259,008 $273,248 $292,952 $1,108,438
-------- -------- -------- -------- -------- ----------
Engineered Systems
Printing & Identification 249,238 239,681 263,648 253,091 266,082 1,022,502
Industrials 358,397 337,314 328,784 317,471 360,212 1,343,781
------- ------- ------- ------- ------- ---------
607,635 576,995 592,432 570,562 626,294 2,366,283
------- ------- ------- ------- ------- ---------
Fluids 525,195 399,062 405,838 412,822 482,852 1,700,574
------- ------- ------- ------- ------- ---------
Refrigeration & Food Equipment 356,834 363,252 429,386 451,328 376,373 1,620,339
------- ------- ------- ------- ------- ---------
Intra-segment eliminations (380) (266) (319) (197) (510) (1,292)
---- ---- ---- ---- ---- ------
Total consolidated revenue $1,813,372 $1,622,273 $1,686,345 $1,707,763 $1,777,961 $6,794,342
========== ========== ========== ========== ========== ==========
NET EARNINGS
------------
Segment Earnings:
Energy $41,691 $11,244 $(75) $13,279 $30,888 $55,336
Engineered Systems 174,398 93,748 104,034 97,240 96,807 391,829
Fluids 52,639 46,047 54,033 66,178 34,663 200,921
Refrigeration & Food Equipment 33,562 38,161 63,230 64,111 118,126 283,628
------ ------ ------ ------ ------- -------
Total segments 302,290 189,200 221,222 240,808 280,484 931,714
Corporate expense / other 36,489 29,862 24,566 26,638 31,674 112,740
Interest expense 36,409 33,318 33,779 33,789 35,515 136,401
Interest income (2,580) (1,604) (1,622) (795) (2,738) (6,759)
------ ------ ------ ---- ------ ------
Earnings before provision for income taxes 231,972 127,624 164,499 181,176 216,033 689,332
Provision for income taxes 59,725 28,268 46,209 51,092 54,871 180,440
------ ------ ------ ------ ------ -------
Net earnings $172,247 $99,356 $118,290 $130,084 $161,162 $508,892
======== ======= ======== ======== ======== ========
SEGMENT MARGIN
--------------
Energy 12.9% 4.0% -% 4.9% 10.5% 5.0%
Engineered Systems 28.7% 16.2% 17.6% 17.0% 15.5% 16.6%
Fluids 10.0% 11.5% 13.3% 16.0% 7.2% 11.8%
Refrigeration & Food Equipment 9.4% 10.5% 14.7% 14.2% 31.4% 17.5%
Total segment operating margin 16.7% 11.7% 13.1% 14.1% 15.8% 13.7%
DEPRECIATION AND AMORTIZATION EXPENSE
-------------------------------------
Energy $31,365 $34,160 $33,289 $32,605 $31,366 $131,420
Engineered Systems 19,575 16,036 16,075 16,238 25,597 73,946
Fluids 28,503 20,511 20,981 20,833 22,899 85,224
Refrigeration & Food Equipment 15,035 16,728 16,881 16,146 15,263 65,018
Corporate 1,120 1,169 868 901 2,193 5,131
----- ----- --- --- ----- -----
Total depreciation and amortization expense $95,598 $88,604 $88,094 $86,723 $97,318 $360,739
======= ======= ======= ======= ======= ========
DOVER CORPORATION
QUARTERLY SEGMENT INFORMATION
(continued)
(unaudited)(in thousands)
2017 2016
Q1 Q1 Q2 Q3 Q4 FY 2016
--- --- --- --- --- -------
BOOKINGS
--------
Energy $348,317 $273,445 $246,021 $270,685 $299,771 $1,089,922
-------- -------- -------- -------- -------- ----------
Engineered Systems
Printing & Identification 256,665 242,569 266,490 248,443 268,951 1,026,453
Industrials 419,455 329,957 304,345 331,435 374,073 1,339,810
676,120 572,526 570,835 579,878 643,024 2,366,263
------- ------- ------- ------- ------- ---------
Fluids 565,987 418,345 413,767 413,535 457,283 1,702,930
------- ------- ------- ------- ------- ---------
Refrigeration & Food Equipment 438,576 411,367 468,661 429,134 336,645 1,645,807
------- ------- ------- ------- ------- ---------
Intra-segment eliminations (1,149) (90) (944) (245) (308) (1,587)
------ --- ---- ---- ---- ------
Total consolidated bookings $2,027,851 $1,675,593 $1,698,340 $1,692,987 $1,736,415 $6,803,335
========== ========== ========== ========== ========== ==========
BACKLOG
-------
Energy $156,255 $144,828 $129,873 $126,519 $134,181
-------- -------- -------- -------- --------
Engineered Systems
Printing & Identification 109,347 102,640 104,509 101,190 98,924
Industrials 310,008 235,384 210,646 224,892 252,780
------- ------- ------- ------- -------
419,355 338,024 315,155 326,082 351,704
------- ------- ------- ------- -------
Fluids 371,717 286,457 315,786 318,246 331,238
------- ------- ------- ------- -------
Refrigeration & Food Equipment 341,530 303,479 332,312 309,462 258,329
------- ------- ------- ------- -------
Intra-segment eliminations (729) (36) (265) (252) (102)
---- --- ---- ---- ----
Total consolidated backlog $1,288,128 $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 Q1 Q2 Q3 Q4 FY 2016
--- --- --- --- --- -------
Net earnings per share:
Basic $1.11 $0.64 $0.76 $0.84 $1.04 $3.28
Diluted $1.09 $0.64 $0.76 $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 $99,356 $118,290 $130,084 $161,162 $508,892
Weighted average shares outstanding:
Basic 155,540 155,064 155,180 155,300 155,376 155,231
Diluted 157,399 156,161 156,595 156,798 156,816 156,636
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 Q1 Q2 Q3 Q4 FY 2016
--- --- --- --- --- -------
Adjusted net earnings:
Net earnings $172,247 $99,356 $118,290 $130,084 $161,162 $508,892
Gain on dispositions, net of tax (61,720) (11,228) - - (56,975) (68,203)
Product recall charge, net of tax - - - - 14,237 14,237
--- --- --- --- ------ ------
Adjusted net earnings $110,527 $88,128 $118,290 $130,084 $118,424 $454,926
======== ======= ======== ======== ======== ========
Adjusted diluted earnings per common share:
Net earnings $1.09 $0.64 $0.76 $0.83 $1.03 $3.25
Gain on dispositions, net of tax (0.39) (0.07) - - (0.36) (0.44)
Product recall charge, net of tax - - - - 0.09 0.09
--- --- --- --- ---- ----
Adjusted net earnings $0.70 $0.56 $0.76 $0.83 $0.76 $2.90
===== ===== ===== ===== ===== =====
* Per share data may be impacted by rounding.
DOVER CORPORATION
ADDITIONAL INFORMATION
(unaudited)(in thousands)
Quarterly Cash Flow
-------------------
2017 2016
Q1 Q1 Q2 Q3 Q4 FY 2016
--- --- --- --- --- -------
Net Cash Flows Provided By (Used In):
Operating activities $78,071 $133,413 $207,868 $231,665 $289,029 $861,975
Investing activities 81,780 (425,857) (69,415) (66,110) (942,461) (1,503,843)
Financing activities (93,293) 178,507 (127,678) 98,491 484,288 633,608
Quarterly Free Cash Flow (Non-GAAP)
----------------------------------
2017 2016
Q1 Q1 Q2 Q3 Q4 FY 2016
--- --- --- --- --- -------
Cash flow from operating activities $78,071 $133,413 $207,868 $231,665 $289,029 $861,975
Less: Capital expenditures (42,259) (37,230) (35,422) (43,116) (49,437) (165,205)
------- ------- ------- ------- ------- --------
Free cash flow $35,812 $96,183 $172,446 $188,549 $239,592 $696,770
======= ======= ======== ======== ======== ========
Free cash flow as a percentage of revenue 2.0% 5.9% 10.2% 11.0% 13.5% 10.3%
Free cash flow as a percentage of net 20.8% 96.8% 145.8% 144.9% 148.7% 136.9%
earnings
Revenue Growth Factors
----------------------
Three Months Ended March 31, 2017
Energy Engineered Fluids Refrigeration
Systems & Food
Equipment Total
------ ---------- ------ -----
Organic 15% 2% (2)% 5% 4%
Acquisitions - % 9% 35% - % 12%
Dispositions - % (4)% - % (7)% (3)%%
Currency translation (1)% (1)% (1)% - % (1)%%
--- --- --- --- --- ----
Total * 14% 5% 32% (2)% 12%
* 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. Management believes that free cash flow is an important measure of operating performance because it provides management and investors a measurement of cash generated from operations that is available for mandatory payment obligations and investment opportunities, such as funding acquisitions, paying dividends, repaying debt and repurchasing our common stock. Management believes that reporting organic revenue growth, which excludes the impact of foreign currency exchange rates and the impact of acquisitions and dispositions, provides a useful comparison of our revenue performance and trends between periods.
Investor Contact: Media Contact:
Paul Goldberg Adrian Sakowicz
Vice President - Investor Relations Vice President - Communications
(212) 922-1640 (630) 743-5039
peg@dovercorp.com asakowicz@dovercorp.com
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SOURCE Dover Corporation
