Dover Reports Third Quarter 2020 Results; Raises Full Year EPS Guidance
10/20/2020 - 06:30 AM
DOWNERS GROVE, Ill. , Oct. 20, 2020 /PRNewswire/ -- Dover (NYSE: DOV), a diversified global manufacturer, announced its financial results for the third quarter ended September 30, 2020.
Three Months Ended
Nine Months Ended
($ in millions, except per share data)
2020
2019
%
2020
2019
%
U.S. GAAP
Revenue
$
1,748
$
1,825
(4)
%
$
4,903
$
5,361
(9)
%
Net earnings 1
200
206
(3)
%
501
510
(2)
%
Diluted EPS
1.38
1.40
(1)
%
3.45
3.47
(1)
%
Non-GAAP
Organic revenue change
(5)
%
(8)
%
Adjusted net earnings 2
232
235
(1)
%
599
646
(7)
%
Adjusted diluted EPS
1.60
1.60
—
%
4.12
4.40
(6)
%
1 Q3 2020 and 2019 net earnings include rightsizing and other costs of $4.5 million and $3.0 million , respectively. Q3 2020 also includes an additional $0.4 million expense related to the sale of Chino completed earlier in the year. Year-to-date 2020 and 2019 net earnings include rightsizing and other costs of $24.1 million and $11.2 million , respectively. Year-to-date 2020 also includes a $3.9 million non-cash gain on the sale of Chino, and year-to-date 2019 includes a $46.9 million non-cash loss on assets held for sale related to Finder.
2 Q3 2020 and 2019 adjusted net earnings exclude after tax acquisition-related amortization costs of $26.5 million and $25.6 million , respectively, and rightsizing and other costs of $4.5 million and $3.0 million , respectively. Q3 2020 also excludes an additional $0.4 million expense related to the sale of Chino completed earlier in the year. Year-to-date 2020 and 2019 adjusted net earnings exclude acquisition-related amortization costs of $77.8 million and $78.5 million , respectively, and rightsizing and other costs of $24.1 million and $11.2 million , respectively. Year-to-date 2020 also excludes a $3.9 million non-cash gain on the sale of Chino, and year-to-date 2019 excludes a $46.9 million non-cash loss on assets held for sale related to Finder.
For the quarter ended September 30, 2020, Dover generated revenue of $1.7 billion 4% (-5% organic) compared to the third quarter of the prior year. GAAP net earnings of $200 million 3% , and GAAP diluted EPS of $1.38 was down 1% . On an adjusted basis, net earnings of $232 million 1% , and adjusted diluted EPS of $1.60 was flat versus the comparable quarter of the prior year.
For the nine months ended September 30, 2020, Dover generated revenue of $4.9 billion 9% (-8% organic) compared to the first nine months of the prior year. GAAP net earnings of $501 million 2% , and GAAP diluted EPS of $3.45 declined 1% year-over-year. On an adjusted basis, net earnings of $599 million 7% , and adjusted diluted EPS of $4.12 was down 6% versus the comparable period of the prior year.
A full reconciliation between GAAP and adjusted measures and definitions of non-GAAP and other performance measures are included as an exhibit herein.
MANAGEMENT COMMENTARY:
Dover's President and Chief Executive Officer, Richard J. Tobin , said, "Our third quarter results reflect the continued recovery in most of the markets we serve, as well as strong execution by our teams around the world. Operationally, we executed well in the quarter, which allowed us to respond effectively to the improved demand environment, deliver on the backlogs in our long-cycle businesses and positively impact the results for the quarter.
"The trajectory of new orders continued to improve through the third quarter resulting in approximately flat bookings compared to the same quarter last year. We saw activity improve with positive comparable year-over-year organic bookings across multiple markets, most notably marking & coding, automotive aftermarket, food retail, heat exchangers, biopharma, can making, plastics & processing and aerospace & defense. Digital textile printing, compression components and aftermarket, commercial foodservice and waste hauling remained impacted by pandemic-induced disruptions in their respective end-markets.
"This year has undoubtedly been challenging, but it also has provided Dover an opportunity to demonstrate the strength of our diverse portfolio with balanced end market and geographic exposure. Our teams have adapted well to the challenging environment by focusing on what we can control as we serve our customers, maintain safe operating environments and reduce costs. We also continue to make significant strides on our process improvement and product simplification efforts, yielding robust margin performance despite demand softness.
"Looking forward, we recognize the uncertain macroeconomic environment but are cautiously optimistic about the balance of the year and the set-up for 2021. Our year-to-date performance positions us to absorb possible temporary disruptions, should those materialize in the fourth quarter. We are operating with a healthy order backlog and have levers in our possession for continued solid conversion margin performance. As a result of our operating results in Q3, we are raising our full year guidance for 2020."
FULL YEAR 2020 GUIDANCE UPDATE:
Full year 2020 GAAP EPS guidance was raised to $4.52 to $4.57 ($5.40 to $5.45 on an adjusted basis).
CONFERENCE CALL INFORMATION:
Dover will host a webcast and conference call to discuss its third quarter and year-to-date 2020 results as well as updated 2020 guidance at 9:00 A.M. Eastern Time (8:00 A.M. Central Time ) on Tuesday, October 20, 2020. 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 third quarter results and its operating segments can be found on the Company's website.
ABOUT DOVER:
Dover is a diversified global manufacturer and solutions provider with annual revenue of approximately $7 billion 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. All statements in this document other than statements of historical fact are statements that are, or could be deemed, "forward-looking" statements. Forward-looking statements are subject to numerous important risks, uncertainties, assumptions and other factors, some of which are beyond the Company's control. Factors that could cause actual results to differ materially from current expectations include, among other things, the impacts of COVID-19, or other future pandemics, on the global economy and on our customers, suppliers, employees, business and cash flows, other general economic conditions and conditions in the particular markets in which we operate, changes in customer demand and capital spending, competitive factors and pricing pressures, our ability to develop and launch new products in a cost-effective manner, our ability to realize synergies from newly acquired businesses, and our ability to derive expected benefits from restructuring, productivity initiatives and other cost reduction actions. For details on the risks and uncertainties that could cause our results to differ materially from the forward-looking statements contained herein, we refer you to the documents we file with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2019, and our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. These documents are available from the Securities and Exchange Commission, and on our website, dovercorporation.com. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.
INVESTOR SUPPLEMENT - THIRD QUARTER 2020
DOVER CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)(in thousands, except per share data)
Three Months Ended
Nine Months Ended
2020
2019
2020
2019
Revenue
$
1,748,256
$
1,825,345
$
4,903,370
$
5,360,808
Cost of goods and services
1,089,527
1,151,857
3,080,800
3,391,185
Gross profit
658,729
673,488
1,822,570
1,969,623
Selling, general, and administrative expenses
381,831
390,775
1,135,512
1,195,875
Loss on assets held for sale
—
—
—
46,946
Operating earnings
276,898
282,713
687,058
726,802
Interest expense
27,724
31,410
83,703
94,972
Interest income
(960)
(1,263)
(2,871)
(3,098)
Loss (gain) on sale of a business
557
—
(5,213)
—
Other income, net
(1,420)
(5,364)
(9,887)
(11,059)
Earnings before provision for income taxes
250,997
257,930
621,326
645,987
Provision for income taxes
50,697
51,924
119,981
136,191
Net earnings
$
200,300
$
206,006
$
501,345
$
509,796
Net earnings per share:
Basic
$
1.39
$
1.42
$
3.48
$
3.51
Diluted
$
1.38
$
1.40
$
3.45
$
3.47
Weighted average shares outstanding:
Basic
144,032
145,372
144,082
145,276
Diluted
145,289
147,051
145,313
147,053
Dividends paid per common share
$
0.50
$
0.49
$
1.48
$
1.45
* Per share data may be impacted by rounding.
DOVER CORPORATION
QUARTERLY SEGMENT INFORMATION
(unaudited)(in thousands)
2020
2019
Q1
Q2
Q3
Q3 YTD
Q1
Q2
Q3
Q3 YTD
Q4
FY 2019
REVENUE
Engineered Products
$
408,160
$
342,380
$
386,562
$
1,137,102
$
418,851
$
429,928
$
426,689
$
1,275,468
$
422,089
$
1,697,557
Fueling Solutions
359,982
326,495
380,511
1,066,988
373,050
390,586
411,769
1,175,405
444,772
1,620,177
Imaging &
256,765
227,977
265,690
750,432
268,354
266,588
275,109
810,051
274,420
1,084,471
Pumps & Process
319,536
309,095
347,875
976,506
330,219
338,924
341,337
1,010,480
328,048
1,338,528
Refrigeration & Food
311,913
293,527
368,395
973,835
334,643
385,474
370,335
1,090,452
306,165
1,396,617
Intra-segment
(417)
(299)
(777)
(1,493)
(360)
(794)
106
(1,048)
95
(953)
Total consolidated
$
1,655,939
$
1,499,175
$1,748,256
$4,903,370
$
1,724,757
$
1,810,706
$
1,825,345
$
5,360,808
$
1,775,589
$
7,136,397
NET EARNINGS
Segment Earnings:
Engineered Products
$
69,094
$
47,702
$
64,890
$
181,686
$
67,119
$
77,129
$
74,367
$
218,615
$
73,233
$
291,848
Fueling Solutions
53,498
47,214
66,601
167,313
37,230
52,637
68,069
157,936
73,937
231,873
Imaging &
51,482
38,046
51,928
141,456
55,955
54,641
61,655
172,251
57,233
229,484
Pumps & Process 1
66,079
67,702
89,786
223,567
14,991
76,278
77,433
168,702
71,379
240,081
Refrigeration & Food 2
23,529
11,459
40,159
75,147
24,807
44,375
35,211
104,393
14,439
118,832
Total segment
263,682
212,123
313,364
789,169
200,102
305,060
316,735
821,897
290,221
1,112,118
Corporate expense / 3
24,097
27,311
35,603
87,011
30,866
24,512
28,658
84,036
63,781
147,817
Interest expense
27,268
28,711
27,724
83,703
31,808
31,754
31,410
94,972
30,846
125,818
Interest income
(1,183)
(728)
(960)
(2,871)
(890)
(945)
(1,263)
(3,098)
(1,428)
(4,526)
Earnings before
213,500
156,829
250,997
621,326
138,318
249,739
257,930
645,987
197,022
843,009
Provision for income
37,221
32,063
50,697
119,981
32,613
51,654
51,924
136,191
28,900
165,091
Net earnings
$
176,279
$
124,766
$
200,300
$
501,345
$
105,705
$
198,085
$
206,006
$
509,796
$
168,122
$
677,918
SEGMENT MARGIN
Engineered Products
16.9 %
13.9 %
16.8 %
16.0 %
16.0 %
17.9 %
17.4 %
17.1 %
17.4 %
17.2 %
Fueling Solutions
14.9 %
14.5 %
17.5 %
15.7 %
10.0 %
13.5 %
16.5 %
13.4 %
16.6 %
14.3 %
Imaging &
20.1 %
16.7 %
19.5 %
18.8 %
20.9 %
20.5 %
22.4 %
21.3 %
20.9 %
21.2 %
Pumps & Process 1
20.7 %
21.9 %
25.8 %
22.9 %
4.5 %
22.5 %
22.7 %
16.7 %
21.8 %
17.9 %
Refrigeration & Food 2
7.5 %
3.9 %
10.9 %
7.7 %
7.4 %
11.5 %
9.5 %
9.6 %
4.7 %
8.5 %
Total segment
15.9 %
14.1 %
17.9 %
16.1 %
11.6 %
16.8 %
17.4 %
15.3 %
16.3 %
15.6 %
DEPRECIATION AND AMORTIZATION EXPENSE
Engineered Products
$
10,122
$
9,722
$
10,717
$
30,561
$
10,359
$
10,452
$
10,095
$
30,906
$
10,126
$
41,032
Fueling Solutions
18,339
17,968
18,014
54,321
17,879
18,945
18,744
55,568
19,477
75,045
Imaging &
8,769
9,224
9,809
27,802
7,435
7,413
7,360
22,208
8,322
30,530
Pumps & Process
18,336
17,572
17,206
53,114
17,548
16,201
16,018
49,767
17,817
67,584
Refrigeration & Food
11,548
11,421
12,081
35,050
13,011
12,777
13,047
38,835
12,525
51,360
Corporate
1,638
1,696
1,662
4,996
1,506
1,981
1,523
5,010
1,726
6,736
Total depreciation
$
68,752
$
67,603
$
69,489
$
205,844
$
67,738
$
67,769
$
66,787
$
202,294
$
69,993
$
272,287
1 Q1 and FY 2019 include a $46,946 loss on assets held for sale for Finder Pompe S.r.l.
2 Q1, Q2, Q3, and Q3 YTD 2020 includes a $6,551 gain, a $781 expense, a $557 expense and a $5,213 net gain on the sale of the Chino, California branch of The AMS Group ("AMS Chino"), respectively. Q2 and Q3 YTD 2020 also include a $3,640 write-off of assets.
3 Q4 and FY 2019 include a $23,543 loss on early extinguishment of debt.
OVER CORPORATION
QUARTERLY EARNINGS PER SHARE
(unaudited)(in thousands, except per share data*)
Earnings Per Share
2020
2019
Q1
Q2
Q3
Q3 YTD
Q1
Q2
Q3
Q3 YTD
Q4
FY 2019
Net earnings per share:
Basic
$
1.22
$
0.87
$
1.39
$
3.48
$
0.73
$
1.36
$
1.42
$
3.51
$
1.16
$
4.67
Diluted
$
1.21
$
0.86
$
1.38
$
3.45
$
0.72
$
1.35
$
1.40
$
3.47
$
1.15
$
4.61
Net earnings and weighted average shares used in calculated earnings per share amounts are as follows:
Net earnings
$
176,279
$
124,766
$
200,300
$
501,345
$
105,705
$
198,085
$
206,006
$
509,796
$
168,122
$
677,918
Weighted average shares outstanding:
Basic
144,259
143,955
144,032
144,082
145,087
145,366
145,372
145,276
144,966
145,198
Diluted
145,782
144,995
145,289
145,313
146,911
147,179
147,051
147,053
146,790
146,992
* Per share data may be impacted by rounding.
DOVER CORPORATION
QUARTERLY ADJUSTED EARNINGS AND ADJUSTED EARNINGS PER SHARE (NON-GAAP)
(unaudited)(in thousands, except per share data*)
Non-GAAP Reconciliations
2020
2019
Q1
Q2
Q3
Q3 YTD
Q1
Q2
Q3
Q3 YTD
Q4
FY 2019
Adjusted net earnings:
Net earnings
$
176,279
$
124,766
$
200,300
$
501,345
$
105,705
$
198,085
$
206,006
$
509,796
$
168,122
$
677,918
Acquisition-related amortization, pre-1
34,062
34,101
35,325
103,488
35,635
34,997
34,244
104,876
33,460
138,336
Acquisition-related amortization, tax 2
(8,411)
(8,451)
(8,810)
(25,672)
(8,964)
(8,777)
(8,624)
(26,365)
(8,403)
(34,768)
Rightsizing and other costs, pre-tax 3
7,859
16,840
5,848
30,547
3,963
6,457
3,807
14,227
17,926
32,153
Rightsizing and other costs, tax2
(1,605)
(3,452)
(1,343)
(6,400)
(861)
(1,377)
(806)
(3,044)
(3,745)
(6,789)
Loss on extinguishment of debt, pre-4
—
—
—
—
—
—
—
—
23,543
23,543
Loss on extinguishment of debt, tax2
—
—
—
—
—
—
—
—
(5,163)
(5,163)
Loss on assets held for sale 5
—
—
—
—
46,946
—
—
46,946
—
46,946
(Gain) loss on disposition, pre-tax 6
(6,551)
781
557
(5,213)
—
—
—
—
—
—
(Gain) loss on disposition, tax-impact 2
1,592
(190)
(135)
1,267
—
—
—
—
—
—
Adjusted net earnings
$
203,225
$
164,395
$
231,742
$
599,362
$
182,424
$
229,385
$
234,627
$
646,436
$
225,740
$
872,176
Adjusted diluted net earnings per share:
Diluted net earnings per share
$
1.21
$
0.86
$
1.38
$
3.45
$
0.72
$
1.35
$
1.40
$
3.47
$
1.15
$
4.61
Acquisition-related amortization, pre-1
0.23
0.24
0.24
0.71
0.24
0.24
0.23
0.71
0.23
0.94
Acquisition-related amortization, tax 2
(0.06)
(0.06)
(0.06)
(0.18)
(0.06)
(0.06)
(0.06)
(0.18)
(0.06)
(0.24)
Rightsizing and other costs, pre-tax 3
0.05
0.12
0.04
0.21
0.03
0.04
0.03
0.10
0.12
0.22
Rightsizing and other costs, tax 2
(0.01)
(0.02)
(0.01)
(0.04)
(0.01)
(0.01)
(0.01)
(0.02)
(0.03)
(0.06)
Loss on extinguishment of debt, pre-4
—
—
—
—
—
—
—
—
0.16
0.16
Loss on extinguishment of debt, tax 2
—
—
—
—
—
—
—
—
(0.04)
(0.04)
Loss on assets held for sale 5
—
—
—
—
0.32
—
—
0.32
—
0.32
(Gain) loss on disposition, pre-tax 6
(0.04)
—
—
(0.04)
—
—
—
—
—
—
(Gain) loss on disposition, tax-impact 2
0.01
—
—
0.01
—
—
—
—
—
—
Adjusted diluted net earnings per
$
1.39
$
1.13
$
1.60
$
4.12
$
1.24
$
1.56
$
1.60
$
4.40
$
1.54
$
5.93
1 Includes amortization on acquisition-related intangible assets and inventory step-up.
2 Adjustments were tax effected using the statutory tax rates in the applicable jurisdictions or the effective tax rate, where applicable, for each period.
3 Rightsizing and other costs include actions taken on employee reductions, facility consolidations and site closures, product line exits and other asset charges.
4 Represents a loss on early extinguishment of €300,000 2.125% notes due 2020 and $450,000 4.30% notes due 2021.
5 Represents a loss on assets held for sale of Finder Pompe S.r.l. ("Finder"). Under local law, no tax benefit is realized from the loss on the sale of a wholly-owned business.
6 Represents a (gain) loss on the disposition of AMS Chino within the Refrigeration & Food Equipment segment, including working capital adjustments.
* Per share data and totals may be impacted by rounding.
DOVER CORPORATION
QUARTERLY SEGMENT ADJUSTED EBIT AND ADJUSTED EBITDA (NON-GAAP)
(unaudited)(in thousands)
Non-GAAP Reconciliations
2020
2019
Q1
Q2
Q3
Q3 YTD
Q1
Q2
Q3
Q3 YTD
Q4
FY 2019
ADJUSTED SEGMENT EBIT AND ADJUSTED EBITDA
Engineered Products:
Segment earnings (EBIT)
$
69,094
$
47,702
$
64,890
$
181,686
$
67,119
$
77,129
$
74,367
$
218,615
$
73,233
$
291,848
Rightsizing and other costs
361
4,169
2,375
6,905
80
1,125
590
1,795
1,355
3,150
Adjusted EBIT - Segment
69,455
51,871
67,265
188,591
67,199
78,254
74,957
220,410
74,588
294,998
Adjusted EBIT %
17.0
%
15.2
%
17.4
%
16.6
%
16.0
%
18.2
%
17.6
%
17.3
%
17.7
%
17.4
%
Adjusted D&A 2
10,122
9,722
10,651
30,495
10,359
9,855
10,095
30,309
10,126
40,435
Adjusted EBITDA - Segment
$
79,577
$
61,593
$
77,916
$
219,086
$
77,558
$
88,109
$
85,052
$
250,719
$
84,714
$
335,433
Adjusted EBITDA %
19.5
%
18.0
%
20.2
%
19.3
%
18.5
%
20.5
%
19.9
%
19.7
%
20.1
%
19.8
%
Fueling Solutions:
Segment earnings (EBIT)
$
53,498
$
47,214
$
66,601
$
167,313
$
37,230
$
52,637
$
68,069
$
157,936
$
73,937
$
231,873
Rightsizing and other costs
1,493
868
1,615
3,976
752
1,768
811
3,331
1,554
4,885
Adjusted EBIT - Segment
54,991
48,082
68,216
171,289
37,982
54,405
68,880
161,267
75,491
236,758
Adjusted EBIT %
15.3
%
14.7
%
17.9
%
16.1
%
10.2
%
13.9
%
16.7
%
13.7
%
17.0
%
14.6
%
Adjusted D&A 2
18,339
17,783
18,014
54,136
17,879
18,945
18,744
55,568
19,477
75,045
Adjusted EBITDA - Segment
$
73,330
$
65,865
$
86,230
$
225,425
$
55,861
$
73,350
$
87,624
$
216,835
$
94,968
$
311,803
Adjusted EBITDA %
20.4
%
20.2
%
22.7
%
21.1
%
15.0
%
18.8
%
21.3
%
18.4
%
21.4
%
19.2
%
Imaging & Identification:
Segment earnings (EBIT)
$
51,482
$
38,046
$
51,928
$
141,456
$
55,955
$
54,641
$
61,655
$
172,251
$
57,233
$
229,484
Rightsizing and other costs
264
(527)
99
(164)
389
1,268
301
1,958
4,392
6,350
Adjusted EBIT - Segment
51,746
37,519
52,027
141,292
56,344
55,909
61,956
174,209
61,625
235,834
Adjusted EBIT %
20.2
%
16.5
%
19.6
%
18.8
%
21.0
%
21.0
%
22.5
%
21.5
%
22.5
%
21.7
%
Adjusted D&A 2
8,769
9,224
9,809
27,802
7,336
7,317
7,286
21,939
7,892
29,831
Adjusted EBITDA - Segment
$
60,515
$
46,743
$
61,836
$
169,094
$
63,680
$
63,226
$
69,242
$
196,148
$
69,517
$
265,665
Adjusted EBITDA %
23.6
%
20.5
%
23.3
%
22.5
%
23.7
%
23.7
%
25.2
%
24.2
%
25.3
%
24.5
%
Pumps & Process Solutions:
Segment earnings (EBIT)
$
66,079
$
67,702
$
89,786
$
223,567
$
14,991
$
76,278
$
77,433
$
168,702
$
71,379
$
240,081
Rightsizing and other costs
3,846
4,691
1,771
10,308
414
903
943
2,260
3,868
6,128
Loss on assets held for sale 1
—
—
—
—
46,946
—
—
46,946
—
46,946
Adjusted EBIT - Segment
69,925
72,393
91,557
233,875
62,351
77,181
78,376
217,908
75,247
293,155
Adjusted EBIT %
21.9
%
23.4
%
26.3
%
24.0
%
18.9
%
22.8
%
23.0
%
21.6
%
22.9
%
21.9
%
Adjusted D&A 2
16,230
16,816
17,206
50,252
17,548
16,199
16,018
49,765
17,004
66,769
Adjusted EBITDA - Segment
$
86,155
$
89,209
$
108,763
$
284,127
$
79,899
$
93,380
$
94,394
$
267,673
$
92,251
$
359,924
Adjusted EBITDA %
27.0
%
28.9
%
31.3
%
29.1
%
24.2
%
27.6
%
27.7
%
26.5
%
28.1
%
26.9
%
Refrigeration & Food Equipment:
Segment earnings (EBIT)
$
23,529
$
11,459
$
40,159
$
75,147
$
24,807
$
44,375
$
35,211
$
104,393
$
14,439
$
118,832
Rightsizing and other costs
704
6,016
(971)
5,749
2,293
666
840
3,799
2,243
6,042
(Gain) loss on disposition 3
(6,551)
781
557
(5,213)
—
—
—
—
—
—
Adjusted EBIT - Segment
17,682
18,256
39,745
75,683
27,100
45,041
36,051
108,192
16,682
124,874
Adjusted EBIT %
5.7
%
6.2
%
10.8
%
7.8
%
8.1
%
11.7
%
9.7
%
9.9
%
5.4
%
8.9
%
Adjusted D&A 2
11,548
11,421
12,081
35,050
13,011
12,777
13,047
38,835
12,525
51,360
Adjusted EBITDA - Segment
$
29,230
$
29,677
$
51,826
$
110,733
$
40,111
$
57,818
$
49,098
$
147,027
$
29,207
$
176,234
Adjusted EBITDA %
9.4
%
10.1
%
14.1
%
11.4
%
12.0
%
15.0
%
13.3
%
13.5
%
9.5
%
12.6
%
Total Segments:
Segment earnings (EBIT) 4
$
263,682
$
212,123
$
313,364
$
789,169
$
200,102
$
305,060
$
316,735
$
821,897
$
290,221
$
1,112,118
Rightsizing and other costs
6,668
15,217
4,889
26,774
3,928
5,730
3,485
13,143
13,412
26,555
Loss on assets held for sale 1
—
—
—
—
46,946
—
—
46,946
—
46,946
(Gain) loss on disposition 3
(6,551)
781
557
(5,213)
—
—
—
—
—
—
Adjusted EBIT - Segment 5
263,799
228,121
318,810
810,730
250,976
310,790
320,220
881,986
303,633
1,185,619
Adjusted EBIT % 4
15.9
%
15.2
%
18.2
%
16.5
%
14.5
%
17.2
%
17.5
%
16.4
%
17.1
%
16.6
%
Adjusted D&A 2
65,008
64,966
67,761
197,735
66,133
65,093
65,190
196,416
67,024
263,440
Adjusted EBITDA - Segment 5
$
328,807
$
293,087
$
386,571
$
1,008,465
$
317,109
$
375,883
$
385,410
$
1,078,402
$
370,657
$
1,449,059
Adjusted EBITDA % 5
19.9
%
19.5
%
22.1
%
20.6
%
18.4
%
20.7
%
21.1
%
20.1
%
20.9
%
20.3
%
1 Q1 and FY 2019 include a $46,946 loss on assets held for sale for Finder.
2 Adjusted D&A is depreciation and amortization expense, excluding depreciation and amortization included within rightsizing and other costs.
3 Q1, Q2, Q3, and Q3 YTD 2020 includes a $6,551 gain, a $781 expense, a $557 expense and a $5,213 net gain on the sale of a business for AMS Chino, respectively.
4 Refer to Quarterly Segment Information section for reconciliation of total segment earnings (EBIT) to net earnings.
5 Refer to Non-GAAP Disclosures section for definition.
DOVER CORPORATION
REVENUE GROWTH FACTORS (NON-GAAP)
(unaudited)(in thousands, except per share data*)
Non-GAAP Reconciliations
Revenue Growth Factors
2020
Q3
Q3 YTD
Organic
Engineered Products
(10.4)
%
(10.9)
%
Fueling Solutions
(7.9)
%
(8.5)
%
Imaging & Identification
(7.6)
%
(8.6)
%
Pumps & Process Solutions
(0.9)
%
(3.6)
%
Refrigeration & Food Equipment
2.6
%
(7.6)
%
Total Organic
(5.1)
%
(8.0)
%
Acquisitions
1.0
%
0.8
%
Dispositions
(0.8)
%
(0.7)
%
Currency translation
0.7
%
(0.6)
%
Total*
(4.2)
%
(8.5)
%
* Totals may be impacted by rounding.
2020
Q3
Organic
United States
(4.2)
%
Other Americas
(4.7)
%
Europe
(4.2)
%
Asia
(10.1)
%
Other
(5.8)
%
Total Organic
(5.1)
%
Acquisitions
1.0
%
Dispositions
(0.8)
%
Currency translation
0.7
%
Total*
(4.2)
%
* Totals may be impacted by rounding.
Adjusted EPS Guidance Reconciliation
Range
2020 Guidance for Earnings per Share (GAAP)
$
4.52
$
4.57
Acquisition-related amortization, net
0.72
Rightsizing and other costs, net
0.19
Gain on disposition, net
(0.03)
2020 Guidance for Adjusted Earnings per Share (Non-GAAP)
$
5.40
$
5.45
DOVER CORPORATION
QUARTERLY CASH FLOW AND FREE CASH FLOW (NON-GAAP)
(unaudited)(in thousands)
Quarterly Cash Flow
2020
2019
Q1
Q2
Q3
Q3 YTD
Q1
Q2
Q3
Q3 YTD
Q4
FY 2019
Net Cash Flows Provided By (Used In):
Operating activities
$
75,863
$
271,809
$
339,247
$
686,919
$
24,524
$
208,709
$
350,865
$
584,098
$
361,208
$
945,306
Investing activities
(230,511)
(67,763)
(64,724)
(362,998)
(217,690)
(69,755)
(48,612)
(336,057)
(48,198)
(384,255)
Financing activities
280,954
(67,458)
(496,832)
(283,336)
36,067
(60,596)
(277,901)
(302,430)
(255,612)
(558,042)
Quarterly Free Cash Flow (Non-GAAP)
2020
2019
Q1
Q2
Q3
Q3 YTD
Q1
Q2
Q3
Q3 YTD
Q4
FY 2019
Cash flow from operating activities1
$
75,863
$
271,809
$
339,247
$
686,919
$
24,524
$
208,709
$
350,865
$
584,098
$
361,208
$
945,306
Less: Capital expenditures
(40,172)
(38,999)
(44,393)
(123,564)
(37,122)
(53,970)
(46,184)
(137,276)
(49,528)
(186,804)
Free cash flow
$
35,691
$
232,810
$
294,854
$
563,355
$
(12,598)
$
154,739
$
304,681
$
446,822
$
311,680
$
758,502
Free cash flow as a percentage of revenue
2.2
%
15.5
%
16.9
%
11.5
%
(0.7)
%
8.5
%
16.7
%
8.3
%
17.6
%
10.6
%
Free cash flow as a percentage of net earnings
20.2
%
186.6
%
147.2
%
112.4
%
(11.9)
%
78.1
%
147.9
%
87.6
%
185.4
%
111.9
%
1 Q3 2020 YTD cash flow from operating activities reflects benefits from permitted deferrals of tax payments, most significantly in Q2 and Q3, and advanced payments on contracts, most significantly in Q3.
DOVER CORPORATION
PERFORMANCE MEASURES
(unaudited)(in thousands)
2020
2019
Q1
Q2
Q3
Q3 YTD
Q1
Q2
Q3
Q3 YTD
Q4
FY 2019
BOOKINGS
Engineered Products
$
414,972
$
278,373
$
381,139
1,074,484
$
427,697
$
397,420
$
426,059
1,251,176
$
457,145
$
1,708,321
Fueling Solutions
373,070
311,498
383,902
1,068,470
343,083
394,256
450,727
1,188,066
425,698
1,613,764
Imaging & Identification
272,604
221,315
266,423
760,342
267,762
264,175
284,527
816,464
276,451
1,092,915
Pumps & Process Solutions
369,403
275,872
323,801
969,076
369,801
375,905
329,642
1,075,348
318,482
1,393,830
Refrigeration & Food Equipment
355,157
326,400
449,549
1,131,106
376,998
384,365
323,422
1,084,785
361,970
1,446,755
Intra-segment eliminations
(375)
(460)
(926)
(1,761)
(725)
(490)
(528)
(1,743)
872
(871)
Total consolidated bookings
$
1,784,831
$
1,412,998
$
1,803,888
$
5,001,717
$
1,784,616
$
1,815,631
$
1,813,849
$
5,414,096
$
1,840,618
$
7,254,714
BACKLOG
Engineered Products
$
453,867
$
378,874
$
373,458
$
451,335
$
418,154
$
416,025
$
452,142
Fueling Solutions
211,518
199,305
204,574
185,847
186,202
223,081
205,842
Imaging & Identification
170,119
168,904
171,158
118,177
116,810
121,877
125,775
Pumps & Process Solutions
397,969
379,090
361,631
353,066
378,427
361,478
353,073
Refrigeration & Food Equipment
356,133
390,368
472,140
311,632
310,454
262,870
320,577
Intra-segment eliminations
(159)
(367)
(269)
(403)
(141)
(252)
(249)
Total consolidated backlog
$
1,589,447
$
1,516,174
$
1,582,692
$
1,419,654
$
1,409,906
$
1,385,079
$
1,457,160
Bookings Growth Factors
2020
Q3
Q3 YTD
Organic
Engineered Products
(11.6)
%
(14.2)
%
Fueling Solutions
(14.2)
%
(8.7)
%
Imaging & Identification
(9.9)
%
(8.7)
%
Pumps & Process Solutions
(3.7)
%
(9.4)
%
Refrigeration & Food Equipment
41.3
%
6.7
%
Total Organic
(1.1)
%
(7.0)
%
Acquisitions
0.8
%
0.8
%
Dispositions
(0.6)
%
(0.6)
%
Currency translation
0.4
%
(0.8)
%
Total*
(0.5)
%
(7.6)
%
* Totals may be impacted by rounding.
Non-GAAP Measures Definitions
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 net earnings per share, total segment earnings (EBIT), adjusted EBIT by segment, adjusted EBIT margin by segment, adjusted EBITDA by segment, adjusted EBITDA margin by segment, free cash flow, free cash flow as a percentage of revenue, free cash flow as a percentage of net earnings, and organic revenue growth are not financial measures under GAAP and should not be considered as a substitute for net earnings, diluted net earnings per 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 the effect of acquisition-related amortization, rightsizing and other costs, loss on extinguishment of debt, loss on assets held for sale, and a gain/loss on disposition. We exclude after-tax acquisition-related amortization because the amount and timing of such charges are significantly impacted by the timing, size, number and nature of the acquisitions the Company consummates. We exclude the other items because they occur for reasons that may be unrelated to the Company's commercial performance during the period and/or Management believes they are not indicative of the Company's ongoing operating costs or gains in a given period.
Adjusted diluted net earnings per share represents adjusted net earnings divided by average diluted shares.
Total segment earnings (EBIT) is defined as net earnings before income taxes, net interest expense and corporate expenses. Total segment earnings (EBIT) margin is defined as total segment earnings (EBIT) divided by revenue.
Adjusted EBIT by Segment is defined as net earnings before income taxes, net interest expense, corporate expenses, rightsizing and other costs, a 2019 loss on assets held for sale and a 2020 gain/loss on disposition. Adjusted EBIT Margin by Segment is defined as adjusted EBIT by segment divided by segment revenue.
Adjusted EBITDA by Segment is defined as adjusted EBIT by segment plus depreciation and amortization, excluding depreciation and amortization included within rightsizing and other costs. Adjusted EBITDA Margin by Segment is defined as adjusted EBITDA by segment divided by segment revenue.
Management believes these measures are useful to investors to better understand the Company's ongoing profitability as it will better reflect the Company's core operating results, offer more transparency and facilitate easier comparability to prior and future periods and to its peers.
Free cash flow represents net cash provided by operating activities minus capital expenditures. Free cash flow as a percentage of revenue equals free cash flow divided by revenue. Free cash flow as a percentage of net earnings equals free cash flow divided by net earnings. Management believes that free cash flow and free cash flow ratios are important measures 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 and bookings performance and trends between periods.
Performance Measures Definitions
Bookings represent total orders received from customers in the current reporting period. This metric is an important measure of performance and an indicator of revenue order trends.
Organic bookings represent total orders received from customers in the current reporting period excluding the impact of foreign currency exchange rates and the impact of acquisition and dispositions. This metric is an important measure of performance and an indicator of revenue order trends.
Backlog represents an estimate of the total remaining bookings at a point in time for which performance obligations have not yet have satisfied. This metric is useful as it represents the aggregate amount we expect to recognize as revenue in the future.
We use the above operational metrics in monitoring the performance of the business. We believe the operational metrics are useful to investors and other users of our financial information in assessing the performance of our segments.
Investor Contact:
Media Contact:
Andrey Galiuk
Adrian Sakowicz
Vice President - Corporate Development
Vice President - Communications
and Investor Relations
(630) 743-5039
(630) 743-5131
asakowicz@dovercorp.com
agaliuk@dovercorp.com
http://www.prnewswire.com/news-releases/dover-reports-third-quarter-2020-results-raises-full-year-eps-guidance-301155275.html
SOURCE Dover
