Dover Reports Third Quarter 2023 Results
- Dover's Q3 revenue remains steady at $2.2 billion compared to the prior year
- Adjusted net earnings increase by 2% to $331 million
- Full-year guidance predicts flat revenue growth
- GAAP net earnings decrease by 5% to $761 million
- GAAP diluted EPS is down 3% to $5.41
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
($ in millions, except per share data) | 2023 | 2022 | % Change | 2023 | 2022 | % Change | ||||||
Revenue | $ 2,153 | $ 2,158 | — % | $ 6,332 | $ 6,369 | (1) % | ||||||
Net earnings | 290 | 286 | 1 % | 761 | 802 | (5) % | ||||||
Diluted EPS | 2.06 | 2.00 | 3 % | 5.41 | 5.55 | (3) % | ||||||
Non-GAAP | ||||||||||||
Organic revenue change | (2) % | (1) % | ||||||||||
Adjusted net earnings 1 | 331 | 324 | 2 % | 892 | 908 | (2) % | ||||||
Adjusted diluted EPS | 2.35 | 2.26 | 4 % | 6.34 | 6.29 | 1 % | ||||||
1 Q3 and year-to-date 2023 and 2022 adjusted net earnings exclude after tax purchase accounting expenses and restructuring and other costs. Year-to-date 2022 also excludes a reduction to income taxes previously recorded related to the Tax Cuts and Jobs Act. |
For the quarter ended September 30, 2023, Dover generated revenue of
For the nine months ended September 30, 2023, Dover generated revenue of
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, "The third quarter results were encouraging. We are especially proud of our margin performance as we offset negative product mix with productivity and disciplined pricing. We are well on our way to delivering on our margin targets outlined during the investor and analyst meeting last March.
"Revenue and order rates improved sequentially in the quarter on improving activity across several end markets and a return to normal seasonality after several years of disruptions from the pandemic and follow-on supply chain issues. Our backlog continued to normalize in the quarter in tandem with lead times as we shipped longer-dated orders from our books.
"Consolidated segment margin reached a record-high level in the quarter, driven by cost containment actions and solid execution by our operating teams. The proactive structural cost reductions we implemented over the last twelve months are paying off and set a foundation for continued robust margin conversion.
"Our two recent portfolio moves—the acquisition of FW Murphy and the sale of De-Sta-Co—continued our portfolio evolution towards higher-growth and higher-return businesses at attractive valuations. These moves clearly follow the portfolio intent and priorities that we reiterated at our investor day earlier this year. Our balance sheet position and cash flow are strong and provide attractive optionality as we continue to pursue bolt-on acquisitions and opportunistic capital return strategies.
"While we are encouraged by the overall trajectory of the portfolio, we are shifting to a more conservative outlook for the remainder of the year to reflect the changes in certain market conditions we observed in the third quarter. We expect biopharma demand and automotive production curtailment to be headwinds for the balance of the year. The higher carrying costs of channel inventory driven by higher interest rates will continue to weigh on near-term volumes in several end markets, and we will be absorbing elevated transaction and integration costs in the fourth quarter related to our recent and ongoing deal activity. Our channel checks indicate that inventories are close to balancing, and as such we aim to optimize pricing, margin, and cash flow generation instead of maximizing volume in the fourth quarter to set up a solid foundation for organic growth and margin accretion in 2024."
FULL YEAR 2023 GUIDANCE:
In 2023, Dover expects to generate GAAP EPS in the range of
CONFERENCE CALL INFORMATION:
Dover will host a webcast and conference call to discuss its third quarter and year-to-date results at 10:00 A.M. Eastern Time (9:00 A.M. Central Time) on Tuesday, October 24, 2023. 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 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 over
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, general economic conditions and conditions in the particular markets in which we operate, supply chain constraints and labor shortages that could result in production stoppages, inflation in material input costs and freight logistics, the impact of interest rate and currency exchange rate fluctuations, the impacts of COVID-19, or other future pandemics, on the global economy and on our customers, suppliers, employees, business and cash flows, the impact on global or a regional economy due to the outbreak or escalation of hostilities or war, 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, 2022, 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 2023
DOVER CORPORATION CONSOLIDATED STATEMENTS OF EARNINGS (unaudited)(in thousands, except per share data*) | |||||||
Three Months Ended | Nine Months Ended | ||||||
2023 | 2022 | 2023 | 2022 | ||||
Revenue | $ 2,153,268 | $ 2,158,291 | $ 6,332,377 | $ 6,368,907 | |||
Cost of goods and services | 1,360,253 | 1,385,541 | 4,033,507 | 4,071,680 | |||
Gross profit | 793,015 | 772,750 | 2,298,870 | 2,297,227 | |||
Selling, general and administrative expenses | 420,245 | 402,339 | 1,286,999 | 1,270,615 | |||
Operating earnings | 372,770 | 370,411 | 1,011,871 | 1,026,612 | |||
Interest expense | 32,389 | 29,789 | 100,407 | 83,330 | |||
Interest income | (3,808) | (1,244) | (8,552) | (2,968) | |||
Other income, net | (10,273) | (11,167) | (20,759) | (17,842) | |||
Earnings before provision for income taxes | 354,462 | 353,033 | 940,775 | 964,092 | |||
Provision for income taxes | 64,709 | 67,007 | 180,209 | 162,295 | |||
Net earnings | $ 289,753 | $ 286,026 | $ 760,566 | $ 801,797 | |||
Net earnings per share: | |||||||
Basic | $ 2.07 | $ 2.01 | $ 5.44 | $ 5.59 | |||
Diluted | $ 2.06 | $ 2.00 | $ 5.41 | $ 5.55 | |||
Weighted average shares outstanding: | |||||||
Basic | 139,878 | 142,506 | 139,833 | 143,469 | |||
Diluted | 140,615 | 143,257 | 140,603 | 144,413 | |||
Dividends paid per common share | $ 0.51 | $ 0.505 | $ 1.52 | $ 1.505 | |||
* Per share data may be impacted by rounding. | |||||||
DOVER CORPORATION QUARTERLY SEGMENT INFORMATION (unaudited)(in thousands) | |||||||||||
2023 | 2022 | ||||||||||
Q1 | Q2 | Q3 | Q3 YTD | Q1 | Q2 | Q3 | Q3 YTD | Q4 | FY 2022 | ||
REVENUE | |||||||||||
Engineered Products | $ 497,549 | $ 473,687 | $ 504,271 | $ 1,475,507 | $ 487,647 | $ 514,436 | $ 516,501 | $ 1,518,584 | $ 525,048 | $ 2,043,632 | |
Clean Energy & Fueling | 430,729 | 441,166 | 466,959 | 1,338,854 | 458,395 | 494,075 | 464,022 | 1,416,492 | 462,015 | $ 1,878,507 | |
Imaging & Identification | 283,091 | 271,932 | 276,179 | 831,202 | 272,255 | 275,951 | 282,371 | 830,577 | 293,238 | 1,123,815 | |
Pumps & Process Solutions | 413,881 | 465,626 | 431,373 | 1,310,880 | 435,195 | 441,127 | 433,558 | 1,309,880 | 418,355 | 1,728,235 | |
Climate & Sustainability | 455,325 | 449,001 | 475,911 | 1,380,237 | 399,078 | 434,164 | 462,671 | 1,295,913 | 441,811 | 1,737,724 | |
Intersegment eliminations | (1,552) | (1,326) | (1,425) | (4,303) | (669) | (1,038) | (832) | (2,539) | (1,286) | (3,825) | |
Total consolidated revenue | $ 2,079,023 | $ 2,100,086 | $ 2,153,268 | $ 6,332,377 | $ 2,051,901 | $ 2,158,715 | $ 2,158,291 | $ 6,368,907 | $ 2,139,181 | $ 8,508,088 | |
NET EARNINGS | |||||||||||
Segment Earnings: | |||||||||||
Engineered Products | $ 84,275 | $ 73,076 | $ 101,610 | $ 258,961 | $ 71,130 | $ 81,671 | $ 90,145 | $ 242,946 | $ 103,573 | $ 346,519 | |
Clean Energy & Fueling | 73,605 | 83,616 | 92,483 | 249,704 | 72,962 | 99,034 | 90,208 | 262,204 | 90,789 | 352,993 | |
Imaging & Identification | 68,315 | 61,336 | 70,316 | 199,967 | 58,598 | 61,392 | 74,477 | 194,467 | 73,617 | 268,084 | |
Pumps & Process Solutions | 115,244 | 129,337 | 117,907 | 362,488 | 146,617 | 138,048 | 128,573 | 413,238 | 119,780 | 533,018 | |
Climate & Sustainability | 73,778 | 76,074 | 84,060 | 233,912 | 53,609 | 64,181 | 75,190 | 192,980 | 61,504 | 254,484 | |
Total segment earnings | 415,217 | 423,439 | 466,376 | 1,305,032 | 402,916 | 444,326 | 458,593 | 1,305,835 | 449,263 | 1,755,098 | |
Purchase accounting expenses 1 | 42,679 | 40,200 | 40,320 | 123,199 | 53,286 | 47,019 | 40,526 | 140,831 | 40,272 | 181,103 | |
Restructuring and other | 14,053 | 18,143 | 12,327 | 44,523 | 10,552 | 7,944 | 8,613 | 27,109 | 11,881 | 38,990 | |
Loss on dispositions 3 | — | — | — | — | 194 | — | — | 194 | — | 194 | |
Corporate expense / other 4,5 | 40,072 | 33,922 | 30,686 | 104,680 | 37,404 | 27,967 | 27,876 | 93,247 | 42,033 | 135,280 | |
Interest expense | 34,214 | 33,804 | 32,389 | 100,407 | 26,552 | 26,989 | 29,789 | 83,330 | 33,126 | 116,456 | |
Interest income | (2,091) | (2,653) | (3,808) | (8,552) | (775) | (949) | (1,244) | (2,968) | (1,462) | (4,430) | |
Earnings before provision | 286,290 | 300,023 | 354,462 | 940,775 | 275,703 | 335,356 | 353,033 | 964,092 | 323,413 | 1,287,505 | |
Provision for income taxes | 57,716 | 57,784 | 64,709 | 180,209 | 49,550 | 45,738 | 67,007 | 162,295 | 59,834 | 222,129 | |
Net earnings | $ 228,574 | $ 242,239 | $ 289,753 | $ 760,566 | $ 226,153 | $ 289,618 | $ 286,026 | $ 801,797 | $ 263,579 | $ 1,065,376 | |
SEGMENT EARNINGS MARGIN | |||||||||||
Engineered Products | 16.9 % | 15.4 % | 20.1 % | 17.6 % | 14.6 % | 15.9 % | 17.5 % | 16.0 % | 19.7 % | 17.0 % | |
Clean Energy & Fueling | 17.1 % | 19.0 % | 19.8 % | 18.7 % | 15.9 % | 20.0 % | 19.4 % | 18.5 % | 19.7 % | 18.8 % | |
Imaging & Identification | 24.1 % | 22.6 % | 25.5 % | 24.1 % | 21.5 % | 22.2 % | 26.4 % | 23.4 % | 25.1 % | 23.9 % | |
Pumps & Process Solutions | 27.8 % | 27.8 % | 27.3 % | 27.7 % | 33.7 % | 31.3 % | 29.7 % | 31.5 % | 28.6 % | 30.8 % | |
Climate & Sustainability | 16.2 % | 16.9 % | 17.7 % | 16.9 % | 13.4 % | 14.8 % | 16.3 % | 14.9 % | 13.9 % | 14.6 % | |
Total segment earnings margin | 20.0 % | 20.2 % | 21.7 % | 20.6 % | 19.6 % | 20.6 % | 21.2 % | 20.5 % | 21.0 % | 20.6 % | |
1 Purchase accounting expenses are primarily comprised of amortization of intangible assets and charges related to fair value step-ups for acquired inventory sold | |||||||||||
2 Restructuring and other costs relate to actions taken for headcount reductions, facility consolidations and site closures, product line exits, and other asset charges. | |||||||||||
3 Loss on dispositions includes working capital adjustments related to dispositions. | |||||||||||
4 Certain expenses are maintained at the corporate level and not allocated to the segments. These expenses include executive and functional compensation costs, | |||||||||||
5 Q4 and FY 2022 include a | |||||||||||
DOVER CORPORATION QUARTERLY EARNINGS PER SHARE (unaudited)(in thousands, except per share data*)
| |||||||||||
Earnings Per Share | |||||||||||
2023 | 2022 | ||||||||||
Q1 | Q2 | Q3 | Q3 YTD | Q1 | Q2 | Q3 | Q3 YTD | Q4 | FY 2022 | ||
Net earnings per share: | |||||||||||
Basic | $ 1.64 | $ 1.73 | $ 2.07 | $ 5.44 | $ 1.57 | $ 2.01 | $ 2.01 | $ 5.59 | $ 1.88 | $ 7.47 | |
Diluted | $ 1.63 | $ 1.72 | $ 2.06 | $ 5.41 | $ 1.56 | $ 2.00 | $ 2.00 | $ 5.55 | $ 1.87 | $ 7.42 | |
Net earnings and weighted average shares used in calculated earnings per share amounts are as follows: | |||||||||||
Net earnings | $ 228,574 | $ 242,239 | $ 289,753 | $ 760,566 | $ 226,153 | $ 289,618 | $ 286,026 | $ 801,797 | $ 263,579 | $ 1,065,376 | |
Weighted average shares outstanding: | |||||||||||
Basic | 139,757 | 139,862 | 139,878 | 139,833 | 144,087 | 143,832 | 142,506 | 143,469 | 140,343 | 142,681 | |
Diluted | 140,616 | 140,578 | 140,615 | 140,603 | 145,329 | 144,669 | 143,257 | 144,413 | 141,168 | 143,595 | |
* 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 | |||||||||||
2023 | 2022 | ||||||||||
Q1 | Q2 | Q3 | Q3 YTD | Q1 | Q2 | Q3 | Q3 YTD | Q4 | FY 2022 | ||
Adjusted net earnings: | |||||||||||
Net earnings | $ 228,574 | $ 242,239 | $ 289,753 | $ 760,566 | $ 226,153 | $ 289,618 | $ 286,026 | $ 263,579 | $ 1,065,376 | ||
Purchase accounting expenses, pre-tax 1 | 42,679 | 40,200 | 40,320 | 123,199 | 53,286 | 47,019 | 40,526 | 140,831 | 40,272 | 181,103 | |
Purchase accounting expenses, tax impact 2 | (9,599) | (9,012) | (8,966) | (27,577) | (12,538) | (11,013) | (9,494) | (33,045) | (8,689) | (41,734) | |
Restructuring and other costs, pre-tax 3 | 14,053 | 18,143 | 12,327 | 44,523 | 10,552 | 7,944 | 8,613 | 27,109 | 11,881 | 38,990 | |
Restructuring and other costs, tax impact 2 | (2,990) | (3,665) | (2,556) | (9,211) | (2,191) | (1,803) | (1,921) | (5,915) | (2,311) | (8,226) | |
Loss on dispositions, pre-tax 4 | — | — | — | — | 194 | — | — | 194 | — | 194 | |
Loss on dispositions, tax-impact 2 | — | — | — | — | (27) | — | — | (27) | — | (27) | |
Tax Cuts and Jobs Act 5 | — | — | — | — | — | (22,579) | — | (22,579) | — | (22,579) | |
Adjusted net earnings | $ 272,717 | $ 287,905 | $ 330,878 | $ 891,500 | $ 275,429 | $ 309,186 | $ 323,750 | $ 304,732 | $ 1,213,097 | ||
Adjusted diluted net earnings per share: | |||||||||||
Diluted net earnings per share | $ 1.63 | $ 1.72 | $ 2.06 | $ 5.41 | $ 1.56 | $ 2.00 | $ 2.00 | $ 5.55 | $ 1.87 | $ 7.42 | |
Purchase accounting expenses, pre-tax 1 | 0.30 | 0.29 | 0.29 | 0.88 | 0.37 | 0.33 | 0.28 | 0.98 | 0.29 | 1.27 | |
Purchase accounting expenses, tax impact 2 | (0.07) | (0.06) | (0.06) | (0.20) | (0.09) | (0.08) | (0.07) | (0.23) | (0.06) | (0.30) | |
Restructuring and other costs, pre-tax 3 | 0.10 | 0.13 | 0.09 | 0.32 | 0.07 | 0.05 | 0.06 | 0.19 | 0.08 | 0.26 | |
Restructuring and other costs, tax impact 2 | (0.02) | (0.03) | (0.02) | (0.07) | (0.02) | (0.01) | (0.01) | (0.04) | (0.02) | (0.06) | |
Loss on dispositions, pre-tax 4 | — | — | — | — | — | — | — | — | — | — | |
Loss on dispositions, tax-impact 2 | — | — | — | — | — | — | — | — | — | — | |
Tax Cuts and Jobs Act 5 | — | — | — | — | — | (0.16) | — | (0.16) | — | (0.16) | |
Adjusted diluted net earnings per share | $ 1.94 | $ 2.05 | $ 2.35 | $ 6.34 | $ 1.90 | $ 2.14 | $ 2.26 | $ 6.29 | $ 2.16 | $ 8.45 | |
1 Purchase accounting expenses are primarily comprised of amortization of intangible assets and charges related to fair value step-ups for acquired | |||||||||||
2 Adjustments were tax effected using the statutory tax rates in the applicable jurisdictions or the effective tax rate, where applicable, for each | |||||||||||
3 Restructuring and other costs relate to actions taken for headcount reductions, facility consolidations and site closures, product line exits, and | |||||||||||
4 Q1 2022 and FY 2022 represents working capital adjustments related to the disposition of Unified Brands and the Race Winning Brands equity | |||||||||||
5 Q2 and FY 2022 represent a reduction to income taxes previously recorded related to the Tax Cuts and Jobs Act. | |||||||||||
* Per share data and totals may be impacted by rounding. | |||||||||||
DOVER CORPORATION QUARTERLY ADJUSTED SEGMENT EBITDA (NON-GAAP) (unaudited)(in thousands) | |||||||||||
Non-GAAP Reconciliations | |||||||||||
2023 | 2022 | ||||||||||
Q1 | Q2 | Q3 | Q3 YTD | Q1 | Q2 | Q3 | Q3 YTD | Q4 | FY 2022 | ||
ADJUSTED SEGMENT EBITDA | |||||||||||
Engineered Products: | |||||||||||
Segment earnings | $ 73,076 | $ 101,610 | $ 258,961 | $ 71,130 | $ 81,671 | $ 90,145 | $ 242,946 | $ 346,519 | |||
Other depreciation and amortization 1 | 7,070 | 7,300 | 7,306 | 21,676 | 7,274 | 6,799 | 6,819 | 20,892 | 6,853 | 27,745 | |
Adjusted segment EBITDA 2 | 91,345 | 80,376 | 108,916 | 280,637 | 78,404 | 88,470 | 96,964 | 263,838 | 110,426 | 374,264 | |
Adjusted segment EBITDA margin 2 | 18.4 % | 17.0 % | 21.6 % | 19.0 % | 16.1 % | 17.2 % | 18.8 % | 17.4 % | 21.0 % | 18.3 % | |
Clean Energy & Fueling: | |||||||||||
Segment earnings | $ 83,616 | $ 92,483 | $ 249,704 | $ 72,962 | $ 99,034 | $ 90,208 | $ 262,204 | $ 90,789 | $ 352,993 | ||
Other depreciation and amortization 1 | 7,046 | 7,541 | 7,686 | 22,273 | 8,466 | 6,533 | 6,893 | 21,892 | 6,923 | 28,815 | |
Adjusted segment EBITDA 2 | 80,651 | 91,157 | 100,169 | 271,977 | 81,428 | 105,567 | 97,101 | 284,096 | 97,712 | 381,808 | |
Adjusted segment EBITDA margin 2 | 18.7 % | 20.7 % | 21.5 % | 20.3 % | 17.8 % | 21.4 % | 20.9 % | 20.1 % | 21.1 % | 20.3 % | |
Imaging & Identification: | |||||||||||
Segment earnings | $ 61,336 | $ 70,316 | $ 199,967 | $ 58,598 | $ 61,392 | $ 74,477 | $ 194,467 | $ 73,617 | $ 268,084 | ||
Other depreciation and amortization 1 | 3,394 | 3,745 | 3,972 | 11,111 | 3,497 | 3,496 | 3,372 | 10,365 | 3,820 | 14,185 | |
Adjusted segment EBITDA 2 | 71,709 | 65,081 | 74,288 | 211,078 | 62,095 | 64,888 | 77,849 | 204,832 | 77,437 | 282,269 | |
Adjusted segment EBITDA margin 2 | 25.3 % | 23.9 % | 26.9 % | 25.4 % | 22.8 % | 23.5 % | 27.6 % | 24.7 % | 26.4 % | 25.1 % | |
Pumps & Process Solutions: | |||||||||||
Segment earnings | $ 115,244 | $ 129,337 | $ 117,907 | $ 362,488 | $ 146,617 | $ 138,048 | $ 128,573 | $ 413,238 | $ 533,018 | ||
Other depreciation and amortization 1 | 10,939 | 11,609 | 12,052 | 34,600 | 9,922 | 9,787 | 10,137 | 29,846 | 10,993 | 40,839 | |
Adjusted segment EBITDA 2 | 126,183 | 140,946 | 129,959 | 397,088 | 156,539 | 147,835 | 138,710 | 443,084 | 130,773 | 573,857 | |
Adjusted segment EBITDA margin 2 | 30.5 % | 30.3 % | 30.1 % | 30.3 % | 36.0 % | 33.5 % | 32.0 % | 33.8 % | 31.3 % | 33.2 % | |
Climate & Sustainability Technologies: | |||||||||||
Segment earnings | $ 76,074 | $ 84,060 | $ 233,912 | $ 53,609 | $ 64,181 | $ 75,190 | $ 192,980 | $ 61,504 | $ 254,484 | ||
Other depreciation and amortization 1 | 6,624 | 6,895 | 6,954 | 20,473 | 6,495 | 6,443 | 6,736 | 19,674 | 6,530 | 26,204 | |
Adjusted segment EBITDA 2 | 80,402 | 82,969 | 91,014 | 254,385 | 60,104 | 70,624 | 81,926 | 212,654 | 68,034 | 280,688 | |
Adjusted segment EBITDA margin 2 | 17.7 % | 18.5 % | 19.1 % | 18.4 % | 15.1 % | 16.3 % | 17.7 % | 16.4 % | 15.4 % | 16.2 % | |
Total Segments: | |||||||||||
Total segment earnings 2, 3 | $ 415,217 | $ 423,439 | $ 466,376 | $ 1,305,032 | $ 402,916 | $ 444,326 | $ 458,593 | $ 1,305,835 | $ 1,755,098 | ||
Other depreciation and amortization 1 | 35,073 | 37,090 | 37,970 | 110,133 | 35,654 | 33,058 | 33,957 | 102,669 | 35,119 | 137,788 | |
Total Adjusted segment EBITDA 2 | 450,290 | 460,529 | 504,346 | 1,415,165 | 438,570 | 477,384 | 492,550 | 1,408,504 | 484,382 | 1,892,886 | |
Total Adjusted segment EBITDA margin 2 | 21.7 % | 21.9 % | 23.4 % | 22.3 % | 21.4 % | 22.1 % | 22.8 % | 22.1 % | 22.6 % | 22.2 % | |
1 Other depreciation and amortization relates to property, plant, and equipment and intangibles, and excludes amounts related to purchase accounting expenses and restructuring and other costs. | |||||||||||
2 Refer to Non-GAAP Disclosures section for definition. | |||||||||||
3 Refer to Quarterly Segment Information section for reconciliation of total segment earnings to net earnings. | |||||||||||
DOVER CORPORATION QUARTERLY NET EARNINGS TO ADJUSTED SEGMENT EBITDA RECONCILIATION (NON-GAAP) (unaudited)(in thousands) | |||||||||||
Non-GAAP Reconciliations | |||||||||||
2023 | 2022 | ||||||||||
Q1 | Q2 | Q3 | Q3 YTD | Q1 | Q2 | Q3 | Q3 YTD | Q4 | FY 2022 | ||
Net earnings | $ 228,574 | $ 242,239 | $ 289,753 | $ 760,566 | $ 226,153 | $ 289,618 | $ 286,026 | $ 801,797 | $ 263,579 | $ 1,065,376 | |
Provision for income taxes | 57,716 | 57,784 | 64,709 | 180,209 | 49,550 | 45,738 | 67,007 | 162,295 | 59,834 | 222,129 | |
Earnings before provision for | 286,290 | 300,023 | 354,462 | 940,775 | 275,703 | 335,356 | 353,033 | 964,092 | 323,413 | 1,287,505 | |
Interest income | (2,091) | (2,653) | (3,808) | (8,552) | (775) | (949) | (1,244) | (2,968) | (1,462) | (4,430) | |
Interest expense | 34,214 | 33,804 | 32,389 | 100,407 | 26,552 | 26,989 | 29,789 | 83,330 | 33,126 | 116,456 | |
Corporate expense / other 1,7 | 40,072 | 33,922 | 30,686 | 104,680 | 37,404 | 27,967 | 27,876 | 93,247 | 42,033 | 135,280 | |
Loss on dispositions 2 | — | — | — | — | 194 | — | — | 194 | — | 194 | |
Restructuring and other costs 3 | 14,053 | 18,143 | 12,327 | 44,523 | 10,552 | 7,944 | 8,613 | 27,109 | 11,881 | 38,990 | |
Purchase accounting expenses 4 | 42,679 | 40,200 | 40,320 | 123,199 | 53,286 | 47,019 | 40,526 | 140,831 | 40,272 | 181,103 | |
Total segment earnings 6 | 415,217 | 423,439 | 466,376 | 1,305,032 | 402,916 | 444,326 | 458,593 | 1,305,835 | 449,263 | 1,755,098 | |
Add: Other depreciation and | 35,073 | 37,090 | 37,970 | 110,133 | 35,654 | 33,058 | 33,957 | 102,669 | 35,119 | 137,788 | |
Total adjusted segment EBITDA 6 | $ 450,290 | $ 460,529 | $ 504,346 | 1,415,165 | $ 438,570 | $ 477,384 | $ 492,550 | $ 1,408,504 | $ 484,382 | $ 1,892,886 | |
1 Certain expenses are maintained at the corporate level and not allocated to the segments. These expenses include executive and functional | |||||||||||
2 Loss on dispositions includes working capital adjustments related to dispositions. | |||||||||||
3 Restructuring and other costs relate to actions taken for headcount reductions, facility consolidations and site closures, product line exits, and other | |||||||||||
4 Purchase accounting expenses are primarily comprised of amortization of intangible assets and charges related to fair value step-ups for acquired | |||||||||||
5 Other depreciation and amortization relates to property, plant, and equipment and intangibles, and excludes amounts related to purchase accounting | |||||||||||
6 Refer to Non-GAAP Disclosures section for definition. | |||||||||||
7 Q4 and FY 2022 include a |
DOVER CORPORATION REVENUE GROWTH FACTORS AND ADJUSTED EPS GUIDANCE RECONCILIATIONS (NON-GAAP) (unaudited)(in thousands, except per share data*) | ||
Non-GAAP Reconciliations
Revenue Growth Factors | ||
2023 | ||
Q3 | Q3 YTD | |
Organic | ||
Engineered Products | (3.0) % | (2.5) % |
Clean Energy & Fueling | (0.2) % | (4.1) % |
Imaging & Identification | (3.6) % | 1.5 % |
Pumps & Process Solutions | (7.3) % | (4.5) % |
Climate & Sustainability Technologies | 1.8 % | 7.0 % |
Total Organic | (2.4) % | (0.9) % |
Acquisitions | 1.0 % | 0.9 % |
Currency translation | 1.2 % | (0.6) % |
Total* | (0.2) % | (0.6) % |
* Totals may be impacted by rounding. | ||
2023 | ||
Q3 | Q3 YTD | |
Organic | ||
(7.3) % | (4.6) % | |
Other | 13.1 % | 14.6 % |
(5.2) % | (2.1) % | |
(3.4) % | (1.8) % | |
Other | 72.8 % | 41.6 % |
Total Organic | (2.4) % | (0.9) % |
Acquisitions | 1.0 % | 0.9 % |
Currency translation | 1.2 % | (0.6) % |
Total* | (0.2) % | (0.6) % |
* Totals may be impacted by rounding. | ||
Adjusted EPS Guidance Reconciliation | |||
Range | |||
2023 Guidance for Earnings per Share (GAAP) | $ 7.51 | $ 7.61 | |
Purchase accounting expenses, net | 0.91 | ||
Restructuring and other costs, net | 0.33 | ||
2023 Guidance for Adjusted Earnings per Share (Non-GAAP) | $ 8.75 | $ 8.85 | |
* Per share data and totals may be impacted by rounding. | |||
DOVER CORPORATION QUARTERLY CASH FLOW AND FREE CASH FLOW (NON-GAAP) (unaudited)(in thousands) | |||||||||||
Quarterly Cash Flow | |||||||||||
2023 | 2022 | ||||||||||
Q1 | Q2 | Q3 | Q3 YTD | Q1 | Q2 | Q3 | Q3 YTD | Q4 | FY 2022 | ||
Net Cash Flows Provided By (Used In): | |||||||||||
Operating activities | $ 241,284 | $ 195,254 | $ 383,457 | $ 819,995 | $ 23,683 | $ 178,773 | $ 264,625 | $ 467,081 | $ 338,643 | $ 805,724 | |
Investing activities | (43,556) | (42,454) | (50,243) | (136,253) | (46,963) | (68,890) | (286,208) | (402,061) | (138,863) | (540,924) | |
Financing activities | (306,565) | (137,924) | (312,716) | (757,205) | (75,204) | 120,469 | (178,844) | (133,579) | (126,686) | (260,265) | |
Quarterly Free Cash Flow (Non-GAAP) | |||||||||||
2023 | 2022 | ||||||||||
Q1 | Q2 | Q3 | Q3 YTD | Q1 | Q2 | Q3 | Q3 YTD | Q4 | FY 2022 | ||
Cash flow from operating activities | $ 241,284 | $ 195,254 | $ 383,457 | $ 819,995 | $ 23,683 | $ 178,773 | $ 264,625 | $ 467,081 | $ 338,643 | $ 805,724 | |
Less: Capital expenditures | (48,375) | (40,079) | (43,128) | (131,582) | (50,381) | (50,196) | (65,462) | (166,039) | (54,923) | (220,962) | |
Free cash flow | $ 192,909 | $ 155,175 | $ 340,329 | $ 688,413 | $ 128,577 | $ 199,163 | $ 301,042 | $ 283,720 | $ 584,762 | ||
Cash flow from operating activities | 11.6 % | 9.3 % | 17.8 % | 12.9 % | 1.2 % | 8.3 % | 12.3 % | 7.3 % | 15.8 % | 9.5 % | |
Cash flow from operating activities | 88.5 % | 67.8 % | 115.9 % | 92.0 % | 8.6 % | 57.8 % | 81.7 % | 51.4 % | 111.1 % | 66.4 % | |
Free cash flow as a percentage of | 9.3 % | 7.4 % | 15.8 % | 10.9 % | (1.3) % | 6.0 % | 9.2 % | 4.7 % | 13.3 % | 6.9 % | |
Free cash flow as a percentage of | 70.7 % | 53.9 % | 102.9 % | 77.2 % | (9.7) % | 41.6 % | 61.5 % | 33.1 % | 93.1 % | 48.2 % | |
DOVER CORPORATION PERFORMANCE MEASURES (unaudited)(in thousands) | |||||||||||
2023 | 2022 | ||||||||||
Q1 | Q2 | Q3 | Q3 YTD | Q1 | Q2 | Q3 | Q3 YTD | Q4 | FY 2022 | ||
BOOKINGS | |||||||||||
Engineered Products | $ 536,472 | $ 489,131 | $ 576,641 | $ 1,602,244 | $ 541,035 | $ 452,668 | $ 512,374 | $ 498,249 | |||
Clean Energy & Fueling | 454,526 | 440,137 | 449,663 | 1,344,326 | 501,491 | 487,861 | 432,259 | 1,421,611 | 399,414 | 1,821,025 | |
Imaging & Identification | 290,712 | 262,092 | 271,113 | 823,917 | 307,104 | 292,136 | 281,789 | 881,029 | 273,170 | 1,154,199 | |
Pumps & Process Solutions | 464,297 | 394,317 | 363,111 | 1,221,725 | 459,790 | 471,693 | 415,253 | 1,346,736 | 362,468 | 1,709,204 | |
Climate & Sustainability Technologies | 300,014 | 345,363 | 347,466 | 992,843 | 444,852 | 403,574 | 422,820 | 1,271,246 | 388,527 | 1,659,773 | |
Intersegment eliminations | (1,530) | (1,917) | (849) | (4,296) | (2,295) | (1,207) | (423) | (3,925) | (1,391) | (5,316) | |
Total consolidated bookings | $ 2,044,491 | $ 1,929,123 | $ 2,007,145 | $ 5,980,759 | $ 2,251,977 | $ 2,106,725 | $ 2,064,072 | $ 1,920,437 | |||
BACKLOG | |||||||||||
Engineered Products | $ 755,442 | $ 771,888 | $ 841,722 | $ 830,135 | $ 759,589 | $ 742,766 | $ 720,114 | ||||
Clean Energy & Fueling | 337,116 | 339,322 | 317,719 | 426,342 | 411,350 | 368,050 | 312,142 | ||||
Imaging & Identification | 236,215 | 227,646 | 217,824 | 243,411 | 255,255 | 241,896 | 232,812 | ||||
Pumps & Process Solutions | 742,890 | 676,191 | 597,745 | 704,935 | 715,646 | 679,955 | 686,512 | ||||
Climate & Sustainability Technologies | 899,379 | 797,307 | 674,578 | 1,218,155 | 1,186,180 | 1,139,737 | 1,068,644 | ||||
Intersegment eliminations | (1,083) | (1,594) | (823) | (1,756) | (1,839) | (1,439) | (1,893) | ||||
Total consolidated backlog | $ 2,969,959 | $ 2,810,760 | $ 2,648,765 | $ 3,421,222 | $ 3,326,181 | $ 3,170,965 | $ 3,018,331 | ||||
2023 | |||
Q3 | Q3 YTD | ||
BOOKINGS GROWTH FACTORS | |||
Organic | |||
Engineered Products | 11.6 % | 6.8 % | |
Clean Energy & Fueling | 3.5 % | (4.0) % | |
Imaging & Identification | (5.4) % | (5.2) % | |
Pumps & Process Solutions | (15.6) % | (12.0) % | |
Climate & Sustainability Technologies | (18.9) % | (21.3) % | |
Total Organic | (4.1) % | (6.7) % | |
Acquisitions | 0.3 % | 0.7 % | |
Currency translation | 1.0 % | (0.9) % | |
Total* | (2.8) % | (6.9) % | |
* 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, total segment earnings margin, adjusted segment EBITDA, adjusted segment EBITDA margin, free cash flow, free cash flow as a percentage of revenue, free cash flow as a percentage of adjusted 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 purchase accounting expenses, restructuring and other costs/benefits, Tax Cuts and Jobs Act, and gain/loss on dispositions. Purchase accounting expenses are primarily comprised of amortization of intangible assets and charges related to fair value step-ups for acquired inventory sold during the period. We exclude after-tax purchase accounting expenses because the amount and timing of such charges are significantly impacted by the timing, size, number and nature of the acquisitions the Company consummates. While we have a history of acquisition activity, our acquisitions do not happen in a predictive cycle. Exclusion of purchase accounting expenses facilitates more consistent comparisons of operating results over time. We believe it is important to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation. 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 or adjusted earnings per share represent diluted EPS adjusted for the effect of purchase accounting expenses, restructuring and other costs/benefits, Tax Cuts and Jobs Act and gain/loss on dispositions.
Total segment earnings is defined as the sum of earnings before purchase accounting expenses, restructuring and other costs/benefits, gain/loss on dispositions, corporate expenses/other, interest expense, interest income and provision for income taxes for all segments. Total segment earnings margin is defined as total segment earnings divided by revenue.
Adjusted segment EBITDA is defined as segment earnings plus other depreciation and amortization expense, which relates to property, plant, and equipment and intangibles, and excludes amounts related to purchase accounting expenses and restructuring and other costs/benefits. Adjusted segment EBITDA margin is defined as adjusted segment EBITDA divided by revenue.
Management believes the non-GAAP measures above are useful to investors to better understand the Company's ongoing profitability as they 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 adjusted net earnings equals free cash flow divided by adjusted net earnings. Management believes that free cash flow and free cash flow ratios are important measures of liquidity because they provide 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. We do not provide a reconciliation of forward-looking organic revenue to the most directly comparable GAAP financial measure pursuant to the exception provided in Item 10(e)(1)(i)(B) of Regulation S-K because we are not able to provide a meaningful or accurate compilation of reconciling items. This is due to the inherent difficulty in accurately forecasting the timing and amounts of the items that would be excluded from the most directly comparable GAAP financial measure or are out of our control. For the same reasons, we are unable to address the probable significance of unavailable information which may be material.
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 acquisitions 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 been 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: |
Jack Dickens | Adrian Sakowicz |
Senior Director - Investor Relations | Vice President - Communications |
(630) 743-2566 | (630) 743-5039 |
jdickens@dovercorp.com | asakowicz@dovercorp.com |
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SOURCE Dover
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