Dover Reports Third Quarter 2020 Results; Raises Full Year EPS Guidance

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DOWNERS GROVE, Ill., Oct. 20, 2020 -- Dover (NYSE: DOV), a diversified global manufacturer, announced its financial results for the third quarter ended September 30, 2020.



Three Months Ended
September 30,


Nine Months Ended
September 30,

($ in millions, except per share data)


2020


2019


%
Change


2020


2019


%
Change

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, a decline of 4% (-5% organic) compared to the third quarter of the prior year. GAAP net earnings of $200 million decreased 3%, and GAAP diluted EPS of $1.38 was down 1%. On an adjusted basis, net earnings of $232 million declined 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, a decline of 9% (-8% organic) compared to the first nine months of the prior year. GAAP net earnings of $501 million decreased 2%, and GAAP diluted EPS of $3.45 declined 1% year-over-year. On an adjusted basis, net earnings of $599 million declined 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. We deliver innovative equipment and components, consumable supplies, aftermarket parts, software and digital solutions, and support services through five operating segments: Engineered Products, Fueling Solutions, Imaging & Identification, Pumps & Process Solutions 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 over 23,000 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. 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
September 30,


Nine Months Ended
September 30,


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 &
Identification

256,765


227,977


265,690


750,432



268,354


266,588


275,109


810,051


274,420


1,084,471


Pumps & Process
Solutions

319,536


309,095


347,875


976,506



330,219


338,924


341,337


1,010,480


328,048


1,338,528


Refrigeration & Food
Equipment

311,913


293,527


368,395


973,835



334,643


385,474


370,335


1,090,452


306,165


1,396,617


Intra-segment
eliminations

(417)


(299)


(777)


(1,493)



(360)


(794)


106


(1,048)


95


(953)


Total consolidated
revenue

$

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 &
Identification

51,482


38,046


51,928


141,456



55,955


54,641


61,655


172,251


57,233


229,484


Pumps & Process
Solutions 1

66,079


67,702


89,786


223,567



14,991


76,278


77,433


168,702


71,379


240,081


Refrigeration & Food
Equipment 2

23,529


11,459


40,159


75,147



24,807


44,375


35,211


104,393


14,439


118,832


Total segment
earnings (EBIT)

263,682


212,123


313,364


789,169



200,102


305,060


316,735


821,897


290,221


1,112,118


Corporate expense /
other3

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
provision for income
taxes

213,500


156,829


250,997


621,326



138,318


249,739


257,930


645,987


197,022


843,009


Provision for income
taxes

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 &
Identification

20.1 %


16.7 %


19.5 %


18.8 %



20.9 %


20.5 %


22.4 %


21.3 %


20.9 %


21.2 %


Pumps & Process
Solutions 1

20.7 %


21.9 %


25.8 %


22.9 %



4.5 %


22.5 %


22.7 %


16.7 %


21.8 %


17.9 %


Refrigeration & Food
Equipment 2

7.5 %


3.9 %


10.9 %


7.7 %



7.4 %


11.5 %


9.5 %


9.6 %


4.7 %


8.5 %


Total segment
operating margin

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 &
Identification

8,769


9,224


9,809


27,802



7,435


7,413


7,360


22,208


8,322


30,530


Pumps & Process
Solutions

18,336


17,572


17,206


53,114



17,548


16,201


16,018


49,767


17,817


67,584


Refrigeration & Food
Equipment

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
and amortization
expense

$

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-
tax 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
impact 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, tax
impact 2

(1,605)


(3,452)


(1,343)


(6,400)



(861)


(1,377)


(806)


(3,044)


(3,745)


(6,789)


Loss on extinguishment of debt, pre-
tax 4

--


--


--


--



--


--


--


--


23,543


23,543


Loss on extinguishment of debt, tax
impact 2

--


--


--


--



--


--


--


--


(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-
tax 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
impact 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
impact 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-
tax 4

--


--


--


--



--


--


--


--


0.16


0.16


Loss on extinguishment of debt, tax
impact 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
share

$

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 EUR300,000 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



Cision